Q4 2025 Coveo Solutions Inc Earnings Call

Konstantin: Good afternoon, my name is Konstantin and I will be your conference operator today.

Good afternoon, My name is constant and I will be your conference operator today.

Konstantin: At this time, I would like to welcome everyone to the Coveo Force Quarter and Full Year 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise.

Speaker Change: At this time I would like to welcome everyone to the Covia fourth quarter and full year 'twenty 25 financial results Conference call.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Konstantin: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to enroll your question, please press star then the number two. Thank you.

After the Speakers' remarks, there will be a question and answer session.

Speaker Change: If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. It if you would like to withdraw your question. Please press Star then the number two thank you.

Adir Academy: I will now turn the line over to Adir Academy. You may now begin your conference.

Speaker Change: I'll now turn the line over to adhere Kabi you May now begin your conference. Good afternoon, everyone and thank you for joining US with me to discuss <unk> fiscal Q4 2025 for full year 2025 results are Louisa to Cabelas executive Chairman Lofty Mono co founder and Chief Executive Officer, and Brendan Duffy Chief.

Laurent Simonot: Good afternoon, everyone, and thank you for joining us.

Laurent Simonot: With me to discuss Coveo's Fiscal Q4 2025 and Full Year 2025 results are Louis Tietou, Coveo's Executive Chairman, Laurent Simonot, Co-Founder and Chief Executive Officer, and Brandon Nussbaum. Chief Financial Officer.

Laurent Simonot: A reminder that some remarks made today will be forward-looking statements within the meaning of applicable securities laws, including those regarding our plan, objectives, expected performance, and our outlook for the first fiscal quarter and full year fiscal 2022. These are forward-looking statements, are given as of May 20th, 2025, and while we believe any statements we make are reasonable, they are based on current expectations and assumptions which are subject to risks and limitations. Actual results could differ materially from those expressed or implied.

Speaker Change: A reminder, that some remarks made today will be forward looking statements within the meaning of the applicable securities laws, including those regarding our plans objectives expected performance and our outlook for the first fiscal quarter and full year fiscal 2026. These are forward looking statements are given as of late.

Speaker Change: 20th 2025, and while we believe any statements. We make are reasonable they are based on current expectations and assumptions, which are subject to risks and uncertainties.

Speaker Change: Results could differ materially from those expressed or implied because they own disclaims any intent or obligation to update our forward looking statements, whether as a result of new information future events or otherwise.

Laurent Simonot: Coveo disclaims any intent or obligation to update our forward-looking statements, whether as a result of new information, future events, or otherwise. Further information on factors that could affect the company's financial results is included in filings we make with Canadian securities regulators, including in the risk factors section of the company's most recently filed annual information form, as well as the key factors affecting our performance section of the company's most recently filed MD&A, both of which are available on our CDAR Plus profile at cdarplus.ca and on ir.coveo.com.

Speaker Change: Further information on factors that could affect the company's financial results is included in filings, we make with Canadian securities regulators, including in the risk factors section of the company's most recently filed annual information form as well as the key factors affecting our performance section of the company's most recently filed N DNA both of which are available on our.

Speaker Change: SEDAR profile at SEDAR, plus dossier, and IR Dot dot com.

Laurent Simonot: Additionally, some of the financial measures and ratios discussed on this call are either non-IFRS measures or ratios or operating metrics used in our industry. A discussion on why we use these metrics and where applicable reconciliation schedules showing IFRS versus non-IFRS results are available in our press release and our MD&A issued today.

Speaker Change: Definitely some of the financial measures and ratios discussed on this call are either non I first measures where ratios our operating metrics used in our industry a discussion on why we use these metrics and where applicable reconciliation schedule showing that forest versus non fr results are available in our press release and our MD&A issued today.

Speaker Change: Finally, please note that unless otherwise stated all references.

Laurent Simonot: Finally, please note that unless otherwise stated, all references and financial figures made today are in U.S. A presentation slide accompanying this conference call can be accessed on our IR website under the News and Events section.

Speaker Change: The actual figures made today are in U S dollars.

Speaker Change: Our presentation.

Speaker Change: Right.

Speaker Change: This conference call can be accessed on our IR website under the news <unk> events section I will now turn the call over to Louie first to review, our operational and strategic highlights of our fourth quarter and full fiscal year, followed by law, who will discuss our platform strategy and we will end off with Brandon taking you through the financial details will provide.

Laurent Simonot: I will now turn the call over to Louis first to review our operational and strategic highlights of our fourth quarter and full fiscal year, followed by Laurent, who will discuss our platform and strategy, and we will end off with Brandon taking you through the financial details and provide our outlook for Q1 and fiscal 2026.

Our outlook for Q1 and fiscal 2026, well then open the line to your questions with that.

Laurent Simonot: We will then open the line to your questions. With that, Louis.

Louis Tietou: Thank you, Adir, and we want to thank everyone joining us on the call. We have many exciting things to discuss. First, we're pleased to report another record quarter for Coveo, demonstrating the resilience and profitability of our business model, our robust unit economics, and Coveo's accelerating growth. Our fourth quarter financials reach the upper end of our guidance. Past subscription revenue hit a new high at $32.6 million U.S. Total revenue climbed to $34.4 million. Adjusted EBITDA was strong at $0.7 million. And operating cash flow for the fiscal year was solidly positive at $11.1 million, ahead of our guidance of approximately $10 million.

Speaker Change: Thank you are there and we want to thank everyone joining us on the call we have many exciting things to discuss.

Speaker Change: First we're pleased to report another record quarter for Cobell, demonstrating the resilience and profitability of our business model are robust unit economics and prevail is accelerating growth.

Speaker Change: Our fourth quarter financials reach the upper end of our guidance.

Speaker Change: Subscription revenue hit a new high at $32 6 million U S. Total revenue climbed to $34 4 million adjusted EBITDA was strong at <unk> 7 million in operating cash flow for the fiscal year was solidly positive at $11 1 million ahead of our guidance of approximately 10.

Speaker Change: Yeah.

Louis Tietou: Our Q4 bookings performance was our best Q4 ever and contributed to more than 50% year-over-year bookings growth during the back half of fiscal 25. Our generative AI customer base increased 30% sequentially and tripled year-over-year. Our strong momentum continued in commerce, which is our fastest growing customer use And finally, net expansion rate for the core platform rose 200 basis points sequentially to 107%. New customers include DocuSign, Gila Bay International, and Agco, and we're continuing to see existing customers expanding their use of our platforms such as Workday, Nestle, Dow Chemical, Armholdings, and Cummins.

Speaker Change: Our Q4 bookings performance was our best Q4 ever and contributed to more than 50% year over year bookings growth during the back half of fiscal 'twenty five or.

Speaker Change: Our generative AI customer base increased 30% sequentially and tripled year over year, our strong momentum continued in commerce, which is our fastest growing customer use case and finally net expansion rate for the core platform rose 200 basis points sequentially to 107.

Speaker Change: First step.

Speaker Change: New customers include docket fine Gil of international and Agco, and we're continuing to see existing customers expanding their use of our platform such as workday naturally down.

Speaker Change: Nicole arm holdings, and Cummins L'oreal will share more details.

Laurent Simonot: Laurent will share more details.

Laurent Simonot: I'm extremely proud of what we've accomplished. and pleased with the acceleration of our market demand. Our ability to deliver both growth and profitability, even amid economic headwinds and AI industry disruption, highlights the uniqueness, enduring value, and scalability of our technology. Since our IPO, our core platform, SAS Revenue, grew around 70%. We turned losses into positive cash flow, consistently delivering high-margin, scalable growth, and continued to acquire marquee customers.

Speaker Change: I'm extremely proud of what we've accomplished and pleased with the acceleration of our market demand.

Speaker Change: Our ability to deliver both growth and profitability, even amid economic headwinds in AI industry disruption highlight the uniqueness enduring value and scalability of our technology.

Speaker Change: Since our IPO, our core platform SaaS revenue grow around 70%, we turned losses into positive cash flow consistently delivering high margin scalable growth and continued to acquire marquee customers today, our momentum in the applied AI market is.

Laurent Simonot: Today, our momentum in the applied AI market is undeniable.

Speaker Change: Ball.

Laurent Simonot: Beyond These Results is a far more exciting story. The numbers do reflect our financial discipline, but more importantly, they demonstrate Coveo's growing strategic importance and adoption in the enterprise applied AI and generative search.

Speaker Change: Beyond these results is a far more exciting story.

Speaker Change: The numbers do reflect our financial discipline, but more importantly, they demonstrate <unk> growing strategic importance and adoption in the enterprise applied AI and generated search space.

Laurent Simonot: Transforming digital experiences is a fast-growing application of AI for enterprises. and Coveo leads in enabling this technology. Generative search and relevance is at the core, and our leadership in the space continues to be recognized by key analyst firms like Gartner, Forrester, and IDC. Our revenue growth is accelerating, and the reasons for this are simple. Enterprises must modernize digital experiences. People online will now expect personalized, prescriptive, and now, thanks to generative AI, advisory and agentic experiences. Because all of us are only a browser window away from a smarter, faster, more contextual and automated experience that gives us back what we value most, our time.

Speaker Change: Transforming digital experiences is a fast growing application of AI for enterprises, and convey our leads and enabling this technology.

Speaker Change: Generative search and relevance is at the core and our leadership in the space continues to be recognized by catalyst firms like Gartner Forrester and IDC or.

Speaker Change: Our revenue growth is accelerating and the reasons for this are simple enterprises must modernize digital experiences.

Speaker Change: People online will now expect personalized prescriptive and now thanks, degenerative AI advisory and agent tick experiences.

Speaker Change: Because all of US are only a browser window away from a smarter faster more contextual and automated experience that gives us back what we value most our time.

Laurent Simonot: Relevance is the key. How products and content align efficiently with a person's context and intent. And AI is the only competitive way to deliver relevance at scale.

Speaker Change: Relevance is the key how.

Speaker Change: Product and content align efficiently with a person's context and intact.

And they I as the only competitive way to deliver relevant at scale and.

Laurent Simonot: Hence, in the coming years, integrating AI at every interaction point will be crucial, and companies that fail to embrace these AI-driven experiences will fall behind. AI not only enhances user engagement and people augmentation, but it can also compute for better business outcomes at every interaction. And that's powerful.

Speaker Change: In the coming years integrating AI at every interaction point will be crucial and companies that fail to embrace these AI driven experiences will fall behind.

Speaker Change: AI not only enhances user engagement and people augmentation, but it can also compute for better business outcomes at every interaction and that powerful.

Laurent Simonot: But there is another reason. We believe enterprises need our technology to make large language models work with a new generative digital experience. You cannot deliver the precise generative experiences enterprise need unless you ground the LLM prompts in secure and current enterprise data, which is what our AI search technology does. That is regardless of which LLM you use. But in addition, we have built a mature AI stack that turns that data into pinnacle relevance vital for precise answers and the agentic rag needed to power these experiences. That is what Coveo does uniquely. That is why Coveo is the AI relevance company.

Speaker Change: But there is another reason.

