Vice President and Software Equity Research Analyst at Barclays PLC
Ryan MacWilliams is a Vice President and Software Equity Research Analyst at Barclays, specializing in coverage of the U.S. software sector with a focus on companies such as HubSpot and Zeta Global Holdings. He covers over 25 technology and software stocks, achieving a success rate of approximately 59% and an average return per recommendation of 15.5%, ranking among the top 500 Wall Street analysts according to TipRanks. MacWilliams began his equity research career in the early 2010s and joined Barclays after serving in research roles at other major investment firms. He holds FINRA securities licenses and is recognized for his in-depth sector insights and performance-driven analysis.
Ryan MacWilliams asked for insights into the expected contribution change from the large AI contract expansion over the next few quarters.
CFO David Obstler stated that Datadog does not provide information on individual customers but noted that the general motion for large customers involves volume expansion and term/volume-based pricing.
Ryan MacWilliams asked for insights into the expected contribution change from the large AI contract expansion over the next few quarters.
David Obstler, CFO, Datadog, stated that the company does not provide information on individual customers but noted that the contract follows typical paths for annual-plus commits and volume-based pricing.
Ryan MacWilliams inquired whether the sales compensation change, incentivizing ARR over on-demand consumption (ODC), is the primary reason for increased early DPS customer renewals and lower ODC expectations, and if these early renewal expansions exceeded expectations.
CFO Jim Benson acknowledged that compensation drives behavior, but also highlighted Dynatrace's proactive engagement with customers on consumption. He explained that sales teams are now more incentivized for ARR-generating expansions and are working with customers to offer compelling unit pricing for increased volumes. He confirmed that the number of early renewal expansions did exceed expectations.
Ryan MacWilliams inquired about the impact of more early DPS customer renewals on the Q3 subscription revenue guide and the on-demand consumption (ODC) guide, seeking more color on these dynamics.
Jim Benson, Chief Financial Officer, confirmed that Q2 saw a strong number of early DPS customer renewals, contributing significantly to net new ARR, citing a large global airline as an example. He noted a dynamic between early expansion and ODC, and highlighted that sales compensation changes in fiscal 2026 incentivize ARR-generating expansions over ODC. He expects this proactive motion with customers, driven by consumption, to continue.
Ryan MacWilliams asked about specific AI use cases involving Confluent that are likely to reach production in the near term, such as customer service or IoT. He also sought clarification on the revenue contribution of a large native company moving to self-hosted in Q3 and its impact on Q4 cloud revenue.
CEO Jay Kreps identified broad AI use cases, including customer support, anomaly detection, and investigations across various industries, emphasizing the challenge of achieving high reliability. CFO Rohan Sivaram reiterated that the large customer's move to on-premise significantly reduced their Confluent spend, resulting in a low single-digit impact on Q4 cloud revenue, which is incorporated into guidance.
Ryan MacWilliams asked about specific AI use cases involving Confluent that are likely to move into production soon, such as customer service or IoT, as enterprises transition from testing to production. He also sought commentary on the impact of a large native company's migration from Confluent Cloud to self-hosted, its Q3 contribution, and potential for the self-managed portion to increase in Q4.
CEO Jay Kreps noted broad AI use cases across customer support, anomaly detection, and investigations in various industries, emphasizing the challenge of achieving high reliability in production. CFO Rohan Sivaram reiterated that the large customer's move to on-prem significantly reduced their Confluent spend, resulting in a low single-digit impact on Q4 cloud revenue, which is factored into guidance, leading to flattish year-over-year cloud growth rates when normalized.
Ryan MacWilliams of Canaccord Genuity inquired about the strategic value of the OfferFit acquisition, its potential additions to the Braze platform, and the near-term impact of AI agents on marketing campaigns. He also asked about Braze's guidance philosophy amid macroeconomic shifts and the in-quarter net retention for Q4.
