Q1 2025 MongoDB Inc Earnings Call

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Speaker Change: I turn the conference over to your Speaker today, Brian Daniel.

Speaker Change: <unk> ICR. Please go ahead.

Victor: Thank you Victor good afternoon, and thank you for joining us today to review <unk> first quarter fiscal 2025 financial results, which we announced in our press release issued after the close of market today joining.

Victor: Joining me on the call today are Dave <unk>, President and CEO of <unk>, and Michael Gordon <unk> COO and CFO.

Victor: During this call we will make forward looking statements, including statements related to our market and the future growth opportunities our expectations for the macroeconomic environment in fiscal 2025, and the impact of AI.

Victor: Benefits of our product platform, our competitive landscape customer behaviors, our financial guidance and our planned investments and growth opportunities. These statements are subject to a variety of risks and uncertainties, including the results of operations or financial conditions.

Victor: <unk> actual results to differ materially from our expectations.

Victor: For a discussion of the material risks and uncertainties that could affect our actual results.

Please refer to the risk factors described in our annual report on Form 10-K for the period ended January 31, 2024 that was filed with the SEC on March 15th 2024.

Victor: Any forward looking statements made on this call reflect our views only as of today and we undertake no obligation to update them, except as required by law.

Victor: Additionally, we will discuss non-GAAP financial measures on this conference call Cleveland.

Victor: Please refer to the tables in our earnings release on the Investor Relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measures.

Speaker Change: With that I'd like to turn the call over to Dave.

Dave: Thanks, Brian and thank you to everyone for joining us today before we dive into the quarterly results I'd like to take a step back and remind everyone of <unk> foundational and durable technology advantage.

Dave: <unk> was built on a novel approach of using documents rather than tables to organize to work with data does not only on lease developer productivity by aligning to the way developers think in code.

Dave: <unk> also made it far easier to work with large volumes and variety of data.

Dave: This approach has been incredibly well suited as application development has evolved over time, most notably with the shift to building apps in the cloud. We believe these advantages will enable a similar dynamic as AI matures and it's S curve adoption cycle and customers build add production applications at scale now.

Dave: Now, let's review, our first quarter results before sharing our broader company update.

Dave: Starting with the first quarter, we generated revenue of $451 million or 22% year over year increase and above the high end of our guidance Atlas revenue grew 32% year over year, representing 70% of revenue.

Investments in growth opportunities. These.

Speaker Change: These statements are subject to a variety of risks and uncertainties, including the results of operations or financial conditions that could cause actual results to differ materially from our expectations.

Dave: We generated non-GAAP operating operating income of $33 million four 7% non-GAAP operating margin and we ended the quarter with over 49200 customers.

Speaker Change: For a discussion of the material risks and uncertainties that could affect our actual results.

Dave: Let me go into our quarterly results in a bit more detail.

Speaker Change: Please refer to the risk factors described in our annual report on Form 10-K for the period ended January 31, 2024 was filed with the SEC on March 15th 2024.

Dave: First Atlas consumption growth was below our expectations in the first quarter, we saw less seasonal improvement unexpected and this dynamic was true with customers across tenure industry size and geography. We believe this indicates a more challenging macro environment than expected at the beginning of the year.

Speaker Change: Any forward looking statements made on this call reflect our views only as of today and we undertake no obligation to update them, except as required by law.

Dave: A new dynamic we saw in Q1 was the growth rate of more recently acquired workloads start to slow down earlier than expected while.

Speaker Change: Additionally, we will discuss non-GAAP financial measures on this conference call.

Speaker Change: Please refer to the tables in our earnings release on the Investor Relations portion of our website for a reconciliation of these measures the most directly comparable GAAP financial measures.

Dave: While the macro environment had an impact. We also believe this is partly due to the go to market changes, we instituted last year, we have fine tuned our process and incentive structures to make sure. The field is focused on winning workloads with higher growth potential.

Speaker Change: With that I'd like to turn the call over to Dave.

Dave: Thanks, Brian and thank you to everyone for joining us today before we dive into the quarterly results I'd like to take a step back and remind everyone of them all going to be foundational and durable technology advantage.

Dave: Second our new business performance in Q1 wasn't up to our standards operationally, we got off to a slow start in the quarter and while we mostly caught up on new business as the quarter went on we didn't quite get there in the and importantly, our win rates remained strong and as we look out to the rest of the year, we're confident in our ability to continue winning new business.

Speaker Change: <unk> was built on the novel approach of using documents rather than tables to organize to work with data does not only unleash developer productivity by aligning to the way developers thinking code.

Speaker Change: It also made it easier to work with large volumes in variety of data.

Dave: Finally retention rates remained strong in Q1, reinforcing the quality of our products and the mission criticality of our platform.

Speaker Change: This approach has been incredibly well suited as application development has evolved over time, most notably with the shift to building apps in the cloud.

Dave: As we look to the rest of the year, we will remain focused on workload acquisition across existing and new customers. Moreover, we will prioritize three key areas, we expect to see the strongest growth and returns over the long term.

Speaker Change: We believe these advantages will enable a similar dynamic as AI matures and it's S curve adoption cycle and customers build add production applications at scale.

Dave: First we will increase our investments in the enterprise channel as we have seen with our strategic account program incremental investments in large accounts has disproportionate returns in terms of workload acquisition and subsequent account growth simply put we see the best returns at the high end of the market. So we will increase our level of investment there.

Speaker Change: Now, let's review, our first quarter results before sharing our broader company update.

Starting with the first quarter, we generated revenue of $451 million or 22% year over year increase and above the high end of our guidance Atlas revenue grew 32% year over year, representing 70% of revenue.

Dave: Second we are more optimistic about the opportunity to accelerate legacy App monetization using AI. This is a large segment of the market that has historically been hard to penetrate we recently completed the first two gen add powered monetization pilots demonstrating we can use AI to meaningfully reduce the time cost and risk of modernizing legacy relational applications.

Speaker Change: We generated non-GAAP operating operating income of $33 million four 7% non-GAAP operating margin and we ended the quarter with over 49200 customers.

Speaker Change: Let me go into our quarterly results in a bit more detail.

Speaker Change: First Atlas consumption growth was below our expectations in the first quarter, we saw less seasonal improvement unexpected and this dynamic was true with customers across tenure industry size and geography. We believe this indicates a more challenging macro environment than expected at the beginning of the year.

Dave: In particular, we see that AI can significantly help with analyzing existing code converting existing code and building unit and functional tests based on our results from our early pilots. We believe that we may be able to reduce the effort needed for app monetization by approximately 50%.

Speaker Change: A new dynamic we saw in Q1 was the growth rate of more recently acquired workloads start to slow down earlier than expected.

Dave: We have a growing list of customers across different industries, and Geos, who want to participate in this program. Consequently, we will be increasing our level of investment in this area.

Speaker Change: While the macro environment had an impact. We also believe this is partly due to the go to market changes, we instituted last year, we have fine tuned our process and incentive structures to make sure. The field is focused on winning workloads with higher growth potential.

Dave: Third although still early in terms of customers building production ready AI apps, we want to capitalize on our inherent technical advantages to become a key component of the emerging AI Tech stack custom.

Speaker Change: Second our new business performance in Q1 wasn't up to our standards operationally, we got off to a slow start in the quarter and while we mostly caught up on new business as the quarter went on we didn't quite get there in the and importantly, our win rates remained strong and as we look out to the rest of the year. We are confident in our ability to continue winning new business.

Dave: Customers tell us that our document based architecture is a powerful differentiator in NII world. The most powerful AI use cases rely on data of different types of structures, such as text image audio and video the flexibility required to handle a variety of different data structures is fundamentally at odds with legacy databases that rely on Richard schemas.

Finally retention rates remained strong in Q1, reinforcing the quality of our products and the mission criticality of our platform.

Dave: Which is what makes <unk> document model such a good fit for these AI workloads.

Speaker Change: As we look to the rest of the year, we will remain focused on workload acquisition across existing and new customers. Moreover, we will prioritize three key areas, we expect to see the strongest growth and returns over the long term.

Dave: Recognizing there are other critical elements of the AD Tech stack, we are leveraging partners to build an ecosystem that will make it easier for customers to build AI powered applications earlier. This month, we launched the <unk> application program or map a first of its kind collaboration that brings together all three hyperscale or foundation model providers.

Speaker Change: First we will increase our investments in the enterprise channel as we have seen with our strategic account program incremental investments in large accounts has disproportionate returns in terms of workload acquisition and subsequent account growth simply put we see the best returns at the high end of the market. So we will increase our level of investment there.

Dave: Generative I frameworks orchestration tools and industry, leading consultancies with map <unk> offers customers reference architectures for different AI use cases, prebuilt integrations and expert professional services to help customers get started quickly.

Speaker Change: Second we are more optimistic about the opdivo accelerated legacy App monetization using AI. This is a large segment of the market that has historically been hard to penetrate we recently completed the first two gen add powered monetization pilots demonstrating we can use AI to meaningfully reduce the time cost and risk of modernizing legacy relational applications.

Dave: Today, we are announcing that accenture as the first global systems integrator to join map and that it will establish a center of excellence focused on marketing projects. We will continue to expand the program through additional partnerships and deeper technical integrations.

Speaker Change: In particular, we see that AI can significantly help with analyzing existing code converting existing code and building unit and functional tests based on our results from early pilots. We believe that we may be able to reduce the effort needed for app monetization by approximately 50%.

Dave: We're excited to pursue the significant growth opportunities, while the timing of when these drivers will impact our results. We're very we're confident that they will support higher growth rates over our business overtime for our business over time.

Dave: Underpinning our success to date and our future growth avenues as our product leadership.

Speaker Change: We have a growing list of customers across different industries, and Geos, who want to participate in this program. Consequently, we will be increasing our level of investment in this area.

Dave: This month at our New York user Conference, we announced a number of innovations to address important customer needs.

Dave: We introduced <unk> zero, which will deliver up to a 60% performance improvement over our last release, while also materially enhancing our shorting functionality. This will allow our customers to build highly performance scalable and resilient applications. We.

Speaker Change: Third although still early in terms of customers building production ready AI apps, we want to capitalize on our inherent technical advantages to become a key component of the emerging AI Tech stack.

Speaker Change: Customers tell us that our document based architecture is a powerful differentiator in an AI world. The most powerful AI use cases rely on data of different types of structures, such as text image audio and video the flexibility required to handle a variety of different data structures is fundamentally at odds with legacy databases that rely on Richard schemas.

We announced that will bring full text search and vector search to a community server offering showcasing our commitment to open source and bringing our run anywhere strategy to the age of AI.

Finally, we unveiled the general availability of Atlas stream processing, demonstrating our commitment to expanding the capabilities of our developer data platform and ensuring that <unk> is the best platform to build real time highly distributed applications across a broad range of industries.

Speaker Change: Which is what makes <unk> document model such a good fit for these AI workloads.

Speaker Change: Recognizing there are other critical elements of the AI Tech stack, we are leveraging partners to build an ecosystem that will make it easier for customers to build app powered applications earlier. This month, we launched the <unk> AI application program or map a first of its kind collaboration that brings together all three hyper Scaler Foundation model providers.

Dave: Now I'd like to spend a few minutes reviewing the adoption trends among DB across our customer base.

Dave: Customers across industries around the world are running mission critical projects on <unk> Atlas leveraging the full power of our developer data platform, including Michelin meltwater and Toyota connected to.

Dave: Toyota connected and independent to EDA company focused on innovation AI data science and connected intelligence services migrated to <unk> Atlas after experiencing reliability issues with the original legacy database system.

Speaker Change: Generative I frameworks orchestration tools and industry, leading consultancies with map <unk> offers customers reference architectures for different AI use cases, prebuilt integrations and expert professional services to help customers get started quickly.

Dave: The team selected <unk> Atlas for its ease of deployment reliability, and multi cloud and multi region capabilities.

Today, we are announcing that accenture as the first global systems integrator to join map and that it will establish a center of excellence focused on marketing projects will continue to expand the program through additional partnerships and deeper technical integrations.

Dave: Toyota connected now use the outlets for over 150 micro services their solution benefits from 90, 999% uptime with Atlas as a platform for all data, including mission critical vehicle telematics and location data needed for emergency response services.

Speaker Change: We're excited.

We're excited to pursue the significant growth opportunities, while the timing of when these drivers will impact our results will vary we're confident that they will support higher growth rates over our business overtime for our business over time.

Speaker Change: Sure.

Speaker Change: What's the timing.

Speaker Change: Right.

Dave: I'm going to be as Toyota connected database of choice for all future services as they explore vector and AI capabilities, knowing they will get the reliability and scalability they need to meet customer needs.

Speaker Change: I'm very confident that.

Speaker Change: Okay.

Speaker Change: Is it one time or business over time.

Speaker Change: Underpinning our supplier.

Speaker Change: Underpinning our success to date and our future growth avenues as our product leadership.

Speaker Change: Earlier this month.

Speaker Change: Dan Wong Morgan Star and Sega are turning to <unk> to be to modernize applications monitoring b outlet serves as the backend for Sega Europe's customer portal platforms. The video game and Entertainment company uses data and the customer portal portal to track and analyze customer churn along with users gaming cadence and geographic location.

Speaker Change: Earlier this month at our New York user Conference, we announced a number of innovations to address important customer needs.

Speaker Change: We announced it.

Speaker Change: We introduced Mark.

Speaker Change: We introduced <unk> zero, which will deliver up to a 60% performance improvement over our last release, while also materially enhancing our shopping functionality.

Speaker Change: Yeah.

Over the last one.

Speaker Change: Alright.

Speaker Change: This will allow our customers.

Speaker Change: This will allow our customers to build highly performance scalable and resilient applications we.

Speaker Change: It's really an application we announced there will be no transfer.

Speaker Change: When Amazon Dynamo DB wasn't providing the necessary flexibility or ability to handle complex queries. They migrated to <unk> to better manage the variation of schemas within customers' records within two weeks. They had a prototype for a fully functioning database and the Sega team can now analyze extensive data to inform product development and keep customers engaged.

Speaker Change: We announced that will bring full text search and vector search to our community server offering showcasing our commitment to open source and bringing our run anywhere strategy to the age of AI.

Speaker Change: Thank you.

Speaker Change: Kissing a crypto.

Speaker Change: It's running right now.

Speaker Change: Yeah.

Speaker Change: Finally, we unveil.

Speaker Change: Finally, we unveiled the general availability of Atlas stream processing, demonstrating our commitment to expanding the capabilities of our developer data platform and ensuring that <unk> is the best platform to build real time highly distributed applications across a broad range of industries.

Speaker Change: Yes.

Speaker Change: Demonstrating our.

Speaker Change: Thank you.

Speaker Change: Great.

And ensuring that launch.

Speaker Change: Hydro <unk>.

Speaker Change: Enterprise and startups use them all going to be to deliver the next wave of AI powered applications to their customers, including ACI worldwide Dev Rev and Novo Nordisk.

Speaker Change: It was up across the broad.

Now I'd like to spend a few metrics.

Speaker Change: Now I'd like to spend a few minutes reviewing the adoption trends among DB across our customer base cuts.

Speaker Change: Yes.

Speaker Change: By harnessing journey II with <unk> Atlas vectors search Novo Nordisk, one of the world's leading health care companies is dramatically accelerating how quickly can get new medicines approved and delivered to patients.

Customers across industries.

Speaker Change: Customers across industries around the world are running mission critical projects on <unk> Atlas leveraging the full power of our developer data platform, including Michelin meltwater and Toyota connected.

Speaker Change: Wanda.

Speaker Change: Yeah.

Speaker Change: In the fourth.

Speaker Change: Michigan water and soil.

Speaker Change: Sure.

Speaker Change: The team responsible for producing clinical study reports turn to outlets when the original relational database wasn't capable of handling complex data and lack the flexibility needed to keep up with the rapid feature development now with Gen AI and the <unk> Atlas platform Novo Nordisk guest the mission critical assurances that needs to run highly regulated applications.

Speaker Change: Toyota connected and independent to EDA company focused on innovation AI data science and connected intelligence services migrated to <unk> Atlas after experiencing reliability issues with the original legacy database system.

Speaker Change: Perfect.

Speaker Change: No.

Speaker Change: Yes.

Speaker Change: Hi.

Speaker Change: In telecom.

Speaker Change: Related to <unk>.

Speaker Change: There is a lot.

Speaker Change: Yeah.

The system the team selected.

Speaker Change: The team selected <unk> Atlas for its ease of deployment reliability, and multi cloud and multi region capabilities.

Speaker Change: Wyman liability.

Speaker Change: Multipurpose capability building Toyota connected.

Speaker Change: <unk>, enabling them to generate complete reports and 10 minutes rather than 12 weeks.

Speaker Change: Toyota connected now use the outlets for over 150 micro services their solution benefits from $99, 99% uptime with Atlas as a platform for all data, including mission critical vehicle telematics and location data needed for emergency response services <unk> is totally connected database of choice for all future services as the explorer.

Speaker Change: Right.

Speaker Change: Okay.

Speaker Change: Their solution vendors.

In summary, our performance in Q1 was mixed while Q1 has implications for our financial results for the rest of fiscal 'twenty, five which Michael will cover the 10 of our customer conversations, especially in the enterprise segment has never been stronger our customers recognize and modernizing legacy applications is no longer optional in the age of AI and are preparing for a multi year journey.

Speaker Change: Nine.

Speaker Change: Okay.

Speaker Change: All data.

Speaker Change: The mission critical.

Speaker Change: Okay.

Speaker Change: Location data.

Speaker Change: 100.

Speaker Change: One <unk>.

Speaker Change: Thank you.

Speaker Change: Future services.

Speaker Change: Okay.

Speaker Change: And AI capabilities, knowing they will get the reliability and scalability they need to meet customer needs.

Speaker Change: They'll get the reliability.

Speaker Change: <unk>.

Michael: To accomplish that goal they see <unk> as a key partner in that journey, we are well positioned to be a key beneficiary as organizations embed AI into the next generation of software applications that transform their business with that here's Michael Thanks.

Speaker Change: Customers need.

Speaker Change: Don Juan.

Speaker Change: Dan Wong Morgan Star and Sega are turning to <unk> to be to modernize applications <unk> outlet serves as the backend for Sega Europe's customer portal platforms. The video game and Entertainment company uses data and the customer portal portal to track and analyze customer churn along with users gaming cadence and geographic location.

Speaker Change: Alright.

Speaker Change: Okay.

Speaker Change: Margaret.

Speaker Change: Thank you.

Speaker Change: A video game.

Michael: Thanks, Dave I'll begin with a detailed review of our first quarter results and then finish with our outlook for the second quarter and full fiscal year 2025.

Speaker Change: Great.

Speaker Change: Trying to satellite.

Speaker Change: Users.

Speaker Change: Geographically.

Michael: First I'll start with our first quarter results total revenue in the quarter was $456 million up 22% year over year and above the high end of our guidance shifting to a product mix, let's start with Atlas Atlas grew 32% in the quarter compared to the previous year and now represents 70% of total revenue compared to 65% in the first quarter of <unk>.

Speaker Change: When Amazon diagnosed.

Speaker Change: When Amazon Dynamo DB wasn't providing the necessary flexibility or ability to handle complex queries. They migrated to <unk> to better manage the variation of schemas within customers' records within two weeks that our prototype for a fully functioning database and the Sega team can now analyze extensive data to inform product development and keep customers engaged.

Speaker Change: Great.

Speaker Change: That's great.

Speaker Change: Great.

Speaker Change: Better medicine.

Speaker Change: Okay.

Speaker Change: In two weeks and a prototype.

Speaker Change: Got it.

Speaker Change: Jacob.

Speaker Change: Nice extended.

Speaker Change: About the customer.

Speaker Change: Customers.

Michael: 2024, and 68% last quarter we.

Speaker Change: Enterprises.

Speaker Change: Enterprise and startups used <unk> to be to deliver the next wave of AI powered applications to their customers, including ACI worldwide Dev Rev and Novo Nordisk.

Michael: We recognize Atlas revenue, primarily based on customer consumption of our platform and that consumption is closely related to end user activity of the application.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: By harnessing.

By harnessing journey, II with <unk> Atlas vectors search Novo Nordisk, one of the world's leading healthcare companies is dramatically accelerating how quickly can get new medicines approved and delivered to patients.

