Financial Data and Key Metrics Changes - Revenue for Q3 was $195 million, representing a 29% year-over-year increase [19] - Non-GAAP operating margin reached 13%, an improvement of 870 basis points year-over-year [22] - Non-GAAP gross margin expanded to 74%, a new high, driven by automation and efficiencies [20][21] - Free cash flow was negative $11 million, but improved by 30% compared to Q3 fiscal year 2025 [22] Business Line Data and Key Metrics Changes - Usage revenue grew by 29%, while subscription revenue increased by 26% year-over-year [19] - Gross booking volume reached $2.62 billion, growing 40% year-over-year [19] - Payment volume processed through Navan Cards was $1.13 billion, up 12% year-over-year [20] Market Data and Key Metrics Changes - Revenue from international customers represented 37% of total revenue in Q3 [20] - The company operates in a $185 billion addressable market, with strong momentum in enterprise deals [7] Company Strategy and Development Direction - The company aims to drive sustained high growth across all customer segments, accelerate innovation, and maintain a balance between growth and profitability [15] - Focus on AI-driven solutions to enhance customer experience and operational efficiency [10][12] - Plans to develop Navan Edge, an AI-powered travel booking experience [14] Management's Comments on Operating Environment and Future Outlook - The current business travel environment remains robust, with expectations for continued strength through the fiscal year [19] - Management noted no significant impact from travel disruptions related to the government shutdown [18] - The company is committed to being free cash flow positive for the full year of fiscal 2027 [28] Other Important Information - The CFO, Amy Butte, will leave the company on January 9, with Ann Giviskos serving as interim CFO [6] - The company has a strong balance sheet with $809 million in cash and $207 million in debt [25] Q&A Session Summary Question: What is the outlook for enterprise business and capturing market share? - Management sees strong momentum in enterprise, driven by customer satisfaction, market consolidation, and AI capabilities [33] Question: What drove the strength in gross booking volume and usage yield? - Growth in GBV is attributed to existing customer expansion, ramping of new customers, and strong go-to-market strategies [35] Question: Are large enterprise deals complete implementations or partial? - Most enterprise deals involve multiple products at launch, indicating a stable and accelerating ramp [44] Question: How sustainable is the margin leverage seen this quarter? - Margin leverage is driven by AI efficiencies and is expected to be sustainable, though Q4 margins may compress seasonally [46] Question: What is the investment plan for the PLG motion? - Investments began in the second half of fiscal 2026, with revenue contributions expected in fiscal 2028 [52] Question: How does the company factor large deals into guidance? - Guidance incorporates active customers, ramping customers, and expected launches, using machine learning for accuracy [54] Question: Has the IPO impacted visibility and competitive positioning? - The IPO has increased market awareness and credibility, leading to more leads and opportunities [62] Question: What is the strategy for M&A opportunities? - The company is always looking for opportunities, particularly in AI and enhancing its platform, but currently sees better potential in-house development [87]
Navan(NAVN) - 2026 Q3 - Earnings Call Transcript