CEO Bill Magnuson explained that OfferFit's AI decisioning excels at generating significant ROI in high-value scenarios, complementing Braze's enterprise offerings. He noted the technology can also be adapted for broader use cases, enhancing the entire BrazeAI suite. CFO Isabelle Winkles stated that the company's guidance philosophy remains prudent or 'closer to the pin.' She highlighted that Q4 saw strong new business momentum and that overall revenue growth is expected to inflect ahead of dollar-based net retention.
Ryan MacWilliams inquired about the packaging and monetization strategy for the new AI feature, Project Catalyst, and asked for an update on the dollar-based net retention rate.
CEO Bill Magnuson explained that Project Catalyst will be a paid, premium feature integrated within Canvas, priced either via flexible credits or as a new SKU. CFO Isabelle Winkles noted that the Q3 dollar-based net retention of 113% was in line with expectations and reiterated the full-year guidance of approximately 110%, citing continued pressure on the metric.
Ryan MacWilliams inquired about customer interest in RCS following Apple's iOS 18 support and its potential as a new channel for Braze. He also asked for the outlook on net retention for the remainder of the fiscal year.
CEO Bill Magnuson stated that Braze is excited for RCS, actively preparing full support, and noted that the new flexible credit model will simplify customer adoption. CFO Isabelle Winkles commented that net retention has not yet bottomed out and the company's guidance embeds continued pressure on this metric, primarily due to lapping stronger historical quarters.
Ryan MacWilliams from Barclays requested an update on GitLab's public sector business and pipeline, and asked if any additional conservatism for this sector was included in the annual guidance.
CEO William Staples noted that the public sector constitutes about 12% of total ARR and that the platform's value proposition of efficiency and cost savings remains strong for these customers. He mentioned that Q3 is typically their strongest quarter for this sector. While the team is monitoring the environment closely, the guidance for FY26 assumes no significant changes to the current business conditions in the public sector.
Ryan MacWilliams asked about adoption differences between Duo Pro and Duo Enterprise and queried where customers are in their AI tool rollouts, specifically if they are moving beyond initial tests.
Co-Founder Sytse Sijbrandij observed that customers fully committed to the GitLab platform on the Ultimate tier are the best candidates for Duo Enterprise. He cautioned that it is still very early for agentic AI (Duo Workflow), with a beta planned for the winter, and significant impact is not expected this fiscal year.
Ryan MacWilliams from Barclays asked about any noticeable changes in the macroeconomic environment and developer hiring trends between Q1 and Q2, and whether customers are showing more interest in non-coding AI tools.
CFO Brian Robins noted that the cautious spending environment and developer hiring trends remained consistent with the previous quarter. CEO Sid Sijbrandij affirmed that the market is moving beyond AI code creation to AI throughout the entire software development lifecycle. He highlighted GitLab's leadership position in the Gartner Magic Quadrant for DevOps Platforms as evidence of its strength in this area, positioning the company to win as AI becomes more integrated and autonomous.
Representing Ryan MacWilliams of Barclays, a speaker asked management to quantify the potential impact of prioritizing RingCX over the NICE partnership and to explain the drivers behind the expected non-GAAP operating margin progression in 2025.
CEO Vlad Shmunis stated that all impacts from the RingCX prioritization are factored into the provided guidance, noting the existing NICE customer base is largely under contract with a significant RPO. CFO Abhey Lamba explained that 2025 operating margin leverage will be driven by top-line growth and continued disciplined spending, including cost structure optimizations using AI, similar to the improvements seen in prior years.
An analyst on behalf of Ryan MacWilliams asked if the Q4 guided growth rate is a reasonable starting point for 2025, and also inquired about the performance of the Microsoft Teams integration opportunity in Q3 and its impact on landing larger customers and pulling through RingCX deals.
