Samad Samana

Samad Samana asked for clarity on ServiceNow's M&A strategy, specifically whether the company anticipates more Armis-sized deals in 2026, and requested financial details on Armis, including its growth and scale, ahead of its expected closure.

Answer

Chairman and CEO Bill McDermott clarified that ServiceNow is an organic growth company and does not have large-scale M&A on the roadmap, emphasizing that recent acquisitions were for talent, technology, and market capture, not revenue necessity. President, Chief Product Officer, and COO Amit Zavery highlighted that acquired products like Armis and Veza are already heavily integrated using the Universal Agentic Network. President and CFO Gina Mastantuono stated that Armis is expected to close in the second half of the year, contributing about 100 basis points to subscription revenue and potentially up to 50 basis points headwind to operating margin in 2026, with full absorption by 2027.

Samad Samana asked about ServiceNow's M&A strategy for 2026, specifically whether Armis-sized deals are unlikely given the statement about not needing more TAM expansion on the security side, and requested financial details on Armis.

Answer

Chairman and CEO Bill McDermott clarified that ServiceNow is an organic growth company, with recent M&A (Moveworks, Armis, Veza) being strategic for talent, technology, and TAM expansion in security, not for revenue. He stated no large-scale M&A is on the roadmap. President, Chief Product Officer, and COO Amit Zavery detailed the architectural integration of Armis and Veza using the Universal Agentic Network. President and CFO Gina Mastantuono provided preliminary financial impacts for Armis in 2026, including a 1-point subscription revenue contribution and up to 50 basis points headwind to operating margin.

Samad Samana inquired about the $500 million+ ACV level for AI, specifically if the broadening deal volume for Now Assist indicates improved sales organization and partner effectiveness, and how the government shutdown might impact Q4 guidance.

Answer

CEO Bill McDermott confirmed that AI is now a standard part of the sales process, evidenced by Pro Plus upgrades and new business. He noted a 55x growth in assists since May, indicating strong customer value. CFO and President Gina Mastantuono congratulated the Fed team on strong Q3 performance and explained that incremental prudence was factored into Q4 guidance due to the government shutdown's potential impact on procurement timing, despite healthy demand.

Samad Samana inquired about the $500 million+ ACV level for AI, specifically if the broadening deal volume for Now Assist indicates improved sales organization and partner effectiveness, and how the government shutdown might impact Q4 guidance.

Answer

CEO Bill McDermott confirmed that AI is now a standard part of the sales process, evidenced by Pro Plus upgrades and new business. He noted a 55x growth in assists since May, indicating strong customer value. CFO and President Gina Mastantuono congratulated the Fed team on strong Q3 performance and explained that incremental prudence was factored into Q4 guidance due to the government shutdown's potential impact on procurement timing, despite healthy demand.

Samad Samana of Jefferies Financial Group Inc. inquired about the M&A framework for larger acquisitions like Moveworks and Logik.ai, specifically asking if the approach is to rewrite them into the core ServiceNow platform.

Answer

President, CPO and COO Amit Zavery clarified that the strategy is an integration play, not a rewrite. He explained that both Moveworks and Logik.ai already have strong integrations with ServiceNow, and the goal is to optimize and accelerate development while maintaining a single platform, data model, and architecture without a full rewrite.

Samad Samana sought evidence that LLM cost deflation is unlocking application-layer budgets and asked about early customer usage of the consumptive element in Pro Plus SKUs and its potential impact on cRPO.

Answer

CEO Bill McDermott explained that confidence stems from customer conversations focused on business model reinvention, where the strong ROI of AI justifies the investment. President and CFO Gina Mastantuono clarified that while past token monetization was not significant, the new agentic capabilities will 'run the meter a lot faster,' driving future consumption growth. President of Product and Engineering Amit Zavery added that agentic tasks require far more 'assists,' which will accelerate usage and monetization.

Samad Samana asked why CEO Bill McDermott specifically called out new President Amit Zavery's expertise in packaging and pricing. He also inquired how Mr. Zavery's responsibilities as President will differ from prior iterations of the role at the company.

Answer

CEO Bill McDermott explained that he deliberately highlighted Amit Zavery's packaging and pricing expertise because it's a unique professional strength that will be a 'net new add' to the company's existing skills. He described Zavery as an 'engineer's engineer' whose primary focus will be as a thought leader for the product and engineering teams, inventing new growth opportunities by leveraging his broad experience from Google and Oracle. The hire is intended to expand the bandwidth and domain expertise of the leadership team.

Samad Samana asked why CEO Bill McDermott specifically highlighted new President Amit Zavery's expertise in "packaging and pricing." He also inquired how Mr. Zavery's responsibilities as President will differ from previous iterations of the role at ServiceNow.

Answer

CEO Bill McDermott explained that he deliberately called out Amit Zavery's packaging and pricing expertise as a unique professional strength that will be a net new addition to ServiceNow's capabilities. He described Mr. Zavery as an "engineer's engineer" whose primary focus will be as a thought leader for the product and engineering organizations, inventing new growth opportunities by leveraging his broad experience from Google and Oracle.