Speaker Change: We believe enterprises need our technology to make large language models work with a new generative digital experiences.

Speaker Change: You cannot deliver the precise generative experiences enterprise need unless you're ground, the LLM prompts and secure and current enterprise data, which is what our AI search technology does that is regardless of which our LM you use.

Speaker Change: But in addition, we have built a mature AI stack that turns that data into pinnacle relevance is vital for precise answers and the agent take rock needed to power these experiences.

Speaker Change: That is what <unk> does uniquely that is why <unk> is the AI relevance company.

Laurent Simonot: We said this a year ago. We published impressive customer results in both our commerce and knowledge lines. We highlighted growing demand and pipeline and noted increased conversion rates when customers measured Coveo against alternatives. And now we're delivering a third consecutive quarter of bookings momentum following the market disruption from Chad GPT, which we continue to believe benefits us. The unique value and differentiation of our technology are now recognized and measured. Coveo's AI relevance and generative search power transformation for some of the world's leading enterprises, including many of the world's top technology companies. We are their AI backbone for hyper-personalized content in areas such as customer service and also high-impact generative search applications.

Speaker Change: We said this a year ago, we published impressive customer results in both our commerce and knowledge lines, we highlighted growing demand and pipeline and noted increased conversion rates when customers measured colville against the alternatives and now we're delivering a third consecutive quarter of bookings momentum following the <unk>.

Speaker Change: Disruption from Chad GPT, which we continue to believe benefits us.

Speaker Change: The unique value and differentiation of our technology are now recognize that measured.

Speaker Change: <unk> AI relevance and generative surge power transformation for some of the world's leading enterprises, including many of the world's top technology company.

Speaker Change: We are their AI backbone for hyper personalized content areas, such as customer service and also high impact generative search applications.

Laurent Simonot: The Good News. that IT and business leaders have now gained a good understanding of the why and the how. Buyers are much more knowledgeable about the capabilities and requirements for AI and generative AI. After two years of education, discovery, and experimentation following the launch of Chad GPT, enterprises are now moving from experimentation to adoption. In fact, it is our view that in many enterprises, AI was somewhat of a technology in search of problems, and we're now seeing some AI talk fatigue as business leaders are now anxiously seeking real production applications and tangible ROI from AI.

Speaker Change: The good news is that I T and business leaders have now gained a good understanding of the why and the half.

Speaker Change: <unk> are much more knowledgeable about the capabilities and requirements for AI and generative AI.

Speaker Change: After two years of education discovery and experimentation following the launch of Chad GPT enterprises are now moving from experimentation to adoption.

Speaker Change: In fact, it is our view that in many enterprises AI was somewhat of a technology in search of problems and we're now seeing some AI talk fatigue as business leaders are now anxiously seeking real production applications and tangible ROI from AI.

Laurent Simonot: Q-Companies can deliver and measure ROI, and so Coveo is benefiting from this shift, driving increased demand and adoption.

Speaker Change: Few companies can deliver and measure ROI and so coffee was benefiting from this shift driving increased demand and adoption are.

Laurent Simonot: Our goal is quite clear, to build the most trusted brand in our industry, helping enterprises materialize applied and generative AI across their commerce, website, service, and workplace knowledge experiences. We aim to capture a significant share of the AI experience economy by maintaining a strong focus on innovation, customer value, and a scalable business model. Our strategy to get there is also clear. We prioritize growth, profitable economics, and a high recurring margin, innovation, and operational excellence in sales and customer success to scale. To capitalize on our momentum, we're investing more aggressively in rapid innovation, superior customer outcomes, and disciplined, data-driven go-to-market strategies.

Speaker Change: Our goal is quite clear.

Speaker Change: To build the most trusted brand in our industry, helping enterprises materialize applied in generative AI across their commerce websites service and workplace knowledge experiences. We aim to capture a significant share of the AI experience economy by maintaining a strong focus on innovation.

Speaker Change: <unk> value and a scalable business model.

Speaker Change: Our strategy to get there is also clear we prioritize growth.

Speaker Change: <unk> economics, and a high recurring margin innovation and operational excellence in sales and customer success to scale.

Speaker Change: To capitalize on our momentum we're investing more aggressively in rapid innovation superior customer outcomes and disciplined data driven go to market strategies. This quarter again demonstrates progress on these metrics.

Laurent Simonot: This quarter, again, demonstrates progress on these metrics. Assuming we execute our plans and guidance, these investments will serve to further accelerate our growth, long-term profitability, and continued improvement in our Rule of 40 metrics, such that we expect to approach 30 on that metric by year-end on an ARR growth and operating cash flow basis.

Speaker Change: Assuming we execute our plans and guidance. These investments will serve to further accelerate our growth long term profitability and continued improvement in our rule of 40 metrics.

Speaker Change: Such that we expect to approach 30 on that metric by year end on and they are our growth and operating cash flow basis.

Laurent Simonot: While we anticipated this success, some investors questioned whether companies like Coveo would be disrupted or become market takers in applied AI. We can confirm our belief that we are a beneficiary. As interest in AI rose, early investor focus was on the silicon GPU layer and the hyperscaler. seen as the obvious initial AI beneficiary. However, we believe greater value will soon emerge at the application layer where AI drives measurable productivity gain, revenue, cost, and experience outcomes.

Speaker Change: While we anticipated this success.

Speaker Change: Some investors questioned whether companies like aveo would be disrupted or become market takers and applied AI. We can confirm our belief that we are a beneficiary.

Speaker Change: As interest in AI Rose early Investor focus was on the silicon GPU layer and the hyper scaler.

Speaker Change: Ciena is the obvious initial AI beneficiaries.

Speaker Change: However, we believe greater value will soon emerge at the application layer.

Speaker Change: Our AI drives measurable productivity gains revenue cost and experience outcomes.

Laurent Simonot: This is where Coveo excels. Our technology deploys in days or weeks, not months or years. delivering measurable service cost reductions, revenue increases, and productivity gains.

Speaker Change: This is where <unk> excels, our technology deploys in days or weeks not months or years.

Speaker Change: Delivering measurable service cost reductions revenue increases and productivity gains.

Laurent Simonot: Dozens of customer case studies and financial returns testimonials are available on our website and I really invited you to take a look at Coveo.com.

Speaker Change: Dozens of customer case studies and financial returns testimonials are available on our website and are really invited you to take a look at <unk> dot com.

Laurent Simonot: As you can see, the market's perception of search has undergone a dramatic reversal. Once considered a basic tool, search is now recognized as a complex science. Think about digital experience leaders that have used AI to deliver highly relevant personalized experiences like those offered by Netflix or Amazon or Spotify and the science that went into building those hyper-personalized and prescriptive experiences. These are grounded in search and relevance.

Speaker Change: As you can see the market's perception of search has undergone a dramatic reversal.

Speaker Change: Once considered a basic tool searches now recognized as a complex science.

Speaker Change: About digital experienced leaders that have used AI to deliver highly relevant personalized experiences like those offered by Netflix or Amazon or Spotify and the science that went into building those hyper personalized and prescriptive experiences.

Speaker Change: These are grounded in search and relevance.

Laurent Simonot: When ChavGPP launched, many thought search might be disruptive. But technical experts knew that search was the linchpin for successful generative experiences, and that without powerful relevance, agent tick would be difficult to pull off. We predicted this need and invested over a decade in maturing advanced AI relevance technology, partnering with leading companies and managing vast data sets.

Speaker Change: When Chad GPT launched many thought search might be disrupted.

Speaker Change: But technical experts knew that search was the linchpin for successful generative experiences and that without powerful relevance agent tick would be difficult to pull off.

We predicted this need and invested over a decade and maturing advanced AI relevance technology partnering with leading companies in managing vast datasets today, our market is booming with private companies, reaching record valuations and global Tech Giants showing strong interest.

Laurent Simonot: Today, our market is booming, with private companies reaching record valuations and global tech giants showing strong interest. We see the trend and validation as very positive for the state, and for Coveo in particular, given our unique strength and the validation we get from our customers.

Speaker Change: We see this trend and validation as very positive for the state and for <unk> in particular, given our unique strengths and the validation we get from our customers at the same time, we remain steadfast and focused on solid unit economics and scalable sustainable.

Laurent Simonot: At the same time, we remain steadfast and focused on solid unit economics and scalable, sustainable growth. We believe we are well positioned to invest for growth and scale and to deliver real value for shareholders.

Speaker Change: Growth.

We believe we are well positioned to invest for growth and scale and to deliver real value for shareholders in.

Laurent Simonot: In summary, we believe Coveo offers substantial asymmetric upside. We bring together the hallmarks of an exceptional company. Our strong prospects for growth and returns are supported by market leadership, unique technology, rapid value delivery, a robust financial model, and an expanding addressable market. Our focus is on innovation. delighting customers with high financial returns through AI, and disciplined execution and operational excellence to scale. Our gross margin is high, our go-to-market strategy and unit economics are profitable, and our multi-tenant platform is scalable. Together, these factors create a solid foundation for investment, significant gains in market recognition, and accelerated growth.

Speaker Change: In summary.

Speaker Change: We believe <unk> offers substantially symmetric op side.

Speaker Change: We bring together the hallmarks of an exceptional company.

Speaker Change: Our strong prospects for growth and returns are supported by market leadership.

Speaker Change: Unique technology rapid value delivery, a robust financial model and an expanding addressable market.

Speaker Change: Our focus is on innovation.

Speaker Change: Lighting customers with high financial returns through AI, and disciplined execution and operational excellence to scale. Our gross margin is high our go to market strategy and unit economics are profitable and our multi tenant platform is scalable.

Speaker Change: Together these factors create a solid foundation for investment significant gains in market recognition and accelerated growth.

Laurent Simonot: And I feel super confident about the quality of our leadership team to lead in the market ahead.

Speaker Change: I feel super confident about the quality of our leadership team to lead in the market ahead.

Laurent Simonot: With that, I'll hand things over to Laurent who will share more details and what's next for Coveo. Laurent returns as CEO, leading our outstanding global team while I serve alongside him as Executive Chairman. Together with our leadership team and our strong team of AI experts, we're shaping Coveo's future.

Speaker Change: With that I'll hand, things over to Laura who will share more details and what's next for <unk> long returns as CEO, leaving our outstanding global team, while I serve alongside him as executive Chairman together with our leadership team and our strong team of AI experts, we're shaping <unk> future Laura.

Laurent Simonot: Laurent? Thanks, Lui. As we introduced, there are several things which make us unique and drive our market success. Enterprise data is primarily unstructured and often scattered, making it hard to use for AI-driven experiences. Generally, AI can now pull together and synthesize this messy data into meaningful insights instantly, but it needs strong indexing and semantic search to work well.

Speaker Change: <unk>.

Speaker Change: Sweet.

As we introduce there are several things, which make us unique and drive our market success so far.

Speaker Change: This data is primarily on structured and often scattered making it hard to use for AI driven experiences generally I can now pull together and synthesize the submissive data into meaningful insights instantly, but it needs strong indexing and semantic search to work well.