Founder, Chairman and CEO Vlad Shmunis stated that the company is not ready to provide 2025 guidance, citing a focus on Q4 and the desire for the incoming CFO to have input. He highlighted potential near-term 'friction' from prioritizing the native RingCX solution over the legacy NICE-based offering. Regarding Microsoft Teams, Shmunis confirmed it remains a key channel for larger enterprise customers, contributing to double-digit enterprise growth. However, he noted the RingCX and Teams integration is not yet a 'needle mover' as RingCX has historically skewed toward smaller businesses, but a 'RingCX for Teams' solution is planned for the future.
Ryan MacWilliams asked about the nature of customer conversations since the election and inquired about the most significant potential upside drivers for Five9 in 2025, such as AI upsells or cloud conversions.
CEO Michael Burkland stated that customer conversations are heavily focused on leveraging AI for accurate and personalized self-service. He identified key 2025 upside drivers as continued AI revenue growth, which hit 46% in Q4, strong core subscription revenue growth of 19%, and continued sales execution, with potential for further improvement from a better macroeconomic environment.
Ryan MacWilliams from Barclays asked for the Acqueon revenue contribution in Q4 and 2025, and also sought clarification on the new 'AI agents' product and its pricing model.
Executive Barry Zwarenstein stated that Acqueon contributed less than 1% of revenue in Q3 and will not be broken out going forward due to the deep integration of the businesses. Executive Michael Burkland clarified that 'AI agents' are the next generation of their IVA and DVA self-service products, designed for more autonomy, and are not part of the agent-assist category.
Ryan MacWilliams asked about the current customer demand for voice AI agents, questioning if it's a present or future trend, and how Bandwidth's contact center relationships aid its competitive positioning. He also sought clarification on the Q1 guidance, which appeared conservative, and any recent macroeconomic fluctuations.
CEO David Morken confirmed that voice AI demand is happening now, citing a global hospitality brand and a Fortune 25 healthcare provider as current customers using Bandwidth for AI agent integration and CCaaS migrations. CFO Daryl Raiford explained the Q1 guidance reflects 4% normalized year-over-year growth after accounting for prior-year political revenue and expects lower surcharge revenue. Morken added that while their guidance is historically prudent, their conviction is that the AI agent opportunity will be larger and more durable than the temporary work-from-home trend.
Ryan MacWilliams inquired about the macro environment since the start of Q4 and whether there were any noticeable changes in customer conversations following the U.S. presidential election. He also asked if security sales might exhibit more Q4 seasonality going forward, given their nature as large enterprise deals.
CEO Shlomi Ben Haim stated there has been no significant change in the macro environment, with customers remaining conservative on cloud usage and commitments. He noted some hesitation around AI adoption pending new administration regulations. Regarding seasonality, he explained that large security deals require patience and longer proof-of-concept cycles, so he does not expect special seasonality, reinforcing the conservative guidance approach.
Ryan MacWilliams asked how the macroeconomic environment is affecting cloud usage and consumption linearity, and whether JFrog could incentivize or accelerate cloud migrations for customers currently on self-hosted deployments.
CEO Shlomi Haim explained that while large customers are planning cloud migrations, execution is slow due to macro headwinds, causing them to pause investments in their on-premise environments. He stated that JFrog will not 'punish' customers with immediate on-prem price hikes but may consider pricing changes next year to motivate future migrations.
Ryan MacWilliams inquired about any noticeable changes in the macro environment or geographic usage trends to start the year. He also asked which voice AI use cases are best suited for Twilio's platform versus over-the-top services.
CFO Aidan Viggiano noted no specific macro changes, explaining that the volume drop from Q4 to Q1 is typical seasonality. CEO Khozema Shipchandler detailed a key use case where a customer replaces a traditional IVR with a voice AI agent. This agent handles the full interaction, creating opportunities for more intimate, data-driven upsell conversations that were previously constrained by human agent cycle times.
Ryan MacWilliams questioned what business trends provided the confidence to issue 2025 guidance. He also asked about the timeline for RCS adoption in the U.S. and the potential for Generative AI to accelerate it.
