S. Kirk Materne

Kirk Materne inquired about Workday's mechanisms for growing ACV with customers experiencing layoffs, focusing on cross-sell, upsell, and contract structures beyond a linear per-seat relationship.

Answer

Carl Eschenbach (CEO, Workday) explained that while customer headcount is up net year-over-year, Workday drives ACV growth by selling new solutions (e.g., Eversort, HiredScore, Sana, Paradox) back into its customer base, increasing revenue per seat. He also mentioned annual true-ups and minimums in contracts provide protection. Zane Rowe (CFO, Workday) added that headcount growth is a net positive but not a primary driver of overall growth.

Kirk Materne inquired about Workday's mechanisms for growing ACV with customers experiencing layoffs, beyond a per-seat basis, considering cross-sell, upsell, and the impact of contractual minimums or true-ups.

Answer

CEO Carl Eschenbach clarified that Workday's customer headcount is net positive year-over-year despite some layoffs. He highlighted growth drivers such as selling new solutions (Eversort, HiredScore, Sana, Paradox, FlowWise) back into the customer base, focusing on revenue per seat, and utilizing contractual true-ups with minimums. CFO Zane Rowe added that headcount growth is not a significant portion of overall growth.

Kirk Materne inquired about any market crosscurrents, such as tariffs or macro pressures, that might be offsetting positive momentum, and asked for color on the sequential revenue ramp from Q3 to Q4.

Answer

CEO & Director Carl Eschenbach noted that while they are monitoring international markets and the SLED sector, Europe performed strongly, and major wins like the University of Virginia show resilience. CFO Zane Rowe added that the full-year guide was raised, and the Q4 ramp is supported by the Paradox acquisition and deliverables for the DIA contract, consistent with their plan for the year.

S. Kirk Materne of Evercore ISI questioned the confidence in reiterating full-year guidance given the choppy macroeconomic environment, particularly in EMEA and SLED markets.

Answer

CEO Carl Eschenbach expressed confidence, citing the strong ROI and TCO of Workday's platform, which resonates in any economic climate. He highlighted progress in key initiatives like AI adoption (100% YoY growth), full-suite wins (over 30% of new deals), and partner-sourced ACV (over 20%). CFO Zane Rowe added that Q1 results beat guidance, and the company expects a tailwind from FX. He also noted that revenue growth is expected to accelerate in the second half due to product deliverables.

S. Kirk Materne of Mizuho Securities USA LLC inquired about the current macroeconomic environment and the factors giving Workday confidence to reiterate its full-year guidance, particularly given management's cautious commentary on the SLED and international markets.

Answer

CEO Carl Eschenbach explained that Workday's value proposition around ROI and platform consolidation remains strong in any economic climate. He cited progress in AI adoption, full-suite wins, partner contributions, and momentum in the U.S. federal sector as reasons for confidence. CFO Zane Rowe added that a strong Q1 performance, favorable FX shifts, and expected revenue from product deliverables in the second half of the year also support the reiterated guidance.

S. Kirk Materne of Evercore ISI questioned the drivers behind the expected revenue acceleration in the second half of FY26, asking if new AI agents would contribute and if Q4 results improved visibility.

Answer

CFO Zane Rowe explained that the FY26 guidance does not assume a meaningful revenue contribution from the newest AI agents, which are still rolling out. He noted a $20 million FX headwind but confirmed that strong Q4 performance improved visibility. CEO Carl Eschenbach specified that while existing AI products are contributing, the four newest agents will not be generally available until the second half and are not expected to materially impact FY26 revenue.

S. Kirk Materne of Evercore ISI asked for clarification on a 'deliverable issue' affecting Q4 and FY26 guidance, and questioned if the appointment of new President Rob Enslin would disrupt the go-to-market strategy.

Answer

CFO Zane Rowe explained the issue involves delayed revenue recognition for key strategic deals, impacting Q4 by $8-10M but contributing to H2 FY26 growth. CEO Carl Eschenbach added context on the strategic importance of these deals, like with the Defense Intelligence Agency. Regarding the new hire, Eschenbach expressed high confidence in a smooth transition, citing a long-standing relationship with Rob Enslin and a six-month overlap with the retiring executive, ensuring no disruption.

