Terrell Tillman

Terry Tillman asked about Manhattan Associates' progress on cloud migrations for WMS, driving faster renewals, and accelerating implementation times for quicker time to value. He also inquired about the 4Q free cash flow strength and any anticipated impacts on cash taxes or the relationship of free cash flow to EBIT/EBITDA in 2026.

Answer

President and CEO Eric Clark detailed significant progress in Active Warehouse cloud conversions, noting a building pipeline and early Q1 deal closures, supported by 100 new services hires in January. He highlighted success in faster implementations, enabling fixed-fee, fixed-timeline deals, and the positive impact on the 23% year-over-year growth in ramped ARR. CFO Dennis Story indicated that cash taxes for 2026 would be similar to previous periods.

Terry Tillman inquired about the progress of cloud migrations for WMS and the development of faster renewal processes, including their potential impact on the 2026 financial model. He also asked for an update on efforts to achieve faster implementation times and time to value, and sought commentary on 4Q free cash flow strength, cash taxes, and the relationship of free cash flow to EBIT or EBITDA for 2026.

Answer

President and CEO Eric Clark detailed the building pipeline for on-premise to cloud conversions, noting early Q1 deal closures and the addition of 100 services headcount, indicating confidence in the services book. He also highlighted good progress on faster implementation times, enabling fixed-fee, fixed-timeline deals and contributing to the 23% year-over-year growth in ramped ARR. CFO Dennis Story confirmed that cash taxes for 2026 would be similar to the previous year.

Terry Tillman asked about Manhattan Associates' RPO levels, optimism, and visibility into 2026 and beyond, considering the upcoming renewal cycle, cross-selling, and conversion opportunities. He also inquired about the company's conversion strategies for on-premise customers to cloud and the projected mix of cloud for the WMS customer base.

Answer

President and CEO Eric Clark highlighted the double-digit RPO growth in Q3, normalizing for FX, and expressed optimism for 2026 driven by visibility into the major renewal cycle over the next 18 months. Regarding conversions, Mr. Clark detailed a proactive, consultative approach, including fixed-fee, fixed-timeline offers for specific warehouse customer cohorts, which has generated significant pipeline growth and early wins. He noted the increasing gap between older on-premise versions and the newest cloud offerings, especially with Agentic AI, as a key driver for conversions.

Terry Tillman asked about Manhattan Associates' RPO levels, optimism, and visibility for 2026 and beyond, considering renewals, cross-selling, and conversions. He also inquired about the company's conversion strategies for on-premise customers to cloud and the trending mix of cloud for the WMS customer base.

Answer

President and CEO Eric Clark highlighted the double-digit RPO growth in Q3 when normalizing for FX and expressed confidence for 2026 due to the upcoming major renewal cycle and pipeline visibility. He detailed a proactive, consultative approach to conversions, including fixed-fee, fixed-timeline offers for specific warehouse customer cohorts, which generated significant pipeline growth. He also noted plans to expand this strategy to other cohorts and products, emphasizing the role of Agentic AI in accelerating these changes.

Terry Tillman of Truist Securities inquired about programmatic ways to accelerate supply chain unification deals and sought an update on the company's confidence in sustaining 20%+ cloud subscription revenue growth.

Answer

President & CEO Eric Clark explained that Manhattan Associates is doubling down on unification with dedicated engineering teams and a customer product council to co-innovate. Regarding cloud revenue, Clark expressed confidence in sustaining over 20% growth, citing a large RPO, a solid pipeline, sales investments, and a significant upcoming renewal cycle in 2026 which offers opportunities for cross-selling and higher run rates.

Terrell Tillman asked about the potential impact of new tariff uncertainty on cloud bookings and RPO, questioning if the sales pipeline might see a near-term slowdown with a stronger finish to the year. He also inquired about opportunistic growth investments.

Answer

President and CEO Eric Clark stated that while they remain cautious, the Q2 pipeline is strong and they have not yet seen an adverse impact on their services business, where they would expect to see it first. Regarding investments, he confirmed that with a market-leading product portfolio, the company plans to increase investment in sales and marketing, particularly sales specialists for new products, to accelerate growth.

Terrell Tillman of Truist Securities asked about the strength of the Q4 RPO result, visibility into Q1 cloud bookings, and the nature of the services revenue slowdown, questioning if it's cyclical or structural. He also inquired about the free cash flow outlook for 2025.

Answer

CEO Eddie Capel confirmed a record Q4 and a strong start to Q1 bookings, noting no specific seasonality beyond a potential mid-year slowdown. He attributed the services pressure to customers trimming budgets for 2025, increased implementation efficiency, and higher partner utilization, while emphasizing that projects are being scaled back, not canceled. CFO Dennis Story provided a 2025 free cash flow target of approximately $300 million.