Michael: In addition, as we communicated last quarter Q1 was the first quarter. We saw the expected significant decline in revenue from unused Atlas commitments, making this quarter, a tough comparison, both sequentially and year over year.

Speaker Change: Okay.

Speaker Change: Nor did the world's leading companies.

Speaker Change: When it comes to dramatically.

Speaker Change: You bet.

Speaker Change: And delivered to patients patient the team responsible.

Speaker Change: The team responsible for producing clinical study reports turn to Atlas when the original relational database wasn't capable of handling complex data and lack the flexibility needed to keep up with our rapid feature development now with Gen AI and the <unk> Atlas platform Novo Nordisk guest the mission critical assurances that needs to run highly regulated applications.

Speaker Change: Let me report reports the outlets.

Michael: Let me provide some additional context on Atlas consumption in the quarter.

Speaker Change: Okay.

Speaker Change: Following our guide in March week over week consumption growth was below our expectations consumption improve compared to Q4, but it was below the seasonal strength. We saw in Q1 of last year as Dave mentioned in his remarks, we saw a smaller than expected improvement across all customers, regardless of industry geography or tenure, indicating that we are operating in a softer macro environment.

Speaker Change: Wasn't capable.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: With Iraq.

Speaker Change: Now with Jenny.

Speaker Change: Yeah.

Speaker Change: Novo Nordisk.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Enabling them.

Speaker Change: Enabling them to generate complete reports and 10 minutes rather than 12 weeks.

In a minute.

Speaker Change: In summary.

Speaker Change: In summary, our performance in Q1 was mixed while Q1 has implications for our financial results for the rest of fiscal 'twenty, five which Michael will cover the 10 of our customer conversations, especially in enterprise segment has never been stronger our customers recognize and modernizing legacy applications is no longer optional in the age of AI and are preparing for a multi year journey.

In addition.

Speaker Change: Okay.

Speaker Change: We observed a smaller contribution from recently acquired workloads.

Speaker Change: <unk> has.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: While we acquired a record volume of workloads last year and those cohorts initially performed in line with our expectations. We are now seeing those cohorts grow more slowly than expected.

Speaker Change: Right.

Speaker Change: <unk>.

Speaker Change: In the enterprise.

Speaker Change: Thank you Rod.

Customers recognize.

Speaker Change: Having analyzed the data we believe that in the process of winning increased workload volumes. We unintentionally lost some focus on workload growth potential and we've made adjustments in our processes and incentives to strike a better balance.

No longer.

Speaker Change: Yeah.

Speaker Change: Is there any more color.

Michael: To accomplish that goal they see <unk> as a key partner in that journey, we are well positioned to be a key beneficiary as organizations embed AI into the next generation of software applications that transform their business with that here's Michael Thanks.

Speaker Change: AC module.

Speaker Change: We're well positioned fiduciary.

Speaker Change: Turning to non Atlas revenue.

Speaker Change: Organizations.

Speaker Change: It generates.

Speaker Change: Came in modestly ahead of our expectations in the quarter as we continue to have success selling incremental workloads into our existing customer base.

Speaker Change: One of them.

Speaker Change: What's that.

Michael: Michael Thanks, Dave I'll begin with the details.

Dave: Thanks, Dave I'll begin with a detailed review of our first quarter results and then finish with our outlook for the second quarter and full fiscal year 2025.

Revenues declined sequentially as expected since Eas, primarily in Upselling motion into existing customers and in Q1, we have a seasonally lower EBITDA renewal base. In addition, despite the outperformance it's worth noting that revenue contribution from multiyear EA contracts in the quarter was lower than expected, reflecting the current macro environment.

Speaker Change: Got it.

For the.

Speaker Change: The order.

Speaker Change: First I'll start with the first.

Speaker Change: First I'll start with our first quarter results total revenue in the quarter was $456 million up 22% year over year and above the high end of our guidance shifting to our product mix, let's start with Atlas Atlas grew 32% in the quarter compared to the previous year and now represents 70% of total revenue compared to 65% in the first quarter of <unk>.

Speaker Change: Our first quarter with total revenue.

Speaker Change: $6 million.

Speaker Change: 3% through the year.

Speaker Change: Hi, Andy.

Speaker Change: Shifting to our project before I start with that.

Speaker Change: <unk> grew 30% compared to the previous.

Speaker Change: Turning to customer growth during the first quarter, we grew our customer base by approximately 1400 customers sequentially, bringing our total customer count to over 49200, which is up from over 43100, a year ago period.

Speaker Change: Now represent.

Speaker Change: Okay.

Speaker Change: Compared to 65%.

Speaker Change: The first 24, 48% to 8% last quarter, we recognized.

Speaker Change: 2024, and 68% last quarter we.

Speaker Change: We recognize Atlas revenue, primarily based on customer consumption of our platform and that consumption is closely related to end user activity of the application.

Speaker Change: Let me see.

Speaker Change: Of our total customer count over 7100 are direct sales customers, which compares to over 6700 in the year ago period the.

Speaker Change: Hum.

Speaker Change: And that consumption.

Speaker Change: Yeah.

Speaker Change: In addition communicated last quarter Q1 is the FERC.

Speaker Change: In addition, as we communicated last quarter Q1 was the first quarter. We saw the expected significant decline in revenue from unused Atlas commitments, making this quarter, a tough comparison, both sequentially and year over year.

Speaker Change: The growth in our total customer count is being driven primarily by Atlas, which had over 47700 customers at the end of the quarter compared to over 41600 customers in the year ago period.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Making this quarter.

Speaker Change: Sequentially year over year and year over year, let me provide you with.

Speaker Change: Let me provide some additional context on Atlas consumption in the quarter.

Speaker Change: It's important to keep in mind that the growth in our Atlas customer count reflects new customers demand <unk>. In addition to existing EAA customers, adding incremental Atlas workloads.

Speaker Change: Following our guide.

Speaker Change: Following our guide in March week over week consumption growth was below our expectations consumption improved compared to Q4, but was below the seasonal strength. We saw in Q1 of last year as Dave mentioned in his remarks, we saw a smaller than expected improvement across all customers, regardless of industry geography or tenure, indicating that we are operating in a softer macro environment.

Speaker Change: We can.

Speaker Change: Hello, Greg.

Speaker Change: Consumption improve.

Speaker Change: Moving onto IRR we.

Speaker Change: Lode.

Speaker Change: We had another quarter with our net expansion rate above 120%. We ended the quarter with 2137 customers with at least $100000 in IRR and annualized MLR, which is up from 1761 in the year ago period move.

Speaker Change: As Dave mentioned.

Speaker Change: Smaller.

Speaker Change: Regardless of industry and geography.

Speaker Change: Indicating that we are obviously.

Speaker Change: In addition.

Speaker Change: In addition.

Speaker Change: We observed a small contribution.

Speaker Change: We observed a smaller contribution from recently acquired workloads.

Speaker Change: Moving down the income statement I will be discussing our results on a non-GAAP basis, unless otherwise noted.

Speaker Change: Okay.

Speaker Change: While we acquired.

Speaker Change: While we acquired a record volume of workloads last year and those cohorts initially performed in line with our expectations. We are now seeing those cohorts grow more slowly than expected.

Speaker Change: Okay.

Speaker Change: Profit in the first quarter was $337 8 million, representing a gross margin of 75%, which is down from 76% in the year ago period, our year over year margin decline is primarily driven by Atlas growing as a percent of the overall business.

Speaker Change: In line with our expectations.

Speaker Change: We are now seeing.

Speaker Change: Hello.

Speaker Change: Having analyzed.

Speaker Change: Having analyzed the data we believe that in the process of winning increased workload volumes. We unintentionally lost some focus on workload growth potential we've made adjustments in our processes and incentives to strike a better balance.

Speaker Change: And then on the product.

Speaker Change: Yes.

Speaker Change: Welcome to algorithm.

Speaker Change: Our income from operations was $32 8 million or 7% operating margin for the first quarter compared to a 12% margin in the year ago period.

Speaker Change: We've made adjustments.

Speaker Change: Okay.

Speaker Change: Better balance.

Speaker Change: Turning to non out.

Speaker Change: Turning to non Atlas revenue.

Speaker Change: EBITDA came in.

Speaker Change: <unk> came in modestly ahead of our expectations in the quarter as we continue to have success selling incremental workloads into our existing EAA customer base.

Speaker Change: Okay.

Speaker Change: Primary reason for a more favorable operating income results versus guidance as our revenue outperformance.

Speaker Change: Oh Wow.

Yes.

Speaker Change: Da revenues actually unexpectedly.

Speaker Change: Revenues declined sequentially as expected since Eas, primarily in Upselling motion into existing customers and in Q1, we have a seasonally lower EA renewal base. In addition, despite the outperformance it's worth noting that revenue contribution from multi year contracts in the quarter was lower than expected, reflecting the current macro environment.

Speaker Change: Net income in the first quarter was $42 7 million or 51 per share based on $83 2 million diluted weighted average shares outstanding this.

Speaker Change: Yes, primarily.

Speaker Change: And in Q1.

Speaker Change: Right.

Speaker Change: In addition, despite the growth.

Speaker Change: This compares to a net income of $45 3 million or <unk> 56 per share on $81 5 million diluted weighted average shares outstanding in the year ago period.

Speaker Change: It's worth noting that I understood.

Speaker Change: It was lower than expected.

Speaker Change: Getting the correct.

Speaker Change: That growth environment turning to customer.

Speaker Change: Turning to the balance sheet and cash flow. We ended the first quarter with $2 $1 billion in cash cash equivalents short term investments of strict cash.

Speaker Change: Turning to customer growth during the first quarter, we grew our customer base by approximately 1400 customers sequentially, bringing our total customer count to over 49200, which is up from over 43100, a year ago period.

Speaker Change: During the first quarter remarks.

Speaker Change: Got it.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: Bringing our total screens.

Speaker Change: 49000.

Speaker Change: Operating cash flow in the first quarter was $63 $6 million driven by seasonal strength in collections.

Speaker Change: This is up from over 3000.

Speaker Change: Of our total cost.

Speaker Change: Of our total customer count over 7100 are direct sales customers, which compares to over 6700 in the year ago period. The growth in our total customer count is being driven primarily by Atlas, which had over 47700 customers at the end of the quarter compared to over 41600 customers in the year ago period. It is important to keep in mind that the growth.

Speaker Change: After taking into consideration approximately $2 6 million in capital expenditures and principal repayments of finance lease liabilities free cash flow was $61 million in the quarter.

Speaker Change: Right.

Speaker Change: This compares over six months.

The growth of our total.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: At over 40%.

Speaker Change: Compares to free cash flow of 51 $8 million in the first quarter of fiscal 2024.

Speaker Change: In the quarter compared to over 41000.

Speaker Change: I would now like to turn to our outlook for the second quarter and full fiscal year 2025 for the second quarter, we expect revenue to be in the range of 4400 $60 million to $464 million. We expect non-GAAP income from operations to be in the range of $35 million $38 million and non-GAAP net income per share to be in the range of 46 to 40 <unk>.

Speaker Change: A year ago.

Speaker Change: It's important to keep in mind.

Speaker Change: In our Atlas customer count reflects new customers to <unk>. In addition to existing <unk> customers, adding incremental Atlas workloads.

Speaker Change: That's right.

Speaker Change: And your existing distribution.

Speaker Change: Adam.

Speaker Change: Moving onto are all funded or we had another quarter.

Speaker Change: Moving onto IRR.

Speaker Change: We had another quarter with our net expansion rate above 120%. We ended the quarter with 2137 customers with at least $100000 in IRR and annualized MRI, which is up from 1761 in the year ago period moves.

Speaker Change: Yes.

Speaker Change: We ended the quarter with.

Speaker Change: Great.

Speaker Change: <unk> based on $84 6 million estimated diluted weighted average shares outstanding for.

Speaker Change: $100000.

Speaker Change: Sure.

Speaker Change: From what.

Speaker Change: For the full fiscal year 2025, we expect revenue to be in the range of $1 88 billion to $1 9 billion.

Speaker Change: Moving down the <unk>.

Speaker Change: Moving down the income statement I'll be discussing our results on a non-GAAP basis, unless otherwise noted.

Speaker Change: Okay.

Speaker Change: Unless otherwise.

Speaker Change: non-GAAP income from operations to be in the range of $168 million to 183 million and non-GAAP net income per share to be in the range of $2 15.

Speaker Change: Gross profit first quarter.

Speaker Change: Profit in the first quarter was $337 8 million, representing a gross margin of 75%, which is down from 76% in the year ago period, our year over year margin decline is primarily driven by Atlas growing as a percent of the overall business.

Speaker Change: Where do you see.

Speaker Change: $8 million.

Speaker Change: Our gross margin.

Speaker Change: This is down from 7%.

Speaker Change: $2 30 based.

Speaker Change: Our year over year.

Speaker Change: Based on $84 5 million estimated diluted weighted average shares outstanding.

Primarily.

Speaker Change: Robert.

Speaker Change: Our income from operations was $8 million or.

Speaker Change: Note that the non-GAAP net income per share guidance for the second quarter and full fiscal year 2025 includes a non-GAAP tax provision of approximately 20%.

Speaker Change: Our income from operations was $32 8 million or 7% operating margin for the first quarter compared to a 12% margin in the year ago period.

Speaker Change: Four 7% operating margin.

Speaker Change: Compared to 12.

Speaker Change: The primary reasons.

Speaker Change: I'll now provide some more context around our guidance starting with the full year.

Speaker Change: Primary reason for a more favorable operating income results versus guidance as our revenue outperformance.

Speaker Change: Yes.

Speaker Change: Our revenue.

Speaker Change: First as a reminder, our fiscal 'twenty five Atlas revenue growth rate will be impacted by the absence of over $40 million in revenue related to unused customer commitments.

Speaker Change: Net income in the past.

Net income in the first quarter was $42 7 million or 51 per share based on $83 2 million diluted weighted average shares outstanding.

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: 83.

Speaker Change: Okay.

Speaker Change: Second wed expected Atlas consumption growth to be stable in fiscal 'twenty five relative to fiscal 'twenty four but after a weaker than expected Q1, we now expect Atlas consumption growth to slow down this year. The slowdown is driven by the more pronounced macro impact we are seeing on our existing workloads recent cohorts in particular in addition, starting Q2 Atlas Air.

Speaker Change: This compares to a net.

Speaker Change: This compares to a net income of $45 3 million or <unk> 56 per share on $81 5 million diluted weighted average shares outstanding in the year ago period.

Speaker Change: Got it.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: One five.

Speaker Change: Sure.

Speaker Change: Over a period.

Speaker Change: Turning to the balance sheet and cash flow. We ended the first quarter with $2 $1 billion in cash cash equivalents short term investments and restricted cash operating cash flow in the first quarter was $63 $6 million driven by seasonal strength in collections.

Speaker Change: On to the balance sheet.

Speaker Change: <unk>.

Speaker Change: We ended the first.

Speaker Change: Million.

Speaker Change: Right.

Speaker Change: Our cash operating cash flow.

Speaker Change: Right.

Speaker Change: <unk> is also lower in part because of the smaller than expected new business cohort in Q1.

Speaker Change: By seasonal.

Speaker Change: Watkins after taking into consideration.

Speaker Change: After taking into consideration approximately $2 6 million in capital expenditures and principal repayments of finance lease liabilities free cash flow was $61 million in the quarter.

Speaker Change: Third we'd previously expected non Atlas revenues to be modestly down in fiscal 'twenty five as a reminder, in fiscal 'twenty four we recognized approximately $40 million more in multi year license revenue than we did in fiscal 'twenty, three making for a difficult compare and this year, we had expected fiscal 'twenty five multi year license revenue contribution to be more in line with fiscal 'twenty three.

Speaker Change: $1 million.

Speaker Change: Capital expenditures.

Speaker Change: Anthony.

Speaker Change: Hello.

Speaker Change: This compares to free cash flow.

Speaker Change: Compares to free cash flow of 51 8 million in the first quarter of fiscal 2024.

Speaker Change: $8 8 million.

Speaker Change: First of all for 2020, I'd now like to turn.

I would now like to turn to our outlook for the second quarter and full fiscal year 2025 for the second quarter, we expect revenue to be in the range of 4400 $60 million to $464 million. We expect non-GAAP income from operations to be in the range of $35 million $38 million and non-GAAP net income per share to be in the range of 46 to 40 <unk>.

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: The second quarter, we expect.

Speaker Change: However in Q1, despite the EBITDA outperformance, we saw lower than expected contribution from multi year deals in our pipeline of multi year deals for the rest of the year is currently lower given the macro environment. Consequently, we now expect non Atlas revenue to be down mid single digits for the year.

Speaker Change: Good morning.

Speaker Change: $1 4 million.

Speaker Change: Dollars.

We expect non-GAAP.

Speaker Change: Regional operation and 35 million $3 million.

Speaker Change: non-GAAP.

Speaker Change: <unk> based on $84 6 million estimated diluted weighted average shares outstanding.

Speaker Change: Based on <unk>.

Speaker Change: Finally, we expect a 9% operating margin at the midpoint of our guidance. We continue we will continue investing to capture our long term opportunity focusing on investments on the strategic priorities that Dave outlined.

Speaker Change: For the full fiscal year.

Speaker Change: For the full fiscal year 2025, we expect revenue to be in the range of $1 88 billion to $1 9 billion non-GAAP income from operations to be in the range of $168 million to 183 million and non-GAAP net income per share to be in the range of $2 15.

Speaker Change: Yeah.

Speaker Change: $9 billion 9 million.

Speaker Change: Turning to our Q2 guidance a few things to keep in mind.

Speaker Change: non-GAAP range of behind.

Speaker Change: First we expect Atlas revenue growth to slow on a year over year basis due in part to the lower than expected consumption growth trends and the lower starting Q2 <unk>.

Speaker Change: non-GAAP.

Speaker Change: Very good.

Yeah.

Speaker Change: 30%.

Speaker Change: To $2 30 based.

Speaker Change: Based on $84 5 million estimated diluted weighted average shares outstanding.

Speaker Change: 85.

Speaker Change: Second we expect to see a sequential decline in the non Atlas revenues on a year over year basis, noninterest revenue will be materially down due to it especially difficult compare as last year's Q2 include a term license contribution from a number of multi year license deals most notably the expansion of our partnership with Alibaba.

Speaker Change: Sure.

Speaker Change: Note that did not.

Speaker Change: Note that the non-GAAP net income per share guidance for the second quarter and full fiscal year 2025 includes the non-GAAP tax provision of approximately 20%.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Sure.

Speaker Change: The non-GAAP.

Speaker Change: I'll now provide some.

Speaker Change: I'll now provide some more context around our guidance starting with the full year.

Speaker Change: Okay.

Speaker Change: Felipe.

First as a reminder.

Speaker Change: First as a reminder, our fiscal 'twenty five Atlas revenue growth rate will be impacted by the absence of over $40 million in revenue related to unused customer commitments.

Speaker Change: To summarize our Q1 results will impact our growth rate for this year. However, we do not believe that our fiscal 'twenty five growth is an indication of our long term potential we.

Speaker Change: Fiscal 'twenty five.

Speaker Change: Thank you.

Speaker Change: $40 million.

Speaker Change: Thanks Chuck.

Speaker Change: Second we had expected.

Speaker Change: We had expected atlas consumption growth to be stable in fiscal 'twenty five relative to fiscal 'twenty four but after a weaker than expected Q1, we now expect Atlas consumption growth to slow down this year. The slowdown is driven by the more pronounced macro impact we're seeing on our existing workloads recent cohorts in particular in addition, starting Q2 Atlas <unk> is also.

Speaker Change: We have a small share in one of the largest and fastest growing markets in all of software the secular tailwind on our back are only getting stronger and the age of AI and we are excited about the future. We'll continue investing judiciously in focusing on our execution to capture this long term opportunity with.

Speaker Change: April.

Speaker Change: But after a weaker than that.

Speaker Change: Now.

Speaker Change: Okay on Russia.

Speaker Change: Slowdown is driven.

Speaker Change: Sure.

Speaker Change: Thanks.

Speaker Change: Recent cohorts.

Speaker Change: With that we'd like to open it up to questions operator.

