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John Streppa: Good afternoon, and welcome to Amplitude's First Quarter 2026 Earnings Conference Call. I'm John Streppa, Head of Investor Relations. And joining me today are Spenser Skates, CEO and Co-Founder of Amplitude; and Andrew Casey, our Chief Financial Officer. During today's call, management will make forward-looking statements, including statements regarding our financial outlook for the second quarter and full year 2026, the expected performance of our products, our expected quarterly and long-term growth, investments and our overall future prospects. These forward-looking statements are based on current information, assumptions and expectations and are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those described in these statements. Further information on the risks that could cause actual results to differ is included in our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, and we assume no obligation to update these statements after today's call, except as required by law. Certain financial measures used on today's call are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. These non-GAAP financial measures have limitations and should not be used in isolation from or as a substitute for financial information prepared in accordance with GAAP. Additional information regarding these non-GAAP financial measures and a reconciliation between these GAAP and non-GAAP financial measures are included in our earnings press release and the supplemental financial information, which can be found on our Investor Relations website at investors.amplitude.com. With that, I'll hand the call over to Spenser. Spenser Skates: Good afternoon, everyone, and welcome to Amplitude's First Quarter 2026 Earnings Call. Today, I'll cover 3 things. First, our Q1 results; second, how AI is reshaping the software development life cycle; and third, a deep dive into our latest AI products and the customers putting them to work. Let me start with the numbers. Q1 revenue was $94 million, up 17% year-over-year. Annual recurring revenue was $374 million, up 17% year-over-year and up $9 million from last quarter. Non-GAAP operating loss was $3.1 million. Customers with more than $100,000 in ARR grew to $727, an increase of 18% year-over-year. Our progress in expanding the enterprise and growing our multiproduct footprint continued in the first quarter. Dollar-based net expansion improved sequentially to 106%. This reflects continued strength in our core business as we expand the capabilities of our platform to help the next generation of builders understand, improve and grow their digital products. I am focused on aggressively transforming Amplitude into an AI company. In Q1, we made broader changes to the leadership within go-to-market to remove layers and become a more technical team. Nate Crook is now our Chief Commercial Officer, overseeing sales, customer success, revenue operations and enablement. Nate and the team now own the entire path from landing a customer to ensuring they succeed long term. We restructured customer success and marketing to match customer buying trends. Customer success now has fewer handoffs and deep technical coverage with forward-deployed engineers. Marketing is now oriented around AI-native storytelling. We welcomed Gab Menachem as Chief Product Officer last month. Gab is a serial founder who built Loom Systems, an AIOps company acquired by ServiceNow. Loom Systems analyze log data across cloud and on-prem similar to what Amplitude does for behavioral data. Gab then spent 6 years scaling ServiceNow's IT operations management business to more than $1 billion in revenue. I'm excited about that combination of founder DNA and enterprise experience at scale. Gab is part of a growing group of founders we brought into Amplitude over the past 18 months to lead our AI transformation. A few weeks ago, we ran AI Week at Amplitude. We paused normal work across the entire company so that every function could build and shift AI-powered workflows to reimagine their daily jobs and functions. It is much more important for Amplitude's talent to be AI native over the next year than any short-term initiative in the business. The team shipped hundreds of amazing demos, including automatically creating custom demo websites per customer, automating part of the quarter close process and automating how we create new creative assets in marketing. Yesterday, we announced a strategic partnership with Statsig. Amplitude, as part of this partnership, Amplitude will take on Statsig's brand and customers. We will also maintain and develop the current Statsig platform across the cloud and data warehouse, including support for all existing Statsig customers. Amplitude will also begin building a more integrated road map for the future of Amplitude and Statsig platforms together. We will work closely with the Statsig team at OpenAI during this transition. As context for the move, AI has dramatically lowered the barrier to building and shipping software, boosting productivity for experienced engineers and enabling nontraditional roles to become AI builders. While teams can generate more code than ever before, the software development life cycle remains bottlenecked in many other places. AI builders are generating code faster than they can understand its impact. The challenge is now evaluating code before it's released, tracking what's working after release, knowing when you need to roll things back, and turning behavioral signals into what to build next. Amplitude is the market leader and is focused on giving the best behavioral insights to product managers. Statsig has reinvented experimentation and feature management and done an amazing job with data leaders with its warehouse native capabilities. Together, we can accelerate the software development life cycle. We now offer organizations access to the same capabilities that the world's most advanced AI companies use today. Initial customer feedback has been promising. Many of our existing customers have already expressed interest in the Statsig product. The pace at which Amplitude builds and ships products continues to accelerate. Over 90% of the code our team ships today is written by AI. I want to show you 4 quick demos today, each one reflecting a different dimension of what it means to close the product development loop. I want to start with Agent Analytics. Everyone building agents has one big question. Are they working? With Agent Analytics, customers get complete visibility into every agent interaction, see every conversation's full thread, what the user asked, what the agent responded, which model was used, how many tokens it burned and how long it took to complete. Once the conversation completes, evaluators automatically run and judge your agent's performance across dimensions like user satisfaction, agent confusion, response quality and task completion. This happens on every conversation and is fully customizable so you can build evaluators specific to your use case. Then you can put all your Agent Analytics data together with your customer data. You can see how your agent's performance directly connects to real customer events, like what impact an original agent interaction can have on a customer later completing a purchase. We have been shipping faster around our Amplitude agents. We've added productivity updates to our Global Agent, including voice to text input for natural language prompting, image upload for providing deeper context, searchable chat history and conversation history across projects. In addition to that, we've also added memory, so agents now monitor when they're corrected or directed in specific ways and save that for the future. For example, a weekly active user in Amplitude is a user who saves a chart, not someone who simply logs in. The agent, after telling the agent this, it remembers it for future analysis instead of needing to be corrected every time. 90% of these memories are automatically created as people use agents, so agents get smarter and better the more people use them. We also have MCP connectors built directly into agents. Agents are incredible at analysis, but the connection to action is broken. A human still needed to file the linear ticket to the write up a notion or read the slack channel for context, not anymore with MCP connectors. All of these actions can be triggered automatically. Non-event data can now be paired with Amplitude's data, connect financial information from BigQuery and quantify the real cost benefit of an experiment or with GitHub and Amplitude, retroactively track how specific releases affect error rates, session length or feature adoption. Now our agents can run and connect to all your data sources to surface insights and deliver the context wherever it's needed. This is exactly what one of our large financial institution customers experienced. They had agents running on Amplitude surfacing insights for a new interface rollout they are planning. One of those agents surfaced pages that were indexed incorrectly before they went live without being instructed to find the inaccuracies. That helped the team avoid serving incorrect data to customers without even being asked. That is what it looks like when the loop closes on the right side automatically. People don't check dashboards. The system catches the problem before it become one. We're also building new AI products to expand our platform for customers. Our most recent launch was AI Assistant. AI Assistant is a chatbot that answers customers' questions in real time like Intercom Fin. It's tied into Amplitude so it can know who users are, where they've been previously and where they are right now. If users want to know how to accomplish a task, instead of giving text instructions, it can create a visually guided tour that walks users through the interface. Here, I'm asking how to integrate with Slack and it's triggering a guide that helps me do so. It shows me where to click on the screen and guides me through the process. This is live for customers to purchase today and is a great way to highlight how we're using AI to infuse context and understanding of the user for our customers. The last demo I want to show with you today is our command line interface Wizard. AI builders need an automated installation of Amplitude. That is why we built the CLI Wizard. Setting up Amplitude used to be a sticking point for some users in the past. Now with our CLI Wizard, it's one line of code in the terminal. The rest is done for them. The CLI Wizard package runs against any code base, any programming language and it instruments Amplitude for you. It adds SDKs, creates the taxonomy and instruments all events and configures MCP. It will even create an initial dashboard for you. What used to take weeks now takes a few minutes, all initial setup into one action, dead simple install for humans. After this, we're going to give the ability for agents to install Amplitude automatically in the cloud. There is now no barrier to installing Amplitude. Let me tell you about a few customers who are putting this to work. Granola is one of the fastest-growing AI companies out there. They came to Amplitude before they had actually, before they had even launched because they wanted to understand from day one whether what they were shipping was actually working for users. Today, more than half the company uses Amplitude every day. And actually, I think everyone Amplitude is a granola user. They ship new features fast and rely on real-time behavioral signals to decide what to do next. They have grown with us horizontally and use the full platform. Granola is what a next-generation software company looks like. No separate analytics team, no weekly reporting cycle. The loop from ship to learn runs continuously and Amplitude is the infrastructure that makes it possible. Smartsheet is an intelligent work management platform that helps enterprises unite people, data and AI to turn strategy into results. As Smartsheet accelerated its push into AI-driven experiences, the team faced a real bottleneck. Their product managers were entirely dependent on the BI team for every single insight. A question as basic as how many people use this feature last month and what does this mean for retention could take weeks to answer. Today, with Amplitude Analytics, feature experimentation and guides and surveys, Smartsheet's product managers, engineers, designers and researchers have that answer instantly. They've used those insights to identify and fix drop-off in their onboarding funnel with a direct measurable impact on retention. As Smartsheet invests in AI, Amplitude gives them the velocity to understand whether new experiences are working at the speed their ambitions demand. Astra Tech chose Amplitude as its partner to support Botim & Botim Money's evolution into an AI-native fintech super app for over 150 million users across 150 countries. Botim uses insights from Amplitude to optimize fintech entry points, pinpoint critical journey drop-offs and establish clear engagement baselines for Botim AI across user segments, usage patterns and downstream actions. With cross-functional teams in growth, design, tech, using those insights to steer a completely revamped Botim to reposition itself as a fintech-led communications platform. I'm very excited to share the business impact we had with them. Their revamp across services, including international transfer, local transfer, ad funds and gold, Astra Tech increased fintech service entries by 4%, lifted engagement from top offers and 4U by up to 3% and grew fintech transacting users by 3x. That happened all within a span of 9 months of working with Amplitude. I want to note that the companies on the bleeding edge of the tech industry are Amplitude customers. That's because the faster you build, the more you need to know what to build next. AI natives understand that better than anyone. This underscores the long-term case for Amplitude. AI makes what we do more critical than ever. We are set up to close the right side of the product development loop, and we have the platform, the customers, the leadership and the conviction to see it through. I'm extraordinarily excited for what's next. Now over to Andrew to walk you through the financials. Andrew Casey: Thank you, Spenser, and good afternoon, everyone. The first quarter was solid with incremental improvement in our dollar-based net retention to 106%, multiproduct accounts for more than 77% of our ARR and our ARR growth was 17%. We beat our guidance on both top and bottom line, and we are combining the best of Statsig with Amplitude. Reflecting on Q1, there were many changes in our go-to-market team. We've introduced a number of new AI products, and Amplitude has been implementing a host of new AI-based workflows to drive efficiency. We are in a moment of transformation. We are transforming the value our customers receive. We are transforming how we deliver value, and we are transforming our organization from the ground up. We've done this while continuing to execute on our core business. We are leveraging AI at scale across our organization and helping customers unlock incremental value faster. No longer is a good piece of code with a friendly UI good enough. We must deliver customer valued outcomes. We are focused on becoming a true partner with our customers to understand how to apply technology in the most effective ways. We are building on a decade of understanding context of delivering this knowledge through our services, our platform and our know-how. The speed of change is accelerating, and we're leaning into that moment. We're seeing increased usage of our AI agents along with data ingested into our platform. This has created some headwinds in our cost to serve, but it's also aligned to our monetization strategy. Adapting quickly and delivering greater value to our customers will be the advantage of the next generation of winners in software, which is why we've made changes to our products, pricing and internal operations. Taking on the Statsig business is another great example of our ability to be flexible and act quickly. By combining Statsig's industry-leading warehouse native experimentation with Amplitude's best-in-class analytics platform, we're expanding our total addressable market and meeting customers where their data needs are. We will build this business to be incremental and accretive to our core business. Spenser highlighted some of the changes our team has undergone, and we're instrumenting the business for long-term scale and efficiency so that driving business growth continues to result in greater leverage. That being said, our goals as a business remains steady. We want to grow our enterprise business, expand our multiproduct footprint and deliver great value for our customers. This focus has enabled us to drive consolidation in the market through our platform approach, now having over 77% of our ARR coming from customers with more than 2 products, up 3 points from last quarter. Customers with 5 or more products now account for 24% of our ARR, up from 20% last quarter. We believe that as customers continue to adopt our AI products, they will naturally expand their use cases into the full suite of our platform and drive incremental upsell opportunities. Turning to our first quarter and full year results. As a reminder, all financial results I will be discussing with the exception of revenue are non-GAAP. Our GAAP financial results, along with a reconciliation between GAAP and non-GAAP can be found in our earnings press release and supplemental financials on the Investor Relations page of our website. First quarter revenue was $93.5 million, up 17% year-over-year versus 10% in the first quarter of 2025. Total ARR increased to $374 million exiting the first quarter, an increase of 17% year-over-year and $9 million sequentially. Total remaining performance obligations grew 31% year-over-year to $427 million compared to 30% growth in Q1 2025. Current RPO was up 20% year-over-year compared to 18% in Q1 of last year. Long-term RPO was up 60% year-over-year compared to 72% from the first quarter of last year. We had a strong quarter for both new and expansion deals in the enterprise. Platform sales were also particularly strong. 