Samad Samana sought clarification on the rationale for nudging the fiscal 2026 guidance towards the low end, asking if it was due to underlying business variables or primarily de-risking the numbers based on investor feedback. He also asked about the pricing environment for installed base renewals in both Management Solutions and PEO, specifically if traditional price increases were holding or if moderation/discounting was occurring.

Answer

CFO Bob Schrader clarified that the guidance adjustment was driven by underlying business trends, not investor feedback. He cited softer-than-expected revenue per client in Management Solutions and challenges in the Insurance Agency (part of PEO and Insurance Solutions) as key factors. He noted that PEO itself performed strongly, exceeding expectations with double-digit demand and near-record retention. CEO John Gibson stated that Paychex continues to drive value and achieve expected price realization in the existing customer base, which is higher than pre-pandemic levels, supported by added product capabilities to bundles.

Samad Samana sought clarification on the guidance recalibration to the low end, asking if it was driven by underlying business variables or de-risking due to investor feedback. He also inquired about pricing within the installed base on renewals for both management solutions and PEO.

Answer

CFO Bob Schrader clarified that the guidance adjustment was based on observed business trends (softer revenue per client in management solutions, agency headwinds in PEO/insurance) and not investor feedback, though he acknowledged the feedback. He noted PEO's strong performance (double-digit demand, near-record retention) but the overall category was impacted by the agency. CEO John Gibson stated that Paychex continues to drive value and achieve expected price realization in the installed base, which is higher than pre-pandemic levels, supported by added product capabilities.

Samad Samana questioned the implied 7-8% recurring revenue growth for Paycor (excluding float), noting it as a material slowdown from standalone performance, and asked if integration disruption was a factor. He also inquired about the 4% organic growth for Management Solutions, seeking clarity on its acceleration through the year.

Answer

CFO Bob Schrader clarified that Paycor's recurring revenue growth was closer to double digits and in line with expectations, with performance building throughout the year. President and CEO John Gibson reiterated that Paycor's performance met expectations, emphasizing the difficulty in disaggregating its specific growth due to strategic segmentation. Schrader explained that the 4% organic growth for Management Solutions in Q1 was anticipated, with acceleration expected in the back half of the year as PEO MPP headwinds anniversary and revenue synergies build.

Samad Samana from Jefferies Financial Group questioned the implied growth for Paycor in the fiscal 2026 forecast, noting it seemed low, and asked about the retention of Paycor's sales and marketing teams post-acquisition.

Answer

CFO Bob Schrader acknowledged the guidance contains conservatism but affirmed that Paycor is expected to be a strong double-digit grower. President & CEO John Gibson explained that they combined the best talent from both sales organizations, increased overall sales headcount, and are now fully staffed with the intent to grow the sales force at a higher rate than Paychex has historically.

Samad Samana questioned the implied growth for Paycor in the fiscal 2026 guidance, suggesting it seemed low, and asked about the retention and integration of Paycor's sales and marketing teams.

Answer

CFO Bob Schrader acknowledged the guidance contains conservatism but affirmed that Paycor is expected to be a strong double-digit grower. President & CEO John Gibson explained that they combined the best talent from both sales organizations, realigned territories, and increased overall sales headcount to optimize their go-to-market strategy.

Samad Samana asked if the implied Q4 growth rate for Management Solutions (ex-Paycor) is a fair starting point for next year and if there were any timing impacts on Q3 operating expenses.

Answer

Executive Robert Schrader declined to give forward guidance on segment splits but noted the ex-ERTC growth has been strong. He cautioned that using Q4 as a run-rate is complex due to integration plans that will blend the businesses. He also confirmed that Q3 operating expense growth of 1% (ex-acquisition costs) was in line with plans and did not have any unusual timing elements.

Samad Samana asked about the monetization model for the new benefits and financial wellness solutions and their expected contribution to the fiscal 2025 outlook, and also inquired about the recent pricing and discounting environment.

Answer

CEO John Gibson described the monetization as a payroll deduction model for employees who opt into the benefits. Executive Robert Schrader added that while some revenue is assumed in the plan, it is not material at this early stage and would primarily fall into the PEO and Insurance Solutions segment. Gibson reiterated that the competitive pricing environment has become more stable recently.

Samad Samana asked how much of the positive Q3 trends were carried into F4Q guidance and where conservative nodes might be, and about the impact of Navan becoming a public company on enterprise sales funnel and competitive profile.

Answer

CFO Amy Butte confirmed positive trends are in effect but reiterated Q4's seasonal lower volume, emphasizing a prudent guidance approach. CEO Ariel Cohen noted a 'market awareness boost' from the IPO, leading to more leads, increased credibility, and aggressive expansion in payments due to capital.

Samad Samana inquired about how much of the positive trends from Q3 were incorporated into Q4 guidance and where conservative assumptions were made. He also asked about the impact of Navan's public company status on its enterprise top-of-funnel activity and competitive profile.

Answer

Amy Butte (CFO) confirmed that positive trends were in effect but reiterated a prudent and conservative approach to Q4 guidance, acknowledging seasonal slowdowns to build a credible track record. Ariel Cohen (CEO) noted a significant 'market awareness boost' from being public, leading to fewer questions from sales leads, more inbound leads, increased credibility, and greater aggression in the payments space due to IPO capital.