Speaker Change: In addition in Q2.

Speaker Change: Thank you and as a reminder to ask a question you will need to press star one on your telephone and wait for me to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and one follow up please standby we compile the Q&A roster.

Speaker Change: Lower in part because of the smaller than expected new business cohort in Q1.

Speaker Change: Okay.

Speaker Change: Isn't that cool.

Speaker Change: One third.

Speaker Change: Third with.

Speaker Change: Third we previously expected non Atlas revenues to be modestly down in fiscal 'twenty five as a reminder, in fiscal 'twenty four we recognized approximately $40 million more in multi year license revenue than we did in fiscal 'twenty three making for a difficult compare in this year, we had expected fiscal 'twenty five multi year license revenue contribution to be more in line with fiscal 'twenty three.

Speaker Change: Yes.

Speaker Change: As a reminder.

Speaker Change: Yeah.

Speaker Change: No.

One of your life.

Speaker Change: One moment for our first question.

Speaker Change: Great.

Speaker Change: We had expected.

Speaker Change: Our first question will come from <unk> from Morgan Stanley. Your line is open.

Speaker Change: Multiyear.

Speaker Change: You should have been more in line with.

Speaker Change: Great.

Speaker Change: However in Q1, despite the EBITDA outperformance, we saw lower than expected contribution from multi year deals in our pipeline of multi year deals for the rest of the year is currently lower given the macro environment. Consequently, we now expect noninterest revenue to be down mid single digits for the year.

Speaker Change: And Keith.

Speaker Change: Yes, thanks for taking the question David wanted to start with.

Speaker Change: Yes.

Speaker Change: We saw lower.

Speaker Change: The combined.

Speaker Change: Just some of the the reasons behind the slowdown or the slow start to the year heard you on the evidence for this being more macro related but just wanted to sort of.

Speaker Change: Pipeline of multi year.

Speaker Change: Your peers lowered.

Speaker Change: Consequently, we now.

Speaker Change: Yeah.

Speaker Change: Finally.

Speaker Change: Finally, we expect a 9% operating margin at the midpoint of our guidance. We continue we will continue investing to capture our long term opportunity focusing that investments on the strategic priorities that Dave outlined.

Speaker Change: Take a pause and get a sense of how <unk> is performing relative to other players in the ecosystem. Obviously, the hyperscale as did quite well I think azure talked about X AI. They saw workload growth improving so I wanted to get a sense. If there is.

Speaker Change: It nicely.

Speaker Change: The guidance continues.

Hello.

Speaker Change: Focusing now.

Speaker Change: Alrighty.

Speaker Change: Turning to our Q.

Speaker Change: Turning to our Q2 guidance a few things to keep in mind.

Speaker Change: First we expect.

Speaker Change: First we expect Atlas revenue growth to slow on a year over year basis due in part to the lower than expected consumption growth trends and the lower starting Q2 IRR.

Speaker Change: Any potential of that.

Speaker Change: Well.

Speaker Change: Thank you Laurie.

Speaker Change: The Hyperscale is are taking more share of wallet, maybe because they are working more closely with like the model providers and.

Speaker Change: Lower starting.

Speaker Change: Uh huh.

Speaker Change: Second week.

Speaker Change: We expect to see a sequential decline in the non Atlas revenues on a year over year basis, non Atlas revenue will be materially down due to it especially difficult compare as last year's Q2 include a term license contribution from a number of multi year license deals most notably the expansion of our partnership with Alibaba.

Speaker Change: Mike.

Speaker Change: They get more database attach whether it's our cosmos DB or or anything on the on the AWS side deals that you may not even see.

Speaker Change: On a year over year basis.

Speaker Change: Yes.

Speaker Change: Actually.

Speaker Change: Last years.

Hi.

Speaker Change: That's maybe.

Speaker Change: A number of multiyear.

Speaker Change: Taking more sort of share of wallet the budget.

Speaker Change: Most notably the quake.

Speaker Change: Our partnership with Alibaba to summarize Q1 results.

Speaker Change: From the opportunity set for <unk> I was wondering if that has come up at all in your conversations with the sales team.

Speaker Change: To summarize our Q1 results will impact our growth rate for this year. However, we do not believe that our fiscal 'twenty five growth is an indication of our long term potential.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yes, so we did see a macro impact because we essentially saw the impact across size industry Geo and tenure.

Speaker Change: Long term, we have a small share.

Speaker Change: We have a small share in one of the largest and fastest growing markets in all of software the secular tailwind on our back are only getting stronger and the age of AI and we're excited about the future. We will continue investing judiciously and focusing on our execution to capture this long term opportunity with.

Speaker Change: Framework.

Speaker Change: The secular challenge.

Speaker Change: But what I will say in contrast to the Hyperscale is.

Speaker Change: Sure.

Speaker Change: We're excited about that.

Speaker Change: We believe the bulk of their growth.

Speaker Change: We're continuing that.

Speaker Change: All three Hyperscale is was really spent on.

Speaker Change: Yeah.

Speaker Change: With that.

Speaker Change: With that we'd like to open it up to questions operator.

Speaker Change: Reselling GPU capacity, because a lot of demand for training models we.

Speaker Change: Yes.

Speaker Change: Operator.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: We don't see a lot of at least today a lot of AI apps and production, we see a lot of experimentation, but we're not seeing.

Speaker Change: As a reminder.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for me to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and one follow up please stand by we compile the Q&A roster.

Speaker Change: Yes.

Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: We're drilling a queen shortly.

Speaker Change: Hum.

Speaker Change: AI apps and production at scale and so I think thats the delta between the results that the Hyperscale.

Speaker Change: Yourself.

Speaker Change: Nissan.

Speaker Change: Hey, Ross.

Speaker Change: One moment for our first question.

Speaker Change: In Washington Metro Boston.

Speaker Change: Produce versus what we're seeing in our business.

Speaker Change: Our first question is with Humana.

Speaker Change: Our first question will <unk> from Morgan Stanley Your line is.

Speaker Change: Our relationship with the Hyperscale is actually very strong we partner very closely with AWS Azure and UCP in the field and in fact, they are coming to us to partner on deals more frequently than we've seen in the past and our win rates frankly are very high so we don't see.

Speaker Change: Morgan Stanley.

Speaker Change: Okay.

Speaker Change: Open.

Speaker Change: Yeah.

Speaker Change: Yes. Thank you for taking the question, Dave I wanted to start with.

Speaker Change: Yes. Thanks.

Speaker Change: Great.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Just some of the the reasons behind the slowdown or the slow start to the year heard you on the evidence for this being more macro related but just wanted to sort of.

Speaker Change: You can find.

Speaker Change: The ear heard you.

Speaker Change: It's more of a macro.

Speaker Change: Any issues, where we're losing deals to any particular vendor, whether the hyperscale or or smaller independent company.

Speaker Change: I just wanted to.

Speaker Change: Awesome.

Speaker Change: Take a pause and get a sense of how <unk> is performing relative to other players in the ecosystem. Obviously, the hyperscale as did quite well I think azure talked about X AI. They saw workload growth improving so I wanted to get a sense. If there is.

Speaker Change: Hi, Margaret.

Speaker Change: Yes.

Speaker Change: We see the highest.

Speaker Change: So from that point of view.

Speaker Change: We think this is more macro related and the trend of a lot of people investing in the GPU infrastructure layer as well as training of models.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: I wanted to get it.

Speaker Change: Any potential.

Speaker Change: Any potential of that.

Speaker Change: Lucky the Hyperscale.

Speaker Change: The Hyperscale is are taking more share of wallet, maybe because they are working more closely with like the module providers and.

Speaker Change: Understood and then just one quick follow up on the sales side.

Speaker Change: Right.

Speaker Change: Working closely with their model.

You mentioned that sort of the.

Speaker Change: They get more database attach whether it's our cosmos DB or or anything on the on the AWS side deals that you may not even see.

Speaker Change: Recently recently acquired workload.

Speaker Change: Yeah.

Speaker Change: With BP.

Speaker Change: Not growing as fast as expected and he seem to.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Hi.

Speaker Change: The point that as.

Speaker Change: That's maybe.

Speaker Change: Hey, Morris.

Speaker Change: Related to some sales execution opportunities could you unpack that for us.

Speaker Change: Taking more sort of share of wallet the budget.

Speaker Change: Yes.

Speaker Change: Thanks.

Speaker Change: From the opportunity set for <unk> I was wondering if that has come up at all in your conversations with the sales team.

Speaker Change: I was wondering if you've had.

Speaker Change: Why that may be an issue once a customer sort of onboard the new workload.

Speaker Change: That's come up at all.

Speaker Change: Okay.

Speaker Change: Sort of.

Speaker Change: Yes, so we did see a macro impact because we essentially saw the impact across size industry Geo in tenure.

Speaker Change: Yes so.

Speaker Change: The responsibility of sales to grow that I would imagine that what you're saying about worst case, it sort of driven.

Speaker Change: Yes.

Speaker Change: Okay.

Driven by the nature of the application. So I just want to understand that that'd be workload dynamics, yes, I just want to I think thats actually two separate issues. One is we are talking when we talked about workloads slowing down or growing more slowly.

Speaker Change: Yeah.

Speaker Change: But what else.

Speaker Change: But what I will say in contrast to the Hyperscale <unk>.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Like I believe.

Speaker Change: We believe the bulk of the growth across all three Hyperscale is was really spent on.

Speaker Change: Across the board.

Speaker Change: Okay.

Speaker Change: Talking about the workloads predominately from last year and before we had a record workload volume last year and we purposely designed our incentive system to reduce the friction to acquire workloads and that actually worked really well what we're seeing is that now as we're starting to hit the.

Speaker Change: Recently.

Speaker Change: Reselling GPU capacity, because a lot of demand for training models we.

Speaker Change: Yes.

Speaker Change: We don't have a lot of.

Speaker Change: We don't see a lot of at least today a lot of AI apps and production, we see a lot of experimentation, but we're not seeing.

Speaker Change: Okay.

Speaker Change: The auction.

We see a lot of experimentation.

Speaker Change: Yeah.

Speaker Change: Absent production at scale and so.

Speaker Change: The scale.

Speaker Change: Our one year Mark for the first workloads required last Q1.

Speaker Change: So it.

Speaker Change: So I think thats the delta between the results that the Hyperscale is.

Speaker Change: It tells us.

Speaker Change: That theyre growing more slowly so we're changing and fine tuning some of the incentives to ensure that our salespeople and our team's focus on higher quality workloads that have higher growth potential thats. So thats one point in terms of new business.

Speaker Change: Yes.

Speaker Change: It does.

Speaker Change: Produce versus what we're seeing in our business.

Speaker Change: Produce versus what you're seeing.

Speaker Change: Hum.

Speaker Change: Our relationship with the Hyperscale is actually very strong we partner very closely with AWS Azure and UCP in the field and in fact, they are coming to us to partner on deals more frequently than we've seen in the past and our win rates frankly are very high so we don't see.

Speaker Change: Yes.

Oh.

Speaker Change: The partner base.

Speaker Change: Sure.

Speaker Change: We did have a slow start to the year as you know, we really focused on acquiring new workloads and measuring workloads all last year. So it took some time for us to analyze that workload data and that then delayed how we organized from an org structure, our territory and ultimately finalizing quotas and so we did.

Speaker Change: In the field.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Our win rates.

Speaker Change: Hi.

Speaker Change: We don't.

Speaker Change: And it is where it is.

Speaker Change: Any issues, where we're losing deals to any particular vendor whether the hyperscale or are smaller independent company.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Smaller.

Speaker Change: And so some of that.

Speaker Change: So from that point of view.

Speaker Change: Almost catch up by the end of the quarter, but not fully but I want to be clear, we remain very confident of our ability to win new business and our win rates remained strong.

Speaker Change: Hum.

Speaker Change: We think this is more macro related and the trend of a lot of people investing in the GPU infrastructure layer as well as training of models.

Speaker Change: Related to the.

Speaker Change: The trend.

Speaker Change: A lot of people.

Speaker Change: G P.

Speaker Change: Labor as well.

Speaker Change: Understood. Thank you so much Dave.

Speaker Change: Yeah.

Speaker Change: Understood and then just one quick follow up on the sales side.

Speaker Change: Understood and just one quick one.

Speaker Change: Thank you one moment for our next question.

Speaker Change: All right.

Speaker Change: You mentioned that.

Speaker Change: Okay.

Speaker Change: You mentioned that sort of the.

Speaker Change: Okay.

Speaker Change: Recently recently acquired workload.

Speaker Change: You can't buy anywhere.

And our next question comes from line of Raimo <unk> from Barclays. Your line is open.

Speaker Change: We're not.

Speaker Change: Not growing as fast as expected and he seem to.

Speaker Change: Hi.

Speaker Change: Seem to.

Speaker Change: Got it.

Speaker Change: The point that as.

Speaker Change: Thank you.

Speaker Change: Or is it some.

Speaker Change: Related to some sales execution opportunities could you unpack that for us.

Speaker Change: Can I stay on that subject a little bit. So if you think about okay. So lets discuss you just talked about is kind of in your own control and then there is macro like.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Why.

Speaker Change: Why that may be an issue once the customer sort of onboard the new workload.

Speaker Change: Hi.

Speaker Change: What's the story.

Speaker Change: Sort of.

Speaker Change: Oh.

Responsibility of sales to grow that I would imagine that what you're saying about where cases sort of driven by the nature of the application. So I just want to understand that that'd be workload dynamics, yes, I just want to I think this actually two separate issues. One is we are talking when we talked about workload slowing down or growing more slowly.

Speaker Change: If you think about like what was more important driver here, then muscle side or the slides that kind of few influence can you speak to that like did we tried to understand that better and when it's Michael show up for you as well.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: And by their nature.

Speaker Change: Yes.

Speaker Change: I just wanted to.

Speaker Change: There are separate issues.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: During the quarter.

Speaker Change: Hum.

Speaker Change: I would say obviously based on expectations. The macro was the consumption was worse than we had expected when we guided at the end of Q4.

Speaker Change: We're talking about.

Felipe: We're talking about the workloads predominately from last year and before we had a record workload volume last year and we purposely designed our incentive system to reduce the friction to acquire workflows and that actually work really well what we're seeing is that now as we're starting to hit the <unk>.

Speaker Change: Wow.

Speaker Change: We had a record.

Speaker Change: Okay.

Speaker Change: Designs.

Speaker Change: Thank you Sir.

Speaker Change: It was actually work.

Speaker Change: Based on our Q4 results and the reason.

Speaker Change: What we're seeing.

Speaker Change: We firmly believe there is a macro impact is because we saw that slowdown happened across different sizes of customers across different industries across different geos and also across the tenure of our customers. There is also the <unk>.

Speaker Change: Yes.

Speaker Change: One year Mark.

Speaker Change: One year Mark for the first workloads required last Q1.

Speaker Change: Last quick one.

Speaker Change: There.

Speaker Change: They are growing more slowly so we're changing and fine tuning some of the incentives to ensure that our salespeople and our team's focus on higher quality work close at a higher growth potential thats. So thats one point in terms of new business.

Speaker Change: Changing.

Speaker Change: Sure.

Speaker Change: People.

Speaker Change: <unk> growth was definitely slower compared to a year ago period. So that's what gives us.

Speaker Change: Homeless on high levels of engagement.

Speaker Change: Yes.

Speaker Change: So that's one point in terms of <unk>.

Speaker Change: You did have a slow start.

I believe that this was a macro issue and then the new business issue was was really as I said, we almost caught up but it was really operationally getting our our organization in place and code is in place and we definitely learned from that and we have changed our planning process. So that we don't repeat the same mistake again.

Speaker Change: We did have a slow start to the year as you know, we really focused on acquiring new workloads and measuring workloads all last year. So it took some time for us to analyze that workload data and that then delayed how we organized from an org structure, our territory and ultimately finalizing quotas and so we did.

Speaker Change: As you know.

Speaker Change: Okay.

Speaker Change: Last year.

Speaker Change: Hi.

Speaker Change: Yeah.

Speaker Change: And that then.

Speaker Change: Oregon.

Speaker Change: Territory.

Ultimately.

Speaker Change: And so.

Speaker Change: But that was the execution issue that I would say that we went through in Q1 with the slower start to the year.

Speaker Change: Almost catch up.

Speaker Change: Almost catch up by the end of the quarter, but not fully but I want to be clear, we remain very confident our ability to win new business and our win rates remained strong.

I want to be clear.

Speaker Change: Okay.

Speaker Change: Our win rates.

Speaker Change: Yes, Okay perfect. Thank you and then Mike if you think about the year from the from an Opex perspective, obviously your revenue is coming down a little bit like how do you think about the investment cadence now I mean, one we used to think like revenues coming down so I need to do something about the cost. The other thing is I opportunities. So I need to keep investing where you are coming out there whats.

Speaker Change: Yeah.

Speaker Change: Understood. Thank you so much Dave.

Speaker Change: Understood.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: And our next question Glenn.

Speaker Change: And our next question comes from the line of Raimo <unk> from Barclays. Your line is open.

Speaker Change: Mark.

Speaker Change: Hey, Thank you.

Speaker Change: Hey, Thank you can I stay on that subject a little bit. So if you think about some of the stuff you just talked about is kind of in your own control and then there is macro like.

Speaker Change: Youre kind of.

Speaker Change: Kevin.

Puts and takes why do you think about that.

Speaker Change: So.

Sure, Yes, and obviously all of this thinking is embedded in the guide and so what the guide reflects is if you think about sort of the remainder of the year.

Speaker Change: Yes.

Speaker Change: Your old in Colombia.

Speaker Change: Yeah.

Speaker Change: Uh huh.

Speaker Change: Like if you think about like what we're doing.

Speaker Change: Thanks, Mike.

Speaker Change: Similar amount of investment.

Speaker Change: Okay.

Speaker Change #100: More important driver here, the macro side or the slides that kind of influence can you speak to that like did we tried to understand that better and when its muscle show up for you as well.

Speaker Change: Yeah.

Speaker Change: And I think to your point, we're very much running the business for the long term and even if there are.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: If we have reduced revenue outlook compared to where we were 90 days ago, none of that changes the long term opportunity for us and so we want to continue to make sure that we're investing for that long term opportunity.

Speaker Change: Youre welcome.

Speaker Change: And the one thing.

Speaker Change: During the quarter.

Speaker Change: Hum.

Speaker Change: I would say.

Speaker Change: C based on expectations.

Speaker Change: Yeah.

Macro was the consumption was worse than we had expected when we guided at the end of Q4 and our base.

Speaker Change: I've also highlighted three specific areas that are particularly.

Speaker Change: Yes.

Speaker Change: I do.

Speaker Change: At the end.

Dave I: High value and so what we'll do to spend within that or it is to live within that existing kind of target spend envelope is re prioritize those three things that Dave said to make sure that we're investing in are the things that are most likely to move the needle and support long term growth.

Speaker Change: Why not.

Speaker Change: Based on our Q4 results and the reason.

Speaker Change: The reason.

Speaker Change: Yeah.

Speaker Change: We firmly believe there is a macro impact is because we saw that slowdown happened across different sizes of customers across different industries across different geos and also across the tenure of our customers. There is also the usage growth was definitely slower compared to a year ago period.

Speaker Change: Okay.

Speaker Change: Oh.

Speaker Change: What's different.

Speaker Change: Oh, it's different at all.

Speaker Change: Okay.

Speaker Change: Also.

Speaker Change: Yes.

Speaker Change: Okay perfect. Thank you.

Okay.

Speaker Change: Thank you one moment for our next question.

Speaker Change: So.

Speaker Change: So that's what gives us.

Speaker Change: I believe this.

Speaker Change #101: I believe that this was a macro issue and then the new business issue was was really as I said, we almost caught up but it was really operationally getting our our organization in place and put us in place.

Speaker Change: Yes.

Speaker Change: The new.

Speaker Change: Oh really.

Speaker Change: Our next question comes from the line of Brian <unk> from Stifel. Your line is open.

Speaker Change: All right.

Speaker Change: It was real.

Speaker Change: Great.

Speaker Change: Yes.

Brian Daniel: Great. Thanks, very much so just following up on that last question.

Speaker Change: Right.

Speaker Change: Right.

