Operating Margin and Sales Productivity
Q: What is driving the improvement in operating margins and sales productivity?
A: Management explained that the improvement in operating margins is due to both top-line growth and cost efficiencies better than planned. Cost efficiencies are across R&D, G&A, and improved sales productivity. Sales productivity has improved due to better channel efficiency, faster ramp-up of new reps, and tenured reps producing more than last year. This gives confidence in expanding operating margins significantly in the second half.

Gross Retention Rates
Q: How are you improving gross retention rates to 90%?
A: Management acknowledged that gross retention rate has been stable at 87%, but their goal is to improve it to over 90%. They are working on initiatives globally, focusing on personnel, technology, and ensuring that migration product users see the full value of the platform to reduce churn.

Growth in Large Customers
Q: What trends are you seeing in the $100k+ customer cohort?
A: Management highlighted strong growth across all customer segments, including large accounts over $100,000, with 594 customers above this threshold. No single customer accounts for more than 2% of total revenue, indicating diversification. The platform approach encourages existing customers to expand usage, with 3 out of 5 big deals coming from existing customers expanding.

Traction Across Product Suites
Q: How is traction across your three suites, and what are customers focused on?
A: Management reported very strong growth in the Control Suite, which is the fastest-growing segment. This growth is driven by data management and governance needs as companies modernize data estates for AI strategies.

Data Readiness for Copilot
Q: How are you involved in Copilot readiness programs?
A: Management stated they are involved in many conversations as experimentation with AI continues. They believe they have the most advanced SaaS offering for Copilot readiness in the cloud. While enterprise-wide deployments are few, they see larger experimentation, especially in companies with over 5,000 employees. The focus is on ROI-driven, business outcome-driven experimentation with AI.

Opus Product Monetization
Q: When will Opus contribute materially to revenue?
A: Opus, launched in late 2023, is part of the Control Suite and is performing well, especially around governance. Management does not disclose specific monetization timelines but noted that the governance and management aspect is their strongest and fastest-growing segment.

Enterprises Deploying AI
Q: Are enterprises showing increased urgency to deploy AI?
A: Management sees continued experimentation in AI, with experimentation sizes getting larger. Enterprise-wide deployments are still few, but enthusiasm for deploying generative AI across enterprises is strong.

Consistent Execution
Q: What's driving your consistent results amid software earnings volatility?
A: Management focuses on profitable growth, controlling what they can, and providing reliable guidance. Execution across global teams and consistent growth in all regions have contributed to their consistent results.

Demand for tyGraph and AI Products
Q: How is AI demand affecting tyGraph, Opus, MyHub, EnPower?
A: Management notes that MyHub is the #1 used Teams application with hundreds of thousands of admins daily. They see strength in adoption of Microsoft Copilot and are involved in many Copilot readiness conversations. Their products position them well for pipeline building and continued business growth.

Macro Environment and Buying Behavior
Q: How is the buying behavior in the market?
A: Management states that macro conditions remain the same, with enterprise deals showing conservatism. They continue to win due to their platform approach across all industries and geographies, growing from strength to strength. Customers need to secure data before implementing AI strategies, which positions them well. Customers are also seeking to optimize costs and consolidate vendors.