S. Kirk Materne asked where Workday can achieve additional efficiency and scale to support its higher margin targets while continuing to invest in key growth areas like international expansion.

Answer

CEO Carl Eschenbach detailed several areas for efficiency, including a global workforce strategy, prudent hiring focused on quota-carrying roles and R&D, and internal use of AI. He noted that prior investments in partners and the financial sales force are now scaling efficiently. CFO Zane Rowe added that all investments are viewed with an ROI mentality, allowing for both margin expansion and growth.

Kirk Materne asked for more details on Intuit's OpenAI partnership, specifically regarding any revenue share arrangements and how customer data privacy and security are maintained when Intuit solutions are used within OpenAI's platform.

Answer

Intuit CEO Sasan Goodarzi described the OpenAI partnership as game-changing for accelerating new customer growth by integrating Intuit apps deeply into ChatGPT. He clarified that there is no revenue share, and Intuit will continue to enjoy its current economics. Goodarzi emphasized that Intuit's data privacy, security, and privacy principles remain unchanged, with customer data staying within Intuit's 'four walls' to train Intuit's large language models, ensuring accurate and personalized answers within ChatGPT.

Kirk Materne asked for more details on the OpenAI partnership, specifically regarding any revenue share and how customer data privacy is maintained when Intuit solutions are used within OpenAI.

Answer

CEO Sasan Goodarzi described the partnership as game-changing, accelerating new customer growth by integrating Intuit apps deeply within ChatGPT. He clarified there is no revenue share, and Intuit's data privacy, security, and privacy principles remain unchanged, with customer data staying within Intuit's four walls to train Intuit's large language models.

Kirk Materne of Evercore ISI asked about Credit Karma's strong performance, seeking color on the confidence behind its double-digit growth guidance for fiscal 2026 against tough comps and how new products might reduce its cyclicality.

Answer

CEO Sasan Goodarzi attributed Credit Karma's success and the confident outlook to several factors. He noted that strong execution and data/AI investments are driving market share gains in credit cards and personal loans. Furthermore, he explained that the business is becoming less cyclical through strategic investments in areas like tax integration, insurance, and serving prime customers, which diversifies revenue streams beyond historically cyclical products.

S. Kirk Materne asked if the 'boomerang customer' example for Intuit Enterprise Suite (IES) indicates a growing trend of reclaiming customers or replacing competitors in the mid-market.

Answer

CEO Sasan Goodarzi clarified that the company's primary focus remains on upgrading its large existing customer base to QBO Advanced and IES. He described the 'boomerang' example as an instance of positive word-of-mouth, which is happening more frequently but is still a smaller part of their growth. He emphasized that the core strategy of focusing on their own base is unchanged, though it indicates future potential for hunting outside the base.

S. Kirk Materne referenced the 'boomerang customer' example for Intuit Enterprise Suite and asked if this signals a growing trend of reclaiming lost customers or replacing competitors, and if the company's perspective on this market has changed.

Answer

CEO Sasan Goodarzi clarified that the company's primary focus remains on upgrading its existing customer base to QBO Advanced and Intuit Enterprise Suite. He explained that the 'boomerang' example is an illustration of word-of-mouth and future potential as they begin to target customers outside their base, but this is not yet the main growth driver. The core strategy of focusing on the internal base is unchanged.

S. Kirk Materne inquired about the current state of the small business (SMB) environment and whether there have been any changes in economic activity levels.

Answer

CEO Sasan Goodarzi reported that smaller businesses (up to 10 employees) are seeing year-over-year profit and cash flow growth on Intuit's platform. He noted that larger mid-market customers are actively leaning into digitization with solutions like the Intuit Enterprise Suite to drive growth and efficiency, indicating a healthy environment that improves with business size.

S. Kirk Materne inquired about the expected impact of Intuit Assist on the Global Business Solutions Group in the upcoming year and its role in driving growth.