Speaker Change: And.

Speaker Change #102: And we definitely learned from that and we have changed our planning process. So that we don't repeat the same mistake again, but that was the execution issue that I would say that we went through in Q1 with the slower start to the year.

Speaker Change: Couple of years ago, when things slowed dramatically slowed down sales hiring and maybe got a little behind.

Speaker Change: We are not doing.

Speaker Change: So that we don't.

Speaker Change: But that would be.

Speaker Change: The execution issues that we can make.

Speaker Change: From your commentary last year.

Speaker Change: Yeah.

Speaker Change: Should we take it to.

Speaker Change: Yes.

Speaker Change: Should we take what we are hearing today lead us to believe that even while theres a softer macro out there you are still going up fairly aggressively invest on the sales and marketing side to keep capacity grilling.

Speaker Change: Yes, okay.

Speaker Change #103: Yes, Okay perfect. Thank you and then Michael if you think about the year from a from the Opex.

Speaker Change: Hum.

Okay.

Speaker Change: I'll take that.

Speaker Change #104: Opex perspective, obviously when your revenue is coming down a little bit like how do you think about the investment cadence now.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Yeah, what I'd say is our investment model is going to be consistent we did pause.

Speaker Change: No.

Speaker Change #105: When we used to think like revenues coming down so I need to do something about the cost. The other thing is the Io opportunity. So I need to keep investing where you are coming out there whats your kind of.

Yeah.

Speaker Change: Okay.

Speaker Change: During last year and.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: Coming up.

Speaker Change: We want to make sure that we continue to grow our productive capacity consistently.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Puts and takes why do you think about it through that.

Speaker Change: Sure Yes.

Speaker Change: Sure, Yes, and obviously all this thinking is embedded in the guide and so with the guide reflects is if you think about sort of the remainder of the year.

Speaker Change: Okay.

Speaker Change: We're going after a very large market, we have low share, but we also have to win business workload by workload, which is harder than a more of a top down centralised sale.

Speaker Change: Okay.

Speaker Change: Goodbye.

Speaker Change: Sure.

Speaker Change:

Speaker Change: Similar amount of investment.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: You are quite right.

And I think to your point, we're very much running the business for the long term and even if there are.

Speaker Change: So what we're also doing is focusing on also increasing the productivity of those teams, but got by getting more better and more efficient at workload by workload focusing on the higher end of the market and also trying to sell more top down using the.

Speaker Change: Yes.

Speaker Change: There are.

Speaker Change: We have already.

Speaker Change: If we have reduced revenue outlook compared to where we were 90 days ago, none of that changes the long term opportunity for us and so we want to continue to make sure that we're investing for that long term opportunity.

Speaker Change: Okay.

Speaker Change: 90 days ago.

Speaker Change: That's our model.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: The whole focus around.

Speaker Change: No.

Speaker Change: Modernizing legacy applications as well as AI, which obviously is getting a lot of senior level attention. So.

Speaker Change: We've also highlighted.

I've also highlighted three specific areas that are particularly.

Speaker Change: Area.

Speaker Change: Okay.

Speaker Change: High value.

Speaker Change #106: High value and so what we'll do to spend within that or it is to live within that existing kind of target spend envelope is re prioritize those three things that Dave said to make sure that we're investing in are the things that are most likely to move the needle and support long term growth.

Speaker Change: What we'll do this.

Speaker Change: We definitely believe the long term growth prospects are strong and so that's why we want to continue to invest in building out sales capacity.

Speaker Change: No.

Speaker Change: Thanks.

Speaker Change: Hello.

Speaker Change: Correct.

Speaker Change: Great things.

Speaker Change: Uh huh.

Great.

Speaker Change: Yes.

Speaker Change: Slide eight.

Speaker Change: On the volume versus potential of <unk>.

Speaker Change: Move the needle.

Speaker Change: Yields will say or or workloads as you talked about last year, a lot of volume maybe the potential wasn't as high for those workloads to grow.

Speaker Change #107: Okay perfect. Thank you.

Speaker Change: Okay perfect. Thank you.

Speaker Change #107: Thank you.

Speaker Change: Thank you.

Speaker Change #109: And for our next question.

Speaker Change #108: The next question.

Speaker Change: Can you give us a sense of.

Speaker Change #108: Yes.

Speaker Change #108: Our next question now.

Speaker Change: The types of workloads that weren't growing as fast or.

Speaker Change #110: Our next question comes from the line of Brian <unk> from Stifel. Your line is open.

Speaker Change #108: Okay.

Speaker Change: What gives you confidence that you have really identified those types of workloads that can get you back to high potential.

Speaker Change #108: Okay.

Speaker Change #112: Great. Thanks, very much so just following up on that last question.

Speaker Change #111: Great. Thanks.

Speaker Change #111: Oh.

Speaker Change #111: Yeah.

Speaker Change #114: Years ago, when things slowed you dramatically slowed down sales hiring and maybe got a little behind.

Speaker Change: Yeah I mean.

Speaker Change #111: So what are the things dramatically.

Speaker Change: Initial workloads actually grew in line with what we're expecting but then just started growing more slowly and we really noticed that this quarter I would say, while it's not easy to identify especially new workloads whats going to take off versus what's going to be more of a slower growth workload, because sometimes even customers don't know what we've done is change the incentive systems a bit.

Speaker Change #111: Yeah.

Speaker Change #111: Maybe got a little.

Speaker Change #113: From your commentary.

Speaker Change #115: From your commentary last year.

Speaker Change #116: Should we take it.

Speaker Change #117: Should we take it.

Speaker Change #116: Should we take.

Speaker Change #119: Should we take what we are hearing today lead us to believe that even while there is a softer macro out there youre still going to have fairly aggressively invest on the sales and marketing side to keep capacity growing.

Speaker Change #118: And I believe you said.

Speaker Change #118: Even while theirs.

Speaker Change #118: Yep.

Speaker Change #118: Okay.

Speaker Change #118: Sales and marketing.

Speaker Change #118: I'd have to go out.

Speaker Change: To emphasize more quality of workloads and the sales comp plans. So by definition. They are very incentivized to really push for the higher growth workloads and they can get that perfect data, but a lot better data by working more closely with customers to understand which are more of the critical workloads versus more of a tertiary workloads.

Speaker Change #120: Yeah, what I'd say is.

Speaker Change #121: Yeah, what I'd say is our investment model is going to be consistent we did pause hiring last year.

Speaker Change #118: Yes.

Speaker Change #118: Oh.

Speaker Change #118: Eric.

Speaker Change #118: And.

Speaker Change: And so.

Speaker Change #118: Yeah.

Speaker Change #122: We want to make sure that we continue to grow our productive capacity consistently.

Speaker Change #118: Yeah.

Speaker Change #118: Right.

Speaker Change #118: Hum.

Speaker Change: Well.

Speaker Change #118: Yeah.

Speaker Change #123: We're going after a very large market, we have low share, but we also have to win business workload by workload, which is harder than the more of a top down centralised sale.

Speaker Change: Got it thanks very much.

Speaker Change #118: We have low share.

Speaker Change: And maybe Brad just to sort of connect the dots just to make sure that everyone's following is that as we <unk>.

Speaker Change #118: Yes.

Speaker Change #118: It was harder than them.

Speaker Change #118: Okay.

Speaker Change #118: Hum.

Speaker Change: Successfully got more volume right because we've got low share in this big market one of the things that we did that helped US do that is reduce friction upfront an unintended consequence of reducing friction is you actually have less information about everything right. So as you as your sales Rep. You are trying to prioritize your time.

Speaker Change: And so what we're also doing is focusing on also increasing the productivity of those teams, but got by getting more better and more efficient at workload by workload focusing on the higher end of the market and also trying to sell more top down using.

Speaker Change #118: Okay.

Speaker Change #118: Please proceed.

Speaker Change #118: It's like a bike.

Speaker Change #118: Yes.

Speaker Change #118: Okay.

Speaker Change #118: Also try to call them.

Speaker Change #118: Hum.

Speaker Change: The whole focus around.

Speaker Change #118: The whole focus.

Speaker Change #118: Modernizing.

Speaker Change #124: Modernizing legacy applications as well as AI, which obviously is getting a lot of senior level attention. So.

Speaker Change: That was an unintended consequences of what Dave was talking about will help address that.

Speaker Change #118: Okay.

Speaker Change #118: Hum.

A lot of.

Speaker Change: Perfect I appreciate it.

Speaker Change #118: And so.

Speaker Change #118: Where we are definitely.

Speaker Change: We definitely believe the long term growth prospects are strong and so that's why we want to continue to invest in building out sales capacity.

Thank you one moment for our next question.

Speaker Change #118: So that's why we were successful.

Speaker Change: Yes.

Speaker Change #125: That's helpful.

Speaker Change #125: Great and.

Speaker Change: Great.

Speaker Change: And our next question comes from the line of Kash Rangan from Goldman Sachs. Your line is open.

Speaker Change #125: On the volume.

Speaker Change: On the volume versus potential deals will say or workloads as you talked about last year, a lot of volume maybe the potential wasn't as high.

Speaker Change #125: Okay.

Speaker Change #125: No.

Speaker Change #125: I'm talking about.

Kash Rangan: Hi, Thank you very much Dave you've been through multiple cycles before this time, it's application software database is a different matter the weakness seems to be prevalent.

Speaker Change #126: Thank you.

Speaker Change #126: Ted.

Speaker Change #126: For those workloads.

Speaker Change: Those workloads to grow.

Speaker Change #126: Can you give us a.

Speaker Change #127: Can you give us a sense of.

Speaker Change #128: The types of work.

Speaker Change: You just take a step back what do you think is really going on and then one for you Michael.

Speaker Change: The types of workloads that weren't growing as fast or.

Speaker Change #128: Wow.

Speaker Change #129: What gives you confidence.

Speaker Change #130: What gives you confidence that you have really identified those types of workloads that can get you back to high potential.

Speaker Change: Consumption trends.

Speaker Change #128: Right.

Speaker Change #128: These types of forces.

Speaker Change: Pan out through the quarter and the month of May what do they look like thank you so much.

Speaker Change #128: At that time.

Speaker Change #128: Yeah, I mean, yeah.

Speaker Change #131: Yes, I mean.

Yes, so cash.

Speaker Change #133: Initial workloads actually grew in line with what we're expecting but then they started growing more slowly and we really noticed that this quarter I would say wireless is not easy to identify especially new workloads whats going to take off versus what's going to be more of a slower growth workload, because sometimes even customers don't know what we've done is change incentive systems a bit.

Speaker Change #128: Okay.

Dave I: Youre right I have been through multiple cycles I think the one thing I will say is with every cycle. When you go back all the way to the mainframe to client server to the Internet and now cloud and mobile.

Alright.

Speaker Change #128: We really noticed that.

Speaker Change #128: I would say Wow.

Speaker Change #128: Right.

Speaker Change #128: Anymore.

Speaker Change #128: It takes them off in the space.

Dave I: The cost of building applications went down so you saw an explosion of more apps and consequently, more data and I think with AI youre going to see a step fold increase in the number of apps and a number of.

Speaker Change #132: Got it.

Speaker Change #132: Right.

Speaker Change #132: What we have done it.

Speaker Change #132: Okay.

Speaker Change #134: To emphasize more quality of workloads and the sales comp plans. So by definition. They are very incentivized to really push for the higher growth workloads and they can get that perfect data, but a lot better data by working more closely with customers to understand which are more of the critical workloads versus more of a tertiary workloads.

Speaker Change #132: Besides the quality of work.

Speaker Change #132: By definition.

Dave I: Amount of software that's being built.

Speaker Change #132: Goodbye.

Speaker Change #132: We pushed the hydrogen.

Dave I: Run businesses et cetera, but that's going to take some time as with any new adoption cycle or adoption happens or what people commonly refer to as S curves and I think we're going through one of those S curves when I see the macro environment.

Speaker Change #132: Perfect.

Speaker Change #132: Yeah.

Speaker Change #132: Okay.

Speaker Change #132: Yeah.

Speaker Change #132: There's more that's for sure.

Speaker Change #132: Okay.

Speaker Change #132: Got it thank you very much.

Speaker Change #136: Got it thanks, very much and maybe Brad just to sort of connect the dots just to make sure that everyone's following is that as we.

Speaker Change #132: And maybe Brett.

Dave I: It's related to this technology transition, but partly it's also related to that the macro environment as is.

Speaker Change #135: Hello, everyone.

Speaker Change #135: We.

Speaker Change #135: Successfully.

Speaker Change: Successfully got more volume right, because we've got low share in this big market.

Speaker Change #135: Right.

Dave I: We don't there's not great.

Speaker Change #135: Yes.

Speaker Change #135: Yes.

Dave I: But we feel we're really well positioned the document model is truly.

Speaker Change #135: Thank you.

Glenn: All of the things that we did that helped US do that is reduce friction upfront an unintended consequence of reducing friction is you actually have less information about everything right. So if you're a sales rep. You are trying to prioritize your time.

Speaker Change #135: You bet.

Speaker Change #135: Friction.

Speaker Change #135: Unintended.

Dave I: The best way to work with a variety of different data and in fact, one customer told US if you had to build a database it would be designed exactly like Mongo DB and so.

Speaker Change #135: Okay.

Speaker Change #135: How about everything.

Speaker Change #135: Yes.

Speaker Change #135: Sure.

Speaker Change #135: Hum.

Speaker Change #138: That was an unintended consequence of what Dave was talking about will help address that.

Dave I: For this new AI era, and so we feel really good about our position.

Speaker Change #135: Yes.

Speaker Change #135: Got that.

Speaker Change #135: Perfect.

Speaker Change: Perfect I appreciate it.

Dave I: And we have.

Speaker Change #135: Yeah.

Speaker Change: Okay.

Dave I: Lots of partners in this endeavor and we are.

Speaker Change #135: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change #135: Our next question.

Dave I: We have a large market that we're going after so so we feel really bullish about the long term growth opportunity for the business.

Speaker Change #135: Okay.

Speaker Change #139: And our next question will come from the line of Kash Rangan from Goldman Sachs. Your line is open.

Speaker Change #135: Sure.

Speaker Change: And cash just on your question about kind of consumption through the quarter. Obviously, when we guided in March we knew at February was so theres no sort of source of variance there.

Speaker Change #135: Gordon.

Your line is open.

Dave I'll: Alright, Thank you very much Dave you've been through multiple cycles before this time, it's application software. Our database is a different matter the weakness seems to be prevalent whereas you just take a step back what do you think is really going on and then one for you Michael.

Gordon: Hi, Thanks.

Gordon: Okay.

At this time.

Speaker Change: And typically.

Gordon: David.

Speaker Change: What that sort of means is that March and April.

Speaker Change #141: We can it's prevalent piece if you just take us too.

Speaker Change: Where we were expecting to see.

Speaker Change #142: What do you think.

Speaker Change: Additional kind of that seasonal rebound that we've talked about.

Speaker Change #145: Well, how did that assumption.

Speaker Change: Consumption trends.

Speaker Change #144: Some kind of pan out.

Speaker Change #147: Pan out through the quarter and the month of May what do they look like thank you so much.

Speaker Change #142: Sure.

Speaker Change: We didn't see that as strongly.

Speaker Change #146: Thank you so much.

Speaker Change: March and April consumption trends were consistent with February normally they are healthier.

Speaker Change #148: Yes, so cash.

Speaker Change #146: So yes.

Speaker Change #149: Youre right I have been through multiple cycles I think the one thing I will say is with every cycle.

Right.

Speaker Change #146: Hi.

Speaker Change #146: Okay.

Speaker Change: So thats sort of the first piece of it and then secondly to your question around May May was also consistent indicating sort of stability may is typically in line I guess the other thing that I would say just for those who follow the story closely.

Speaker Change #146: Okay.

Speaker Change: Go back all the way to the mainframe to client server to the Internet and now cloud and mobile.

Speaker Change #146: Right.

Speaker Change #146: No.

Speaker Change #146: Hum.

Speaker Change: The cost of building applications went down so you saw an explosion of more apps and consequently, more data and I think with AI youre going to see a step fold increase in the number of apps and a number of.

Speaker Change #146: I'm sorry.

Speaker Change #146: Absolutely.

Speaker Change #146: And I think yeah.

Speaker Change #146: And the number.

Speaker Change: As you will know our recall that Q2 as a quarter is generally a seasonally lower quarter relative to Q1, but.

Speaker Change #146: Yeah.

Speaker Change: <unk>.

Speaker Change #146: The amount of software.

Speaker Change: Amount of software that's being built.

Speaker Change #146: Two months.

Speaker Change: To run businesses et cetera, but that's going to take some time as with any new adoption cycle or adoption happens or what people commonly refer to as S curves and I think we're going through one of those S curves when I see the macro environment.

Speaker Change #146: Yes.

Speaker Change #146: That's what it takes.

Speaker Change #146: And with any.

Speaker Change #146: Options.

Speaker Change: But that tends to happen after may and so may being in line with what we saw in being consistent with what we saw in Q1 would be the typical pattern and that's what we saw showing that sort of consistency.

Speaker Change #146: Hum.

Speaker Change #150: I don't think we're going ahead.

Speaker Change #150: I don't see them accurately.

Harley: It's Harley.

Speaker Change: Partly it's related to this technology transition, but partly it's also related to that the macro environment as is.

Harley: Okay.

Speaker Change: So hopefully that helps.

Harley: Is oh.

Speaker Change #152: It's not great.

Harley: Right.

Speaker Change: But we feel we're really well positioned the document model is truly.

Harley: We feel really well.

Harley: On the document.

Speaker Change: Alright. Thank you one moment for our next question.

Harley: You know the best.

Speaker Change: The best way to work with a variety of different data and in fact, one customer told US if you had to build a database it would be designed exactly like Mongo DB and so.

Harley: Yes.

Harley: Customers.

Speaker Change: And our next question comes from the line of Karl Keirstead from UBS. Your line is open. Thank you maybe I'll direct this to Dave.

Harley: Exactly.

Harley: So.

Harley: This new era.

Speaker Change #153: Toward this new AI era, and so we feel really good about our position.

Harley: Okay.

Harley: And.

Speaker Change: And we have.

Harley: Uh huh.

Dave I: I know, it's hard to get into the heads of of your your customers and understand their behavior, but I guess the spirit of this question is when you say macro.

Speaker Change: Lots of partners in this endeavor and we are.

Harley: London.

Harley: Sure.

Harley: Sure.

Harley: Large markets.

Speaker Change: We have a large market that we're going after so so we feel really bullish about the long term growth opportunity for the business.

Harley: We feel really bullish.

Speaker Change: What do you mean exactly what are the what are the customers telling you as the root causes.

Harley: Thank you.

Harley: Okay.

Speaker Change #156: And Kash just on your question about kind of consumption through the quarter. Obviously, when we guided in March we knew at February was so theres no sort of source of variance there.

Harley: And cash.

Speaker Change #154: Got it.

Speaker Change #155: That's the mood disorder.

Dave I: Sensitivity to rates or consumer end market weakness are you able to pinpoint what it is and then maybe part two one easy alternative explanation to macro is that AI has become such a big issue for <unk> and boardrooms that it might be.

Speaker Change #155: Yeah.

Speaker Change #155: Okay.

The variance there.

Speaker Change: And typically.

Speaker Change #155: Eight.

Speaker Change: What that sort of means is that March and April is where we were expecting.

Speaker Change #155: Martin in April.

Speaker Change #155: Exactly.

Speaker Change: <unk> to see.

Speaker Change #157: Additional kind of that seasonal rebound that we've talked about.

Speaker Change #155: Seasonal.

Speaker Change #155: That we've talked about.

Speaker Change #158: We did not.

Speaker Change #159: We didn't see that as strongly.

Speaker Change: Crowding out other spend do you feel like Theres any credence to that thesis. Thank you for both Dave.

Speaker Change #158: In April.

Speaker Change #160: March and April consumption trends were consistent with February normally they are healthier.

This February.

Speaker Change #158: Pierre.

Carl: So thanks for the question Carl So what we talked about macro remember ultimately where our database our data platform and the usage of our platform is directly are very tightly correlated to the.

Speaker Change #158: And so.

And so thats sort of the first piece of it and then secondly to your question around May May was also consistent indicating sort of stability may is typically in line.

