Financial Data and Key Metrics Changes - In Q2, the company exceeded guidance on billings, revenue, and delivered its first positive non-GAAP EPS while generating positive free cash flow [23][24] - Total revenue was $79.7 million, and billings were $70.3 million, marking a significant performance improvement [23][24] - Non-GAAP net income was $0.9 million, with non-GAAP diluted earnings per share at $0.02 based on 43.6 million diluted weighted average shares outstanding [29][30] - Subscription gross margin rose to 81.9%, and operating margin reached 7.7%, the highest in company history [26][28] Business Line Data and Key Metrics Changes - New ACV growth accelerated to nearly 20%, the highest in 3.5 years, with sales force productivity growth increasing from 19% to 67% year-over-year [6][26] - Subscription RPO growth accelerated from 3% to 19% year-over-year, with current subscription RPO growing 4% to $220.2 million and total subscription RPO growing 19% to $409.8 million [26][27] Market Data and Key Metrics Changes - International momentum was strong, particularly in Japan, where new ACV nearly doubled year-over-year, and TCV hit all-time highs [15][16] - Japan's NRR reached close to 130%, indicating robust customer retention and growth in that market [15] Company Strategy and Development Direction - The company is focused on sustainable profitable growth, emphasizing a partner-centric go-to-market strategy and a shift to a consumption-based model [4][5] - The strategy includes deepening partnerships with cloud data warehouse (CDW) partners and enhancing AI capabilities [10][11] - The company aims to maintain a disciplined financial execution while investing in AI innovation and partner enablement [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation and momentum, highlighting the strong demand for advanced AI solutions [9][10] - The company expects to see continued improvement in gross retention rates and new ACV growth, particularly from consumption contracts [41][90] - Management anticipates that the impact of recent strategic initiatives will accelerate in the coming quarters [9][40] Other Important Information - The company was recognized as a leader in several industry reports and awards, reflecting its commitment to innovation and talent advancement [21][22] - The company plans to continue investing in partnerships and AI innovations to drive future growth [22][29] Q&A Session Summary Question: How has the Snowflake Conference impacted the business? - The Snowflake event generated thousands of leads and significantly increased new ACV, with expectations for continued growth in Q3 [34][36] Question: Can you elaborate on the 108% NRR and customer migration to the consumption model? - The 108% NRR is for customers who originally purchased on a consumption basis, and management expects retention rates to improve as more customers transition to this model [41][44] Question: What insights can you provide on international markets and verticals? - Japan has shown exceptional performance, with strong retention and growth across various industries, while other regions in Asia Pacific and EMEA are also performing well [63][64] Question: How does the consumption model affect customer engagement and use cases? - The consumption model allows for broader user access and encourages experimentation with different use cases, leading to increased adoption and retention [70][72] Question: What is the outlook for future growth and profitability? - Future growth is expected to be driven by improved retention rates, new ACV growth, and strong demand for AI-driven solutions [90][91]

Financial Data and Key Metrics Changes - In Q1 2026, total revenue was $80.1 million, and billings were $63.9 million, exceeding guidance [25] - Subscription Remaining Performance Obligations (RPO) grew 24% year over year, with long-term subscription RPO up 61% year over year [6][27] - Gross retention improved to 86% from 85% in Q4 and 83% a year ago, while net retention was 94%, up more than four percentage points year over year [26] Business Line Data and Key Metrics Changes - Subscription Total Contract Value (TCV) increased by 69% year over year, indicating strong demand for long-term contracts [6] - Sales force productivity increased over 60% year over year, reflecting improved efficiency in sales operations [7][8] Market Data and Key Metrics Changes - Consumption customers now represent over 70% of Annual Recurring Revenue (ARR), with expectations to reach 90% by year-end [9] - The pipeline generated through ecosystem partners has increased significantly, with partner-sourced leads and deals up more than 200% from the previous quarter [18] Company Strategy and Development Direction - The company is focusing on driving adoption of AI across its platform, enhancing customer relationships, and developing its ecosystem of partners [12][14] - The transition to a consumption-based pricing model is expected to deliver higher usage, customer satisfaction, and retention [24] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment is challenging, customer interest in leveraging AI is driving positive activity [34] - The company expects to exit FY 2026 with 5% billings growth and a 5% operating margin, with plans to double these figures by FY 2027 [10][24] Other Important Information - The company achieved positive adjusted free cash flow of $1.3 million in Q1, a significant improvement from the previous year [27] - The non-GAAP subscription gross margin increased to 81.6%, with expectations to maintain this level in the near term [28] Q&A Session Summary Question: How is the macro environment affecting the business? - Management indicated that while the macro environment is not ideal, customer interest in AI solutions is driving positive activity [34] Question: Can you elaborate on the increase in sales productivity? - The increase in sales productivity is attributed to the consumption model and improved relationships with cloud data warehouse partners [39] Question: What is driving the strong growth in RPO? - The growth in RPO is driven by strong technology, the consumption model, and improved customer relationships leading to longer-term contracts [52] Question: How do you see gross margin trajectory over the medium term? - The company expects subscription gross margin to remain around 81.6% in the near term, with long-term goals for improvement [58] Question: How are enterprise and commercial spaces performing? - The enterprise segment remains a significant part of the business, with many leads coming from partnerships, indicating growth opportunities [61]