Financial Data and Key Metrics Changes - For the six months ended September 30, 2025, the group's revenue decreased by 6% to HKD 3.2 billion compared to the previous year, primarily due to weak demand and competitive pricing in the Chinese mainland operation [2] - The gross profit margin decreased to 51.1%, with profits from operations down 4% to HKD 247 million, mainly due to a decline in gross profit [2][3] - Profits attributable to shareholders increased by 1% to HKD 172 million, driven by lower finance costs and income tax [2] - Earnings per share rose by 2% to HKD 0.16 [3] - Capital expenditure for the period was HKD 57 million, slightly higher than last year, with cash on hand at HKD 1.27 billion [3] Business Line Data and Key Metrics Changes - The Chinese mainland unit's revenue was HKD 2.9 billion, down 7% year-on-year, with operating profit decreasing by 14% to HKD 326 million [7] - Hong Kong operations maintained strong performance, contributing 34% to total group sales, but faced challenges in Macau and exports to the United States [5][10] - Australia and Singapore units showed growth, with Australia-New Zealand revenue increasing by 5% in local currency [11] Market Data and Key Metrics Changes - The Chinese mainland remains the largest operation by revenue at 55% of the group, while Australia-New Zealand grew from 8% to 9% of total group revenue [7] - The plant milk category in China declined by 10%, while the tea category's growth slowed to 5% [8] - In the Philippines, the plant-based category continues to grow healthily, with double-digit growth year-on-year [13] Company Strategy and Development Direction - The company aims to enhance capabilities in the Chinese mainland to improve top-line performance, focusing on general trade and new channels like online commerce and snack chains [6][14] - Hong Kong operations will work to accelerate growth in the second half of the financial year [15] - Australia and Singapore units will focus on top-line growth and reducing operating losses [15] Management Comments on Operating Environment and Future Outlook - Management acknowledged short-term challenges but expressed confidence in long-term potential for scaling up [15] - The company is adjusting its commercial strategy in response to evolving tariff situations affecting North American business [11] Other Important Information - The company continues to implement cost reduction programs to improve operational efficiency and profitability across various markets [12] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached approximately $82.5 million, marking a 1.1% year-over-year increase and the ninth consecutive quarter of growth [5][12] - Gross margin remained above 48%, reflecting improvements in product mix and operating efficiency [6] - Non-GAAP net margin reached 24.4%, while GAAP net margin was 18.2%, expanding by more than 23.6 percentage points year-over-year [7][19] - Total operating expenses declined to $36 million, down 34.1% year-over-year, contributing to improved GAAP operating margins of 4.6% [19] Business Line Data and Key Metrics Changes - PaaS business generated $59.2 million, a 2.4% year-over-year increase, with the number of premium customers reaching 280 [13] - SaaS and others business generated $11.5 million, a 15.4% increase year-over-year, driven by growth in cloud software products [13] - Revenue from smart solutions reached $11.8 million, with a strategic focus on high-value solutions like AI energy management [14] Market Data and Key Metrics Changes - In the China market, AI Toy showed healthy growth with over 50 customers launching products powered by Tuya [14] - In the European market, demand for AI-powered solutions such as AI cloud storage and AI energy saving solutions continued to rise [15] - In North America, AI-enabled products like smart bird feeders recorded healthy growth [16] Company Strategy and Development Direction - The company continues to embrace AI, with smart devices equipped with AI capabilities accounting for 93.99% of total shipments [9] - A new AI Agent App is in global beta testing, aimed at developing a universal AI life assistant for users [10] - The company is focused on optimizing expense structures while maintaining key investments in business development [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the global consumer electronics industry is experiencing an uneven recovery, with cautious customer demand due to macro uncertainties [5] - For Q4 2025, management anticipates a soft demand environment, but expects a positive outlook for 2026 driven by AI adoption [26][29] - The company aims to lower barriers for new users to adopt smart devices through the introduction of an AI assistant [39] Other Important Information - Operating net cash flow reached $30 million, a 25.7% increase year-over-year, with a net cash balance above $1 billion [20] - The platform had 1.62 million registered developers, a 23% year-over-year increase, indicating strong growth in the developer ecosystem [20][21] Q&A Session Summary Question: Business outlook for Q4 and 2026 - Management indicated that Q4 may see soft demand due to global macroeconomic uncertainties, but expressed a positive outlook for 2026 driven by AI