Q3 revenue $886M, +28% YoY, above guidance high end (prepared).
Non-AI customer revenue growth accelerated to 20% YoY (Q3) vs 18% in Q2; sequential usage growth for non-AI existing customers highest in 12 quarters (CEO, CFO).
AI native customers (excl. largest) revenue growth accelerated in Q3; AI cohort represented 12% of revenue (Q3) vs 11% last quarter and ~6% year ago (CFO).
New logo annualized bookings more than doubled YoY, set a new record; new customer contribution to YoY revenue growth ~25% (Q3) vs 20% (Q2) (CFO).
Customers: ~32,000 total (up from ~29,200 a year ago); ~4,060 with ARR ≥$100K (up from ~3,490); these customers generated ~89% of ARR (CEO).
Product adoption: 84% using ≥2 products (vs 83% a year ago); 54% using ≥4 (vs 49%); 31% using ≥6 (vs 26%); 16% using ≥8 (vs 12%) (CEO).
Digital experience products (RUM, synthetics, product analytics) exceed $300M ARR; product analytics adopted by >1,000 customers (CEO).
Security ARR growth mid-50s% YoY (Q3), up from mid-40s% last quarter; acceleration in each security product (CEO).
Gross margin 81.2% (Q3) vs 80.9% last quarter and 81.1% year ago (CFO).
Operating income $207M, 23% margin (Q3) vs 20% last quarter and 25% year ago (CFO).
Free cash flow $214M, 24% margin (CFO).
RPO $2.79B, +53% YoY; current RPO growth low-50s% YoY (CFO).
Billings $893M, +30% YoY (CFO).
Trailing 12-month net revenue retention 120% (similar to last quarter); gross revenue retention mid- to high 90s (CFO).
CapEx/capitalized software expected ~4% of FY2025 revenue (CFO).
Mgmt Quotes
“We have seen broad-based positive trends in the demand environment with an ongoing strength of cloud migration and digital transformation.” (CEO)
“The sequential usage growth for non-AI existing customers was the highest we have seen going back 12 quarters.” (CEO)
“We are seeing high customer interest in our Bits AI agents… we have now onboarded thousands of customers for preview access.” (CEO)
“Our Q3 revenue was $886 million, up 28% year-over-year and up 7% quarter-over-quarter.” (CFO)
“We are well positioned to help our existing and prospective customers with their cloud migration and digital transformation journeys, including their adoption of AI.” (CFO)