Samad Samana asked if the full-year guidance increase for cloud revenue was organic or primarily due to Cognigy. Samana also questioned early observations on Cognigy's integration, joint go-to-market efforts, and customer reception to the 'better together' story.

Answer

CFO Beth Gaspich clarified that the cloud guidance increase was predominantly from Cognigy, with organic cloud growth expectations remaining at 12%. CEO Scott Russell noted Cognigy's positive impact on backlog and enhanced standalone business. Russell highlighted successful enablement of NICE teams and partners, strong resonance from the NICE customer base, and increased optionality for customers' transformation journeys, expecting higher win rates.

Samad Samana first asked if the cloud guidance increase was organic or primarily due to Cognigy. He then inquired about the early observations and joint go-to-market efforts for Cognigy, specifically if customers are appreciating the "better together" story.

Answer

CFO Beth Gaspich clarified that the 12% cloud growth expectation, excluding Cognigy, remains unchanged, and the increase in the range is predominantly from Cognigy. CEO Scott Russell noted Cognigy's positive impact on backlog, its strong standalone pipeline, and enhanced brand recognition. He highlighted successful enablement of NICE teams and partners, strong resonance from the NICE customer base, and the optionality Cognigy provides for customers' transformation roadmaps. Beth Gaspich added that cloud backlog growth, excluding Cognigy, was 13% year-over-year.

Samad Samana from Jefferies asked a multi-part question about pricing, first seeking clarification on a website pricing error and whether it was related to A/B testing. Second, he inquired about the extent to which Toast has implemented targeted fintech pricing moves across its existing customer base ("backbook").

Answer

CFO Elena Gomez clarified that the website pricing issue was human error, not a test, and affected a non-material portion of bookings. She stated that Toast's pricing philosophy remains unchanged, focusing on targeted and surgical price changes balanced with market share gains, and while the backbook penetration wasn't disclosed, new customers are onboarded at market rates.

Samad Samana asked for clarification on a website pricing error, inquiring if it was part of an A/B testing strategy, and also asked about the extent to which targeted fintech pricing moves have been applied to the existing customer base (backbook).

Answer

CFO Elena Gomez clarified that the website pricing issue was a human error, not a test, and was quickly corrected, noting it affected a very small percentage of bookings. Regarding pricing philosophy, she stated it remains unchanged, focusing on targeted and surgical price adjustments balanced with market share gains. She did not disclose the exact penetration into the backbook but emphasized confidence in driving price over time by delivering value, with new customers onboarding at current market rates.

On behalf of Samad Samana, Jeremy Seller asked about the competitive landscape for the Topgolf win, how such deals in non-traditional formats impact the view of the total addressable market, and if Toast Capital data shows any change in restaurant creditworthiness.

Answer

CEO Aman Narang explained that competition in specialized verticals is often from legacy providers and that wins like Topgolf demonstrate the platform's versatility, expanding the TAM. CFO Elena Gomez addressed the credit question, stating that the Toast Capital program remains very healthy, with originations growing and defaults in line with expectations, showing no signs of increased credit stress.

Samad Samana asked about the learnings from past enterprise rollouts and how they apply to new wins like Hilton, and also questioned the impact of the ARR conversion headwind on the back-half 2025 growth outlook.

Answer

CEO Aman Narang clarified that enterprise deals vary; hotel wins often involve working with franchisees post-corporate approval, while other brands may have a defined rollout plan upfront. CFO Elena Gomez stated that the H2 2024 ARR conversion benefit included onetime items that won't recur, impacting the H2 2025 growth comparison, but declined to quantify the exact impact.

Samad Samana of Jefferies asked about the go-to-market motion and margin profile for the new Branded App and SMS Marketing products, and also inquired about the rollout timeline and expected impact of recent targeted price increases.

Answer

CEO Aman Narang described the new Branded App and SMS Marketing as valuable additions to the guest suite, seeing strong early adoption from mid-market and multi-unit SMB customers. CFO Elena Gomez added that while it's too early to report specific gross margins, the company's focus on unit economics remains unchanged. Regarding pricing, Gomez reiterated that it's a long-term strategy of targeted adjustments, with the recent changes having a minimal Q3 impact but a small expected benefit in Q4.

Samad Samana asked about the current HCM demand backdrop, specifically inquiring about deal cycles, time to close, and any observed changes in deal timelines, particularly for larger customers.

Answer

Maria Black (President and CEO) indicated that the HCM demand backdrop remains "relatively stable," with deal cycles returning to pre-pandemic norms and no meaningful changes observed in Q1. Peter Hadley (CFO) addressed the full-year guidance, noting minor, offsetting movements in pays per control (down) and client funds interest revenue (up), expressing confidence in the maintained forecast. He also highlighted an extra processing day in Q2 last year and a pull-forward of SUI revenue affecting Q2 comparisons.

Samad Samana asked about the current HCM demand backdrop, specifically inquiring about deal cycles, time to close, and any observed changes in deal timelines, particularly for larger customers.

Answer

President and CEO Maria Black stated that the HCM demand backdrop remains relatively stable, with deal cycles returning to a 'normal' or pre-pandemic pace. She noted that pipeline aging continued from fiscal year 2025 into Q1, but no meaningful changes in deal timelines were observed in the first quarter.