adoption [25][29] Question: Details on the AI home agent and its impact - The AI assistant is designed to help users with various home tasks, aiming to simplify the user experience and lower barriers for new users [34][39] Question: Impact of AI on PaaS and smart solutions - AI is expected to enhance product offerings and drive demand, with a focus on seamless integration across business models [42] Question: Recovery progress in overseas markets - Recent tariff agreements provide stability for importers, which may positively impact demand in the upcoming promotional season [48] Question: Progress on AI technology commercialization - AI capabilities are being integrated across all product categories, with significant interest from developers and customers [49][51] Question: Decline in smart solutions revenue - Management anticipates a better year in 2026, with AI features becoming more standard in new projects [57]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached approximately $82.5 million, marking a 1.1% year-over-year increase, representing the ninth consecutive quarter of growth [10][4] - Gross margin remained above 48%, with a GAAP net margin of 18.2%, expanding by more than 23.6 percentage points year-over-year [5][17] - Non-GAAP net margin reached 24.4%, supported by improved gross margin and expense efficiency [5][17] - Total operating expenses declined to $36 million, down 34.1% year-over-year, while operating net cash flow grew to $30 million, a 25.7% increase year-over-year [17][18] Business Line Data and Key Metrics Changes - PaaS business generated $59.2 million, a 2.4% year-over-year increase, with 280 premium customers [11] - SaaS and others business generated $11.5 million, a 15.4% increase year-over-year, driven by growth in cloud software products [11] - Revenue from smart solutions reached $11.8 million, with a strategic focus on high-value solutions like AI energy management [12] Market Data and Key Metrics Changes - In the China market, AI Toy showed healthy growth with over 50 customers launching products powered by Tuya [12] - In the European market, demand for AI-powered solutions such as AI cloud storage and AI energy saving solutions continued to rise [13] - In North America, AI-enabled products like smart bird feeders recorded healthy growth [14] Company Strategy and Development Direction - The company continues to embrace AI, with smart devices equipped with AI capabilities accounting for 93.99% of total shipments [7] - A new AI Agent App is in global beta testing, aimed at developing a universal AI life assistant for users [8] - The company is focused on optimizing its expense structure while maintaining key investments in business development [6][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains volatile, with cautious customer demand due to macro uncertainties [4] - For Q4 2025, management anticipates a soft demand environment compared to the previous year, but remains optimistic about long-term growth driven by AI adoption [25][27] - The company aims to lower barriers for new users to adopt smart devices through the introduction of an AI assistant [26][37] Other Important Information - The platform had 1.62 million registered developers, a 23% year-over-year increase, with over 12,000 AI agents created [18][19] - The company is focused on maintaining a strong cash position, with a net cash balance above $1 billion [18] Q&A Session Summary Question: Business outlook for Q4 and 2026 customer demand - Management expects soft demand in Q4 due to global macroeconomic uncertainties but is optimistic about growth in 2026 driven by AI adoption [25][27] Question: Details on the AI home agent and its impact - The AI assistant is designed to help users with various home tasks, aiming to simplify the user experience and lower barriers for new users [32][36] Question: Recovery progress in overseas markets, especially North America - Recent tariff agreements provide stability for importers, and management anticipates positive impacts on demand for the next year [47] Question: Latest progress on AI technology and commercialization - AI capabilities are being integrated across all product categories, with significant breakthroughs in sectors like toys [49][50] Question: Reasons for the decline in smart solutions revenue and growth outlook - Management expects a better year in 2026 with less market turbulence and increased AI adoption across various sectors [55][56]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached approximately $82.5 million, marking a 1.1% year-over-year increase and the ninth consecutive quarter of growth [11][4] - Gross margin remained above 48%, with GAAP net margin expanding by more than 23.6 percentage points year-over-year to 18.2% [5][16] - Non-GAAP net margin reached 24.4%, supported by improved gross margin and expense efficiency [5][16] Business Line Data and Key Metrics Changes - PaaS business generated $59.2 million, a 2.4% year-over-year increase, with the number of premium customers reaching 280 [11][12] - SaaS and others business generated $11.5 million, a 15.4% year-over-year increase, driven by growth in cloud software products [12] - Revenue from smart solutions reached $11.8 million, with