Answer

CEO Sasan Goodarzi clarified that the fiscal 2025 guidance does not assume any revenue contribution from Intuit Assist. However, he highlighted its significant momentum, with approximately 1 million businesses already engaging with the AI tool for tasks like creating marketing campaigns and digitizing invoices. He explained that Intuit Assist is foundational to the company's 'done for you' strategy and is expected to be a major future growth driver by increasing new customer acquisition and accelerating the adoption of monetizable services.

Kirk Materne (Evercore ISI) inquired about the expected timeline for monetization of Blackbaud's new AI agents, specifically if it would begin in 2026, and whether existing Raiser's Edge users could expect quick ROI or if data remediation would be necessary. He also asked about the conceptual impact of selling more agents on gross margins.

Answer

Mike Gianoni, Blackbaud's CEO, President, and Vice Chairman, confirmed that sales of the new agents would begin this quarter, with modest revenue expected next year and a subsequent ramp-up. He emphasized the clear ROI for the development agent, particularly for fundraising, and noted that early adopters are already seeing value. Gianoni also highlighted plans for a catalog of agents across platforms, augmenting staff and driving new revenue from previously unreached donors through a multi-year SaaS subscription model. Chad Anderson, Blackbaud's EVP and CFO, indicated that while it's early, gross margin impacts are expected to be favorable, positively influencing company EBITDA margins. Gianoni added that Blackbaud has a long runway for gross margin improvement through internal initiatives, data center closures, India office build-out, and internal AI adoption for productivity.

Kirk Materne inquired about the timeline for monetizing Blackbaud's new agentic AI solutions, particularly if Raiser's Edge NXT users would see quick ROI or require data remediation. He also asked about the conceptual impact of selling more agents on gross margins.

Answer

Mike Gianoni, Blackbaud's CEO, President, and Vice Chairman, stated that sales for the first agent (development agent) are commencing this quarter, expecting modest revenue next year, with clear and quick ROI for customers. He noted early adopters are already seeing value in augmenting staff to reach untapped donors. Chad Anderson, Blackbaud's Executive Vice President and CFO, indicated that while it's early, they anticipate favorable gross margin impacts and a positive influence on company EBITDA margins from AI investments. Mike Gianoni added that Blackbaud has a long runway for gross margin improvement through internal initiatives like data center closures and leveraging AI for internal productivity.

Kirk Materne from Evercore ISI asked about the company's strategy for upselling and cross-selling to the first cohort of customers whose three-year contracts are set to renew starting next year. He also sought to understand the potential magnitude of cash tax benefits from recent tax legislation.

Answer

President, CEO & Vice Chairman Mike Gianoni clarified that upselling is an ongoing activity managed by a dedicated sales team and is not limited to the renewal period. EVP & CFO Chad Anderson described the expected cash tax benefit as 'very favorable' and 'meaningful,' primarily due to the repeal of Section 174 R&D amortization, with more specific guidance to come. Mike Gianoni added this benefit, along with non-recurring cash uses, points to an 'outstanding' cash flow outlook for 2026.

S. Kirk Materne from Evercore ISI inquired about Blackbaud's strategy for monetizing its AI innovations and asked about the potential impact of recent foreign currency movements on reported financial results.

Answer

CEO Michael Gianoni clarified that current AI features, including the upcoming Blackbaud Copilot, are included in subscription pricing to add value. However, the company is exploring future monetization models for more advanced 'Agentic AI'. CFO Tony Boor confirmed that recent currency movements are favorable and could provide a 'tailwind' to reported results if they persist.

S. Kirk Materne asked how Blackbaud's vast repository of social impact data is influencing its AI development, what new capabilities this could bring to customers, and how it might factor into future growth and cross-sell opportunities.

Answer

CEO Mike Gianoni detailed the company's extensive AI initiatives, noting that over 5,000 customers have already adopted machine learning features in Raiser's Edge NXT. He announced the upcoming Blackbaud Copilot, which will enable natural language queries to drive actions and insights. While current AI features are included in base products, he confirmed that the company is actively exploring future monetization opportunities for more advanced AI capabilities.