Samad Samana questioned how the fourth-quarter bookings result compared to expectations at the time of the Analyst Day and asked for an update on the distribution strategy for the Lyric platform.

Answer

CFO Peter Hadley clarified that the Analyst Day focused on medium-term goals, not a single quarter's results, and the softer Q4 finish does not alter their long-term outlook. President & CEO Maria Black added that Lyric has seen robust sales growth and is expanding its distribution from direct enterprise sales to a global footprint, increasingly leveraging partnerships with system integrators and ERP players.

Samad Samana asked for a breakdown of the ADP Lyric bookings pipeline between existing customer upgrades and net new logos, and inquired about ADP's own hiring plans for fiscal 2025.

Answer

CEO Maria Black stated that the Lyric pipeline growth is driven by 'both' upgrades and new logos, emphasizing the modern technology is resonating well with CHROs. CFO Don McGuire confirmed that ADP has no plans to change its own hiring trajectory at this time, as the business remains solid and they are proceeding 'full speed ahead' with budgeting.

Samad Samana asked about the new Fiserv partnership, inquiring about its structure (referral vs. co-development), revenue model, and if it signals a broader ISV-driven strategy. He also asked if the ADP Lyric platform has reached an inflection point and how it's impacting enterprise bookings.

Answer

CEO Maria Black explained the Fiserv partnership is currently a referral relationship but will evolve into an integrated solution with RUN embedded in Clover and vice versa. She confirmed ADP's belief in ecosystem partnerships. Regarding Lyric, she stated it is resonating well in the market with a significantly larger pipeline year-over-year and is expected to contribute to new business bookings growth, though it will take time to materially impact overall financials.

Samad Samana questioned if the large WorkForce Software acquisition signals a change in M&A strategy and asked about the timing and rationale for rebranding Next Gen HCM to ADP Lyric.

Answer

CFO Don McGuire clarified that ADP's M&A strategy remains unchanged, focusing on additive acquisitions in tight adjacencies with recurring revenue models. CEO Maria Black explained the ADP Lyric rebranding reflects that the market and the product are ready for a flexible, human-centric global HCM platform. She noted strong interest following the HR Tech conference and positioned Lyric as a key growth story, especially when combined with WorkForce Software.

Samad Samana of Jefferies Financial Group asked about the take rate dynamics of the new 3B2C product and its potential impact on overall take rates. He also inquired about the strategic rationale for the ReturnGo acquisition, including partnership history and cross-selling opportunities.

Answer

Co-Founder and President Nir Debbi explained that the 3B2C solution has a take rate similar to the standard B2C model, with minimal overall impact, as fees are based on the consumer transaction value. Regarding ReturnGo, Debbi stated the primary goal was to acquire a best-in-class post-purchase solution to enhance their native offering. While there is a potential cross-sell opportunity with ReturnGo's client base, it was a secondary consideration.

Samad Samana requested a more precise explanation of the commercial benefits Global-e received in the revised Shopify agreement to offset the loss of exclusivity. He also asked about the thought process behind reiterating guidance amidst significant market uncertainty.

Answer

CFO Ofer Koren clarified that in exchange for moving from an exclusive to a preferred provider status, Global-e gained an exclusive feature set and improved commercial terms, which are expected to reduce S&M expenses over time, particularly in Q4. CEO Amir Schlachet added that they maintained guidance because, despite heightened uncertainty, they have not yet identified any clear directional changes in trading patterns that would warrant a revision.

Samad Samana inquired whether the take rate impact from tariffs is an anticipated event or if merchants are already making operational changes. He also asked about the net revenue retention (NRR) assumption for 2025 and any large merchant go-lives.

Answer

Executive Nir Debbi confirmed that merchants are already showing growing interest in multi-local strategies to mitigate tariff risks, which is factored into the take rate guidance. He compared the situation to Brexit, where initial complexity ultimately drove more business to Global-e. CFO Ofer Koren stated that while the 2025 new merchant backlog is solid, it does not contain any single client as large as those onboarded in late 2024. He expects NRR to be similar to or slightly lower than 2024 levels.

Samad Samana asked if merchants are already altering fulfillment strategies due to tariff concerns or if the guidance is purely anticipatory. He also inquired about the net revenue retention (NRR) assumption for 2025 and any major merchant go-lives.

Answer

President Nir Debbi confirmed that merchants are already showing growing interest in multi-local and 3P B2C options to manage tariff risks, drawing parallels to the Brexit impact. CFO Ofer Koren stated that while the 2025 new merchant backlog is solid, it does not include any single client as large as those onboarded in late 2024. He expects NRR to be similar to or slightly below 2024 levels.

Samad Samana inquired about the expected Q4 impact from Borderfree.com and whether the completion of major 2024 launches implies other large merchants are booked to go live in 2025.

Answer

CFO Ofer Koren stated that Q4 guidance includes expenses for Borderfree.com but no revenue, as the focus is on value creation. Executive Nir Debbi confirmed a robust pipeline of signed merchants set to launch in 2025, with significant contributions expected to begin in Q2 2025, similar to the 2024 cadence.

Samad Samana asked if the slowdown in payments was related to broader QSR macro trends and requested context on the $100 million pipeline, questioning how to weigh its significance relative to the company's current size.