Laurent Simonot: That's where we come in. Our technology handles this complexity across any content source, ensuring AI outputs are relevant, complete, and secure. Our customers also face the challenge of delivering consistent results and answers across systems like SAP, Salesforce, Adobe, Shopify, Microsoft, ServiceNow, and across millions of digital journeys. These platforms are not designed to work together, often leading to fragmented experiences and inconsistent answers.

Speaker Change: That's where we come in our technology handles this complexity across any content source entering AI outputs are relevant complete and secure our.

Speaker Change: Our customers also faced the challenge of delivering consistent results and answers across systems like Asap Salesforce Adobe Shopify, Microsoft service snow and across millions of digital journeys. These platforms are not designed to work together often leading to Frank <unk>.

Speaker Change: Experience is an inconsistent answers.

Laurent Simonot: Coveo solved this with Unified AI Relevance. our ability to unify and personalize experiences across all these platforms. is a foundation that supports the unique value we bring in both commerce and knowledge. Ultimately, however, customers choose Coveo not just for the power and flexibility of our tech platform, but for the complete value we provide.

Speaker Change: <unk> solves this with unified AI relevance, so our ability to unify and personalized experiences across all these platforms is the foundation that supports the unique value we bring in both commerce and knowledge ultimately however customers choose avail not just for the.

Speaker Change: Power and flexibility of our tech platform, but for the complete value we bring.

Laurent Simonot: Let's take an example in commerce. One of our recent customer wins pursuant to our SAP partnership was with a large B2C retailer. Consistent with what I mentioned earlier, this customer's data requirements were complex, involving a large quantity of SKUs, a very high volume of consumer sessions, and needing to handle multiple languages. While our ability to handle their scale was one part of the evaluation, this customer ultimately selected Coveo for commerce-specific PI relevance designed to lift revenues, conversion, and margin. Furthermore, they require these capabilities to be enabled through a business-oriented merchandising hub.

Speaker Change: Well, let's take an example in commerce.

Speaker Change: One of our recent customer wins pursuant to our SAP partnership was with a large b to C retailer consistence with fourth I mentioned earlier discussed the Mers data requirements were complex involving a large quantity of skus.

Speaker Change: High volume of consumers sessions and needing to handle multiple languages.

Speaker Change: While their ability to handle their scale was one part of the evaluation discussed them are ultimately selected carvell for commerce specific AI relevance does want to lift revenues conversion and margins. Furthermore, they require these capabilities to be enabled through our business.

Speaker Change: Oriented merchandising hub.

Laurent Simonot: Finally, our ability to bring together catalog data and enterprise content together offers the opportunity to add narrative and personalized advice within the shopping experience.

Speaker Change: Finally, our ability to bring together catalog data and enterprise content together offers the approach needs to add derivative and personalized advice within the shopping experience.

Laurent Simonot: It is strategically vital for customers to own their shopping experience and remain a destination. Relying on third-party shopping proxies or aggregators to drive sales puts them at risk of losing direct insight into what their customers want and care about, along with the opportunity to increase conversion and upsell effectiveness.

Speaker Change: It is strategically vital for our customers to own their shopping experience and remain a destination relying on third party shopping proxies or aggregators to drive sales puts them at risk of losing direct insight into what their customer want and care about along with the unfortunate thing to increase <unk>.

Speaker Change: Version that up sell effectively.

Laurent Simonot: This foundation also underpins our partnership with Shopify, where we announced this quarter that Coveo is now a Shopify Premier Partner, with our solution available on the Shopify app store. We also landed our first joint customer with Shopify. Gillivay International is one of Canada's largest distributors of electrical safety products and industrial supplies. Gillivay chose Coveo for the depth and flexibility of our platform, particularly our ability to manage the complexity of their B2B catalog and environment.

Speaker Change: This foundation also underpins our partnership with Shopify, where we announced this quarter that Colorado is nowhere Shopify Premier partner with our solution available on the Shopify App store.

Speaker Change: We also landed our first joint customer with Shopify <unk> International is one of Canada's largest distributors of electrical safety products and industrial supplies Gil very chose <unk> for the depth and flexibility of our platform, particularly our ability to manage the complexity of their b to b cataloging environment.

Laurent Simonot: Another key point of action comes from our SAP partnership, where we're seeing strong and growing traction. We've recorded three consecutive quarters of solid bookings momentum, culminating in Q4 being the strongest quarter to date for bookings originating from this partnership. We remain highly optimistic about the future of our commerce business, which has been on a year-over-year basis our fastest growing sector.

Speaker Change: Another key point of <unk> comes from our SAP partnership, where we're seeing strong and growing traction we've recorded three consecutive quarters of solid bookings momentum, culminating in Q4 being the strongest quarter to date for bookings originating from this partnership.

We remain highly optimistic about the future of our ecommerce business, which have been on a year over year basis, our fastest growing segment.

Laurent Simonot: Now, let's talk about knowledge, the umbrella term we now use for customer service, website and workplace use cases, where unstructured content, not products, forms the majority of the experience. As I mentioned earlier, enterprises in this space often face a common challenge. Their content is scattered across multiple systems, yet they can't accept house nations and require highly accurate answers delivered with enterprise-grade security and privacy.

Speaker Change: No, let's talk about knowledge the umbrella term, we now use for customer service website, and workplace use cases, where unstructured content nut products forms the majority of the experience.

Speaker Change: As I mentioned earlier enterprises in this space often face a common challenge their content is scattered across multiple systems, yet the camp, except house nations and require highly accurate answers delivered with enterprise grade security and privacy.

Laurent Simonot: Ultimately, they turn to Coveo to solve specific business problems, more often automating self-service and improving customer service operations with AI and generative AI. where we believe we're a clear market leader.

Speaker Change: Ultimately they turned took aveo to solve specific business problems more often automating self service and improving customer service operations with AI and <unk> AI.

Speaker Change: Where we believe we are clear market leader.

Laurent Simonot: A standout win this quarter was DocuSign, which shows Coveo following a rigorous and competitive evaluation process. We demonstrated a clear ability to deliver personalized and relevant results and generated answers within multiple touchpoints. These answers are gathered from multiple data sources such as Salesforce, Jira, Confluence, Contentful, and others, increasing case deflection rates, thus delivering tangible, measurable ROI. This success highlights the impact of our platform in driving operational efficiency and enhancing customer experience for more than 1.7 million customers across multiple touch points while supporting enterprise requirements. Customers choose Coveo for more than just search. They value our agnostic, out-of-the-box connectivity, powerful analytics, and admin-friendly tooling, all purpose-built to solve the specific business challenge.

Speaker Change: A standout win this quarter was doctor sign which shows <unk> following a rigorous and competitive evaluation process, we demonstrated a clear ability to deliver personalized and relevant to resolve and generated answers within multiple touch points. These answers are graduate from multiple data sources such as Salesforce.

Speaker Change: <unk> Giro confluence can pencil and others, increasing case deflection rates does delivering tangible measurable ROI.

Speaker Change: This success highlights the impact of our platform and driving operational efficiency and enhancing customer experience for more than one 7 million customers across multiple touch points, while supporting enterprise requirements.

Speaker Change: Customers choose <unk> for more than just search they value our agnostic out of the box connectivity powerful analytics and in men's friendly tooling all purpose built to solve the specific business challenge.

Laurent Simonot: Our platform ensures reliable, contextual, and trusted answers at every step of the customer journey. By empowering both customers and agents with AI-driven generative knowledge, we enable faster resolution of even the most complex queries grounded in enterprise code. The result, lower support costs and higher customer satisfaction.

Speaker Change: Our platform ensure reliable contextual and trusted answers at every step of the customer journey by empowering both customers and agents with AI driven <unk> knowledge, we enabled faster resolution of even the most complex square east grounded in enterprise content. The result, lower support costs.

Speaker Change: And higher customer satisfaction.

Laurent Simonot: We are increasingly seeing commerce and knowledge converge across our customers.

Speaker Change: We are increasingly seeing commerce and knowledge converge across our customer base. A great example, this quarter's Adi global which initially adopted <unk> to support their b to B E. Commerce experience. They are now extending to use a common covino indexed to power their customer service journey as well.

Laurent Simonot: A great example this quarter is ADI Global, which initially adopted Coveo to support their B2B commerce experience. They are now extending to use a common Coveo index to power their customer service journey as well, streamlining experiences across the entire lifecycle.

Speaker Change: Streamlining experiences across the entire life cycle.

Laurent Simonot: As commerce evolves towards more conversational, knowledge-driven interactions, these blended use cases are becoming more. We're uniquely positioned to help enterprises thrive in this shift, bringing together relevance, intelligence, and seamless experiences across both commerce and service.

Speaker Change: As commerce evolves towards more conversational knowledge driven interactions. These blended use cases are becoming more common.

Speaker Change: We're uniquely positioned to help enterprises drive in this shift, bringing together relevance intelligence and seamless experiences across both commerce and service.

Laurent Simonot: I will close by highlighting our investments in what we believe is the next major tailwind in our industry, the rise of agent-tech AI. We're currently piloting our agent-tech AI integration with a select group of customers and plan to roll it out more broadly soon. In March, we launched Coveo for AgentForce, now available on the Salesforce Agent Exchange Marketplace.

Speaker Change: I will close by highlighting our investments in what we believe is the next major tailwind in our industry. The rise of agent take AI. We're currently piloting our agents take AI integration with select group of customers and plan to roll it out more broadly soon in March we launched <unk> four agent force now.

Available on the Salesforce agent exchange marketplace. We're genuinely excited about this momentum just as we were with the successful launch of our journey capabilities last year.

Laurent Simonot: We're genuinely excited about this momentum, just as we were with the successful launch of our GenEye capabilities last year. Many of our customers and partners are actively exploring this space. While the potential is immense, early adopters are quickly realizing that effective retrieval is essential for This is where Coveo excels. Our leadership and relevant segmented retrieval, or RAD, empowers enterprises to securely index and search millions of documents across diverse content sources, delivering highly relevant answers, minimizing hallucinations, and enabling a coherent, trusted, agentic experience.

Speaker Change: Many of our customers and partners are actively exploring the space. While the potential is immense early adopters are quickly realizing that effective retrieval is essential for success. This is a work of AOR itself, our leadership and relevance segmented retrieval orad empowers enterprises to securely.

Speaker Change: <unk> and search millions of documents across diverse content sources, delivering highly relevant answers minimizing house nations and enabling a coherent trusted agent <unk> experience.

Laurent Simonot: Finally, as part of this evolution, we're also investing in the development of Ancient Tech RAG, designed to power the next generation of conversational experience. This will enable more dynamic, multi-step interactions that go beyond static answers, allowing AI to better interpret intent, manage context, and guide users through complex journeys across support, commerce, and workplace scenarios. We're currently collaborating with select customers and expect initial deployments later this year.

Speaker Change: Finally, as part of this evolution. We're also investing in the development of agent that Crag designed to power. The next generation of conversational experiences.

Speaker Change: This will enable more dynamic multi step interactions that go beyond static cancers, allowing AI to better interpreting Kent managed contacts and guide users through complex journey across support commerce and workplace scenarios, where it currently collaborating with select customers and expect initial.

