Steve Enders

Steve Enders asked about the forward pipeline, new appointment requests, and other forward-leading indicators following a strong selling season. He also inquired about any changes in the broker channel, including the number of opportunities, capture share, and the impact of new solutions on future opportunities.

Answer

Toby Williams, CEO and President, reported that forward-leading indicators like the demand environment and pipelining activity have been stable, giving confidence for the rest of the fiscal year. He highlighted that the broker channel consistently contributes over 25% of new business, with strong momentum driven by Paylocity's execution, focus, value-added delivery, and product innovations like Benefits-Guided Setup, which enhance partnership and service to mutual clients.

Steve Enders asked if Paylocity has observed any changes in customer hiring strategies due to AI's impact on labor markets, given better-than-expected headcount. He also inquired about seasonal trends for the back half of the year, considering Airbase's less seasonal nature.

Answer

President and CEO Toby Williams stated that Paylocity tracks workforce levels and other data points weekly, and to date, there's no indication of customers changing hiring strategies due to AI. Mr. Williams noted no one-time seasonal impacts to call out for the back half of the year, acknowledging Airbase's less seasonal cadence but its small current business size.

Steve Enders from Citi asked if Paylocity has observed any indications that customers are altering their hiring strategies due to the broader impact of AI on labor markets, given that customer headcount was slightly better than expected this quarter. He also inquired about seasonal trends for the back half of the year, specifically how the less seasonal nature of Airbase might affect overall patterns compared to historical norms.

Answer

Toby Williams, President and CEO, reported no current indications that customers are changing hiring practices based on AI, noting stable workforce level data points. Regarding seasonal trends, Mr. Williams stated there are no significant one-time factors to call out, and while Airbase is less seasonal, its small contribution to the overall business means it won't discretely alter typical historical seasonal patterns.

Steve Enders asked for clarification on the full-year guidance, specifically why the Q2 revenue beat wasn't fully rolled through, and if it reflects faster SaaS conversion. He also inquired about the forward cadence of the re-upped share repurchase program and its implications for broader capital allocation.

Answer

CFO David Morton reiterated Intapp's cloud-first strategy, noting that the full guidance was passed through despite puts and takes in services and license revenue, with more details on modeling to be shared at Investor Day. Regarding the buyback, he stated that a formal capital allocation strategy would be presented at Investor Day, but for the near term, capital is being used for anti-dilution measures, reflecting confidence in the business and balance sheet.

Steve Enders from Citigroup Inc. asked for the specific ARR contribution from the Termsheet acquisition in the quarter and whether the shift to an account management structure would change the historical linearity of ARR. He also sought more detail on the evolution of the Microsoft partnership.

Answer

CFO David Morton stated that the ARR contribution from Termsheet was 'relatively immaterial,' representing less than 5% of the incremental cloud ARR added in Q4. CEO John Hall added that the Microsoft partnership has hit 'big milestones,' citing joint quota attainment, increased leverage of Azure MAC agreements to smooth deals, and better alignment with Microsoft's new professional services sales organization.

Steve Enders asked about Navan's momentum in the enterprise segment, its strategy for capturing market share from managed incumbents, and the drivers behind the strong gross bookings volume (GBV) growth, as well as factors influencing usage yield.

Answer

Ariel Cohen (CEO) highlighted strong enterprise momentum driven by customer satisfaction, industry consolidation forcing reevaluation of legacy solutions, and Navan's AI leadership. Amy Butte (CFO) attributed GBV growth to Navan's robust go-to-market motion, existing customer net revenue retention (NRR) over 110%, customer ramping, and new customer acquisition. She explained usage yield variability based on trip fees, supplier mix, and product attachment.

Steve Enders asked about Navan's enterprise business momentum, strategy for capturing market share from managed incumbents, and the drivers behind strong gross bookings volume (GBV) acceleration and usage yield variations.

Answer

CEO Ariel Cohen attributed enterprise acceleration to customer satisfaction, industry consolidation, and Navan's AI-driven platform. CFO Amy Butte explained GBV growth through net revenue retention, customer ramp benefits, and new customer momentum, while usage yield variations depend on trip fees, supplier mix, and product attachments.

Steve Enders inquired about the confidence in the tech vertical stabilizing despite recent layoffs and its projected impact on Q4 and the next fiscal year. He also asked for clarity on the Q4 guidance raise and changes in assumptions.

Answer

CEO Dan Rogers indicated stabilization in the tech vertical, noting no follow-on downgrades, expansions among large tech customers, and improved logo churn, with AI Studio mitigating seat downgrades. CFO Sonalee Parekh attributed the Q4 guidance raise to enterprise strength, international growth, NRR improvement (successful tech renewals, 12-month high monthly customer retention), and AI momentum driving larger initial deals.

