Financial Data and Key Metrics Changes - For the first quarter of fiscal year 2026, consolidated revenue grew just under 1% year over year to $1.16 billion, with service revenue increasing just under 1% and purchased vehicle sales increasing nearly 2% [17] - Net income was $404 million, up 11.5% versus last year, and earnings per diluted share increased 10.8% to $0.41, driven by revenue growth and margin expansion [18] - Gross profit increased 4.9% to $537 million, with gross margin improving 184 basis points to 46.5% [17][18] Business Line Data and Key Metrics Changes - Total global units sold decreased 6.7%, with global insurance units declining 8.1% and global non-insurance units declining 1.5% [16] - In the U.S., total units sold declined 7.9%, with U.S. insurance volumes declining 9.5% [18] - U.S. purchased vehicle sales increased 10.9%, reflecting higher average sale prices which increased over 50% from the prior year period [20] Market Data and Key Metrics Changes - International revenue increased 1.6% year over year to $202 million, with international service revenues increasing 7.9% [24] - The average selling price for international insurance units declined 2.4% from the prior year period [24] - International buyers purchased vehicles that are 38% higher in value than comparable U.S. buyers [11] Company Strategy and Development Direction - The company is focusing on expanding its non-insurance vehicle business, leveraging rising total loss frequency to draw buyers for repairable vehicles [7][8] - Investments in technology, storage capacity, and logistics infrastructure are aimed at supporting long-term international growth [25] - The company continues to prioritize organic growth while remaining open to strategic acquisitions if compelling opportunities arise [73] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in insurance unit volumes is tied to changes in consumer behavior and market share shifts among insurance carriers [31] - The long-term trend of total loss frequency is expected to continue upward, despite short-term fluctuations [34] - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and maintain operational efficiency [25][70] Other Important Information - The company ended the quarter with liquidity of approximately $6.5 billion, including cash and cash equivalents of $5.2 billion and no debt [25] - The company is focused on disciplined capital allocation to support growth while generating robust free cash flow [25] Q&A Session Summary Question: Concerns about the larger than expected decline in unit volumes - Management attributed the decline to changes in insurance coverage and consumer behavior rather than a shift in market share among competitors [31] Question: Insights on total loss frequency trends - Management indicated that total loss frequency is expected to continue its long-term upward trend, despite recent fluctuations [34] Question: Impact of ADAS technology on accident claims - Management acknowledged that safety technologies have historically reduced accident rates, but total loss frequency remains a more significant factor [42] Question: Handling of vehicles involved in severe accidents without insurance - Management confirmed that the company can capture such vehicles through its consumer business, although it is less efficient than institutional relationships [43] Question: Disparity between international and U.S. bidders - Management clarified that international buyers tend to purchase higher value vehicles, leading to a 38% higher average selling price compared to U.S. buyers [50] Question: Future capacity investments - Management stated that while capacity needs have decreased, they will continue to invest in areas where growth is projected [55] Question: Share repurchase strategy - Management emphasized a focus on capital deployment for long-term value creation, with share repurchases being a potential avenue in the future [84][87]

Financial Data and Key Metrics Changes - Global units sold decreased by 6.7% in Q1 FY2026, with fee units down 6.3% [16] - Consolidated revenue grew just under 1% year-over-year to $1.16 billion, with service revenue increasing just under 1% and purchased vehicle sales increasing nearly 2% [17] - Gross profit increased by 4.9% to $537 million, with gross margin improving by 184 basis points to 46.5% [17] - Net income rose by 11.5% to $404 million, and earnings per diluted share increased by 10.8% to $0.41 [18] Business Line Data and Key Metrics Changes - Global insurance units declined by 8.1%, or 5.6% adjusted for catastrophic events, while global non-insurance units decreased by 1.5% [16] - U.S. insurance volumes declined by 9.5%, or 7.3% excluding catastrophic events [18] - U.S. non-insurance business performed well, with dealer unit sales increasing by 5.3% [18] - U.S. purchased vehicle sales increased by 10.9%, reflecting higher average sale prices which increased over 50% from the prior year [20] Market Data and Key Metrics Changes - Total loss frequency in the U.S. was reported at 22.6%, an increase of 80 basis points