Speaker Change #158: And then secondly.

Speaker Change #158: Yes.

Speaker Change #158: We also though.

Speaker Change #158: Indicators.

Speaker Change #158: Ability.

Speaker Change #158: Okay.

Carl: The performance of the end customers business. If they are selling 100 widgets are weak and also on now to selling 80 widgets a week that we will.

Speaker Change #158: I guess the other.

Speaker Change #111: The other thing that I would say just for those who follow the story closely.

Speaker Change #158: All of those very closely.

Speaker Change #111: As you will.

Speaker Change #158: Yes.

Speaker Change #158: Hum.

Speaker Change #111: Recall that Q2 as a quarter is generally a seasonally lower quarter relative to Q1.

Carl: Meaning that they're using the database less intensely.

Speaker Change #161: You too.

Speaker Change #161: Is it really slowly.

Carl: When we see broad based slowdown across different customer cohorts of different sizes across different industries and across different geos.

Speaker Change #161:

Speaker Change #161: But that didn't happen.

But that tends to happen after may and so may being in line with what we saw in being consistent with what we saw in Q1 would be the typical pattern and that's what we saw showing that sort of consistency.

Speaker Change #161: So may be in line.

Speaker Change #161: With.

Speaker Change #161: We saw a coupon on coupon would be the typical pattern.

Carl: That strikes us as pretty much a macro issue and so that's why.

Speaker Change #161: Okay.

So hopefully that helps.

Speaker Change #120: So hopefully that helps.

Carl: Based on and we are close to 50000 customers. So we have a pretty good feel for what's happening.

Speaker Change #162: Alright, thank you.

Speaker Change #118: Alright. Thank you one moment for our next question.

Carl: Right now and Thats, why we feel that there's definitely a macro element to it with.

Speaker Change #162: Okay.

Carl: With regards to the second part of your question is AI essentially crowding out new business, we definitely think that that's plausible we definitely see development team's experimenting on AI projects at the technology is changing very very quickly.

Speaker Change #163: And our next question comes from Bryan Maher.

Speaker Change #165: And our next question comes from the line of Karl Keirstead from UBS. Your line is open. Thank you maybe I'll direct this to Dave.

Speaker Change #162: No.

Speaker Change #162: UBS.

Speaker Change #164: Oh, Thank you maybe.

Speaker Change #164: Okay.

Speaker Change #164: Dave.

Speaker Change #166: I know, it's hard to get into the heads of of your your customers and understand their behavior, but I guess the spirit of this question is when you say macro.

Speaker Change #164: Pardon.

Speaker Change #164: Sure.

Carl: But that being said, we don't see that as a reason for us to not hit our new business targets and as I said, even though we started slow we almost caught up at the end of this quarter and we feel really good about our new business opportunity for the rest of this year. So.

Speaker Change #164: I guess the spirit.

Speaker Change #164: What do you mean exactly.

What do you mean exactly what are the what are the customers telling you as the root causes.

Speaker Change #164: Alright.

Speaker Change #164: Yes.

Speaker Change #164: Sensitivity.

Speaker Change #167: Sensitivity to rates or consumer end market weakness are you able to pinpoint what it is and then maybe part two one easy alternative explanation to macro is that AI has become such a big issue for <unk> and boardrooms that it might be.

Sure.

Carl: So I don't want to use that as an excuse for.

Speaker Change #164: With marketing.

Speaker Change #164: Yeah.

Speaker Change: US not meeting our new business targets, Okay got it helpful. Thank you.

Speaker Change #164: Yes.

Speaker Change #164: One easy alternatives.

Speaker Change: Thank you one moment for your next question.

Speaker Change #164: Is that.

Speaker Change #164: Hi.

Speaker Change #164: Thank you.

Speaker Change #164: Okay.

Speaker Change: Our next question comes from the line of Brad Sills from Bank of America. Your line is open.

Crowding.

Speaker Change #168: Crowding out other spend do you feel like Theres any credence to that thesis. Thank you for both Dave.

Does that mean.

Brad Sills: Great. Thank you so much I guess, maybe just a follow up to that last question. There David It sounds like you are starting to see some improvement here, perhaps in pipeline if I'm hearing you properly.

Speaker Change #164: Thank you.

Speaker Change #164: Yeah, Yeah. So.

Karl Emil Keirstead: So thanks for the question Karl So what we talked about macro remember ultimately where our database our data platform and the usage of our platform is directly are very tightly correlated to the.

Speaker Change #164: So what are we.

Speaker Change #164: Well not really.

Speaker Change #164: Absolutely.

Brad Sills: Since you've kind of gotten things back on track here with regards to some of the planning that's out of the way is that a fair assessment in other words do you feel like your pipeline coverage is now improving.

Speaker Change #164: Absolutely.

Speaker Change #164: Right.

Speaker Change #164: Okay.

Speaker Change #164: <unk>.

Speaker Change #164: Performance.

Speaker Change #128: The performance of the end customers business. If they are selling 100 widgets are weak and also now the selling 80 widgets a week that we will.

Speaker Change #164: And customers.

Selling.

Speaker Change #164: Okay.

Speaker Change: Potentially assigned for some improvement later in the year.

Speaker Change #164: Thank you.

Speaker Change #164: Yes that was.

Speaker Change #128: Meaning that they're using the database less intensely.

Speaker Change #164: Yes.

David It: Yes, I wouldn't characterize it as improving I think we felt good about our pipeline. We just got us off to a slow start for the quarter and so that was the point that I think the nuance that we're trying to communicate and that we do feel good about the new business opportunity for the rest of this year.

Speaker Change #164: Database.

Speaker Change #164: Lessons.

Speaker Change #164: So.

Speaker Change #128: When we see broad based slowdown across different customer cohorts of different sizes across different industries and across different geos.

Speaker Change #164: The broad based.

Speaker Change #164: Absolutely.

Speaker Change #164: Different side.

Speaker Change #164: Angela.

Speaker Change #164:

Speaker Change #132: That strikes us as pretty much a macro issue and so that's why.

Speaker Change #164: Right.

Pretty much.

<unk>.

Speaker Change #164: And so that's right.

David It: When I talked to our sales leadership team there.

Speaker Change #164: Based on two things.

Speaker Change #132: Based on and we are close to 50000 customers. So we have a pretty good feel for what's happening.

David It: I feel really good the win rates seem very high our competitiveness against different types of competitors are strong. So our new business opportunity is strong I wouldn't say, it's slightly improved its just that we got off to a slow start to Q1.

Speaker Change #164: Great.

Yes.

Speaker Change #164: Deal.

Speaker Change #164: Okay.

Speaker Change #164: Right now.

Speaker Change #132: Right now and Thats, why we feel that there's definitely a macro element to it with.

Speaker Change #164: Yes.

Speaker Change #164: Okay.

Speaker Change #164: With regard.

Speaker Change #132: With regards to the second part of your question is AI essentially crowding out new business, we definitely think that that's plausible we definitely see development team's experimenting on AI projects. The technology is changing very very quickly.

Speaker Change #164: Yeah.

Brad Sills: Yes, Brad I would just broadly say like this is very consistent with how we've talked about the business for the last couple of years now in terms of sort of thinking about new business.

Speaker Change #164: Yeah.

Speaker Change #164: Duffy.

Speaker Change #164: We are.

Speaker Change #164: Development.

Speaker Change #164: Yeah.

Brad Sills: And sort of expansion of our consumption.

Speaker Change #164: The technology.

Speaker Change #164: But that.

Of existing workloads.

Speaker Change #172: But that being said, we don't see that as a reason for us to not hit our new business targets and as I said, even though we started slow we almost caught up at the end of this quarter and we feel really good about our new business opportunity for the rest of this year. So.

Speaker Change #164: I don't see that.

And that the macro impact, which obviously.

Speaker Change #170: Got it.

Speaker Change #170: Oh.

Brad Sills: Even if it's getting more sensitive isn't a brand new topic or isn't the brand new discussion from a new business standpoint, we've been able to execute well against that but it does affect the underlying usage of applications that kind of those underlying REIT rights that drive consumption.

Speaker Change #170: Almost caught up.

Speaker Change #170: We feel.

Speaker Change #171: Thank you.

Speaker Change #171: And this year so.

Speaker Change #171: I don't want to.

Speaker Change #135: So I don't want to use that as an excuse for.

Speaker Change #171: Or not.

Speaker Change #135: US not meeting our new business targets, Okay got it helpful. Thank you.

Speaker Change #171: Got.

Speaker Change #173: Okay got it.

Speaker Change #174: Thank you.

Speaker Change #135: Okay.

Brad Sills: And so that's really the same dynamic is playing out here the operational stuff.

Speaker Change #174: Thank you one moment.

Speaker Change #135: Thank you one moment for your next question.

Speaker Change #174: Yeah.

Let's start at the beginning of that we kicked off is just trying to put that.

Speaker Change #175: Our next question.

Speaker Change #176: Our next question comes from the line of Brad Sills from Bank of America. Your line is open.

Brad Sills: Q1, lighter new business quarter into context, and is a nuance that sort of meant to help understand not some fundamental different shift about the macroeconomic environment, we've been able to continue.

Speaker Change #175: Right.

Speaker Change #177: Oh, great. Thank you.

Bradley Hartwell Sills: Oh, great. Thank you so much I guess, maybe just a follow up to that last question. There David It sounds like you are starting to see some improvement here, perhaps in pipeline if I'm hearing you properly.

Speaker Change #177: No.

Speaker Change #177: Alright.

Speaker Change #177: Okay.

Brad Sills: Well from that standpoint from a go to market and everything else perspective, so just to try and.

Speaker Change #177: Perhaps.

Speaker Change #177: Great.

Speaker Change #177: Since.

Speaker Change #180: Since you've kind of gotten things back on track here with regards to some of the planning that's out of the way is that a fair assessment in other words do you feel like your pipeline coverage is now improving.

Speaker Change #177: You're putting things back on track.

Brad Sills: Connect the dots for those who.

Speaker Change #177: We are planning.

Brad Sills: Our listing and if we kind of seen the lunch <unk>.

Speaker Change #177: Planning.

Speaker Change #177: Is that a fair.

Speaker Change #179: Like you mentioned.

Speaker Change: Understood. Thank you so much and one more if I may please just do.

Speaker Change #179: Mike.

Speaker Change #179: As I went through in later in the year and later into the year Yeah.

Speaker Change #146: Potentially assigned for some improvement later in the year.

Speaker Change: You feel like you have identified what those higher quality workloads are.

Speaker Change #181: Yes, I wouldn't characterize it as improving I think we felt good about our pipeline. We just got us off to a slow start for the quarter and so that was the point that I think the nuance that we're trying to communicate and that we do feel good about the new business opportunity for the rest of this year.

Speaker Change: Just curious what in your view those or is it just larger more tenured customers.

Speaker Change #179: Alright.

Speaker Change #179: Hello.

Speaker Change: To have.

Speaker Change #179: Sure.

Bigger data sets.

Speaker Change #179: It's everything.

Speaker Change: He can address or is there something more to what that higher workload definition is higher quality workload. Thank you.

Speaker Change #179: Yeah.

Speaker Change #179: That.

Speaker Change #179: Okay.

Speaker Change #179: Uh huh.

Speaker Change #179: Okay.

Speaker Change #146: And.

Speaker Change: I mean, it really depends on the.

Speaker Change #146: When I talked to our sales leadership team there.

Speaker Change: If it's a new workload and existing workloads, if it's a new work workload, it's hardest suss out exactly how quickly that workload is going to grow but while we changes in our incentive mechanisms that that's more balanced to quality in terms of size versus just pure volume again, I just want to remind people we had record workload volumes.

Speaker Change #179: Okay.

Speaker Change #146: They feel really good the win rates seem very high our competitiveness against different types of competitors are strong. So our new business opportunity is strong I wouldn't say, it's slightly improved its just that we got off to a slow start to Q1.

Speaker Change #179: It's very high competitiveness.

Strong so our newbuild.

Speaker Change #179: I would say.

It was just that we got up.

Speaker Change #182: Yes, Brad.

Speaker Change #183: Yes, Brad I would just broadly say like this is very consistent with how we've talked about the business for the last couple of years now in terms of sort of thinking about new business.

Speaker Change #179: Okay.

Speaker Change #179: Okay.

Speaker Change #179: Last couple of years now.

Speaker Change #179: In terms of.

Last year, which so the intent of our strategy actually worked well because we really reduced the amount of friction in terms of acquiring new workloads. Just now that we're seeing starting to see one year data. We just made fine tune some of some of our incentives to just make sure there's a little bit more balance on an on a rewarding people for the size of it.

Speaker Change #184: Uh huh.

Harley: And sort of expansion of our consumption of existing workloads.

Speaker Change #184: Okay.

Speaker Change #184: Okay.

Speaker Change #184: More of us.

Harley: And that the macro impact, which obviously.

Speaker Change #184: Macro.

Speaker Change #184: Okay.

Harley: Even if it's getting more sensitive isn't a brand new topic or isn't the brand new discussion from a new business standpoint, we've been able to execute well against that but it does affect the underlying usage of applications that kind of those underlying read rates that drive consumption.

Speaker Change #184: They are getting.

Speaker Change #184: Is it new.

Speaker Change #185: I'm from a new deal.

Speaker Change: Workload, not just of what volume.

Speaker Change #184: Okay.

Speaker Change #184: Well with that.

Speaker Change: Understood. Thanks, Dave Thanks, Michael.

Speaker Change #186: Thank you.

Speaker Change #186: Oh of applications.

Speaker Change: One moment for our next question.

Speaker Change #186: Great.

Speaker Change #186: And so that's good.

Speaker Change #187: And so that's really the same dynamic is playing out here the operational stuff.

Speaker Change: Our next question comes from the line from the line of Tyler Radke from Citi. Your line is open.

Yes.

Speaker Change #186: Let's start.

Harley: Slow start to the beginning of that we've kicked off is just trying to put the.

Speaker Change #186: Perhaps.

Speaker Change #186: Yes.

Speaker Change #186: Q1 later new business.

Harley: Q1, lighter new business quarter into context, and is a nuance that sort of meant to help understand not some fundamental different shift about the macroeconomic environment, we've been able to continue.

Tyler Radke: Yes, thanks for taking the question.

Speaker Change #186: Okay.

Speaker Change #186: Thank you.

Tyler Radke: Just a follow up in terms of the consumption weakness you saw in the quarter I guess could you help us understand is this more driven by kind of the <unk>.

Speaker Change #186: Additional ship microeconomic macroeconomic environment.

Speaker Change #186: Next year.

Speaker Change #188: Well from that standpoint from a go to market and everything else perspective, so just to try and.

Speaker Change #186: Go to market marketing, so just trying to.

Tyler Radke: And applications being less usage do you think that this is.

Connect the dots.

Speaker Change #155: Connect the dots for those who.

Speaker Change #186: No.

Our listening.

Speaker Change #155: Our listing and if a kind of seen the lunch <unk>.

Tyler Radke: Specific.

Speaker Change #186: Okay.

Tyler Radke: Optimizations that.

Speaker Change #189: Understood. Thank you.

Speaker Change #190: Understood. Thank you so much and one more if I may please just do.

Tyler Radke: Customers are putting in place are.

Speaker Change #186: Right.

Speaker Change #186: Just do you feel like you would like.

Tyler Radke: Or maybe it's just slower pace of.

Speaker Change #191: You feel like you have identified what those higher quality workloads are.

Tyler Radke: Application modernization.

Speaker Change #186: Higher quality blah blah blah.

Or just curious.

Tyler Radke: Across those customer bases given.

Speaker Change #192: Just curious what in your view those or is it just larger more tenured customers.

Speaker Change #186: And your view of those R&D more tomorrow.

Speaker Change: Budget environment, if you could just kind of pinpoint where you're seeing that consumption.

Speaker Change #186: Your customer.

Speaker Change #158: To have.

Speaker Change #186: Year to date.

Speaker Change #158: Bigger data sets.

Speaker Change: Expansion top estimates.

Speaker Change #186: Okay.

Speaker Change #194: He can address or is there something more to what that higher workload definition is that higher quality workload. Thank you.

Speaker Change #186: Okay.

Speaker Change: Yes, so when we.

Speaker Change #186: These are higher than that.

Speaker Change: Are you talking about consumption weakness it is in our view the end applications.

Speaker Change #186: Yes.

Speaker Change #193: Thank you. Thank you.

Speaker Change #158: I mean, it really depends on the.

Speaker Change #193: Hi.

Usage slowing down which in some ways a proxy for our end customers business is slowing down.

Speaker Change #196: If it's a new workload and existing workloads, if it's a new work workloads hardest suss out exactly how quickly that workload is going to grow but what we changes in our incentive mechanisms that that's more balanced to quality in terms of size versus just pure volume again, I just want to remind people we had record workload volumes.

Speaker Change #193: Yeah.

Speaker Change #195: Good morning.

Speaker Change #195: Yeah.

And.

Speaker Change #195: Okay.

Speaker Change: And it's not new business because this is consumption of existing workloads.

So we changed.

Speaker Change: And it's and you have to remember we never saw really optimization as a major dynamic in our business last year. So it wasn't a headwind last year. So so it's not really a tailwind this year.

Speaker Change #195: Our balance on quality into all size, Bristol ICU or volume again.

Speaker Change #195: Yes.

Speaker Change #161: Last year, which so the intent of our strategy actually worked well because we really reduce the amount of friction in terms of acquiring new workloads. Just now that we're seeing starting to see one year data. We just made fine tune some of some of our incentives to just make sure there's a little bit more balance on an on a rewarding people for the size of <unk>.

Speaker Change #195: So the intangible.

Speaker Change #198: Excellent well not really.

Speaker Change: And so that is not a major dynamic in our business relative to other consumption oriented businesses.

Speaker Change #197: You bet.

Speaker Change #195: Our new work.

Speaker Change #195: Just now that we're seeing.

Speaker Change #195: One year data.

Speaker Change: That.

Speaker Change #195: Right.

Speaker Change: You track.

Speaker Change #200: Thank you.

Tyler Radke: And Tyler.

Speaker Change #199: Alright. Thank.

Tyler Radke: We said this in the prepared remarks, but again just to make sure that we hit this point.

Speaker Change #199: Thank you.

Speaker Change #199: On peoples lives.

Tyler Radke: If you think about the slower growth in Atlas consumption that we saw we talked about how if you look on a year over year basis. The underlying usage right think liking our reads and writes that grew more slowly this year as well and as we've talked about there tends to be.

Speaker Change #201: Workload not just the volume.

Volume.

Speaker Change #203: Understood. Thanks, Dave Thanks, Michael.

Speaker Change #199: Understood.

Speaker Change #199: Thanks, Michael.

Speaker Change #199: One moment.

Speaker Change #202: One moment for our next question.

Speaker Change #199: Next question.

Speaker Change #199: Our next question.

Speaker Change #204: Our next question comes from the line from the line of Tyler Radke from Citi. Your line is open.

Yes.

From Citi.

Tyler Radke: Tight linkage between those two given sort of the way that our value proposition works.

Speaker Change #199: Okay.

Speaker Change #199: Yes. Thanks.

Speaker Change #205: Yes, thanks for taking the question.

Speaker Change #199: And a follow up.

Speaker Change: Okay helpful. Michael.

Speaker Change #206: Just a follow up on in terms of the consumption weakness you saw in the quarter I guess could you help us understand is this more driven by kind of the <unk>.

Speaker Change #199: Consumption.

Speaker Change: On the guidance here obviously.

Speaker Change #199: Alright, okay.

Speaker Change #199: Okay.

Speaker Change: So you don't like lowering lowering guidance, but considering you didn't hear and hopefully this is the last time. This year can you just remind us.

Speaker Change #199: Goodbye.

Speaker Change #199: And.

Speaker Change #164: And applications being less usage do you think that this is.

Speaker Change #199: We've seen what.

Speaker Change #199: Yeah.

Speaker Change #199: Specific.

Speaker Change #164: Specific.

Speaker Change #199: Optimism.

Speaker Change #164: Optimizations that.

What you're assuming from a.

Speaker Change #199: Customers.

Speaker Change: Consumption pattern I know you said that this year is obviously starting off.

Speaker Change #164: Customers are putting in place are.