CEO Khozema Shipchandler explained that the 2025 outlook is supported by stabilizing trends, strong performance in self-serve and ISV channels, new product innovations, and customer conversations. Regarding RCS, he stated the near-term timeline is unclear, as it's well-suited for some use cases but not others. He expressed bullishness on Generative AI's role across all channels, especially when paired with contextual data.
Ryan MacWilliams asked how fourth-quarter revenue performed against expectations and requested quantification of any one-time impacts, such as foreign exchange, on revenue or profitability.
CFO Jason Schwartz confirmed that FX pressure impacted Q4 results by approximately 1-2% on a run-rate basis and is factored into future guidance. He characterized the quarter as strong, highlighting accelerated growth in large customer accounts, increased average revenue from that cohort, a higher NRR, and significant new partnerships with S&P and Bloomberg as positive business indicators.
Ryan MacWilliams asked about the key factors driving the acceleration in new customer growth and for early insights into the revenue growth drivers for 2025.
CEO Or Offer attributed the growth to internal improvements, specifically in marketing which generated record registrations and meetings, and strong execution by the go-to-market teams. CFO Jason Schwartz indicated that while full 2025 guidance is forthcoming, the current momentum and exit rates are good indicators for the future, emphasizing a continued focus on profitable growth.
Ryan MacWilliams asked about the expected shape of net retention throughout 2025 as implied by the guidance, and inquired about the anticipated revenue contribution from Device42 for the year.
COO & CFO Tyler Sloat stated that after guiding to 104% constant currency NRR for Q1, the company expects the rate to remain relatively consistent for the full year, though it will be updated quarterly. He clarified that Freshworks does not plan to break out Device42 revenue separately going forward, as it is increasingly sold as a bundled, unified product with Freshservice, which is a positive indicator of the acquisition's strategic success.
Ryan MacWilliams asked for a reminder on how HubSpot expects its installed base to adopt the new pricing model and how the financial impact will layer into results throughout 2025.
CFO Kathryn Bueker explained that the migration of existing customers to the new seat-based model will continue through 2025. A price increase of up to 5% only applies upon the first renewal *after* a customer is migrated. She projected that between 50% and 60% of the company's ARR will have completed this first renewal by the end of 2025.
Ryan MacWilliams from Barclays asked about macroeconomic trends and differences in customer purchasing behavior by size or geography since the presidential election. He also inquired about 8x8's view of Salesforce as a partner versus a competitor.
CEO Samuel Wilson described a 'tale of two cities,' noting a 14-year high in U.S. bankruptcies affecting some larger businesses, while credit card default rates among its small business customers remain steady. He views Salesforce as a great partner, not a competitor, noting 8x8 is a large Salesforce customer and is looking at technologies like Agentforce to deepen the partnership.
An analyst on behalf of Ryan MacWilliams asked about the key factors driving the sequential improvement in services revenue and the sustainability of those trends. They also inquired about the drivers for the 200% year-over-year growth in AI-based solution sales and whether customer willingness to adopt these features has increased.
CFO Kevin Kraus attributed the revenue results to robust platform usage revenue and growth in the core 8x8 platform business. CEO Samuel Wilson added that strong gross retention provided a solid foundation for growth. Regarding AI, Wilson confirmed customers are more willing to adopt these solutions now compared to six months ago, driven by the ability to turn AI into tangible business outcomes like improved agent productivity, fraud detection, and shorter training cycles.
Ryan MacWilliams inquired about the adoption and progress of Atlassian's AI offering, Rovo, and how its features, such as AutoDev, are expected to transform daily developer workflows.
CEO Mike Cannon-Brookes noted that while it's early for Rovo, customer feedback is very positive. He pointed to the broader Atlassian Intelligence platform surpassing one million monthly active users and a 25x year-over-year increase in AI interactions, which is driving adoption of Premium and Enterprise editions. He stated that investments in Rovo are focused on search quality, the Teamwork Graph, and expanding data connectors to enhance its capabilities.
