Financial Performance & Guidance - Q4'25 ARR as reported reached $2478 million, a 10% YoY increase[22] - FY'25 Free Cash Flow was $857 million, a 16% YoY increase[23] - FY'26 Free Cash Flow guidance is approximately $1000 million[19,29] - FY'26 constant currency ARR growth guidance, excluding Kepware and ThingWorx, is 75% to 95%[16,29] - Q1'26 Free Cash Flow guidance is $265 million to $270 million[29] Kepware and ThingWorx Divestiture - The divestiture involves Kepware industrial connectivity and ThingWorx IoT businesses[9] - Estimated net transaction proceeds from the divestiture are approximately $365 million[12,14] - Kepware and ThingWorx contribute approximately $160 million of ARR and $200 million of revenue[15] - Kepware and ThingWorx contribute an estimated $70 million of free cash flow[17] Capital Allocation - The company intends to repurchase between $150 million and $250 million of its common stock per quarter in FY'26[40,80]

ETF Market Overview - The ETF marketplace has seen significant growth, with net inflows reaching $1.11 trillion as of the end of October 2025, which is approximately $100 billion short of the record set in 2024 [1][2] - 2025 is noted as the best year for the ETF industry across various asset classes, including equity, fixed income, gold, and cryptocurrencies, indicating a strong investor interest [2] Secular and New Trends - Secular trends show that low-cost beta strategies have attracted nearly $500 billion in new flows, primarily through S&P 500 exposure [4] - New trends are emerging around income generation, digital assets, cryptocurrencies, and private assets, which are expected to complement traditional low-cost market exposure [5][9] Private Assets and Partnerships - There is a growing emphasis on private assets, with partnerships established with firms like Blackstone, Apollo, and Bridgewater to enhance access to private market segments [8] - The All Weather ETF has seen significant success, crossing $600 million in flows and projected to reach $1 billion within its first year [9] Fee Sensitivity and Product Diversity - Investors are increasingly willing to pay higher fees for access to unique investment strategies, such as Bitcoin-oriented ETFs and private credit products, which offer exposure to harder-to-access markets [14][15] - The market is characterized by a mix of low-cost products and more complex offerings, including actively managed ETFs that charge higher premiums [16] Market Momentum and Sector Performance - The current market momentum is heavily influenced by technology, consumer discretionary, and communication services sectors, with analysts predicting continued strength in indices like the S&P 500 and NASDAQ [20][24] - There is speculation about a potential catch-up trade as investors may begin to diversify away from high-performing sectors, although this is not expected to happen until early next year [25][23] Defensive Sector Interest - The healthcare sector, represented by the Health Care Select Sector SPDR ETF (XLV), has started to regain favor after being out of favor for much of the year, indicating a potential shift towards more defensive investments [27]

Core Insights - Freshworks Inc. reported strong financial results for Q3 2025, exceeding previous estimates in growth and profitability metrics, driven by the integration of AI into their software solutions [2][6]. Financial Summary - Total revenue for Q3 2025 was $215.1 million, a 15% increase from $186.6 million in Q3 2024, with the same growth rate when adjusted for constant currency [6]. - GAAP loss from operations was $(7.5) million, improving from $(38.9) million in Q3 2024, resulting in an operating margin of (3.5)% compared to (20.8)% [6]. - Non-GAAP income from operations was $45.2 million, with a non-GAAP operating margin of 21.0%, up from $24.0 million and 12.8% in Q3 2024 [6]. - GAAP net loss per share was $(0.02) based on 286.2 million weighted-average shares outstanding, compared to $(0.10) based on 302.1 million shares in Q3 2024 [6]. - Non-GAAP diluted net income per share was $0.16, compared to $0.11 in Q3 2024 [6]. - Net cash provided by operating activities was $63.5 million, representing a margin of 29.5%, up from $42.3 million and 22.7% in Q3 2024 [6]. - Adjusted free cash flow was $57.2 million, with a margin of 26.6%, compared to $40.1 million and 21.5% in Q3 2024 [6]. Customer Metrics - The number of customers contributing more than $5,000 in ARR reached 24,377, a 9% year-over-year increase [7]. - The net dollar retention rate was 105%, slightly down from 107% in Q3 2024 [7]. Business Highlights - Freshworks onboarded several new customers, including AllSaints/John Varvatos and Société Générale, expanding its market presence [7]. - The company appointed Enrique Ortegon as Senior Vice President and General Manager of Americas Field Sales [14]. Financial Outlook - For Q4 2025, Freshworks expects revenue between $217.0 million and $220.0 million, with year-over-year growth of 12% to 13% [9]. - The full-year revenue forecast is between $833.1 million and $836.1 million, reflecting a 16% growth [9].

