“We delivered another quarter of strong results and disciplined execution, putting us firmly on track toward our Investor Day revenue target of $1.8 billion for FY 2027.” (Roy Mann, co-CEO)
“New products now account for over 10% of total ARR, surpassing our 2025 goal ahead of schedule.” (Eran Zinman, co-CEO)
“Operating income was a record $47.5 million in Q3, up from $32.2 million from the year-ago quarter, and operating margin was 15%.” (Eliran Glazer, CFO)
“Adjusted free cash flow for Q3 was $92.3 million, and adjusted free cash flow margin was 29%.” (Eliran Glazer, CFO)
“We continue to expect overall NDR to be stable at 111% for fiscal year 2025.” (Eliran Glazer, CFO)
Prepared Metrics
Metric
Value
Speaker/Context
Total Revenue (Q3 2025)
$317 million
CFO
Revenue Growth (YoY)
26%
CFO
Non-GAAP Gross Margin
90%
CFO
Non-GAAP Operating Income
$47.5 million
CFO
Non-GAAP Operating Margin
15%
CFO
Non-GAAP Net Income
$61.9 million
CFO
Diluted EPS
$1.16
CFO
Adjusted Free Cash Flow
$92.3 million
CFO
Adjusted Free Cash Flow Margin
29%
CFO
Cash & Cash Equivalents
$1.53 billion
CFO
Marketable Securities
$211.7 million
CFO
Net Dollar Retention (NDR)
111%
CFO
Total Paying Customers
500k+
co-CEO
Employee Headcount
3,018
CFO
Q&A Batch (1-5 of 5)
Q1 — Kash Rangan
Topic: Customer spending priorities for 2026 and go-to-market transition impact on results
Key points:
Customer demand accelerating across segments (50k, 100k, 500k+ accounts); go-to-market strategy for larger accounts working well.
Customers increasingly interested in AI features/products; new AI announcements resonate.
Q3 beat was more measured due to timing effects from rebalancing investments toward higher-ROI areas (direct sales, new products like Service CRM, PLG channels like video/social media), which have longer sales cycles.
Only 6% of customers consume more than one product; multiproduct journey is early but expected to be a significant revenue contributor.
Mgmt stance: Bullish — healthy demand across all segments, strong momentum in upmarket and AI adoption, confidence in 2026 assumptions.
Q2 — Jackson Ader
Topic: Deferred revenue vs. revenue growth and 2026 growth rate signal
Key points:
Billings are not a perfect measurement due to cash basis and conservatism; RPO (new metric disclosed at Investor Day) is a better measure and is accelerating quarter-over-quarter, reflecting full contract value from upmarket deals.
Q4 implied growth rate is ~20.5%–23% year-over-year.
2026 initial expectations will be provided next quarter; reiterated Investor Day target of $1.8 billion revenue by fiscal year 2027, with operating and free cash flow margin expansion.
Mgmt stance: Neutral — acknowledges billings fluctuations but directs focus to RPO as a more accurate metric; reaffirms long-term revenue and margin targets.
Q3 — Arjun Bhatia
Topic: Investment rebalancing for 2026 and headcount growth plans
Key points:
Upmarket strategy is working: majority of business now from 50k/100k/500k+ accounts, which have better retention, expansion, and stability.
Product investment (AI features, functionality) is well-received; customer feedback from Elevate event was positive.
Headcount growth expected ~30% by end of this year, focused on sales, product, and R&D; next year headcount growth expected closer to 20%, with deceleration starting in H2 this year.
Most investment in headcount is already behind the company.
Mgmt stance: Bullish — confident in strategy and product innovation; expects less investment in headcount next year, implying improving operating leverage.
Q4 — Joshua Phillip Baer
Topic: New product bundles launched in Q4
Key points:
Three bundles launched this month, combining work management with Service CRM and CRM/service use cases.
Bundles offer commercial advantage (discounts) and ease of use (ready-built, quick deployment).
Targeted at industries where these use cases are pervasive; early traction is very good.
Mgmt stance: Bullish — sees strong early adoption and believes bundles will drive customer value and sales efficiency.