S. Kirk Materne of Evercore ISI asked about bookings performance in the contractual recurring business, specifically regarding net new logos versus the uplift from renewal pricing. He also asked about the growth drag from a previously divested EVERFI services business.

Answer

CEO Mike Gianoni stated that net new logo acquisition is performing well and is up year-over-year, noting the primary source of softness in overall bookings is EVERFI. EVP and CFO Anthony Boor clarified that the divested EVERFI services business accounted for a revenue reduction of approximately $6 million for the full year.

Kirk Materne asked how Samsara ensures its expansive product portfolio receives adequate sales attention, including tactics like spiffs or specialized reps. He also inquired if the numerous integration partners are a "check-the-box" requirement or a significant differentiator for large customers.

Answer

Sanjit Biswas (CEO) explained that sales reps focus on platform value and customer operations, supported by sales engineers and specialists, with ongoing experimentation with tactics. He emphasized that widespread, high-quality integrations are a huge differentiator, unifying data from various sources (OEM telematics, fuel cards, insurance, payroll) to unlock significant customer value.

Kirk Materne of Evercore ISI asked about the role AI is playing in customer conversations and whether it's becoming a more significant part of the sales process. He also requested an update on pipeline visibility for the remainder of the fiscal year.

Answer

Co-Founder and CEO Sanjit Biswas stated that while customers are very interested in AI, their focus is on clear and fast ROI, which Samsara demonstrates through its safety and efficiency solutions. Chief Financial Officer Dominic Phillips added that the company feels good about its record pipeline, which reflects strong customer demand, but acknowledged that near-term macro uncertainty creates timing risks for deal closures.

S. Kirk Materne questioned if the strategy of creating market-specific products for Europe could be applied to industry verticals like construction or public sector. He also asked about any Q1 seasonality impact from the prior year's leap day.

Answer

CEO Sanjit Biswas confirmed they use feedback loops for both geographies and verticals, noting that while 80% of customer needs are horizontal, 20% require specific features that guide investment, such as the Asset Tag for construction. CFO Dominic Phillips stated that the leap day is not expected to have a material impact on the business.

S. Kirk Materne asked if customers are using the new Asset Tags for high-value or low-value assets and how the company is thinking about hiring plans heading into the next calendar year.

Answer

CEO and Co-Founder Sanjit Biswas explained that it's early, but the primary pattern for Asset Tags is tracking historically untracked assets that lack a power source, covering a wide range of values. He noted the tags are part of a broader portfolio of equipment trackers. CFO Dominic Phillips stated that it's too early to discuss calendar '25 hiring plans, as the annual operating plan review is just beginning, but confirmed hiring has been robust and on track this year.

Speaking for Kirk Materne of Evercore ISI, an analyst asked if Veeva is realizing any internal productivity benefits from AI within its own R&D or sales and marketing functions.

Answer

CFO Brian Van Wagener responded that while AI is viewed as a transformational long-term tool for productivity and quality, they do not expect a meaningful contribution in the short term. He noted that engineers have access to specific AI tools in their workflow, but it is not expected to lead to sudden headcount changes.

Kirk Materne asked about the risk of a consultant shortage for Vault CRM migrations and whether potential tariff or supply chain disruptions could distract customers from signing new contracts.

Answer

CEO Peter Gassner expressed confidence in the services ecosystem, noting that Veeva's internal team and partners like Accenture can flex to meet demand, aided by automation tools like the data migrator. He added that while significant industry disruption could delay contracts, they have seen no signs of it yet and any impact would likely be a delay, not a loss.

Speaking for Kirk Materne, William McNamara asked about the specific factors driving the strong performance of Veeva Crossix within the commercial business.

Answer

CEO Peter Gassner attributed Crossix's success to strong execution, product innovation in areas like micro-audiences, a growing data network, and competitors stumbling. He emphasized that Crossix is one of several strong performers in the commercial segment, alongside CRM, Commercial Content, and Compass.