a focus on scalable high-value solutions [12][15] Market Data and Key Metrics Changes - In the China market, AI Toy showed healthy growth with over 50 customers launching products powered by Tuya [12] - In the European market, demand for AI-powered solutions continued to rise, with new industrial clients added in the energy and HVAC sectors [13] - In North America, AI-enabled products like smart bird feeders recorded healthy growth, validating the commercial potential of niche scenarios [14] Company Strategy and Development Direction - The company continues to embrace AI, with smart devices equipped with AI capabilities accounting for 93.99% of total shipments [8] - A new AI Agent App is in global beta testing, aimed at developing a universal AI life assistant for users [9] - The company is focused on optimizing product mix and operating efficiency while maintaining key investments in business development [5][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains volatile, with cautious customer demand due to macro uncertainties [4] - For Q4 2025, management anticipates a soft demand environment compared to the previous year, but remains optimistic about long-term growth driven by AI adoption [21][25] - The company believes AI will enhance user experience and lower barriers for new users, contributing to future growth [24][34] Other Important Information - Operating net cash flow grew to $30 million, a 25.7% increase year-over-year, with a net cash balance above $1 billion [16][17] - The platform had 1.62 million registered developers, a 23% year-over-year increase, indicating strong engagement in the developer ecosystem [17][18] Q&A Session Summary Question: Business outlook for Q4 and 2026 - Management expects soft demand in Q4 due to global macroeconomic uncertainties but is optimistic about long-term growth driven by AI adoption [21][25] Question: Details on the AI home agent and its impact - The AI assistant is designed to simplify user interactions with smart devices, aiming to lower barriers for new users and enhance overall user experience [30][34] Question: Recovery progress in overseas markets and AI commercialization - Management noted stable cost levels due to recent trade agreements and highlighted breakthroughs in AI applications across various sectors, including toys [41][46] Question: Reasons for decline in smart solutions revenue and growth outlook - Management anticipates a better year in 2026 with less market turbulence and expects AI features to become standard in new projects, driving growth [50][51]

Financial Data and Key Metrics Changes - Total revenue for Q3 FY2026 grew 4.4% year-over-year to $1.23 billion, exceeding guidance by $15 million [13] - Enterprise revenue increased by 6.1% year-over-year, accounting for 60% of total revenue, up 1 percentage point year-over-year [13] - Non-GAAP gross margin improved to 80%, up 117 basis points from the previous year, driven by cost optimization [14] - Non-GAAP income from operations grew 11% year-over-year to $507 million, exceeding guidance by $37 million [14] - Non-GAAP diluted net income per share increased to $1.52, $0.08 above guidance and $0.14 higher than the previous year [15] - Operating cash flow grew 30% year-over-year to $629 million, representing a margin of 51.2% [16] - Free cash flow margin increased to 50%, up 11 percentage points year-over-year [16] Business Line Data and Key Metrics Changes - AI Companion adoption surged more than four times year-over-year, indicating strong demand for AI-driven solutions [8] - Team Chat monthly active users rose 20% year-over-year, enhancing asynchronous work capabilities [8] - Workvivo logos grew nearly 70% year-over-year to 1,225, indicating strong performance in employee experience offerings [9] - Zoom Phone surpassed 10 million paid seats, marking significant growth in unified communications [9] Market Data and Key Metrics Changes - Americas revenue grew 5% year-over-year, EMEA grew 3%, and APAC grew 4% [14] - The number of enterprise customers contributing over $100,000 in trailing 12-month revenue grew by 9% year-over-year [13] Company Strategy and Development Direction - The company aims to evolve into an AI-first platform for work and customer experience, focusing on three priorities: enhancing core products with AI, driving growth of new AI products, and scaling AI-first customer experience [7] - The acquisition of BrightHire is part of the strategy to enhance collaboration and customer engagement through AI [10] - The company is committed to disciplined growth while investing in AI and maintaining strong profitability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and the growing value delivered to customers [7] - The company anticipates continued strength in customer experience and AI differentiation as key growth drivers [11] - Management expects revenue for Q4 FY2026 to be in the range of $1.23 billion to $1.235 billion, representing approximately 4.1% year-over-year growth [17] Other Important Information - Deferred revenue at the end of Q3 grew 5% year-over-year to $1.44 billion [15] - The board authorized an incremental $1 billion share repurchase, reflecting confidence in the company's financial position [18] Q&A