Todd Coupland

Todd Coupland asked about the impact of the rise of LLMs on competitive dynamics and share shifts in the observability market, and how Datadog is affected.

Answer

Olivier Pomel, Co-founder and CEO, Datadog, stated that there hasn't been a significant change in competitive dynamics, with Datadog continuing to gain share. He acknowledged new LLM observability products but believes the market is still early and undifferentiated, emphasizing the need for integrated observability across the entire system, including LLMs.

Todd Coupland asked about the impact of the rise of LLMs on competition and share shifts within the observability market, and how Datadog anticipates being affected by these changes.

Answer

Olivier Pomel, Co-founder and CEO of Datadog, stated that there hasn't been a significant change in competitive dynamics, with Datadog continuing to gain market share. He acknowledged that LLMs introduce new functionalities and ways to serve customers, but emphasized that LLM observability should be integrated with the rest of the system, a strong footing for Datadog.

Todd Coupland asked about the range of outcomes and gating factors for the 1.6T programs expected to ramp in the second half of the year.

Answer

CEO Rob Mionis stated that Celestica has 10 active 1.6T programs, with about 5 ramping in the back half of 2026 and into 2027, and the rest in development for later ramps. He identified completing the development cycle as planned and silicon being on track as the main gating factors. CFO Mandeep Chawla added that strong 800G growth continues, 400G remains resilient, and 1.6T is coming online, with next-generation technology not cannibalizing previous generations, leading to optimism in networking.

Todd Coupland asked about the range of outcomes and gating factors for the 1.6T programs to start ramping in the second half of the year.

Answer

Rob Mionis (President and CEO) stated that Celestica has 10 active 1.6T programs, with about 5 ramping in the back half of 2026 and into 2027, and the rest in development for later ramps. He identified the gating factor as completing the development cycle as planned, with silicon on track. Mandeep Chawla (CFO) added that 800G growth is strong, 400G remains resilient, and 1.6T is coming online, noting that next-generation technology is not cannibalizing previous generations, which provides optimism for networking.

Todd Coupland asked if Celestica is single-sourced or if there are dual-sourced suppliers for its largest customers in the switching business. He also asked about the win rate implications for 1.6T ports through 2026 and 2027, referencing earlier market share stats.

Answer

Steve Dorwart (SVP and GM of Hyperscalers) stated that Celestica tends to be the preferred supplier for new technology with most large customers, often exclusive through development and ramp, with dual-sourcing excursions often returning to Celestica. Jason Phillips (President of Connectivity and Cloud Solutions) confirmed that 800G engagements are on track to translate into 1.6T, with incremental opportunities in scale-up. Steve Dorwart added that Celestica wins a disproportionate share as technologies advance, with custom Ethernet switch market share above 50% this year, and has 10 programs currently underway in 1.6T.

Todd Coupland asked if Celestica is single-sourced or if there are dual-sourced suppliers for its largest customers in the switching business. He also asked what the 1.6T win rate implies for ports through 2026 and 2027.

Answer

Steve Dorwart (SVP and GM of Hyperscalers) explained that Celestica tends to be the preferred and often exclusive supplier for new technology with most large customers, especially during development and ramp, with dual-sourcing excursions often returning to Celestica. Jason Phillips (President of Connectivity and Cloud Solutions) stated that engagements in 800G are on track to translate to 1.6T, with incremental opportunities in scale-up. Steve Dorwart added that Celestica wins a disproportionate amount of share as technologies advance, with custom Ethernet switch market share above 50% this year, and they have 10 programs currently underway in 1.6T with significant share wins.

Todd Coupland asked management to bridge the gap between large hyperscaler CapEx increase announcements and Celestica's own guidance updates. He also inquired about the company's current market share trends in AI servers.

Answer

CFO Mandeep Chawla explained that hyperscaler CapEx announcements often affirm demand forecasts Celestica has already received. President and CEO Rob Mionis added that silicon lead times are another key leading indicator. On servers, Mionis stated they are gaining share with their largest customers on AI servers due to strong execution, with a new program ramp expected to drive significant momentum.

Todd Coupland from CIBC World Markets asked for clarification on the disconnect between Celestica's strong CCS growth outlook and the consensus forecast for low double-digit hyperscaler CapEx growth in 2025. He also asked for commentary on the broader market adoption of generative AI applications.

Answer

CFO Mandeep Chawla clarified the 2025 outlook (8% total, low-double-digit for CCS) and noted it reflects the current consensus for hyperscaler CapEx. He explained Celestica's high-confidence view is based on robust 12-month customer forecasts, though Q4 is less firm, and an update will come in January. Jason Phillips, President of CCS, noted that overall CapEx figures include facilities and power, not just hardware spend. Mandeep Chawla concluded by highlighting that new program wins for 2026 and beyond provide confidence in continued momentum.