Answer

CEO Savneet Singh clarified the payments slowdown was primarily driven by slower POS rollouts, which are often bundled, and secondarily by the QSR macro environment. Regarding the pipeline, Singh noted it's a conservative figure representing deals expected to sign within 12 months, and it excludes over $20 million in already-contracted POS revenue and the mega Tier 1 deals. He stated that pipeline coverage relative to growth targets is higher than it has been historically.

Samad Samana of Jefferies Financial Group Inc. inquired about PAR's M&A strategy, how it differs from a financial roll-up model, and how the company would approach funding a future transformative acquisition given its current balance sheet.

Answer

CEO Savneet Singh detailed that PAR's M&A strategy is product-led, focusing on deep integration to accelerate growth, increase customer stickiness, and ultimately enhance shareholder value more than a simple roll-up could. He affirmed PAR will remain aggressive with M&A, including transformative deals. Funding decisions would be based on the lowest cost of capital at the time—whether equity, cash, or debt—while ensuring future operational flexibility is maintained.

Samad Samana asked about the AI strategy for the drive-thru hardware, the reasons behind Punchh customers churning and then returning, and the financial profile of the newly acquired Delaget, including its growth rate and margins.

Answer

CEO and President Savneet Singh explained that PAR provides the hardware and an API for third-party AI vendors, monetizing through access fees. He stated Punchh customers returned after finding that broader data platforms lacked the ROI of a dedicated loyalty program. For Delaget, he noted it had ~$19M in recurring revenue, historical growth over 30%, and is expected to be a fast-growing, profitable product for PAR.

Samad Samana asked about the key learnings from the large-scale rollouts at Burger King and Wendy's and how they inform future strategy. He also questioned the company's philosophy on balancing investment against profitability now that it has achieved positive adjusted EBITDA.

Answer

CEO Savneet Singh explained that the Wendy's rollout was their fastest ever, giving them confidence to be more creative in structuring future Tier 1 deals. The Burger King experience highlighted the value of selling a combined platform (POS + back office) from the start. On investment, Singh affirmed the need to continue investing to capture the market opportunity, stating the mandate is to deliver both growth and profitability, not trade one for the other.

Samad Samana from Jefferies Financial Group inquired about the evolution of inbound marketing in an AI-driven world, asking how HubSpot is adapting its strategy as traditional search and SEO are disrupted by agentic AI.

Answer

CEO Yamini Rangan explained that HubSpot anticipated this shift away from organic search and has diversified its lead generation, with only 10% of leads now coming from blog traffic. She highlighted significant lead growth from YouTube, social media, and newsletters. Rangan stated HubSpot is now pioneering 'AI Engine Optimization' (AEO) to ensure customers are found in LLM answers, viewing it as a major new opportunity to write the next chapter beyond traditional inbound marketing.

Samad Samana from Jefferies Financial Group asked how HubSpot is evolving its inbound marketing strategy in an 'agentic AI world' where traditional search and SEO are being disrupted.

Answer

CEO Yamini Rangan explained that HubSpot anticipated this shift and has diversified its lead sources, with only 10% of leads now coming from blog traffic. She highlighted significant growth from YouTube, social media, and newsletters. Rangan introduced the concept of 'AI Engine Optimization' (AEO), noting that HubSpot is focused on being cited in LLM answers, which yields higher conversion rates. She asserted that while content delivery is changing, the importance of content is greater than ever, and HubSpot is positioning itself to lead customers through this transition.

Samad Samana inquired about the revised full-year guidance, asking for clarity on the implied quarterly growth trajectory and the impact of recent M&A on operating expenses.

Answer

CFO Kathryn Bueker stated that the guidance approach remains consistent. She clarified that while a $50 million favorable FX impact was included in the full-year revenue guidance, the Q1 revenue outperformance was not flowed through. This decision reflects increased macro uncertainty. Bueker affirmed the outlook is prudent but does not assume a full-scale downturn. She also noted that the OpEx impact from recent M&A is "very small."

Samad Samana asked about HubSpot's evolving AI monetization strategy, customer conversations regarding AI pricing and ROI, and the expected impact of AI and the Clearbit wind-down on the 2025 revenue forecast.

Answer

CEO Yamini Rangan explained that HubSpot's strategy is to embed AI across the platform to drive customer acquisition and expansion, rather than creating a separate AI add-on. She noted that while the future of AI pricing will likely be a hybrid of seat-based and usage-based models, the immediate focus is on delivering value. CFO Kathryn Bueker added that the 2025 guidance does not assume any direct revenue from AI agents but does account for AI's role in driving adoption of existing hubs.

Samad Samana inquired about the professional services revenue line, asking what is driving its inflection and how the recent acquisition of Cash flow strategically fits into the commerce vision and its potential revenue model.

Answer

CFO Kathryn Bueker clarified that the small services and other revenue line is primarily driven by momentum in the Commerce business, while margin improvement comes from efficiencies in support and services. CEO Yamini Rangan explained that the Cash flow acquisition accelerates HubSpot's commerce vision by adding sophisticated subscription management and CPQ capabilities, noting that half of Cash flow's existing customers are already HubSpot users.

