Financial Data and Key Metrics Changes - The company reported revenue of $189.7 million for Q1 2025, representing a 15% year-over-year increase and a 4% sequential increase [8][14] - Adjusted EBITDA was $40.7 million, accounting for 21.5% of revenue, which is a 61% increase from $25.2 million in the prior year [8][18] - Free cash flow generated was $37.8 million, exceeding typical seasonal patterns due to favorable timing with larger customer invoicing [8][19] Business Line Data and Key Metrics Changes - Subscription-based revenues grew by 18% year-over-year and 5% sequentially, making up 81% of total revenue [15] - Services and other revenues declined by 7% year-over-year, primarily due to a reduction in professional service revenues [15] - Total annualized recurring revenue (ARR) increased to $847 million, up 11% year-over-year, driven by strength in subscription ARR, which grew to $720 million, up 14% year-over-year [16] Market Data and Key Metrics Changes - The company signed a Tier one relationship pricing deal with a bank to enhance commercial relationship profitability across lending and deposit product lines [9] - Expansion activity was noted with a top 50 U.S. bank signing a deal for risk and fraud solutions, indicating a growing demand for fraud management [10] Company Strategy and Development Direction - The company aims to focus on higher-margin recurring subscription revenues, which positions it well for sustainable profitable growth [15] - The management emphasized the importance of fraud mitigation solutions, which are expected to remain a priority for customers [10][22] - The company plans to continue investing in R&D and expanding its partner ecosystem to deliver innovation quickly [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability due to the mission-critical nature of its products and a strong customer base [12][20] - The company anticipates a solid pipeline for the remainder of the year, with strong renewal and expansion opportunities [12][20] - Despite macroeconomic uncertainties, the company believes its strong financial foundation will help navigate potential challenges [20][21] Other Important Information - Gross margins improved to 57.9%, up from 54.9% in the prior year, driven by a higher mix of subscription-based revenues [17] - Total operating expenses were $77 million, or 40.7% of revenue, showing improvement in operational efficiency [18] Q&A Session Summary Question: Insights on fraud management traction and pipeline - Management indicated that fraud management is a differentiator in both new deals and expansions, with significant opportunities for growth in this area [26][28] Question: Confidence in renewal opportunities for 2025 and 2026 - Management confirmed that the confidence is based on the number of logos up for renewal, similar to previous years [29][31] Question: Macro assumptions in raised outlook - Management stated that no different macro assumptions were incorporated into the raised outlook compared to the last quarter [35][36] Question: Performance in the credit union market - Management noted strong performance in the credit union sector, with many looking to diversify their offerings and enhance commercial capabilities [38][39] Question: Cash flow performance and future expectations - Management acknowledged an anomaly in Q1 cash flow due to a large customer switching to annual payments, but remains confident in maintaining high free cash flow conversion [75][76] Question: Subscription growth versus ARR growth - Management explained that subscription ARR is a leading indicator for subscription revenue, with current patterns reflecting previous trends [108]