Terrell Tillman asked for more detail on the strong start to Q4, questioning if deals that slipped from Q3 had already closed. He also inquired about the potential for a year-end budget flush and the reasoning behind the 2025 services revenue forecast, probing whether it reflected customer frugality, longer rollouts, or baked-in conservatism.

Answer

CEO Eddie Capel confirmed that the strong Q4 start was a combination of both slipped Q3 deals and new Q4 deals closing. He dismissed the idea of a budget flush, noting that OpEx commitments differ from historical one-time license payments. Regarding services, Capel explained that Manhattan is becoming more efficient at implementations, the solutions require less customization, and the system integrator network is handling more work. CFO Dennis Story affirmed the company's 'underpromise and overdeliver' philosophy and stated that 5-year contract terms remain stable.

Terry Tillman asked about any improvement in Deltek's perpetual order volume in December or January, the lessening effects of DOGE, and whether ARPU lift for DAT is expected to continue, along with progress on autonomous load matching technology.

Answer

Jason Conley, Executive Vice President and Chief Financial Officer, noted that December is seasonally stronger, with two large GovCon deals slipping to H1 2026. Neil Hunn, President and Chief Executive Officer, added that pipeline build is encouraging despite slower signatures, with DOGE's impact lingering but less prominent. For DAT, Neil Hunn expects ARPU to continue improving in 2026 due to pricing and increased value offerings. He stated that autonomous matching technology is in early days but working, with a focus on building both broker and carrier sides of the network.

Terry Tillman from Truist Securities inquired about any improvement in Deltek's perpetual order volume in December or January and whether the effects of DOGE are lessening. He also asked if ARPU lift continues for DAT and if autonomous load matching technology is on track for 2027.

Answer

Jason Conley, Executive Vice President and Chief Financial Officer, noted that December is seasonally strong for Deltek, with two large government contractor deals slipping from Q4 2025 into H1 2026. Neil Hunn, President and Chief Executive Officer, added that commercial activity and pipeline build for Deltek have been encouraging, and DOGE's impact is lingering but less prominent. For DAT, Hunn confirmed expectations for continued ARPU improvement in 2026 due to pricing opportunities and increased value offerings, with autonomous matching showing encouraging early progress.

Terry Tillman asked about Roper Technologies' software bookings, specifically the high singles growth in Q3, assumptions for Q4, and the potential for government shutdown-related licenses to still close in November or December. He also inquired about DAT's strategic evolution, asking how much revenue per successful load or transaction could be garnered with newer technology like one-click automation and payments.

Answer

Neil Hunn, President and CEO, noted tough Q4 comps but strong pipelines for software bookings, not assuming Deltek licenses will hit this year but acknowledging potential for quick customer decisions. He expressed optimism for Deltek in 2026 due to the OB3 bill and new cloud/AI features. Regarding DAT, Mr. Hunn explained the strategy of scaffolding value on the network, highlighting $100-$200 in task labor savings per load and DAT's 'Switzerland' position, but deferred quantifying specific acceleration until actual momentum is observed.

Terry Tillman asked about Roper Technologies' software bookings, specifically the Q4 assumption following high singles in Q3, and the possibility of Deltek licenses closing in November or December if the government shutdown ends. He also inquired about DAT's strategic evolution and how much revenue per load or transaction could be garnered with newer technology compared to the past.

Answer

President and CEO Neil Hunn noted tougher Q4 comps for software bookings but strong pipelines, not assuming Deltek licenses will close this year but acknowledging potential quick decisions. He expressed optimism for Deltek in 2026 due to the OB3 bill and new cloud/AI features. For DAT, Mr. Hunn explained the strategy to 'scaffold more value' on the network, highlighting $100-$200 in task labor savings per load for brokers, but deferred quantifying the acceleration magnitude until more growth is observed.

Terry Tillman asked about the performance of ProCare as it moves into the organic calculation, focusing on leadership changes and payment attach rates. He also had a follow-up question on Neptune and whether its newer data solutions could reaccelerate growth.

Answer

President and CEO Neil Hunn acknowledged ProCare had a mixed first year but detailed significant countermeasures, including a new leadership team and improved go-to-market, and expects it to return to mid-teens growth. On Neptune, he described the 'meter to cash' strategy as a unique and compelling value proposition that should drive future growth, particularly with smaller municipalities.

Terrell Tillman inquired about the materiality of AI-driven revenue at Centralreach and across the broader portfolio, and also asked for the full-year outlook on core EBITDA margins.

Answer

President and CEO Neil Hunn stated that AI revenue at Centralreach is not yet material but is a significant future growth driver, positioning it as an AI leader within the portfolio. EVP and CFO Jason Conley projected that core EBITDA margins at the segment level would be up slightly for the year, with overall acquisition margins expected to improve as the year progresses.