Speaking on behalf of Kirk Materne, Bill from Evercore ISI asked about the implementation process for the Vault Direct Data API and how seamless it is for customers to begin using.

Answer

CEO Peter Gassner explained that the Vault Direct Data API is a purchased product. Once a customer buys it, there is 'no implementation' required; the service is simply turned on. The customer's effort is then focused on learning how to best utilize the new, powerful API for their specific use cases.

Kirk Materne of Evercore ISI asked how the outperformance from new products was factored into the Q3 guidance, noting the company's typical practice of waiting for an established trend before making significant bets in forecasts.

Answer

CFO Mike Scarpelli acknowledged that new products outperformed expectations but clarified that a modest contribution was already included in the forecast. He explained that the forward-looking guidance is always based on current consumption patterns. He conceded that Q2's strength was a positive surprise, highlighting the inherent variability of a consumption-based business model.

S. Kirk Materne from Evercore ISI asked about the drivers behind the outperformance of Snowpark and Dynamic Tables, questioning whether it was due to product maturation or go-to-market enhancements.

Answer

CEO Sridhar Ramaswamy attributed the success to both factors, highlighting the need for great products that drive utility, like Snowpark, Dynamic Tables, and Iceberg support. He also emphasized the role of a specialized go-to-market motion, led by new sales leaders, which identifies high-value use cases and pioneers implementations with flagship customers and GSI partners.

S. Kirk Materne asked for commentary on the trend of data companies partnering with enterprise software vendors like ServiceNow, Salesforce, and SAP, and what this implies about the data's center of gravity. He also inquired about any adjustments to the sales compensation model for the upcoming fiscal year.

Answer

CFO Mike Scarpelli stated the main change to the sales comp model is reintroducing a quota on total contract bookings, although the bulk of variable compensation will still be based on consumption revenue. CEO Sridhar Ramaswamy explained that Snowflake is seen as the central repository for analytic and predictive value, with bidirectional integrations with partners like Salesforce and ServiceNow. EVP of Product Christian Kleinerman added that Snowflake is actively working with SAP on its business data cloud product, reinforcing a commitment to an open data environment.

S. Kirk Materne of Evercore ISI asked about the implications of autonomous agents for data consumption on the Snowflake platform and inquired about the company's strategic positioning in Europe and Asia Pacific heading into the next fiscal year.

Answer

CEO Sridhar Ramaswamy described agents as a powerful tool for creating customer value by automating complex tasks, comparing them to "21st-century CRON jobs," and stated that this value creation will naturally drive consumption. CFO Mike Scarpelli confirmed Snowflake is well-positioned internationally, focusing on the high-end and mid-market in Europe and seeing strong growth across APJ, particularly in Japan, India, and Korea.

Bill, on behalf of Kirk Materne from Evercore ISI, asked about the embedded AI functionalities that could enhance customer experience and inquired about the potential tax implications of the 'One Big Beautiful bill'.

Answer

President Matt Feierstein detailed existing AI-powered features in marketing and customer experience, noting AI is a core part of future roadmaps. EverHealth CEO Evan Berlin added that upcoming AI features like AmbientScribe aim to improve customer efficiency. Regarding the tax bill, CFO Ryan Siurek stated that analysis is ongoing but they anticipate some benefits from changes to interest deductibility limitations.

Kirk Materne from Evercore ISI inquired about the initial market reaction to the new Creative Cloud Pro offering and the company's revenue expectations from these changes in the second half of the year.

Answer

David Wadhwani, President of Digital Media, outlined the strategy of expanding offerings for different user segments, positioning CC Pro as a higher-value plan for professionals. CFO Dan Durn highlighted that core creative subscription revenue growth accelerated to 10.1% YoY, up from 7.9% a year ago. CEO Shantanu Narayen added that the full impact is yet to come as changes roll out upon customer renewal, but initial feedback has been positive.

S. Kirk Materne questioned the focus on new user acquisition over price increases, asking about potential pricing sensitivity. He also asked for color on the impact of Black Friday and Cyber Monday on the current quarter's Creative Cloud ARR.