Speaker Change #199: Sure.

Speaker Change #164: Or maybe it's just slower pace of.

Speaker Change #199: Hello.

Speaker Change: Slower than you expected.

Speaker Change #199: Applications.

Speaker Change #164: Application modernization.

Speaker Change: And kind of behind seasonal trend versus last year like what what are you doing from an adjustment perspective are you taking any kind of a worst case scenario you're looking back.

Speaker Change #199: Okay.

Speaker Change #164: Across those customer bases given.

Speaker Change #199: Okay.

Speaker Change #199: Yes.

Speaker Change #207: Budget environment, if you could just kind of pinpoint where you're seeing that consumption.

Speaker Change #199: Let's see.

Speaker Change #199: Good point.

Speaker Change #199: You mentioned expansion.

Speaker Change #208: Expansion suffered the most.

Speaker Change #199: Yeah. So.

Speaker Change #209: Yes so.

Maybe a couple of years back when consumption trends.

Speaker Change #210: Are you talking about consumption weakness it is in our view the end applications.

Speaker Change #199: We talked about.

Speaker Change #199: It is.

Speaker Change #199: Absolutely.

Speaker Change: Even worse just help us understand what what's embedded.

Speaker Change #164: Usage slowing down which in some ways a proxy for our end customers business is slowing down.

Speaker Change #199: Yeah.

Speaker Change: And what level of conservatism here youre, implying thank you.

Speaker Change #199: Please go ahead.

Speaker Change #211: This slowing down.

Okay.

Speaker Change: Yeah, So happy to help you walk through obviously, we went through the.

Speaker Change #164: And.

Speaker Change #211: And it's not.

Speaker Change #164: And it's not new business because this is consumption of existing workloads.

Speaker Change #211: As consumption.

Speaker Change: Fiscal 'twenty five guide in a fair amount of detail.

Speaker Change #211: Hum.

Speaker Change #211: And you.

Speaker Change #164: And it's and you have to remember we never saw really optimization as a major dynamic in our business last year. So it wasn't a headwind last year. So so it's not really a tailwind this year.

Speaker Change #211: You have to remember.

Speaker Change: When we guided back in March and so maybe I'll kind of call out the things that have changed since then in terms of our understanding obviously first and foremost the Q1 results.

Speaker Change #211: Really tough.

Speaker Change #211: Okay.

Speaker Change #211: Not this year.

Speaker Change #211: Sure.

Speaker Change #211: No.

Speaker Change #211: Sure.

Speaker Change #211: Not really.

Speaker Change #211: And <unk>.

Speaker Change: Being the being the biggest piece so as.

Speaker Change #164: And so that is not a major dynamic in our business relative to other consumption oriented businesses.

Speaker Change #211: China.

Speaker Change: As we've talked about consumption and consumption growth in consumption growth trends.

Speaker Change #211: Relative to <unk>.

Speaker Change #211: At this point.

Speaker Change #212: That's correct.

Speaker Change #164: That.

Speaker Change: Tend to be the biggest near term factor.

Speaker Change #164: You track.

Speaker Change #213: Yeah, Tyler Grant Thank you said.

Speaker Change #164: And Tyler.

Speaker Change: When you look out at the business. So we saw those lower as we mentioned.

Speaker Change #215: We said this in the prepared remarks, but again just to make sure that we hit this point.

Speaker Change #212: Okay.

Speaker Change #214: So you can explain.

Speaker Change #164: If you think about the slower growth in Atlas consumption that we saw we talked about how if you look on a year over year basis. The underlying usage right think liking our reads and writes that grew more slowly this year as well and as we've talked about there tends to be a.

Speaker Change #214: If you think now.

Speaker Change: In March and April than what we expected.

Speaker Change #214: Lower.

Speaker Change: As I mentioned is consistent with that and so we've assumed that same level.

Speaker Change #214: We talked about.

Speaker Change #214: If you look on the euro.

Speaker Change: <unk> throughout the year, so we haven't assumed a recovery.

Speaker Change #214: Underlying.

Speaker Change #214: I can think of things like right now.

Speaker Change: Nor have we assumed a deterioration any of the other thing within Atlas, it's important to keep in mind.

Speaker Change #214: That group.

Speaker Change #214: Well.

Speaker Change #216: You talked about.

Speaker Change #216: Right.

Speaker Change #170: Tight linkage between those two given sort of the way that our value proposition works.

Speaker Change #216: Pete.

Speaker Change: Do you think through kind of the impacts are.

Speaker Change #216: Okay.

Speaker Change #216: Proposition.

Speaker Change: In part because of that lower expansion in Q1, and then also the smaller new business cohort within Atlas in Q1, the starting Q2 <unk> is lower.

Speaker Change #216: Okay. Okay.

Speaker Change #217: Okay helpful and Mike.

Speaker Change #216: Michael.

Speaker Change #171: Michael.

Speaker Change #216: On the guidance.

Speaker Change #171: On the guidance here obviously.

Speaker Change #216: I'm sure you don't like.

Speaker Change #218: So you don't like lowering lowering guidance, but considering you did it here and hopefully this is the last time. This year can you just remind us what you're assuming from a.

Speaker Change #216: Goodbye.

Speaker Change #216: Okay.

Speaker Change #216: Yes.

And that compounds over the course of the year right. So we spent a bunch of time last year talking about how Q1 was a particularly strong quarter and given the math of compounding that wound up being the gift that kept giving throughout the year from an absolute revenue number perspective, even if we saw.

Speaker Change #216: This isn't.

Speaker Change #216: Yeah.

Speaker Change #216: Yes.

Speaker Change #216: What you have.

Speaker Change #216: Uh huh.

Speaker Change #175: Consumption pattern I know you said that this year is obviously starting off.

Speaker Change #216: Right.

Speaker Change #216: This years obviously.

Speaker Change #216: Though slower than smaller than it is in.

Speaker Change #219: Slower than you expected.

Speaker Change #216: And behind that.

Speaker Change #221: And kind of behind seasonal trend versus last year like what what are you doing from an adjustment perspective are you taking any kind of a worst case scenario you're looking back.

Speaker Change: Different consumption trends that will work the same way this year, but sort of in reverse right with with a softer growth in.

Speaker Change #216: Well.

Speaker Change #220: Are you doing.

Speaker Change #220: Jeff.

Speaker Change #220: Yes.

Speaker Change #220: I think in kind of worst.

Speaker Change #220: Worst case.

Speaker Change: In Q1 that will compound as you think about it relative to your full year guide and so that's baked in to the math in the equation and the third thing that I'd call out.

Speaker Change #220: Hum.

Speaker Change #223: Maybe a couple of years back when consumption trends were even worse just help us understand what what's embedded.

Speaker Change #220: Maybe a couple of years.

Speaker Change #220: Hum.

Speaker Change #220: We are working to help them.

Speaker Change #222: What what would that look like.

Speaker Change #222: Hum.

Speaker Change #224: And what level of conservatism here youre, implying thank you.

Speaker Change: As I referenced.

Speaker Change #222: Yes, I'm happy to.

Speaker Change #225: Yes, so happy to help you walk through obviously, we went through the <unk>.

Speaker Change: EMEA did have a stronger Q1 and outperformed relative to our expectations.

Speaker Change #222: Through August.

Speaker Change #222: Great.

Speaker Change #226: Uh huh.

Speaker Change #179: Fiscal 'twenty five guide in a fair amount of detail.

Speaker Change #226: No.

Speaker Change: But despite that outperformance, we actually saw fewer multi year deals and in the current macro environment when we look out.

Speaker Change #226: And we got to get back to our domestic walk kind of coffee.

Speaker Change #227: When we guided back in March and so maybe I'll kind of call out the things that have changed since then in terms of our understanding obviously first and foremost the Q1 results.

Speaker Change #226: Sure.

Speaker Change #226: Okay.

Speaker Change: We think Theres reason.

Speaker Change #226: Almost.

Speaker Change: To believe that Q1 wasn't a fluke.

Speaker Change #226: Yes.

Speaker Change #226: Being.

Speaker Change #179: Being the being the biggest piece so.

Speaker Change: And that that will be a headwind and so when you think about the $6 six dynamics associated with enterprise advance, we factored that into account as well and so those are really the three key things that make up the inputs into the fiscal 'twenty five updated guide.

Speaker Change #226: So as we've talked about.

Speaker Change #228: As we've talked about consumption and consumption growth in consumption growth trends tend to be the biggest near term factor.

Speaker Change #226: Okay.

Speaker Change #226: The biggest factor I look out.

Speaker Change #179: When you look out at the business. So we saw those lower as we mentioned.

Speaker Change #226: So at those levels.

March and April.

Speaker Change #179: In March and April than what we expected.

Speaker Change: Thank you.

Speaker Change #226: Okay.

May as I mentioned is consistent with that and so we've assumed that same level.

Speaker Change #226: Yes.

Speaker Change: Thank you.

Speaker Change #226: Okay.

Speaker Change: Our next question.

Speaker Change #226: Hum.

Speaker Change #184: Persist throughout the year, so we haven't assumed a recovery.

Speaker Change #226: Yeah.

Speaker Change #226: Okay.

Speaker Change #226: And.

Speaker Change #229: And nor have we assumed a deterioration any of the other thing within Atlas, it's important to keep in mind.

Speaker Change: Okay.

Speaker Change #226: Yeah.

Speaker Change: And our next question will come from the line of Mike Cecos from Needham Your line is open.

Speaker Change #226: Okay.

Speaker Change #226: Hi.

Speaker Change #226: Thank you.

Speaker Change #184: As you think through kind of the impacts.

Mike Cecos: Thanks for taking the questions guys I have two and I'll start with the first one here just could be to be clear, but I want to make sure I'm interpreting this properly.

Speaker Change #226: <unk>.

Speaker Change #226: <unk>.

Speaker Change #230: In part because of that lower expansion in Q1, and then also the smaller new business cohort within Atlas in Q1, the starting Q2 <unk> is lower than that.

Speaker Change #226: Okay.

Speaker Change #226: One.

Speaker Change #226: A smaller.

Speaker Change #226: Martha.

Speaker Change: On the slower growth from those newly acquired workloads last year.

Speaker Change #226: Starting.

Speaker Change #226: R R.

Speaker Change: The takeaway that the sales team wasn't necessarily acquiring the quote unquote right type of workload because mongo DB.

Speaker Change #226: Lower.

Speaker Change #226: And that one.

Speaker Change #186: Compounds over the course of the year right. So we spent a bunch of time last year talking about how Q1 was a particularly strong quarter and given the massive compounding that wound up being the gift that kept giving throughout the year from an absolute revenue number perspective, even if we.

Speaker Change #226: Alright.

Speaker Change #226: Oh of course.

It sounded like you did over indexed towards focusing on the volume of these newly acquired workloads over quality.

Speaker Change #226: Given.

Speaker Change #226: Rhonda.

Yeah.

A year.

Speaker Change: Fair characterization or take away from what we're hearing today.

Speaker Change #226: Yeah.

Speaker Change #226: So different.

Speaker Change: Potentially I mean, I would say that.

Speaker Change #186: Different consumption trends that will work the same way this year, but sort of in reverse right with with a softer growth in.

Speaker Change #226: I think that that will work.

Speaker Change: We obviously have learned a lot and.

Speaker Change #226: Okay.

Speaker Change #226: Right.

Speaker Change: And so we've really indexed on volume because.

Speaker Change #226: The growth.

Speaker Change #226: One final comment.

Speaker Change #186: In Q1 that will compound as you think about it relative to your full year guide and so that's baked in to the Bath in the equation and the third thing that I'd call out.

Speaker Change #226: Relative.

Speaker Change: As in past years, when you have a portfolio of workloads, you're not sure, which workload is going to take off and Thats.

Speaker Change #226: So that's baked in to the bad things happening.

Speaker Change: It's been the growth driver of our business and I'll just remind you five years ago, we were 110th of the size of our business. Today. So that's our strategy has been to acquire workloads as quickly as possible and we want to make it even easier for customers to for us to win work closer customers could use our platform as just that as we see.

Speaker Change #226: Hum.

Speaker Change #186: As I referenced.

Speaker Change #226: Yeah.

Speaker Change #226: Yeah.

Speaker Change #231: EMEA did have a stronger Q1 and outperformed relative to our expectations.

Speaker Change #226: One.

Speaker Change #226: Relative to our equity.

Speaker Change #226: But.

Speaker Change #186: But despite that outperformance, we actually saw fewer multi year deals and in the current macro environment when we look out.

Speaker Change #226: Yeah.

Speaker Change #226: Multiyear.

Speaker Change #226: Correct.

Speaker Change #226: Yeah.

Speaker Change #226: Thank you.

Speaker Change #186: We think Theres reason.

Speaker Change #226: Great.

Speaker Change: The growth rates of the workloads that are more recently acquired they seem to be growing a little slower than we expected and so we're just making some refinements I don't want to suggest that there's some major pivot or or kind of change in direction is just some.

Speaker Change #193: To believe that Q1 wasn't a fluke.

Speaker Change #226: One one.

Speaker Change #232: And that that will be a headwind and so when you think about the $6 six dynamics associated with enterprise advance, we've factored that into account as well and so those are really the three key things that make up the inputs into the fiscal 'twenty five updated guide.

Speaker Change #226: Yeah.

Speaker Change #226: Right.

Speaker Change #226: Hey, David.

Speaker Change #226: Yes.

Speaker Change #226: Get back to that.

Speaker Change #226: As well.

Speaker Change #226: Yeah.

Speaker Change: Some refinements in terms of our incentive system to reward salespeople for.

The makeup.

Speaker Change #226: Five.

Speaker Change #226: Hi.

Speaker Change: Workloads that grow even.

Speaker Change #226: Thank you.

Speaker Change #233: Thank you.

Speaker Change: Grow fast and so.

Speaker Change #226: Thank you.

Speaker Change #195: Thank you.

Speaker Change: And that's we think that's the appropriate response here.

Speaker Change #226: Our next question.

Speaker Change #234: Our next question.

Speaker Change #226: Thanks.

Speaker Change: Got it.

Speaker Change: My follow up again, I'm trying to get this from the outside in but I'd appreciate any color.

Speaker Change #195: Okay.

Speaker Change #226: And our next question.

Speaker Change #235: And our next question will come from the line of Mike Cecos from Needham Your line is open.

Speaker Change: Understand the refinement here on.

Speaker Change #226: Okay.

Speaker Change #236: Hi, Thanks for taking my call.

Speaker Change #100: Looking at those workloads to grow faster, but I think Michael had made the earlier point as well.

Michael Joseph Cikos: Thanks for taking the questions guys I have two and I'll start with the first one here just could be to be clear, but I want to make sure I'm interpreting this properly.

Speaker Change #237: Thank you.

Speaker Change #100: Because of this go to market it for almost.

Speaker Change #237: Great.

It could be cleared.

Speaker Change #100: Almost by default have less visibility into that customer because you have reduced the friction to adapt.

Speaker Change #237: Okay.

Speaker Change #237: On the road.

Speaker Change #239: On the slower growth from those newly acquired workloads last year.

Speaker Change #237: <unk>.

Speaker Change #101: Can you can you help me think about how you guys are defining that.

Speaker Change #237: Here is the takeaway.

Speaker Change #240: The takeaway that the sales team wasn't necessarily acquiring the quote unquote right type of workload because mongo DB.

Speaker Change #237: Yes.

Speaker Change #237: Yeah.

Speaker Change #101: On acquiring those right workloads, just given that reduced visibility we have.

Speaker Change #237: Okay.

Speaker Change #237: Okay.

Speaker Change #237: Alright.

Speaker Change #237: Sounds like it in.

It sounded like you did over indexed towards focusing on the volume of these newly acquired workloads over quality.

Speaker Change #102: Well I think it's really tied to those three priorities. We outlined so one we are devoting more resources to the enterprise segment of the market.

Speaker Change #237: We're getting on the call.

Speaker Change #237: Okay.

Speaker Change #237: Aircastle.

Speaker Change #241: Fair characterization or take away from what we're hearing today.

Speaker Change #237: Okay.

Speaker Change #102: Well, we've seen great success, there we have lots of.

Speaker Change #242: Potentially I mean, I would say that.

Speaker Change #237: Absolutely.

Speaker Change #237: Yeah.

Speaker Change #237: Yep.

Speaker Change #102: Customers, who spend eight figures with us we have.

Speaker Change #243: We obviously have learned a lot and.

Speaker Change #237: Okay.

Speaker Change #237: Oh really.

Speaker Change #199: And so we've really indexed on volume because.

Lots of customers.

Speaker Change #102: A lot of customers, who spend seven figures with us.

Speaker Change #237: All you.

No.

Speaker Change #199: As in past years, when you have a portfolio of workloads, you're not sure, which workload is going to take off and Thats.

Speaker Change #237: As in past years.

Speaker Change #102: We just see the returns on that segment.

That's helpful.

Speaker Change #102: Be very very strong.

Speaker Change #237: You know what's driving that.

Speaker Change #199: It's been the growth driver of our business and I'll just remind you five years ago, we were 110th of the size of our business. Today. So that's our strategy has been to acquire workloads as quickly as possible and we want to be kind of make it even easier for customers to for us to win work closer customers could use our platform as just that as we see.

Speaker Change #102: <unk> focused on that segment of the market.

Speaker Change #237: Mind you.

Speaker Change #102: We talked about this focus on this kind of.

Speaker Change #237: Right.

That's actually all of our hospitals.

Speaker Change #102: Segment of the market that historically has been hard to crack these legacy workloads run mission critical portions of these large businesses, but.

Speaker Change #237: Hum.

Speaker Change #237: Yes.

Speaker Change #237: So far as to what they are.

Speaker Change #237: Okay.

Speaker Change #102: Frankly, some of those developers have retired or left and people are scared to make change because the time in the risk and the cost to do so.

Speaker Change #237: Just that.

Speaker Change #237:

Speaker Change #199: The growth rates of the workloads that are more recently acquired they seem to be growing a little slower than we expected and so we're just making some refinements I don't want to suggest that there's some major pivot or or kind of change in direction is just some.

Oh, that's great.

Speaker Change #237: Most recently in Florida.

Speaker Change #237: Michael.

Speaker Change #102: Can be quite difficult and risky and so essentially by using AI. We've done some pilots, we can dramatically reduce the cost and time.

Speaker Change #237: So we're just.

Speaker Change #237: Nature.

Speaker Change #237: Nature.

Speaker Change #237: Or kind of ancient.

Speaker Change #237: Maintenance.

Speaker Change #211: Some refinements in terms of our incentive system to reward salespeople for.

Speaker Change #102: Make these migrations happen so that's generating a lot of interest in for customers, they're feeling a lot of pressure because the cost of baring. Those legacy applications is very high this increasing regulatory and compliance pressures to.

Speaker Change #237: In terms of incentives.

Speaker Change #237: More people towards.

Speaker Change #237: We're close to it.

Speaker Change #211: Workloads that grow even.

Speaker Change #237: Okay.

Speaker Change #211: Grow fast and so.

Speaker Change #237: And that's.

Speaker Change #211: And that's we think that's the appropriate response here.

Speaker Change #237: We think that's the approach.

Speaker Change #102: To upgrade those applications. Some of these technologies are end of life ing. So they have a compelling reason to take action and they want to also.

Speaker Change #237: Okay.

Speaker Change #244: Got it.

Speaker Change #245: Got it.

Speaker Change #246: My follow up again, I'm trying to get this from the outside in but I'd appreciate any color.

Speaker Change #244: I'm trying to get this right.

Speaker Change #244: Yes.

Speaker Change #244: Understand.

Speaker Change #213: Understand the refinement here on.

Speaker Change #102: Essentially position these apps to be AI enabled and they can't do that.

Looking at those.

Speaker Change #247: Looking at those workloads to grow faster, but I think Michael had made the earlier point as well.

Speaker Change #244: Okay.

Speaker Change #102: With the <unk>.

Speaker Change #244: Because it.

Speaker Change #102: The legacy architectures that they have so there's a whole set of reasons that these customers are interested in kind of migraine and those workloads are definitely by definition bigger and then as I said the third category is all about positioning ourselves for the coming set of apps.

Speaker Change #214: Because of this go to market effort almost.