Market Sentiment - A recent poll indicated that 48.8% of respondents believe the stock market is in a bubble, while 51.2% disagree, suggesting a divided sentiment among investors [2][10] - Despite concerns about a potential bubble, there is a prevailing optimism as many investors continue to engage in the market, indicating a willingness to invest even among those who perceive risks [10][11] Bull Market Analysis - The current bull market is in its fourth year, with historical data showing that five bull markets in the last 50 years have lasted this long, typically reaching at least five years, with an average duration of eight years [3][4] - The market is described as a "cruise ship," suggesting that once it gains momentum, it is difficult to slow down or reverse [4] Performance Indicators - Historical data shows that when the market is up at least 10% going into November, it has ended higher in the last 14 occurrences, and when up 15%, it has ended higher 20 out of 21 times [6][7] - The market is currently up 15% as of November 1st, which aligns with these positive historical trends [6] Global Market Context - The U.S. market has performed well, but many global markets have outperformed it, indicating a broader global bull market and opportunities for investment outside the U.S. [12][13] - The company has increased its international exposure in its portfolio, now holding about 19% in developed international equities, compared to previous years [13][14]

Core Insights - The West Coast office market is experiencing a recovery driven by strong demand from tech and AI companies, with significant leasing activity and declining vacancy rates in key areas like San Francisco and Silicon Valley [1][4][5] - Hudson Pacific Properties is positioned to capitalize on this recovery, reporting strong leasing performance and a favorable lease expiration profile, which allows for growth opportunities [4][13][25] - The company has a robust financial position with $1 billion in liquidity and 100% of its debt fixed or capped, providing stability and flexibility for future growth [2][21][26] Leasing and Occupancy Trends - Hudson Pacific Properties achieved over 1.7 million square feet of leasing year-to-date, with a strong third quarter contributing to the best leasing year since 2019 [4][10] - The company reported a sequential increase in occupancy to 75.9%, with positive absorption trends indicating a recovery in the West Coast office market [10][12] - The leasing pipeline is strong, with 2.2 million square feet in proposals, reflecting growing confidence among tenants, particularly in the tech sector [12][13] Financial Performance - Total revenues for the third quarter were $180.6 million, down from $200.4 million year-over-year, primarily due to asset sales and lower occupancy [18] - Funds from Operations (FFO) excluding specified items increased by 17% year-over-year to $16.7 million, driven by improved G&A and studio NOI [19] - The company successfully refinanced significant assets and amended its credit facility, enhancing its capital structure and financial flexibility [20][21] Studio Operations - Demand for studio space remains strong, with California's expanded film and television tax credits driving production activity [6][16] - The company reported a sequential increase in studio occupancy, with Hollywood studios nearing full occupancy [14][15] - The development of new studio facilities, such as Sunset Pier 94, is on track, with strong interest from high-quality productions [16][17] Market Dynamics - Venture capital investment in the U.S. remains robust, with AI accounting for nearly two-thirds of deal value year-to-date, particularly benefiting the San Francisco Bay Area [2][5] - The overall production environment is improving, with a notable increase in inquiries and proposals for available studio space [8][12] - The company is strategically positioned to benefit from the ongoing recovery in both the office and studio markets, with a focus on high-quality assets in innovation hubs [25][26]

