Latest news with #operatingMargin
Yahoo
5 days ago
- Business
- Yahoo
PagerDuty Inc (PD) Q1 2026 Earnings Call Highlights: Strong Revenue Growth Amidst Market Challenges
Revenue: $120 million, up 8% year over year. Non-GAAP Operating Margin: 20%, exceeding target by 500 basis points. Annual Recurring Revenue (ARR): $496 million, 7% growth year over year. Dollar-Based Net Retention: 104%. Gross Margin: 86%, at the high end of the 84% to 86% target range. Operating Income: $24 million, 20% of revenue. Cash from Operations: $31 million, 26% of revenue. Free Cash Flow: $29 million, 24% of revenue. Cash and Investments: $597 million. Total Paid Customers: 15,247, with 127 net new customers added. Guidance for Q2 Fiscal 2026 Revenue: $122.5 million to $124.5 million, growth rate of 6% to 7%. Guidance for Full Fiscal Year 2026 Revenue: $493 million to $499 million, growth rate of 5% to 7%. Net Income per Diluted Share Guidance for Q2 Fiscal 2026: $0.19 to $0.20. Net Income per Diluted Share Guidance for Full Fiscal Year 2026: $0.95 to $1. Warning! GuruFocus has detected 2 Warning Signs with PD. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. PagerDuty Inc (NYSE:PD) delivered revenue of $120 million, representing 8% growth at the top of their guidance range. Non-GAAP operating margin reached 20%, exceeding their target by 500 basis points. Significant improvement in net-new paid customers, driven by a new commercial digital acquisition strategy. Strengthened strategic partnership with AWS, expanding integration capabilities and serving nearly 6,000 joint customers. Public sector expansion achieved FedRAMP Low authorization, enabling federal agencies to leverage AI and automation capabilities. Dollar-based net retention was 104%, reflecting higher than expected customer downgrades in the enterprise segment and elevated churn in the commercial business. Transitional dynamics in the go-to-market motion led to inconsistent sales and marketing execution. Organizational transitions and go-to-market execution challenges impacted Q1 results. Revenue growth guidance for the full fiscal year 2026 was revised down to a range of 5% to 7%, compared to the previous range of 6% to 7%. Enterprise churn was noted, with downgrades due to company mergers and cautious spending due to macroeconomic uncertainty. Q: Can you discuss the enterprise pressure and the impact of rapid innovation in IT and DevOps, particularly with generative AI? Are enterprises hesitant to commit to multiyear contracts due to market evolution? A: Jennifer Tejada, CEO: The primary issue is execution rather than market hesitancy. We experienced gaps in customer engagement due to significant transformations, such as reassigning territories and onboarding new reps. However, new logo growth, especially from AI companies, indicates strong demand. We are confident that our experienced sales force will drive stronger execution in the latter half of the year. Q: The full-year guidance implies revenue growth exiting the year at 5%. How derisked is this guidance, and what precautions were considered? A: Howard Wilson, CFO: The guidance is prudent, reflecting organizational transitions and go-to-market execution challenges in Q1. We expect improvements in bookings in the latter half of the year as sales reps ramp up, but the guidance accounts for early-year challenges. Q: What adoption trends are you seeing for new modules like PagerDuty Advance and Enterprise Plus? A: Jennifer Tejada, CEO: Adoption is in early stages, with strong interest in our generative AI solutions. Customers appreciate the chat-native experience and our ability to integrate with platforms like Teams and Slack. We are reducing friction by seeding access to new features across pricing packages and enabling easier access to AI products. Q: Can you provide more color on the enterprise churn and downgrades? Was this broad-based, and how did it impact the quarter? A: Jennifer Tejada, CEO: We saw elevated churn in SMBs and downgrades in enterprise due to factors like company mergers. The macro environment remains uncertain, but we are focusing on helping customers realize operational efficiencies. Our quarters are more back-end loaded, and April was particularly challenging. Q: How did non-incident management products perform this quarter, and what trends are you seeing? A: Jennifer Tejada, CEO: AIOps continues to lead growth, with new use cases emerging, such as helping customers manage observability costs. Our AIOps offering is maturing, and customers are using it to prioritize tech debt reduction and manage operational risks. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
01-06-2025
- Business
- Yahoo
Here's Why You Should Retain 3M Stock in Your Portfolio Now
