Financial Data and Key Metrics Changes - The company reported quarterly revenue of $639 million, exceeding the guided range of $620 million to $630 million, representing a year-over-year growth rate of 22% [14][15] - Annual Recurring Revenue (ARR) at the end of Q3 was $2.14 billion, reflecting an 18% year-over-year growth [15][18] - Non-GAAP gross margin in Q3 was 88.2%, and non-GAAP operating margin was 21.5%, higher than the guided range of 17% to 18% [16][18] - Non-GAAP net income in Q3 was $125 million, translating to a fully diluted EPS of $0.42 per share [17][18] - Free cash flow in Q3 was $203 million, representing a free cash flow margin of 32% [18] Business Line Data and Key Metrics Changes - The company experienced strong new logo growth across all customer segments, with significant wins in large organizations modernizing their IT infrastructure [9][10] - The average contract duration increased to 3.1 years, slightly higher than expectations [16] - The net dollar-based retention rate (NRR) at the end of Q3 was 110%, remaining flat quarter-over-quarter [16] Market Data and Key Metrics Changes - The company noted strong demand for its solutions, particularly in the federal business, despite longer deal cycles due to changes in the federal government [26][27] - The company is optimistic about opportunities in the federal sector, focusing on modernization and total cost of ownership (TCO) improvements [26] Company Strategy and Development Direction - The company aims to become the leading platform for running applications and managing data anywhere, focusing on hybrid multi-cloud capabilities and partnerships [12][13] - Recent partnerships with Dell and Pure Storage are expected to enhance the company's offerings and market reach [12][63] - The company is expanding its cloud platform to support Google Cloud and announced new solutions to enable modern applications [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a dynamic macro environment affecting deal cycles and customer engagement but remains optimistic about continued demand for their solutions [25][26] - The company expects to continue adding new customers while noting that Q4 presents a tough year-over-year comparison for new logo additions [21] - Management raised full-year guidance across all metrics, reflecting confidence in sustained growth and profitability [22][20] Other Important Information - The company repurchased $38 million worth of common stock during Q3 and used approximately $65 million to retire shares related to employee tax liabilities [19] - The updated guidance for fiscal year 2025 includes revenue of $2.52 billion to $2.53 billion, representing a year-over-year growth of approximately 17.5% [20] Q&A Session Summary Question: Can you walk us through the linearity seen throughout the quarter? - Management noted that while linearity can vary, they have not seen significant changes in deal cycles, although some variability exists in the federal business [30][31] Question: What is the delta between NCIC and the core standard NCI license? - The NCIC offering includes the platform minus the storage, and early customer feedback has been positive [39] Question: What is driving the increase in operating margin guidance? - The increase is attributed to timing of hiring and expected productivity improvements, along with prudent investments in areas with anticipated returns [41][45] Question: How did the renewals business perform versus land and expand? - The company saw strong new logo growth and solid renewals in Q3, with a greater mix of larger deals in the pipeline [78][79] Question: What is the pricing environment like? - The pricing environment has been stable, with no significant changes noted, and the company continues to see traction in new customer acquisitions [74][75] Question: How is the company addressing the competitive landscape, particularly with VMware? - The company is gaining traction with new customers, many of whom are adopting their hypervisor, and is optimistic about opportunities arising from VMware's changes [72][74]

Financial Data and Key Metrics Changes - Revenue growth increased by 14% year over year to $211 million in Q1 2025, with annual run rate revenue (ARR) reaching $843 million [6][30] - Net dollar retention rate (NDR) improved to 100%, marking the first improvement since Q2 2023 [7][31] - Gross margin for Q1 was 61%, a 200 basis point increase from the prior year, driven by cost optimization [8][32] - Adjusted EBITDA was $86 million, reflecting a 16% year-over-year increase, with an adjusted EBITDA margin of 41% [32] Business Line Data and Key Metrics Changes - Revenue from customers with an annual run rate of over $100,000 grew by 41% year over year, representing 23% of total revenue [7][30] - The number of higher spending customers increased by 27% year over year, with average spend rising by 11% [8] - The company released over 50 new products and features in Q1, significantly more than the previous year [10][11] Market Data and Key Metrics Changes - The company is seeing strong growth in AI-related annual recurring revenue (ARR), which is growing over 160% year over year [6] - The demand for AI products, particularly those leveraging NVIDIA and AMD GPUs, is outpacing supply, indicating strong market traction [20] Company Strategy and Development Direction - The company aims to scale with digital native enterprise customers and democratize access to AI for startups and existing customers [5][28] - A focus on product innovation and strategic go-to-market efforts is evident, with significant enhancements to core cloud and AI platforms [10][11] - The company is exploring additional funding strategies to support larger workload migrations and maintain strong free cash flow generation [10][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite economic uncertainties, citing strong visibility into customer usage trends [44][60] - The company is observing a cautious approach among some customers, particularly in the ad tech sector, but overall demand remains robust [58][60] - The management is optimistic about the potential for larger, multi-year deals as customer confidence in the platform grows [63][66] Other Important Information - The company has initiated a new secured five-year credit facility agreement of $800 million to refinance existing convertible notes [26][42] - The Atlanta data center is expected to enhance capacity for AI workloads and improve long-term gross margin profiles [39][40] Q&A Session Summary Question: When is the GenAI platform expected to be generally available? - The GenAI platform is expected to go live by the end of Q2 or beginning of Q3, with ongoing feature additions during the beta phase [49][50] Question: What changes are observed in customer buying behavior amid macroeconomic uncertainty? - The company sees solid growth among digital native enterprises, with no significant concentration in verticals or geographies, maintaining confidence in full-year guidance [56][60] Question: Can you elaborate on the $20 million multi-year deal and the potential for similar deals? - Conversations for multi-year commitments are increasing, supported by new functionalities that allow staged migrations and larger workloads [62][63] Question: How is the company thinking about CapEx investments for the year? - The company is comfortable with its capital expenditure estimates for the year, focusing on driving revenue growth while maintaining strong free cash flow margins [68][70]