Ryan MacWilliams asked whether large data center customers are timing their cloud migrations around contract renewals or if new cloud features are prompting them to move earlier via hybrid deployments.
CEO Mike Cannon-Brookes explained that it's a mix of both. While contract renewals are a natural trigger, significant cloud innovations like Atlassian Intelligence are prompting some customers to start their migration journey earlier. He stressed that for large enterprises, this is a multi-year IT project that typically begins with a hybrid state. CFO Joe Binz reiterated confidence that migrations will contribute mid-to-high single digits to cloud revenue growth over the next three years.
Ryan MacWilliams from Barclays inquired about the macroeconomic impact, post-election spending trends, and the outlook for the holiday season. He also asked about the 2025 plans of the top 5 agency holdcos and whether the agency business would be a stronger growth contributor next year.
CEO David Steinberg noted that the certainty following the election is unlocking advertising dollars and expressed bullishness for Q4. He confirmed that Zeta's largest agency client has renewed for multiple years and that agencies are scaling well, reinforcing his confidence in achieving over 20% organic growth next year.
Ryan MacWilliams of Barclays inquired about the macroeconomic impact on Zeta during the quarter, any post-election changes in marketing spend, and the outlook for the holiday season. He also asked about 2025 plans with top agency holdcos.
CEO David Steinberg noted that the certainty following the election has helped unlock advertiser dollars and expressed strong confidence in the Q4 outlook. Regarding agencies, he confirmed their largest agency client recently renewed and that they feel solid about achieving 20%+ organic growth in 2025, supported by strong agency partnerships.
Ryan MacWilliams sought early insights for building 2025 financial models, particularly regarding the impact of price increases, and asked if the company's thinking on M&A has changed, especially for acquiring bolt-on AI capabilities.
CFO Eliran Glazer stated that formal 2025 guidance would be provided next quarter but expressed optimism for potential upside due to monday Service, price increases, and cross-sell opportunities. Co-CEO Eran Zinman confirmed that the company has an active M&A team constantly monitoring the market for opportunities and is definitely exploring acquisitions given its cash reserves.
On behalf of Ryan MacWilliams, Damon Calvin inquired about customer AI investment plans for the upcoming year, whether enterprise budgets are improving, and the expected breakdown between product and service revenue for Q4 and fiscal year 2025.
President and CEO Shabtai Adlersberg confirmed seeing increased interest and demand for AI solutions, particularly from the government sector. He explained that while the growing Live services business is a key focus, its positive impact is currently muted by a corresponding decline in perpetual CapEx sales for Teams and legacy products. Adlersberg projected that as the recurring revenue mix surpasses 50% in the coming quarters, overall growth will accelerate, with the Microsoft business expected to return to double-digit growth by 2026.
Ryan MacWilliams of Barclays asked about the cost of providing free AI Companion features, the possibility of charging power users, and the overall impact of AI investments on gross margins.
CEO Eric Yuan reiterated Zoom's philosophy of not charging for AI Companion within its core Workplace offerings to build customer trust, though he confirmed new premium services like Contact Center will be monetized. CFO Kelly Steckelberg stated that the full-year gross margin guidance of approximately 79% reflects AI investments but that the company maintains its long-term target of 80%. Yuan also credited the DevOps team for cost-saving efforts that create room for AI spending.
Ryan MacWilliams asked for a ranking of the top three drivers for net new revenue in fiscal 2026 and what the full-year guidance implies for contributions from the enterprise versus online segments.
CFO Michelle Chang explained the guidance assumes the Online segment will be slightly down, with Enterprise as the primary growth driver. She ranked the top drivers as: 1) The core business, including Phone, benefiting from low churn; 2) Adjacent growth products like Contact Center and Workvivo; and 3) AI, particularly through the premium Contact Center SKU.
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