Market and Performance Overview - Emerging markets experienced a 10.6% increase in Q3 2025, outperforming developed markets, with China leading at 20.4% growth driven by AI opportunities and favorable valuations [2] - Taiwan and Korea also showed strong performance, rising 14.3% and 12.7% respectively, fueled by AI demand, with Taiwan being a key semiconductor manufacturer and Korea a memory product supplier [2] Sector Performance - The materials sector was the top performer, up 24%, largely due to rising gold prices boosting mining shares [4] - Technology-related sectors, including communication services, consumer discretionary, and IT, outperformed the overall market, benefiting from AI and Internet services [4] - Cyclical sectors generally underperformed, with energy and financials showing the greatest weakness [4] Company Contributions - In China, Tencent and CATL were significant contributors, with Tencent benefiting from strong operating results and positive market sentiment, while CATL capitalized on its leadership in battery supply amid rising EV demand [6] - Taiwan's Delta Electronics and South Korea's Samsung Electronics saw share price increases due to their critical roles in AI development, with Delta's market share in data centers and Samsung's memory supply benefiting from high AI demand [7] Portfolio Positioning - The ClearBridge Emerging Markets Strategy outperformed its benchmark, with strong stock selection in China, Taiwan, and South Korea offsetting negative impacts from China and India [5] - New purchases included Sieyuan Electric, expected to grow through grid investment and market share gains, and HD Hyundai Electric, which is positioned to benefit from global power equipment demand [12][13] Outlook - The long-term investment outlook for emerging markets remains robust, with expectations for technology adoption, urbanization, and services sector growth to drive returns [18] - Emerging markets are anticipated to succeed in the next 12 months, particularly in technology, with India expected to recover and China continuing its key role in the asset class [22]

Group 1: Goldman Sachs - Goldman Sachs is trading near its all-time highs despite bearish market sentiment and economic concerns such as potential GDP slowdown and government shutdown [3][4] - The proposed trade involves buying December 19th 775 puts and selling 770 puts for a $1.75 debit, indicating a strategy for a short-term pullback [5] - Technical analysis shows resistance at around 805 and a potential downward trend, with support levels identified at 740 and moving averages at 780 and 760 [7][9][10] Group 2: High Yield Corporate Bond ETF (HYG) - The HYG ETF is experiencing financial plumbing issues, with significant capital influx from the Fed and liquidity injections needed in repo markets [12] - A bearish trade is suggested by buying an 80 put for a 90 debit, indicating a strategy to capitalize on potential financial stress [15] - Technical analysis indicates support around 7975 to 80, with a downward trend suggested by moving averages and a declining RSI [19][20] Group 3: Amazon - Amazon's stock recently closed at a record high following a $38 billion deal with OpenAI, resulting in a significant market cap increase of nearly $200 billion [22][24] - The proposed trade involves buying January 16th 235 puts and selling 225 puts for a $2.58 debit, aiming for a retreat from the recent high of 260 [25] - Technical analysis indicates a potential fade from the gap created at 230 to 260, with support levels around 225 and 240, and a bearish signal from the RSI [28][30][31]

Market Overview - S&P and NASDAQ experienced their worst day in about a month, with Russell 2000 closing below the 50-day moving average, indicating increased market volatility [1] Tariff and Trade Outlook - The probability of the court upholding Trump's tariffs is estimated at 50%, contrasting with betting markets that suggest a 40% chance of the tariffs being overturned, indicating a higher probability than consensus for Trump to prevail [3] - If tariffs are not upheld, it could lead to market negativity due to deficit concerns, rising bond yields, and increased uncertainty regarding future tariffs [4] - A potential positive outcome could be a more structured tariff regime, which may provide medium-term stability despite near-term uncertainty [4] Economic Indicators - There is a tension between seasonal market dynamics and concerns over high valuations, particularly in AI-related sectors, suggesting a need for market digestion before further gains [6] - The Federal Reserve's trajectory for interest rate cuts is less certain, with a 65% probability of a December cut, but expectations of a pause in cuts thereafter [7][8] - Discrepancies in economic data show that while services are accelerating, manufacturing is weakening, contradicting the intended strengthening effects of tariffs on manufacturing [9][11] Consumer Behavior - The economy is exhibiting a K-shaped recovery, with disparities between high-end and low-end consumers, affecting consumer discretionary stocks [11][12] - Companies like McDonald's are reflecting significant signs of weakness in sectors related to lower-end consumers, despite overall solid performance in services [12]

