GLOO

To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Oliver Roll, Chief Marketing & Communications Officer. Please go ahead.

Thank you, operator. Thank you to all of you for joining our fiscal first quarter earnings conference call. We will be discussing Gloo's performance for the first quarter ended April 30th, 2026, as well as providing guidance for our Q2 and full year 2026. Joining me on today's call are CEO and Co-Founder, Scott Beck, and CFO, Paul Seamon. Our Executive Board Chair and Head of Technology, Pat Gelsinger, will also join the Q&A session. Before we begin, please be reminded that this call will contain forward-looking statements, including statements related to our business, future growth, strategic initiatives, key priorities, and our financial outlook for Q2 and fiscal year 2026. These statements are based on Gloo's current expectations, but are subject to risks and uncertainties relating to future events and/or the future financial performance of Gloo.

Gloo assumes no obligation to update or revise them, whether as a result of new developments or otherwise. Actual results could differ materially from those anticipated in these forward-looking statements. A discussion of some of the risks that could cause actual results to differ materially from our forward-looking statements can be found in today's press release and are disclosed under the caption "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended January 31st, 2026. Our SEC filings are also available on Gloo's investor relations website at investors.gloo.com and the SEC's website. In addition, during today's call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our GAAP results. Reconciliations of these non-GAAP metrics to the most directly comparable GAAP metrics, as well as the definitions of each measure, their limitations, and our rationale for using them, are included in today's press release and will be included in our Form 10-Q to be filed for the quarter ended April 30th, 2026. Now I'll turn the call over to Scott.

Thanks, Oliver, and thank you for joining our 2026 first quarter earnings call. Q1 was another strong quarter for Gloo. We exceeded our guidance and street consensus on both revenue and adjusted EBITDA. Revenue came in at $41.5 million, growing 3x over the prior year. This was also 13% above guidance and street consensus. Adjusted EBITDA was negative $11.5 million, also ahead of guidance and street consensus, and representing more than a $7 million sequential improvement from Q4 2025. This represented our third consecutive quarter of sequential adjusted EBITDA improvement. This progress reinforces our confidence in delivering against our adjusted EBITDA profitability goals with adjusted EBITDA expected to approach breakeven in Q3 of 2026 and reach profitability in Q4 2026. Our Q1 results demonstrated that our strategy is working. We're seeing growing demand from large strategic customers.

Our current acquisitions are delivering compounding value, and AI is becoming an increasingly important accelerator across the business. Before turning to the specific drivers for the quarter, I want to connect our results to the broader opportunity. Gloo is building the leading technology platform for the faith and flourishing ecosystem, with Applied AI becoming a defining capability across the platform. This is a large, durable, and highly fragmented ecosystem spanning education, social impact, Bible translation, churches, and the denominations that serve them. Donations remain the economic engine of the ecosystem, funding the mission-driven work of faith and flourishing organizations. In 2025, revenues for faith-based organizations grew 8.2% to more than $265 billion, underscoring both the scale of the opportunity and the importance of donor development. Across these segments, organizations consistently need two things.

They need to modernize technology, and they need to expand marketing reach to attract more donors and more constituents. That is how we have organized the Gloo platform, Powering Tech and Powering Reach. Applied AI has become an increasingly important capability of the platform. Our Powering Tech business is designed to take over the customer's technology operations, modernize them, and then apply agentic AI to deliver significantly better outcomes at lower costs for our customers while creating higher margins and durable revenue streams for Gloo. With Powering Reach, Applied AI helps customers better understand their audiences, personalize engagement, and strengthen donor development. That combination is what makes Gloo distinct. We are not simply providing software or services. We are bringing Applied AI into the workflows that matter most to the organizations that we serve.

We can do this because Gloo has earned a position of trust within the faith and flourishing ecosystem. Over decades, we have built the relationships and credibility needed to convene leaders, understand their most important workflows, and apply AI in ways that are practical and mission-aligned. In Q1, we saw strong momentum across the platform. On the Powering Reach side, Masterworks, Barna, and Westfall delivered one of their best revenue quarters ever. That performance demonstrates the value of combining donor engagement with media, research, and the fundraising capabilities all on one platform. On the Powering Technology side, customers are increasingly selecting Gloo to take over, modernize, and transform core technology operations through offerings like Gloo360. In Q1, that momentum showed up in larger strategic wins, including five new customers contributing more than one million in annual contract revenue.

These larger strategic wins show growing traction across both existing and new segments of the faith and flourishing ecosystem. Assemblies of God is a strong example of a denomination choosing Gloo. They are leveraging Gloo360 across their enterprise by modernizing legacy systems to better serve their 13,000 churches within the United States. Indiana Wesleyan University is another important example. We're partnering with Wesley Seminary at IWU to build VIA Journeys, an AI-powered ministry life cycle ecosystem that connects ministry leaders with personalized resources and mentors. We believe this points to a broader transformation in how universities will equip students and the communities where they lead. For example, our work with Jessup University, announced earlier this year, is progressing extremely well and running ahead of schedule. Beyond the customer examples, we continue to build broader ecosystem momentum around Applied AI.

Our 2026 fourth annual Gloo Hackathon will bring together more than 700 developers, engineers, and mission-driven builders in Boulder this October for 48 hours of hacking and building mission-aligned apps and technology. This quarter, we announced the general availability of Gloo AI Studio, a comprehensive set of AI tools and capabilities for developers in the faith and flourishing ecosystem. This release includes support for over 80 LLM models. It includes new safety capabilities, varied subscription options to pay for token usage, and a free sandbox for developers to experience our values-aligned guardrails. The goal is to accelerate practical AI solutions that advance human flourishing. Moving now to acquisitions, which remain a key part of how we're strengthening the Gloo platform. Our strategy is to add best-in-class providers that expand our ability to Powering Tech and to Powering Reach. Q1 provided strong evidence that strategy is working.

Westfall Group and Masterworks both delivered one of their best quarters ever. That validates the strength of those businesses and the compounding value of bringing them onto the Gloo platform. During Q1, we signed a purchase agreement to acquire EMD, which we closed at the beginning of Q2. EMD expands our Powering Tech portfolio with Workday consulting, implementation, and support capabilities for not-for-profit, small, and mid-market organizations. EMD also aligns directly with our broader strategy that I mentioned earlier. We take on and modernize critical customer workflows, then apply specialized engineering talent and agentic AI to deliver them better outcomes at a lower cost. Over time, this creates a strong customer value proposition while also improving Gloo's margin profile. Today, we're also announcing the acquisition of the remaining stake in Midwestern, bringing our ownership to 100%. Midwestern increases our investment in the cost-effective global talent capability area.