Terrell Tillman asked for the primary drivers behind the strong enterprise software bookings, questioning the impact of macro stability, execution, and SaaS conversions. He also inquired about the timing and impact of pricing and packaging initiatives at DAT.

Answer

President and CEO Neil Hunn attributed the bookings strength to a more stable macro environment and, more importantly, to improved leadership and execution at key businesses like Deltek, Aderant, and PowerPlan. EVP and CFO Jason Conley added that DAT implemented a pricing action in Q4 on one side of its network and plans more in 2025, tied to delivering increased value through fraud prevention and network reliability.

Terrell Tillman asked for more color on the double-digit enterprise software bookings growth and its potential to create a revenue inflection point, and also inquired about the drivers behind the leadership and go-to-market changes at ProCare and Frontline.

Answer

President and CEO Neil Hunn and Executive VP and CFO Jason Conley highlighted strong performance at Deltek's enterprise segment, Vertafore's carrier space, and Aderant as drivers for the bookings growth, noting it should matriculate into revenue next year. Hunn explained the ProCare changes were to address a go-to-market improvement opportunity identified during diligence, while the Frontline change was a planned leadership transition to install a growth-oriented CEO.

Terry Tillman from Truist Securities inquired about the commonalities among the two new clients added in Q3 and Q4, and how these specific customers are expected to contribute to Exzeo's model in 2026. He also asked about the build-out of Exzeo's go-to-market capabilities and the seasonality impact on free cash flow for Q4 and the upcoming year.

Answer

Kevin Mitchell (President and Director, Exzeo Group) explained that new clients sought efficiency and improved risk selection, noting a tripling of the sales pipeline since the IPO. He detailed that sales channels, including reinsurance brokers and consultants, are actively referring clients, and the sales team build-out is progressing. Suela Bulku (CFO, Exzeo Group) clarified that Q4 managed premium converts to 2026 revenue, affirming strong free cash flow with over 50% margin and 140% net income conversion.

Terry Tillman asked if ServiceTitan is seeing a multiplier effect or benefits from its ecosystem (PE consolidators, fintech partners, OEMs) influencing new business or faster expansion. He also inquired about the seasonality of free cash flow for Q4.

Answer

CEO Ara Mahdessian confirmed that ServiceTitan sees evangelism and referrals from its ecosystem partners, as their solutions often work better when integrated with ServiceTitan, aiding go-to-market. CFO Dave Sherry stated that Q4 free cash flow typically aligns with operating income, with Q1 being the big seasonal quarter due to bonus payouts, and no unique Q4 trends.

Terry Tillman inquired about Contact Center Pro, its role in automation, whether Roto-Rooter will use it, and the general uptake of the product.

Answer

Co-Founder and CEO Ara Mahdessian clarified that Roto-Rooter will likely start with the core solution and then adopt Pro Products, with their go-live expected early next fiscal year. Co-Founder and President Vahe Kuzoyan added that Contact Center Pro is making steady progress on its roadmap with promising results, but it's still early days with more features to be released.

Terry Tillman of Truist Securities asked about the forward-looking visibility created by major customer go-lives, specifically for subscription revenue, usage revenue, and Pro Product adoption.

Answer

CFO Dave Sherry clarified that visibility on subscription revenue is high post-go-live due to contract structures. GTV and usage revenue depend on the customer's ramp. For Pro Products, the strategy is to first ensure the customer realizes ROI on the core platform, which then 'earns the right' to upsell additional products.

Terry Tillman of Truist Securities asked about the forward visibility that major customer go-lives provide for subscription revenue, usage, and Pro Product adoption.

Answer

CFO Dave Sherry clarified that while subscription revenue has high visibility upon go-live, usage revenue depends on the customer's ramp. He emphasized that the company's model is to first focus on delivering ROI with the core product, which then earns them the right to upsell Pro Products.

Terrell Tillman asked for the launch timing of the commercial CRM and its potential to accelerate growth, and also inquired about the expected relationship between free cash flow and non-GAAP operating income in FY26.

Answer

President Vahe Kuzoyan noted the commercial CRM is progressing well but did not provide a specific launch timeline, promising future updates. CFO Dave Sherry stated that for the full year, free cash flow and non-GAAP operating income are expected to be 'pretty close,' after accounting for the seasonal Q1 cash bonus outflow.

Asked about the next potential breakout Pro product following the success of Marketing Pro, and inquired about the cadence and revenue recognition timing for large consolidator deals.

Answer

The company is focused on the significant runway of its existing Pro products, but highlighted the new commercial CRM product as the commercial analog to Marketing Pro. Regarding large consolidator deals, rollouts are done site-by-site and typically completed within a year. The company is pleased with the early progress on recent large deals.

Terrell Tillman asked about the next potential breakout Pro product after Marketing Pro and inquired about the revenue recognition timing for large consolidator customers.