Steve Enders inquired about the tech vertical, specifically regarding high-profile layoffs and the company's confidence in being near a trough, and the anticipated impact on Q4 and the next fiscal year. He also asked for clarity on the Q4 guidance raise and changes in underlying assumptions.

Answer

Dan Rogers, CEO, stated that the tech vertical is stabilizing, with no follow-on downgrade path for customers who previously downgraded. He noted expansions among large tech customers, improved logo churn, and a 12-month high in gross retention for monthly customers, with AI Studio mitigating seat downgrades. Sonalee Parekh, CFO, attributed the Q4 guidance raise to enterprise strength (15% YoY growth in $100k+ customers, exceptional strength in $50k-$100k cohort), international market strength (12% YoY growth), NRR improvement (successful large tech renewals, monthly customer retention), and continued AI momentum driving conversations and expansion.

Steve Enders of Citigroup sought to clarify the source of macro pressure, asking if the noted downgrades in enterprise and mid-market segments were new pressures extending beyond the tech vertical. He also asked for more detail on the updated revenue guidance, specifically how much risk is factored into the low end of the range.

Answer

COO & Head of Business Anne Raimondi acknowledged early signs of customer budget pressures and tool consolidation, particularly in the enterprise segment and the Americas region. She outlined mitigation strategies including enhanced customer success and the value of AI Studio. CFO Sonalee Parekh explained that the low end of the guidance range is prudent and incorporates additional macroeconomic risk and pressure that the company has not yet seen, reflecting a more bearish view on NRR and the overall environment compared to the previous quarter's outlook.

Steve Enders asked about the strategic intent behind Intuit's rollout of the in-person TurboTax experience, specifically how it might change the types of customers served or the dynamics of the upcoming tax season.

Answer

Intuit CEO Sasan Goodarzi explained that the in-person TurboTax experience, expanding to 600 locations and 20 stores, is consistent with the strategy of 'showing up where the eyeballs are.' He stated that it's about increasing reach and access for the same types of customers Intuit already serves. Goodarzi emphasized that when customers find Intuit locally, Intuit wins on experience, price, and access to money, doubling down on success in the assisted segment based on strong prior-year results.

Steve Enders asked about the expected impact of the new in-person TurboTax experience on customer types and overall dynamics during the upcoming tax season.

Answer

CEO Sasan Goodarzi explained that the strategy of expanding to 600 locations and 20 stores, including a flagship in New York, is about increasing reach and access for existing customer types. He emphasized that when customers engage locally, Intuit wins on experience, price, and access to money, reinforcing the company's commitment to winning in the assisted tax segment.

Steve Enders asked about the drivers behind the accelerated ACV growth, which exceeded expectations despite tougher comparisons, and sought guidance on ACV outlook for Q4 and the full fiscal year 2025. He also inquired about the deal environment and Pega's performance within the federal sector.

Answer

Ken Stillwell, COO and CFO of Pegasystems, attributed the strong ACV performance to the positive impact of Pega GenAI Blueprint, which is now the exclusive go-to-market strategy and gaining partner adoption. Regarding the federal business, Mr. Stillwell acknowledged the impact of the government shutdown but emphasized the long-term, strategic nature of federal projects. Alan Trefler, Founder and CEO, added that Pega Cloud for Government is seeing accelerated adoption, and IT modernization remains a bipartisan priority in the federal space.

Steve Enders with Citi inquired about the drivers behind Pegasystems' accelerated ACV growth in Q3 2025, exceeding expectations, and sought guidance on ACV outlook for Q4 and the full fiscal year 2025. He also asked for an update on the federal business deal environment.

Answer

Ken Stillwell, COO and CFO, attributed the strong ACV performance primarily to the positive impact of Pega Blueprint, which is now the exclusive go-to-market strategy and is being rapidly adopted by partners. Regarding the federal business, Mr. Stillwell noted that while government shutdowns can impact project progress, Pega's long-term strategic projects with federal clients tend to continue, with IT modernization being a bipartisan priority. Alan Trefler, Founder and CEO, added that government workflows require predictability, aligning well with Pega's offerings.

Steve Enders inquired about the current deal environment, customer focus areas, and any potential impacts from macro factors. He also asked if the strong ACV results alter the full-year outlook and requested the FX impact on ACV.

Answer

Founder & CEO Alan Trefler stated that while there is some customer anxiety, Pega has not seen specific headwinds from tariffs or other macro issues. COO & CFO Kenneth Stillwell added that GenAI is accelerating legacy transformation discussions. Stillwell also noted they intend to maintain growth momentum and quantified the currency headwind on ACV growth at approximately two percentage points for the quarter.