We believe this will continue to be a significant growth opportunity as we combine lower-cost delivery capabilities with agentic AI. This also eliminates the call option, which will result in a one-time improvement by removing the associated $12.1 million liability from Gloo's balance sheet. Together, these acquisitions strengthen the platform, expand customer value, and reinforce the flywheel that we're building. Our approach with acquisitions is always disciplined. We continue to see a strong pipeline, but we will only pursue opportunities that are best in class, strategically aligned, and accretive to the Gloo platform. Even though we have a strong pipeline, as we previously stated, our current plan does not depend on additional acquisitions to achieve our revenue or adjusted EBITDA profitability guidance. As we look ahead, our priorities remain clear.

We're focused on deepening strategic customer relationships, scaling our platform, and applying AI in ways that improve outcomes for our customers while creating durable value for Gloo. At the same time, we will keep integrating acquisitions with discipline and executing against our path to profitability. Q1 was a strong start of the year. We remain confident in our strategy, our 2026 plan, and the long-term opportunity to build the category-defining technology platform for the faith and flourishing ecosystem. Paul, I'll turn it over to you to walk through the numbers in more detail.

Thank you, Scott. We delivered strong first quarter results with both revenue and adjusted EBITDA beating guidance. This performance reflects solid business momentum and disciplined execution, giving us a solid financial start to the year. Q1 revenue was $41.5 million, an increase of 238% compared to the same period last year, and 23.5% sequential growth compared to Q4. Year-over-year revenue growth was driven by momentum in several business lines, most notably Gloo 360, as well as the acquisitions of Capital Partner businesses such as Masterworks and Midwestern. Platform revenue totaled $24.1 million, an increase of $15.6 million from Q1 of last year, and up 19.9% over Q4 2025. Platform solutions revenue was $17.4 million, up $13.6 million from the same period in 2025, and about 29% sequentially. Cost of revenue in the quarter was 67.7% of total revenue, an improvement from 72.1% in the prior year period.

That increase was driven by improvements in margins at our Workspace and Outreach business lines, as well as the full quarter of Westfall Group. We expect improvement to continue through the year. Adjusted EBITDA improved $7.1 million sequentially to negative $11.5 million. This significant improvement reflects the impact of our cost-saving actions implemented in Q4, along with the growth already mentioned. In particular, our operating expenses decreased $8.4 million sequentially, while revenue grew 24%. Also note that general administrative expenses include acquisition costs related to the EMD acquisition, which closed in the second quarter. We do not adjust for these costs in our non-GAAP results. We expect continued sequential improvement in Q2 as we aim to achieve adjusted EBITDA profitability in Q4.

As Scott described earlier, we recently agreed to purchase the remaining 20% of Midwestern that we did not previously own, as well as eliminate the call option permitting the holder of the remaining 20% from reacquiring a controlling interest of Midwestern from us. We anticipate closing on the transaction later this quarter. The elimination of the call option will result in no longer having large swings in the financial statement reporting line titled "Gain or Loss from Change in Fair Value of Financial Instruments." As of April 30th, 2026, we had $33 million of cash and cash equivalents. We believe that we have the liquidity to reach positive adjusted EBITDA in Q4, which we expect will put us on a path of sustainable, positive free cash flow growth in future quarters.

With significant momentum across the business, we also believe we have multiple options to further strengthen the balance sheet, fund our growth, and support future acquisition opportunities should we choose to pursue them. I'd like to now turn to our full year 2026 and Q2 outlook. For full year 2026 revenue, we're increasing our outlook $5 million-$195 million. In the second quarter, we expect revenue to be $44 million and adjusted EBITDA loss to narrow to a -$8.5 million. We continue to expect adjusted EBITDA to approach breakeven in Q3 2026 and reach profitability in Q4 2026. For Q2, we expect a weighted average share count of approximately 81 million shares. With that, I'll turn this call back to Scott.

Thanks, Paul. With that, operator, we're ready to take the first question.

As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Daniel Kurnos of Benchmark. Your line is open, Dan.

Great. Thanks. Good afternoon, Scott, Paul. Congrats on another great quarter. I guess first question, the revenue cadence implies a bit of a re-acceleration in the back half. Not to say that the growth hasn't been impressive, and I just want to get a sense from you guys. I know you said in the last call, starting to see larger customer wins. You flagged the $5 million annualized contracts this quarter. And how much line of sight do you have into stuff like that, and how much is coming from, let's call it the more recently acquired business, and how has that mix changed since the April guidance?

Yeah, thanks. Good to hear from you, Dan. We definitely have been able to have continued acceleration. I wouldn't say that it is accelerating any different than it has been. We've been super pleased with the growth. The growth has been a combination of scaling some of the core Gloo offerings like 360 and Gloo AI. At the same time, it's also been able to continue to scale and get synergies across the different Capital Partners that we've acquired over the years as well. We've been able to drive really strong organic growth in our core offerings, as well as really strong organic growth in the offerings from the different Capital Partners. One of the great things that we're excited about is being able to see the synergies that are taking place in the cross-sell.

More and more of the organizations that we're serving, they have one offering, but when we see them get to that second offering, we see a significant step-up, almost two times the revenue. When they get to three or more offerings, we're now then seeing that to be closer to sometimes 5x-10x the volume of what just a single offering should be. It's really a combination of the two. Overall, we're seeing more than 30% sort of coming from a lot of these organic growth and the organic growth of the new acquisitions.

Scott, that's a great segue into my next question. I'm just trying to understand, you talked about land and expand, right? You just outlined the way that you guys attack that. I just want to get a sense from you, when you win one of these larger contracts, are they taking multiples at once? Is it dip the toe in the water, and then all of a sudden you think that that contract can be 10x over time? I just want to get a sense from you, we know that this is a massive TAM and you guys are the undisputed leader with really no competition out there, I'm just trying to get a sense of how quickly some of these major deals can expand, because you guys have had a lot of very early success, even earlier than I think most of us anticipated.

