Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $424 million, a 5% increase year over year, with an adjusted revenue of $426 million after excluding a $2 million FX headwind [6][25] - Annual recurring revenue (ARR) reached $1.666 billion, reflecting a 14% year-over-year increase, driven by net new ARR of $60 million [6][26] - Full year revenue for fiscal 2025 totaled $1.43 billion, marking a 9% increase year over year [25] Business Line Data and Key Metrics Changes - The company reported a dollar-based gross retention rate of 98% and a dollar-based net retention rate of 110% as of Q4 [30] - The attach rate for AI products among total customers is approximately 20%, and over 85% for customers with ARR greater than $1 million [26] - Cloud ARR exceeded $975 million, up over 50% year over year, indicating strong growth in cloud offerings [27] Market Data and Key Metrics Changes - The company experienced a significant impact from geopolitical factors and macroeconomic volatility, affecting deal closures, particularly in the public sector [7][8] - Customer count remained flat year over year at approximately 10,750, with a 7% increase in customers spending over $30,000 in ARR [28][29] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating innovation across the AgenTic roadmap, increasing customer adoption, and driving operational efficiencies [9][10] - The company plans to enhance its product offerings through acquisitions, such as PEAK AI, to strengthen vertical specialization [17][18] - The company aims to leverage its unique agent orchestration capabilities to optimize end-to-end business processes across various industries [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing uncertainty in the macroeconomic environment and its impact on customer budgets and deal closures [8][34] - The company remains optimistic about long-term opportunities in the public sector despite short-term challenges [34][46] - Management expects the first half of fiscal 2026 to be under pressure due to the macroeconomic environment, with a stronger second half anticipated [48][49] Other Important Information - The company achieved GAAP profitability for the second consecutive year, with a GAAP operating income of $34 million in Q4 [31] - Non-GAAP operating income for Q4 was $134 million, resulting in a record non-GAAP operating margin of 32% [32] - The company repurchased approximately $390 million worth of shares during the fiscal year [32] Q&A Session Summary Question: Can you elaborate on the recent volatility and its impact on customer budgets? - Management noted that the volatility is affecting all companies, leading to delays in deal approvals and a cautious approach from customers regarding budgets [38][39] Question: What are the early use cases for the agents being developed? - Management highlighted that agents are being integrated into end-to-end enterprise processes, with applications in financial services and healthcare [40][41] Question: How significant is the public sector business for the company? - Management confirmed that the federal sector is one of the best-performing verticals, but current transitions are causing short-term disruptions [44][46] Question: How does the company view the impact of AI on customer investment decisions? - Management believes that while uncertainty exists, there is still strong interest in AI solutions, particularly in the AgenTic space [51][52] Question: Can you provide details on the pricing strategy for the agent portfolio? - Management indicated that a consumption-based model will be used for monetizing agents and orchestration, with further details to be announced soon [66]