Session Summary Question: How should we think about growth heading into next year? - Management indicated that enterprise will continue to be the predominant growth driver, with a focus on stabilization and product diversification [23][24] Question: Can you discuss the pressure on net dollar expansion and seat-based contraction? - Management noted that while there are some seat pressures, overall macro demand remains strong, and net dollar expansion is stabilizing [28] Question: What is the company's approach to M&A going forward? - Management stated that future M&A will be thoughtful and disciplined, focusing on small to medium-sized investments that align with strategic goals [34] Question: Can you elaborate on the growth sustainability of Zoom Phone and customer experience? - Management highlighted strong growth in Zoom Phone and customer experience, driven by AI integration and customer demand [40][41] Question: How is the company integrating with other productivity software? - Management confirmed strong integrations with major ecosystems like Google and Microsoft, and emphasized the importance of customer feedback in driving integration efforts [67] Question: Were there any one-time benefits to free cash flow this quarter? - Management clarified that improvements in the collection process contributed to free cash flow, but these changes are sustainable rather than one-time [73][74] Question: How does the BrightHire acquisition fit into the broader platform expansion strategy? - Management indicated that BrightHire aligns with the strategy to leverage AI in mission-critical business workflows, particularly in HR [83][107]

Financial Data and Key Metrics Changes - Annual revenue exceeded $3.5 billion for the first time, marking a record performance [5] - Fourth quarter net sales totaled $995 million, an increase of 16%, while total net sales for 2025 were $3.6 billion, up 7% [17] - Adjusted earnings per share for the fourth quarter were $2.09, compared to $1.41, and for 2025, earnings per share were $7.19, up from $6.01 [17][24] Business Line Data and Key Metrics Changes - Aerospace segment sales increased 20% in the fourth quarter to $661 million, with commercial services sales up 40% [18] - Industrial segment sales for the fourth quarter were $334 million, up 11%, with core industrial sales growing 15% [20] - Aerospace segment earnings for the fourth quarter were $162 million, with margins expanding 520 basis points to 24.4% [18] Market Data and Key Metrics Changes - Aerospace sales growth was driven by strong demand in defense OEM, which increased 27%, while commercial OEM sales were flat [18] - Industrial sales growth included 15% in transportation and 13% in oil and gas, while power generation grew only 6% due to a divestiture [21] - Core industrial margins expanded 330 basis points to 15.2% of core industrial sales, driven by price realization [23] Company Strategy and Development Direction - The company is focused on growth, operational excellence, and innovation, with strategic investments in automation and new facilities [9][11] - A new facility in Spartanburg, South Carolina, is under construction to support advanced manufacturing and increased capacity [10] - The company aims to capture growth in aerospace and industrial markets, with expectations for increased OEM orders and sustained demand [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory across segments, with guidance for 2026 reflecting continued strong demand [26] - Aerospace segment earnings are expected to be 22%-23% of segment sales, while industrial segment earnings are projected at 14.5%-15.5% [27] - The company anticipates a modest adjustment to cumulative free cash flow targets due to increased capital allocation towards high-return growth investments [16][25] Other Important Information - The company returned over $238 million to shareholders in 2025, including $173 million in share repurchases [24] - A new three-year share repurchase program has been authorized for up to $1.8 billion, reflecting confidence in the company's strategy [25] - Capital expenditures for 2026 are expected to be approximately $290 million, including investments in automation and the Spartanburg facility [28] Q&A Session Summary Question: What growth is expected for legacy narrowbody engine aftermarket in 2026? - Management expects single-digit growth rates for legacy narrowbody engines in 2026, with some price increases anticipated [42][44] Question: How much of the current power generation revenue is tied to Caterpillar? - Management indicated healthy growth from power generation customers, including Caterpillar, but did not specify revenue tied to individual customers [47][49] Question: What are the assumptions for OE de-stocking? - Management expects de-stocking to occur around the second quarter of the fiscal year if airframe and engine customers meet forecasted rates [81][82] Question: Will capital expenditures normalize after the A350 build-out? - Management indicated that the Spartanburg investment is causing a peak in capital expenditures, with future investments being evaluated [90] Question: How should shareholders expect the return of capital to be distributed? - Management plans to spread the return of capital evenly throughout the year [111]