Answer

CEO Ara Mahdessian emphasized that the company is focused on the significant runway with its existing Pro products, including the new Sales Pro and Contact Center Pro, rather than looking for the next new thing. President Vahe Kuzoyan added that the new commercial CRM will be a key focus. CFO Dave Sherry explained that for large consolidator deals, revenue recognition depends on the contract, with rollouts typically occurring site-by-site over a period that is often less than a year.

Terry Tillman inquired about the replacement cycle opportunity, RFP activity, how Athena might assist, and an update on the independent agency segment.

Answer

David Steinberg (Co-Founder, Chairman, and CEO, Zeta Global) stated that the replacement cycle is at full scale with record RFPs, targeting legacy marketing clouds, and that Zeta Live further boosted an already record pipeline. He reported rapid growth in the independent agency segment, with each representing significant marketing revenue, and noted a dedicated sales force for them.

Terry Tillman double-clicked on the replacement cycle opportunity, asking about the increase in RFP activity and how Athena might contribute. He also inquired about potential pricing and packaging strategies to minimize inertia for clients moving to Zeta's platform. Additionally, he requested an update on the independent agency segment.

Answer

CEO David Steinberg confirmed that the replacement cycle is at full scale, with record numbers of RFPs, including the largest ever, driven by legacy marketing clouds. He stated that Athena would accelerate this cycle. David Steinberg also reported rapid growth in the independent agency segment, with each representing significant marketing revenue, and noted a dedicated sales force for them.

Bobby Dee on for Terry Tillman asked if Zeta is seeing a trend of brands in-housing marketing operations due to AI and inquired about the primary goals for the new Zeta Data and AI Lab.

Answer

CEO David Steinberg responded 'not yet' to the in-housing trend, stating that enterprises still heavily rely on agencies who, in turn, are adopting Zeta's AI tools. He described the Zeta Data and AI Lab, led by new hire Nate Johannes, as an 'innovation factory' designed to maintain Zeta's 18-24 month competitive lead in AI by developing next-generation tools.

Terrell Tillman of Truist Securities inquired about the progress of the 'One Zeta' strategy in accelerating cross-selling and use case expansion. He also asked about the outlook for scaled customer count and ARPU growth for the remainder of the year, excluding the LiveIntent acquisition.

Answer

CEO David Steinberg stated the 'One Zeta' strategy is ahead of schedule, driving significant growth and larger customer deals, with a goal of getting key customers to $100 million in annual spend. CFO Chris Greiner added that all three use cases (acquire, grow, retain) saw double-digit growth and that customers using three or more channels grew 42% YoY. Regarding the growth algorithm, Greiner noted that ARPU growth was 12% YoY and scaled customer count grew 19% YoY, and he expects this trend to continue.

Terrell Tillman of Truist Securities asked about the expected timing for the growing pipeline to convert into revenue and whether 'One Zeta' deals might have longer sales cycles. He also requested an update on the mobile channel and its potential to become a meaningful contributor in 2025.

Answer

CFO Chris Greiner confirmed that deal cycles remain consistent, with a mix of longer RFPs and faster-moving pilots. CEO David Steinberg added that the pipeline is converting steadily, supporting their confidence in the 2028 plan. Regarding mobile, Steinberg reiterated that it is expected to be a significant driver in 2026 and beyond. While growing rapidly from a zero base, it is not yet large enough to materially impact results in 2025, similar to how the CTV channel has matured over time.

Terrell Tillman of Truist Securities asked for more detail on the dramatic 60% growth in the RFP pipeline. He also questioned the pace of sales hiring and whether the current headcount included staff from the LiveIntent acquisition.

Answer

CEO David Steinberg attributed the pipeline surge to a combination of hiring senior sales reps, the success of the Zeta Live event, and strong industry analyst ratings. CFO Christopher Greiner clarified the 155-rep count does not include the 25-30 reps from LiveIntent, and that hiring remains focused on quality over quantity.

Terrell Tillman of Truist Securities asked for more detail on the drivers behind the dramatic 60% RFP pipeline growth and questioned the company's thinking on accelerating sales hiring, including whether the headcount figures included LiveIntent staff.

Answer

CEO David Steinberg attributed the pipeline surge to a combination of hiring senior sales reps, the success of the Zeta Live event, and strong industry analyst ratings. CFO Christopher Greiner confirmed the hiring pace is focused on quality over quantity and that the 155 quota carrier count does not yet include the 25-30 reps from LiveIntent, who will be additive.

Terry Tillman inquired about the typical price uplift being realized from the new platform pricing model and how it's tracking against expectations. He also asked if the recent strength in the mortgage business is due to market share gains rather than a broader industry recovery.