year-over-year [4] - International buyers purchased vehicles at a value 38% higher than U.S. buyers, indicating strong international demand [11][50] - International revenue increased by 1.6% year-over-year to $202 million, with service revenues up 7.9% [24] Company Strategy and Development Direction - The company is focusing on expanding its non-insurance vehicle business and enhancing auction returns for insurance clients [3][8] - Investments in technology, storage capacity, and logistics infrastructure are aimed at supporting long-term international growth [25] - The company continues to prioritize organic growth while remaining open to strategic acquisitions if compelling opportunities arise [73] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior is shifting towards reduced insurance coverage, impacting total loss processes [7] - The company remains confident in the long-term upward trend of total loss frequency despite recent fluctuations [34] - Management highlighted the importance of maintaining a strong balance sheet and disciplined capital allocation to support growth [25][85] Other Important Information - The company ended the quarter with liquidity of approximately $6.5 billion, including cash and cash equivalents of $5.2 billion and no debt [25] - The company is experiencing a decline in inventory levels, down over 17% from the previous year, while processing capacity is increasing [21] Q&A Session Summary Question: Concerns about the larger than expected decline in unit volumes - Management attributed the decline to changes in insurance coverage and consumer behavior rather than market share shifts [31] Question: Insights on total loss frequency trends - Management indicated that total loss frequency is expected to continue its long-term upward trend despite recent stability [34] Question: Impact of ADAS technology on accident claims - Management confirmed that safety technologies have historically reduced accident rates, but total loss frequency remains a more significant factor [41] Question: Handling of vehicles involved in severe accidents without insurance - Management stated that the company can capture these vehicles through its Cash for Cars platform, albeit less efficiently [43] Question: Disparity between international and U.S. bidders - Management clarified that international buyers tend to purchase higher value vehicles, leading to a significant price differential [50] Question: Future capacity investments - Management indicated that while capacity needs have decreased, they will continue to invest in areas with projected growth [55] Question: Market share dynamics with competitors - Management noted that the insurance industry is dynamic, with different players gaining and losing share over time [58] Question: Cash on the balance sheet and buyback strategy - Management emphasized a disciplined approach to capital allocation, prioritizing investments that create long-term value [83][87]

Financial Data and Key Metrics Changes - For Q1 2026, consolidated revenue grew just under 1% year over year to $1.16 billion, with service revenue increasing just under 1% and purchased vehicle sales increasing nearly 2% [18] - Global units sold decreased 6.7%, with fee units decreasing 6.3%. Normalizing for catastrophic events, global units sold decreased 4.6% [17] - Net income was $404 million, up 11.5% versus last year, and earnings per diluted share increased 10.8% to $0.41 [19] Business Line Data and Key Metrics Changes - Global insurance units declined 8.1% or 5.6% adjusted for catastrophic events, while global non-insurance units declined 1.5% [17] - In the U.S., total units sold declined 7.9% or 5.2% excluding catastrophic events, with U.S. insurance volumes declining 9.5% or 7.3% excluding catastrophic events [19] - U.S. purchased vehicle sales increased 10.9%, reflecting higher average sale prices which increased over 50% from the prior year period [21] Market Data and Key Metrics Changes - Total loss frequency in the U.S. was 22.6%, an increase of 80 basis points year over year [4] - International buyers purchased vehicles that are 38% higher in value than comparable U.S. buyers [11] - Average selling price for international insurance units declined 2.4% from the prior year period [25] Company Strategy and Development Direction - The company is focusing on expanding its non-insurance vehicle business and enhancing auction returns for insurance clients [3][9] - Investments in technology, storage capacity, and logistics infrastructure are aimed at supporting long-term international growth [26] - The company continues to prioritize organic growth while remaining open to strategic acquisitions when compelling opportunities arise [78] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer retrenchment in auto insurance purchasing behavior is impacting unit volumes, but believes total loss frequency will continue to rise over time [6][34] - The company remains confident in its competitive advantage in auction liquidity and returns, which are expected to expand further [14] - Management