Samad Samana of Jefferies inquired about the specific claims volume trend assumptions baked into the full-year guidance. He also asked about the typical timeline from a broader product rollout to revenue recognition and the potential for further expansion within those new contracts.

Answer

CFO Brian Herb clarified that the guidance assumes the recent one-percentage-point growth drag from lower claims volumes will continue through the second half of the year. CEO Githesh Ramamurthy explained that new solution adoption is a long-term process. He noted two growth dimensions: 1) existing customers who have signed contracts will continue to ramp up their usage and volume, and 2) the success of these early adopters serves as a reference to attract new customers to the platform.

Jeremy Sahler, on for Samad Samana, asked about the demand elasticity of the EvolutionIQ and Casualty businesses compared to the core auto claims business. He also inquired about the pricing model for Medhub and the nature of early customer conversations.

Answer

CEO Githesh Ramamurthy explained that EvolutionIQ's core disability and workers' comp businesses are not correlated to auto claim frequency. CFO Brian Herb added that these are non-discretionary claims and that EvolutionIQ's NDR was over 150% in Q1. Regarding Medhub, management noted tremendous customer excitement, a target of a 5:1 ROI, and confirmed it will be a subscription-based product with a material impact expected next year.

Samad Samana inquired about the expected impact of new solution packaging on net revenue retention in 2025 and what changes might be anticipated from the appointment of Tim Welsh as President.

Answer

CFO Brian Herb reiterated that pricing is not a material growth driver and is embedded in NDR. CEO Githesh Ramamurthy added that growth primarily comes from new solution adoption. Regarding the new President, Ramamurthy expressed excitement for Tim Welsh's deep insurance industry knowledge and his direct experience leading a large-scale digital transformation, which will be valuable in guiding CCCS's teams and customers.

Samad Samana asked whether the current softness in claim volume is expected to persist and inquired about the impact of recent changes to the customer-facing organization.

Answer

CFO Brian Herb stated that while the claim volume softness is not considered a permanent trend, the company is not forecasting a near-term recovery and has factored current levels into its guidance. He and CEO Githesh Ramamurthy explained that unifying the sales and client services teams is designed to improve sales velocity and create a more seamless customer experience that reflects the interconnected product architecture.

Samad Samana asked about the drivers of Workvivo's strong customer growth, the contribution from the Meta partnership, and the timing for lapping that benefit. He also inquired about the rationale behind the accelerated share buyback.

Answer

CFO Michelle Chang explained that Workvivo's growth is from both the Meta partnership and organic wins, with the Meta migration opportunity expected to normalize in the second half of the year. She noted 90% of Workvivo customers are new to Zoom. Regarding the buyback, she stated it reflects leadership's confidence and the intention to complete the remaining $1.2 billion authorization within fiscal 2026.

Samad Samana from Jefferies asked about the growth ramp for Workvivo, particularly the contribution from the Meta Workplace partnership and the outlook for its momentum.

Answer

Founder and CEO Eric Yuan confirmed the Meta partnership is a major growth driver, with Workvivo serving as the exclusive migration partner and building a strong pipeline of large enterprise deals. CFO Michelle Chang added that while the partnership is key, growth is also supported by durable factors like international expansion, channel leverage, and alignment with Zoom's strengths in industries like retail and manufacturing.

Samad Samana of Jefferies asked for a size breakdown of the 1,100 Contact Center customers and the drivers behind the record-low online churn rate.

Answer

CFO Kelly Steckelberg noted that Contact Center deals are getting larger, with ASPs nearly doubling quarter-over-quarter due to the adoption of higher-priced tiers with advanced AI features. Regarding online churn, she stated the record low 2.9% rate was especially positive in a seasonally high churn quarter. She attributed the improvement to platform enhancements, as the impact from a prior change in dunning periods was isolated to the previous quarter.

Samad Samana inquired about how AI is influencing large customers' decisions to adopt the broader Zoom platform and whether AI investments are fully factored into the fiscal year guidance.

Answer

CEO Eric Yuan stated that customers appreciate Zoom's transparent AI strategy of offering core features at no extra cost, which builds trust. CFO Michelle Chang confirmed that AI-driven trends, such as lower churn and Contact Center Elite revenue, are included in the top-line guidance, and all planned AI investments are baked into the financial outlook.

An analyst on behalf of Samad Samana asked about the macroeconomic impact on deal cycles in the second quarter, potential effects from tariffs, and whether macro uncertainty accelerates sales of AI tools.

Answer

President and COO Kira Makagon responded that AI tools are increasingly seen as a necessity for cost savings, which drives adoption of products like RingCentral Air. She stated that while the company is monitoring the macro environment, it is not currently seeing a direct impact on its business, describing deal flow and sales cycles as "business as usual."

An analyst on behalf of Samad Samana requested an update on macro and go-to-market dynamics, asking how Q2 trends in large deals versus SMB softness progressed in Q3 and what is implied in the Q4 guidance regarding customer segments and verticals.

Answer

SVP and Chief Accounting Officer Vaibhav Agarwal reported that Q3 saw continued double-digit ARR growth in the enterprise segment, though deals remain back-end loaded. He noted that the SMB segment is showing early signs of stabilization but still faces macro headwinds. Net retention remains healthy at over 99%, with stable churn, but new seat growth is an opportunity as clients rationalize headcount. Agarwal confirmed these trends are factored into the company's guidance.