Yeah. Thanks, Dan. This is Pat. I'll just say that, as we, I think, noted in the formal comments, 30% of our customers over $1 million now are on more than one, which means the large majority are only one. Typically, a sale will be a single product area that we then expand one or two quarters later over time. Most of them start with one, right? Some of our sales strategy is to keep things simpler and moving forward. I will say, we have had a couple that we've landed more than one product area at the same time for them. I expect that that will become a larger aspect of our sales motion as each of the sales offerings becomes more mature, we have more customers in the land expand, and then we'll be able to land expand over time.

So far, it's mostly one landing in a quarter, then we're following it with a subsequent offer later in time.

Got it. Thank you, Pat. That's super helpful, you're already putting up the numbers, excited to see what you guys do next. Thanks, guys.

Thank you.

Thank you. Our next question comes from the line of Richard Baldry of Roth Capital. Your line is open, Richard.

Thanks. When we look from Q4 to Q1, the revenue increase had about a 70% gross margin contribution on the quarter. I'm sort of curious if you can look into that and talk about how much would be because of the organic growth, and how much might have been sort of cost realignment. It's 2x where your normal gross margins are sitting today. I'm sort of curious how sustainable that sort of drop-down could be as we move forward.

Yeah, great question, Rich. Thanks for chiming in. I think there's a balance between the two in the quarter. We definitely got some significant benefit from overall reduction in our operating expenses, that you saw that flow through in terms of contribution to adjusted EBITDA which was obviously very significant relative to the revenue increase. I would say that you've got somewhere between 50% and 60% of that probably came from the operating expense, and the remainder came from just continuing to get leverage across the cost basis associated with what you would think of as the cost of goods sold or contribution margin.

Thanks. You're still early into some of the larger deals on the Gloo360 side, I'm curious as those are under your umbrella a little bit longer, are you seeing incremental headcount synergies? Are you starting to see early cross-selling or upselling opportunities? How are the earlier large deals playing out?

Yeah, every one of them is causing us to just get more mature, Rich. This is Pat again. We're getting more proof points of different offerings. As we get more and more customers, hey, we already have some level of expertise on some of the tools that we're picking up from them. We already have more maturity in some of the agentic workflows that we're applying to them. Of course, our HR systems are getting more mature of being able to bring them in, onboard them, and make the best application of good HR disciplines to those as well. I'll say every one of these is making us better. We still, I'd say, are not fully mature in those offerings because several of them are ones that we're still picking up and learning.

I think we still have a lot of margin improvement to get, as well as rapidity of the motions and the ability to onboard and then to be able to commercialize. The good aspect of this is that every one of those that we do, we are now creating the agentic workflows that the next one is just easier and faster. We just see this as an engine that we are going to be able to rinse and repeat over and over again, and each one of those is showing more maturity in the offering. A long way to go. The ecosystem is large, but we are now having more and more proven capabilities that can be applied against them.

If I can squeeze one last one in. When you look at the five deals over $1 million, can you talk about, are there any commonalities across those or are there multiple entry points you can do those in now? Just so we can sort of see how extensible that is going forward. Thanks.

Maybe Scott, you can add as well, but we are starting to see a lot more pipeline in the university segment, in particular, which is one that we have highlighted. William Jessup was our first major example. We are now closing more of those offerings. That is an area that, as you said, there is over 900 faith-based universities in the U.S. We have a long path to go. We are clearly a critical mass in some sectors, such as Bible translation, campus ministry, and other areas like rescue mission is an area that our work that we have specifically on Powering Reach is well proven. There is a lot more opportunities there. Finally, I think as we noted in our formal comments, we have started to have some success in the Catholic segment, which is a very large space for us that we are just getting started.

I think more replicable, big opportunities that we see the land expand just as enormous pathway in front of us. Scott, anything else you would add?

Thanks, Pat. I really like what you've coined there in terms of land, expand and expand, because we're landing and expanding within a specific account. When we find ourselves into a category like campus ministries or a category like faith-based universities or rescue mission, when we find ourselves getting into a different segment, that segment also has the dynamic of expand as well. We've got really the power of landing and expanding within an account and expanding again within a category. We've been adding categories extremely quickly. Really sort of surprising in terms of how quick the categories are expanding. One of the things I would like to anchor us back in is they are looking for the same thing, okay?

There's a commonality in terms of, hey, help me Power Tech, help me get more Power Reach so I can have more donors, more constituents, more students, more volunteers, you name it. They're really Power Tech, Power Reach, just being able to then apply AI to be able to give them the lower cost, better benefit, and to give us an ever-increasing margin as we bring more AI-executed work into the program.

Got it. Congrats on a great quarter.

Thank you.

Thank you. Our next question comes from the line of Yun Kim of Loop Capital Markets. Your line is open, Yun.

Okay, great. Thank you. Congrats on a strong quarter. On the Enterprise Marketdesk business, can you update us on the progress that you have made since the acquisition closed? And for the Enterprise Marketdesk customers, I know there's some who are not faith-based customers or organizations. Do you expect the non-faith-based customer base to show growth there? Or is your near-term go-to-market primarily focused on faith-based organizations?

Yeah. As you're aware, they do have both faith-based and not faith-based, and we're growing them both. Obviously, we've got some obvious synergies within the faith-based where we can do a lot of cross-selling immediately, but also in the non-faith-based. That's on its own growth plan as well. Relatively new, right? It just closed at the beginning of this quarter. We're five or six weeks in now. We're liking what we're seeing. Additionally, Midwestern, which we just went to 100% ownership from 80%, those guys have pretty much the same profile. A significant amount of Midwestern is also non-faith-based. It's pretty much about the same percentage, say about a third faith-based and about two-thirds not faith-based. It's nice to be able to see some of the synergies there between, let's say, a Midwestern and an EMD on the non-faith-based side. Yeah, they're both growing.

We're committed to growing them both. For the last few years at Midwestern, we've grown both sides of it as well.

Is there an opportunity to cross-sell Gloo360 to the non-faith-based customers of EnterpriseMarketdesk?

Yeah, there are. There's no question that the small to mid-size organizations are coming up against the same set of issues, which is, "Hey, help me with my tech, help me with my reach." Those are common concerns, common value propositions, whether they're faith-based or not faith-based organizations. Everybody needs help applying AI into their specific organizational workflows. Likewise, when you've got a workflow that helps somebody engage with employees on an ongoing basis, that workflow is the same, whether it's a faith-based or a non-faith-based workflow. There's a lot of commonality against that as well.

Okay, great. Maybe this question is for Pat, but I know it's very early, what's been the early feedback on Gloo AI Studio? Was that part of your Gloo AI Hackathon at all? Thanks.