Speaker Change: Deployments later this year.

Laurent Simonot: I'll wrap up by sharing our key priorities as we enter fiscal 2020. Our focus remains clear and distinct. Purge. Drive growth with strong unit economics and a high recurring margin profile. Second, deliver meaningful innovation that creates real value for our customers. And third, maintain and enhance operational excellence with a focus on sales execution and customer success. We've made strong progress across all key areas, and we remain committed to investing strategically to sustain and accelerate this momentum. Our position in the market is clearly defined and we're seeing that translate into more consistent wins and growing recognition for customers, partners, and industry analysts alike.

Speaker Change: I'll wrap up by sharing our key priorities as we enter fiscal 2026 our.

Speaker Change: Our focus remains clear and disciplined first.

Speaker Change: Drive growth with strong unit economics, and a high recurring margin profile.

Speaker Change: Second deliver meaningful innovation that creates real value for our customers.

Speaker Change: Third maintain and enhance operational excellence with a focus on sales execution and customer success.

Speaker Change: We've made strong progress across all key areas and we remain committed to investing strategically to sustain and accelerate this momentum our position in the market is clearly defined and we're seeing that translate into a more consistent wins and growing recognition for customers partners and industry analysts alike.

Laurent Simonot: None of this would be possible without our amazing team. Their talent, drive, and dedication continue to be a key differentiator.

Speaker Change: None of this would be possible without our amazing team their talent drive and dedication continue to be a key differentiator.

Laurent Simonot: Looking ahead, I'm genuinely excited about the opportunities Fiscal 26 presents. and we look forward to sharing our continued progress with you throughout the year.

Speaker Change: Looking ahead I'm genuinely excited about the opportunities fiscal 'twenty six presidents.

Speaker Change: We look forward to sharing our continued progress with you throughout the year.

Brandon Nussbaum: With that, I'll turn it over to Brendan, who will walk you through the financial details. Brendan. Thanks, Laurent. At the start of the fiscal year, we commented that we anticipated stronger bookings of Fiscal 25, especially in the second half, and I'm pleased to report that played out as expected. After a record Q3, we followed with our best ever Q4. Overall, new bookings in the second half are up over 50% year over year. As a result of this bookings performance, we are now well positioned to see our reported revenue growth rates accelerate, as you see in our Q1 and fiscal year guidance, where we expect to improve our growth rate on the Coveo core to approximately 14% based on midpoint in Q1, and further accelerate through the fiscal year.

Speaker Change: With that I'll turn it over to Brendan who will walk you through the financial details.

Speaker Change: Brendan.

Brendan Duffy: Thanks, Laura.

Brendan Duffy: We started the fiscal year, we commented that we anticipated stronger bookings in fiscal 'twenty five, especially in the second half and I am pleased to report that played out as expected. After a record Q3, we followed with our best ever Q4 <unk>.

Brendan Duffy: Overall, new bookings in the second half are up over 50% year over year.

Brendan Duffy: As a result of this bookings performance, we are well positioned to see our reported revenue growth rates accelerate as you see in our Q1 and fiscal year guidance, where we expect to improve our growth rate on the <unk> two.

Brendan Duffy: Approximately 14% based on midpoint in Q1, and further accelerate through the fiscal year.

Brandon Nussbaum: While building this momentum, we've maintained our operational discipline, and I'm also pleased to report that we delivered $11.1 million of operating cash flow, representing 8% of revenue. As we now enter our new fiscal year, we'll be leaning into our growth potential while keeping our fiscal discipline. We'll make some intentional investments to further our growth and maintain a focus on healthy unit economics. I believe we're well positioned for further improvements in our rule of metrics and long term profitable growth. Summarizing the key points from the quarter, SAS subscription revenue was $32.6 million, increasing 6%. For the full year, SAS subscription revenue was $126.6 million, up 7%.

Brendan Duffy: While building this momentum we've maintained our operational discipline and I'm also pleased to report that we delivered $11 1 million of operating cash flow representing 8% of revenue.

Brendan Duffy: As we now enter our new fiscal year, we'll be leaning into our growth potential while keeping our fiscal discipline.

We'll make some intentional investments to further our growth and maintain our focus on healthy unit economics, I believe we're well positioned for further improvements that are rule of metrics and long term profitable growth.

Summarizing the key points from the quarter SaaS subscription revenue was $32 6 million, increasing 6% for the full year SaaS subscription revenue was $126 6 million up 7%.

Brandon Nussbaum: Our focus is on the Coveo Core Platform, which drove subscription revenue of $31.6 million, an increase of 10% over the prior year. Please note that Q4 this year included one less day of revenue recognition than a year ago, and on a constant-day, constant-currency basis, this growth rate was 12 percent. In the full year, Coveo Core Platform subscription revenue was $121.3 million, growing 11 percent, and 12 percent on a constant-currency, constant-days basis. previously communicated, subscription revenue from the Qubit platform declined by 50% and is now down to approximately $1 million in revenue for the quarter. During the quarter, we formally communicated an end of life to this platform and expect this revenue stream to fully churn in the coming quarters.

Brendan Duffy: Our focus is on the <unk> core platform, which drove subscription revenue of $31 6 million, an increase of 10% over the prior year.

Brendan Duffy: Please note that Q4. This year included one less day of revenue recognition and a year ago and on a constant day constant currency basis. This growth rate was 12%.

Brendan Duffy: For the full year <unk> core platform subscription revenue was $121 3 million growing 11% and 12% on a constant currency constant days basis.

Brendan Duffy: As previously communicated subscription revenue from the cubic platform declined by 50% and is now down to approximately $1 million in revenue for the quarter.

Brendan Duffy: During the quarter, we formally communicated an end of life to this platform is expect this revenue stream to fully churn in the coming quarters.

Brandon Nussbaum: Total revenue was $34.4 million, an increase of 5% over the prior year. Total revenue growth rates were affected by the Qubit decline, along with a decline in lower margin professional services revenue as we increasingly prioritize our partners for that line item. Total revenue for the full year was $133.3 million, growing 6%. Gross margins for the quarter and full year were 79%, more or less consistent with the prior year. Product gross margins were a very healthy 82% for the quarter and year. Adjusted EBITDA was $0.7 million compared to $0.2 million a year ago and for the full year adjusted EBITDA was $1.0 million compared to a loss of $2.4 million in the prior year.

Total revenue was $34 4 million, an increase of 5% over the prior year.

Brendan Duffy: Total revenue growth rates were affected by the Cuba decline along with a decline in lower margin professional services revenue as we increasingly prioritize our partners for that line item.

Brendan Duffy: Total revenue for the full year was $133 3 million growing 6%.

Brendan Duffy: Gross margins for the quarter and full year were 79% more or less consistent with the prior year.

Brendan Duffy: Product gross margins were very healthy, 82% for the quarter and year.

Brendan Duffy: Adjusted EBITDA was <unk> 7 million compared to 0.2 million a year ago and for the full year. Adjusted EBITDA was 1.0 million compared to a loss of $2 4 million in the prior year.

Brandon Nussbaum: Operating cash flow is $6.8 million in the quarter, improved from $4.6 million in the prior year period. And as I mentioned, full year operating cash flow is $11.1 million, or 8% of total revenue. We ended the quarter and year with approximately $125 million in cash and no debt.

Brendan Duffy: Operating cash flow was $6 8 million in the quarter improved from $4 6 million in the prior year period.

Brendan Duffy: And as I mentioned full year operating cash flow was $11 1 million or 8% of total revenue.

We ended the quarter and year with approximately $125 million in cash and no debt.

Brandon Nussbaum: Before diving into bookings, I want to quickly clarify our vertical exposure and business model amid the ongoing macroeconomic environment. HITECH remains our largest vertical with a strong and growing customer base. While we do have some exposure to tariff-sensitive sectors, like retail and manufacturing, thus far we've seen our enterprise customers continue to prioritize AI investments to help drive improved margins and conversion rates.

Brendan Duffy: Before diving into bookings I want to quickly clarify our vertical exposure and business model amid the ongoing macroeconomic environment high.

Brendan Duffy: Hi Tech remains our largest vertical was a strong and growing customer base, while we do have some exposure to tariffs sensitive sectors like retail and manufacturing.

Brendan Duffy: Thus far we've seen our enterprise customers continue to prioritize investments to help drive improve margins and conversion rates.

Brandon Nussbaum: Further, our revenue model is a SaaS-based subscription model with fixed annual and typically multi-year contracts. We have no direct exposure to transaction-based revenue, which insulates us well from any downturn in economic activity levels.

Brendan Duffy: Further our revenue model is a SaaS based subscription model with fixed annual are typically multi year contracts. We have no direct exposure to transaction based revenue, which insulates us well from any downturn in economic activity levels.

Brandon Nussbaum: So as we look at bookings, as I previously mentioned, bookings and ARR are important metrics which I follow in our business, and as such I wanted to further explain how I calculate these metrics. For bookings, these represent committed customer orders signed in a period for new subscription revenue. ARR includes only contractually committed subscription amounts that can be recognized in revenue. Thus, ARR at one quarter end becomes SAS subscription revenue for the next quarter.

Brendan Duffy: So as we look at bookings as I've previously mentioned bookings and they are an important metrics, which I follow in our business.

Brendan Duffy: Such a one to further explain how I calculate these metrics.

Brendan Duffy: Bookings these represent committed customer orders signed in the period for new subscription revenue.

Brendan Duffy: <unk> includes only contractually committed subscription amounts that can be recognized in revenue thus.

Brendan Duffy: At one quarter end becomes subscription revenue for the next quarter.

Brandon Nussbaum: So diving into Booking's details, we're pleased with our progress here. Our ARR growth rates exceeded our revenue growth rates for the quarter, landing at 14% as we signaled last quarter. Our Gen-AI products continue to show momentum and are now up to approximately 75 customers and more than 3X increase from a year ago. Importantly, we're now crossing renewal periods, and while many in the Gen AI space are struggling for renewals, our initial results have been highly encouraging. We have a near-perfect renewal rate, and the revenue from the cohort of customers from a year ago has increased their spending by more than 50 percent compared to their initial levels.

Brendan Duffy: So diving into bookings details, we're pleased with our progress here.

Brendan Duffy: They are our growth rates exceeded our revenue growth rates for the quarter lending at 14% as we signaled last quarter.

Brendan Duffy: Our Gen AI products continue to show momentum and are now up to approximately 75 customers more than <unk> increase from a year ago.

Brendan Duffy: Importantly, we are now crossing renewal periods and while many in the jet AI space are struggling for renewals.

Our initial results have been highly encouraging we have a near perfect renewal rate and the revenue from the cohort of customers from a year ago has increased their spending by more than 50% compared to their initial levels.

Brandon Nussbaum: that speaks loudly to the value we're helping to deliver.

Brendan Duffy: This speaks loudly to the value we are helping to deliver.