3M Company MMM has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in roofing granules, industrial adhesives and tapes, and electrical markets. Strong demand for cable accessories, driven by an increase in the construction of data centers and renewable energy projects, augurs well for the segment in the quarters ahead. The segment's organic sales improved 2.5% year over year in the first quarter of company's Transportation and Electronics segment has also been benefiting from strength in the transportation and aerospace end markets. Solid momentum in the commercial aircraft and defense-related business and project wins in the advanced materials business are proving beneficial for the segment. However, weakness in the electronics business, due to lower demand for devices, remains a concern. The segment's adjusted organic revenues grew 1.1% in the first quarter.3M has been undertaking structural reorganization actions to reduce the size of its corporate center, streamline its geographic footprint and simplify the supply chain. It expects these actions to be completed by 2025 and yield annual pre-tax savings. In the first quarter of 2025, these actions, together with strong organic volume and productivity, raised 3M's adjusted operating margin by 220 basis points year over year to 23.5%. For 2025, the company expects the adjusted operating margin to increase 130-190 basis points year over year. Image Source: Zacks Investment Research In the past year, shares of this Zacks Rank #3 (Hold) company have gained 41% compared with the industry's 3.3% persistent weakness in the consumer retail end markets, owing to a decrease in consumer discretionary spending, remains a concern. This is reflected in the Consumer segment's results, which declined 1.4% in the first quarter. There was a particular softness in the command and packaging expression businesses as high debt level remains another concern for its profitability. Exiting first-quarter 2025, the company's long-term debt was $12.3 billion, reflecting an increase of 10.8% sequentially. Its short-term borrowings and current portion of long-term debt totaled $1.2 billion. Considering its high debt level, 3M's cash and cash equivalents of $6.3 billion do not look impressive. It's worth noting that MMM's long-term debt-to-capital ratio is currently 73.1%, much higher than the industry's 55.2%. Some better-ranked stocks are discussed Signal Corporation FSS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks delivered a trailing four-quarter average earnings surprise of 6.4%. In the past 60 days, the Zacks Consensus Estimate for Federal Signal's 2025 earnings has increased 1.6%.Unifirst Corporation UNF currently carries a Zacks Rank of 2. UNF delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the consensus estimate for Unifirst's fiscal 2025 (ending August 2025) earnings has increased 4.1%.AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup's 2025 earnings has increased 4.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 3M Company (MMM) : Free Stock Analysis Report Unifirst Corporation (UNF) : Free Stock Analysis Report AptarGroup, Inc. (ATR) : Free Stock Analysis Report Federal Signal Corporation (FSS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
29-05-2025
- Business
- Yahoo
Veeva Systems Inc (VEEV) Q1 2026 Earnings Call Highlights: Surpassing Revenue Goals and ...
Total Revenue: $759 million for the quarter. Non-GAAP Operating Margin: 46%. Revenue Run Rate Goal: Achieved $3 billion for calendar 2025. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Veeva Systems Inc (NYSE:VEEV) reported total revenue of $759 million, surpassing their guidance. The company achieved a non-GAAP operating margin of 46%, indicating strong operational efficiency. Veeva AI is a major initiative that is off to a good start, with potential positive impacts on the life sciences industry. The company has successfully onboarded over 80 customers to Vault CRM, with plans to reach 200 customers within a year. Crossix, a part of Veeva's commercial segment, outperformed expectations and is growing at more than 30% year-over-year. The macroeconomic environment is uncertain, largely due to dynamics in the US administration, which could impact future performance. Some customers prefer custom projects, which may lead to decisions against migrating to Veeva's solutions. The company acknowledges potential funding issues in the small biopharma market due to macroeconomic uncertainties. Veeva's horizontal CRM initiative is still in the early stages, with many details yet to be determined. There is a risk of conservatism in large pharma due to macroeconomic uncertainties, which could delay projects. Warning! GuruFocus has detected 4 Warning Sign with VEEV. Q: Can you provide insights into the migration of 200 customers to Vault CRM and the factors influencing their decisions? A: Paul Shawah, EVP, Strategy: Vault CRM is performing well, with over 80 customers live today and on track to reach 200 in a year. The migrations are driven by Vault CRM's superior features, including our AI strategy and integration of sales, marketing, and medical functions. Some customers prefer custom projects, but we expect to retain the majority. Q: How is the macro environment affecting Veeva's business, particularly in discretionary revenue areas like services? A: Peter Gassner, CEO: Despite macro uncertainties, we haven't seen a material impact on our results or pipeline. Smaller biopharma might face funding issues, but areas like Crossix, which offer quick ROI, are less likely to be affected. Q: Can you elaborate on Veeva's strategy for entering the horizontal CRM market? A: Peter Gassner, CEO: We're excited about horizontal CRM, focusing initially on large enterprises. We aim to differentiate through innovation and our public benefit corporation model. We hope to have our first customers by year-end, emphasizing customer success and product excellence. Q: What is driving the commercial strength, particularly in Crossix, and are there other growth areas? A: Paul Shawah, EVP, Strategy: Crossix has seen significant growth due to investments in product development, particularly in marketing optimization and audience targeting. CRM remains stable, and we're seeing early success in data cloud initiatives like Link and Compass. Q: How is Veeva approaching AI in life sciences, and what potential does it hold for