47% of our customers now have multiple products with 77% coming from that cohort. We have made great progress on expanding our multiproduct footprint within our customer base compared to a year ago when only 30% of our customers had multiproducts and accounted for only 64% of our ARR. The number of customers representing $100,000 or more of ARR in Q1 grew to 727, an increase of 18% year-over-year and up 29 customers since the last quarter. In-period net dollar retention increased to 106% from 105% last quarter, led by cross-sell expansions across our customer base. We expect net dollar retention to improve over the long term as we continue to see customers adopt multiproduct. However, it may not be in a linear fashion. Gross margin was 75% for the first quarter, down 2 points from the first quarter of last year. This was largely driven by growth in inference costs as adoption of our AI tools by our customers outpaced our expectations. We now expect this adoption trend to continue given the feedback we received from our customers. In the short term, this will cause gross margin compression, but we believe this will help us to drive greater data ingestion and monetization of our core platform over time. Sales and marketing expenses were 45% of revenue, in line with the first quarter from last year. Some of the increase in costs included severance costs related to our organizational changes and other activities like our go-to-market kickoff that occurred in the first quarter. We have focused our entire go-to-market team on driving value for our customers, increasing adoption organization-wide and improving our internal processes, coverage and expanding the buyer personas that we can sell to. These changes will take time to manifest in net new ARR, but ultimately, they will increase the health of our customer base and drive greater opportunity to grow our net dollar-based retention. R&D was 20% of revenue, up 1 point from the same period last year. We will be adding to the team to scale the Statsig opportunity and continue to support those customers. G&A was 13% of revenue, down 2 points from the first quarter of 2025, and we expect G&A to improve as a percentage of revenue over time. Total operating expenses were $73 million or 78% of revenue, down 1 point from the same period a year ago. Operating loss was $3.1 million or 3.3% of revenue. Net loss per share was $0.02 based on 133.3 million basic shares compared to a net loss per share of $0.00 with 129.7 million shares a year ago. Free cash flow in the quarter was a negative $13.2 million or negative 14% of revenue compared to a negative $9.2 million or negative 12% of revenue during the same period last year. We continue to be active in the open market last quarter, retiring shares against our open buyback. We have conviction in the long-term value of our platform and have used and will use our cash to minimize the impacts of dilution while our share price continues to not align with the value we believe we're creating. Our balance sheet position remains strong and allows us the opportunity to be more aggressive in our M&A strategy to accelerate our R&D road map when appropriate. In Q2, we will also take into consideration bringing the Statsig customers and technology over to Amplitude as of the beginning of May. To start, we will record an additional $16 million in incremental ARR from the Statsig customer base, aligning that business to our definition of ARR. As we take on the Statsig business, we will also be investing in the transition team as we ramp an internal team to continue to provide the best support for the Statsig customers. Over time, we will scale our internal team to continue to develop the warehouse native and cloud aspects of Statsig. Additionally, there will be some pressure on gross margins for the remainder of the year as we integrate and optimize our hosting environment. Now turning to our outlook. As a reminder, the philosophy of how we set guidance is through the lens of execution. We are pleased with our progression on driving adoption of our core platform, our different AI technologies and multiproduct adoption. Our new pricing and packaging rollout is progressing very well. And in the first quarter, 25% of total ARR contracted, both new business and renewals was on our new pricing and packaging. We will continue to increase this percentage as we make it easier for our sellers to quote and make it easier for our customers to understand the path to platform adoption. We are already seeing early signs of willingness to test new features and products on the platform given the easier on-ramp from a contract view. This will also lend itself to allowing easier adoption of our AI agents as we continue to iterate and ship. So, for the first, for the second quarter of 2026, we expect revenue to be between $96.9 million and $99.1 million, representing an annual growth rate of 18% at the midpoint. We expect non-GAAP operating income to be between negative $3.6 million and negative $1.6 million. We expect non-GAAP net income per share to be between negative $0.02 and negative $0.01, assuming basic weighted average shares outstanding of approximately 134 million. For the full year of 2026, we expect full year revenue to be between $397 million and $403 million, an annual growth rate of 17% at the midpoint. This assumes a $5 million to $7 million contribution from the Statsig business, taking into account the assumption of the customer contracts and the impacts to deferred revenue. We expect our full year non-GAAP operating income to be between $2.5 million and $6.5 million. This reflects incremental investment we'll need to incorporate the Statsig business. We expect non-GAAP net income per share to be between $0.03 and $0.06, assuming weighted average shares outstanding of approximately 145.1 million as measured on a fully diluted basis. In closing, we are accelerating our pace of innovation, and we're growing the value that we can deliver to our customers. We have confidence in our ability to scale a durable and growing business while also bringing Agentic Analytics to the world. With that, we'll open it up for Q&A. Over to you, John. John Streppa: Thank you, Andrew. We will now turn to Q&A. [Operator Instructions] Our first question will come from the line of Taylor McGinnis from UBS, followed by Rob Oliver from R.W. Baird. Taylor McGinnis: Maybe first, Spenser, for you. Could you just maybe explain why OpenAI is foregoing the Statsig business? And if there's any parts that OpenAI is retaining in that? And then, Andrew, maybe a second one for you. Helpful color on breaking out some of the Statsig impact this year to the guide. If we strip that out, does that mean that you're taking down, I guess, the organic growth guide a little bit on revenue this year? And maybe you could just unpack that and the margin impact. Spenser Skates: So, first, just to answer the question on the Statsig side. I mean, Vijay and I have known each other for years. Amplitude and Statsig have been competitors and kind of pushing the bleeding edge in their respective niches. I'm extraordinarily excited that we get to kind of carry a bunch of that forward with both the customers, the technology as well as the brand. I think Vijay was looking for a home for the kind of continued support of the Statsig customer base. And after looking at a number of different places, him and I agreed that the best place that would be Amplitude. We just executed that agreement on Friday. So, we're kind of still just getting up to speed with all everything it entails and making sure it's a smooth trend, making sure those customers continue to be supported and then figuring out what the long-term plans for Amplitude and Statsig are together. But I'm just, I'm very, very, very excited about it. OpenAI will be continuing to run the technology internally that they have from Statsig, and so they'll be continuing to use it, but that will obviously be supported by Vijay and the existing Statsig team at OpenAI. Andrew Casey: And Taylor, part of the guidance we have is incorporating the accounting associated agreement like this, where you have to take a fair value assessment on the revenue that's aligned to the annual recurring revenue I mentioned. But by taking that fair value assessment, you actually take a haircut on the value. It actually reduces down. And so what you're seeing in the amount I'm indicating that comes from ARR and the lower revenue is really related to that fair value assessment. And I would tell you that we had a good quarter in Q1. We beat expectations. We beat what our guidance was, and that's flowed through into our guidance for FY '26. So, for us, we think it's a huge opportunity for us to go build out a great product that a lot of customers will be very interested in. Taylor McGinnis: Perfect. And just a quick follow-up, if I may. So, if I look at the net new ARR numbers, it looks like maybe it was flattish on a year-over-year basis. I know you mentioned that there were a number of changes that you guys made in the quarter from leadership changes to pricing and packaging. So, did that at all have any impact in the quarter? And maybe you could just talk about what occurred and how you guys are thinking about that metric for the remainder of the year? Andrew Casey: Whenever you make big changes in organizational structures or you're making changes in core processes, invariably, there is going to be an impact. I would tell you that we're pretty proud of the fact that given those changes that we made, we were still able to, one, exceed the guidance we had put out with respect to ARR and turn in a pretty good quarter, especially with respect to net dollar retention increasing, the number of $100,000 customers we added. So yes, there's always going to be some impact, but we did a pretty good job of kind of executing through it. John Streppa: Our next question will come from Rob Oliver at R.W. Baird, followed by Jackson Ader at KeyBanc. Robert Oliver: I apologize for background noise. I'm out in the wind here a little bit. Yes. So, I guess first question, Andrew, for you. Really great progress on the new pricing model. I mean it feels like just yesterday, you guys were in pilot on that, and now you're at 25% of ARR. I guess a couple of questions there to start. One, how should we think about the progression of that? I think you said it's key to the selling motion. But is that something as customers come up for renewal this year, we can expect that number to continue to move higher? And any, recognizing it's very early, any early indications on what kind of pricing uplift or impact it's having on the contracts in terms of the combinations of usage? And then I had a quick follow-up as well. Andrew Casey: Yes. I'd say we're pretty pleased with our progress on the pricing and package as well, Rob. The response from our sales team has been tremendous. They love the simplicity in the way they can actually express value back to clients. That proxy on value from a price perspective and the methodology is one that customers really understand. I can tell you there are a number of deals in Q1 that customers added more product associated with our platform because of the simplicity and the way they get cost predictability on that new strategy. So I do expect that the percentage of our ARR that's going to be on the new pricing and packaging will increase. We're not going to force customers through hard migrations. We're going to give them the carrot and show them the value, and we expect that customers are going to really want to adopt the new pricing and packaging. Robert Oliver: Great. Helpful. And then my follow-up, Spenser, in your prepared remarks, you made it clear that being an AI company right now is the most important thing. And I guess that creates a ton of exciting opportunity like around Statsig. It also creates some, a fair amount of uncertainty around both the gross and operating margin line. So just wondering, I know we've got updated numbers for you guys and thoughts around that. But recognizing you just closed Statsig on Friday, can we expect at some point, perhaps this year, we'll get updated thoughts from you guys around cost to integrate go-to-market and potential further impacts both on the gross cost to serve side as well as on the operating margin side. Spenser Skates: For sure, for sure. So yes, I mean, again, it's a few days old, so we did our best with the guidance that we put out, but we'll absolutely have a much better picture as we get into next quarter and subsequent quarters. Let me talk about Statsig specifically, and then I'll talk about more generally on the AI transformation of Amplitude. On Statsig specifically, I think it will be long term, very accretive to the business. A lot of Amplitude customers are very interested in their product. A lot of Amplitude customers are also Statsig customers, like we just talked to one yesterday, Atlassian, who is a big user on the Statsig experimentation side while being a big user on the Amplitude Analytics. And they're actually really excited because now the data from the two products will talk to each other, and that will drive a whole bunch more value and usage and good things for both Atlassian and Amplitude. And we expect to see similar things across the entire customer base. Now in terms of exactly quantifying them, again, it's very rough in the air because it's only a few days old, but we'll have a much better picture into it come next earnings call. In terms of AI generally, it's absolutely going to be, so I think on operating margin leverage, it absolutely will be accretive. People get more efficient. We'll be able to get a lot more done with the same number of people. We'll be able to have 2x or 3x the impact without having to grow the team. And so, I'm extraordinarily excited about that. The mistake I see a lot of companies making is there, like we just said, hey, just go and be aggressive on your internal spend. I see a lot of companies that's like, oh, let's only have like a $200 budget per person for AI spend. And it's like that's nowhere near unleashes the full capabilities. I mean you see some of our top engineers that are shipping 5x the amount of pull requests, but they're also spending thousands of dollars a month or more on tokens. So, we're figuring out exactly how to budget and price it out, but we absolutely expect that will translate to operating leverage long term. The last thing to call out is as part of using these products, there is inference spend. So right, if you're using Global Agent and you're asking Amplitude, hey, find me what's the cause of this drop in this conversion funnel, like that's going to cost us a bunch of tokens and all of that. Now for the here and now, we've said, hey, let's just support it, and we're going to bundle it in with our core stuff because that just means more Amplitude usage. And you can see that in a little bit with what Andrew shared with the gross margin numbers. And so that has, that does put short-term pressure. But we, again, expect that to be accretive long term, most importantly to revenue growth, but then also to operating margin as it requires less people on our end to support more customers. Andrew Casey: Just one clarification to Rob. I'll tell you, we did take into consideration the operating expenses associated with the Statsig business into our guide. John Streppa: Our next question will come from Jackson Ader at KeyBanc, followed by Clark Wright at D.A. Davidson. Jackson Ader: The first question I had, Spenser, on the command line interface and the MCP server that you're kind of turning live, making it frictionless, right, to actually adopt and use Amplitude. But if I think about the other side of maybe it's enterprise customers where you're having forward deployed engineers, right, who are ostensibly, I would think, trying to like make sure you go hand-in-hand with customers and make sure that they are adopting things. So those two things, like the frictionless and the forward deployed engineers just seem not an odds, but just like. Spenser Skates: Yes, a little bit different. You need a one-line thing. "Why do you need someone to teach you? " Okay. So I think a few things. One is that a lot of the, by the way, I love the question. I love that you pay attention during the demos because not everyone does. So, thank you. So, first on the frictionless, it's so much of the process before to get set up with any data system, including Amplitude was extraordinarily manual. You have to define your objectives. You have to define a taxonomy, you put in the SDK, you put one line of code wherever you do it. You have to then create a bunch of charts and dashboards on the basis of that. And so I there's tremendous opportunities to automate that with AI. And so that's what we did with Amplitude CLI with all of that installation process. It's actually pretty wild. I didn't, 3 months ago, that wouldn't have been possible. And so it's really cool to see it possible today. Now the flip side is what we see with customers is every single one of them is looking for education on "how do I adopt AI". Arguably, you could say that all the growth in these AI natives, if you look at the private markets, comes from companies that are just doing a really good job of educating customers. It's actually no longer a technology bottleneck; in that the models are getting so fast, software is like there's, it's very easy to build. And so, the customer is choosing on, "okay, who do I trust to actually kind of get me through