Brandon Nussbaum: In commerce, it remains our fastest growing customer use case, and our SEP partnership continues to accelerate, with Q4 representing the highest bookings quarter since the launch of the partnership. Looking at renewal rates, NER improved to 107% when excluding the impact from Qubit, increasing 200 basis points sequentially. As we said previously, we invested in our account management teams throughout the fiscal year and we expected this would drive better NER rates and I'm happy to share that much of the improvement we saw this quarter can be attributed to those investments.

Brendan Duffy: E Commerce remains our fastest growing customer use case that our SAP partnership continues to accelerate with Q4, representing the highest bookings quarter since the launch of the partnership.

Brendan Duffy: Looking at renewal rates and improved to 107% when excluding the impact from Cuba, increasing 200 basis points sequentially.

Brendan Duffy: As we said previously we invested in our account management teams throughout the fiscal year and we expect that this will drive better NAR rates and I'm happy to share that much of the improvement. We saw this quarter can be attributed to those investments I'll wrap up with our guidance.

Brandon Nussbaum: I'll wrap up with our guidance. We see the momentum built in Fiscal 25 continuing in Fiscal 26 and are targeting to return to 20% plus ARR growth rates on the Coveo Corps in the latter part of the fiscal year. Given the business model, recognized revenue will lag this by a quarter or so. We expect the Qubit revenue will churn completely in the next quarters, and consequently, Qubit's contribution to revenue in the year will be approximately $2 million, down from approximately $5 million this year. With that context, for Q1 revenue, we expect SAS subscription revenue of $33.5 to $34.0 million.

Brendan Duffy: We see the momentum built in fiscal 'twenty five continuing in fiscal 'twenty six.

Brendan Duffy: We're targeting to return to 20% plus <unk> growth rates on the <unk> in the latter part of the fiscal year.

Brendan Duffy: Given the business model recognize revenue will lag by a quarter or so.

Brendan Duffy: We expect the qubit revenue will churn completely in the next quarters and consequently, cubits contribution to revenue in the year will be approximately $2 million down from approximately $5 million this year.

Brendan Duffy: With that context for Q1 revenue, we expect subscription revenue of 33, 5% to 34.0 million.

Brandon Nussbaum: an increase of 10% from a year ago at midpoint, and implying a growth rate of approximately 14% on the Coveo core platform. and we expect total revenue of $34.9 to $35.4 million. For the year, we expect SAS subscription revenue of $141.5 to $144.5 million, an increase of 13% at midpoint, and implying a growth rate of 15% to 17% on the Coveo Core. And we expect total revenue of $147.5 to $150.5 million. Looking at profitability guidance, we expect Q1 adjusted EBITDA of approximately minus one to minus two million dollars, given the seasonally high costs we incur in Q1.

Brendan Duffy: An increase of 10% from a year ago at midpoint, and implying a growth rate of approximately 14% on the <unk> platform.

Brendan Duffy: And we expect total revenue of 34, 9% to $35 $4 million.

Brendan Duffy: For the year, we expect SaaS subscription revenue of 141, five to $144 5 million, an increase of 13% at midpoint and implying a growth rate of 15% to 17% on the covalent Corp.

Brendan Duffy: And we expect total revenue of 147 $5 million to $155 million.

Brendan Duffy: Looking at profitability guidance, we expect Q1, adjusted EBITDA of approximately minus one to minus $2 million given the seasonally high costs, we incur in Q1.

Brandon Nussbaum: For the fiscal year, we expect adjusted EBITDA at approximately break-even levels. We are committed to maintaining positive operating cash flow roughly in line with fiscal 25 levels of approximately $10 million.

Brendan Duffy: For the fiscal year, we expect adjusted EBITDA at approximately breakeven levels.

Brendan Duffy: We are committed to maintaining positive operating cash flow roughly in line with fiscal 'twenty five levels of approximately $10 million.

Brandon Nussbaum: to provide further context. With our current growth outlook and encouraging improvement in our sales efficiency metrics, we are making intentional investments in innovation and go-to-market to ensure we capture the opportunity ahead. These investments involve increasing our quota carrying sales roles and accelerating R&D initiatives to further our pace of innovation. This decision is straightforward to us. With 82% gross margins, NER rates at 107% and growing, and strong unit economics on our go-to-market spending, we believe the opportunity is present to further improve our growth rate. We will do this while maintaining roughly the same adjusted EBITDA and cash flow levels seen in Fiscal 25 and believe this will drive even further improvements to our rule of metrics beyond Fiscal 26.

Brendan Duffy: To provide further context.

Brendan Duffy: With our current growth outlook and encouraging improvement in our sales efficiency metrics, we're making intentional investments and the innovation and go to market.

Brendan Duffy: To ensure we capture the opportunity ahead.

Brendan Duffy: These investments involve increasing our quota carrying sales roles and accelerating R&D initiatives to further our pace of innovation.

Brendan Duffy: Decision is straightforward to us with 82% gross margins.

Brendan Duffy: Our rates at 107% and growing and strong unit economics on our go to market spending we believe the opportunity is present to further improve our growth rates. We will do this while maintaining roughly the same adjusted EBITDA and cash flow levels seen in fiscal 'twenty five and believe this will drive even further improvements to our rule of metro.

Brendan Duffy: Mix beyond fiscal 'twenty six.

Brandon Nussbaum: So in closing, Fiscal 25 is a great year of progress for us, and I'm excited to see this continue into Fiscal 26 and beyond.

Brendan Duffy: So in closing fiscal 'twenty five was a great year of progress for us and I'm excited to see this continue into fiscal 'twenty six and beyond.

Konstantin: And with that, Operator, you may now open the line for questions. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two.

Speaker Change: And with that operator, you may now open the line for questions.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone. If you will hear a prompt that her hand has been raised.

Speaker Change: Should you wish to decline from the polling process. Please press star followed by the number too.

Konstantin: If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

Speaker Change: If you are using a speaker phone please make sure to lift your handset before pressing any keys.

David Kwan: Your first question comes from the line of David Kwan from TV Cowling, please ask your question. Good afternoon, guys.

Speaker Change: Your first question comes from the line of David Kwan from TD Cowen. Please ask your question.

Speaker Change: Good afternoon guys.

Laurent Simonot: I was curious, you spoke a lot about the SAP partnership and a lot of the success that you're having there, which is great and touched a bit on the Salesforce, but I'd like to dig a bit more on the Salesforce side. You, I guess, announced something last, I think, September in terms of kind of re-engagement there, strengthened partnership. Can you talk about what impact that's had in terms of, you know, joint customer wins? And have you seen an increase in the contribution from Salesforce?

David Kwan: I was curious you spoke a lot about the SCP partnership and a lot of the success that you're having there which is great and touched a bit on the sales force.

Speaker Change: Dig a bit more of the sales force side.

Speaker Change: Yeah, I guess announce something last I think it's September or in terms of.

Speaker Change: I'm kind of Reengagement narrow strengthened partnerships can you talk about what impact that's had in terms of joint customer wins and have you seen an increase in the contribution from Salesforce.

Speaker Change: Okay.

Laurent Simonot: Good evening, David. This is Laurent. Thank you for your question. On March 5th, I believe, we're the launch partner, a launch partner for Salesforce AgentForce on their agent exchange. So AgentForce is very important for Salesforce. It's also fairly new, so we're glad to be connected and integrated into AgentForce. Now in terms of in terms of a pipeline, we are having current projects going on. Customers are deciding about their roadmap with AgentForce, and we are extremely happy to be part of that roadmap with them. Customers like DocuSign and many others are part of this overall conversation.

Speaker Change: Oh good good evening, David This is Laura Thank you for your question so.

Speaker Change: On the.

Speaker Change: March.

Speaker Change: First I believe we were the launch partner a launch partner for <unk>.

Speaker Change: Salesforce agent horse on their agent exchange So agent force is very.

Speaker Change: Very important for sales force, but it's also fairly new so we're glad to be to be connected and integrated into our agent force now in terms of.

Speaker Change: In terms of.

Speaker Change: Pipeline.

Speaker Change: We are having current projects going on customers are deciding.

Speaker Change: About that roadmap with agent force and we are extremely happy to be part of that roadmap with them cut.

Speaker Change: Customers like doctors signed and many others are part of this are part of this overall cargo station.

Louis Tietou: Yeah, David, if I may add, this is Louis. We're quite excited about Agentik. AgentForce is one example. There will be every large app vendor right now is creating their own Agentik orchestration layer. And Coveo really acts as sort of the intelligence behind. So Coveo for AgentForce is the first manifestation of that. And really comes into play whenever, you know, there are basically two conditions is, you know, that you find within large enterprises. So typically the content required to make AgentForce work needs to be ingested within data cloud. And that's not always practical for large enterprises to make that happen.

Louis: Yeah, David if I may add this is louis.

Speaker Change: We're quite excited about agent tick.

Speaker Change: Agent Force is one example, there will be every every large app vendor right now is creating their own <unk>.

Speaker Change: And <expletive> orchestration layer and convey Oh really acts as sort of the intelligence behind so eight prevail for agent forces the first manifestation of that.

Speaker Change: And really comes into play whenever.

Speaker Change: There are basically two conditions is.

Speaker Change: Youll find within large enterprises, so typically the content required to make agent force work.

Speaker Change: <unk> needs to be.

Speaker Change: In.

Speaker Change: Ingested within data cloud and that's not always practical.

Speaker Change: For large enterprises to make that happen and number two is large enterprises typically.

Louis Tietou: And number two is large enterprises typically have very, very acute requirements in terms of relevance at large scale. And this is why Coveo injecting actions within AgentForce is such a powerful solution. So as this grows, as Laurent says, you know, AgentForce, you know, despite all the marketing is still at the early innings. And we think we're adding a lot of value and that's evidenced by the fact that we're one of the early launch partners. If you go on the AgentForce marketplace of Salesforce, you'll find Coveo. Hope that clarifies. That's helpful. Thanks, Louie. Thanks, Laurel.

Speaker Change: We have very very acute.

Speaker Change: The requirements in terms of relevance at large scale and this is why <unk> injecting actions within agent force as is.

Speaker Change: <unk> is such a powerful solution. So as this grows as l'oreal says.

And for Us despite all the marketing is still at the early innings, and we think we're adding a lot of value and that's evidenced by the fact that we're one of the early launch partners. If you go on the <unk>.

Agent Force.

Speaker Change: Marketplace of Salesforce, you opine come out.

Speaker Change: I hope that clarifies.

Speaker Change: No that's helpful. Thanks, Louis and thanks Laurel.

David Kwan: And then just a follow-up question, you talked about, I think, Louie, you talked about targeting rule of 40, I guess, maybe rule of 30 exiting this year, based on ARR growth and operating cash flow margin. Can you talk about, I guess what the growth and the margin of symptoms are exiting this year and and how you see that playing out over the next couple of years that next Hey, David. Yeah, look, so we, the guiding principles in how we're running the business is trying to drive ARR growth. We pay a lot of attention to the unit economics in terms of how much we're leaning into growth versus how much we flow through the profitability line.

Speaker Change: Just a follow up question.

Speaker Change: You talked about I think you talked about targeting rule of 40, and I guess, maybe real a 30 exiting this year based on <unk> growth and operating cash flow margin.