Financial Data and Key Metrics Changes - Annual revenue exceeded $3.5 billion for the first time, marking a record performance [5] - Adjusted earnings per share increased nearly 13% compared to the prior year [6] - Net sales for Q4 2025 totaled $995 million, a 16% increase, while net sales for the full year reached $3.6 billion, a 7% increase [17] - Earnings per share for Q4 2025 were $2.23 compared to $1.36, and adjusted earnings per share were $2.09 compared to $1.41 [17] Business Line Data and Key Metrics Changes - Aerospace sales increased 14% to record levels, with margin expansion of 290 basis points [6] - Industrial segment sales for Q4 were $334 million, up 11%, with core industrial sales growing 15% [20] - Commercial services sales in the aerospace segment increased 40%, while defense OEM sales rose 27% [18] - Industrial segment earnings for Q4 were $49 million, or 14.6% of segment sales, compared to $38 million, or 12.6% of segment sales [21] Market Data and Key Metrics Changes - Aerospace segment sales for the full year were $2.3 billion, up 14%, driven by strong demand in commercial services and defense OEM [18] - Industrial sales anticipated to grow across all primary markets, with power generation growth expected to be muted in the first half of 2026 due to divestiture impacts [26][27] - China on-highway sales in 2026 expected to be approximately $60 million, in line with 2025 [27] Company Strategy and Development Direction - Company focuses on strong execution, capturing growth in markets, and driving operational excellence [15] - Strategic investments in automation and new facilities to support long-term growth [11][24] - Continued emphasis on innovation and partnerships to enhance technology solutions [14] Management's Comments on Operating Environment and Future Outlook - Management expects sustained demand across core markets, with a modest adjustment to cumulative free cash flow target due to increased capital allocation towards growth investments [16] - Anticipated strong repair growth for LEAP and GTF engines, with expectations for LEAP and GTF repair revenue to surpass legacy repair revenue by late 2026 or early 2027 [8][15] - Management remains confident in the growth trajectory across segments, with guidance for 2026 reflecting continued operational discipline [16][26] Other Important Information - Capital expenditures for 2025 were $131 million, driven by investments in automation and new facility construction [24] - New three-year share repurchase program authorized for up to $1.8 billion, reflecting confidence in the company's strategy and growth outlook [25] Q&A Session Summary Question: What growth is expected for legacy narrowbody engine aftermarket in 2026? - Management expects single-digit growth rates for legacy narrowbody engines in 2026, with some price increases anticipated [42][44] Question: How much of the current power generation revenue is tied to Caterpillar? - Management indicated healthy growth from power generation customers, including Caterpillar, but did not specify exact revenue figures [47][49] Question: What are the assumptions for OE de-stocking? - Management anticipates de-stocking could occur by the second quarter of fiscal year 2026 if airframe and engine customers meet forecasted rates [81][82] Question: Will capital expenditures normalize after the A350 build-out? - Management indicated that the Spartanburg investment is causing a peak in capital expenditures, with future investments being evaluated [90] Question: How should shareholders expect the return of capital to be distributed? - Management plans to spread the return of capital evenly throughout the year [111]

Financial Data and Key Metrics Changes - For the full fiscal year 2025, the company reported a revenue increase of 26% year over year, with fourth-quarter revenue growing 10% year over year to $618 million [4][10] - The net loss for the fourth quarter was $19 million, compared to a net income of $16 million in the same quarter of fiscal year 2024 [10] - Adjusted EBITDA for the fourth quarter was $49 million, up from $42 million in the fourth quarter of fiscal year 2024 [10] - Cash on the balance sheet exceeded $1.2 billion, up from $778 million in the fiscal third quarter [13] Business Line Data and Key Metrics Changes - Software revenue grew 57% year over year to $9.3 million in the fourth quarter, while operation services revenue increased 21% year over year to $26.9 million [12] - The backlog remained strong at $22.5 billion, with an increase from $22.4 billion in the previous quarter [10][11] Market Data and Key Metrics Changes - The company signed a new customer, Medline, marking its entry into the healthcare vertical, which has significant potential due to the large number of healthcare distribution centers in the U.S. [8] - The company is expanding its reach with GreenBox, signing new sites in Dallas and Chicago, extending coverage from California to the Midwest and Southeast [7][8] Company Strategy and Development Direction - The company aims to harness its growing product portfolio to broaden opportunities, particularly in e-commerce with its micro-fulfillment solution [9] - Key