Speaker Change #244: Almost five years.

Speaker Change #214: Almost by default have less visibility into that customer because you have reduced the friction to adapt.

Speaker Change #244: Okay.

Speaker Change #244: Average user adoption.

Speaker Change #244: Can you tell me.

Speaker Change #248: Can you can you help me think about how you guys are defining that.

Speaker Change #244: How are you guys with that.

Our focus on acquiring those right workloads.

Speaker Change #214: On acquiring those right workloads, just given that reduced visibility we have.

Speaker Change #102: Perhaps that will come to production.

Speaker Change #244: Yes.

Speaker Change #103: The other thing Mike just not to get lost in the details, but I wouldnt quite use the word visibility, but I do think if you think about it this way if youre going through the process of negotiating a commitment with the customer youre going to get an enormous amount of information from that customer about the workload in Nevada everything else and so when you are moving.

Speaker Change #249: Well I think in Australia.

Pete: Well I think it's really tied to those three priorities. We outlined so one we are devoting more resources to the enterprise segment of the market.

Speaker Change #244: Yeah.

Speaker Change #250: Good morning, everybody.

Speaker Change #250: The market.

Speaker Change #250: Hum.

Speaker Change #252: Well, we've seen great success, there we have lots of.

Speaker Change #250: We've seen great success there.

Speaker Change #250: Okay.

Speaker Change #253: I was curious if you have.

Speaker Change #216: Customers, who spend eight figures with us we have.

Speaker Change #254: I don't know.

Speaker Change #216: Lots of customers.

Speaker Change #103: In a frictionless manner to get more workloads, you won't get all of that information.

Speaker Change #254: A lot of customers.

Speaker Change #216: A lot of customers, who spend seven figures with us.

Speaker Change #255: He was with us.

Speaker Change #256: I see.

It is still possible with intent and purpose and incentives to get some of that information and getting that little bit of relevant information is dramatically different than getting a commitment right and so that's the balance that we're just we're trying to strike and network continuing to iterate as we learn here and also I just wanted to add it's not that we're anti commitments, we want to the customer.

Speaker Change #216: We just see the returns on that segment.

Speaker Change #256: Okay.

Speaker Change #256: Very well.

Speaker Change #216: Be very very strong. So we're obviously focused on that segment of the market. We talked about this focus on this kind of <unk>.

Well, we're obviously.

Speaker Change #256: Yes.

Speaker Change #256: We talked about we talked about.

Speaker Change #256: Hum.

Speaker Change #216: Segment of the market Thats been historically has been hard to crack these legacy workloads run mission critical portions of these large businesses, but.

Speaker Change #256: Mark.

Speaker Change #256: No.

Speaker Change #256: Right.

Speaker Change #256: Z worth noting.

Speaker Change #256: Yes.

Speaker Change #256: Of these large businesses, but.

Speaker Change #103: <unk> to feel like Okay, I see enough volume either through this one workload through the multitude of workloads they have to make a big or a bigger commitment and it's a much more natural conversation than trying to prematurely force that commitment when the customer themselves may not know how quickly that workflow is going to grow and so consequently, we will struggle to figure out like what kind of commitment.

Speaker Change #256: At least some backdrop.

Speaker Change #220: Frankly, some of those developers have have retired or left and people are scared to make change because the time in the risk and the cost to do so.

Speaker Change #256: All right.

Speaker Change #256: And people are scared.

Speaker Change #256: You still can.

Speaker Change #256: Can be quite high.

Speaker Change #222: Can be quite difficult and risky and so essentially by using AI. We've done some pilots, we can dramatically reduce the cost and time to <unk>.

Speaker Change #256: Okey Dokey.

Speaker Change #256: Using AI.

Speaker Change #256: Dramatically.

Speaker Change #256: The cost.

Michael Joseph Cikos: I make these Mike.

Speaker Change #103: They want to sign up for it.

Speaker Change #259: These migrations happen so that's generating a lot of interest in for customers, they're feeling a lot of pressure because the cost of baring. Those legacy applications is very high this increasing regulatory and compliance pressures to to.

Michael Joseph Cikos: That's generally.

Got it thank you for pushing it up I really appreciate all the detail. Thank you.

Speaker Change #257: Yes definitely.

Speaker Change #257: I've talked to very high.

Speaker Change #257: Hi.

Speaker Change #104: Thank you.

Speaker Change #258: Kris and Greg regulatory compliance.

Speaker Change #105: Reminder, Thats star one for a question Star 111 moment for our next question.

Speaker Change #258: Appliance pressures.

Speaker Change #258: To upgrade them.

Speaker Change #261: Those applications. Some of these technologies are end of life ing. So they have a compelling reason to take action and they want to also.

Speaker Change #258: Agent technology.

Speaker Change #260: How are you.

Speaker Change #260: It didn't take accurate and they want.

Speaker Change #106: Our next question will come from line of Brent <unk> from Piper Sandler Your line is open.

Speaker Change #226: Essentially position these apps to be AI enabled and they can't do that.

Speaker Change #262: Thank you ladies.

Speaker Change #262: I can't.

Speaker Change #262: Can't do that.

Michael: Thank you good afternoon, Michael I wanted to go back to the slow start to do business, how much of that was internal versus.

Speaker Change #262: With.

Speaker Change #226: With the <unk>.

Speaker Change #262: Yes.

Speaker Change #226: The legacy architectures that they have so there's a whole set of reasons that these customers are interested in kind of a migraine and those workloads are definitely by definition bigger.

Speaker Change #262: New York.

Speaker Change #262: That's all.

Speaker Change #262: Set of reasons.

Speaker Change #262: Christine.

Speaker Change #262: Great.

Brent <unk>: A change in the external selling environment that created the slow start be lengthening sales cycles longer close time, just trying to think through the.

Speaker Change #262: By definition.

And then that's it.

Speaker Change #264: And then as I said the third category is all about positioning ourselves for the coming set of.

Speaker Change #263: Got it.

Speaker Change #263: Okay.

Speaker Change #263: Perhaps that will come out and talked to them.

Speaker Change #226: Perhaps that will come to production.

Brent <unk>: Internal and external factor there.

Speaker Change #265: The other thing Mike.

Speaker Change #267: The other thing Mike just not to get lost in the details, but I wouldnt quite use the word visibility, but I do think if you think about it this way if youre going through the process of negotiating a commitment with the customer youre going to get an enormous amount of information from that customer about the workload in Nevada everything else and so when you are moving.

Brent <unk>: Internal.

Speaker Change #265: I Wonder why.

Speaker Change #108: Okay engineer replenishing water, yes.

Speaker Change #265: Thanks.

Speaker Change #109: That's helpful color and then Dave for you as we think about the business, where we're seeing a slowdown across the broader application software space. It does feel out the feel like there is a AI crowding out effect here temporarily but as we think about the next year and what you can control to drive <unk>.

Speaker Change #265: Going to the.

Speaker Change #265: Okay.

Speaker Change #265: Thank you.

Speaker Change #265: It was about.

Speaker Change #265: From that.

Speaker Change #266: Hello, everyone.

Speaker Change #265: Okay.

Right.

Speaker Change #268: In a frictionless manner to get more workloads, you won't get all of that information, it's still possible with intent and purpose and incentives to get some of that information and getting that little bit of relevant information is dramatically different than getting a commitment right and so that's the balance that we're just we're trying to strike and that we're continuing to iterate as we learn here and also I just wanted to.

Speaker Change #265: We'll work with it.

Right.

Speaker Change #265: The comparable intensive.

Speaker Change #110: Be an acceleration in the business a year from now what are the things you're focused on.

Speaker Change #265: Yes.

Speaker Change #265: And getting them.

Speaker Change #265: Yeah.

Speaker Change #110: Position this company for improving growth next year.

Speaker Change #265: Does that somehow.

Speaker Change #265: Right.

Speaker Change #265: Interestingly.

Dave I: Yes so.

Speaker Change #265: And also as well.

Speaker Change #111: Again, just to go back I mean, we're going after a very large market, we have low share, but we have to acquire business workload by workload, which is.

Speaker Change #269: It's not that we're anti commitments, we want to the customer to feel like okay. I see enough volume either through this one workload out through the multitude of workloads they have to make a big or a bigger commitment and it's a much more natural conversation than trying to prematurely force a commitment when the customer themselves may not know how quickly that.

Speaker Change #265: Yeah.

Speaker Change #265: We wanted to.

Speaker Change #265: Consumer.

Speaker Change #265: Okay.

Speaker Change #265: Yes.

Speaker Change #265: Our board makeup.

Speaker Change #111: Harder than say getting a broad based decision.

Speaker Change #265: To make a big if.

Speaker Change #265: And it's a much Pat.

Speaker Change #111: If a company to standardizing technology across the enterprise.

Speaker Change #265: Congratulations.

Speaker Change #265: It's early.

Speaker Change #265: One of the customers.

Speaker Change #111: The base is growing but it is slowing overtime and the key to US then is the pace of workload acquisition. So one thing that we're doing is as we as I said earlier is that we are growing our productive capacity and trying to do that consistently we did pause last year, but we are investing this year. We're also trying to increase the productivity of that sales organization by getting better and more.

Speaker Change #226: Workload is going to grow and so consequently, we will struggle to figure out like what kind of commitment they want to sign up for.

Speaker Change #265: So continental.

Speaker Change #265: Richard.

Speaker Change #270: What they want to own it.

Speaker Change #265: Fourth.

Speaker Change #272: Got it thank you for pushing it up I really appreciate all the detail. Thank you.

Speaker Change #271: Got it thank you.

Speaker Change #271: Alright.

Speaker Change #271: Thank you. Thank you.

Speaker Change #271: Thank you.

Speaker Change #226: Thank you.

Speaker Change #271: Yes.

Speaker Change #273: Reminder, Thats star one to one for a question Star 111 moment for our next question.

Speaker Change #271: Alright.

Speaker Change #271: Okay.

Speaker Change #111: Efficient at increasing the pace of which we can acquire workloads posting on the large segment of the large enterprise segment will help that we also are trying to sell more top down the whole focus on legacy App monetization is really elevating our conversations with senior level customers because they are in such pain right now that they want to talk to us.

Speaker Change #271: One moment.

Speaker Change #271: Yeah.

Our next question.

Speaker Change #274: Our next question will come from line of Brent Breslin from Piper Sandler Your line is open.

Speaker Change #271: Yeah.

Speaker Change #271: Okay.

Speaker Change #271: Okay.

Speaker Change #271: Thank you Beth.

Michael: Thank you good afternoon, Michael I wanted to go back to the slow start to do business, how much of that was internal versus.

Speaker Change #271: Goodbye.

Speaker Change #271: Yes.

Speaker Change #271: Internally.

Speaker Change #111: They're quite excited about the results that we've produced in some of these pilots and we're talking to customers.

Speaker Change #271: Change.

Speaker Change #275: Change in the external selling environment that created the slow start be it lengthening sales cycles longer close time, just trying to think through the.

Speaker Change #271: Okay.

Speaker Change #271: Creative.

Speaker Change #111: Who will.

Speaker Change #111: We're interested in and really engaging with us in the program and then obviously AI is also top of mind for senior level executives in there and we're using that as a way to also sell more top down. So those are the things that we're focused on.

Speaker Change #271: Having salesmen.

Speaker Change #271: Yes.

Speaker Change #276: Internal and external factor there.

Speaker Change #271: For service.

Speaker Change #236: Internal.

Speaker Change #271: In General Engineering.

Speaker Change #236: Okay.

Speaker Change #271: Good luck.

Speaker Change #277: Can you just walk through that.

Speaker Change #271: Yes, that's right.

Speaker Change #278: That's helpful color and then Dave for you.

Speaker Change #271: Okay.

Speaker Change #111: In terms of how we continue to drive the long term growth of the business and as I said, we feel really good about the long term prospects.

Speaker Change #271: As we think about it.

Speaker Change #280: As we think about the business, where we're seeing a slowdown across the broader application software space. It does feel out the feel like there is a.

Speaker Change #279: Got it.

Speaker Change #271: Water.

Speaker Change #271: Oh of course.

Speaker Change #271: Yes.

Speaker Change #271: Yeah.

Speaker Change #281: AI crowding out effect here temporarily but as we think about the next year and what you can control to drive maybe an acceleration in the business a year from now what are the things you're focused on.

Speaker Change #271: Yeah.

Speaker Change #271: Okay.

Speaker Change #271: I would think about it.

Speaker Change #271: And what.

Speaker Change #112: Thank you one moment our next question.

Speaker Change #271: Right.

Speaker Change #271: Sure.

Speaker Change #271: Almost.

Speaker Change #271: Thanks.

Speaker Change #112: Okay.

Speaker Change #271: [noise] repositioning.

Speaker Change #237: Reposition this company for improving growth next year.

Speaker Change #113: Our next question will come from the line of will empower from Baird. Your line is open.

Speaker Change #271: Yeah.

Yes, so no.

Speaker Change #237: Yes so.

Speaker Change #237: Again, just to go back I mean, we're going after a very large market, we have low share, but we have to acquire business workload by workload, which is.

Speaker Change #114: Okay, great. Thanks for taking the question.

Speaker Change #271: Again, just to go back.

Speaker Change #271: Yes.

Maybe a slightly different tack I guess, Dave coming out of Mongo DB local in New York, a bunch of new product announcements, so it'd be great to kind of.

Speaker Change #271: Sure.

Speaker Change #271: Hum.

Speaker Change #271: Hum harder than.

Speaker Change #237: Harder than say getting broad based decision.

Speaker Change #271: Broad basis.

Speaker Change #271: Okay.

Here what customers are most excited about where the conversations were focused.

Speaker Change #237: If a company to standardizing technology across the enterprise.

Speaker Change #271: Got it.

Speaker Change #271: Basically.

Speaker Change #237: The base is growing but it is slowing overtime and the key to US then is the pace of workload acquisition. So one thing that we're doing is as we as I said earlier is that we are growing our productive capacity and trying to do that consistently we did pause last year, but we are investing this year. We're also trying to increase the productivity of that sales organization by getting better in <unk>.

Speaker Change #271: Okay.

Speaker Change #114: The meetings, there and I guess, secondly, I guess I'd be curious just as you were talking to customers.

Speaker Change #271: Hey.

Speaker Change #271: So that's one thing.

I said earlier.

Speaker Change #114: Kind of what their view was towards macro.

Speaker Change #271: Right.

Speaker Change #114: Versus investments because it sounds like a lot of the macro youre seeing on the consumption side and the underlying workloads, but I guess I'm curious kind of from a top down level kind of what their views of conversations were around macro versus investing in new technologies.

Speaker Change #271: Okay.

Speaker Change #271: Pause here.

Speaker Change #271: Thanks.

Speaker Change #271: We're also trying to create.

Yes.

Speaker Change #271: Getting better.

Speaker Change #282: More efficient at increasing the pace of which we can acquire workloads posting on the large segment of the large enterprise segment will help that we also are trying to sell more top down the whole focus on legacy App monetization is really elevating our conversations with senior level customers because they are in such pain right now that they want to talk to us.

Speaker Change #271: Okay.

Speaker Change #271: Postings.

Speaker Change #271: Thanks.

Speaker Change #115: Yes so.

Speaker Change #115: So in terms of new products obviously.

Speaker Change #271: He also.

Speaker Change #271: Yeah.

Speaker Change #115: The way, we introduce new products is just first kind of.

Speaker Change #271: Folks.

Speaker Change #271: Alex.

Speaker Change #115: Do a beta rollout get some early pilot customers and then do more of a controlled introduction before we got to general availability and so for our stream processing product, we already had a number of customers actually in the one hundreds of customers, who were testing and giving us feedback.

Speaker Change #271: The station cluster.

Speaker Change #271: Yes.

Speaker Change #271: If you want to talk to you.

Speaker Change #237: And they are quite excited about.

Speaker Change #283: I did.

Speaker Change #283: The result.

Speaker Change #237: The results that we've produced in some of these pilots and we're talking to customers.

Speaker Change #283: Okay.

Speaker Change #283: And we're talking to.

Speaker Change #283: Who are interested.

Speaker Change #244: Who who are interested in really engaging with us in the program and then obviously AI is also top of mind for senior level executives and there and we're using that as a way to also sell more top down. So those are the things that we're focused on.

Speaker Change #115: The receptivity was very positive and the interest rate is very high because when you think about.

Speaker Change #283: And then.

Speaker Change #283: Hi.

Speaker Change #283: Sure.

Speaker Change #283: Great.

Speaker Change #115: Being able to process data in motion most of that data is Jason based it's obviously core to who we are as a platform and so is well suited.

Speaker Change #283: Yeah.

Yes.

Speaker Change #283: Hum.

Speaker Change #244: In terms of how we continue to drive the long term growth of the business and as I said, we feel really good about the long term prospects.

Speaker Change #283: How are we going to keep.

Speaker Change #283: Right.

Business.

Speaker Change #283: We feel just as good.

Speaker Change #115: Or something that should be part of the marketing platform and so so that receptivity was quite high.

Speaker Change #283: Thanks.

Speaker Change #115: Obviously.

Speaker Change #115: <unk> zero, we've announced but we have not really it will be generally available later this year, but we have lots of customers. We have some of the most demanding and sophisticated customers who are pushing our platform. We by definition are much more performance and scalable than most of the platforms out there. So by definition, we have customers who are really pushed the <unk>.

Speaker Change #284: Thank you.

Speaker Change #287: Thank you one moment our next question.

Speaker Change #285: One moment.

Speaker Change #286: Please proceed.

Speaker Change #286: Okay.

Speaker Change #250: Okay.

Speaker Change #286: Yes.

Speaker Change #286: Our next question.

Speaker Change #288: Our next question will come from the line of will empower from Baird. Your line is open.

Speaker Change #286: Okay.

Speaker Change #286: Okay.

Speaker Change #286: Okay great.

Speaker Change #289: Okay, great. Thanks for taking the question.

Speaker Change #286: Okay.

Speaker Change #286: Maybe.

Dave I'll: Maybe a slightly different tack I guess, Dave coming out of Mongo DB local in New York, you idle a bunch of new product announcements, so it'd be great to kind of.

Speaker Change #115: Globe and they're really excited about the fact about the performance gains that we're delivering.

Speaker Change #286: Yeah.

Speaker Change #286: Okay.

Speaker Change #286: Long ago.

Speaker Change #286: One product.

Speaker Change #115: Because that will only help them in terms of what they wanted to and then in terms of the new products that we are in terms of full text search and vector search that we're introducing the community. They are really excited because in many places for our for our prospects that's where they start they start with a community version before they say move to Atlas or move to EMEA.

Speaker Change #286: Got it.

Speaker Change #286: Here.

Here, what customers are most excited about where the conversations.

Speaker Change #286: Yeah.

Speaker Change #286: You know where the copper.

Speaker Change #256: Our stations were focused.

Speaker Change #286: Yes.

Speaker Change #290: The meetings, there and I guess, secondly, I guess I'd be curious just as you were talking to customers.

Speaker Change #286: Yeah.

Speaker Change #286: Yes.

Speaker Change #286: And part of it you.

Speaker Change #286: You know kind of what.

Speaker Change #256: Kind of what their view was towards macro.

Speaker Change #286: Hello.

Speaker Change #286: Versus.

Speaker Change #292: <unk> investments and it sounds like a lot of the macro youre seeing on the consumption side and the underlying workloads, but I guess I'm curious kind of from a top down level kind of what their views of conversations were around macro versus investing in new technologies.

Speaker Change #115: And so by basically allowing them to start using these new products. When they are in the early prototyping and development phase of their project.

Speaker Change #286: Like a lot of it.

Speaker Change #291: Uh huh.

Speaker Change #286: Okay.

Speaker Change #286: Opt out.

Speaker Change #286: Okay.

Speaker Change #286: Okay.

Speaker Change #115: In that goodness for them because then they can kind of start using all of our products right from the gate versus having to start and then add on these other products later, so from that point of view.

And that new technique.

Speaker Change #286: Yes, so yes.

Speaker Change #293: Yes so.

Speaker Change #256: So in terms of new products obviously.

Speaker Change #286: So you probably.

Speaker Change #294: Oh great.

Speaker Change #295: We introduced new products as his first.

Speaker Change #294: First of all I do.