Speaker Change: Can you talk about.

Speaker Change: I guess, what the growth and the margin assumptions are exiting this year and how you see that playing out over the next couple of years that next.

Speaker Change: Yeah.

David Kwan: Hey, David.

Speaker Change: Yeah look so we.

Speaker Change: The guiding principles in how we're running the businesses.

Speaker Change: To drive our growth and we pay a lot of attention to the unit economics.

Speaker Change: In terms of.

Speaker Change: How much were leaning into growth versus how much we flow through the profitability line.

Brandon Nussbaum: Tried to give some comments on the call. Right now, what we're seeing is good booking performance. We see accelerating revenue growth and ARR growth based on the outlook we provided and encouraged by the unit economics and what they're telling us. Our pipeline's healthy. The return on our sales spend is good. And so in this coming year, we're going to make some intentional investments. We've increased the amount of core carrying headcount that we'll have in the field for the year. And that should bode well as we kind of look beyond fiscal 26, if all things play out as expected, to making sure that we continue to see that growth rate move up.

Speaker Change: <unk> tried to give some comments on the call Rick right now what we're seeing is good bookings performance, we see accelerating.

Speaker Change: Revenue growth and <unk> growth based on the outlook we provided.

Speaker Change: And encouraged by the unit economics of what they are telling us our pipeline's healthy.

Speaker Change: The return on our sales spend is good and so in this coming year, we're going to make some intentional investments.

Speaker Change: We've increased the amount of quota carrying head count that we'll have in the field for the for the year and that should bode well as we kind of look beyond fiscal 2006 with all those things play out as expected.

Speaker Change: Making sure that we continue to see that growth rate move up and as long as we're seeing that as long as the unit economics are healthy with good returns.

Brandon Nussbaum: And as long as we're seeing that, as long as the unit economics are healthy with good returns, that becomes our priority. So right now, you know, as we look at rule of metrics, as you mentioned, based on ARR and cash flow, we do see those improve. And the mix of how that will improve will let the unit economics tell us. And, you know, we'll continue to let those guide the way and inform where we put our money to work, whether we return that to the bottom line or invest it for future growth. That's great.

Speaker Change: Becomes our priority. So right now you know as we look at rule of metrics.

Speaker Change: As you mentioned based on our cash flow we.

Speaker Change: We do see those improve and the mix of how that will improve will let P&I economics tell us right now it's about growth and.

Speaker Change: We will continue to.

Speaker Change: Let those guys to weigh in.

Speaker Change: And.

Speaker Change: It was for me.

Speaker Change: Where we put our money to work, whether we return that to the bottom line or invested for future growth.

Speaker Change: Hope that helps.

David Kwan: That's great. Thanks Brendan.

Brandon Nussbaum: Thanks, Brendan.

Phanis Michopoulos: Your next question comes from the line of Phanis Michopoulos from BMO Capital Markets. Please ask your question. Hi, good afternoon. You're leading into some investments and talking about accelerating growth, which is which is very encouraging. But the macro on the flip side has been looking worse over the last couple of months. So just help us reconcile that is the dynamic that customers and prospects are just becoming all the more aware that this is a high ROI solution. And so that's what's causing them to proceed despite incremental macro softness. Coveo Solutions Yeah.

Speaker Change: Your next question comes from the line of Fantasy Michel <unk> from BMO capital markets. Please ask your question.

Speaker Change: Hi, good afternoon.

Speaker Change: You are.

Speaker Change: Leaning into some investments and I'm talking about accelerating growth, which is which is very encouraging but the macro on the flip side is doing.

Speaker Change: Looking worse over the last couple of months, so just help us reconcile that.

Speaker Change: Amex that.

Customers and prospects are just becoming all the more aware that this is a high ROI solution and so that's what's causing them to proceed despite.

Incremental macro softness.

Tavis Louie: Yes, Hi, Tom So I'll start Tavis Louie Thanks for your comments and your question.

Louis Tietou: Hi, Thanos. I'll start. This is Louis. Thanks for your comments and your question. Look, first of all, we'll start at a high level. As you know, in our business, we're not really directly influenced by tariffs, given, obviously, the nature of our business selling, being in the SaaS business, number one. Number two, in fact, yes, I mean, there's clearly, we all read the same news, there's some uncertainty, but AI remains a greater story than that uncertainty. And I guess the answer was right within your question, is we can demonstrate, and we're publishing more and more of those.

Tavis Louie: First of all we'll start at a high level as you know in our business, we're not really directly influenced by tariffs given obviously the nature of our business selling.

Tavis Louie: SAP being in the SaaS business number one number two in fact, yes, I mean, there is clearly we all read the same news there series some uncertainty but.

Tavis Louie: It remains.

Tavis Louie: Greater story that uncertainty and I guess.

Tavis Louie: The answer was was right within your question is we can demonstrate and we're publishing more and more of those if you go on our website as I invited you to there is that there is a.

Louis Tietou: If you go on our website, as I invited you to, there's a section with dozens and dozens of customer testimonials, where it's not only just about the technology, but it's about the fact that we measure everything we do financially. So the ROI is the winning story here at Coveo. So whenever we put our algorithms in our platform on a commerce site, we generally succeed at increasing revenue and metrics, such as conversion and margins, very significantly, and the same in the knowledge area and productivity area. So fundamentally, we believe, and we're seeing increased demand, and I think we might have mentioned, if not, I'll mention it, that our pipeline right now is at an all-time high.

Tavis Louie: Section with dozens and dozens of customer testimonials, where we it's not only just about the technology, but it's about the fact that we measure everything we do financially. So the ROI is is the winning story here at prevail. So when whenever we put our algorithms and our platform.

Tavis Louie: On a commerce site, we generally.

Tavis Louie: Succeed at at increasing revenue and.

Tavis Louie: And metrics, such as conversion and margins very significantly and.

Tavis Louie: And the same in the knowledge area and productivity area. So fundamentally.

Tavis Louie: We believe and we're seeing.

Tavis Louie: Increased demand in.

Tavis Louie: And I think we might have mentioned if not I'll mention that our pipeline right. Now is at an all time high and that's predominantly driven by the fact that enterprises want to deploy AI and they want to do it in such a way that they drive higher.

Louis Tietou: And that's predominantly driven by the fact that, A, enterprises want to deploy AI, and they want to do it in such a way that they drive success. And B, they want to do that, despite the economic context and uncertainty, they want to do that with high ROI, which we absolutely can demonstrate and even sometimes commit to. So I hope that answers your question.

Tavis Louie: They may drive success and B, they want to do that despite the economic context and uncertainty they want to do that with high ROI, which we absolutely.

Ken demonstrate that even.

Tavis Louie: Sometimes commit to.

Tavis Louie: Hope that answers your question.

Phanis Michopoulos: It does, thank you.

Tavis Louie: It does thank you.

Laurent Simonot: And then on Shopify, you announced the first joint win. Can you expand, perhaps, in terms of how that pipeline is building and how your go-to-market initiatives with Shopify have been ramping? Yeah, as you know, and as Brandon mentioned, you know, commerce right now is, is, you know, on a relative scale, percentage wise, our fastest growing segment. So we're enjoying quite a bit of success.

Speaker Change: And then on Shopify, you announced the first joint win.

Can you expand perhaps in terms of how that pipeline is building and.

Speaker Change: How your go to market.

Speaker Change: Just us with shopify and ramping.

Speaker Change: Yes, as you know and as Brandon mentioned Commerce right now.

Speaker Change: On a relative scale.

Speaker Change: Percentage wise are our fastest growing segment. So we're enjoying quite a bit of success, we've talked about the partnership with SAP.

Louis Tietou: We've talked about the partnership with SAP. We obviously are agnostic to the commerce platform, but Shopify is quite interesting. Shopify, if you follow the company, is making a huge commitment and investment in the enterprise space. So after Shopify, you know, a decade ago, growing into what's called Shopify Plus, which was really designed, you know, for SMBs up to, you know, a couple of hundred million in sales. Now, Shopify is committing a lot of investment around enterprise. And this is where, you know, enterprises, in particular, you know, large business to consumer, but, you know, large B2B companies, business to business companies.

Speaker Change: We obviously are agnostic to the commerce platform, but shopify is quite interesting shopify. If you follow the company is making a huge commitment and investment in the enterprise space. So after core shopify, a decade ago growing into what's called Shopify, plus which was really designed for SMB.

Speaker Change: He's up to couple of hundred million dollars in sales now Shopify is is committing.

Speaker Change: A lot of investment around enterprise and this is where enterprises in particular large business to consumer, but large b to b company's.

Speaker Change: Business to business.

Louis Tietou: So think about very large distributors or aftermarket parts, manufacturers, you know, things of that nature require, you know, very complex search and relevance platforms, and, and AI merchandising tools. And that's where we come in. So we're very committed to this partnership. We've actually, we're impressed by the velocity of this, the potential velocity of this channel and the velocity of some of those accounts. And, and, you know, this is still, you know, nascent, but we already, you know, have, we signed a new customer during the quarter. We already, we're at two right now, joint customers. And in that pipeline, I can't comment on the specifics of the pipeline, but that pipeline is definitely growing.

Speaker Change: Companies, So think about very large distributors or aftermarket parts manufacturers things of that nature.

Speaker Change: Require very complex.

Speaker Change: <unk>.

Speaker Change: Search and relevant platforms, and AI merchandising tools, and that's where we come in so we're very committed to this partnership we've actually.

Speaker Change: We're impressed by the velocity.

Speaker Change: No.

All of this.

Speaker Change: The potential velocity of this channel and the velocity of some of those accounts and and you know this is still nascent but we already.

Speaker Change: Have.

Speaker Change: We signed a new customer during the quarter, we already were at two right now joined customers.

Speaker Change: And that pipeline I can't comment on the specifics of the pipeline, but that pipeline is definitely growing in this event.

Louis Tietou: And, and this is a fairly powerful channel, you know, for, for Coveo. And we think we bring a lot of value to Shopify in the enterprise, in the enterprise space.

Speaker Change: Charity powerful channel for.

Speaker Change: Sure.

Speaker Change: For.

Speaker Change: And we think we bring a lot of value to shopify in the enterprise and the enterprise space.

Louis Tietou: Great. It's good to hear.

Speaker Change: Great to hear I'll pass the line. Thank you.

Paul Tremor: I'll pass the line.

Speaker Change: Okay.

Brandon Nussbaum: Your next question comes from the line of Paul Tremor from RBC Capital Markets. Please ask your question. Oh, thanks very much. Good afternoon. Just a question on on bookings momentum. I mean, you called out generative has been in the in the 20 to 25% range for several quarters. Now, the question is really around the non generative bookings. You know, what's what's primarily driving that? You mentioned commerce. You know, how do we how do you size commerce as a percent of total bookings? And then outside of that, you know, what's what's driving the growth?

Speaker Change: Your next question comes from the line of Paul Treiber from RBC capital markets. Please ask your question.