acknowledged the uncertainty in the macroeconomic environment but expressed optimism about the long-term growth potential [22][72] Other Important Information - The company ended the quarter with liquidity of approximately $6.5 billion, including cash and cash equivalents of $5.2 billion and no debt [26] - Gross profit for the international segment grew 13%, and operating income was $56 million, reflecting a 27.5% operating margin [25] Q&A Session Summary Question: What caused the larger than expected decline in unit volumes? - Management attributed the decline to changes in insurance coverage and consumer behavior, with fewer policies providing collision coverage [31] Question: What has caused the pause in the expansion of total loss frequency? - Management indicated that the total loss frequency is subject to various market dynamics and that fluctuations in input variables like tariffs and parts prices have contributed to the observed trends [34][36] Question: How does the company view the impact of ADAS technology on accident claims? - Management acknowledged that safety technologies have historically reduced accident rates, but the overall impact on total loss frequency remains significant [41] Question: What is the outlook for insurance rates and their impact on the business? - Management noted that potential softening in insurance rates could support business volume, as it may lead to more vehicles being covered by insurance [72] Question: How does the company plan to utilize its cash reserves? - Management emphasized a disciplined approach to capital allocation, focusing on investments that create long-term value, while also considering share repurchases when appropriate [88][92]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $811 million, with non-GAAP operating income at $365 million, exceeding guidance [6] - CRM now constitutes about 20% of total revenue, down from 25% two years ago, indicating growth in other product areas [9] Business Line Data and Key Metrics Changes - Veeva AI is highlighted as a major initiative, with significant progress expected to benefit customers and the industry [6] - Crossix continues to perform well, with expectations for it to remain a growth driver in the coming years [34][39] Market Data and Key Metrics Changes - The overall health of the pharmaceutical industry remains strong, with no significant changes in customer buying behaviors noted [31] - Digital marketing spending is increasing, which positively impacts Crossix's business [39] Company Strategy and Development Direction - The company is focused on delivering integrated solutions across clinical operations and clinical data to drive efficiency [11] - Veeva aims to leverage its consulting, data, and software capabilities to provide comprehensive solutions for life sciences [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry, citing ongoing demand for innovative solutions to address uncured diseases [31] - The company anticipates no material impact on its 2030 goals despite some customer attrition in the CRM segment [9][75] Other Important Information - The company is investing in product and services teams, which may impact margins in the short term but is expected to yield positive results over time [58] - The partnership with IQVIA is seen as beneficial, enhancing customer confidence and operational capabilities [41][42] Q&A Session Summary Question: Concerns about CRM customer migration - Management acknowledged that CRM is about 20% of total revenue and that attrition is expected to have no immediate impact on 2030 goals [9][75] Question: Competitive landscape in EDC market - Management noted that while one customer returned to a previous provider, overall trends in clinical remain positive with opportunities for growth [11] Question: Impact of AI on sales force efficiency - Management indicated that while there have been some reductions in sales force size, the industry is cautious about making significant changes [28] Question: Demand environment in pharma - Management reported that the industry is healthy, with no significant changes in customer buying behaviors despite external political factors [31] Question: Crossix performance and future growth - Management confirmed that Crossix continues to perform well and is expected to be a strong growth driver moving forward [34][39] Question: Quality cloud expansion - Management highlighted that the quality cloud opportunity is expanding through reaching new customer types and product expansion [80]