Michael Joseph Cikos: Do a beta rollout get some early pilot customers and then do more of a controlled introduction before we got to general availability and so for our stream processing product, we already had a number of customers actually in the one hundreds of customers, who were testing and giving us feedback.

Speaker Change #115: The sentiment of the positive is very high with regards to the macro environment I would say two things one at the high end the market Theres no question that customers are very cost conscious.

Speaker Change #294: Got it.

Speaker Change #294: And yet.

Speaker Change #294: Oh.

Speaker Change #294: Okay.

Speaker Change #294: Nope.

We are already.

Speaker Change #115: No.

Speaker Change #115: And so I think thats thats, playing out just because everyone's kind of watching their pennies and so.

Speaker Change #294: And Sheila.

Speaker Change #294: We're testing and giving us feedback.

Speaker Change #297: Receptivity was very positive and the interest rate is very high because when you think about being able to process data in motion most of that data is Jason based.

Speaker Change #294: Okay.

Speaker Change #294: And the interest.

Speaker Change #115: We like the fact that we're very on a price performance basis, a very attractive platform, but theres. No question that customers are are mindful about costs in this new kind of macroeconomic era and then on the lower end of the channel. It's also not a shock to say that obviously smaller customers have are having more difficulty raising capital.

Speaker Change #294: Right.

Speaker Change #296: What was the problem.

Speaker Change #294: Okay.

Speaker Change #294: Jason.

It's obviously core to you.

Speaker Change #262: It is obviously core to who we are as a platform and so is well suited.

Speaker Change #294: So as well.

Speaker Change #294: Yes.

Kind of a something that should be part of the <unk> platform and so so that that receptivity is quite high.

I've got two parts of automotive that warm so much activity right now.

Speaker Change #115: And consequently, they have to be also more judicious about how they spend money and that also obviously factors in in terms of how much they can spend on their own internal technology stack.

Obviously.

Speaker Change #263: Obviously.

Speaker Change #263: Eight zero, we've announced but we.

Speaker Change #294: Zero.

Speaker Change #294: Even if nothing happened.

Speaker Change #265: Not really it will be generally available later this year, but we have lots of customers. We have some of the most demanding and sophisticated customers who are pushing our platform. We by definition are much more performance and scalable than most of the platforms out there. So by definition, we have customers that really pushed the envelope and they are really excited by the fact about the performed.

Speaker Change #294: Okay.

Speaker Change #298: Uh huh.

Speaker Change #298: Okay.

Speaker Change #298: Okay.

Speaker Change #116: That's helpful. Thank you.

Speaker Change #298: Have you I guess.

Speaker Change #117: Thank you.

Speaker Change #298: Most of them.

Speaker Change #118: One moment for our final question.

Speaker Change #298: So.

Speaker Change #298: I definitely.

Speaker Change #299: Not really.

And our last question will come from the line of Patrick <unk> from Scotiabank. Your line is open.

Okay.

Speaker Change #265: <unk> gains that we're delivering.

Speaker Change #299:

Speaker Change #265: Because that will only help them in terms of what they wanted to and then in terms of the new products that we are in terms of full text search and vector search that we are introducing the community. They are really excited because in many places for our for our prospects that's where they start they start with a community version before they say move to Atlas or move to EMEA.

Speaker Change #299: That one in.

Speaker Change #299: Hi, good morning.

Speaker Change #118: Hi, This is Joe have Andrew <unk> on for Patrick Colville.

Speaker Change #299: And then in terms of.

Speaker Change #300: Got it.

Speaker Change #119: So it seems like your excitement on application modernization has ticked up a little bit.

Speaker Change #300: Excellent.

Speaker Change #300: Sure.

Speaker Change #301: They're really not.

Speaker Change #300: Okay.

Speaker Change #119: And it is now a key focus.

Speaker Change #300: Okay.

Speaker Change #120: I'm curious.

Speaker Change #300: That's about right.

Speaker Change #300: Sure.

Speaker Change #120: How are you defining and tracking success with relational migrate air product.

Speaker Change #300: They say outlets are moved to ebay and Oh.

Speaker Change #265: And so by basically allowing them to start using these new products. When they are in the early prototyping and development phase of their project.

Speaker Change #121: Yes so.

Speaker Change #300: We are using our product, but they are indeed.

Speaker Change #121: So for those of you who may not know the full story, let me explain so.

Speaker Change #302: Hi, Jack.

Speaker Change #122: So we have an existing relational migrated product it allows people to essentially migrate data from.

Speaker Change #302: Is that.

Speaker Change #265: In that goodness for them because then they can kind of start using all our products right from the gate versus having to start and then add on these other products later, so from that point of view.

Speaker Change #302: Because.

Speaker Change #303: You saw the product.

Speaker Change #304: I can start.

Speaker Change #122: Legacy relational databases and does the schema mapping for them. The one thing it does not do which is the most cumbersome and tedious part of the migration as to auto generate or build application code. So when you go from a relational app to an app built on long it would be you still have to essentially rewrite.

Speaker Change #304: So from that point of view.

Speaker Change #304: Hum.

Speaker Change #306: The sentiment is positive is very high with regards to the macro environment I would say two things one at the high end the market Theres no question that customers are very cost conscious.

Speaker Change #304: With regard.

Speaker Change #305: I'll take that one.

Speaker Change #305: That's a great customer.

Speaker Change #305: Hum.

Speaker Change #305: And so that's that's playing out.

And so I think that's that's playing out just because everyone's kind of watching their pennies and so.

Speaker Change #122: Application code.

Speaker Change #122: For many customers that was the inhibitor for them to migrate more apps because that takes a lot of time and a lot of labor resources. So our app monetization effort is all about using AI is all about now solving the third leg of that stool, which is being able to.

Speaker Change #305: One.

Speaker Change #305: And even then.

Speaker Change #305: We liked the fact.

Speaker Change #308: We like the fact that we are very on a price performance basis, a very attractive platform, but there is no question that customers are are mindful about costs in this new kind of macroeconomic era and then on the lower end of the channel. It's also not a shock to say that obviously smaller customers have are having more difficulty raising capital.

Speaker Change #305: Okay.

There's no question.

Speaker Change #307: Are you.

Speaker Change #307: Are you kind of macroeconomic.

Speaker Change #307: And then on the.

Speaker Change #122: Reduce the time and cost and effort of rewriting the App code all the way from analyzing existing code converting that code to New code and then also building the test suites, both unit tests and functional test to be able to make sure. The the the new App is obviously operating and functioning the way it should be.

Speaker Change #307: That's all.

Customers, having more capital.

Capital and.

Speaker Change #309: <unk> and consequently, they have to be also more judicious about how they spend money and that also factors in in terms of how much they can spend on their own internal technology stack.

Speaker Change #307: Yeah.

Speaker Change #307: Sure.

Speaker Change #307: They spend more.

And that also that also the actors and interact with them, sometimes they can stand on their own on their own internal.

Speaker Change #307: Across the stack.

Speaker Change #310: That's helpful.

Speaker Change #311: That's helpful. Thank you.

Speaker Change #122: <unk>.

Speaker Change #310: Yes.

Speaker Change #122: And so.

Speaker Change #312: Thank you. Thank you one moment.

Speaker Change #271: Thank you.

So those parts of the equation is what we are excited about because now AI can really help reduce the cost and complexity of rewriting App code and Thats why customers are getting more excited because of the lower you reduce the cost for that migration of the switching costs. The more apps you can then by definition migrate and.

Speaker Change #313: One moment for our final question.

Okay.

Speaker Change #312: And arm.

Speaker Change #314: And our last question will come from the line Patrick <unk> from Scotiabank. Your line is open.

Speaker Change #312: Okay.

Both metrics with Scotiabank Your line is open.

Andrew: Hi, This is Andrew.

Speaker Change #271: Hi, This is Joe Andrew on for Patrick Colville.

Andrew: Okay.

Speaker Change #271: So it seems like excitement on application modernization has ticked up a little bit.

Andrew: Right.

Speaker Change #122: So that is something that we are very excited about I will caution you that.

Andrew: Okay.

Andrew: Hum.

Speaker Change #271: And it is now a key focus.

Speaker Change #122: It's early days.

Andrew: So I'm curious.

Speaker Change #271: I am curious.

Speaker Change #122: You should not expect some inflection in the business because of this but we're really excited about the opportunity and we're also really excited about the fact that it gives us access to very senior decision makers because today by definition can make decisions quickly around what to do and what not to do.

Andrew: How are you defining that.

Speaker Change #316: How are you defining and tracking success with relational migrate air products.

Andrew: Yes.

Andrew: Okay.

Speaker Change #271: Yes so.

Andrew: Yeah. So.

Andrew: Hum.

So for those of you who may not know the full story, let me explain so.

Andrew: I don't know the full.

Andrew: So we haven't really.

Speaker Change #271: So we have an existing relational migrated product that allows people to essentially migrate data from.

Andrew: Language.

Andrew: Allows people.

Andrew: Great.

Speaker Change #123: Got it.

Andrew: Yes.

And one more if I could get it in.

Speaker Change #271: Legacy relational databases and does the schema mapping for them. The one thing it does not do which is the most cumbersome and tedious part of the migration is to auto generate or build application code. So when you go from a relational app to an app built in along that would be you still have to essentially rewrite.

Andrew: Okay.

Speaker Change #123: Total customer count continues to grow at a pretty decent pace and so does the customer count.

Andrew: Just one thing.

Andrew: Most of this.

Speaker Change #124: 100000 customers, but it looks like the direct sales customer count growth has tapered off a little bit could you talk through if thats just a function of going after more strategic customers or if it is maybe something else. Thanks.

Andrew: Isolation.

Andrew: To regenerate.

Andrew: To generate.

Andrew: When you go from relational.

Speaker Change #317: Uh huh.

Speaker Change #318: Essentially right.

Speaker Change #271: The application code.

Speaker Change #318: And with.

Speaker Change #319: For many customers that was the inhibitor for them to migrate more apps because that takes a lot of time and a lot of labor resources. So our app monetization effort is all about or using AI is all about now solving the third leg of that stool, which is being able to.

Speaker Change #125: Yes, I mean, we're definitely interested in continuing to acquire customers obviously.

Speaker Change #318: With me.

Speaker Change #318: Okay.

Speaker Change #318: That's great.

Speaker Change #318: A lot of late.

Speaker Change #125: We have a.

Speaker Change #318: So.

Speaker Change #125: A lot of our existing customers is still vastly underpenetrated and so our biggest growth opportunities in the near term are actually winning more vocal workloads in our existing customer accounts and as I mentioned, we have lots of eight figure customers and lots of seven figure customers along with a six figure customers. So we know that once you get in and we can kind of win a lot more business in those accounts.

Speaker Change #318: Okay.

Speaker Change #318: Sure.

Speaker Change #318: All of that.

Speaker Change #318: AI.

Speaker Change #318: Yeah.

Speaker Change #318: Okay.

Speaker Change #318: Which is big pitches.

Speaker Change #318: Reduce.

Speaker Change #283: Reduce the time and cost and effort of rewriting the App code all the way from analyzing existing code converting that code to New code and then also building the test suites, both unit tests and functional test to be able to make sure the the.

Speaker Change #318: I'm sorry.

Speaker Change #318: Rewrite.

Speaker Change #318: Great.

Speaker Change #318: Oh, just converting that converted.

Speaker Change #125: But we do have teams focused on acquiring new new logos.

Speaker Change #318: And then also.

Thank you.

Speaker Change #318: Functional test to be able to print.

Speaker Change #125: That obviously is.

Speaker Change #125: Longer sales cycle.

Speaker Change #318: The new App, obviously, you're operating.

Speaker Change #283: The new App is obviously operating and functioning the way it should be.

Speaker Change #125: But it's something that we do care about especially at the higher end, where there's still lots of enterprise logos, where we are they are not yet going to be customers and we are definitely focused on making sure we crack into those accounts.

Speaker Change #318: Hum.

Speaker Change #283: And so.

Speaker Change #318: So those parts.

Speaker Change #320: So those parts of the equation is what we're excited about because now AI can really help reduce the cost and complexity of rewriting App code and Thats why customers are getting more excited because of the lower you reduce the cost for that migration or the switching costs. The more apps you can then by definition migrate and.

Speaker Change #318: We are excited about it.

Speaker Change #318: Okay.

Okay.

Speaker Change #318: Actually if you like.

Speaker Change #318: And that's why.

Speaker Change #318: What we decided.

Speaker Change #318: Lower.

Speaker Change #126: Thank you.

The call is.

Speaker Change #127: I'll turn it back over to our CEO, Dave for closing remarks.

Speaker Change #318: That might be.

Speaker Change #318: You can also think of our more apps.

Speaker Change #318: And the migration I think of that.

Dave I: Well I want to thank everyone for joining us today, just to kind of summarize the call. We are tempering our outlook for the rest of this year due to a more challenging macro environment. We are focusing more resources on the high end of the market accelerating legacy app monetization using AI and cementing our position as the platform of choice for Nexgen.

Speaker Change #322: So that is something that we are very excited about I will caution you that as it is.

Speaker Change #321: I'm sorry.

Speaker Change #321: It is not possible.

Speaker Change #321: It's early days.

Early days.

Speaker Change #321: Hum.

Speaker Change #286: You should not expect some inflection in the business because of this but we're really excited about the opportunity and we're also really excited by the fact that it gives us access to very senior decision makers because today by definition can make decisions quickly around what to do and what not to do.

Speaker Change #321: Not expecting tax protection.

Speaker Change #323: But we're really excited about.

Speaker Change #323: Yes.

Speaker Change #323: Actually a very senior banker.

Speaker Change #323: They might have.

Speaker Change #323: And makes it.

Dave I: <unk> AI applications, and we will invest judiciously and these priorities through the rest of this year.

Speaker Change #323: You can come out to do and what not.

Speaker Change #324: Got it.

Speaker Change #286: Got it.

Dave I: We also remain confident in our foundational and durable technology advantage, which has been well suited as application development has evolved over time and we believe this advantage will remain as customers build AI production apps upscale. Thank you for joining us and we'll talk to you soon take care.

Speaker Change #286: And one more if I could get it in.

Speaker Change #324: And one more.

Speaker Change #325: From a customer.

Speaker Change #326: Total customer count continues to grow at a pretty decent pace.

Speaker Change #325: Okay.

Speaker Change #327: Does anything customers.

Speaker Change #286: As the customer count.

Speaker Change #327: Over 100.

Speaker Change #329: Over 100000 customers, but it looks like the direct sales customer count growth has tapered off a little bit could you talk through if thats just a function of going after more strategic customers or if it is maybe something else. Thanks.

Speaker Change #327: So it looks like.

Speaker Change #327: Yeah.

With paper.

Speaker Change #128: Thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.

Speaker Change #328: You talked to them.

Speaker Change #327: Okay.

Speaker Change #327: Okay.

Speaker Change #327: Okay.

Speaker Change #327: Thanks.

Speaker Change #327: Yeah, we I mean.

Speaker Change #330: Yes, I mean, we're definitely interested in continuing to acquire customers obviously.

Speaker Change #327: Pardon.

Speaker Change #327: Okay.

Speaker Change #327: Hum.

Speaker Change #294: We have.

Speaker Change #327: Alright.

Speaker Change #294: A lot of our existing customers is still vastly underpenetrated and so our biggest growth opportunities in the near term are actually winning more vocal workloads in our existing customer accounts and as I mentioned, we have lots of eight figure customers and lots of centric customers along with a six figure customers. So we know that once you get in and we can kind of win a lot more business in those accounts.

Speaker Change #327: Fill gaps.

Speaker Change #327: Oh.

Speaker Change #327: Yeah.

Speaker Change #327: Yeah.

Speaker Change #327: Okay.

Speaker Change #327: Okay.

Speaker Change #327: There's lots of new customers.

Speaker Change #327: Yes.

Speaker Change #327: No.

Speaker Change #327: Got it.

Speaker Change #327: Yeah.

Speaker Change #331: But we do have teams focused on acquiring new new logos.

Speaker Change #327: We do.

Alright.

Speaker Change #327: No that's it.

Speaker Change #296: That obviously is.

Speaker Change #327: Uh huh.

Speaker Change #327: Longer.

Speaker Change #332: Longer sales cycle.

Speaker Change #327: Hum.

Speaker Change #332: But it's something that we do care about especially at the higher end, where there's still lots of enterprise logos, where we are they are not yet going to be customers and we are definitely focused on making sure we crack into those accounts.

Speaker Change #327: Yes.

Lots of them.

Speaker Change #327: Yeah definitely.

Speaker Change #327: We are definitely.

Speaker Change #327: Hi.

Speaker Change #327: Yes.

Speaker Change #327: Thank you.

Speaker Change #333: Thank you.

Speaker Change #327: With that.

Speaker Change #334: I'll turn it back over to our CEO, Dave for closing remarks.

Speaker Change #327: Yes.

Speaker Change #327: Well I want to thank you everyone.

Dave: Well I want to thank everyone for joining us today, just to kind of summarize the call. We are tempering our outlook for the rest of this year due to a more challenging macro environment. We are focusing more resources on the high end of the market accelerating legacy app monetization using AI and cementing our position as the platform of choice for next Gen.

Speaker Change #327: Right.

Speaker Change #327: Yeah.

Speaker Change #327: Yes.

Speaker Change #327: We are closing.

Speaker Change #327: Mark.

Speaker Change #327: Already.

Speaker Change #327: Yeah.

Speaker Change #327: Yep.

Speaker Change #327: Absolutely.

Speaker Change #327: Yes.

Speaker Change #299: <unk> AI applications, and we will invest judiciously and these priorities through the rest of this year.

Speaker Change #327: And we will.

Speaker Change #327: I already.

Speaker Change #327: We also remained.

Speaker Change #336: We also remain confident in our foundational and durable technology advantage, which has been well suited as application development has evolved over time and we believe this advantage will remain as customers build AI production apps upscale. Thank you for joining us and we'll talk to you soon take care.

Speaker Change #327: Hum.

Speaker Change #327: Yeah.

Speaker Change #327: Okay.

Speaker Change #327: Paul.

Speaker Change #327: We believe.

Speaker Change #327: And productive.

Speaker Change #327: Thank you for joining us.

Yeah.

Speaker Change #335: Thank you.

Speaker Change #337: Thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.

Speaker Change #335: Yes.

Speaker Change #335: Okay.

Speaker Change #335: Yeah.

Speaker Change #335: Yeah.

Speaker Change #304: Okay.

Speaker Change #335: Mhm.

Speaker Change #304: [music].

Speaker Change #305: Hum.

Speaker Change #335: Yeah.

Speaker Change #305: <unk>.

Okay.

Speaker Change #335: Okay.

Speaker Change #305: Yes.

Speaker Change #335: Okay.

Speaker Change #335: Okay.

Speaker Change #335: Yeah.

Speaker Change #305: Okay.

Speaker Change #305: [music].

Speaker Change #335: Yeah.

Speaker Change #335: Yes.

Speaker Change #305: Yes.

Speaker Change #335: Yes.

Speaker Change #305: Okay.

Speaker Change #335: Okay.

Speaker Change #305: Okay.

Speaker Change #335: Okay.

Speaker Change #305: Okay.

Speaker Change #335: Yeah.

Speaker Change #335: Yeah.

Speaker Change #335: Oh.

Speaker Change #335: Yeah.

Speaker Change #307: Yes.

Speaker Change #307: Sure.

Speaker Change #335: Yeah.

Speaker Change #307: [music].

Speaker Change #335: Yes.

Speaker Change #307: [music].

Speaker Change #335: Yes.

Speaker Change #335: Yes.

Speaker Change #335: Yeah.

Speaker Change #335: Okay.

Speaker Change #335: Yes.

Speaker Change #335: Mhm.

Speaker Change #310: Okay.

Speaker Change #335: Yeah.

Speaker Change #335: Yeah.

Speaker Change #335: Yeah.

Yes.

Speaker Change #335: Yes.

Speaker Change #335: Yeah.

Speaker Change #312: Okay.

Speaker Change #335: Yeah.

Speaker Change #335: [music].

Speaker Change #318: Yes.

[music].

Speaker Change #335: Yes.

Speaker Change #335: Yeah.

Speaker Change #335: Yeah.