Speaker Change: Alright, thanks very much good afternoon, just a question on bookings momentum I mean, you've called out generative has been in the 20% to 25% range for several quarters. Now. The question is really around the non generative bookings you know, what's what's primarily driving that you mentioned commerce.

Speaker Change: How do we how do you size commerce as a percent of total bookings and then outside of that what's driving that the growth that you've seen.

Brandon Nussbaum: Hey, Paul. Commerce is the predominant source of the rest. We've been highlighting our optimism and conviction around some of the go-to-market partnerships we've had, and certainly had a great quarter with SAP, and it's great to see Shopify starting now. So, that's the majority of the rest of the bookings. Take a customer like DocuSign, they are buying an overall customer service solution from us, of which generative answering is a component of it. So certainly, the part of a contract that isn't specifically tied to generative is also rounding out that answer. But yeah, I'd say between commerce and just generative AI, generative answering solutions, that's the majority of the bookings momentum.

Hey, Paul Yeah, Commerce as the as the.

Speaker Change: Predominant source of the rest.

Speaker Change: We've been highlighting.

Speaker Change: Our optimism and conviction around some of the go to market partnerships, we've had and certainly had a great quarter with S&P and it's great to see shopify starting now.

Speaker Change: That's the that's the majority of the rest of the bookings you know take a customer like Doc you sign they are buying.

Speaker Change: And overall customer service solution from us of which generative answering is a component of it.

Speaker Change: So certainly the.

Speaker Change: The part of our part of our contract that isn't specifically tied to generative as is also.

Speaker Change: Rounding out that answer.

Speaker Change: But.

Speaker Change: Yes, I would say between commerce and just generally.

Speaker Change: Answering solutions.

Speaker Change: The majority of the bookings momentum.

Brandon Nussbaum: Thanks, that's helpful.

Speaker Change: Thanks, That's helpful. And then a question on AT&T and specifically around the economics of <unk>. How are you thinking about the <unk>.

Laurent Simonot: And then a question on Agentic and specifically around the economics of Agentic, how are you thinking about the monetization strategy there? Is there will be a pricing uplift with Agentic or do you anticipate monetization primarily through increased increased queries?

Speaker Change: Monetization strategy there is zero.

Speaker Change: Pricing.

Speaker Change: <unk> uplift with Atlantic or do you anticipate monetization primarily through increased increased queries.

Laurent Simonot: Hi Paul, this is Laurent. Because we believe that HNTIC will consume more Coveo, more generative queries and more regular queries, we're quite happy about the potential of additional consumption. So that's how we are looking at pricing right now. And we feel that Coveo being embedded in more experiences and more HNTIC experiences is going to be good for us and good for our customers. And we are seeing this market evolving into multiple different kind of HNTIC experiences. As Louis mentioned, we are generic in our approach. Age Enforced is one that is, I guess, more mature from a marketplace perspective where we are available into it, but we expect to be available to others as they come out.

Speaker Change: Hi, Paul this is Laura.

Speaker Change: Because because we believe that the agent took will consume more <unk> more generalist queries and more regular queries.

Speaker Change: We're quite happy about the potential of additional consumption.

Speaker Change: So that's how we're looking at pricing right now.

Speaker Change: And we feel that <unk> being being embedded in more experiences and.

Speaker Change: More agent <expletive> experiences is is going to be good for us and good for our customers.

Sure.

Speaker Change: We are seeing this market evolving into multiple different kind of agent tick experiences.

Speaker Change: As we mentioned we are generic and our approach agent force is one that is I guess more mature from a marketplace perspective, where we where we are we are available to them, but we expect to be available into orders as they come out and again the value we create.

Laurent Simonot: And again, the value we create is we get access to the entire enterprise with security, with relevance, and we make that available into the HNTIC framework, the HNTIC workflow, and plan to create a lot of value.

Speaker Change: As we get access to your entire enterprise with security with relevance and we make that available into the agent that framework the agent workflow.

Speaker Change: And our plan to create a lot of value with that.

Laurent Simonot: Thanks for taking the question.

Speaker Change: Thanks for taking the question.

Brandon Nussbaum: Your next question comes from the line of Richard Say from the National Bank. Please ask your question. Oh, hi, good afternoon. This is Mike Stephens on for Rich. Congrats on the strong quarter. Just with your strategic investments, just wondering for some more color on that, you know, the cadence of those investments, are they, how much may be going to R&D versus the sales team? And it sounds like you may be leaning in as far as the sales team on commerce, or how should we think about those investments? Yes, so the majority of the incremental investment will be in go-to-market.

Speaker Change: Your next question comes from the line of Richard Safe from the National Bank. Please ask your question.

Mike Stevens: Oh Hi, good afternoon. This is Mike Stevens on for rich congrats on the strong quarter.

Mike Stevens: Just with your strategic investments just wondering for some more color on that.

Mike Stevens: The cadence of those investments are they.

Mike Stevens: Maybe go into R&D versus the sales team and it sounds like you may be leaning in.

Mike Stevens: As far as the sales team on commerce or how should we think about that.

Mike Stevens: Investments.

Mike Stevens: Yes, so the majority of the incremental investment will be in go to market you can already see it starting to show up in the financials and the Q4 results. So when you look at kind of the sequential change there.

Brandon Nussbaum: You can already see it starting to show up in the financials in the Q4 results when you look at kind of the sequential change there. We have been building out areas like account management teams. We have been increasing quota capacity, unit economics continue to dictate that we should keep doing that and so that is where the majority of investment will go.

Mike Stevens: We've been building out areas like account management teams, we've been been increasing quota capacity unit economics continue to.

Mike Stevens: Dictate that we should keep doing that.

Mike Stevens: And so that's where the majority of investment will go we are also going to direct some incremental money into innovation.

Brandon Nussbaum: We are also going to direct some incremental money into innovation and Laura, I don't know if you want to comment on some of those areas of focus. Yes, absolutely. We're spending a lot of time currently with large strategic customers around building innovation with them around the agent take about AI, about relevance and so on. And we see an opportunity to accelerate that because we're seeing results. And we feel that there's a lot of value at productizing the early results that we're seeing with customers. Okay, great. Appreciate that. With the Qubit churn, like, is any of that churn actually going toward your core platform?

Speaker Change: Innovation and Laura I don't know if you want to comment on some of those areas of focus.

Mike Stevens: Yeah.

Laura: Yes, absolutely we're spending.

Mike Stevens: A lot of time currently with <unk>.

Mike Stevens: A large strategic customers.

Your own building innovation with them from agent take about AI.

Mike Stevens: Relevance and so on and we are fortunate to accelerate that because we're seeing results.

Mike Stevens: And.

Mike Stevens: We feel that there is a lot of value add product ties in yearly results, so torsten with customers.

Mike Stevens: Okay, great appreciate that.

Mike Stevens: With the <unk> churn.

Mike Stevens: Like is any of that churn actually going toward your core platform or any of those customers moving to the core platform and kind of embedded in some of this growth or are those customers essentially just left there are no longer core customers.

Brandon Nussbaum: Are any of those customers moving to the core platform and kind of embedded in some of this growth? Or, you know, are those customers essentially just left? They're no longer Coveo customers? No, if the question is, is any of the churns moving into a different line item, no, that is not happening. So we continue to work with these customers to make sure we take good care of them, but as I mentioned, formal end-of-life has now been announced and we expect it to churn fully now in the coming quarters. Okay, great. And then just lastly, with that DocuSign sound like a pretty competitive process.

Mike Stevens: No. The question is does any of that churn just moving into a different line item no that is not happening.

Mike Stevens: So.

Mike Stevens: We continue to work with these customers to make sure.

Mike Stevens: We take good care of them, but as I mentioned formal end of life.

Mike Stevens: Now been announced.

Mike Stevens: We expect it to turn fully now in the coming quarters.

Mike Stevens: Okay, Great and then just lastly, with that dock you sign it sounded like a pretty competitive process.

Laurent Simonot: Was that displacing something or and who are you kind of up against? Was this like an in-house type of team versus or peers that you kind of usually see show up in these sorts of?

Mike Stevens: Was that displacing something or.

Mike Stevens: Who are you kind of up against what looks like an in house type of.

Mike Stevens: Team versus our peers that you kind of usually see show up in these sorts of.

Laurent Simonot: Any color the color Yes, this is Laurent here. Thanks for the question. So DocuSign is like a lot of our large customers into the larger space. They have, they're using built-in capabilities, large systems, and or they have homegrown systems that support that. Now, content is growing, diversity of content is growing, the number of customers that serve is growing, so they need an extra, another level of relevance that is powered by AI and a new way to have, a new way to have access to these contents and answers across multiple experience. That's what we, that's what created.

Mike Stevens: Any color would be color.

Lawrence: Yes. This is Lawrence here. Thanks for the question so.

Speaker Change: So a doctor sign is.

Lawrence: Right.

Lawrence: Like a lot of our large customers interest in Lawler space. They have they are using built in capabilities large systems and or do.

Lawrence: Do you have homegrown systems that support that no contest isn't growing diversity of function is growing the number of customers or serve is growing so they need an extra another level of relevance that is powered by AI and a new way to have a new way to.

Lawrence: Have access to these contents and answers across multiple experiences that's what we that's what created for them.

Laurent Simonot: Okay, appreciate the insights, guys.

Lawrence: Okay. Appreciate the insights guys.

Sustan Sukumar: Your next question is from the line of Sustan Sukumar from Estyful. Please go ahead. Good evening, guys, and congrats on the quarter.

Speaker Change: Your next question is from the line of sensor Kumar from Stifel. Please go ahead.

Good evening, guys and congrats on the quarter.

Laurent Simonot: On the first question, just on the on the bookings momentum, can you speak a little bit about what's changed incrementally since last quarter with respect to kind of sales cycles, buyer behavior and and and from a go to market perspective? You know, how are your priorities changing here given the investments that you? What has changed is really the market dynamic. If you go back to when ChadGPT was launched, it really, as we said on earnings calls prior quarters, it really kind of stalled the market in many ways. Customers were new to AI, trying to discover, trying to experiment, trying to figure out.

Speaker Change: On the first question just on the on the bookings momentum.

Speaker Change: Can you speak a little bit about what's changed incrementally since last quarter with respect to kind of sales cycles buyer behavior in and and from a go to market perspective.

Speaker Change: How are your priorities changing your given the investments that you plan to make.

Speaker Change: Hi, <unk>, thanks for the questions.

Speaker Change: So from from.

Changed is is really the market dynamic.

Speaker Change: So if you if you go back to when Chad GPT was launched.

Speaker Change: It really is as we said on the earnings calls prior quarters.

Speaker Change: Really kind of stalled the market in many ways.

Speaker Change: Those were new to AI trying to discover trying to experiment and try to figure out and as I said on the call.

Louis Tietou: As I said on the call, AI was a bit of technology in search of problems within many companies. Now we're seeing, and I'm repeating what we said earlier purposely here, we're seeing AI fatigue. Companies are now turning to their staff and saying, where is AI? Where can we apply it? Where can we generate benefits? And that's the market dynamic that we see all around. The second aspect is that it took a bit of time to figure out, for the market to figure out that search was not dead and quite the opposite. So it was kind of a market reversal.