Billy Fitzsimmons, on behalf of Samad Samana, asked if Alarm.com observed any material changes in consumer sentiment or account origination in April following tariff announcements. He also asked new CFO Kevin Bradley about his initial priorities.

Answer

CEO Stephen Trundle noted that while the commercial side took a brief 'breath' in early April before returning to normal, they did not discern any meaningful or sustained macro-driven changes affecting the business. CFO Kevin Bradley stated his initial priorities include becoming more familiar with external stakeholder communication, while internally, operations will largely be 'business as usual' given his long tenure.

Samad Samana from Jefferies asked about merchants' inventory sourcing, their exposure to new tariffs, and how Shopify is balancing potential demand destruction with rising average order values.

Answer

President Harley Finkelstein explained that it's still early, but Shopify's diverse merchant base mitigates concentrated risk. He noted that over half of U.S. buyers on the platform have incomes exceeding $100,000, providing some insulation. CFO Jeff Hoffmeister added that these factors are incorporated into guidance and that GMV strength continued through April and early May.

Samad Samana asked for an update on the ramp time for new sales offices, questioning if they are ramping faster than the typical 18-24 months, and also inquired about the impact of processing days on the shape of revenue throughout the year.

Answer

CEO Chad Richison confirmed that Paycom is getting more efficient at opening new offices, allowing them to "hit the ground running." However, he reiterated that it will still take the standard 24 months for a new office to reach the quota of a mature one. He also noted that any impact from the number of processing days is already factored into the company's full-year guidance.

Samad Samana asked if the AI used in customer service was built internally, its potential for monetization, and whether the company has moved past headwinds from CRR cross-selling and BETI adoption.

Answer

CEO Chad Richison confirmed the AI agent was built in-house and has improved service response rates by 25%. He also noted that BETI continues to drive significant client efficiencies, with tax resolutions down by a third year-over-year, and that the Client Relations Representatives (CRRs) are performing well, with many exceeding their quotas.

Samad Samana asked about the full-year guidance, seeking to understand what factors would enable Dayforce to reach the high end of its reiterated 15% to 17% constant currency growth range.

Answer

CEO David Ossip explained that revenue is highly predictable and modeled based on individual project go-live schedules. CFO Jeremy Johnson added that the key variable outside of their direct control is employment levels at customer sites, which have so far remained steady. Other factors contributing to performance include the timing of go-lives from strong Q4/Q1 sales, continued strength in add-on sales, and Dayforce Wallet performance.

Samad Samana questioned the change in guidance philosophy to no longer provide a quarterly Dayforce recurring ex-float outlook, asked for clarity on midterm growth expectations for that metric, and inquired about the 4x pipeline coverage.

Answer

CFO Jeremy Johnson confirmed the guidance change reflects an internal focus on total revenue, adjusted EBITDA, and free cash flow. CEO David Ossip clarified the midterm goal is for total revenue to grow around 15% while reaching 20%+ FCF margin, simplifying reporting as legacy platforms decline. He explained that the 4x pipeline coverage is their target operating model, reflecting improved sales productivity that is now near best-in-class.

Samad Samana sought clarity on the assumptions for Dayforce recurring revenue ex-float within the 2025 outlook and asked about the impact of AI on customer decision-making and deal cycles.

Answer

CFO Jeremy Johnson explained that specific 2025 breakouts are not being provided yet, citing the upcoming Q4 results and variables like FX and interest rates, but noted the 2024 growth included a tailwind from the eloomi acquisition. CEO David Ossip highlighted the Dayforce Copilot and other AI features as key differentiators that are not contributing to longer sales cycles.

Samad Samana asked about the context for raising guidance by more than the quarterly beat, given macro uncertainty, and questioned the drivers behind relatively flat sales and marketing expenses.

Answer

CFO Ryan Glenn explained the guidance reflects continued business momentum and a prudent approach that is not materially impacted by macro volatility. President and CEO Toby Williams attributed the S&M efficiency to a deliberate strategic focus on driving productivity with lower sales headcount growth, which was a core part of the fiscal year plan.

Samad Samana of Jefferies asked about the initial customer reception for the Airbase acquisition, specifically if it's being adopted upfront by new clients. He also questioned its revenue contribution and impact on the revised guidance.

Answer

Executive Chairman Steven Beauchamp stated that while it's early, they are pleased with the reception from both new clients purchasing Airbase upfront and existing clients showing interest. CFO Ryan Glenn clarified that Airbase's contribution is consistent with prior estimates of roughly 1% of revenue for the fiscal year, and the strong guidance raise was driven by core Paylocity business overperformance.

Samad Samana asked about the confidence behind raising full-year guidance by the full Q1 beat and more, and inquired about the product integration timeline for Airbase to achieve a 'single pane of glass' experience.

Answer

CFO Ryan Glenn explained the guidance increase was driven by the Q1 beat, strong sales momentum, and the impact of the Airbase acquisition. Executive Chairman Steven Beauchamp detailed that the Airbase integration will be incremental, with significant improvements in the first year and deeper integration of workflows and reporting occurring between 12 and 24 months.

