Sheldon McMeans

Sheldon McMeans asked how Snowflake plans to manage potential 'sticker shock' for customers as AI agents proliferate and new users create more applications, and whether customers truly understand the potential consumption uplift. He also inquired about the evolution of agentic workflows leveraging Snowflake for critical steps, its growth opportunity in FY27, and the role of zero-copy partnerships.

Answer

Sridhar Ramaswamy, CEO, stated that Snowflake's consumption model offers predictability, with products designed to show immediate value. To address sticker shock, Snowflake plans to introduce features like per-user caps for Snowflake Intelligence, combining consumption pricing with predictability. Regarding agentic workflows, he emphasized Snowflake's commitment to interoperability at every layer (e.g., Iceberg support, SQL on open data, semantic models, Snowflake Intelligence agents as MCP servers) to drive additional workloads and provide customer options. He confirmed that Snowflake Intelligence drives more usage and queries, with a focus on value creation.

Sheldon McMeans asked how Snowflake is addressing the risk of 'sticker shock' as AI agents proliferate and new users create more applications, and whether customers truly understand the potential consumption uplift. He also inquired about the evolution of agentic workflows leveraging Snowflake for critical steps, and if this represents a fiscal year 2027 growth opportunity, potentially through zero-copy partnerships.

Answer

CEO Sridhar Ramaswamy stated that Snowflake's consumption-based model offers predictability, and products like the sales agent have demonstrated immediate ROI by replacing legacy systems. He announced plans to launch features like per-user caps for Snowflake Intelligence to provide price predictability, aiming for a model that combines consumption pricing with clear upper limits. Regarding agentic workflows, he emphasized Snowflake's commitment to interoperability, supporting Iceberg and enabling SQL queries on open data, and making semantic models and Snowflake Intelligence agents available to other systems via MCP, ensuring customers have options while Snowflake provides world-class, easy-to-use products.

Sheldon McMeans, on behalf of Raimo Lenschow, asked about the expected contribution from newer AI-related solutions, many of which are slated for availability in the second half of 2026, to the positive growth outlook for the year.

Answer

President and CEO Steve McMillan stated that while many roadmap elements for new products are set for late Q2 and Q3, sales teams are already generating excitement among customers. He clarified that not much incremental ARR from these specific capabilities has been factored into the current financial outlook, but he views them as potential upside. Regarding the hardware refresh, he noted that the new platform is expected to go GA in late Q2/Q3, with refresh activity kicking in late 2026/2027. He sees the refresh, especially with integrated GPUs and NVIDIA AI software, as an opportunity for increased sales, but again, not much is baked into the H2 2026 model, viewing it as upside.

Sheldon McMeans inquired about the expected contribution from newer AI-related solutions, many of which were launched in October and will be available in the back half of 2026, to the positive growth outlook for the year.

Answer

Steve McMillan, President and CEO of Teradata, acknowledged that many roadmap elements for new products arrive in late Q2/Q3. While sales teams are generating excitement, the company has not factored significant incremental ARR from these specific capabilities into the current outlook, viewing them as potential upside. He also noted that the new hardware platform with built-in GPUs is expected to go GA in late Q2/Q3, with refresh activity kicking in during Q4 2026 and into 2027, also seen as potential upside not heavily baked into the 2026 model.

Sheldon McMeans, on for Raimo Lenschow, asked for more context on the drivers behind the improved customer retention rates, questioning the influence of sales execution, AI solutions, and the macro environment. He also questioned the reasoning for an expected sequential ARR decline in Q3.

Answer

President and CEO Steve McMillan confirmed that the meaningful improvement in retention rates seen in H1 was expected to continue for the full year, moving past the outlier erosion of 2024. CFO John Ederer reiterated that the Q3 dynamic is due to a change in linearity; a bigger step-up in Q2 ARR growth will lead to a flatter Q3 before another step-up in Q4, but the company remains on track for its full-year total ARR goals.

