Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $219 million, representing a 14% year-over-year growth [7] - Adjusted free cash flow was $57 million, or 26% of revenue, marking a significant increase from Q1 [30] - Annual run rate revenue (ARR) reached $875 million, with an incremental ARR of $32 million, the highest since 2022 [26][30] - Net dollar retention (NDR) improved to 99%, up from 97% in the same quarter last year [28] Business Line Data and Key Metrics Changes - AIML revenue grew over 100% year-over-year, driven by strong demand for inference workloads [29] - Revenue from Scalar Plus customers, those with an annual run rate over $100,000, grew 35% year-over-year and accounted for 24% of total revenue [28] - The company released over 60 new products and features during the quarter, with significant adoption among top customers [9] Market Data and Key Metrics Changes - The company is experiencing strong growth in both core cloud and AIML segments, with improved customer acquisition metrics [22][29] - The introduction of new data centers and advanced networking features is expected to enhance service offerings and attract larger enterprise customers [10][12] Company Strategy and Development Direction - The company is focusing on product innovation and enhancing its go-to-market strategy, particularly in core cloud and AIML [6][23] - A dedicated migrations team has been established to support customers transitioning from other cloud providers [13] - The launch of the Gradient AI platform aims to democratize access to AI and streamline the development of AI applications [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, raising full-year revenue guidance to $888 million to $892 million [8][34] - The company is optimistic about maintaining healthy profitability while accelerating revenue growth [30][82] - Management noted that the current economic environment has mixed impacts on customer behavior, with some customers expanding while others are cautious [52] Other Important Information - The company is on track to address its 2026 convertible debt by the end of the calendar year [9][32] - The balance sheet remains strong, with $388 million in cash and ongoing share repurchase programs [31] Q&A Session Summary Question: Can you elaborate on the AIML revenue growth? - Management indicated that AIML revenue grew over 100% year-over-year, driven by the launch of new NVIDIA gear and the introduction of a three-layer AI stack [39][41] Question: What is the current status of net new ARR? - Management clarified that while AIML ARR was previously noted at over 160%, the current growth reflects a more challenging comparison due to last year's strong performance [48][49] Question: How are the unit economics of the AI business tracking? - Management expressed confidence in the margins of the AI business, noting that higher layers of the AI stack command better margins than pure infrastructure [58][60] Question: What is the breakdown of AI versus non-AI revenue? - Management did not provide specific figures but indicated that AI revenue is becoming a material part of the business, expected to grow significantly in the coming years [85][88] Question: How does the company view capacity constraints in the AI industry? - Management acknowledged that capacity constraints are a reality in AI but emphasized their differentiation through a dual cloud stack that supports both AI infrastructure and general cloud services [75][78]