Financial Data and Key Metrics Changes - Total revenue for the second quarter grew 8% year over year to $212 million, while subscription revenue increased 6% year over year to $188.5 million [4][18] - Non-GAAP operating income reached a record $38.2 million, resulting in an 18% non-GAAP operating margin for the quarter [4][21] - Free cash flow generated was $29.8 million, or $31 million after adjustments for restructuring payments [21][28] - Non-GAAP net income per diluted share was $0.13 [21] Business Line Data and Key Metrics Changes - Professional services revenue was $23.6 million, driven by large CCaaS implementations [18] - Subscription revenue-based net dollar expansion rate was 102%, reflecting ongoing customer churn and downsell activity [18] - The number of customers generating at least $1 million in annual subscription revenue increased to 149, up three from the previous quarter [17][19] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) was $923.8 million, up 4% year over year, while current RPO was $597.1 million, up 7% year over year [23] - Calculated billings for the second quarter were $200.6 million, an increase of 4% year over year [22] Company Strategy and Development Direction - The company is in a transitional year, focusing on business optimization and entering the second phase of transformation, which includes strategic investments in AI functionality and enhanced product capabilities [5][8] - Project BearHug aims to engage top customers to minimize churn and improve customer satisfaction [11][12] - The company is making incremental investments to extend enterprise leadership across core and Sprinklr Service [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in renewal cycles and customer churn, emphasizing the importance of improving customer engagement and satisfaction [10][11] - The company expects a bend in business metrics in the second half of FY26 into FY27, with improvements in renewals and customer satisfaction [31][32] - Management remains optimistic about the impact of AI investments and the overall transformation strategy [41][75] Other Important Information - The CFO, Manish Sarin, will be leaving the company on September 19, 2024, with the CEO assuming interim responsibilities [4][5] - The company has a healthy balance sheet with $474 million in cash and marketable securities and no debt outstanding [21] Q&A Session Summary Question: When will the company see a bend in business metrics? - Management indicated that improvements in renewals and customer satisfaction are expected in the second half of FY26 into FY27, with metrics to watch including renewals and customer engagement [30][31] Question: Can you provide an example of a significant churn situation? - Management explained that renewal pressure has been ongoing for several years, with efforts focused on improving customer engagement and addressing execution issues [37][38] Question: What is the impact of AI investments on costs? - Management noted that increased uptake in AI products is leading to higher cloud costs, but the growth in consumption is positive [40][41] Question: What are the drivers for unlocking demand in the CCaaS business? - Management highlighted the importance of successful large implementations and enhancing customer experience as key drivers for growth in the CCaaS space [49][50] Question: How is the hybrid pricing model being received? - Management explained that the new pricing model aims to simplify customer purchasing and improve satisfaction, with plans to expand it across the product portfolio [54][56] Question: What is the company's approach to new customer acquisition? - Management stated that the focus for the year has been on expanding existing accounts rather than aggressively pursuing new logos, with a mix of 25% new logo and 75% expansion planned [80]

Financial Data and Key Metrics Changes - Total revenue for Q2 FY26 grew 8% year over year to $212 million, while subscription revenue increased 6% year over year to $188.5 million [4][18] - Non-GAAP operating income reached a record $38.2 million, resulting in an 18% non-GAAP operating margin for the quarter [4][21] - Free cash flow generated was $29.8 million, with a total of $123.5 million in the first half of FY26, excluding restructuring payments [21][28] Business Line Data and Key Metrics Changes - Professional services revenue was $23.6 million, driven by large CCaaS implementations [18] - Subscription revenue-based net dollar expansion rate was 102%, reflecting ongoing customer churn and downsell activity [18] - The number of customers generating at least $1 million in annual subscription revenue increased to 149, up by three from the previous quarter [17][19] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) was $923.8 million, up 4% year over year, while current RPO (CRPO) was $597.1 million, up 7% year over year [23] - Calculated billings for Q2 were $200.6 million, an increase of 4% year over year [22] Company Strategy and Development Direction - The company is in a transformation phase, focusing on business optimization and strategic investments to improve execution and customer service [5][6] - Investments are being made in AI functionality, enhanced video capabilities, and technical skills to better serve customers [8][9] - The company aims to strengthen its leadership team and improve customer engagement through initiatives like Project BearHug [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in renewals and customer churn, emphasizing the importance of improving customer satisfaction and engagement [10][11] - The company expects to see improvements in renewals and customer satisfaction metrics in the second half of FY26 and into FY27 [31][32] - Management remains optimistic about the transformational journey and the potential for growth in the coming quarters [17][32] Other Important Information - The CFO announced plans to step down, with the CEO assuming interim responsibilities while a search for a new CFO is conducted [4][5] - The company has completed a $150 million stock buyback program, purchasing 16.5 million shares [22] Q&A Session Summary Question: When will the company see a bend in the transformation journey? - Management indicated that improvements in renewals and customer satisfaction are expected in the second half of FY26, with metrics to watch including renewals and customer engagement [30][31] Question: Can you provide an example of a significant churn situation? - Management explained that churn has been influenced by inconsistent execution and customer engagement, but efforts like Project BearHug are aimed at improving these relationships [37][38] Question: What is the impact of AI-related investments on costs? - Management noted that increased costs are associated with the uptake of AI products, including hosting and support, but the growth in consumption is positive [40][41] Question: What are the drivers for unlocking demand in the CCaaS business? - Management highlighted the importance of successful large implementations and enhancing customer experience as key drivers for growth in the CCaaS segment [49][50] Question: How is the hybrid pricing model being received by customers? - Management stated that the new hybrid pricing model aims to simplify customer purchasing and improve satisfaction, with plans to expand it across the product portfolio [54][56] Question: What is the company's approach to new customer acquisition? - Management indicated a focus on expanding existing customer relationships while being cautious about introducing new logos until execution improves [80]

Core Insights - Quadient has maintained its leadership position on the Aspire Leaderboard, which evaluates vendors in the customer communications management (CCM) and customer experience management software sectors [1][2] - The company has seen an increase in its scores for "overall strategy" and "ability to execute," remaining a Leader in four market segments for 2025 [2] Company Performance - Quadient has secured large contracts in the healthcare and insurance sectors, focusing on automating core processes, particularly through AI [3] - The company is transitioning customers from legacy systems using its InspireXpress platform and competitor-specific conversion tools [3] - Quadient's CCM solutions, including Quadient Inspire Evolve and the upcoming Quadient Inspire Flex, offer a 'bring your own' AI model approach to enhance customer safety [3] Product Innovation - Quadient Inspire is recognized as a high-performance platform that enables organizations to create and deliver omnichannel customer communications [3] - The platform supports complex, high-volume production jobs in regulatory-driven industries while providing hyper-personalized digital interactions [3] - The company emphasizes continuous innovation, leveraging AI for meaningful digital interactions, sentiment analysis, and auto-generation of translated content [4]