this. " So, if you're an AI-native bleeding edge, hey, it's just like, "Give me the one-line CLI and I'm off to the races. " But if you're a traditional company, like, say, Fox Broadcasting or Walmart, you're going to want a lot of hands-on help from an Amplitude to make sure you educate your team. It's one thing to just have a bunch of software running and you can get that from anywhere, but it's another to say, "Hey, educate me on how to use analytics from a bleeding edge AI standpoint, what the future is going to be and help me reskill the hundreds or thousands of people I have with my organization. " And that you just need a human touch to do. So it's, the forward deployed engineers are much like, yes, there is a, "okay, well, why do we even need that if we have the one line of code, " but actually getting adoption of Amplitude or any software product within the enterprise is much less about like do you have the widget or the specific feature and it's much more about, "hey, are you going to be the best person out there to educate my organization on what the future of this technology is. " Jackson Ader: Okay. All right. That makes sense. The follow-up question I had is really, I guess, for both of you. I'm just thinking like you're shifting to an AI-first company, right, which has come from a lot of personnel, which has manifested itself in a lot of personnel changes, leadership changes, personnel, we're changing pricing and packaging, right? Now doing like an acquisition, right, like this integration of another product. So there's a lot going on. What is your plan to make sure that execution does, like execution risk doesn't bubble up with so many balls here. Spenser Skates: I mean, look, just to be very candid and direct, I think vast majority of SaaS companies are being way too conservative with the change. And I've taken the opposite approach where it's like, look, market has spoken about its opinion of what the future is going to look like. We know from talking to customers what they want. We see the innovations from a technological standpoint. And so we want to run as fast as possible to where the puck is going on all of this stuff. As part of that, acknowledging it is going to be bumpy and it is going to be chaotic and there will be things that we don't expect or can't perfectly plan for in advance. It is much more important to get there with a lot of speed for a lot of different reasons than it is to say, "Hey, let's try to protect some existing thing we have. " The existing thing we have, frankly, isn't valued much. And so what's much more interesting to me is can we generate billions of dollars in revenue in this new world. And so whether that is changes on the organization in terms of leadership, whether that's changes on functions and roles, whether it's changing on product, on pricing, on working with partnering with OpenAI and Statsig through the future of Statsig, like we're just going to be really aggressive on making sure we reinvent the whole category. In my mind, the same thing that happened in the coding space over the last two years, where it just looks fundamentally different today than it did two years ago, that is going to happen in our category with analytics, experimentation, session replay and the whole thing. And so, it's a race to see who can do that the fastest. And so that's what I'm really focused on is not the close to $400 million in ARR that we have. I'm much more focused on the billions and potential in the future that are going to be created. John Streppa: Our next question will be from the line of Clark Wright, followed by Scott Berg at Needham. Clark Wright: Any update on the ramp of events in the pricing curve that you've implemented to help enterprises scale usage previously and ongoing? Andrew Casey: Yes. So, one of the things that we were talking about, Clark, is that our new pricing and packaging that we rolled out, we did a lot of testing on. We had kind of a soft rollout this quarter. It was still one that was handheld because we hadn't implemented many of our systems related to doing the quoting or letting reps actually do the quoting themselves. That's all been now implemented, and we're seeing great responses back from clients. I think that they're appreciative of the changes we've made. They see that as they add more events that they're getting a marginal incremental cost reduction from their perspective. But for us, it's always going to be increasing the ARR as events increase. And I think they like the simplicity of how they can quickly adopt the modules that are surrounding analytics. Enterprises want cost predictability that they can align back to what their value propositions are. And as our sales team becomes more adept at showing and delivering what customers will get in value from Amplitude, I think that the pricing and packaging changes we've made will really reinforce their ability to move at pace. Clark Wright: That's helpful. And then one of the other things that you noted during the prepared remarks was the TAM expansion with Statsig. Can you explain what budgets you're going after? I think the other piece that was consolidation that's unlocked with this partnership? And what could you do with that, that you couldn't as a stand-alone entity? Spenser Skates: So the thing that, I mean, it's all kind of, there's overlapping. So, it's not like we don't have any of it. But they've done two things extraordinarily well. One, experimentation. The bleeding edge teams in AI are using them for experimentation. Like I don't know if you ever use ChatGPT, but if you ever get those like, hey, do you prefer prompt A or prompt B, that is stats internally at OpenAI powering that. And so, we're really excited that we get the opportunity to offer that out there just broadly to everyone. The other thing that they've done extraordinarily well is work with the data leader and specifically their data warehouse architecture. While we obviously, we've done that a bunch of Amplitude, I mean, they are definitely the bleeding edge on that, where they actively both allow you to query on warehouses directly as well as run experiments and a whole bunch of other infrastructure. And so that's really exciting for us because especially at some of these larger, at the largest customers, when you start getting into the multimillion-dollar range, we often see this category of functionality owned by the data leader. And as part of that, we're excited to get much closer to them and unlock a lot of data warehouse and data warehouse adjacent budget. John Streppa: Our next question will come from the line of Scott Berg at Needham, followed by Nick Altmann from BTIG. Scott Berg: Spenser, I want to talk kind of an architectural type question. With the pressure on gross margins, how have you thought about things like Open Source models or some small language models being used within the broader Amplitude platform versus maybe some of the frontier models that you're using with reference and such today. There's a very large private software company that kind of announced a large, what we'll call, Open Source model and their new platform. It was really intriguing in terms of what they're doing with it. I'd love to hear what you have all considered through that process. Spenser Skates: Yes. We're early on this to be clear. Inference spend is growing quite a bit, and you see that reflected in a few places, both the operating margin guide and the gross margin guide. Now ultimately, what we see from customers is, in most cases, they want the bleeding edge thing. So they want the latest Sonnet release or the latest Codex release from OpenAI or Anthropic or one of the other providers. And that also leads to higher scores on our benchmark. Like last quarter, we published a benchmark where we got a 76% accuracy rate. And we could downgrade that in some places, but you'd probably be looking at maybe a 40% accuracy rate, and that's a pretty significant difference. Now over the long term, we'll obviously find places to use cheaper, more effective models where it makes sense. But in general, and we'll sort out the path on gross margin as part of it. In general, right now, we're just in the, "hey, like let's make sure we win the market first and foremost, " and then there's optimization down the line that comes with that. So, we do expect our ability either with the Open Source models or some of the cheaper models like if you look at Anthropic's Haiku model, that's a really great one that for actually a good chunk of cases actually works decently well. But again, when you're doing some of the complex data reporting, especially with Amplitude, we see a lot of customer demand for high accuracy, and that means the most bleeding edge ones, and there's always a new one release. Now the good news in all of this is this, the curve on this is crazy. I mean you're seeing a factor of 10 or more improvements in the price performance of these models year-on-year. And so, it's hard to say exactly what it's going to be in 12 months from now. But I know we're, it's going to be a lot better, and that means we can choose, okay, exactly where it makes sense on the price performance so we have reasonable gross margins. Scott Berg: Understood. Very helpful. And then, Andrew, I wanted to dig into the Statsig acquisition a little bit more. I think when OpenAI acquired that business, they're doing about $40 million worth of ARR. Are you, I guess, saying or implying that the balance of the $16 million that you're bringing over versus that $40 million is effectively staying with OpenAI? And then I guess, did you happen to pay for any part of this business? Didn't know if there's a purchase price cash or stock, some sort of allocation that's committed to this that any of that any of that information we can? Andrew Casey: Now a couple of things you need to understand about Statsig's former business prior to OpenAI acquiring them. OpenAI was a fairly large customer for them. And that was a substantial portion of their ARR, right? So, then your question is what is OpenAI's intention with Statsig? It's back to what Spenser mentioned earlier. They're intending to use it for internal noncommercial reasons, and they're continuing to use it to support their core products. So, as we go forward, what we've taken on is the customer contracts, all of them. And we're taking on all of the brand assets, and we are increasingly going to be developing on the product itself. So, delivering great solutions for those clients and future clients, frankly, of Amplitude. Spenser Skates: One minor technical point, we're also talking about Statsig as a partnership, not an acquisition. So it's nuanced, but yes, it's an important one as well. John Streppa: Our next question will come from the line of Nick Altmann from BTIG, followed by Arjun Bhatia from William Blair. Nicholas Altmann: Awesome. Andrew, we appreciate the color on the Statsig contribution. But you guys, you've kind of talked about this before, but there's overlapping customers. There's overlapping product sets. At the same time, you guys have kind of also made an effort to consolidate your customers onto more of the Amplitude products. And so in terms of that revenue contribution framework that you outlined, what does that sort of imply for those customers where there is overlap working with both you guys and Statsig and on the product side and on the customer side? Just any other details you can kind of unpack in the assumptions would be helpful. Andrew Casey: We don't think, we don't actually see that there's huge overlap in the products that customers are using from Statsig and us. As Spenser mentioned, they're really good on experimentation. And they may, you may find customers where we did have overlaps if they were using analytics from Amplitude, but experimentation from Statsig. So there really isn't like overlapping revenue. It's an opportunity for us to actually add more and more to a consolidated platform. So if they didn't have such a replay or guides and surveys. In fact, we see a huge opportunity for us to go sell into the customer base that is overlapping. Not to mention, there's a whole new group of customers that Amplitude now has access to. Spenser Skates: Yes. It's not, Nick, I'll say it's not the cleanest like, okay, yes, theoretically, we both have experimentation. There's has been developed in a little bit of a different way. So it's a little bit of a different customer set. So there is a lot of great opportunity across both customer bases. Again, we're kind of three days into this thing. So we're still sizing that, and we'll have more detail when we go through on the Q2 earnings call. Nicholas Altmann: Understood. And then the NRR continues to accelerate. The ARR growth remained at 17%. So Andrew, can you just maybe unpack why we're seeing those two metrics disconnect? Is it something on the new logo ACV side of the equation? Is it gross retention dynamic? Maybe just talk to us about the disconnect between those 2 metrics. Andrew Casey: Yes. So in any given quarter, Nick, you have an amount of new ARR we're adding in new logo versus expansion. In fact, a year ago, you probably remember, we talked about having a really strong new logo quarter. and not making as much progression on net dollar retention. I would say in Q1 this quarter, you saw the opposite effect. You saw really good expansions happen. That may have been partially due to the really strong new logo quarter we saw in Q4. And in Q1, it shifted more to an expansion quarter than we anticipated. And every quarter, we try to take a look at what is the real balance of our pipeline between new logo and expansions and do our best to estimate what the impact is going to be. It wouldn't surprise me given what we've seen in Q1 that you might see a shift into Q2 where there is more new logo versus expansion. So that's why I was commenting that in some cases, we're seeing quarter-to-quarter progressions on our long-term plan. In other quarters, you might see it not improve as much, and it's really related to that balance. Is it overweighted in new logos in any given quarter? Is it overweighted in expansion? But the long-term view is that we're continuing to ship new products and add to the value that customers can purchase from Amplitude, which sets us up for additional expansions. John Streppa: Our next question will be from Arjun Bhatia from William Blair, followed by Billy Fitzsimmons from Piper Sandler. Arjun Bhatia: Perfect. I want to go back to the sort of the inferencing costs increasing. And Spenser, I'm just curious where the AI usage is coming in strong. And you've made a lot of sort of enhancements to your MCP server. And I'm curious if that's also driving a meaningful change in how your customers are using the Amplitude platform. Spenser Skates: Yes. A lot of customers are using MCP. We're seeing huge uses of that, huge uses of Global Agent, a good chunk on specialized agents. That's kind of the bulk. Those all kind of hook up to the same underlying services. So you can say, hey, find the root cause of an issue in this chart and that can either come in through MCP, come in through Global Agent, which is a chat interface or come through specialized agents, which is purposely designed. All of those combined, they're what is the vast majority of the usage of those is the vast majority of what the inference costs are. Arjun Bhatia: Got you. And then just your, I mean, your comment, and I think we see it broadly as well that the software development life cycle is changing very quickly. Obviously, it's starting in just code gen and code writing. And what is your, what is your perspective on the steps that will be required before you start to see it in your category? Like does the fundamental composition of the software team or the ops team need to change? And is there more change management ahead of us, I guess, before we see sort of this hockey stick in analytics and monitoring and experimentation. Like it's just more of a philosophical question, but I'm curious where we are in this cycle in your mind? Spenser Skates: It's early, yes, to be clear. So it's hard to prognosticate on exactly when. I'll tell you the best, so I'd say let me talk about tech and then I'll talk about non-tech. Within tech, they're already embracing this in terms of the automated instrumentation, in terms of automated analysis, automating the product development life cycle. You might have seen blog posts or Twitter posts about how companies are having an agent harness and then automatically building software. And so that's awesome. They're kind of already living in this future. And a lot of the companies we work with Granola is a great example I called out, are pushing us on that being like, hey, here's what we want to be relevant. Agent Analytics was one of the outputs of that. And we're in the early days with it. We just announced it, I think, 6 weeks ago, something like that. We had the first post about it 6 weeks ago. And so we're early days in the adoption, but very exciting. A lot of these companies are living in the future, and now it's on us to like, okay, let's make sure we go capture it. On the non-tech company side, it's much, much earlier. They're looking to get educated on the basics and hey, show me a maturity model, okay, if I'm not step 1, how do I get to step 2? And then, okay, I get like eventually, you guys will help me get to step 4 on having an agent harness and automatically building software, but that might be a few years away. And instead, they're just saying, okay, well, at least let me take some of my existing workflows and speed them up a whole bunch so that I don't need to do all this instrumentation. I can just use your CLI wizard or I can use the chat Global Agent in the chat interface and have it generated a dashboard for me and now I'm saving time. So they're more focused on making a bunch of existing stuff more efficient