Siti Panigrahi • Mizuho Securities

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CFO Beth Gaspich explained that the lower cloud gross margin was an intentional, planned investment to accelerate growth, particularly in international markets and go-live timeframes. She anticipates the cloud gross margin will be relatively flat in the near term but expects operating leverage in the second half of the year from reduced marketing spend and the company's proven ability to drive efficiency, which will support margin expansion over time.

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CFO Beth Gaspich explained that the lower cloud gross margin was a deliberate, intentional investment to accelerate growth, especially in international markets and for faster customer go-live times. She anticipates the cloud gross margin will be flattish in the near term, with operating leverage in the second half of the year coming from reduced OpEx and future margin improvements as investments mature.

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CEO Khozema Shipchandler described the AI opportunity as 'materially TAM expansive,' positioning Twilio at the center of the value chain and expecting it to add material revenue over time. He declined to break out SIP trunking but confirmed that voice infrastructure is the primary contributor to the voice business.

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CEO Chad Richison stated that the demand environment remains strong and that Paycom also creates its own demand given its low market share. He asserted that the competitive landscape became 'a lot less competitive' with the launch of iWant, as he believes clients will not want to use older, less intuitive HCM systems. He expects customers to gravitate toward Paycom's command-driven experience, making it difficult for competitors to keep up.

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CEO Chad Richison gave a concise response, stating that the competitive environment regarding pricing is not different from what Paycom has seen in the past.

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CEO Nicholas Cumins stated that AI is a top priority for engineering firms facing labor shortages. He highlighted strong customer engagement with Bentley's AI-powered OpenSite+ application and a strategy to expand these capabilities. He also noted that Bentley Infrastructure Cloud is positioned to help firms use their own data to build custom AI agents, which will drive new business models and value redistribution in the ecosystem.

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Executive Chair Greg Bentley expressed that the infrastructure community is largely unconcerned about administration changes due to the visibility from the multi-year IIJA program. He noted that infrastructure is a bipartisan priority and sees potential upside from permitting reform, which could accelerate energy and grid projects, regardless of project mix changes.

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Chairman & CEO David Ossip explained that it takes about twelve months to onboard a new client, with add-on modules for existing clients going live faster. He highlighted that SI-led sales, now 45% of new sales, are crucial for handling implementation. He attributed the 40%+ ACV growth to high full-suite attachment, strong AI and Managed services uptake, and a 50% year-over-year increase in sales to the existing client base.

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President, CEO & Director Toby Williams noted that the integrated 'Paylocity for Finance' product was just launched, so go-to-market efforts are in the early stages, but feedback on the underlying Airbase product has been strong. Executive Chairman Steve Beauchamp confirmed the 8% sales force growth is for the total sales organization, with the majority of new hires joining the core HCM sales teams.

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Co-Founder and CEO Andrew Bialecki expressed the most bullish view on the conversational agent, seeing it as a source of enormous value. He stated there are no current plans to price or package the MCP server, viewing it instead as a tool for customers and a valuable source of feedback for Klaviyo's own product development by revealing how users want to query their data.

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President Andy Dignan reported that the previous quarter's deal elongation and international slowdown did not persist. CFO Bryan Lee explained the guidance incorporates conservatism due to minimal expected seasonality from macro uncertainty, longer revenue ramps for recent large software deals, and tough year-over-year comparisons from a major customer's ramp-up in the prior year.

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President and CEO Neil Barua explained that AI is a key topic in customer conversations, with PTC's differentiation lying in its ability to combine AI with contextualized product data from PLM, ALM, and SLM. While he noted positive feedback from proofs-of-concept and some customers purchasing AI modules, he cautioned that it is still early to quantify an ARR impact. Chief Revenue Officer Robert Dahdah added that the AI opportunity focuses on creating predictive insights and automating tasks.

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President & CEO Anirudh Devgan noted that while systems companies continue to expand their design efforts, there are now positive signs of recovery in the traditional semiconductor space. He pointed to strength in the memory market and highlighted a significant expansion with ADI as an example of improving demand in mixed-signal. However, he stressed that Cadence's diversified business is not dependent on the timing of a full recovery.

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CEO Safra Catz described the database business as being 'on fire,' with strong growth across license, support, and cloud services, driven by multi-cloud availability. CTO Larry Ellison provided a financial model, stating that migrating $10 billion of on-premise database support revenue to the cloud would generate at least $50 billion in total cloud revenue, as it includes compute and networking services.

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CFO & COO Ashim Gupta stated that while the new agentic platform is seeing early traction with POCs, it is not expected to have a material revenue impact this fiscal year, suggesting the NRR discussion could be revisited later. Regarding FX, Gupta reiterated that the company uses the most recent rates for its guidance and the impact was not material.

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CEO Sassine Ghazi noted seeing stabilization and 'new energy' in the industrial and automotive sectors, with early positive signals appearing in the IP portfolio. He confirmed that the trend of new companies pursuing custom silicon, whether through ASIC models or full in-house design, is a 'fantastic opportunity' for Synopsys across its EDA, IP, and hardware verification products.

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CEO Sassine Ghazi observed that after a period of being muted, the industrial and automotive sectors are showing signs of stabilization and new design activity, which is first visible in the IP portfolio. He affirmed that the trend of new companies pursuing custom silicon, whether via ASIC models or full in-house design, is a significant growth opportunity for Synopsys's entire product portfolio.

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CEO Samuel Wilson explained that the target market of upper small business to low-end enterprise shows strong interest in best-in-breed, natively integrated AI like voice bots for self-service payments and digital messaging. While he believes AI will replace some agent functions over time, he doesn't see a major trend today. He noted that even if seat counts decline, the average revenue per customer increases substantially with the adoption of AI and other next-gen technologies.

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