Speaker Change: AI was a bit of technology in search of problems.

Speaker Change: Within many companies and now we're seeing and I'm repeating what we said earlier purposely here.

Speaker Change: We're seeing AI fatigue as like companies are now turning to.

Speaker Change: Two.

Their staff, and saying where is AI, where can we apply it where can we.

Speaker Change: Generate benefits and that's a market dynamic that we see all around the second aspect is that it took it took a bit of time to figure out for.

Speaker Change: For the market to figure out that search was not dead and quite the opposite so it was kind of a market reversal that search is really the linchpin.

Louis Tietou: That search is really the linchpin necessary to make generative AI work. You need to ground generative AI, and LLM alone is not grounded into enterprise data and specific relevance. And so that technology becomes very, very essential. And so now it's the third quarter in a row that we demonstrate the growth and we demonstrate that. And that's really an answer to your question, the change in market dynamics here that is fueling the growth. And frankly, there are not that many players who can deliver that kind of technology. And we certainly think we're recognized in the leader pack here.

Speaker Change: Necessary to make generative AI work you need to ground generative and LLM alone will not will not is not grounded into enterprise data and specific relevance and so that technology becomes very very essential and so now we have it.

Speaker Change: The third quarter in a row that we demonstrate the growth and we demonstrate that and that's really an answer to your question the change in.

Speaker Change: And in market dynamics here that is that is fueling the growth and frankly, they are not that many players who can deliver that kind of technology and <unk>.

Speaker Change: Certainly thank you.

Speaker Change: Recognize that the leader pack here does that answer your question.

Sustan Sukumar: Does that answer your question? That's helpful, Louie. Thank you.

Speaker Change: That's helpful. Louis Thank you.

Speaker Change:

Sustan Sukumar: My second question, guys, I just wanted to touch on the expansion opportunity. You know, it's really encouraging to see NER uptick here to 107 percent. And the fact that you're seeing at least more than a 50 percent increase in spending for the Gen AI cohort.

Speaker Change: My second question goes I, just wanted to touch on the the expansion opportunity, it's really encouraging to us.

Speaker Change: See any or uptick here to under 7% and in fact that you're seeing.

Speaker Change: Elisa or some of the more than a 50% increase in spending for the Ginnie I cohort.

Laurent Simonot: Can you talk a little bit about, you know, what have typical cross-cells use case expansions been that you've been seeing within the base? And how should we think about the, you know, what the average lift is in contract values as you start to, you know, cross-cell?

Speaker Change: Can you talk a little bit about what have typical cross sells a use case expansion has been that you've been seeing within the basin.

And how should we think about the you know what the average lift is in contract values as you start to cross sell them a given customer.

Brandon Nussbaum: Hi, this is Laurent. Thanks for the question. I would say that Gen-AI is becoming a core ingredient in knowledge. So we're seeing variation, if you want, of the size of the deals and so on, because it's an integral part of knowledge. We're now also starting to see this happening more consistently in commerce, in B2B commerce more specifically. So these are, of course, different kind of deals, but we're quite encouraged by what we're seeing there.

Ron: Alright. This is Ron thanks for the question.

Speaker Change: I would say that.

Ron: <unk> is becoming a core ingredient.

Ron: <unk>.

Ron: So we're seeing we're seeing variation if you want it.

Ron: The size of the deals and so on because it's so integral part of knowledge.

Ron: We're now also starting to see this.

Ron: Have any more consistently in commerce and <unk> commerce more specifically so these are different these are of course different kind of deals.

Ron: We are quite encouraged.

Ron: What we're seeing there.

Brandon Nussbaum: Maybe, Brendan, do you want to add something on this? I'll just add that, Laurent, you mentioned in the prepared remarks, customer ADI global buyers where we are seeing the convergence of Commerce and service, especially in that B2B commerce segment that Laurent just mentioned, you know, ultimately that cross-sell is something that our account management team and the newly built team has been focused on, along with just, of course, the things we've been talking about around Gen-AI bolt-ons and so on. The difference between when a customer takes one use case versus more than one is quite substantial to the ACV of that customer.

Ron: Brendan do you want to add something on this.

I'll just add that Ron you mentioned.

Speaker Change: The prepared remarks customer Adi global buyers, we are seeing the convergence of.

Lora: Commerce and service, especially in the <unk> E Commerce segment that Lora just mentioned.

Lora: Ultimately that cross sell is.

Lora: It's something that our account management team in the newly built team has been focused on.

Lora: Along with just of course, the things we've been talking about around Gen AIG bolt ons and so on.

Lora: The difference between when a customer takes one use case versus versus more than one is is quite substantial to the ACB of that customer.

Brandon Nussbaum: You know, we move from kind of $100,000 to $200,000 a year to, you know, $300,000 to $500,000 to $500,000 plus when we can get, you know, a full suite of products inside a customer. So the big reason we built out this account management function, it's great to see it starting to settle in and contribute results. I love seeing NERs go up and hope to continue to report on that progress. Thank you guys, that's a helpful color.

Lora: We move from kind of.

Lora: One to 200000 a year.

Lora: 300 to 500 to 500, plus when we can get.

Lora: Our full suite of products inside of customers. So it's a big reason, we built out this account management function.

Lora: It's great to see it starting to settle in and contribute results love seeing any ours go up and hope to continue to report on that progress.

Speaker Change: Thank you guys. So that's that's a helpful color.

Brandon Nussbaum: Appreciate it, we'll pass.

It will pass the line.

Koji Ikeda: Your last question comes from the line of Koji Ikeda from Bank of America, please go ahead. Yeah, hey, thanks guys. Thanks for taking the questions. I wanted to ask or go back to the investments for growth. And I think it totally makes sense given the opportunity in generative AI. But it also gives an element of trust us will grow. And so is the increased investment profile needed to drive the SAS acceleration already baked into the guide? Or could it drive an even better growth trajectory? Good question. I tried to be clear in the prepared comments on that.

Speaker Change: Your last question comes from the line of Koji Aikido from Bank of America. Please go ahead.

Koji Aikido: Yeah, Hey, thanks, guys. Thanks for taking the questions I wanted to ask her to go back to the investments for growth and I think it totally makes sense given the opportunity in generative AI.

Speaker Change: But it also gives us an element of trust us will grow and so is the increased investment profile needed to drive the SaaS acceleration already baked into the guide or could it drive an even better growth trajectory.

Speaker Change: Good question I tried to be clear in the prepared comments on that I do we are making these investments to further those growth rates.

Brandon Nussbaum: We are making these investments to further those growth rates, you know, essentially with the ramp time in enterprise sellers along with the sales cycle length of enterprise sales that we encounter. Investments made this year are to inflect beyond the current year. So, essentially, you know, the growth we are planning and have guided to in fiscal 26 reflects the investments we have been making in the business. So, no, to answer your question very directly, the incremental spend is not directly tied to the current year's revenue plan. It is to further those growth rates. We like the returns we have been seeing over the back half of fiscal 25 here that we have reported in terms of return on those incremental investments, and so we are going to keep going.

Speaker Change: Essentially with.

Speaker Change: The ramp time in enterprise.

Speaker Change: Sellers along with the <unk>.

Speaker Change: The sales cycle length of enterprise.

Speaker Change: Enterprise sales that we encounter in our investments made this year are to inflict beyond the current year.

Speaker Change: So essentially the growth with <unk>.

Speaker Change: Planning is guided to in fiscal 'twenty six reflects the investments we've been making in the business. So no to answer your question very directly the incremental spend is not.

<unk> does not directly tied to the current years revenue plan, it's too.

Speaker Change: To further those growth rates, we like the returns that we've been seeing over the back half of.

Speaker Change: Fiscal 'twenty five here that we've reported in terms of return on those incremental investments and so we're going to keep going.

Brandon Nussbaum: Sounds good, Brandon. And just to follow up here, it was in the press release, but also in the prepared remarks. It sounds like the initial cohort of generative AI customers, in aggregate, are up 50% on their usage. And so I guess the question here is, why or why wouldn't more recent cohorts exhibit similar expansion a year later? I guess what I'm getting at is maybe were some of the early ones just signing really, really small given how early it was? Or more positively, is something inflecting with customers overall, where we should see some similar trends like this in the future?

Speaker Change: Sounds good Brandon and just a follow up here.

Speaker Change: It was in the press release, but also in the in the prepared remarks. It sounds like the initial cohort of generative AI customers in aggregate are up 50% on their usage and so I guess the question here is why or why wouldn't more recent cohorts are exhibit similar expansion a year later like a I guess, what I'm getting at is maybe.

Speaker Change: The early ones, just signing really really small given how early it was or.

Speaker Change: More positively as something inflicting with customers overall, where we see some similar trends like this in the future. Thanks guys.

Brandon Nussbaum: Thanks, guys. Yeah, for every signal we see, we should expect that to continue. I highlighted the initial cohort only because we're sort of a, you know, roughly a year into this now. You know, we haven't crossed two renewal cycles yet, so just reporting on what that first renewal cycle is showing us, but absolutely, based on the signals we're seeing, customers are increasing usage, they're deploying us in, you know, kind of different use cases once they get going and have success with one, so nope, no reason to not expect that to continue, at least at this point.

Speaker Change: Yeah from every signal, we see wish we should expect that to continue to.

Speaker Change: Highlighted the initial cohort only because we're sort of it.

Speaker Change: Roughly a year into this now.

Speaker Change: Cross two renewal cycles, yet so just.

Speaker Change: Reporting on what that first renewal cycle is.

Speaker Change: It's showing us but.

Speaker Change: Absolutely based on the signals that we're seeing.

Speaker Change: Customers are increasing usage they are deploying us in.

Speaker Change: You know kind of different use cases, once they get going and have success with one <unk>.

Speaker Change: So no reason to not expect that to continue at least at this point.

Brandon Nussbaum: Got it. Thanks, guys. Thanks for taking the questions.

Speaker Change: Got it thanks, guys. Thanks for taking the questions.

Yeah.

Konstantin: Thank you, there are no further questions at this time.

Speaker Change: Thank you there are no further questions at this time I'd like to turn the call over to Luis <unk> for closing comments Sir. Please go ahead.

Louis Tietou: I'd like to turn the call over to Loree Tattoo for closing comments. Sir, please go ahead. Thank you, operator. And look, we want to thank everyone for joining our call today. I guess we hope you appreciate our momentum and share our optimism and confidence for our company and this market, and we look forward to a great year ahead, innovating and working for our customers and investors. And with that, Operator, you may close the call. This concludes today's conference. Thank you very much for your participation. You may now disconnect.

Speaker Change: Thank you operator, and look we want to thank everyone for joining our call today and I.

Speaker Change: I guess, we hope you appreciate our momentum and share our optimism and confidence for our company in this market and we look forward to.

Speaker Change: Great year ahead, innovating and working for our customers and investors and with that operator, you may close the call.

Speaker Change: This concludes today's conference. Thank you very much for your participation you may now disconnect.

Speaker Change: Okay.

Speaker Change: Okay.