Answer

CFO Greg Orenstein stated that the platform pricing transition is proceeding as planned, with price uplifts targeting around 10% on an apples-to-apples basis. CEO Sean Desmond confirmed the mortgage momentum is driven by nCino's execution and competitive technology, not by reliance on an industry rebound, highlighting activity with both IMBs and depository institutions.

Robert Dee, on behalf of Terry Tillman from Truist Securities, asked what management believes is most misunderstood about the nCino story and questioned the sales strategy, pricing, and overall platform importance of the new omnichannel experiences.

Answer

CEO Sean Desmond stated he believes investors now have a good understanding of nCino's focus on execution, key metrics like ACV, and growth initiatives. He explained that the new omnichannel experience is a core part of the platform and is included in upgrades for existing customers without incremental cost, though new solution adoption would still generate new ACV.

Terrell Tillman questioned the rationale for increased go-to-market investments given recent gross bookings results and asked why operating leverage would materialize in the second half of the year after these first-half investments.

Answer

CEO Sean Desmond explained the investments target key areas with new leadership in product marketing, EMEA, and a dedicated credit union team. CFO Greg Orenstein added that nCino is shifting from 'defense' to 'offense' as the market improves, making sales investments more productive. He attributed second-half leverage to improved bookings momentum, ongoing efficiency initiatives, and benefits from AI.

Speaking for Terry Tillman, an analyst asked about market speculation regarding the CEO's potential retirement and requested an update on customer feedback for the Banking Advisor product.

Answer

Chief Executive Officer Pierre Naude addressed the succession question, stating that while a plan is in place, there is no specific retirement timeline and the focus is on finding the right successor. Regarding Banking Advisor, he reported adding 11 new customers and a significant expansion of the product's internal roadmap from 4 to 48 potential skills, noting that customer adoption is proceeding cautiously within the regulated industry.

Terrell Tillman asked about the importance of the new platform pricing structure for achieving the 50% net bookings growth target this year and for revenue acceleration next year. He also requested clarification on Q2 cash flow performance and the full-year outlook.

Answer

CEO Pierre Naude clarified that achieving this year's financial goals is not dependent on the platform pricing change, as its rollout will be gradual over 3-4 years. CFO Greg Orenstein attributed the Q2 cash flow results partly to a $4.8 million increase in unbilled accounts receivable, a timing effect related to revenue recognition under new platform pricing models. He also reiterated that the second half of the year is seasonally lower for cash generation.

Terry Tillman asked about Riskified's assumptions for second-half pipeline conversion, particularly for the holiday season, and whether the fashion and luxury vertical would see positive same-store sales. He also inquired how the rise of Agentic Commerce is impacting sales conversations and pipeline velocity.

Answer

CFO Aggie Doceva stated that while some pipeline opportunities are already committed, others will convert later in the year, expressing confidence in the second-half performance. CEO Idogal added that conversion rates are expected to be similar to historical levels. Regarding Agentic Commerce, Idogal explained it is a net benefit, opening new budget opportunities and sparking more conversations with merchants who want to be at the forefront of AI-driven commerce.

Terrell Tillman inquired about Riskified's specific strategies to expand the top of its sales funnel and sought details on the company's push for multiyear renewals, including the renewal exposure for 2025 and management's confidence in securing these longer-term contracts.

Answer

Eido Gal, Co-Founder and CEO, explained that top-of-funnel growth is being driven by the expanded multi-product platform, geographic expansion, and a more strategic approach to the mid-tier market through channels. Regarding renewals, he expressed high confidence, stating that over 70% of the 2025 book of business is already committed under longer contracts, with a 30% increase in the weighted average contract term and minimal discounting required.

Terry Tillman of Truist Securities, Inc. inquired about the nature of the front-loaded Q1 investments, asking if it was more marketing-focused or involved adding sellers. He also asked about the vitality of the law firm vertical and the progress of DealCloud penetration within it.

Answer

CEO John Hall clarified that the Q1 investments include both bringing the sales team together for training and support as well as making headcount increases to the enterprise sales force. Regarding the legal vertical, Hall described it as a 'great growth opportunity,' stating that DealCloud, enhanced with Intapp Assist, is now consistently replacing traditional horizontal CRM systems at law firms of all sizes.

Terrell Tillman asked about the potential for seasonality in Cloud ARR, whether large on-premise conversions are factored into the outlook, and if the legal vertical is seeing an inflection in growth.

Answer

CFO David Morton confirmed that seasonality is emerging, with the December and June quarters being strong. He noted that several on-premise to cloud migrations are in progress and will favorably impact results in the next 6-9 months. CEO John Hall added that the legal vertical is showing exciting trends, driven by an underlying industry optimism and a push to invest in modern cloud and AI technology, where Intapp is well-positioned.

Terrell Tillman asked about the momentum of the collaboration product following the major KPMG win and how leveraging the Azure Marketplace is reducing friction in sales cycles.