Todd Coupland asked for insights into the fluctuating growth rate of the QNX business (15% last quarter, 10% this quarter, 15% guidance) and how to project its trend for fiscal 2027. He also questioned if the improved decline rates in the Secusmart business indicate a 'new normal' and if it could become a growth segment in fiscal 2027, driven by defense spending.

Answer

CFO Tim Foote stated that double-digit growth for QNX is solid, and the Q4 backlog number will be a key indicator for fiscal 2027, with strong royalties from new programs driving current growth. CEO John Giamatteo noted a strong pipeline for Secure Communications, acknowledging the business can be lumpy, but expressed satisfaction with navigating the U.S. government shutdown. Both executives indicated that detailed fiscal 2027 guidance would be provided next quarter.

Todd Coupland inquired about the fluctuating growth rate of the QNX business (15% last quarter, 10% this quarter, 15% guided) and how to project its trend into fiscal 2027. He also asked if the improved decline rates in Secusmart indicate a new normal and if the business could become a growth segment in fiscal 2027, given positive defense spending trends.

Answer

CFO Tim Foote stated that fiscal 2027 guidance for QNX would be provided in 90 days, but expressed positive sentiment about double-digit growth, strong backlog momentum, and traction from growth accelerators like QNX Sound and Cabin. CEO John Giamatteo noted that while Secure Communications pipeline is strong, lumpiness in the space means one quarter doesn't set a trend. He expressed satisfaction with navigating the U.S. government shutdown and looks forward to converting the pipeline for fiscal 2027.

Todd Adair Coupland asked for an update on the QNX backlog and its growth during the quarter. He also questioned the sustainability of QNX's double-digit growth, given the 15% growth in Q2 and the implied double-digit growth for the second half of the fiscal year.

Answer

CFO Tim Foote clarified that QNX backlog metrics are provided annually due to quarterly volatility in design win dollars, noting Q1 was weaker but Q2 was ahead of plan with a solid pipeline. CEO John Giamatteo expressed optimism for sustained double-digit growth, citing progress from booked deals, new programs, the vehicle platform initiative, SDP8 adoption, QNX Sound wins, and diversification into the General Embedded Market (GEM).

Todd Adair Coupland from CIBC asked for an update on QNX's backlog and its growth during the quarter. He also questioned the sustainability of QNX's double-digit growth, given the 15% growth in Q2 and implied double-digit growth for the second half of the year.

Answer

CFO Tim Foote explained that QNX backlog is an annual metric due to quarterly volatility in design win dollars, noting Q1 was weaker but Q2 was ahead of plan with a solid pipeline for the second half, with a full update expected at Q4. CEO John Giamatteo affirmed confidence in sustainable double-digit growth, citing progress from existing bookings, new programs, the vehicle platform initiative, SDP8 adoption, the QNX Sound win, and successful diversification into the General Embedded Market (GEM), including robotics.

Todd Coupland requested an update on BlackBerry's QNX backlog and its growth during the quarter. He also questioned the sustainability of QNX's double-digit revenue growth, given the 15% growth in Q2 and implied double-digit growth for the second half of the fiscal year.

Answer

CFO Tim Foote clarified that QNX backlog is an annual metric due to quarterly volatility in design win dollars, with Q1 being weaker but Q2 showing strong recovery and exceeding plans, and a solid pipeline for the second half. He confirmed the next backlog update would be at the end of Q4. CEO John Giamatteo expressed optimism for sustained double-digit growth, citing progress from already booked deals, new programs, the vehicle platform initiative, SDP 8 adoption, the QNX Sound win, and successful diversification into the General Embedded (GEM) market, including robotics.

Todd Coupland asked about the QNX macro environment, questioning if the anticipated automotive production slowdowns are already being realized or if the Q2 guidance is simply precautionary, and inquired about confidence for the rest of the fiscal year.

Answer

CFO Tim Foote explained that Q2 royalty revenue reflects Q1 production, and the final data is not yet available. He confirmed they have priced in a reasonable amount of risk for potential disruption into the guidance. Foote added that while the situation is fluid, BlackBerry feels confident due to diversified revenue streams like professional services and development seats, which are not solely reliant on production volumes.

Todd Coupland of CIBC World Markets asked when BlackBerry plans to provide segmented financial results below the revenue line for its two main divisions. He also sought clarification on the 'headwind' comment regarding the IoT business and its potential impact on growth.

Answer

CEO John Giamatteo announced that detailed segmented financial reporting will be unveiled at the company's Investor Day on October 16th. Executive Tim Foote clarified that the 'headwind' refers to the ongoing, industry-wide delays in OEM software development programs, not the EV/ICE powertrain mix, to which QNX is largely agnostic. He confirmed these known delays are already factored into the full-year guidance.