Financial Data and Key Metrics Changes - The company reported a 30% year-over-year increase in adjusted earnings per share from continuing operations, reaching a record $2.32 per share [4][10] - Adjusted EBIT margin expanded by 100 basis points to 23.9% [10] - Sales for the quarter were $353 million, representing a 29% growth, with organic growth at 8% [10][15] Business Line Data and Key Metrics Changes - Aerospace and Defense (A&D) segment saw orders grow by 60% on a reported basis and 12% organically, with sales increasing by 72% to just over $170 million [11] - Utility Solutions Group experienced 17% growth in orders, driven by Doble, while sales growth was muted at 2% [13] - The test business reported a 10% revenue growth, ending the year with a backlog of $187 million, up nearly 20% compared to the previous year [14] Market Data and Key Metrics Changes - Organic sales for the Navy market increased by 53% in the quarter and 24% year-over-year, reflecting strong demand for submarines [6] - Aerospace revenue was up over 10% in the quarter and 14% year-over-year, driven by increased production rates from Boeing [7] Company Strategy and Development Direction - The company aims to focus on the aerospace and Navy end markets, which present durable, long-term growth opportunities [5] - The successful acquisition of Maritime and divestiture of VACO are pivotal steps in the evolution of the company's portfolio [4] Management's Comments on Operating Environment and Future Outlook - Management remains positive about the long-term outlook for both aircraft and Navy markets, expecting increasing production rates to drive growth [6] - The company anticipates another strong financial year in 2026, with reported sales growth projected in the range of 16%-20% [17] Other Important Information - The company achieved record performance in 2025 across all key metrics, with orders exceeding $1.5 billion, a growth of over 56% [15] - Operating cash flow for the year was just over $200 million, significantly up from nearly $122 million in the prior year [16] Q&A Session Summary Question: Context on growth rates and margin trends at the segment level - Management provided guidance of 6%-8% growth for A&D, 6%-8% for Doble, and 3%-5% for test, with expected margin improvements across all segments [21] Question: Update on the integration of SM&T - The integration is on plan, with the Maritime business performing ahead of expectations, and positive new order activity noted [22] Question: Details on $200 million in ESCO maritime orders - The orders are associated with U.K. submarine-related programs, expected to generate revenue over two years [27][29] Question: Headwinds from canceled flights affecting aerospace - Management indicated no significant impact from recent shutdowns, with strong growth expected in aircraft manufacturing [30] Question: Insights on the energy business and potential inflection points - Management noted a potential downturn in the renewables market due to expiring tax credits but expects a return to normal growth rates in 2027 [39][41] Question: Capital allocation priorities moving forward - The company is focused on M&A opportunities within aerospace, navy, or utility markets, emphasizing disciplined investment strategies [42][43]

Financial Data and Key Metrics Changes - Gap Inc. reported Q3 net sales of $3.9 billion, up 3% year-over-year, with comparable sales increasing by 5%, marking the highest quarterly comp in over four years [6][20][22] - Operating margin for Q3 was 8.5%, down 80 basis points from last year, impacted by tariffs, but underlying margin expansion was noted [24][30] - Earnings per share decreased by 14% to $0.62 compared to $0.72 last year, primarily due to tariff impacts [24][30] Business Line Data and Key Metrics Changes - Old Navy's net sales were $2.3 billion, up 5%, with comparable sales increasing by 6%, driven by strong performance in denim and active categories [22][7] - Gap brand achieved net sales of $951 million, up 6%, with comparable sales rising by 7%, marking the eighth consecutive quarter of positive comps [22][10] - Banana Republic's net sales were $464 million, down 1%, but comparable sales increased by 4%, indicating progress in brand reinvigoration [22][14] - Athleta's net sales decreased by 11% to $257 million, with comparable sales also down 11%, reflecting ongoing challenges [22][16] Market Data and Key Metrics Changes - Old Navy is now the number five active apparel brand in the U.S. and the number four brand in the women's active space [8] - Gap has improved its ranking in the denim category, now the number six adult denim brand in the U.S., up from eight last year [38] Company Strategy and Development Direction - The company is focused on brand reinvigoration, operational excellence, and strategic partnerships to drive relevance and revenue [4][6][31] - Plans for expansion into the beauty category were announced, starting with Old Navy, indicating a strategic move to tap into a growing market [9][16] - The company aims to maintain a disciplined approach to inventory management and pricing strategies to enhance profitability [25][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum heading into the holiday season, with expectations for continued growth across major brands [18][31] - The company raised its full-year 2025 net sales growth outlook to the high end of the prior range, anticipating ongoing strength at Old Navy, Gap, and Banana Republic [27][28] - Management acknowledged potential uncertainties in consumer behavior and macroeconomic conditions but remains focused on controlling internal