the industry? A: Peter Gassner, CEO: We're embedding AI deeply into core applications, aiming to increase life sciences efficiency by 15% by 2030. Our AI strategy focuses on specific industry needs, such as regulatory approval and safety case management, ensuring a significant impact on customer operations. Q: What are the key takeaways from the recent Veeva Commercial Summit? A: Peter Gassner, CEO: Customer sentiment is positive, with excitement around Vault CRM's growth and Veeva AI's potential. The summit highlighted our progress in CRM add-ons, data cloud, and the broader commercial solutions beyond CRM. Q: How is the CRM conversion progressing among top 20 pharma companies, and what are the decision drivers? A: Paul Shawah, EVP, Strategy: We're on track with expectations, with some top 20 companies already deciding to move to Vault CRM. The decision drivers include the desire for innovation and integration of sales, marketing, and medical functions. Q: How is Veeva addressing challenges in data integration and AI within the industry? A: Paul Shawah, EVP, Strategy: The industry faces challenges in fragmented data and AI integration. Veeva's approach involves harmonizing data sets and embedding AI into industry-specific processes, addressing these challenges at a foundational level. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
8x8 Inc (EGHT) Q4 2025 Earnings Call Highlights: Strong Service Revenue Growth Amid Challenging ...
Total Revenue: $177 million, near the midpoint of guidance. Service Revenue: $171.6 million, near the midpoint of guidance. 8x8 Standalone Service Revenue Growth: 4.6% year-over-year growth in Q4, 2.8% for fiscal 2025. Gross Margin: 69%, at the low end of guidance range. Operating Margin: 10%, at the high end of guidance range. Operating Cash Flow: $5.9 million in Q4; $63.6 million for fiscal year 2025. Debt Reduction: Over $209 million reduced since August 2022 peak. Cash and Cash Equivalents: $89.3 million at the end of Q4. Net Debt to EBITDA Ratio: Approximately 2.7 times. Stock-Based Compensation: 4.6% of total revenue, a multi-year low. Guidance for Fiscal Q1 '26: Service revenue between $170 million and $175 million; total revenue between $175 million and $182 million; non-GAAP operating margin between 9% and 9.5%. Guidance for Fiscal Year 2026: Service revenue between $682 million and $702 million; total revenue between $702 million and $724 million; operating margin between 9% and 10%. Warning! GuruFocus has detected 5 Warning Signs with EGHT. Release Date: May 19, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 8x8 Inc (NASDAQ:EGHT) reported a year-over-year growth in service revenue, excluding Fuze, of 4.6% in Q4, marking the highest growth rate in 10 quarters. The company achieved its highest two-year cash flow from operations, exceeding half of its market capitalization. There was a 13% year-over-year increase in customers with three or more products, indicating successful cross-selling and new customer acquisition. Strong momentum was observed in sales of Microsoft Teams integrations, with new license sales up 72% in Q4. 8x8 Inc (NASDAQ:EGHT) made substantial progress in upgrading customers from the Fuze platform, expecting full transition by the end of the calendar year. The economic environment remains challenging, with global uncertainties and tariff actions impacting market dynamics. The company is still navigating the transition of Fuze customers, which poses a risk of revenue loss during the migration process. Gross margin was at the low end of guidance due to a revenue mix shift towards lower-margin platform usage revenue. There is ongoing pressure on non-GAAP operating margins due to investments in growth and innovation. The macroeconomic environment has led to elongated deal cycles and shrinking deal sizes, affecting sales performance. Q: Can you share insights on the macro impact from your field reps and partners? Are there delays in sales cycles or spending? A: Samuel Wilson, CEO: In March and April, we noticed chaos in the US with elongated deal cycles and shrinking deal sizes. However, May has been calmer. The rest of the world seems to be chugging along unaffected by US dynamics. Q: What remains to be addressed in your go-to-market strategy, and can you provide adjusted service revenue growth for fiscal '26 excluding Fuze? A: Samuel Wilson, CEO: We are about 60-70% through our go-to-market transformation, focusing on solution selling. Kevin Kraus, CFO: Excluding Fuze, we expect positive growth next year as headwinds diminish. Q: How do you plan to achieve high single-digit growth, and what factors are driving this? A: Samuel Wilson, CEO: Growth is driven by internal factors like increased multi-product customers, new product sales, and improved go-to-market execution. We don't rely on market changes for growth. Q: Why are you winning in the CCaaS space, and how is your performance in the APAC region? A: Samuel Wilson, CEO: We offer a complete solution with best-in-breed technology from a single vendor, appealing to mid-market enterprises. In APAC, our CCaaS continues to perform well, supported by strong VAR and reseller networks. Q: What is your focus now that you've improved the balance sheet and expense structure? A: Samuel Wilson, CEO: Our focus is on returning to growth by accelerating the shutdown of Fuze and investing in CCaaS and distribution improvements for fiscal '27 and '28. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
8x8 Inc (EGHT) Q4 2025 Earnings Call Highlights: Strong Service Revenue Growth Amid Challenging ...