Yeah. The early feedback is strong. Obviously, as you open a new service like that, there's lots of learnings. As developers come on and we're getting more efficient at bringing developers on, bringing the billing systems up and operating for them. We did have a big customer, HelloBible, that does a consumer chat service move over to Gloo AI Studio. They were public on LinkedIn or one of the other social channels about that and the good experience that we're having. We're now starting to have, I'll say, real customers who are bringing their workloads onto the platform. We also, as a result of Studio, we will have more to talk about as we go through our virtual Gloo AI Hackathon events and then our big Gloo AI Hackathon in the fall.

They will be very heavily featured and announcements of new capabilities, new services, new customers coming on the platform as part of the Hackathon is a big thing when we come up on that in the fall. Overall, we're happy with the momentum that we're seeing. 1,000+ developers now on platform. We have to grow this much faster, much larger, and we believe that we now have a mature offering that will enable us to do exactly that.

Okay, great. Looking forward to it. Thank you very much.

Thank you. Our next question comes from the line of Jason Kreyer of Craig-Hallum. Your line is open, Jason.

Great. Thank you, guys. Scott, great to hear the early success with cross-sell here in the first quarter. Wanted to ask just about the go-to-market for cross-selling these new solutions to existing customers. If we think about a Westfall or an EMD, how quickly can you get customers interested in the new solutions? How quickly can you get them up and running? And just what that upsell process looks like.

Generally, there's a strong effort and our Chief Revenue Officer, Rebecca, runs a very aggressive process across the different sales teams to drive exactly that. We're seeing a good effect from that already. I'll say we're pleasantly surprised how easy it is to get that process underway. We do see that Westfall Gold with Masterworks, 360 into Masterworks accounts, Servant into our 360 accounts. These motions are ones that we think have a lot of replicability, a lot of scale. Overall, we're just building more sales capacity. We're bringing sales teams on. We're getting more rigorous in our processes to manage large account pipelines. Then building more cross-sell mechanisms across the portfolio. We just see ourself at the beginning of the cycle, and every element of the portfolio gives us more opportunity to cross-sell.

Perfect. One follow-up just on the M&A has continued to expand your addressable market. When you think about the bigger customers that you have today, curious what you think your penetration is into the existing base? I'm trying to figure out how much runway is there ahead with such a large customer base into a large addressable market.

The runway is truly enormous. That's why we somewhat easily talk about TAMs in excess of $100 billion. This is just a large market for it. When we talk about universities, we now have several closed, 900 to go. Even where we're pretty well penetrated in a few accounts at this point, we're not well penetrated across the portfolio. We even in our land expand into the account have room to grow. We would consider our effective SOM to be in very low % at this point. The TAM is enormous. The SAM that's reachable is very large. We don't see ourself as anywhere close to saturation on any dimension of the business.

Wonderful. Thank you.

Thank you. Our next question comes from the line of Ryan Meyers of Lake Street Capital Markets. Please go ahead, Ryan.

Hey, guys. Thanks for taking my questions. First question here. Have you seen any changes in customer budgets or any other major changes across the ecosystem in terms of appetite for more digital offerings?

Thanks, Ryan. For sure. As I said in my prepared remarks, the revenue in this ecosystem grew at 8.2% last year. For a very significant, what is an old ecosystem, to be able to have that kind of growth is remarkable. As a result of that, you get more budget dollars to work with. There's no question that that kind of growth in the core donations that are funding this ecosystem definitely allows us to be able to have more dollars to work with. We feel it. I would say there's another thing, too, and that is that younger people are re-engaging at a much bigger and higher number than others in spirituality and faith. That bodes really well for where we're at in the overall cycle.

Because if you look at that growth and you were to segment that, I would imagine that you'll definitely see the younger people having a very significant positive influence on the market. Not only in terms of there's more dollars to be worked with, no question, but it's just encouraging. Our market is encouraged. They're seeing a lot of opportunity to serve in the community. When you have younger people starting to show up, that's a very big encouragement to this ecosystem.

Got it. Thank you. Second question here. You mentioned 30% organic growth. How much of this do you think will come from new customer wins versus new customers expanding their spend?

Yeah, I said 30% plus. We're above that. We're very comfortable with that continued organic growth. Our big driver is new customers. That is what's really driving our growth in terms of within that organic growth, so much of it is new people that are getting introduced to Gloo 360, Gloo AI, Masterworks, Barna, across the board. It is really about attracting new into that growing the ones that we currently have. Both are happening, absolutely new names is super important. Pat, what would you add to that?

Not too much to add. The opportunity for us as we build our sales force is one that we just get more and more account coverage over time. We're regularly adding more salespeople to 360, to Masterworks, to our Westfall Gold. Every one of our offerings is getting more sales capacity, we'll be able to invest more into it. We do not see that there's budget limitations, even though we don't really fundamentally view that tighter budgets is a bad thing for us. Fundamentally, they're looking for cost savings, we also present cost savings to them as well. We do see ourself in many respects as not particularly vulnerable to cost issues. This is a good time for our ecosystem, as Scott has said. It's a good time for our offering.

As we build more capacity to sell and deliver, we do think that we see a very clean line of sight to a rapidly growing revenue customer base and land expand for many quarters to come.

All right. Thanks so much, though. Super helpful.

Thank you. Our last question comes from the line of Matthew Harrigan of Benchmark StoneX. Your line is open, Matthew.

Thank you. Good to book-end the call. You made a reference at the end of one of your answers to getting traction with the Catholics. Clearly you've been focused on Evangelicals relative to Catholics or Anglicans. It's interesting, the Catholic Church certainly was arguably the most successful hierarchical global organization for a long time. Obviously it's unique on the educational side, both on the secondary schools and a lot of universities, although they're becoming, I guess, increasingly secularized.

If you really get traction on the Catholic side or some of the other denominations where you're not as penetrated, could you hit a pretty fast tipping point where at a higher level, you could have a lot of acceptance of a broad bouquet of products relative to, I think, some of the denominations you're dealing with maybe more on a grassroots basis where you get really good word of mouth. You have to convince a lot of people to get momentum. Thanks. Congratulations on the results, clearly.