objectives for fiscal year 2026 include unlocking higher margins and continuing investment in innovation to support future growth [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growing sales pipeline and the ability to deliver higher value through innovative technology and improved installation efficiency [6][9] - The introduction of next-generation storage technology is expected to impact revenue phasing throughout fiscal year 2026, with less pronounced growth in the first half and a ramp-up in the second half [14][20] Other Important Information - The company is focused on improving operational efficiencies and reducing installation times, which are expected to generate significant savings for customers [6][7] - Management highlighted the importance of attracting and retaining talent, with strategic investments in R&D to support the expanding product portfolio [13][48] Q&A Session Summary Question: Can you provide more color on the Medline relationship and its potential? - Management indicated that the relationship with Medline was developed over a year, focusing on the unique capabilities of their system to meet healthcare needs [17] Question: What is the expectation for ramping next-gen systems? - Management confirmed that the ramp-up for next-gen systems is expected to occur in the second half of fiscal 2026, with stable revenue in the first half [20] Question: Can you discuss the specifics of the Medline project? - The initial engagement with Medline is a proof of concept at one site, with potential for future expansion based on performance [23] Question: How is the company addressing the backlog and new customer opportunities? - Management emphasized that while they do not guide on backlog, they are optimistic about new customer acquisitions and the potential for growth in 2026 [34] Question: What are the implications of the new battery technology partnership? - The partnership with Nyobolt is expected to enhance the reliability of bots, particularly in regions with erratic power supply [70] Question: How does the company view its expansion into Europe? - Management is optimistic about opportunities in Europe, with half of the sales team already engaged there [73]

Financial Data and Key Metrics Changes - For the full fiscal year 2025, the company increased revenue by 26% year over year, achieving a revenue of $618 million in the fourth quarter, which is a 10% increase year over year [4][10] - The net loss for the fourth quarter was $19 million compared to a net income of $16 million in the same quarter of fiscal year 2024 [10] - Adjusted EBITDA for the fourth quarter was $49 million, up from $42 million in the fourth quarter of fiscal year 2024 [10] - The backlog at the end of the quarter was $22.5 billion, slightly up from $22.4 billion in the previous quarter [10][11] Business Line Data and Key Metrics Changes - Software revenue grew 57% year over year to $9.3 million in the fourth quarter, while operation services revenue increased by 21% year over year to $26.9 million [12] - The company began 10 new system deployments in the fourth quarter, including two for GreenBox and one for Medline, bringing the total operational systems to 48 [11][12] Market Data and Key Metrics Changes - The company signed a new customer, Medline, marking its entry into the healthcare vertical, which has significant potential due to the large number of healthcare distribution centers in the U.S. [8] - The healthcare vertical presents a substantial opportunity with over 500 distribution centers and 76 million square feet of warehouse space in the U.S. [8] Company Strategy and Development Direction - The company aims to harness its growing product portfolio to broaden opportunities, particularly in e-commerce with its micro-fulfillment solution [9] - Key objectives for fiscal year 2026 include unlocking higher margins through operational improvements and continuing investment in innovation [9] - The introduction of next-generation storage technology is expected to enhance deployment efficiency and customer value, leading to higher margins over time [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to handle a broader customer base and deploy systems effectively, citing significant improvements in internal measures [18] - The company anticipates less pronounced sequential revenue growth in the first half of fiscal 2026, with a ramp-up expected in the second half [20][74] - Management highlighted that the introduction of next-gen systems has resulted in a realignment of deployment schedules, impacting revenue phasing but not the backlog [15][34] Other Important Information - The company has a strong cash position with cash equivalents of $1.2 billion, up from $778 million in the previous quarter [13] - The company is focused on attracting and retaining talent, with recent expansions in its sales team and new offices opened in strategic locations [48] Q&A Session Summary Question: Can you provide more details on the Medline relationship and its potential? - Management indicated that the relationship with Medline was developed over a year, focusing on the unique capabilities of their system to meet healthcare needs [17] Question: What is the expectation for ramping next-gen