Total Revenue: $177 million, near the midpoint of guidance. Service Revenue: $171.6 million, near the midpoint of guidance. 8x8 Standalone Service Revenue Growth: 4.6% year-over-year growth in Q4, 2.8% for fiscal 2025. Gross Margin: 69%, at the low end of guidance range. Operating Margin: 10%, at the high end of guidance range. Operating Cash Flow: $5.9 million in Q4; $63.6 million for fiscal year 2025. Debt Reduction: Over $209 million reduced since August 2022 peak. Cash and Cash Equivalents: $89.3 million at the end of Q4. Net Debt to EBITDA Ratio: Approximately 2.7 times. Stock-Based Compensation: 4.6% of total revenue, a multi-year low. Guidance for Fiscal Q1 '26: Service revenue between $170 million and $175 million; total revenue between $175 million and $182 million; non-GAAP operating margin between 9% and 9.5%. Guidance for Fiscal Year 2026: Service revenue between $682 million and $702 million; total revenue between $702 million and $724 million; operating margin between 9% and 10%. Warning! GuruFocus has detected 5 Warning Signs with EGHT. Release Date: May 19, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 8x8 Inc (NASDAQ:EGHT) reported a year-over-year growth in service revenue, excluding Fuze, of 4.6% in Q4, marking the highest growth rate in 10 quarters. The company achieved its highest two-year cash flow from operations, exceeding half of its market capitalization. There was a 13% year-over-year increase in customers with three or more products, indicating successful cross-selling and new customer acquisition. Strong momentum was observed in sales of Microsoft Teams integrations, with new license sales up 72% in Q4. 8x8 Inc (NASDAQ:EGHT) made substantial progress in upgrading customers from the Fuze platform, expecting full transition by the end of the calendar year. The economic environment remains challenging, with global uncertainties and tariff actions impacting market dynamics. The company is still navigating the transition of Fuze customers, which poses a risk of revenue loss during the migration process. Gross margin was at the low end of guidance due to a revenue mix shift towards lower-margin platform usage revenue. There is ongoing pressure on non-GAAP operating margins due to investments in growth and innovation. The macroeconomic environment has led to elongated deal cycles and shrinking deal sizes, affecting sales performance. Q: Can you share insights on the macro impact from your field reps and partners? Are there delays in sales cycles or spending? A: Samuel Wilson, CEO: In March and April, we noticed chaos in the US with elongated deal cycles and shrinking deal sizes. However, May has been calmer. The rest of the world seems to be chugging along unaffected by US dynamics. Q: What remains to be addressed in your go-to-market strategy, and can you provide adjusted service revenue growth for fiscal '26 excluding Fuze? A: Samuel Wilson, CEO: We are about 60-70% through our go-to-market transformation, focusing on solution selling. Kevin Kraus, CFO: Excluding Fuze, we expect positive growth next year as headwinds diminish. Q: How do you plan to achieve high single-digit growth, and what factors are driving this? A: Samuel Wilson, CEO: Growth is driven by internal factors like increased multi-product customers, new product sales, and improved go-to-market execution. We don't rely on market changes for growth. Q: Why are you winning in the CCaaS space, and how is your performance in the APAC region? A: Samuel Wilson, CEO: We offer a complete solution with best-in-breed technology from a single vendor, appealing to mid-market enterprises. In APAC, our CCaaS continues to perform well, supported by strong VAR and reseller networks. Q: What is your focus now that you've improved the balance sheet and expense structure? A: Samuel Wilson, CEO: Our focus is on returning to growth by accelerating the shutdown of Fuze and investing in CCaaS and distribution improvements for fiscal '27 and '28. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