Yeah. Thank you. Well, I think first I'd say that we're probably not far enough along to know the repeatability of the sales patterns yet in the Catholic segment. I'd say it's a great question for us to come back to in future quarters as we have more Catholic customers, we see more of the sales motion. That said, given the hierarchical nature that you point to, we think that you actually have very referenceable relationships across them. As you get success in one, it'll be very repeatable across others. We do, for that very reason, think that we will have good sales productivity as we engage. We have also had the most success so far Powering Tech in that sector, but we do see that the full range of our offerings could be applicable there at scale.

We've also had good affinity for some of the AI opportunities that we uniquely have and gaining more momentum with customers there. Overall, I say it's very early for us, but we're super happy because of the size. When you look at the size of that portion of the marketplace, archdioceses across the nation are large. They have large technology needs, and as you say, they're structured, organized, and we believe will be very repeatable.

Could that extend into the university side as well, or is that kind of?

Yes

different animal?

No.

Okay

We see it as very replicable into the university side. Of the 900 that we've quoted, a little bit, sort of 2/3, 1/3. 2/3 are evangelically oriented and 1/3 Catholic oriented. We do hope to have several successes in the university side of the Catholic community as well.

Great. Thank you.

Thank you. I would now like to turn the conference back to Scott Beck for closing remarks. Sir?

Thanks a lot. Appreciate that. As you can tell in the call, we're super excited about the performance. We're also really excited about the progress. This faith and flourishing ecosystem needs what Gloo is providing. The technology and the marketing reach, all being powered by AI. It is just incredibly good timing for us to be sort of at the point that we're at. It's still early. We're still early on in our journey as a public company. The momentum's strong and it's growing. We really do have an opportunity to build a category-defining technology platform for this ecosystem. In doing that, one of the things that excites us the most is that we can actually be engaged in shaping technology as a force for good.

If you think about it, the time and the intensity of the technology changes that are taking place right now, it's one of the most consequential periods of change in our lifetime. To be able to be there and to be able to be on the front lines with these organizations is super encouraging to our organization. As we're doing this, we always have to remember that we're serving those who serve. That's the ministers, the campus ministries, the rescue missions, the world child development organizations, the global water organizations, the faith-based universities, the churches and the denominations that serve them. In doing that, they're out on the front line, and they're out there changing lives for real people. They're changing families, they're changing cities. As we pursue this all together, we're pursuing it so that we can accomplish the vision that we have.

That's a world where every person can flourish and be all that they were born to be. That's what fires us up. That's what gets us out of bed in the morning and gets us pressing so hard. You all, as shareholders, are part of that. You're making a difference in these organizations. You're being able to give them access to capabilities and capital that allow them to scale what they love to do and what they're called to do. We're grateful. We're grateful for the champions that we serve, and we're grateful for the shareholders that are serving on behalf of them with us. On behalf of all of us, we say thank you. Thanks for tuning in today. God bless you. God bless you in all your efforts and Gloo in its efforts as well. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Gloo Holdings Fiscal Q4 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone.

If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. We ask that you please limit yourselves to one question and one follow-up. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Oliver Roll, Chief Marketing & Communications Officer. Please go ahead, sir.

Thank you, operator. Thank you to all of you for joining our fiscal Q4 and full year 2025 earnings conference call. We'll be discussing Gloo's performance for the Q4 ended January the 31st 2026, as well as our results for the full year 2025. We'll also be providing guidance for our Q1 and full year 2026. Joining me on today's call, our CEO and Co-Founder, Scott Beck, and CFO, Paul Seamon. Our Executive Board Chair and Head of Technology, Pat Gelsinger, will also join the Q&A session.

Before we begin, please be reminded that this call will contain forward-looking statements which are based on Gloo's current expectations, but which are subject to risks and uncertainties relating to future events and/or the future financial performance of Gloo. Actual results could differ materially from those anticipated in these forward-looking statements.

A discussion of some of the risks that could cause actual results to differ materially from our forward-looking statements can be found in today's press release and elsewhere in our filings with the Securities and Exchange Commission, including our prospectus dated November 18th, 2025, and our annual report on Form 10-K that we expect to file later this week. Our SEC filings are also available on Gloo's investor relations website at investors.gloo.com and the SEC's website. In addition, during today's call, we'll discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP metrics to the most directly comparable GAAP metrics, as well as the definitions of each measure, their limitations, and our rationale for using them are included in today's press release and in our Form 10-K. Now I'll turn the call over to Scott.

Thank you, Oliver. Thank you for joining our 2025 Q4 and year-end earnings call. Q4 was a strong quarter for Gloo that exceeded our guidance and capped a strong year in 2025, our 1st year as a public company. In Q4 2025, we more than quadrupled our revenue compared to the prior year period. We also exited 2025 with a much stronger balance sheet following our November IPO and the conversion of a significant majority of our debt into equity. We're also making good progress toward Adjusted EBITDA profitability, as reflected in our Q1 guidance of more than 30% improvement in Adjusted EBITDA from Q4. We remain confident in achieving Adjusted EBITDA profitability in Q4 2026, and continue to expect to approach Adjusted EBITDA profitability in Q3.

These results and our confidence in the future reflect the unique value that we are delivering against two mission-critical needs across the faith and flourishing ecosystem, the need to modernize technology and the need to expand reach. Our growth is driven organically as well as through continued expansion from accretive strategic acquisitions that strengthen our platform. Before I go deeper into our strategy, I want to briefly revisit the ecosystem that we serve, because that context is important to understanding both our opportunity and our results. Gloo is building the leading technology platform for the faith and flourishing ecosystem.

This is one of the oldest and largest sectors in the world, yet one that remains highly fragmented and materially underserved by modern technology. At the center of this ecosystem are two interconnected groups. 1st are churches and frontline organizations, or CFLs, which serve people and communities directly.

The 2nd are network capability providers, or NCPs, which equip them with the tools, services, resources, and infrastructure that they need to succeed. At the heart of the ecosystem, we also see 2 mission-critical and unmet needs. 1 is the need to modernize technology, including systems, data, workflows, and core operating infrastructures. The other is the need to expand reach, deepen engagement, and increase donor support in more effective and scalable ways. The Gloo platform is built to address those needs through 2 core areas of focus, Powering Technology and Powering Reach.

Our solutions that power tech help organizations modernize their operations and build the foundation required to adopt new technologies effectively. Our solutions that power reach help organizations expand awareness, strengthen engagement, and grow support through differentiated marketing, media, and fundraising. Underpinning everything is the company's growing leadership in applied AI.