Todd Coupland of CIBC inquired whether the recent acceleration in net new ARR, following a period of lumpiness, represents a new normal or if volatility should still be anticipated when forecasting for fiscal year 2027.

Answer

CFO Kiran Choudary confirmed that Q3 saw a record $94 million in net new ARR. He advised focusing on the annual net new ARR figure for business performance, as quarterly numbers can fluctuate due to deal timing and pipeline dynamics.

Todd Coupland asked about the current competitive environment, Rubrik's major sources of market share, and its deal win rate.

Answer

Rubrik CEO Bipul Sinha stated that the competitive environment remains unchanged, with Rubrik maintaining a high win rate against both legacy and new GenAI vendors. He attributed this success to the Rubrik Security Cloud's differentiated Preemptive Recovery Engine, which ensures fast recovery and a simplified cyber resilience platform.

Todd Coupland asked about the current competitive environment, Rubrik's major sources of market share, and an update on their deal win rate, following several examples of competitive wins provided by management.

Answer

CEO Bipul Sinha stated that the competitive environment remains unchanged, with Rubrik winning a vast majority of deals against both legacy and new-generation vendors. He attributed this success to their unique Rubrik Security Cloud platform, underpinned by the Preemptive Recovery Engine, which pre-calculates a clean data state for rapid recovery. Bipul emphasized Rubrik's role as an 'equal opportunity replacement' for solutions lacking robust cyber resilience capabilities.

Todd Coupland asked about the competitive environment, Rubrik's major sources of market share gains, and an update on the company's deal win rate, following examples of competitive wins provided by management.

Answer

CEO Bipul Sinha stated there's no change in the competitive environment, with Rubrik winning a vast majority of deals against both legacy and new-gen vendors due to its unique Rubrik Security Cloud platform, underpinned by the Preemptive Recovery Engine. He explained that this engine pre-calculates a clean data state for fast recovery, differentiating Rubrik and enabling customers to recover without disruption.

Todd Coupland from CIBC World Markets questioned why the forward guidance appeared conservative, even after accounting for a Q1 revenue tailwind, given the strong results and positive market drivers discussed.

Answer

Chief Financial Officer Kiran Choudary clarified that the 7% figure mentioned was a tailwind to revenue growth, not a headwind. Regarding the guidance, she explained that the company focuses on subscription ARR as its key performance metric. She noted that after a strong quarter with 23% net new ARR growth, the company passed the full beat from Q1 into the full-year guidance and raised it slightly more, reflecting confidence in the business.

Todd Coupland asked about Shopify's perspective on the current state of the consumer, broken down by geography, and the observed impact of tariffs now that more data is available.

Answer

Harley Finkelstein, Shopify's President, stated that consumer confidence, as measured by checkout activity, remains resilient, with shoppers continuing to buy from beloved brands on Shopify. He noted strong demand across channels and categories, with Europe showing particular traction. Jeff Hoffmeister, Shopify's CFO, addressed tariffs, indicating minimal change since April's announcements. He observed a slight downtick in merchants raising prices compared to previous quarters, with cross-border GMV remaining consistent at 15% and no significant impacts from de minimis elimination, highlighting merchants' adaptability.

Todd Coupland asked for Shopify's perspective on the state of the consumer, specifically by geography and in light of recent tariff data.

Answer

Harley Finkelstein, President of Shopify, indicated that consumer confidence, as measured by checkout activity on Shopify, remains resilient across channels and categories, with shoppers buying from beloved brands. He noted strong GMV ($92 billion in Q3) and traction in Europe. Jeff Hoffmeister, CFO of Shopify, added that post-tariff data shows little change, with a slight downtick in merchant price increases compared to prior quarters. He confirmed no significant impacts on merchants from tariffs, with cross-border GMV remaining consistent at 15% of total GMV.

Todd Coupland of CIBC World Markets asked if the planned 150 sales reps would be sufficient to achieve the 10-15% location growth target once fully productive. He also inquired if the strong transaction growth was due to a favorable mix or higher payment attachment rates.

Answer

Founder and CEO Dax Dasilva confirmed the 150 reps are a key part of the plan to reach the three-year 10-15% CAGR target. CFO Asha Bakshani attributed the payments growth to solid execution, as payments are now mandatory for eligible new customers. Dax Dasilva added that a significant opportunity remains to increase the 35% penetration rate in the company's efficiency markets.

Todd Coupland asked if the company could disclose whether it received any formal offers during the strategic review and inquired about the potential structure of the share buyback, such as using a substantial issuer bid.

Answer

Founder and CEO Dax Dasilva declined to share specifics of the review process but reiterated that there was strong engagement before the board concluded to remain public. CFO Asha Bakshani explained the initial $100 million buyback would be under the current NCIB, while the structure for the additional $300 million is still being evaluated, with more details to come at the Investor Day.