factors [27] Other Important Information - The company ended Q3 with cash and short-term investments of approximately $2.5 billion, an increase of 13% year-over-year [25][26] - The strategic focus includes driving cost savings of $150 million in core operations while reinvesting in growth opportunities [28][30] Q&A Session Summary Question: What drove the strong comp acceleration at the Gap banner? - Management attributed the strong comp acceleration to effective strategy execution, compelling product assortments, and successful marketing campaigns [36][38] Question: Can you elaborate on AUR trends and growth plans? - Management indicated that AUR growth was driven by improved product offerings and reduced discounting, with confidence in sustaining this growth into Q4 [46][47] Question: What are the drivers of top-line inflection at Old Navy? - Old Navy's strong performance was attributed to strategic focus on key categories, effective marketing, and partnerships that resonate with consumers [50][51] Question: How is the store fleet performing and what are the future plans? - Management emphasized the importance of optimizing the store fleet, closing underperforming locations, and testing new store formats to enhance customer experience [56][58] Question: What is the outlook for Athleta? - Athleta is undergoing a reset with a focus on long-term success, and management is optimistic about the brand's future under new leadership [79][80]

Financial Data and Key Metrics Changes - Net revenue for Q4 2025 grew 7.2% year-over-year to $257 million, supported by a 5.7% increase in average total degree enrollment to 79,300 students [14][15] - For the full year, net revenue increased 6% to $1.01 billion, compared to $950 million in fiscal 2024, driven by a 3.7% increase in average total degree enrollment to 81,900 [15][16] - Net income for fiscal 2025 was $135.4 million, up from $115.1 million in the prior year, reflecting strong operating performance and continued margin expansion [15][16] Business Line Data and Key Metrics Changes - Average total degree enrollment grew to nearly 82,000 in fiscal 2025, up from approximately 79,000 in fiscal 2024, with strong retention supporting this growth [7][11] - Enrollment through employer relationships increased to 32% of average total degree enrollment, up from 30% in fiscal 2024, indicating sustained demand from working adults [8] Market Data and Key Metrics Changes - The university's student body primarily consists of working adults, with 75% currently employed while pursuing a degree, and the average age of students is 38 years [5] - Over 50% of students are first-generation college attendees, and nearly two-thirds are caring for a family while pursuing their degree [5] Company Strategy and Development Direction - The company aims to expand access to higher education through flexible, career-relevant programs that empower working adults [4][6] - Continued focus on improving student outcomes and increasing operating efficiencies through AI and automation is a key strategic initiative [8][11] - The company is open to selective mission-aligned acquisitions to extend its reach into career-relevant learning [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal 2026 outlook, expecting revenue in the range of $1.025 billion to $1.035 billion and adjusted EBITDA between $244 million and $249 million [19][20] - Strong retention trends and steady demand across programs were highlighted as positive indicators for future performance [11][30] Other Important Information - The College of Nursing received a 10-year accreditation for its Master of Science in Nursing program, reinforcing the commitment to academic excellence [9] - The company has a strong balance sheet with no debt and total cash and marketable securities of $195 million as of August 31, 2025 [17] Q&A Session Summary Question: Expectations for FY 2026 revenue growth - Management explained that the implied guidance for revenue growth of 2%-3% is due to various factors including timing differences in the academic calendar and a scholarship not offered in FY 2025 [22][23] Question: Total degree enrollment by verticals, specifically healthcare - Management confirmed healthy growth in nursing programs and noted that healthcare remains a significant opportunity for growth [34][35] Question: Assumptions for enrollment growth and revenue per student for 2026 - Management indicated that revenue per student is expected to normalize, and they anticipate stronger growth in the latter part of FY 2026 [41][42] Question: Impact of suspicious activity controls on enrollments - Management discussed the effectiveness of advanced algorithms in identifying suspicious activity and the improvements seen in enrollment productivity after moving controls to the application process [50][52] Question: Technology investment and capacity for future growth - Management stated that the current technology platform has the capacity to manage growth well beyond 10,000 additional students without significant further investment [58][60] Question: Updates on Department of Education policies - Management reassured that there have been no significant changes affecting the university from recent Department of Education announcements and expressed confidence in managing any potential impacts [64][66]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $811 million, with non-GAAP operating income at $365 million, exceeding guidance [6] - CRM now constitutes about 20% of total revenue, down from 25% two years ago, indicating growth in other product areas [9] Business Line Data and Key Metrics Changes - Veeva AI is highlighted as a major initiative with significant progress, expected to add value across various product areas including Vault CRM, Crossix, clinical, and safety [6] - Crossix continues to perform well, with expectations for it to remain a growth driver in the coming years [34] Market Data and Key Metrics Changes - The overall health of the pharmaceutical industry remains strong despite political chaos, with no significant changes in customer buying behaviors noted [31] - Digital marketing spending is increasing, which benefits Crossix as it becomes a standard for measurement and optimization [39] Company Strategy and Development Direction - The company is focused on delivering integrated solutions across clinical operations and clinical data, emphasizing efficiency as a key driver [11] - Veeva aims to be a comprehensive provider in the life sciences sector, integrating software, data, and consulting services [47] Management's Comments on Operating Environment and Future Outlook - Management expresses optimism about the industry, citing ongoing demand for innovative solutions to address uncured diseases [31] - The company anticipates no material impact on its 2030 goals despite some customer attrition in the CRM segment, as the business is diverse and has multiple growth paths [75][76] Other Important Information - The company is investing in product and services teams, with a focus on business consulting and professional services to enhance customer engagement [59] - The partnership with IQVIA is seen as a positive trend, enhancing customer confidence and operational capabilities [42] Q&A Session Summary Question: Concerns about CRM customer migration - Management noted that CRM is currently about 20% of total revenue, down from 25% two years ago, and emphasized that no immediate impact is expected from customer migrations [9][19] Question: Competitive landscape in EDC market - Management acknowledged a competitor winning back a top 20 customer but expressed confidence in their own pipeline and opportunities in the EDC market [10][11] Question: Impact of AI on sales force efficiency - Management indicated that while there have been some reductions in sales force size, the industry remains cautious about significant changes due to the need for relationship building [28] Question: Demand environment and financial health of pharma market - Management reported that the pharmaceutical industry is healthy, with no significant changes in demand or buying behavior observed [31] Question: Crossix performance and future growth - Management confirmed that Crossix continues to perform well and is expected to be a strong growth driver in the future [34][70] Question: Insights from customer-specific factors affecting CRM wins - Management stated that customer-specific dynamics are at play, with no overarching pattern, and emphasized the health of the overall CRM business [56][57]

Financial Data and Key Metrics Changes - The company reported total revenue of $423 million for Q2, representing a growth of 16% year-over-year and 15% on a constant currency basis [24] - Sales-led subscription revenue was $349 million, growing 18% as reported and 17% on a constant currency basis [24] - The current remaining performance obligation (CRPO) was approximately $971 million, growing 17% as reported and 15% in constant currency [25] - Subscription gross margins were 82%, total gross margins were 78%, and operating margin was 16.5% [28] - Adjusted free cash flow was approximately $26 million, representing a margin of 6% [29] Business Line Data and Key Metrics Changes - The company saw strong execution in sales-led subscription revenue, with a notable increase in large commitments, including over 30 commitments greater than $1 million in annual contract value [24][26] - The number of customers spending over $100,000 annually grew to more than 1,600, with 23% of this cohort utilizing Elastic for GenAI use cases, up from 17% a year ago [27][33] Market Data and Key Metrics Changes - The company experienced broad-based demand across all geographies, supported by healthy consumption trends [23] - Despite a government shutdown impacting some renewals, the company closed significant deals, including a $26 million commitment with CISA [26][29] Company Strategy and Development Direction - The company is focused on leveraging its AI capabilities across all business areas, with a strong emphasis on security and observability [6][10] - The introduction of new products like Agent