We're leveraging the latest innovations in agentic AI, foundational models, and services from top AI companies. We're combining that with the AI advancements across our own platform. As part of this strategy, we're taking over more of our customers' work that can now be executed by AI. We take over a customer's technology operations, we modernize them, and then we apply agentic AI to deliver significantly better outcomes at lower costs, while also creating higher margins for Gloo and highly durable revenue streams.

This allows AI to be uniquely applied to the real operations, workflows, and mission-critical activities of churches, ministries, and not-for-profits in ways that protect theological integrity, strengthen relational ministry, and advance human flourishing. This approach is supported by forward-deployed engineers, similar to the models used by Palantir. We understand customer operations and build tailored agentic solutions that create meaningful, repeatable value.

Over time, we believe that expands our opportunity well beyond software spend into the much larger labor budgets that sit behind it. We believe Gloo is uniquely positioned to lead applied AI in the faith and flourishing ecosystem by helping customers harness those capabilities in practical, mission-aligned ways. I now want to turn to our broader platform strategy and how we continue to strengthen it over time. As the platform expands, it benefits from a powerful flywheel effect.

Each new capability, solution, and network capability provider makes the platform even more valuable to the churches and the frontline organizations that we serve. As more of these organizations engage, the platform becomes more valuable to the network capability providers and the partners serving them. Strategic acquisitions are a key part of strengthening that flywheel, enhancing our ability to Power Tech and Power Reach for our customers.

Earlier today, we announced our latest example of that flywheel in action. Today, we announced the definitive agreement to acquire Enterprise MarketDesk, known as EMD, a leading Workday service partner that provides consulting, implementation, and operating services to small and mid-sized organizations and not-for-profits. This is an important addition to our solutions for Powering Tech. Workday is a leading ERP platform in the faith and flourishing ecosystem, and often the preferred solution for many of the Gloo enterprise customers, creating clear synergies between the 2 companies.

EMD offers a full suite of services, including Workday deployments, application management services, and staff augmentation. This strengthens the Gloo 360 value proposition and expands our ability to help customers modernize core systems and transform IT in more strategic ways through our applied AI.

This aligns with our core strategy of taking over and modernizing the work of an organization, using forward-deployed engineers, then applying agentic AI, thereby delivering better results at lower cost, while at the same time creating higher margins for Gloo. Workday offers a major set of capabilities that we see many of the organizations in the faith and flourishing ecosystem using more often. Workday implementations are long-cycle engagements that will lead to larger digital transformation mandates that Gloo 360 is uniquely able to support. In addition, we successfully completed the acquisition of Westfall Group during the quarter.

Westfall is a leading platform for major donor engagement in the faith and flourishing ecosystem. Its addition has expanded our donor development capabilities and strengthened the strategic fit and synergies with Masterworks, which we acquired in 2025.

Together, these moves reflect our disciplined approach of adding best-in-class network capability providers as Gloo capital partners, strengthening the platform and reinforcing the flywheel. Westfall Group has been immediately accretive since close, and we anticipate EMD will be immediately accretive upon close as well. Now, let me turn back to the importance of AI to our strategy. Underpinning everything we do is our growing leadership in applied AI. Our applied AI strategy is focused on three areas.

1st, we're building the core AI capabilities we believe the ecosystem needs, including agents, values-aligned AI, unified data infrastructures, and trusted chat-based interfaces. 2nd, we're embedding AI across our solutions to improve automation, personalization, data integration, and overall customer outcomes.

3rd, we're helping both our customers and Gloo itself put AI agents to work and evolve toward more agentic operating models so that the ecosystem can focus more time, energy, and resources on mission. We believe this strengthens our platform, accelerates innovation across our portfolio, and reinforces our leadership in applied AI for the faith and flourishing ecosystem. Let's turn to customer momentum. We're seeing strong customer momentum across our portfolio.

We continue to close larger strategic deals with two customers now expanding to almost $10 million of annual revenue. We also closed several agreements valued at more than $1 million, including an exciting expansion in the university segment through our work with Jessup University. This is the 1st example of us bringing the full breadth of the Gloo platform to a large university, and it's a strong validation of the value that we can provide this very large market segment.

We also announced a new strategic technology partnership with InterVarsity Christian Fellowship/USA, with Gloo 360 powering its enterprise technology operations. That will enable InterVarsity to spend less time managing systems and more time engaging students and faculty across more than 700 campuses in the United States. It's a strong example of how by powering their technology, we can help organizations modernize operations while increasing mission impact. Separately, we also expanded our partnership with YouVersion in Brazil, establishing a co-located engineering presence alongside their regional hub to strengthen the cultural alignment with their team while building engineering capacity in the region.

In a moment, Paul will take you through our guidance for Q1 and the year ahead. We remain super confident in our strategy and our outlook for 2026.

Our confidence reflects the strength of the platform that we're building, the flywheels that continue to strengthen as we scale, and the momentum that we're seeing across the business. It also reflects the role AI is increasingly playing as an accelerator across both Powering Tech and our Powering Reach solutions. We believe our AI is unlocking enormous possibilities for ministries, churches, and network capability providers to grow their reach and to expand their impact. Our focus on applied AI and bringing agentic workflows into the faith and flourishing ecosystem in practical mission-aligned ways uniquely positions us to capture that opportunity.

Taken together, that gives us confidence in our guidance, our path to profitability, and the long-term value that we believe we are delivering to our customers and to our shareholders. Paul, over to you to talk about our numbers in more detail.

Thank you, Scott. Our Q4 2025 results were strong, with revenue beating our guidance and Adjusted EBITDA at the upper end of our guidance range, giving us solid momentum as we ended the year. Revenue for the quarter was $33.6 million, an increase of 418% compared to the same period last year, and 3.3% sequential growth compared to Q3, which is good performance given the seasonality characteristics of our industry. Year-over-year results were driven by solid organic growth across our portfolio, as well as the acquisitions of several capital partner businesses, most notably Masterworks and Midwestern. Platform revenue totaled $20.1 million, an increase of $13.8 million from Q4 of last year and 1.6% sequential growth. As a reminder, Platform revenue includes advertising, marketplace, and subscription offerings.

Much of this sequential growth was driven by Gloo 360 and Igniter, partially offset by some Masterworks advertising revenue that shifted into Q3, as we previously discussed. Platform solutions revenue was $13.5 million, up 6% sequentially, supported by strong performance from Barna and the addition of Westfall Group. Going forward, Westfall's donor events and design business will primarily contribute to platform solutions revenue and, together with Masterworks, will strengthen our solutions for Powering Reach by supporting customers' fundraising throughout the year and around key events. Cost of revenue in the quarter was 76.5%, an improvement from 83.4% in the prior year period.

