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 -$11 million, an improvement of 30% compared to Q3 fiscal year 2025 [22] Business Line Data and Key Metrics Changes - Usage revenue increased by 29%, while subscription revenue grew 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] - Customer satisfaction hit a high of 97%, with a Net Promoter Score (NPS) of 45, significantly above the industry average [8] 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 leverage the IPO proceeds to enhance payment solutions and expand customer credit offerings [25] 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, with record performance in October [18] - The company anticipates Q4 to be seasonally lower than Q3, reflecting typical business travel patterns [27] Other Important Information - The company is undergoing a leadership transition with the departure of the CFO, who will assist in a seamless transition [6][16] - The Navan Cognition AI platform is central to the company's strategy, enhancing service quality and operational margins [12][14] Q&A Session Summary Question: What is the outlook for enterprise business and share capture from incumbents? - 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: How are large enterprise deals structured and their revenue recognition? - Most enterprise deals involve multiple product attachments at launch, with a stable ramp-up period [44] Question: What is the sustainability of gross margin and yield? - Gross margin sustainability is linked to AI efficiencies, while yield is expected to stabilize around 7% [75] Question: How will the company deploy cash for credit payments? - The deployment of cash for credit will phase in over fiscal year 2027, with expected impacts in 2028 [78] Question: How does the company view the SAP Concur partnership with Amex GBT? - Management views the old model of stitching together services as outdated, emphasizing the need for integrated solutions [89]
Navan(NAVN) - 2026 Q3 - Earnings Call Transcript