Steve Enders inquired about the drivers behind the Q2 billings outperformance, asking to distinguish between the impact of Enterprise Advanced momentum and a broader improvement in the deal environment. He also sought details on how the pipeline for Enterprise Advanced is expanding use cases and deal sizes.

Answer

CFO Dylan Smith explained that the billings strength was driven by a combination of strong bookings, Box Consulting performance, and early renewals, all influenced by the demand for AI capabilities in Enterprise Advanced, rather than a change in the macro environment. CEO Aaron Levie added that Enterprise Advanced is enabling larger deals by solving new, high-value use cases like automated contract management and digital asset management, with price-per-seat uplifts of 20-40% and expansion into new user groups.

Steve Enders asked about the impact of recent go-to-market leadership changes, including the new CRO and the promotion to a new Chief Customer Officer role. He also sought more detail on the efficacy of plans to mitigate the Google search impact.

Answer

Co-CEO Eran Zinman highlighted the positive impact of the new leadership, noting strong performance in the enterprise segment and explaining the CCO role is designed to improve retention and expansion. Co-CEO Roy Mann and Eran Zinman both reiterated that the Google impact is manageable, as growth also comes from expanding existing customers and they can reallocate marketing spend to other efficient channels.

Steve Enders inquired about OneStream's go-to-market approach for its AI portfolio, specifically how the company is working to build trust and accelerate adoption among CFOs.

Answer

CEO & President Tom Shea outlined a two-pronged approach. First, by productizing AI into applied solutions with predictable outcomes for specific use cases. Second, by embedding trust and transparency into the AI fabric, ensuring results are deterministic and understandable, which is a critical requirement for finance teams to accept and rely on the technology.

Steve Enders of Citigroup inquired about the impact of Appian AI on the sales pipeline and customer conversations, and sought clarity on the drivers behind the increased full-year guidance.

Answer

CEO Matt Calkins stated that AI is a significant pipeline driver that elevates customer conversations by demonstrating practical value and building a strong portfolio of case studies. CFO Serge Tanjga clarified that the guidance increase was driven by fundamental business strength and cautious optimism, with foreign exchange providing only a marginal benefit, rather than a change in guidance philosophy.

Steve Enders from Citigroup asked about the drivers behind the strong quarterly outperformance compared to recent quarters and questioned if the new iWant product has any implications for the adoption of Paycom's Beti payroll product.

Answer

CEO Chad Richison attributed the strong quarter to record sales materializing into revenue and efficiency gains from automation, which has slowed the pace of hiring. Regarding product synergy, he explained that while Beti adoption is not required to use iWant, the value of iWant increases with the number of modules used, including Beti. He reiterated his belief that Beti remains the best way to process payroll.

Steve Enders of Citigroup asked for an update on the demand environment, specifically seeking color on what Dayforce is seeing across its enterprise and mid-market segments and in the sales pipeline.

Answer

Chairman & CEO David Ossip described the buying environment as 'very strong,' consistent with the last few quarters, and highlighted the sales organization as an 'operational machine.' He stated that he sees no significant difference in demand between the segments Dayforce serves (typically 500+ employees) and that the company is experiencing broad-based success across major markets, enterprise, and its key geographies.

Steve Enders of Citigroup sought to understand the macro environment's impact on large deal delays and how that reconciles with strong bookings. He also asked about the timeline for the strategic shift away from smaller mid-market customers.

Answer

Co-CEO Owen Ryan acknowledged some macro-related deal deferrals but emphasized that improved execution and value articulation are driving overall success. CFO Patrick Villanova stated they are about two-thirds through the process of churning smaller, non-transformational mid-market accounts, noting that new customers are significantly larger and more committed, as evidenced by strong multi-year renewal performance and RPO growth.

Steve Enders requested more detail on the observed moderation in the sustainability solutions market, how that weakness is factored into the guidance, and the outlook for the pipeline. He also asked why the free cash flow margin guide didn't see a similar level of increase as the operating margin guide.

Answer

CEO Julie Iskow explained that the moderation in sustainability demand was observed in the corporate segment in the U.S. and Europe, tapering from strong momentum in late 2024. She reiterated that sustainability is less than 15% of revenue and the slowdown is fully factored into the updated guidance, while long-term demand remains durable. CFO Jill Klindt clarified that the free cash flow metric is complex, influenced by cash timing, and the provided guide is a risk-adjusted figure that properly reflects business uncertainty through year-end.

Asked for details on the new CRO's impact and focus, and the rationale behind the size of the new share buyback program versus reinvesting in growth.

Answer

The new CRO has brought a focus on use cases and an up-leveled enterprise mindset. The $150M buyback was deemed a prudent use of capital given the stock price, while still maintaining a strong balance sheet and capacity for M&A or other investments.