systems? - Management confirmed that the ramp-up for next-gen systems is expected to occur around the middle of the year, with stable revenue anticipated in the first half [20] Question: How many sites are involved with Medline and what technology is included? - Currently, it is a proof of concept at one site, with potential for upselling additional technologies in the future [23] Question: Can you clarify the impact of Walmart's deployment changes? - Management stated that the changes have actually increased interest in their technology, as retailers seek to optimize space and efficiency [94] Question: What is the outlook for backlog growth in 2026? - Management did not provide specific guidance on backlog growth but expressed confidence in the opportunities available, particularly with new sales personnel and product offerings [34] Question: How does the company plan to address potential memory shortages? - Management indicated that memory is not a significant issue for their operations, as their bots primarily transmit data for processing rather than relying heavily on onboard memory [76]

Financial Data and Key Metrics Changes - Total revenue for Q3 FY2026 grew 4.4% year over year to $1.23 billion, exceeding guidance by $15 million [13] - Enterprise revenue increased by 6.1% year over year, accounting for 60% of total revenue, up 1 percentage point year over year [13] - Average monthly churn was 2.7%, matching last year's Q3 and marking an all-time low [13] - Non-GAAP gross margin improved to 80%, up 117 basis points year over year due to cost optimization [14] - Non-GAAP income from operations grew 11% year over year to $507 million, exceeding guidance by $37 million [14] - Non-GAAP diluted net income per share increased to $1.52, $0.08 above guidance and $0.14 higher than last year [15] - Operating cash flow grew 30% year over year to $629 million, with a margin of 51.2% [16] - Free cash flow margin increased to 50%, up 11 points year over year [16] Business Line Data and Key Metrics Changes - AI Companion adoption surged more than four times year over year, indicating strong demand for AI-driven solutions [8] - Team Chat monthly active users rose 20% year over year, enhancing asynchronous work capabilities [8] - WorkVivo logos grew nearly 70% year over year to 1,225, indicating strong performance in employee experience offerings [9] - Zoom Phone surpassed 10 million paid seats, with consistent ARR growth in the mid-teens [9] Market Data and Key Metrics Changes - Americas revenue grew 5% year over year, EMEA grew 3%, and APAC grew 4% [14] - Customer experience segment saw high double-digit ARR growth, with nine of the top ten CX deals involving paid AI solutions [11] Company Strategy and Development Direction - The company aims to evolve into an AI-first platform for work and customer experience, focusing on three priorities: elevating core products with AI, driving growth of new AI products, and scaling AI-first customer experience [7] - The acquisition of BrightHire is part of the strategy to enhance collaboration and customer engagement through AI [10] - The company is committed to disciplined growth while investing in AI and maintaining strong profitability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and the growing value delivered to customers [7] - The outlook for Q4 revenue is projected to be in the range of $1.23-$1.235 billion, representing approximately 4.1% year-over-year growth [17] - The company raised its full-year revenue guidance to $4.852-$4.857 billion, indicating a positive growth trajectory [18] Other Important Information - The board authorized an incremental $1 billion share repurchase, reflecting confidence in the company's financial health [18] - Deferred revenue grew 5% year over year to $1.44 billion, with expectations for continued growth in Q4 [15] Q&A Session Summary Question: Outlook for Q4 and pricing strategy for next year - Management indicated that they are not yet at the planning stage for FY2027 guidance, but enterprise growth will continue to be a key driver [22] Question: Pressure on enterprise net dollar expansion and seat-based contraction - Management noted that net dollar expansion is stabilizing, and while some seat pressures exist, overall macro demand remains strong [28] Question: Future M&A strategy - Management reiterated a disciplined approach to M&A, focusing on small to medium-sized acquisitions that align with strategic goals [33] Question: Sustainability of growth in Zoom Phone and customer experience - Management highlighted strong growth in Zoom Phone and customer experience, driven by AI integration and customer demand [41] Question: Integration with other productivity software - Management confirmed ongoing integrations with major productivity tools like Google and Microsoft, emphasizing the importance of customer feedback [66] Question: Free cash flow performance - Management acknowledged improvements in the collections process contributing to free cash flow, which is expected to remain durable [72] Question: Expansion into HR and other business workflows - Management confirmed that the BrightHire acquisition is part of a broader strategy to expand into mission-critical business workflows [82]