Answer

David Wadhwani, President of Digital Media, addressed the need to balance user proliferation with monetization, noting price sensitivity at the lower end of the market (Express, Lightroom) but significant opportunity for value-based tiering for creative professionals and enterprises. Dan Durn, EVP and CFO, commented that the holiday promotional period performed as expected, reflecting a multi-year trend of sales activity shifting earlier and spreading out over a longer window.

Kirk Materne from Evercore ISI asked for an expansion on the role of GSI partners and their potential to be a source of net new ACV. He also asked for a reminder of the drivers behind the Q1 operating margin upside relative to guidance.

Answer

CEO Allan Thygesen stated that while GSI partnerships are currently immature, they are a top priority for unlocking enterprise potential with IAM, and there is strong inbound interest. CFO Blake Grayson explained that the operating margin outperformance was primarily driven by revenue beating expectations, with a smaller contribution from a slight timing shift in cloud migration costs from Q1 to later in the year.

S. Kirk Materne of Evercore ISI asked for help dimensionalizing the potential uplift in average customer spend from IAM and questioned the drivers behind the forecast for flat dollar net retention in the upcoming quarter.

Answer

CEO Allan Thygesen described the IAM uplift as 'very meaningful' but declined to provide specific numbers, emphasizing that the value proposition is strong and sales reps are required to secure an uplift. CFO Blake Grayson clarified that the 'flat' dollar net retention forecast was specific to Q1, with moderate gradual improvement expected throughout the year, driven by further gross retention gains and expansion opportunities from IAM.

Speaking on behalf of Kirk Materne, an analyst asked about the economic model for partnerships like those with Google Cloud and Microsoft Copilot Studio, and inquired about the potential for developing more industry-specific vertical solutions.

Answer

Founder & CEO Daniel Dines clarified that the goal is to build a horizontal platform that enables vertical solutions, citing the PEAK acquisition for retail and the GCP partnership for a healthcare agent as examples. He described the Microsoft integration as a broader, horizontal collaboration enabling customers to use Microsoft Copilot agents with UiPath robots, reinforcing UiPath's open platform strategy.

S. Kirk Materne asked for an update on HubSpot's internal use of AI, how it's trending, and if it is creating operating expense efficiencies, particularly in software development.

Answer

CEO Yamini Rangan detailed extensive internal AI adoption. In Q1, AI resolved 41% of support tickets, helping keep support headcount flat for 18 months. AI also booked nearly 11,000 sales meetings and improved marketing email conversion rates by up to 80%. In R&D, developers are using AI tools like GitHub Copilot and Cursor to accelerate innovation. Rangan framed these initiatives as drivers of mid-to-long-term efficiency and a source of best practices that can be shared with customers.

S. Kirk Materne asked for color on the 2025 guidance, specifically regarding the expected balance between new customer acquisition growth and average subscription revenue per customer (ASRPC) growth.

Answer

CFO Kathryn Bueker stated that net new customer additions are expected to remain in the 9,000 to 10,000 range for the next couple of quarters, with a more balanced mix of starter and pro/enterprise customers. As a result, she guided for ASRPC to stabilize in the near term and then return to low single-digit growth in the second half of 2025.

S. Kirk Materne asked for more detail on the headwinds affecting Net Revenue Retention (NRR), specifically in 'other upgrade motions,' and whether these were specific to certain hubs, geographies, or just the macro environment.

Answer

CFO Kathryn Bueker responded that the pressure on NRR is consistent with recent quarters and is broad-based across all upgrade motions, including edition upgrades, cross-sell, and contact tier upgrades, rather than being specific to any one hub. She noted positives remain strong customer dollar retention and stabilizing downgrades, with green shoots in seat upgrades, and expects similar trends in Q4.

An analyst on behalf of Kirk Materne asked about the potential impact of tariffs on the parts supplier business and inquired about the efficiency gains and learning curve associated with the new Medhub solution.