Sheldon McMeans inquired about insights from Elevate conference sign-ups and top-of-funnel metrics, and how these inform the company's outlook for the selling season. He also asked if the new AI assistant could drive platform expansion by encouraging adoption of underlying modules.

Answer

President and CEO Toby Williams expressed satisfaction with Q1 go-to-market progress, stable demand, and positive momentum in Elevate registration levels. Executive Chairman Steve Beauchamp confirmed that AI investments are driving broader product adoption and cross-sells, simplifying the user experience and increasing value, especially across IT and finance, as customers realize greater benefits from integrated AI experiences.

Sheldon McMeans from Barclays inquired about insights from sign-ups for Paylocity's upcoming Elevate conference and broader top-of-funnel metrics, and how these inform their strategy for the peak selling season. He also asked about the new generation of the AI assistant, specifically if it presents an opportunity to drive platform expansion and cross-sell to existing customers, given that maximum value is derived from using multiple underlying modules.

Answer

Toby Williams, President and CEO, reported strong Q1 results and stable go-to-market momentum, with positive year-over-year registration momentum for the Elevate conference. Steve Beauchamp, Executive Chairman, confirmed that AI investments are indeed driving broader product adoption and cross-selling to the client base, as integrated AI experiences simplify the user experience and enhance the value proposition, particularly when customers utilize more products.

Sheldon McMeans, on for Raimo Lenschow, asked about learnings from past economic cycles and whether the company is adjusting its sales message to focus more on efficiency and the Office of the CFO.

Answer

Executive Chairman Steven Beauchamp stated that Paylocity's platform has always balanced employee engagement with operational efficiency. He noted that while the efficiency message can be emphasized more in uncertain times, the company is already well-equipped to address this and sees no need for a major change in its sales script, as the value proposition is strong in any market.

Sheldon McMeans, on for Raimo Lenshow, asked about engagement at the recent Elevate conference compared to last year and questioned if Airbase has a target 'sweet spot' by customer size that could help Paylocity move upmarket.

Answer

President and CEO Toby Williams reported that the Elevate conference was a success with increased attendance and broader role representation. Executive Chairman Steven Beauchamp explained that a key appeal of Airbase was its strong overlap with Paylocity's average customer size, providing a core near-term opportunity, with the potential to move upmarket over time as the product matures.

Sheldon McMeans from Barclays Capital asked if the success of Dayforce's 'twelve-to-one' system consolidation story is a cyclical trend driven by efficiency demands or a more structural shift caused by factors like AI highlighting the value of a single database.

Answer

Chairman & CEO David Ossip argued the demand for a single system is structural and has always existed. He stated that Dayforce's unique single-database architecture provides a strong cash IRR for customers through simplification and a fundamental advantage in leveraging AI. He believes the combination of this cash return and superior AI capabilities is driving the company's strong win rates and sales momentum, as competitors lack a similarly integrated data model.

Sheldon McMeans inquired about the current macroeconomic environment compared to the previous quarter, the impact of foreign exchange rates on Q1 results and full-year guidance, and initial customer feedback on the new consumption-based pricing model for agentic automation.

Answer

CFO & COO Ashim Gupta stated the macro environment remains variable, and the company has prudently adjusted its revenue linearity based on Q2 visibility. He noted that FX impact was minimal and assumptions for the year are materially unchanged. Founder & CEO Daniel Dines added that the initial reaction to the new pricing model is positive as it ties cost closer to adoption and simplifies business case creation for customers.

Sheldon McMeans, on for Raimo Lenschow, inquired about the potential for a consumption-based model in the federal sector to align monetization with value, and whether customers were delaying decisions to wait for Agentic AI to mature.

Answer

CEO Daniel Dines confirmed that their Document Understanding solution, used by customers like the IRS, is already consumption-based. He clarified that while there is some market confusion around AI, customers view UiPath's Agentic offerings as pragmatic and capable of delivering tangible value, much like their established unattended robots.