That improvement was driven by growth in higher-margin business lines and improved pricing in some areas. We expect improvement to continue throughout the year. Adjusted EBITDA improved $0.7 million sequentially to -$18.6 million.

This improvement reflects incremental gains across nearly all of our Gloo businesses and capital partners and includes acquisition costs related to the Westfall Group acquisition, which we do not adjust out. Westfall did not contribute to Adjusted EBITDA, as January is seasonally slower for fundraising activity. There are also 2 important non-cash items to note that significantly reduced net income in the quarter. 1st, share-based compensation was higher than normal due to non-recurring IPO-related award activity, as noted in our Q3 10-Q.

2nd, the line item loss from the change in fair value of financial instruments reflects derivative calculations affected by our share price. If our price declines in a quarter, we will generally record a loss in this line, and if our share price increases in a quarter, we will generally record a gain. In Q4, this number pressured net income and therefore EPS.

As of January 31st, 2026, we had $57.3 million of cash and cash equivalents. I'd like to now turn to our Q1 and full year 2026 outlook. As Scott mentioned, we continue to guide to Q1 revenue of $36 million. For the quarter, we expect Adjusted EBITDA loss to narrow to -$12 million, representing more than $6 million of sequential improvement as we grow revenue, improve cost of revenue, and continue to aggressively manage operating expenses.

We remain focused on progressing towards Adjusted EBITDA profitability in Q4. Our full year 2026 revenue outlook is now $190 million, which includes the addition of EMD. While we continue to see M&A opportunities, we are confident in our ability to achieve this guidance without any additional acquisitions. As we move through 2026, we continue to expect meaningful sequential improvement each quarter and expect profitability in Q4 2026.

For Q1, we expect a weighted average share count of approximately 80 million shares. Looking ahead, we're excited about scaling the business and applying Gloo AI internally as we become more efficient, and using it externally to help customers better serve their constituents. With that, back to you, Scott.

Thanks, Paul. With that, Operator, we're ready to take the 1st question.

Certainly. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star 1 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1 1 again. One moment for our 1st question. Our 1st question comes from the line of Richard Baldry from Roth Capital. Your question, please.

Thanks. You probably don't want to name them, but I'm curious if you can maybe just broadly describe the two customers that are nearing $10 million a year in revenue, and maybe how replicable that could be across the total addressable market you're looking at.

Yeah. Thank you. This is Pat. We see that these customers are now taking more of the different offerings of Gloo, and that's part of what's making these accounts larger, right, is that they're Masterworks, Westfall Gold, Gloo 360 AI customers, so that as we're aggregating more of those capabilities, these account relationships are becoming very large.

Obviously, these are some of the larger customers in the ecosystem, but we continue to win more customers at the $1 million level. A number of those are maturing to be multi-million customers. We do see that these are very large customers in the ecosystem, so we do think they're replicable to having more customers get to that level of relationship.

Overall, the key point is that these are big accounts and we're establishing big trust and deep, enduring relationships with them across an increasing breadth of the portfolio of our offerings.

Maybe you addressed it a little bit, but can you talk about sort of the funnel for million-dollar plus deals, how that's changing now that you're a public entity with sort of greater visibility, how that's changed as you've rapidly scaled the portfolio and your revenues? Is that pipeline sort of picking up because of the capabilities you have now?

Yeah, I'll say there's probably 3 aspects to the pipeline to just highlight. The one is, it is just getting bigger, right? The more we're building our sales capacity, we're seeing more accounts that we're engaging with. More salespeople have reference accounts that they can, secondly, move horizontally, and that's one of the things that's exciting. We do see that we're able to move to other customers in that segment. We're able to land and expand within an account. We're able to land and expand within the segment. We're also seeing the sales cycle, if anything, shorten.

That's probably maybe the most exciting aspect of the growing momentum in sales, that the more reference accounts that we have, the more we're able to then replicate that into other segments.

Like we saw this quarter, we closed our 1st major multi-offering university, and we expect that we'll have many other universities that we'll be able to replicate that kind of sales motion with. With InterVarsity, one of the reference customers, the campus ministry segment is showing replicability as well. It really is a very positive aspect to the business. As the accounts get bigger, we're able to see the sales funnel increase and the acceleration in those accounts as well.

Switching gears, if we look at the AI part of the business, can you talk about how far into it you feel you are in terms of rolling out products and services based upon it, and then maybe second stage, how far you're into adopting internally tools for efficiency purposes operationally? Thanks.

Yeah. Maybe I'll start and ask Scott to add to this one. The first would be is, I see AI overall in the 1st inning, period, for the industry writ large. There's a lot to go. For most of our accounts, we're even earlier than the 1st inning, right? We're just getting started because in many cases, we're just starting the 360 engagement.

We're about to turn on some of the first agentic capabilities. I'll say this is very early, and we see tremendous opportunity to build on those offerings for the accounts. Internally, we're further along, and we have more of our internal businesses, our capital partners, taking advantage of our AI and our capabilities today. We're using it across many different aspects of our business today.

Again, we see a lot more opportunity, which will only improve our speed of operation and the margin of the business. This idea of applied AI is one that we really believe that we can be operating in that space for many, many years to come because the market is large, the customer needs are large, the gap in technology is large, and the benefits of AI, and particularly this idea of agentic applied AI, that it's not just addressing how to do things better, but it's also literally turning people and manual processes into service offerings in the future. This is something we think is an industry trend and one we're uniquely applying to this segment of the market. Scott?

Yeah. Thanks, Pat. Yeah. Rich, in addition to that, AI is actually driving a lot of demand for Gloo 360. It's one of the reasons that we're seeing these bigger deals come in, because it's just now gotten to the point with keeping up with technology for ministries where their primary job is not to be a technology company. Their primary job is to go out and do mission, to translate Bibles, to work on campuses, to be able to help people in their communities.

Now all of a sudden that AI has come on the scene, it's just accelerated the reality of not being able to fully keep up. Us being able to show up and to be able to help them with that is, I think, a big driver for overall demand.