Answer

CEO Githesh Ramamurthy stated that tariffs have a minimal direct impact on CCCS's subscription-based model but have increased customer demand for its data and insights. He also explained that Medhub can deliver significant ROI, with low single-digit point impacts on combined ratios and efficiency gains of over 20% for customers.

S. Kirk Materne inquired about the timeline for enabling CCCS salespeople to cross-sell EvolutionIQ products and asked if CCCS is realizing internal R&D productivity gains from its own use of AI.

Answer

CEO Githesh Ramamurthy clarified that the EvolutionIQ team will continue to sell into its existing pipeline. The broader CCCS sales team will begin selling EvolutionIQ's capabilities once its medical summarization AI is integrated into the CCCS Casualty suite. Regarding internal AI use, CFO Brian Herb noted they are in the early stages. Ramamurthy added a specific example, stating that AI is proving effective at accelerating the creation of test cases in software development.

S. Kirk Materne inquired about the primary bottlenecks slowing the adoption of CCC's newer products and whether the rising cost per claim could shift contract discussions away from volume variability.

Answer

CEO Githesh Ramamurthy explained that new product adoption is gated by the customer's internal processes for piloting, testing, and calculating ROI, not a macro issue. He noted that while claim volumes are soft due to consumer reluctance to file claims amid higher premiums, this is a cyclical trend expected to normalize. The company's focus remains on the breadth of its solutions rather than just claim frequency.

Kirk Materne asked if there has been a change in how Datadog assists its AI-native customers, specifically if there's a shift from monitoring training to inference. He also inquired about how Datadog views using AI for its own internal efficiency.

Answer

CEO Olivier Pomel clarified that for AI natives, Datadog primarily helps monitor customer-facing inference workloads, as training is often done with homegrown, one-off systems. Regarding internal AI use, he and CFO David Obstler explained that current productivity gains are being reinvested to produce more, as the company is constrained by engineering and sales capacity. They believe AI will be a major long-term driver of efficiency.

S. Kirk Materne asked about the broader trends and opportunity for Datadog within the U.S. federal government sector, especially in light of the government's fiscal year-end in September.

Answer

CEO Olivier Pomel described the federal sector as a huge, early-stage opportunity with significant upside. He mentioned key customer wins and noted that Datadog is still building its go-to-market capacity for government. He also highlighted ongoing product investments to achieve higher-level certifications like FedRAMP and IL5 to capture more of this market.

S. Kirk Materne from Evercore ISI asked for more detail on the outperformance of non-AI Azure services and what makes the current environment different from past periods that saw optimization trends.

Answer

CFO Amy Hood explained that the non-AI Azure outperformance was driven by better-than-expected results from their largest enterprise customers and some improvement in their 'scale motions,' though work remains there. She noted consistent performance across geographies and attributed the success to improved execution by sales and partner teams on workloads like data and migrations.

S. Kirk Materne of Evercore ISI inquired about the key leading indicators Tyler Technologies uses to monitor business health amid macro volatility and sought clarification on the year-over-year decline in annualized recurring revenue (ARR).

Answer

President and CEO Lynn Moore stated that key health indicators like RFP and demo activity remain stable at elevated levels, showing no significant macro impact. CFO Brian Miller confirmed the change in ARR was tied to the timing-related decline in SaaS bookings for the quarter.

S. Kirk Materne of Evercore ISI asked for early customer feedback on the agentic technologies released in Yokohama and the associated consumption-based pricing model.

Answer

President, CPO and COO Amit Zavery reported very positive feedback, citing Adobe as an early adopter using the agentic platform for lead management. He explained the hybrid pricing model, where customers buy a subscription and burn down usage based on calls, offers both predictability and flexibility. He highlighted the platform's unique end-to-end capabilities, including a full orchestration engine and pre-packaged agents, as key differentiators.

S. Kirk Materne from Evercore ISI asked if the new AI agents built into Oracle's applications are impacting the strategic SaaS business and accelerating on-premise to cloud migrations, suggesting it could be a 'tipping point' for customers.