Core Viewpoint - A well-known analyst has reduced his year-end price target for Bitcoin (BTC) from $185,000 to $120,000, citing evolving cyclical dynamics despite a strong structural investment case [1][2] Analyst Insights - Alex Thorn from Galaxy Digital highlights factors such as whale distribution, declining interest in BTC-related investments, and competition from gold, AI, and stablecoins as headwinds affecting Bitcoin's price [2] - Charlie Morris from ByteTree expresses cautious optimism, noting that the $100,000 level could serve as a significant support level, although he warns against over-reliance on it [3] - Geoffrey Kendrick from Standard Chartered sees potential in Bitcoin's volatility and suggests a phased dip-buying strategy based on price movements [4] Market Movements - Bitcoin experienced a modest recovery, bouncing back above $103,000 after a significant selloff that saw prices dip below $99,000 for the first time since June [5] - Ethereum's ether (ETH) rebounded nearly 10% from its low, trading at $3,340, although it remains down 6% over a 24-hour period [5] - Altcoins like Hyperliquid (HYPE) and Zcash (ZEC) led the recovery with gains of 6% and 10%, respectively [6] - Crypto-related equities showed slight gains, with Coinbase (COIN) up 1.9% and MicroStrategy (MSTR) up 1.4% [6]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $715 million, reflecting a 3% year-on-year increase, consistent with guidance for low to mid-single-digit growth [16][17] - Normalized adjusted EBITDA for the quarter was $150 million, up 23% year-on-year, with the normalized adjusted EBITDA margin expanding by 340 basis points to 21% [18][9] - Pro forma free cash flow was $13 million, with an expectation of approximately $70 million for the full year 2025 [18][19] Business Line Data and Key Metrics Changes - Total distribution bookings grew by 3% year-on-year, with air distribution bookings increasing by more than 2% [7][8] - Hotel distribution bookings grew by 6% in the quarter, and the attachment rate to air bookings increased over 100 basis points year-on-year [8] - IT solutions revenue remained flat at $140 million year-on-year, as growth from passengers boarded was offset by a decrease in license fee revenue [17] Market Data and Key Metrics Changes - The company experienced softness in July air bookings, but saw improvement in September, which finished strong with a 7% year-on-year increase [7][8] - The GDS industry air distribution bookings declined approximately 1 percentage point year-on-year, impacting the company's air booking mix [8] - The company noted that U.S. military and government travel represented about 4% of global air distribution volumes, which is a minor component of current trading volumes [29] Company Strategy and Development Direction - The company aims to reduce net leverage by approximately 50% by year-end 2025 compared to year-end 2023, focusing on generating free cash flow and deleveraging the balance sheet [6][20] - Innovation is central to the company's strategy, with recent announcements including agentic APIs for travel and a continuous revenue optimizer within the Sabre Mosaic platform [6][10] - The company is transforming its platform into a modern, open travel marketplace, with 41 live NDC integrations enhancing its competitive position [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive air distribution bookings growth, despite challenges from the government shutdown impacting October bookings by approximately 3 percentage points [15][21] - The outlook for Q4 anticipates air distribution bookings growth of between 6% and 8%, with a full-year expectation of near the low end of the previously provided range of 0.5%-3.5% [21][22] - Management highlighted that leisure demand is positive year-on-year, while corporate demand remains mixed, with expectations for low single-digit passenger growth globally [38][39] Other Important Information - The company has made significant progress in its capital structure, paying off over $1 billion of debt this year, including approximately $825 million from the sale of the Hospitality Solutions business [19][20] - The payments business is scaling rapidly, processing over $20 billion in annual transactions, with quarterly gross spend growing over 40% year-on-year [11][10] Q&A Session Summary Question: Can you run through the updated FY25 guidance and explain the changes in EBITDA and free cash flow? - Management noted that the $20 million reduction in EBITDA is primarily due to a $10-$12 million impact from the government shutdown, along with lower margin from FX and product sales [23][24] Question: What is the impact of the government shutdown on travel? - The impact is mainly on travel by government employees and U.S. military, with a high concentration of this business affecting overall volumes [28][29] Question: What is the current NDC mix? - The NDC mix remains in the low single digits, between 2% and 3% of air distribution volumes, but is expected to grow rapidly [30] Question: How does the company expect to recover from the government shutdown? - Management anticipates a phased recovery back to normalcy, likely in the first quarter following the resolution of the shutdown [32] Question: Can you elaborate on the payments business strategy? - The payments business is scaling at a 40% top line rate, with significant growth opportunities identified, although specific revenue and margin details have not been disclosed yet [32]