than going straight to the bleeding edge. So anyway, early days, I do expect in the next few years, it will look substantially different. But hard to say exactly which quarter and when. John Streppa: Our next question comes from the line of Billy Fitzsimmons from Piper Sandler, followed by Koji Ikeda from Bank of America. William Fitzsimmons: I'll keep to one because I know we're getting close to the end of the call. Spenser, for you. I appreciated the commentary in the prepared remarks on some of the new members of the C-suite. With Nate coming in as the Chief Commercial Officer, I want to double-click there because it seems like you're seeing some solid go-to-market progress in some of the initiatives you've already been doing, multiproduct adoption. Any additional color you can provide on his plan or top priorities going in and expected changes to sales motions, sales incentives, partner strategies and just general changes relative to what you've kind of already done? Spenser Skates: So yes, let me talk about the transition, and then I'll talk about going forward. So Thomas, our prior President, ran all go-to-market, did a phenomenal job over the last 3.5 years, really upgraded us to an enterprise company. Before, we weren't even engaging with executives consistently. Now we are, and we have all the services across the board to support them, and that's been fantastic. And you've seen that show up in terms of $100,000-plus customers, platform adoption, a whole bunch of other metrics. Nate actually, as our Chief Commercial Officer, was previously our Chief Revenue Officer and was in place reporting to Thomas for the last 3 years. So he's not actually, so that part is not actually new when he was running sales. The change in his role now is he's now running the post-sales motion as well as revenue operations and enablement. And so those, we're thinking about, okay, how do we streamline to make sure that is seamless between the AEs and then the technical success managers and all the parts of the post-sales motion. In terms of going forward, I had a slide on this briefly, but, so a few different things. One, just more technical talent in post sales generally. We've renamed it from customer success managers, gotten rid of a bunch of the extraneous roles and just called them technical success managers. We expect them to be able to educate prospects on the Amplitude product and platform, how to implement it, how to integrate it with their code base and be the go-to on AI when it comes to technical queries. We're also added 4 deployed engineers that can do a lot of the actual coding work. Now it's early in the function. We just spun up that group about a month ago, but that can do like actually code and hook up like a lot of the problem with AI adoption internally within companies is not just turn on the software, it's actually hook it up to the right systems. So, make sure it's plugged into the back end, make sure the SDK is in, make sure the events are instrumented, make sure that the right people are getting reports. We now introduce the MCP clients to make sure it can hook up the Slack and Linear or Atlassian or Jira or what have you. And so that's what the forward deployed engineers is, actually do the coding work on behalf or alongside the customer. So that change has been received. It's early, but that change has been received very well by customers. Really, what they're looking for is expertise on how AI is going to change analytics as well as the associated functions within product management, data and everything related. And so yes, like they're really excited to learn. Actually, one of the funny ones is like we've even gotten a lot of questions from customers about our AI week. It's like, "oh, I want to do the same thing. How do I do it? " And so even if it's not necessarily one-to-one amplitude related, just having people there that are able to speak about here is how you can upskill yourself with AI and transform your organization, that's the value. They see a lot of value in it, and so we want to make sure to provide that in the post-sales motion. John Streppa: Our next question will come from the line of Koji Ikeda from Bank of America, followed by Elizabeth Porter from Morgan Stanley. George McGreehan: This is George McGreen on for Koji Ikeda from BofA. I kind of wanted to ask as a follow-up to that last question on go-to-market changes. And forgive me if I didn't hear it, are there any sort of tweaks being made as it relates to sales incentive comp? And then kind of as an unrelated follow-up, I'd be interested to hear if there's any update. I believe last quarter, 25% of queries on the platform were coming from AI agents. And if there's any update to that number, I'm sure it's growing healthily. And yes, just kind of like what's kind of the outlook and trends there? Spenser Skates: For sure. In terms of sales incentive comp, we've had incentives in place both for platform adoption as well as for multiyear, and those are continuing. I mean we'll look at those, tweak those every quarter based on what it is we're trying to do with the business. Right now, like right this second, a lot of the priority is making sure that Statsig customers coming over are very successful, and we're able to continue to serve them and help them. So we're, Nate and the broader sales team are very focused on that, and we've put in a few specific incentives around that. But we're always tweaking that stuff. It's not like there's a major massive shift in strategy there. And then in terms of the Agent adoption, it continues to grow, and there has been a significant increase. We're not sharing numbers on this particular call, but we will have an update next quarter on agent adoption relative to human usage of data analytics. John Streppa: Our next question will come from the line of Elizabeth Porter from Morgan Stanley, followed by YC Wong from Citi. Elizabeth Porter: I'm on for Elizabeth Porter. Spenser, you talked about seeing the puck as fast as possible early in the call. I just wanted to ask you to help us frame where your incremental AI-related investments are going this year, whether it's infrastructure, experimentation tools, workflow automation, like where is the puck going for you guys? Spenser Skates: Specifically on expenses, the big one is inference costs. So to be able to support Global Agent, MCP, specialized agents as well as some of the other AI products, we've been spending quite a bit there. Those show up under cost of goods sold. So it's growing a lot. We'll monitor it and we'll figure out what the right long-term place for that to be and how do we value capture and get paid for it, too. But right now, we just want to drive adoption as the priority. The other big place is on internal tooling for the team. The big one we're using a ton is Quad. So that was what we standard on an AI Week. I think Anthropic has done an amazing job with Claude and both the Chat Claude.ai as well as Claude Code in terms of integrating it with existing business systems. So we actually, you hook it up to Slack, e-mail calendar. We actually built Salesforce hasn't gotten their act together yet, I'm building MCP connectors. We built their own, built a few others. And so now you can access all Amplitude data through that interface. And so that's a significant spend internally. And then we also spend some on the team on Cursor as well. There's a tail of them. Obviously, Granola is another one I mentioned on the call that is both a customer of ours and vice versa. But yes, those are the inference cost is the biggest one and then Claude for the team and then Cursor. John Streppa: And our last question will come from YC Wong from Citi. Yitchuin Wong: Just a quick one for Andrew, we just close in with AI. Last quarter, we talked about 25 AI customers like crossing over the 100 ARR mark, like if you're improving deep integration with the foundational models, the Cursor including, you are positioning Amplitude to capture a larger share of the AI market. Are these AI customers exhibiting like structurally different Net Retention Rate, consumption pattern that you're seeing compared to your traditional enterprise SaaS customer? And how do you view the opportunity longer term here? Andrew Casey: So certainly, we believe that AI companies as they standardize on Amplitude will continue to see greater and greater value from using Amplitude and they embed and use it to drive marketing purchase, build better products, get better insights on how users are acting. And we're seeing, in some cases, some of the larger AI customers we have increase their data ingestion into our platform. And one of the things we talked about on the gross margin headwinds was related to greater data ingestion. I think there was a confluence of that's all related to the AI agents. Well, there's also very classic cases where customers are using more of our capabilities and they're expanding their data usage and some of the AI companies are certainly exhibiting that. And one of the things that Statsig had in their customer base was a strong AI customer component. So we look forward to updating you all in Q2 on what that looks like with the combined product set and customers. John Streppa: Thanks, YC. And that will conclude our first quarter earnings call. Thank you for your time and interest. We look forward to seeing you on the road this quarter as we attend conferences hosted by Needham, Jefferies, Bank of America and D.A. Davidson. Take care. Spenser Skates: Awesome. Thank you, everyone. Andrew Casey: Thank you.
Operator: Good afternoon. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to Pursuit's 2026 First Quarter Earnings Conference Call. [Operator Instructions] I will now hand the call over to Carrie Long. You may now begin the conference. Carrie Long: Good afternoon, and thank you for joining us for our 2026 first quarter earnings conference call. During the call, you'll hear from David Barry, our President and CEO; and Bo Heitz, our Chief Financial Officer. As David and Bo cover our results and outlook, they will be referencing our earnings presentation, which is available on the Investors section of our website. We encourage investors to monitor this section of our website in addition to our press releases, filings submitted with the SEC and any public conference calls or webcast. Today's call will contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to the disclaimer on Page 2 of our presentation for identification of forward-looking statements and for a discussion of risks and other important factors that could cause results to differ from those expressed in such statements. During the call, we'll also discuss non-GAAP financial measures and definitions of these measures are provided on page 3 and reconciliations to the most directly comparable GAAP financial measures are provided in the appendix of the presentation and in our earnings release. And with that, I'd like to turn the call over to David, who will start on page 4 of our presentation. David Barry: Thanks, Carrie, and thank you all for joining us as we review our record 2026 first quarter results and our forward look to continued significant long-term growth and value creation. We're off to a strong start in 2026. Our strategy is working, and there's real momentum in the business. Let me begin with powerful growth drivers that speak to this. First, we delivered record first quarter results. Revenue grew 37%, and we delivered meaningful margin improvement. We saw healthy demand across our year-round experiences, strong execution by our teams and continued discipline on costs. Our team stayed focused on what matters most, delivering great guest experiences, and that showed up in yield and profitability. It's exactly how we wanted to start the year. I'll also recognize Tabacon, which delivered strong performance with $10 million of revenue in the quarter. Tabacon experienced very strong demand during the quarter, delivered an exceptional guest experience and made smart operational adjustments to drive volume growth through its thermal river attractions. We couldn't be happier about the quality of our team and leadership in Costa Rica, how well this business is performing following our acquisition in '25 and the strength of its cultural and strategic fit with Pursuit. Second, looking ahead to 2026, our demand indicators are positive and show continued strength. We're confident in the demand backdrop and our ability to deliver results in line with our prior guidance range for double-digit growth in revenue and adjusted EBITDA at the midpoint, excluding FlyOver. Our outlook reflects continued growth in revenue and profit and the flexibility to keep investing in the best opportunities. Third, we're making steady progress towards our Vision 2030 targets, continuing to invest in our iconic assets while maintaining strong discipline around capital deployment and long-term value creation. That includes being opportunistic with share repurchases. To date, we've repurchased $40.4 million at an average price of $35.40. And with the recent approval from our Board to increase our authorization by another $50 million, we have approximately $60 million remaining for future repurchases. We're confident in the long-term value of the business, and we're excited about our strong momentum heading into our peak summer season and beyond. So let's turn to Page 6 and walk through what differentiates Pursuit and why we're built to perform through cycles and keep growing. At our core, we own and operate iconic irreplaceable experiences in some of the world's most beautiful places. Today, our portfolio includes 17 world-class sightseeing attractions and 29 distinctive lodges supported by integrated dining, retail and transportation, allowing us to serve guests across their entire journey. We operate at scale across 4 countries in true bucket list destinations, including Banff, Jasper, Waterton Lakes, Alberta and Golden BC in the Canadian Rockies, from Whitefish across Glacier National Park in Montana and experiences that stretch from Seward to Denali in Alaska, together with Iceland and Costa Rica. Pursuit comes to life through our 4,600 team members whose passion for hospitality and place turns iconic locations into unforgettable experiences. Put simply, this is what makes Pursuit special, a portfolio of one-of-a-kind experiences at scale with real staying power and a foundation that gives us confidence as we continue to elevate experiences, grow and create long-term value. Let's turn to page 7 and look at our site-seeing attractions, and this is where our model really stands apart. We own and operate iconic point of interest site-seeing attractions that provide guests of all ages and abilities access to unforgettable views. These are experiential infrastructure assets that anchor destination visitation and guest experiences. A great example is the Banff Gondola. It's not just a ride. It's one of the defining ways guests experience Banff National Park from the ascent to the dramatic 360-degree summit views and top-rated mountaintop dining. That's what makes it an absolute must-do and a powerful demand driver. This dynamic plays out across our portfolio. That uniqueness drives sustainable yield growth as we continue to elevate experiences and guests are willing to pay for the differentiation. These attractions are largely fixed cost operations, creating strong operating leverage and attractive flow-through as volume and yield grow. The differentiation carries directly into our lodging business on page 8. Our lodges are distinctive destination-anchored properties in iconic supply-constrained destinations where the destination itself drives demand. Guests aren't just looking for a room. They're staying inside places like Jasper National Park with direct access to the experiences that define the trip. These markets have highly restricted bed bases, which creates perennial demand and very attractive long-term supply dynamics. Performance here isn't driven by the hotel rate cycle. It's driven by experience, access and authenticity and our integration with our attractions amplifies that advantage. We also benefit from a highly differentiated demand channel with about 40% of our lodging mix coming from global travel trade partners. These long-standing relationships deliver multi-year foundational demand visibility, support peak and shoulder seasons and drive meaningful revenue beyond the room, which is not the typical hotel company or REIT model. And that brings us to the simple conclusion on page 9. Pursuit is in a category of one, and that's why traditional comparisons don't hold. We're not a theme park company. As the chart on the left shows, our site seeing attractions drive outsized growth in revenue per visitor, fueled by experience quality, scarcity and guest willingness to pay for great experiences. And we're not a commodity hotel company either. As the chart on the right shows, our lodging portfolio delivers RevPAR growth that meaningfully outperforms the broader U.S. hotel market, driven by access and authenticity, not the rate cycle. Page 10 provides a view into the strong perennial demand for our iconic destinations. Over the past 25 years, our markets have demonstrated resiliency through economic cycles and other external forces. And as we reflect on the current macro backdrop, we believe our geographies are well positioned to sustain strong demand. Now on page 11, I want to briefly highlight the power of our experience-driven operating model. We're built attractions first. Our sightseeing experiences anchor demand and economics and everything else is intentionally designed around that foundation. By connecting attractions with lodging, food, retail and transportation, we provide a seamless guest journey. And when those pieces come together, value compounds. Guests spend more, demand extends beyond peak periods and the experience