The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jacob Roberge - William Blair & Company L.L.C., Research Division - Analyst
: Can you just talk a little bit more about the retention expansion dynamics this year and what's happening at renewal time just given the macro?
It seems like gross retention is pretty steady. But when customers are expanding, where are they expanding most? Is that more on the advanced
capabilities front or new products like Brandfolder and Outfit starting to layer in more meaningfully. Just given you called out that 7-figure deal
on Brandfolder, it would be great to get that commentary.
Question: Jacob Roberge - William Blair & Company L.L.C., Research Division - Analyst
: Okay. Great. And then helpful commentary on just AI monetization, how that's going to track with enterprise skew upsells and free to paid
conversions. Will you start monetizing that right after ENGAGE? So could we see some incremental benefits in Q4 and maybe Q1 of next year? And
then, Pete, is there anything we should keep in mind on the expense side of the house as it relates to AI?
Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst
: Congrats on the quarter. Pete, I want to go back to the billings guide a bit. Obviously, you had a good ARR quarter. Seems like billings was healthy.
You beat your guide, but you kind of kept the full year. I mean we appreciate it, I guess, given the macro and conservatism in that front. But is that
it? Is that just a prudent conservatism that we should read into the guide? Or was there any kind of pull forward in the first half versus the second
half? Like -- or is there any risk that you see in the second half for some of the renewals that you have coming?
Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst
: Okay. Got it. And Mark, obviously, you have a lot of AI features coming out, and you'll hear more about it. But I wanted to ask you about this large
base of free collaborators that you have. I'm wondering as you roll out these AI features and start monetizing them, do you see kind of a big
opportunity to accelerate that free to paid conversion as you have kind of a second trigger point now with AI?
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