Answer

CEO John Hall confirmed the KPMG deal exemplifies the large network opportunities available and noted strong uptake for the collaboration solution, particularly in the underserved accounting market. He explained the Azure Marketplace reduces friction by allowing clients to use their committed Microsoft Azure Consumption Commitment (MACC) spend and by simplifying vendor management.

Terry Tillman posed a two-part question, asking if the Genesys architecture is a direct revenue opportunity and seeking clarification on whether the Q4 billings growth guidance was for the quarter or TTM.

Answer

CEO & President Tom Shea explained that Genesys has multiple pathways to revenue: by enabling AI services, powering new productized solutions like CPM Express, and forming the foundation for the ISV marketplace. CFO Bill Koefoed clarified that the Q4 guidance for billings growth to revert to '20% plus' was on a year-over-year basis for that specific quarter, not on a trailing-twelve-month basis.

Terrell Tillman from Truist Securities asked a two-part question about SensibleAI Forecast: what is driving its adoption, and when will its 50% bookings growth become material to the company's overall results.

Answer

CEO Tom Shea attributed the product's growing traction to validated customer results, including improved forecast accuracy and reduced effort. He noted that while the market is still learning to buy AI, OneStream is leaning into these successes and will announce further AI portfolio expansions at its upcoming conference.

Terrell Tillman of Truist Securities inquired about the company's go-to-market strategy, focusing on the Microsoft relationship and any other partners that may be at an inflection point.

Answer

Co-Founder and CEO Tom Shea highlighted the Microsoft partnership as crucial and expanding, particularly with the certified Power BI connector and joint efforts in AI and operational analytics. He also pointed to the growing importance of the entire partner ecosystem, including GSIs and specialized 'Artisan partners' like Infinity SPM, which built a solution on the OneStream exchange. Shea noted that the growing base of successful customers, evidenced by 98% gross retention, powers this entire ecosystem.

Terry Tillman of Truist Securities asked about the partner ecosystem's response to OneStream's growth and public status, and also inquired if Q4 would remain the strongest quarter for free cash flow.

Answer

CEO Tom Shea described partners as a critical enabler of scale and a trusted referral source, noting their investment is evidenced by over 100 products on the Partner Place exchange. CFO Bill Koefoed clarified free cash flow seasonality, stating that going forward, Q1 will generally be the highest seasonal quarter, although Q4 is expected to be free cash flow positive.

Terry Tillman of Truist Securities asked about the new agentic commerce tools, Universal Cart and CheckoutKit, inquiring about their availability for the holiday season and their potential impact.

Answer

President Harley Finkelstein clarified that the key products are already being rolled out. Catalog launched in Q2, and CheckoutKit, which includes Universal Cart, is in early access and already being used by partners like Microsoft Copilot. He positioned these tools as critical infrastructure to ensure Shopify merchants are at the forefront of conversational commerce, leveraging Shopify's key advantage: hosting the brands consumers love.

Terry Tillman from Truist Securities asked about the market size of Klaviyo's new service suite (help desk, conversational agents) relative to its other products and whether the go-to-market strategy would target down-market first or be broad-based.

Answer

Co-Founder and CEO Andrew Bialecki positioned the service and conversational AI market as being of an equal size to the marketing automation category. He emphasized that the vision is for every business to offer a personal AI agent, blending service and marketing. He stated they would not wait to bring this to the mid-market and enterprise, as they are already seeing significant interest from larger businesses.

Terrell Tillman from Truist Securities asked about international traction, specifically regarding new customer personas, multi-product adoption rates, and the current stage of outbound sales investments.

Answer

CEO Andrew Bialecki responded that international customer personas are similar to the U.S., starting with SMBs and now expanding upmarket at an accelerated pace. He noted that investments in local sales teams in Europe are beginning, supported by product localization in French, German, Spanish, and Italian, which is laying the groundwork for future growth.

Terrell Tillman asked about the upmarket opportunity, specifically the balance between product-led growth (PLG) and outbound sales, the ramp of the sales team, and any potential ceiling on customer size.

Answer

Co-Founder and CEO Andrew Bialecki explained that Klaviyo's PLG motion lowers the cost of acquisition by simplifying the evaluation process for larger clients. CFO Amanda Whalen added that the company will continue investing in quota-carrying capacity in 2025 and noted that the top 10 customers average over $1.5 million in ARR, indicating a high ceiling for customer size.

Terrell Tillman of Truist Securities asked about Q4 seasonality for new customer additions and whether Klaviyo anticipates lower SMS sending volumes from existing customers during the holidays due to macro concerns.

Answer

CFO Amanda Whalen responded that Q4 is historically a strong quarter for new customer adds, especially for smaller businesses. For SMS, she expects seasonally strong volumes as it's a critical channel for holiday promotions. While customers are being intentional with message counts, overall SMS subscriber lists are growing healthily.