just gets better. At the same time, scale and integration drive strong economics through fixed cost leverage and operating efficiencies. And importantly, this model is repeatable, giving us a clear path to expand within existing destinations, enter new iconic markets and compound growth over time. Stepping back on page 12, what's compelling is Pursuit's positioning relative to global travel trends. Travel today is about experiences over things, and people plan trips around must-do bucket list moments, exactly what we offer. Growth in outdoor and adventure travel connects directly to our portfolio of iconic natural destinations. As travelers increasingly prioritize wellness and longevity, our natural immersive experiences deliver exactly what they're seeking, mental restoration and physical vitality that support long-term well-being. Demand for curated itineraries and group travel continues to rise, and our experiences remain essential stops for global tour operators. More flexible work patterns are also extending stays and supporting broader seasonal demand. At the same time, technology amplifies discovery, surfacing the very viewpoints and experiences we specialize in delivering. And now on page 13, the element that ties everything together is our culture. Great assets only create value if you execute well. And at Pursuit, we're guest obsessed. Hospitality excellence is at the core of everything we do. And our focus on people, both our team members and our guests is a real competitive advantage. We have deeply engaged teams who take pride in delivering exceptional experiences, and it shows in the results, strong guest satisfaction, leading Net Promoter Scores and top TripAdvisor rankings across our portfolio. We also use Medallia to continuously listen, learn and improve in real time. Reviews matter. Great reviews, they lift us up and tough reviews force self-reflection followed by real-time action to improve. The connection to performance is clear. Engaged teams create great experiences. Great guest experiences drive happiness and referrals, which increases demand, higher spend and durable yield growth. And that translates into strong profitability over time. Let's turn to page 15 and briefly cover our strategy to grow and create long-term value through four proven levers. First, we expect every business within Pursuit to improve performance, which drives continuous year-over-year growth across our iconic experiences through strong demand and a relentless focus on the guest experience. Second, we invest in ourselves through low-risk organic growth projects that elevate our experiences, create additional capacity and generate attractive returns. Third, we grow through strategic acquisitions of experiential infrastructure that strengthen our portfolio. And finally, we remain opportunistic with share repurchases at compelling valuations as part of our disciplined capital allocation. These levers have proven to create significant value as demonstrated by our track record. As shown on page 16, Pursuit is a powerful growth engine with more than a decade of compounding execution. From 2015 to 2025, we quadrupled revenue at a double-digit CAGR of approximately 15%, while roughly tripling guest volume across attraction visits and lodging room nights sold. We scaled from four attractions to 17 and from 12 lodges to 29, while elevating the guest experience and strengthening the platform. That history matters. It demonstrates our ability to operate, integrate and scale, and it's the foundation for the confidence we have looking forward. As shown on page 17, we're not changing the playbook. We're driving a consistent strategy and approach to continue executing growth at pace. From 2014 through 2025, we invested approximately $578 million across major growth projects that generated approximately $102 million of adjusted EBITDA in 2025 at an effective multiple of roughly 6x. Looking ahead, our road map to 2030 looks very similar. We have approximately $300 million of organic growth investments in development from 2026 through 2030, with approximately $200 million front-loaded over the next 2 years. We expect those investments will contribute more than $40 million of incremental adjusted EBITDA by 2030 at an estimated effective multiple of less than 7x with a meaningful adjusted EBITDA inflection beginning in 2028. And that organic growth is complemented by a robust pipeline of strategic acquisition opportunities that fit naturally within our platform. This isn't a new strategy. It's proven execution, repeated at scale with a clear line of sight to the next phase of growth. To make that tangible, I'll highlight a few examples from our $300 million organic growth pipeline. Starting with attractions on page 18, there are several high-impact growth projects in progress. Investments in the Jasper SkyTram, Banff Gondola and Denali Backcountry Adventure build on already iconic experiences, elevating storytelling, access and engagement to drive incremental demand and higher revenue per guest. In Jasper, we're reimagining the Jasper SkyTram by replacing an aged capacity-constrained trans system with a modern gondola, significantly improving the guest experience, throughput and efficiency and aligning the experience to better meet group demand. With a smoother, more immersive journey from arrival to summit, this multi-year investment will reinforce the SkyTram as a must-do anchor within Jasper National Park. In Banff, we're continuing to elevate the Banff Gondola, including the expansion of Sky Bistro, where demand consistently exceeds current capacity. I recently visited the renovated space and was incredibly impressed with the improved guest experience. It's a powerful example of what happens when we put guests first, thoughtful design, strong execution and a clear sense of place. This project increases premium guest capacity and revenue per visitor while enhancing one of the most iconic summit dining experiences in the Canadian Rockies. We're also planning additional growth initiatives to further strengthen the end-to-end guest journey at the gondola. And in Alaska, we're underway to reintroduce the Denali Backcountry Adventure as a premium, high-margin guided experience deep within Denali National Park, designed to deliver rare access and unforgettable moments when road access reopens in 2027. The goal is simple: reinforce these assets as absolute must-do experiences in their respective markets. We're also investing on the lodging side, as shown on page 19, and growth projects are progressing well. Projects like the Forest Park Hotel Woodland Wing, Grouse Mountain Lodge, and Lobstick Lodge are not typical hotel upgrades. These are strategic repositionings of distinctive lodges in iconic supply-constrained destinations, designed to elevate experiences and long-term earning power. In Jasper, the Forest Park Woodland Wing provides a compelling example of the returns we can drive from renovations that improve the guest experience. Phase 1, which we completed last year, is already translating into meaningful ADR uplift with renovated rooms yielding a 22% premium over non-renovated rooms. We're excited to complete the next and final phase of the room renovations ahead of this peak summer. In the town of Whitefish, Montana near Glacier National Park, we're repositioning Grouse Mountain Lodge to serve higher-end lodging and year-round event demand with the first phase, including room upgrades, pool enhancements and a new purpose-built event pavilion. The first phase of room renovations will be complete for this summer season, and our reservation pace points to strong demand and higher ADRs for these rooms. And at Lobstick Lodge in Jasper, we're planning investments to better capture strong year-round demand from both consumer and tour and travel segments in one of Canada's most iconic national parks. These projects position our lodges to deliver incredible guest experiences and in turn, deliver outsized RevPAR growth, attract higher-value guests and generate durable returns, all while being executed through phased renovations during seasonally slower periods to protect occupancy and cash flow during the renovation itself. Our organic growth projects demonstrate how much opportunity we continue to see within our existing footprint and how we think about driving continued growth through investments in ourselves to elevate experiences, delight our guests and deliver strong shareholder returns. We apply that same investment discipline to acquisitions with Tabacon on page 20 being a great proof point. Tabacon exemplifies exactly what we look for in an acquisition, high-quality, attraction-focused, experiential infrastructure. Located at the base of Costa Rica's Arenal Volcano with unique access to the country's largest naturally flowing hot Springs, it's a truly irreplaceable experience. Importantly, execution is validating our investment thesis. We're seeing strong attraction visitation, healthy lodging performance and continued high guest satisfaction, driven by a team that's performing incredibly well and fully aligned with our culture. Under prior ownership, Tabacon's premium thermal river experience was largely operated as a hotel amenity for overnight guests with tight restrictions on day use visitors. In a clear demonstration of the growth mindset and guest obsession that we have within Pursuit, Tabacon's leadership is thoughtfully increasing attraction visitors while protecting the premium guest experience through disciplined guest flow management. Additionally, recent enhancements, including the improved arrival experience in the Hot Springs Pura Vida rebrand are gaining traction, and 2026 rooms revenue on the books is tracking ahead of prior years. Operational improvements alone create a clear path to reduce the effective adjusted EBITDA multiple below 9x by year 3. Beyond that, we see meaningful incremental upside from organic growth opportunities across the 570-acre property. And over time, the ability to build a broader Costa Rica collection through complementary tuck-in acquisitions. Tabacon is exactly what we said we were looking for and a clear example of the disciplined acquisition with early execution and a long runway to compound value. We're pursuing investment opportunities from a position of financial strength shown on page 21. Pro forma for the pending sale of FlyOver, our March 31 liquidity was approximately $250 million, and our pro forma net leverage was less than 1x, which is well below our 2 to 3.5x target range. With strong liquidity, low leverage and continued EBITDA growth, we have substantial capacity for disciplined deployment of capital into organic growth projects, strategic acquisitions and opportunistic share repurchases that reinforce our confidence in the long-term value of the business. And all of this brings us to our Vision 2030 on page 22 and why we're so confident about what lies ahead. We're executing a disciplined and proven strategy to compound growth, expand margins and create long-term shareholder value. By 2030, we're targeting more than $265 million in adjusted EBITDA, which is more than double 2025 and margins above 30%. Vision 2030 isn't aspirational. It's built on a decade of successful execution and a model designed for sustainable double-digit growth at scale, driven primarily by organic expansion across our iconic experiences. With a high-return investment engine, expanding operational leverage and free cash flow generation and continued financial discipline, Vision 2030 reflects exactly what Pursuit is built to do, elevate experiences, grow with discipline, scale with leverage and compound value over the long term. So with that, I'll turn it over to Bo, who will walk you through our first quarter financial highlights and reaffirm 2026 outlook starting on page 24. Michael Heitz: Thanks, David. As highlighted earlier, we are off to a great start in 2026. Our first quarter revenue grew 37% to reach a record level of $51.6 million. This growth was primarily driven by strong performance at Tabacon, which was acquired in July 2025 and is already exceeding our expectations as well as continued strong demand across our broader portfolio of year-round iconic experiences. Our seasonal net loss attributable to Pursuit was $24.9 million as compared to $31.1 million in the prior year. The year-over-year improvement was primarily driven by lower transaction-related costs from the GES sale and stronger revenue. Our adjusted net loss was $26.2 million as compared to $26.9 million in the prior year. The year-over-year improvement primarily reflects higher adjusted EBITDA, partially offset by a lower amount of seasonal first quarter losses being allocated to noncontrolling interest. Adjusted EBITDA improved by $2.6 million year-over-year to negative $14.9 million during the seasonally slow first quarter, primarily driven by higher revenue with strong margin improvement, supported by the contribution of Tabacon and continued cost discipline. Now let's look at our attractions performance on page 25. Q1 attraction ticket revenue reached $23 million, reflecting a 22% year-over-year increase, driven by strong performance at Tabacon and increases in same-store effective ticket prices. Same-store constant currency effective ticket price, which excludes Tabacon grew by 5% as compared to 2025. This improvement was enabled by continued demand for our one-of-a-kind sight-seeing attractions and focus on guest experience with strong performance from our year-round Canadian attractions in Banff and from Sky Lagoon in Iceland. Next, let's turn to our hospitality performance on page 26. Q1 lodging room revenue totaled $13 million, reflecting a 78% year-over-year increase driven by strong performance at Tabacon and improvement in same-store constant currency ADR. As David discussed, our lodges are situated in iconic high-demand destinations, offering guests unparalleled access to extraordinary natural landscapes and seamless proximity to our most sought-after pursuit attractions. Within these destinations, our same-store constant currency RevPAR, which excludes Tabacon, grew 6% as compared to 2025. Turning to our early demand indicators on page 27. Our lodging pacing for 2026 across both Canada and the U.S. continues to support our view for continued strong demand. Revenue on the books for our Canadian and U.S. lodging properties is pacing ahead of the same time last year. In addition to these confirmed room bookings, we continue to see strong demand from our travel trade partners this year, which is not fully reflected in these numbers. As a reminder, our travel trade partners hold inventory with strict release dates, generally 90 to 120 days out. Unsold touring travel inventory gets released and is immediately available to FIT, consumer direct and OTA channels. As we approach our core operating season, we're keeping a close watch on booking pace and other forward indicators and are ready to adjust if we see any shifts in trends. Let's turn to our reaffirmed full year 2026 financial outlook on page 28. We continue to expect 2026 to be a pivotal year for execution of large-scale multiyear, high-return growth projects, combined with continued strong profitable growth. Our unchanged adjusted EBITDA guidance range of $123 million to $133 million reflects an increase of approximately 9% at the midpoint from 2025. Adjusting to exclude FlyOver from both years, revenue and adjusted EBITDA are expected to increase double digits at the midpoint from 2025, with adjusted EBITDA margin improvement. The pending FlyOver sale remains on track and is expected to close in May. Our outlook reflects solid underlying growth drivers, including continued demand for authentic experiential travel and iconic destinations and improvements in guest experience and revenue management that are driving higher effective ticket prices, ADR and visitation. Strong flow-through and disciplined labor and expense management further enhance year-over-year EBITDA growth. We anticipate investing $70 million to $80 million into growth capital expenditures during 2026, including multi-year growth projects that are expected to have a minimal impact on 2026 results and propel our growth into future years. This growth CapEx guidance range has been reduced relative to our prior guidance due to a shift in the expected timing of cash outlays from 2026 to 2027 as we continue to actively work through approvals and planning. Project completion time lines remain on track. Finally, as a reminder, the pending sale of FlyOver will shift our income tax position in a favorable direction driven by an expected improvement in our U.S. financial results. As a result, we are anticipating a much lower effective tax rate in 2026 and beyond of approximately 22% to 26% -- and with that, David, I'll turn it back to you. David Barry: Thanks, Bo. Across Pursuit, we're gearing up to welcome guests and deliver exceptional experiences as we head into what we expect will be a strong peak summer season. I want to thank our team members and leadership for their dedication, their passion and their hospitality excellence. They show up every single day focused on creating unforgettable memories for our guests. And to our shareholders, thank you for your continued support as we execute our strategy and build long-term value. We have the right assets, the right strategy and the right team, and we're very focused on execution. With that, let's open up the line for questions. Operator: [Operator Instructions] Your first question comes from Jeff Stantial from Stifel. Jeffrey Stantial: Maybe starting off by drilling into more of the demand side, slide 27, showing lodging bookings. David, can you just talk about -- if you drill into the more recent period, have you seen any impact -- any discernible impact so far following the start of the conflict in the Middle East? And then broadly speaking, if you look back