Samad Samana of Jefferies inquired if major partnerships include co-selling motions with incentives for partner sales teams and asked about the assumed AI revenue impact on gross margins in the medium-term model.

Answer

Executives Michael Burkland and Andy Dignan confirmed that partnerships feature co-selling and mutual incentives. President Bryan Lee stated the medium-term model assumes current AI momentum, with potential upside from accelerated adoption. He clarified that AI products carry high gross margins (high 70s-low 80s) and are considered a tailwind, not a headwind, to overall gross margin.

Samad Samana asked about the demand environment, questioning if conditions had improved before the tariff-related pause, and inquired about the priorities within capital management, specifically between buybacks and divestitures.

Answer

CEO Mark Barrenechea noted that deal terms had stabilized before the tariff announcements caused a shock-induced pause. He highlighted a new positive dynamic where non-U.S. customers are seeking local deployments, creating an opportunity for OpenText. CFO Chadwick Westlake and Barrenechea both emphasized a flexible capital allocation strategy, pointing to the recent increase in the share buyback program as an example of deploying capital to the highest-return opportunity at the time.

Samad Samana asked for clarification on comments that a competitor's global outage is driving business to OpenText and requested a breakdown of the key drivers for the 'up to 5%' cloud revenue growth target for fiscal 2025.

Answer

CEO and CTO Mark J. Barrenechea confirmed that a recent major security outage at another vendor, which did not impact OpenText, is prompting new customer conversations about alternatives from OpenText's security portfolio. He identified the main cloud growth drivers as expansion of business clouds (Content, BN, ITOM), new SaaS offerings via Titanium X, and a stronger partner ecosystem. President and Chief Customer Officer Paul Duggan added that the shift to Net Renewal Rates (NRR) will better capture expansion from pricing, consumption, and new services, which would have put the Q4 rate in the mid-to-high 90s.

Samad Samana requested details on the early customer cohort for the Acozio e-invoicing solution and sought clarification on the investments in 'internal AI' and their potential applications.

Answer

CEO David DeStefano described the initial e-invoicing wins as a mix, including a competitive takeaway in the U.S. and a European deal that expanded into a broader product suite sale, all on core ERP platforms. CFO John Schwab clarified that the majority of AI investment is for external commercial products like 'smart categorization,' with a smaller portion dedicated to internal efficiencies.

Samad Samana asked about the historical impact of global election cycles on Vertex's business and decision-making timelines. He also inquired about the assumptions for revenue synergies from the ecosio acquisition in the initial 2025 outlook.

Answer

CEO David DeStefano explained that U.S. federal elections are less impactful than state and local tax changes, which drive complexity. Globally, government debt challenges are fueling a turn to VAT and e-invoicing, creating a tailwind. CFO John Schwab stated that the initial 2025 guidance for ecosio assumes it runs at its normal pace with very little revenue synergy activity included.

Samad Samana asked if the growing number of payment types makes forecasting monetization more difficult and if the company's methodology has become more conservative. He also requested details on the negative mix shift impacting the Spend & Expense solution.

Answer

CFO John Rettig responded that forecasting isn't necessarily more difficult and the philosophy remains a balanced view. Regarding the Spend & Expense solution, he explained that a large online ad company's policy change shifting payments from card to ACH created a headwind. This impacted the high-interchange advertising category, resulting in an approximate 4-point negative impact on S&E revenue growth for the quarter.

Samad Samana sought to understand the key drivers for the 20% core revenue growth target in FY26, asking about the mix between accelerating existing business versus contributions from new revenue streams. He also requested a breakdown of the factors behind the dollar-based net revenue retention (NRR) rate decline.

Answer

CEO René Lacerte described the path to 20% growth as a balanced approach of optimizing the current business while innovating with new solutions. CFO John Rettig attributed the NRR rate change primarily to lower TPV resulting from the macro environment, with the large FI partner contract amendment being a secondary factor. He specified that other variables had a minimal impact.

On behalf of Samad Samana, Billy Fitzsimmons asked for more detail on the factors driving management's confidence in the Microsoft business returning to double-digit growth, particularly regarding the pipeline. He also requested anecdotes on conversational AI customer wins and the product's key competitive differentiators.

Answer

President and CEO Shabtai Adlersberg explained that his confidence stems from a clear trend: the fast-growing Live recurring revenue business (up 21%) will inevitably overtake the declining CapEx business (down 12%), leading to a return to growth. He clarified this would likely be visible in 2025 and achieve double-digits in 2026. Regarding conversational AI, he differentiated Meeting Insights as an 'organizational' solution, unlike personal note-takers, emphasizing its value in enterprise-wide knowledge retention, information sharing, and onboarding, which is driving wins in sectors like government and healthcare.

Sought clarification on the embedded HCM channel, asking if the expected revenue doubling in FY '25 comes from new or existing partners and about contract structures. Also inquired about the sales organization's composition and training to support the move upmarket.

Answer

The doubling of embedded revenue in guidance is based on existing, signed partners, not future ones; contracts are mostly usage-based, though some have minimums. For the upmarket push, about one-third of the sales force is focused on the 500+ employee segment, with the company's 'best of the best' reps assigned to these larger opportunities.