Terry Tillman from Truist Securities asked about the sustainability of Five9's impressive enterprise AI growth and the company's visibility into its AI pipeline for both new and existing customers.

Answer

CEO & Chairman Mike Burkland confirmed the strength in AI bookings was broad-based, with net new logo AI bookings doubling year-over-year and installed base AI bookings quadrupling. He attributed this momentum to a superior AI platform and targeted go-to-market strategies like the AI Blueprint program, expressing strong confidence in its continuation.

Representing Terrell Tillman of Truist Securities, Robert Dee asked about the Five9 Fusion announcement with Salesforce and the key factors driving the doubling of 'bring your own telephony' (BYOT) adoption.

Answer

Executive Michael Burkland explained that Salesforce has been actively driving BYOT adoption within its customer base to support its AI journey. He stated that the Five9 Fusion initiative was designed to simplify the go-to-market motion, making it easier for joint customers to leverage Five9's transcript and voice streams to power Salesforce's Einstein AI.

Terry Tillman from Truist Securities asked for more detail on the significant sequential and year-over-year growth in SaaS bookings, inquiring about the specific drivers beyond new deals, such as renewals and expansions.

Answer

EVP & CFO Brian Miller explained that while new deal volume improved sequentially, the primary driver for the strong SaaS bookings was inside sales, including expansions with existing customers and a very strong renewal period. He noted that the timing of multi-year SaaS deals signed during the previous strong year contributed significantly to the renewal strength.

Terrell Tillman of Truist Securities questioned the relative visibility and execution risk between on-premise-to-cloud flips and new SaaS bookings, and asked for reasons behind the shorter average contract duration in Q1.

Answer

President and CEO Lynn Moore stated that the on-premise flip business is on pace with annual plans, while Q1's new SaaS softness was a timing issue. CFO Brian Miller explained that the average contract duration fluctuates quarterly around the standard 3-year term depending on the specific deal mix.

Terrell Tillman asked if the DOGE narrative is increasing digitization discussions at the state level and if a meaningful shift in the business mix between local and state government is expected in 2025.

Answer

CEO H. Moore responded that they are not yet hearing about DOGE from clients and do not expect a major shift in the state versus local business mix in 2025. However, he highlighted the creation of a new, dedicated state sales team as a key investment designed to drive more state-level business across the entire Tyler portfolio over the long term, though it will take time to ramp up.

Terrell Tillman posed a multi-part question about cross-selling, asking about go-to-market changes driving success, common product pairings, and the potential for increased cross-selling after clients migrate to the cloud.

Answer

CEO Lynn Moore confirmed that cloud migrations (flips) create significant upsell opportunities. She credited recent cross-selling success to internal initiatives like the 'One Tyler' sales compensation plan, which has reduced internal barriers. She provided examples of large integrated deals, noting that the comprehensive Tyler story is resonating and leading to broad product adoption beyond typical pairings.

Terry Tillman from Truist Securities inquired if customer conversations are shifting from deposit gathering to lending and asked if subscription ARR growth could accelerate in the second half given the strong pipeline.

Answer

CEO Matt Flake and President Kirk Coleman affirmed that deposit gathering remains a fundamental focus for banks and the primary anchor for relationships. CFO Jonathan Price noted that while the pipeline is strong, tougher comps mean the current 12-14% subscription ARR growth is a sustainable and durable level, with quarterly growth expected to be in the 2-4% range.

Terrell Tillman questioned the quarterly timing of 2025 renewals and the uplift from them, and also sought an update on the strategic impact of the Q2 Innovation Studio.

Answer

CFO Jonathan Price explained that renewal timing is not linear but the overall opportunity for 2025-2026 is robust. Price, along with President Kirk Coleman, highlighted that the Innovation Studio continues to gain traction, driving new deals and showing broad application across all banking segments.

Terrell Tillman from Truist Securities inquired about the specifics of the Wells Fargo deal, the significance of the relationship pricing business (PrecisionLender), and the potential for synergies with commercial digital banking. He also asked about the 2025 sales pipeline and the expected mix between large Tier 1 deals and Tier 2/3 volume.

Answer

President Kirk Coleman confirmed the Wells Fargo deal was a PrecisionLender win from Q4 2023, highlighting a rapid deployment. CFO Jonathan Price clarified that 'relationship pricing' is the company's term for the entire PrecisionLender business. CEO Matt Flake noted that while direct product synergies with digital banking are limited, having master agreements creates intangible value. For 2025, Flake anticipates a balanced pipeline with steady Tier 2/3 deal flow and a return to larger enterprise deals in the second half of the year.

Terry Tillman asked about the increasing mentions of 'replacements' and whether agentic automation is driving a trend of vendor consolidation. He also inquired if the redesigned partner program is expected to drive more growth from existing large customers or from acquiring new ones.