historically, can you just remind us what sort of impact or even tailwind that you typically see when gas prices move much higher very quickly during the sort of the peak summer months? David Barry: Yes. So let me start with -- I'm just going to check and see if you can hear me. Jeffrey Stantial: Loud and clear. David Barry: Perfect. Thanks, Jeff. I'll start with the conflict in the Gulf. I think that the challenge there is obviously something that's very impactful for people. It affects the region. We are quite isolated from that in our part of the world. And so we are not feeling impact from the conflict in the Gulf. It's not affecting booking patterns or travel behavior. I think that the security and safety of our destinations is well established. And so if you look at the chart in the investor deck where we show you sort of visitation to our destinations, that's on page 10. You can see that there's a real continuity. And I think that in times of crisis for the world on a global level, that's when, again, I think we get more tailwinds than we get headwinds for our destinations. Jeffrey Stantial: That's great. And maybe actually sticking on this subject, but thinking through some of the second order effects. Have you done any work yet or have a sense for potential impact to the project cost and project scope if you do see crude stay here at, call it, north of $100 a barrel. Just how much of an impact would that have on your growth CapEx plans? Michael Heitz: Yes. Thanks, Jeff. We're not expecting significant impacts for our business from a fuel cost perspective. I'll speak first to the OpEx side, where clearly, we're not immune to fuel cost increases. We do operate boats, motor coaches, things like that. But fortunately, for us, it's not a major expense line for our business. And so some impacts, but not major on there. And honestly, I think the same is true on the capital side where these are multiyear projects. A lot of it is not overly specific to the fuel impacts on it. So we'll keep monitoring it, but I'm not expecting major impacts from that... David Barry: Also, I'd say the pricing … dynamic pricing enables us to flex. And so if you have issues where all of a sudden, you have a change in fuel costs or other things, you can move price dynamically. And I think it just really helps because you're able to price based on demand, you're able to price on exterior factors and so on. So all of those things really important. Operator: Your next question comes from Eric Des Lauriers from Craig-Hallum. Eric Des Lauriers: First one to get just a bit of a piggyback on the last one there. So sort of separating the violence in the Middle East, just sticking with overall like fuel costs specifically. Historically, how has that impacted visitation to your locations? I mean, on the one hand, sure road trips to national parks become more expensive, but so do flights. So I don't know whether to think of this overall as more of a headwind or more of a tailwind if consumers' wallets get pinched from fuel costs. Do you have any sort of info historically on how that impacts visitation? David Barry: Yes. First, let me start with overall cost of fuel and how that affects travel. So the effect is marginal on our business. People are making decisions and they may be booking a less exotic trip. They're maybe not going to go to the Middle East. They're not going to go to other parts of the world, but they are going to be in their own backyard having fun. And so we see continued momentum. Eric Des Lauriers: My line is disconnected or perhaps yours, but I'm not able to hear anything. Operator, are you there? Is my line live? Operator: You are still connected, sir. Can you hear us? [Operator Instructions] Eric Des Lauriers: Yes, I can hear you fine now. All right. Great. Sorry about that... Operator: I'm sorry, sir. [Operator Instructions] David Barry: Yes, we can hear you. Operator: Okay. Please go ahead, sir. Eric Des Lauriers: My apologies for the error there. So just excluding the actual sort of physical threats out of the Middle East, just sticking with fuel prices in general, historically, how has that impacted visitation to your markets? I see on the one hand, road trips to national parks, for example, get more expensive, but so do flights. So I'm just not sure whether conceptually think of this as more of a headwind or a tailwind to your business. I'm just wondering if you have sort of any historical data to help inform us how elevated fuel prices may or may not impact visitation to your markets? David Barry: Elevated fuel prices in times of global crisis have had marginal effect, if any, on the business. And so with the mass affluent clientele, you have folks that are deciding, I'm going to perhaps take a less exotic trip somewhere in the world, and I'm going to focus on having fun and creating memories in my own backyard. So our business, and again, I would refer you back to page 10 in the deck that really articulates the visitation. And that shows you all the way back to 9/11, SARS, the global financial crisis, the impacts of COVID and so on. So the fuel really doesn't have an impact in terms of visitation. We're not seeing a slowdown on the booking side. And guests are planning and organizing their trips for the coming summer season. In the U.S., we're 50% sold through on inventory. In Canada, we're high 40s. And so there's great momentum. Booking pace is strong. ADR and RevPAR lift is strong. And so we're continuing to perform. And so it's a great newsy thing to talk about, but it's not something that's having a big impact on the business for Pursuit. Eric Des Lauriers: That's great to hear. And just my second question here. So you guys have highlighted the sort of friendly competition you have internally to find the most attractive CapEx projects and how that's been a real positive feature of your culture there. And I'm just wondering how share buybacks sort of work into the mix there? And just overall, any comments you have on sort of viewing the trade-off between spending -- spending cash on buybacks versus growth CapEx? Just conceptually how you think about that would be helpful now that buybacks are quite active here. David Barry: Yes, I'll give my view, and then I'll cede the floor to my colleagues. So first off, I would say the energy and excitement from the internal team around the projects that they're working on, that's palpable. You can feel it. And so they're excited about growing and improving their businesses and making the right investments and participating in a process that allows them -- I mean it's a true meritocracy. Pursuit is a meritocracy where their great ideas come to the surface and get funded just based on the quality of those ideas. And so when you think of the four levers of growth, we're expecting each business to improve year-over-year. We're investing in ourselves through our organic refresh. The acquisition side is powerful. And then the final lever is our share repurchase program, which is also a strong belief in investment in ourselves. And so those things go together. Michael Heitz: And I would add, Eric, that given where we are from a capital structure perspective, where we expect to be sub 1x net leverage after the sale of FlyOver that we're in a position where we can really pursue all four of those growth levers simultaneously. And so the share repurchase step of that is really about being opportunistic on when there's a disconnect from a valuation perspective, and that's where we're going to aggressively pursue repurchases when we can get a strong return on that. Operator: [Operator Instructions] And we'll go to Alex Fuhrman from Lucid Capital Markets. Alex Fuhrman: David, interested to see, it looks like ADRs are going to be up mid-teens or at least that's how they're tracking right now for you in the Canadian Rockies. You've got a really long history in the region here. Are we looking at kind of record hotel prices in the region in either Canadian dollars or U.S. dollars or both? David Barry: Yes, I'm not sure I would describe it in that way. I think what we have is a move to value. I think that guests appreciate experiences that have been improved, that are thoughtful, that have been intentionally designed to create great guest experiences and that they're willing to pay you for those experiences if their needs are being met in a way. And so you measure not just what you might get from a yield and price increase, but you also measure guest satisfaction. The other thing I would point out is if you take Banff as a microcosm of the Canadian Rockies, a significant hotel investment into Banff by all operators, not just ourselves. And so the quality of hotel product has improved dramatically, and that will continue to improve. And so as experiences get better, prices can change, but they change with, I think, a sense of momentum for guests who are satisfied with the product that's being delivered and find real value there. Michael Heitz: I think the only other thing I would add is that, Alex, just on that point, we're -- where we are in the cycle right now, we're about halfway through our percent of rooms available that are sold. And that average ADR that you're referencing, it's a great directional reference for positive trends that we're seeing in the business. And there can definitely be some nuances with various channels and mix of when things are sold year-over-year. That can create some noise in the specific number of it. But I think the directional indication is that we expect some strong ADR growth. Alex Fuhrman: Okay. That's really helpful. And then I wanted to ask about all the work you're doing at the Jasper SkyTram. Obviously, you've got a lot of history operating the Banff gondola to apply there. What's been the biggest bottleneck to growing that? Is it parking or size of the restaurant or the number of cars that can move on the gondola? Just curious what were kind of the biggest pain points there for you? David Barry: Well, I think when you go back in time, right, go to 60 years ago when that lift facility was built and travel back in the time machine with me Alex, and you think about what it was like 60 years ago. And that tram car, I think you've been on it. I mean it's one car up, one car down, its capacity itself is constrained. And the lift infrastructure is 60 years old. So I think primarily what you're changing first is you're improving dramatically the lift infrastructure. And what that does is it provides a much better guest experience, lift smoother, lift is quicker, really beautiful and also accommodates a full group as an example, where the turnaround time with the old Jasper SkyTram was more challenged for our group business because they're on a set itinerary. They're trying to see the world in three days. And so they're moving quickly from one place to another. And so the opportunity there is to really thoughtfully work on the experience design in Jasper. Reminder, Jasper is very different than Banff. And our colleagues and team members that live in Jasper, Jasper is a unique destination, unique in the world. And so the experience will be much more Jasper-esque and something that -- but capacity improving, quality of experience improving. Everything from restrooms to the lift itself will see great improvement. So we're excited about that. Operator: And everyone, at this time, there are no further questions. David Barry, I'll hand the call back to you for any additional or closing remarks. David Barry: Well, thanks so much. Thanks, Lisa, for marshaling everything, dealing with some sound in and outs. We appreciate that. Thank you, everyone, for tuning into our Q1 2026 earnings call. We'll be following up with many of you, but just appreciate your attention and interest in the world of Pursuit, and we look forward to seeing you soon in a destination near us. Thank you. Operator: This does conclude today's conference call. You may now disconnect.
Operator: Hello, everyone, and thank you for joining us, and welcome to Sturm, Ruger & Co.'s 2026 Q1 Earnings Call. [Operator Instructions] I'll now hand the conference over to Todd Seyfert, President and Chief Executive Officer. Please go ahead, Todd. Todd Seyfert: Good afternoon, and welcome to Sturm, Ruger & Company's First Quarter 2026 Earnings Conference Call. I'm Todd Seyfert, President and Chief Executive Officer. Before we get started, I would like to turn it over to Sarah Colbert, our General Counsel, for the caution on forward-looking statements. Sarah Colbert: I would like to remind everyone that some of the statements we make today will be forward-looking in nature. These statements reflect our current expectations, but actual results could differ materially due to a number of uncertainties and risks. You can find more information about these factors in our most recent Form 10-K and other filings with the SEC. We do not undertake any obligation to update these forward-looking statements. Todd Seyfert: Thank you, Sarah. There's a lot for me to comment on from the quarter. But before I get into the financials, I would like to step through a few recent news items from the past few weeks. First, as we ended the quarter, we announced the appointment of Andrew Wieland as Senior Vice President and Chief Financial Officer, following the planned transition of Tom to me. We are excited for Andrew to join our team in this capacity and look forward to his leadership in the continued execution of Ruger's long-term plan. I would like to thank Tom for his many years of dedicated service and financial stewardship. As I stated in our announcement, we are grateful for Tom's leadership over the last three decades and wish him the very best in his next chapter. He will be noticeably missed from this call. Additionally, I want to acknowledge the announcement of our strategic cooperation agreement with Beretta Holding, our largest shareholder. After months of constructive dialogue, we have reached a cooperation agreement with Beretta Holding that avoids a proxy contest and ensures we remain focused on running and growing our business. This outcome reflects our commitment to act in the best interest of all Ruger shareholders while bringing in a significant investor with deep industry knowledge and a shared focus on our success. This agreement provides stability, removes distraction and allows us to move forward with clarity as we execute our 2026 plan and continue building toward our long-term strategy. Lastly, I would like to comment on a situation that occurred Monday with the New York Stock Exchange. Unfortunately and unexpectedly, the exchange inadvertently disclosed information related to our dividend prior to our earnings release this afternoon. So that there is no confusion, we immediately filed an 8-K regarding this event. Now let me walk through the financials for the quarter. Net sales for the quarter increased 4% to $141 million compared with $136 million in the prior year period. Diluted earnings were $0.01 per share compared to $0.46 per share in the corresponding period of 2025. On an adjusted basis, excluding the impact of expenses related to the strategic cooperation agreement with Beretta Holding and organizational changes implemented in February, diluted earnings for the quarter were $0.27 per share. In the first quarter, we generated $19 million of cash from operations. Year-to-date, capital expenditures totaled $5 million. The company expects capital expenditures to total $30 million for the year for continued investments in new product introductions, expanded capacity for product lines in greatest demand, upgraded manufacturing capabilities and strengthened facility infrastructure. On March 28, 2026, our cash and short-term investments totaled $105 million. Our short-term investments are in United States treasury bills and in a money market fund that invests exclusively in United States treasury instruments, which mature within one year. Our current ratio is 3.5:1, and we have no debt. In the first quarter of 2026, we returned $1.3 million to our shareholders through the payment of a quarterly dividend. The company announced that its Board of Directors declared a dividend of $0.11 per share for the first quarter for shareholders of record as of May 14, 2026, payable on May 29, 2026. This dividend equates to approximately 40% of net income. As you can see, Q1 marks our fourth consecutive quarter of year-over-year top line sales growth, a clear indication that the actions we've taken over the past year are gaining traction. We continue to outperform the broader market as measured by a sales increase of 3.2% versus only a 1.6% increase in adjusted NICS, reinforcing that our strategy is not only working internally but resonating with consumers. For the period, units ordered increased 28% to 525,000 units versus 410,000 units for the same period last year. Correspondingly, our backlog of $330 million exceeded the $275 million for the same period in 2025, an increase of 20% year-over-year. A key driver of this performance is the strength of our innovation and new product launches. Demand for our newest offerings remains exceptionally strong, particularly those introduced over the past two quarters, including additional models of the American Generation II Rifle, the Glenfield Rifles, Harrier rifles, the Red Label III shotgun and the RXM pistol. This momentum is reflected in the fact that new products accounted for $51.6 million, representing 41% of total firearm sales in the quarter, a meaningful indicator of both innovation and consumer relevance. At the same time, we made measurable progress on profitability. Through disciplined operational cost reductions and improved execution, we have now delivered continued improvement of adjusted operating profit over the past four quarters. While we still have work to do, the trend is clear. We are building a more efficient and more profitable business. Taken together, these results reinforce that we are moving in the right direction. Our 2026 plan, aligned with our broader Ruger 2030 strategy, is taking hold across the organization, from product development to operations to go-to-market execution. Our focus remains unchanged: improve profitability, align factory capacity with demand, right-size the business to our future product portfolio, increase output on proven high-demand product lines, and expand into new markets through complete product ecosystems and accessory offerings, not just stand-alone models. As I have stated before, these priorities are not short-term actions. They are foundational steps that position us for sustained performance. This year is pivotal in laying the groundwork for Ruger 2030, our long-term framework built on profitable expansion, product innovation and agile responsiveness. With that said, during the quarter, we did incur certain nonrecurring expenses, including approximately $3.2 million in costs associated with the Beretta agreement, $2.5 million related to a reduction in force in February and $1.7 million in a one-time expense related to the accrual of retention awards. We also experienced temporary production disruptions due to severe weather impacting our Newport and Mayodan facilities, creating a shortfall of roughly 30,000 units in the quarter compared to Q1 of 2025. While these events created some near-term headwinds, they do not change our underlying trajectory or reflect the underlying performance of the business. Looking ahead to the current quarter, our priorities are clear. First, recover production shortfalls from Q1. Second, to meet strong demand while rebuilding both our internal and distributor inventories, which were drawn down amid improving market conditions. And third, to meaningfully expand our accessory offerings, an important step in building out our product ecosystems. We are excited about the future. We are aligned on our strategy, confident in our direction, encouraged by our recent performance and energized by the opportunity in front of us. At the same time, we remain appropriately cautious as we monitor the broader macroeconomic environment, particularly as pressure on discretionary income continues to impact consumer behavior. In closing, we are executing against our plan, seeing tangible results and remain committed to delivering long-term value for our shareholders. Thank you for your time and continued support of Ruger. Operator, can we please have the first question? Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Mark Smith at Lake Street. Mark Smith: Just wanted to ask a little bit on the one-time items here in Q1. Just as we think about the potential proxy fights with Beretta, what maybe we could expect for one-time-ish expenses as we roll into Q2? Todd Seyfert: Mark, good question. Listen, we just finalized the deal in the last few days. And so our expectation is obviously that the run rate will come down quickly. We obviously have some work to do between now and the annual meeting. And so a majority of those costs will run through by the end of May. And so we'll continue to have some costs, but we're seeing the end of that and look forward to cutting those off and moving the business forward. Operator: There are no further questions at this time. I will now turn the call back to Todd for closing remarks. Todd Seyfert: Thank you. Well, thank you again for joining us today and for your continued support and confidence in Ruger. We look forward to speaking to all of you again next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to LegalZoom's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Madeleine Crane, Head of Investor Relations. Please go ahead. Madeleine Crane: Thank you, operator. Welcome to LegalZoom's First Quarter 2026 Earnings Conference Call. Joining me today is Jeff Stibel, our Chairman and Chief Executive Officer; and Noel Watson, our Chief Operating Officer and Chief Financial Officer. As a reminder, we will be making forward-looking statements on this call. These forward-looking statements can be identified by the use of words such as believe, expect, plan, anticipate, will, intend and similar expressions and are not and should not be relied upon as a guarantee of future performance or results. Such forward-looking statements are based on management's assumptions and expectations and information available to us as of today's date. These forward-looking statements are also subject to risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties are referred to in the press release we issued today and in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission. Except as required by law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. In addition, we will also discuss certain non-GAAP financial measures. We use non-GAAP measures in making decisions regarding our business, and we believe these measures provide helpful information to investors. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are set forth in our investor presentation, which can be found on the Investor Relations section of our website at investors.legalzoom.com. I will now turn the call over to Jeff. Jeffrey Stibel: Thank you, Madeline, and thank you all for joining our call. LegalZoom is a different company than it was 2 years ago, more focused, better positioned and increasingly differentiated. We are building a subscription-led AI-enabled platform that serves small businesses across their entire life cycle. Our results this quarter show that the strategy is working. Total revenue growth of 13% year-over-year and adjusted EBITDA of over $36 million, both exceeded our expectations. In 2026, we are focused on 3 core growth levers: one, driving high-quality subscription growth through premium human-in-the-loop offerings; two, scaling customer acquisition through partnerships and AI channels; and three, leveraging AI to enhance the customer experience and to drive efficiency. We are seeing clear traction across each of these areas. Q1 marked our fourth consecutive quarter of double-digit subscription growth, led by strong momentum in our human-in-the-loop offerings. Through these personalized higher-value services, we are strengthening our customer relationships and increasing lifetime value. This is how we've repositioned LegalZoom for more durable growth in an AI-driven market. AI is reshaping the first mile of the customer journey, expanding access and bringing more customers into the market. But at the last mile, where high-stake decisions are made, expert judgment, execution and accountability still matter. That's where LegalZoom is differentiated. Our human-in-the-loop strategy remains central to how we differentiate and where we see some of our most attractive growth opportunities. At a high level, this includes both our service layer, products like registered agent and virtual mail and our expert layer, which now includes legal plans, IP services and concierge offerings. Together, these solutions address higher-value customer needs through a combination of automation and professional guidance, supporting stronger ARPU and lifetime value. In Q1, revenue across our expert-led offerings grew more than 2x faster than our overall business year-over-year and continues to accelerate. The standout performer is our concierge suite, now at over 3x average ARPU. We are tapping into an underserved market. For example, we estimate that nearly 1/3 of U.S. small businesses are in bad standing or at risk of falling out of compliance each year. LegalZoom is the only provider offering a fully managed do-it-for-me reinstatement and compliance solution, and demand has consistently exceeded our expectations since launch. We are extending this strategy through curated, high-value formation and concierge bundles sold exclusively through our sales team. These packages combine entity formation with ongoing compliance and advisory services, bringing customers directly into higher-value subscription relationships from day 1. We are excited to see the robust rate of adoption with customers increasingly opting for higher tier bundles. These packages support higher ARPU, are driving more durable customer relationships and reinforce the value of expert-led support. As a result, we are using concierge not just as a product, but as a strategic entry point to engage more established small business customers, a key long-term growth opportunity for LegalZoom. Moving to our second growth lever. We are continuing to diversify our go-to-market model to make customer acquisition broader and more efficient over time. We've accelerated both the number of partners and the velocity of growth within this channel. In Q1, our expanded partner portfolio drove order volume from partnerships to 10% of total orders, up from 4% a year ago, reflecting both increased scale and higher intent customers. New partnerships include LinkedIn, Chase and our strategic partnership this year with GoDaddy, where LegalZoom is now the sole legal services provider across their ecosystem. We have a strong pipeline of diversified partnership opportunities and expect these to fuel a greater share of high-value customer acquisition in 2026 as we work to diversify our top of funnel. This quarter, we made a deliberate decision to front-load our marketing investment, aligning spend with peak business formation seasonality. That investment delivered. Unaided brand awareness increased 19% year-over-year. Direct traffic to legalzoom.com grew 13%, and conversion remains strong. These are important signals that our brand investments are driving both awareness and higher-value customer acquisition. Our goal is straightforward: meet customers where they are, bring them into the LegalZoom ecosystem and introduce them to higher-value services over time. Importantly, this approach extends to how we are positioning LegalZoom within AI ecosystems. We've long described LegalZoom as the last mile solution in an AI-driven world. In this quarter, we continue to embed ourselves into the platforms where customers are asking questions and making decisions. That includes the LegalZoom Connector for Quad and the LegalZoom ChatGPT formations app, both launched in Q1. While still early, these integrations are strategically important, allowing us to be present at the moment of intent when a small business owner is ready to act. Over time, we believe this will position LegalZoom to capture more high-intent demand and further strengthen our role as the trusted partner to help customers complete their journey. Finally, we are embedding AI across our workflows and reimagining our organization to increase speed, improve quality and drive efficiency. As Noel will detail, we are already seeing tangible impact. Our AI-powered tools are empowering our experts, improving sales effectiveness, increasing customer satisfaction and allowing us to scale output without proportional increases in headcount. This is translating into real operating leverage and will be an increasingly important driver of our planned margin expansion throughout the year. Stepping back, these initiatives reflect a business that is becoming more durable, more efficient and better positioned for long-term growth. As we move through 2026, we are executing with clarity and building momentum across each of our growth levers. AI is changing how businesses start, but starting is the easy part. Getting to the finish line is what matters, and that's where we win. We combine technology with real human expertise to solve the last mile, deliver outcomes and help our customers move forward with confidence. That combination is difficult to replicate and is what we believe will continue to set LegalZoom apart. Thank you. And I'll now turn it over to Noel. Noel Watson: Thanks, Jeff, and good afternoon, everyone. Let me connect our growth levers to what you're seeing in the numbers. Our results this quarter reflect continued progress in shifting the business toward higher-value subscription-driven revenue. While a portion of our growth benefited from factors I'll discuss shortly, the underlying performance of the business continues to be strong. At the same time, leveraging AI, we are quickly scaling efficiencies across the business and improving execution through our core workflows, which we expect to be an increasing contributor to margin expansion. With that context, I'll turn to our first quarter financial results. Unless otherwise stated, all comparisons will be on a year-over-year basis. Total revenue was $207 million, ahead of our expectations, reflecting growth of 13%. Subscription revenue increased 12% to $130 million, marking our fourth consecutive quarter of double-digit growth. Performance was led by the human-in-the-loop services Jeff highlighted, including strength in registered agent services, benefiting from our pricing initiatives implemented last year, higher revenue from legal advisory subscriptions bundled into certain formation offerings and contributions from Virtual Mail and our concierge suite. We also saw strength in our compliance offering, driven by strong retention from experience improvements rolled out over the past year, including annual report auto file. ARPU increased 4% year-over-year, reflecting our strategy to grow higher-value human-in-the-loop offerings. These services drive ARPU expansion and improve overall revenue quality as we aim to increase customer lifetime value. We expect ARPU to be the primary driver of subscription growth throughout the year. As we execute this strategy, we are seeing a decline in lower-value subscriptions previously bundled within the formation package. As a result, we ended the quarter with approximately 1.92 million subscription units, stable year-over-year, reflecting the continued shift in mix toward higher-value offerings. Turning to transactions. Revenue increased 15% to $77 million. Transaction revenue benefited from the higher-than-expected annual report filing activity within our compliance offering. As a reminder, these filing fees are seasonal in nature with more activity heavily weighted in Q1. Transaction revenue was also driven by strength in trademark and IP offerings as well as a full quarter of contribution from Formation Nation. Growth was partially offset by the expected decline in BOIR revenue. AOV was $205, up 5%, reflecting packaging changes in our formation bundles and the lapping of low-value EOIR transactions in prior year. Transaction units increased 10% to 375,000, reflecting higher annual report volumes as well as growth in business formation volume. We processed 142,000 business formations in the quarter, up 8%, driven by a full quarter contribution from Formation Nation and increased business formation volume from partnerships. Finally, deferred revenue increased $20 million sequentially, reflecting normal seasonality. Turning to profitability, where all metrics are on a non-GAAP basis. Gross margin was 67%, flat year-over-year, driven by more efficient service delivery, offset by higher filing fees. Sales and marketing costs were $72 million or 35% of revenue, up 29%. Customer acquisition marketing increased 25%, reflecting a shift in the timing of investments to align with peak business formation seasonality and diversification of investments in brand and partnerships. Non-CAM sales and marketing expenses increased $5 million or 45%, largely reflecting a full quarter of Formation Nation and targeted investments in our sales team, both of which are directly supporting the higher value revenue growth you're seeing in these results. Technology and development costs were $14 million, down 6%. General and administrative expenses were $15 million, an increase of 2%. Across the organization, we are actively managing cost structure and productivity to ensure investments are aligned with higher value growth. This includes leveraging AI, which is fundamentally changing how we operate the business. We are rapidly transitioning to a fully AI-native organization with tools deployed broadly across the company, backed by ongoing training to drive real workflow transformation. We've launched targeted initiatives to redesign workflows and drive efficiencies through year-end and into 2027. In product and software development, AI is now integrated across the life cycle, improving engineering velocity and enabling increased output without proportional increases in headcount. We are already seeing tangible results. Across our law firm workflows, AI is driving efficiency gains, reducing trademark classification search time by 55%, accelerating patent drafting by 30% and automating key processes, resulting in faster turnaround and more efficient use of attorney capacity. Further, AI-powered coaching has reduced missed sales opportunities by roughly 1/3, enabling our teams to offer more solutions and cross-sell our products. Agentic AI is also handling thousands of customer care chat interactions, fully resolving approximately 40% of inquiries end-to-end. Our operational execution drove adjusted EBITDA of $36 million, representing a margin of 18%. Moving now to our balance sheet and capital allocation. Free cash flow was $41 million, flat year-over-year. We continue to generate strong free cash flow, maintain a debt-free balance sheet and our $100 million revolving credit facility is fully undrawn. We ended the quarter with $183 million in cash and cash equivalents, down $20 million from Q4. The sequential change reflects share repurchases and a $13 million payment of deferred consideration related to the Formation Nation acquisition, partially offset by solid free cash flow generation. During Q1, we repurchased approximately 5.3 million shares of our common stock for $43 million. As of March 31, 2026, we had approximately $126 million remaining under our authorization. We have remained active in the market in Q2, a direct reflection of our confidence in the long-term value of the business relative