Q5 — Brent Thill
Topic: Guidance philosophy and upmarket transition progress
Key points:
Guidance approach is consistent with prior quarters; more measured guidance reflects timing effects from rebalancing investments toward upmarket (longer sales cycles) vs. performance marketing (immediate dollars).
Upmarket momentum is positive: 50k/100k/250k/500k customer segments all accelerated in Q3.
Three wins over $1 million in the quarter; all started 3–4 years ago at ~$50,000 and expanded (e.g., a European logistics company consuming 5,000 seats across three products, a large tech company using product across 10 departments for M&A).
Mgmt stance: Bullish — upmarket transition is going exceptionally well; key metrics accelerating, with examples of multiyear expansion from small initial deals to seven-figure contracts.
Q&A Batch (6-10 of 15)
Q6 — Mark Murphy
Topic: Mid-market and down-market trends; AIO traffic vs. Google search
Key points:
Q3 top-of-funnel trends were choppy overall, with continued volatility in paid search performance.
Towards the end of Q3, new sign-ups and top-of-funnel showed encouraging stabilization.
Pipeline remained healthy, with solid growth in large and high-quality opportunities (both touch and no touch).
AIO traffic is increasing, but it is too soon to tell if it will fill the gap from Google search; the company is already filling the gap with a different strategy.
Mgmt stance: Neutral – confident in rebalancing acquisition channels and investments paying off, but AIO impact is uncertain.
Q7 — Scott Berg
Topic: Early AI functionality traction and sales & marketing leverage
Key points:
A large regulated European insurance company built a reporting tool in 20 minutes, avoiding a ~$150,000 software purchase.
A large retailer solved a year-long reporting gap in less than 30 minutes using AI tools.
Performance marketing as a percentage of total S&M is expected to decline; total dollar value may stay flat or slightly below.
Investment will shift mostly to headcount (quota-carrying, partners, sales channels, customer success), but at a more moderate pace than in the past.
Mgmt stance: Bullish – encouraged by early AI use cases; confident in moderate S&M investment and strong momentum from upmarket expansion.
Q8 — Steve Enders
Topic: Performance marketing channel breakdown and FY2027 revenue confidence
Key points:
Google AdWords accounts for less than 10% of new revenue; Q3 saw choppiness but stabilization toward the end.
Pipeline is growing according to plans; strategy focuses on quality over quantity (high-quality customers, bigger lands, more expansion, high retention).
Confidence in FY2027 $1.8 billion revenue target is based on: accelerating year-over-year growth for upmarket customers (50k, 100k, 500k), improving 50k NDR, multiproduct adoption (CRM >$100M ARR, only 6% of customers using >1 product at Investor Day, now much better), AI product engagement accelerating (monetization expected next year), and signs of top-of-funnel stabilization.
Mgmt stance: Bullish – confident in achieving $1.8B in FY2027 and consensus for next year, supported by multiple growth drivers.
Q9 — Alex Zukin
Topic: CRM and service product traction; growth pacing for next year
Key points:
CRM eclipsed $100M ARR in less than two years; traction continues across SMB and mid-market.
Service product is only nine months in, but customer size is ~2x that of other products; service continues to accelerate.
Management feels very confident in achieving $1.8B revenue in FY2027, based on assumptions about cross-sell, new products, AI monetization, and existing customer expansion.
Management is also confident with consensus numbers for next year.
Mgmt stance: Bullish – very confident in FY2027 target and next-year consensus, driven by strong CRM/service traction and cross-sell.
Q10 — D. J. Hynes
Topic: AI pricing model visibility and contract duration trends
Key points:
AI revenue is not expected to be very meaningful next year; focus remains on education and adoption.
Multiyear contracts are becoming more meaningful: from 5% five years ago to now ~13% of ARR.
Annual contracts have increased from 65% to 70%; combined annual + multiyear now >80% of ARR, and the trend continues.
Mgmt stance: Neutral on AI (early days, not meaningful for next year); bullish on contract duration trends (longer terms upmarket).