Answer

Executive Chairman and CTO Lawrence Ellison confirmed this, citing healthcare as an example where AI agents that automate clinical notes and insurance authorizations are a key differentiator driving sales of entire health systems. He stated that all Oracle applications are evolving into AI agents. CEO Safra Catz agreed it is a major motivator for cloud migration, as the embedded AI in Fusion applications delivers massive productivity gains and business insights.

S. Kirk Materne asked about Oracle's line of sight for bringing new capacity online to recognize revenue from the high demand reflected in its OCI pipeline and RPO.

Answer

CEO Safra Catz confirmed that significant new capacity is scheduled to come online in the second half of the fiscal year, which will translate into accelerated revenue growth. She also noted that while this new capacity will help fulfill existing RPO, she expects the total RPO balance to increase further in Q3 due to the signing of several very large new contracts.

On behalf of Kirk Materne, Chirag Ved asked about the progress of enterprise AI adoption compared to a year ago and inquired about revenue and ARR seasonality for the upcoming fiscal year.

Answer

CEO Tianyi Jiang noted that while AI is more accessible, enterprise rollout still depends on data quality, governance, and security, placing the industry in the early innings of deployment. CFO James Caci advised that revenue seasonality in 2025 should be similar to 2024, while ARR seasonality will likely see the second half stronger than the first, with Q1 being the lowest quarter.

S. Kirk Materne asked whether the business acceleration stems from AvePoint being reprioritized within IT budgets or from a general loosening of spending, and also inquired about the Q4 operating margin guidance.

Answer

CEO Tianyi Jiang stated it is a combination of both factors. While initial AI experiments often use separate funds, full-scale rollouts are integrated into primary IT budgets, elevating the importance of data management. CFO Jim Caci explained that the lower Q4 operating margin guidance is consistent with historical trends, as Q4 is typically a higher spending quarter for marketing and other initiatives. He also noted that approximately $1 million in expenses were shifted from Q3 into Q4.

S. Kirk Materne inquired whether Agentforce is creating a 'halo effect' for other Salesforce products, driving higher activity in core clouds before full Agentforce monetization.

Answer

President and COO Brian Millham confirmed this effect, stating it makes every core application better and more intelligent. He used the Lennar customer example to illustrate how Agentforce-generated leads flow directly into the core Sales Cloud, reinforcing the value of the 'trinity of apps, data, and agents.'

S. Kirk Materne of Evercore ISI asked about customer readiness for Agentforce, specifically how long it takes for them to organize their data and begin realizing value from the solution.

Answer

COO Brian Millham responded that the timeline varies significantly. Customers with a mature data strategy can see value in "weeks even," while those with siloed data may take "6 months even" to harmonize their information in Data Cloud. Millham emphasized that the need to power AI is creating urgency among all customers to unify their data, driving strong demand for both the technology and related implementation services.

S. Kirk Materne asked about the speed of adoption for Agentforce, questioning how quickly existing customers can deploy the technology given AI's complexity and security risks. He also sought clarity on whether Data Cloud is a prerequisite for using Agentforce or if it simply enhances its value.

Answer

CEO Marc Benioff stated that customers can get started with Agentforce 'almost immediately,' highlighting high customer satisfaction scores from early trials. He clarified that while Data Cloud is not a prerequisite, it is highly encouraged because it significantly improves accuracy. Benioff stressed the value of Salesforce's single, integrated platform, contrasting it with the risky and often unsuccessful DIY AI projects he sees customers attempting.

Kirk Materne asked about the role of AI in customer discussions and whether the need for data to train new models is creating a halo effect for LiveRamp.

Answer

CEO Scott Howe confirmed that AI is a growing topic and suggested investors may start to view LiveRamp as an AI investment vehicle. He described three ways this is manifesting: 1) providing authenticated, collaborative data to improve model efficacy; 2) helping clients create synthetic data for secure model testing; and 3) integrating with a wide array of emerging AI companies to offer more use cases, replicating their early strategy in ad tech. He stressed that it is still the early stages of this trend.