to current valuation. Now turning to our outlook. For the full year, we are increasing our revenue outlook to a range of $810 million to $830 million, representing approximately 8% year-over-year growth at the midpoint. We continue to expect adjusted EBITDA in the range of $190 million to $200 million or approximately 13% growth at the midpoint. For the second quarter, we expect revenue in the range of $203 million to $207 million, representing approximately 6% growth at the midpoint. Relative to the first quarter, this reflects the full lapping of our Formation Nation acquisition as well as a reduced volume of annual report filings due to seasonality. We expect adjusted EBITDA in the range of $40 million to $42 million. In terms of quarterly cadence, we expect adjusted EBITDA to build throughout the year from improved gross margin, disciplined cost management and AI-driven efficiencies realized in the back half of the year. To wrap up, our first quarter results reflect continued execution against our business strategy, and we look forward to building on our momentum. We have the foundation in place to leverage our differentiated market positioning to drive higher quality revenue growth and margin expansion in 2026 and beyond. With that, we'll open the call for questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Ella Smith with JPMorgan. Eleanor Smith: So first, you framed AI as a tailwind and have seen some major partnerships in the past few months. How are you seeing the customer acquisition funnel change? And what kind of conversion are you seeing from that kind of customer? Jeffrey Stibel: Yes. Thanks, Ella. Good to hear from you. Look, we're incredibly excited about what's happening with AI for a couple of reasons. And in effect, we're becoming the execution layer that AI can't replace. We've now launched products into ChatGPT and Cloud, both of those launched in Q1. We've started expanding our partnerships with them and the reach that we're driving to address and attack the additional incremental traffic that's coming from these AI engines. What we're not seeing, I don't think anyone is seeing right now is traffic coming directly in significant volumes. In large part, it's too early, both because they're trying to figure out how that works as are we. So, what we're doing is we're embedding products. We're embedding their AI intelligence into what we're doing. And that's helping to drive the throughput that we're seeing into our business. And the thing that's encouraging for us is what that's allowing us to do is drive incremental formation volume that is coming from higher-value customers and lifting ARPU up. Eleanor Smith: Very clear. And for my follow-up, how do you see ARPU contributing to growth in 2026? You said that it's going to be an important driver. I was curious if you or Noel could walk us through the customer trends and sentiment that you're seeing that give you more confidence to realize ARPU expansion in 2026 and beyond. Jeffrey Stibel: Sure. I mean I can start and then let Noel finish. I mean, if you look, we've had now 2 sequential quarters of ARPU growth, 1% in Q4, accelerating to 4% in this past quarter, and we expect that to continue from a trend perspective. That drives through the entire business. And historically, what we've seen both at LegalZoom and across the ecosystem of SMBs is when you increase value alongside driving higher-priced, better products, you ultimately reduce churn. That's a virtuous cycle for lifetime value. And we've already seen the benefits of that. We've spoken, I think, over the last couple of quarters, in particular, about how our compliance products have seen decreases in churn despite the fact that we're seeing improvement in ARPU. And we're pleased to just start the lapping of concierge right now given that launched about a year ago, and we're pleased with the trends there on retention as well. Noel Watson: Yes. I think you hit the nail on the head. Some of it is driven by some of the pricing initiatives that we took last year and matching kind of price to value. But importantly, we're also seeing a shift in customer mix as we drive more customers towards our higher-value human-in-the-loop offerings like concierge. So, it's the combination of those 2 things that's really driving ARPU, and we see it as a sustainable driver of revenue growth throughout the rest of this year and beyond. Jeffrey Stibel: And then the only thing I'll add is it's what gives us confidence in our raised revenue guide because this is a roll-forward exercise. So, you can see those improvements compounding in the organic business. Operator: Your next question comes from the line of Patrick McIlwee with William Blair. Patrick McIlwee: My first, just following up on Ella's question on the Cloud OpenAI and Perplexity partnerships, it sounded like, Jeff, you said those were not driving a material amount of your traffic at this point. Can you just confirm that, first of all? Because initially, I was curious if those were -- if those represented a material portion of that 10% of volumes you talked about coming through your partnership channels. Jeffrey Stibel: Yes. It's too early for it to be material at this point. This is still test and learn. We are seeing material increase in our partnership channel broadly, and we talked about that in the prepared remarks. That 10% growth is disproportionately coming from the partnerships around GoDaddy, Chase, LinkedIn and others, and we can continue to accelerate that. With these new traffic channels through AI, it really is just too early for it to be a significant driver. Noel Watson: But what's important there is that strategically, we positioned ourselves as the brand and the player that these AI companies are looking to work with when they're looking to work with somebody in the legal services space. So, it's strategically important for us to be there. And obviously, we all expect that this will evolve and become much more significant over time. Jeffrey Stibel: It's probably the most important point. So, I'm glad you brought that up, Noel. I mean we are effectively the de facto choice for legal services across AI. And we're pretty excited about that. And I think it's in part because of our brand, it's in part because of our product and it's in part because of our 25-year history. Patrick McIlwee: Understood. And last quarter, you talked about leaning into the positive formation environment earlier this year with some incremental TAM, and we definitely saw that come through this quarter. Obviously, it seems like that yielded the intended results with the top line performance and also some implied share gains on the formation front. But my question is, can you talk about how you evaluate the ROI on that TAM as we look further into the year, what channels you're leaning into and how your spending plans have evolved, if at all, since last quarter? Noel Watson: Yes. So, we clearly and intentionally spent up into a stronger environment, but also to get our brand messaging across in Q1. We're expecting that to continue, but to a lesser extent. Year-over-year, we expect spend to be up in the -- for the rest of the but to a lesser extent than in Q1. And we measure it in several different ways. We're heavily performance marketing oriented. So, we're measuring ROAs on a daily basis and making tweaks and adjustments to our bidding strategy. But we're also measuring in intangible ways, things like unaided brand awareness, which we mentioned in our prepared remarks where we saw a marked improvement in unaided brand awareness in the quarter as we surveyed it as we know that this will lend itself to supporting our efforts around channel diversification, things like how we show up in AIO and how we do in terms of our partner channel where we're seeing strong momentum. The brand strength really supports all of those initiatives as well. Jeffrey Stibel: And make no mistake, the point we're making, the positioning we're making is we are the choice. There shouldn't be alternatives. And that's one of the reasons why we're pushing towards these exclusive relationships with other small business channels that have great existing and established small businesses. Noel Watson: And I guess one other thing to mention is as we partners, we think that's just a great strategic opportunity for us. It does take some investment upfront to onboard them and start to scale them up. We have clear plans that we engage in to optimize those over time. And it gives us not only the opportunity to drive customer acquisition, that's new formation, but for us to start to roll out initiatives that target established businesses within those partner bases. And there's a lot more flexibility when you're working with a partner on your go-to-market and approaching acquisition as a whole, much more so than we see in traditional search. Operator: Your next question comes from the line of Kishan Patel with Raymond James. Kishan Patel: This is Kishan Patel on for Josh Beck. How are you thinking about utilizing AI internally as a way to grow number of SMBs managed per expert or concierge manager while maintaining your service levels? And what areas of the business are furthest along today? Jeffrey Stibel: Great question. We're not thinking we're doing, and we've seen tremendous progress here. And at the risk of overstating, the answer is all areas from the office of the CEO down to anyone taking out the trash, including me. And the reality is we've seen greater throughput almost across the board. We mentioned a handful of things on the side of customer service. We've talked in the past about what we're able to do with concierge reps. and expanding throughput there. Legal services, we're having a great deal of success with our owned and operated law firm, and we're starting to push that out to our network in terms of understanding there. And just the ability to use AI as a true partner here is probably more valuable within LegalZoom than it is with most customer -- with most companies because our expertise has to be right. There is no sense of good enough. And we hinted at the progress we expect to be making on the margin side in the back half of the year. So much of that is because of our ability to scale our AI investment and push that down throughout the organization and do it effectively and aggressively. And the final point that I'll bring up is this requires an organizational sea shift as well. And we've embraced that pretty deeply. And because of it, we feel pretty excited and downright confident in our ability to execute. Noel Watson: And it's moving real metrics in the business. We -- I'll reiterate maybe a couple of them that we called out in our prepared remarks. So, for example, on our -- on the legal side, in terms of servicing our customers, we saw a 55% reduction in trademark search classification time and a 30% increase in efficiency around drafting patents. On our customer care side, AI is now handling approximately 40% of our chat volume end-to-end and doing it at a TNPS that's on par with our human agents. And then when it does transfer chat, it's increasing the efficiency with the human agents can bring that to closure. On the sales side, we're using it in terms of onboarding sales reps more quickly and providing on-call guidance that's helping identify cross-sell and upsell opportunities. So, as Jeff said, we're really using it cross-functionally and in a way that's directly impacting the customer experience. Operator: Your next question comes from the line of Matt Condon with Citizens Bank. Matthew Condon: My first is just on the concierge suite. Great to see that it's doing very well. Just as you think about 2026 and the product road map, how does that really form where you're going to go next with the products? And what can we see coming down the pike here? And my second question is just on partnerships, getting to that 10% volume. How big can this be over time? And what types of partners are you finding that are working really well? Jeffrey Stibel: Both great questions. I'll take them and Noel feel free to fill in on anything I missed. Concierge has been a great success. Obviously, it's early. It's a recurring revenue product, typically annual. So, we're just getting through the first set of renewal cycles. But the most important thing to understand is it's roughly 3x the ARPU of our average product. So, when you look forward, where we headed to drive ARPU higher and higher so that we have enough margin to add greater and greater value to ultimately reduce churn and extend lifetime value. So, this has been a tremendous success, and we're now leveraging some of that success to go back into our other products like our legal plan products, Business Advisory as an example, and learn from that and integrate some of those learnings. So, our expectation is that is going to grow. We're going to leverage other human-in-the-loop products to push on that motion. And we're going to leverage more and more experts at greater and greater scale as we integrate both human and artificial expertise using AI to give us both a margin boost but also drive ARPU further up the curve while adding value for our customers so that we can keep them longer. It really is a virtuous circle. On switching to the partnership side, the partner channel, I think, is an area of missed opportunity in the past and something we have spent a huge amount of time investing in. And the leaders of that channel, Kathy and Liz have been laser-focused on this for the last 6 to 9 months. You've seen a marked increase in a very short period of time. But mark our words, there's more to come. This is underpenetrated because anyone who has access to, has built relationships with, has a trusted relationship with a small business audience, we should be working with them. And we can help them. We can help them if they haven't formed, form their business. But more importantly, if they have, through concierge products, through legal plans, through compliance offerings. And these are all things that are native to what we do, but that we haven't offered outside of our platform. Even concierge, we're still in that test phase such that we've been selling only to our customers. Opening that up to other partners is a really exciting avenue. So, I think you should expect more to come from us and we want that pressure. Operator: Your last question comes from the line of John Byron with Jefferies. Unknown Analyst: This is John again for Brent Thill at Jefferies. Actually, I had another question regarding concierge suite. I mean I'm looking at your slide deck, it looks like the list prices are between $1,000 and $1,400 compared to ARPUs like the $260. So obviously, it can be a very big contributor. But just wondering if you can kind of size up the percentage contribution maybe either as an overall business or the subscription business? And also wondering where are you getting the lead gen sources? I mean, I guess you just mentioned it's your base itself. And then a follow-up would be in terms of formation nation sales rep productivity, wondering if there's any -- if you can talk about that and whether the number of reps is growing at all. Jeffrey Stibel: Sure. Yes, I'll take the concierge question. It's a continuation. We haven't disclosed the size and scale in part for 2 reasons, both of which we think warrant a bit more time. The first is we are only using leads from our base. And to your specific question, John, that means we're looking at that base of customers. We're checking whether they're in compliance or not in compliance, whether they need to be reinstated and what the direct needs from LegalZoom's perspective are. You can imagine over time, once we perfect this, the ability to go out to partners and direct marketing because we'll be able to help people get banking relationships, get insurance they might not have been able to get otherwise. Get off personal guarantees by helping them become and maintain compliance over the long run with these concierge products. The second is we haven't perfected the product itself yet. We're still looking at pricing. We think that there is huge inelasticity, and we've tested it, but we won't pressure test that until we have the product right. Do we want to include lawyers in that product? Do we want to include accountants in that product? How far up the chain do we want to go? Because we know that the more we can offer a customer, the longer they're going to stay, and they are willing to pay for that value if we're providing a strong service for them. So, we continue to tease apart what the different variables of concierge are currently and should be. And so far, we're incredibly pleased. We're seeing incredible growth from that. And when you look at it, it is the predominant driver of our human-in-the-loop growth here, and we expect it to continue to be. So, we're excited, but we think it's premature to discuss the overall contribution. And Noel, I'll let you take that. Noel Watson: Yes. Just on the sales question. So, for Formation Nation specifically, I think the call out is that this quarter represents a full quarter of Formation Nation sales costs relative to a partial quarter last year because we acquired them partway through the calendar quarter. With that said, we are investing in sales both -- across both of the brands, Formation Nation and LegalZoom, in part to support the growth that we're seeing on concierge on the LegalZoom side. And then on the Formation Nation side as we see greater demand, and we're very much tying any incremental hires on the Formation Nation side to an ROI equation and ensuring that there's enough demand to support the incremental hire. And so that's how we're determining when to add sales reps there. Operator: This does conclude the question-and-answer session. Thank you for your participation in today's conference. This concludes the program, and you may now disconnect.