Answer

Founder & CEO Daniel Dines confirmed that replacements are becoming more natural as traditional RPA vendors struggle to keep pace with innovation, highlighting the benefit of consolidating AI agents and robots on a single platform. CFO & COO Ashim Gupta explained the partner program is designed to enable high-quality partners to drive adoption, particularly with mid-tier customers, viewing all partner activity as a net positive.

Terrell Tillman of Truist Securities asked about the SAP SolEx partnership, covering the timing of its rollout, the impact of Test Suite on S/4HANA migrations, and the revenue recognition mechanics for SolEx deals.

Answer

CEO Daniel Dines described the SolEx partnership as being in its early innings but already improving pipeline creation, expressing long-term optimism. He also noted tremendous momentum for Test Suite. CFO & COO Ashim Gupta clarified that revenue from SolEx deals follows normal ASC 606 accounting with no unique treatment.

Terrell Tillman of Truist Securities asked why the company maintains a conservative second-half outlook, suggesting that an increased focus on the fast-growing consumer subscription business could yield a more immediate payback.

Answer

CFO Sarah Blanchard acknowledged the potential for the consumer subscription business but explained the cautious outlook. She noted that a strategic shift toward subscriptions could temporarily impact GMV and delay some revenue recognition compared to the transactional model. While optimistic about the long-term opportunity, the company is balancing this against external macroeconomic uncertainties affecting consumer spending.

Terrell Tillman of Truist Securities sought clarification on whether the "few points of headwind" for 2025 growth applied to total revenue or just the Udemy Business segment. He also asked if the new CRO's impact would be greater in expanding existing large customer accounts or landing new ones.

Answer

CFO Sarah Blanchard clarified that the "few points of headwind" applies to total company growth, meaning the impact on the Udemy Business (UB) segment will be larger. CEO Greg Brown responded that the biggest impact will come from getting more out of existing customers, noting that Udemy is less than 10% penetrated in its enterprise customer base.

Terrell Tillman of Truist Securities asked for more details on the company's upmarket traction, specifically concerning product attach rates and the interest level of larger clients in the new Office of the CFO products.

Answer

Executive Chairman Steven Beauchamp attributed the gradual increase in upmarket attach rates to improved sales execution. He noted that the product-market fit for Airbase is strong, as its average customer size aligns with Paylocity's core market, where he expects the best initial receptivity. Upmarket appeal is expected to grow as the product's capabilities are enhanced over time.

Terrell Tillman inquired if the target customer profile or average deal size has changed in the current selling season and asked about the expected balance between new customer growth and average revenue per customer this year.

Answer

President and CEO Toby Williams responded that there are no fundamental changes, though the multi-year trend of gaining traction slightly upmarket continues. He also confirmed the expectation for fiscal '25 is that growth will remain relatively well-balanced between new client acquisition and increased revenue from the existing base, similar to the prior year.

Terry Tillman asked about the validity of a report suggesting Cisco is migrating away from Smartsheet, the general health of large enterprise customers, and the productivity ramp of the sales capacity added over the last year.

Answer

Mark Mader refuted the Cisco report, stating they signed a multiyear, multimillion-dollar extension in Q2, and affirmed the health of large customers, noting over 50 customers now exceed $1 million in ARR. Pete Godbole added that while overall sales productivity was impacted by macro conditions affecting high-velocity business, enterprise sales productivity specifically grew quarter-over-quarter and is expected to continue improving.

Asked about enterprise vendor consolidation trends in the work management space and requested an update on the net retention rate (NRR) split between enterprise and SMB segments.

Answer

Executives confirmed that enterprises are making more strategic purchasing decisions, which benefits Smartsheet's strengths in scale and governance. Enterprise NRR remained above 120%, while SMB NRR dropped slightly but stayed above 100%, with future upside expected from the new pricing model.

Asked about the go-to-market and product requirements for larger enterprise deals (1,000+ employees) and the timing of revenue recognition for such deals. Also sought confirmation on whether full-year assumptions for form filings had changed.

Answer

The company is being pulled upmarket into the enterprise segment by clients attracted to the platform's talent features. The most experienced reps are segmented to handle these larger accounts. Full-year assumptions for form filings have not changed; the Q2 overperformance was due to operational timing and does not impact the full-year outlook.

Asked about Parchment's market position, questioning if its small market share implies a greenfield opportunity or competition against legacy systems, and also inquired about the growth and resilience of the international business.

Answer

Parchment's main competitor in its core transcript business is the National Student Clearinghouse (NSC), making it a stable market. The greenfield growth opportunities lie in newer areas like badging, comprehensive learner records, and the Pathways product. The international business grew 14% on a constant currency basis and remains the fastest-growing segment, though it faces similar, if less acute, strategic headwinds as North American higher ed.