Builder aims to enhance the company's offerings in AI and context engineering [15][19] - The company is committed to innovation and strategic acquisitions, such as the acquisition of Jina AI, to strengthen its position in the AI and search markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong consumption and commitment trends [23][38] - The company raised its full fiscal year 2026 revenue guidance, expecting total revenue in the range of $1.715 billion to $1.721 billion, representing approximately 16% growth at the midpoint [32] - Management highlighted the importance of both cloud and self-managed environments in driving sales-led subscription revenue [30][31] Other Important Information - The company plans to return approximately $500 million to shareholders through a share repurchase program, having already returned $114 million in Q2 [29] - The company will participate in upcoming conferences, including the Barclays Global Technology Conference and the Needham Growth Conference [5] Q&A Session Summary Question: Performance of non-AI-native customers - Management noted strong consumption trends across all customer segments, including traditional businesses, driven by increased commitments and consolidation onto the platform [36][38] Question: Billings lagging behind other metrics - Management explained that seasonality and a government shutdown impacted billings, but overall commitments and consumption remained strong [40][42] Question: Composition of sales-led subscription revenue guidance - Management clarified that the guidance reflects commitments from both cloud and self-managed environments, with expectations for flat growth in the self-serve segment [49][50] Question: Growth opportunities outside of RAG - Management emphasized that relevance and context engineering are core strengths, and new products like Agent Builder will help monetize these capabilities [66] Question: Competitive landscape in security - Management indicated that the company is successfully displacing incumbents in the security space, leveraging its data platform and AI capabilities [85][90]

Financial Data and Key Metrics Changes - The company reported a 30% year-over-year increase in adjusted earnings per share from continuing operations, reaching a record $2.32 per share [4][10] - Adjusted EBIT margin expanded by 100 basis points to 23.9% [10] - Sales for the quarter were $353 million, representing a 29% growth, with organic growth at 8% [10][15] Business Line Data and Key Metrics Changes - Aerospace and Defense (A&D) segment saw orders grow by 60% on a reported basis and 12% organically, with sales increasing by 72% to just over $170 million [11] - Utility Solutions Group experienced 17% growth in orders, while sales growth was muted at 2% [13] - The test business reported a 10% revenue growth, ending the year with a backlog up nearly 20% compared to the previous year [14] Market Data and Key Metrics Changes - Organic sales for the Navy market increased by 53% in the quarter and 24% year-over-year [6] - The aerospace market saw revenue up over 10% in the quarter and 14% year-over-year, driven by increased production rates from Boeing [7] Company Strategy and Development Direction - The company aims to focus on the aerospace and Navy end markets, which present durable, long-term growth opportunities [5] - The successful acquisition of Maritime and divestiture of VACO are pivotal steps in the evolution of the company's portfolio [4] Management's Comments on Operating Environment and Future Outlook - Management remains positive about the long-term outlook for both the aircraft and Navy markets, expecting increasing production rates to drive growth [6] - The company anticipates another strong financial year in 2026, with reported sales growth projected in the range of 16%-20% [17] Other Important Information - The company achieved record performance in 2025 across all key metrics, with orders finishing in excess of $1.5 billion, a growth of over 56% [15] - Operating cash flow from continuing operations exceeded $200 million, a significant increase from nearly $122 million in the prior year [16] Q&A Session Summary Question: Context on growth rates and margin trends at the segment level - Management provided guidance for A&D business growth at 6%-8%, with expected margin improvements across all segments [21] Question: Update on the integration of SM&T - The integration is on plan, with the Maritime business performing ahead of expectations and positive new order activity noted [22] Question: Details on $200 million in ESCO maritime orders - The orders are associated with U.K. submarine-related programs, expected to generate revenue over two years [27][29] Question: Impact of canceled flights on aerospace - Management indicated no significant impact from shutdowns, with strong growth expected in aircraft manufacturing [30] Question: Thoughts on capital allocation moving forward - The company is actively looking at M&A opportunities, focusing on businesses that fit into aerospace, navy, or utility end markets [42][43]