Now, as I stick with 360 for a second, in addition, what we've been able to do is pull work out of these different organizations, literally pull the SaaS technologies as well as the people out of the organizations, being able to help that move to a whole next level, and then applying AI to that to be able to deliver better results to the organizations that we're serving at a lower cost, and then being able to keep applying the AI to that, which allows us to be able to improve margins, and pass that along to the rest of the system.

There's a lot happening there. We also announced this quarter, or just this last month, Gloo AI Studio. Pat, you can just chime in for finishing up here, but really providing developers infrastructures that can be used beyond Gloo.

Yeah. Just to add to that, we just finished Missional AI, a major AI conference for the faith and flourishing industry. At it, we announced Studio AI, now a full set of API services, pay-for services. We have a growing set of developers now taking advantage of that because we really see part of our mission is not just what we do in our offerings, but enabling a broad ecosystem to build on the foundational capabilities that Gloo AI provides.

Maybe last for me, could you just generally discuss the M&A environment? Sort of curious how it's impacting the faith and flourishing world. It's obviously been valuation pretty depressed in the open market as people are fearful about the disruptions of generative AI. Sort of if you can walk through a backdrop of that'd be helpful. Thanks.

Sure. I'll take that. It basically goes back to what I was just talking about. AI, from our standpoint, is definitely a friend in that entire process.

As the SaaS tools out there, big system of record tools, for us to be able to take on those tools, to be able to integrate with them, to be able to build workflows, AI-powered agentic workflows on top of those historical infrastructures, whether it's a church management system in a church or whether it's a Salesforce or a Workday in some of these big enterprise customers, our ability to basically build the workflows on top of that and then to be able to power that back into the ecosystem, that's just a great thing for us. We don't see ourselves being negatively impacted at all as a result of some of the conversations around SaaS.

In fact, we see it as basically being able to further power our business and power our strategy.

Thanks. Congrats on a great quarter and a great outlook.

Thanks, Rich.

Thank you. Our next question comes from the line of Yun Kim from Loop Capital. Your question, please.

All right. Congrats on the quarter, Scott, Paul, and Pat, and also on the EMD acquisition announcement. 1st, maybe Paul can answer this, but obviously Gloo 360 is doing very well. Is scaling that business a key driver behind your margin improvement this year, or is there other part of your business that's even bigger margin driver than Gloo 360?

Gloo 360 is definitely key each quarter. It steps up incrementally, both on the growth side and on the margin side. It's a big contributing factor along with AI rolled into that. I'd say those are number one and number two together.

Okay. On the EMD, any additional details you want to share with us, like the revenue run rate and then also the margin profile?

Yeah. Just a few things on EMD to start with. Overall, we just have seen, and part of what motivated us to do this acquisition was that Workday was already being well adopted by our ecosystem. In fact, some 40%+ and growing of 360 customers are already using Workday. We saw it as a great fit for our offerings and acceleration of what we're doing with areas like 360 already. Super great fit for that, and we see ourselves having these deep relationships with customers only enhanced.

Scott mentioned in his formal remarks, accretive from day one. We do see that as being beneficial to our journey. As we indicated at the beginning of the year, we saw a couple of M&A. We've now completed both of those, so we're very confident and raised our guidance as a result financially.

We're not giving specific size on the deal itself, revenue, but between this and Westfall Gold now being completed, we satisfied that portion of the growth that we had indicated of our inorganic growth for the year. Overall, we see great synergies as well. They were supplying many of the customers who we were already engaging with, so we do see synergy sales being a benefit to our ecosystem. Finally, this is a path for improving margins over time as we expand our unique relationship with Workday and the benefits that it brings to the ecosystem. This will only be more accretive over time as we get deeper and deeper on these key assets that provide value.

Finally, building our AI capabilities, as Scott already indicated before, will only enhance what we can do and use the unique capabilities, both of Workday and the broader capabilities of Gloo AI.

Okay, great. I just want to better understand the cross-sell opportunity with EMD. Is that primarily selling Workday and related services to your current install base, or is it more around converting certain customer segment of EMD to Gloo 360?

Yeah, it's actually quite a bit both because some of the accounts that were in the Gloo 360 pipeline were already being serviced by EMD. That's part of what got us actually quite excited because some of those accounts that we hadn't yet broken into are now becoming Gloo customers, and we expect that the land and expand opportunity as a result has only accelerated. We also see, because of their depth of capabilities, that we'll be introducing it into accounts where we already have activity, and now we'll have a much richer set of capabilities to accelerate Workday deployments into a number of Gloo accounts already.

Finally, EMD was servicing customers that weren't even in our pipeline today. We do see some market expansion opportunity for us. I'll say it's yes, and yes, for the synergy opportunities.

Just lastly on Gloo AI Studio, I know you already mentioned it. Is that targeted at customers wanting to customize their Gloo AI solutions? Is that a precursor to potentially opening up your platform and maybe getting into the partner ecosystem where try to develop an ISV ecosystem?

Yeah, we unquestionably see this as building an ecosystem of developers that are aligned with faith and flourishing. Some of the accounts that were already doing these type of AI app development, and they might be looking at whether they would want to do that on Anthropic or Google or Amazon or Microsoft. Well, we offer all of those models through the Gloo AI Studio, but we add guardrails, protections, and testing to validate that it meets the values and expectations of these customers.

Those are part of what the Gloo AI Studio provides. We're finding increasing resonance from people that say, "Yeah, I want the best models that are there in the industry, but I also want them to be safe and trusted." That's the value that Gloo 360 is adding on top of enabling the best AI capabilities in the industry.

We expect that this ability for us to service big customers like YouVersion, and we're partnering with them on many AI builds, but a much broader set of customers as they want to build their own applications, but doing it with a trusted partner like Gloo.

Okay, great. Thank you so much.

Thank you. As a reminder, ladies and gentlemen, we do ask that you please limit yourself to one question and one follow-up. Our next question comes from the line of Matthew Harrigan from Benchmark. Your question, please.

Thank you. I'm curious what the reaction right out of the blocks is on Gloo AI Studio in terms of partners who have used it. In February, we saw this rapturous reaction to Sora in terms of the implications for the entertainment industry, and I imagine that's kind of an overreach comparison. Do you think the ease of use is good? Are people really interested? Are people getting utility out of it right away?

Super early, and I'm sure in a quarter or 2 when we've been in market for more than just a couple of weeks, we're going to have a much better signal. The response so far is we're getting emails that people who are using other people's platforms and tools, very excited to move their apps over on top of Gloo AI Studio. We definitely have some early positive anecdotal signals that give us a lot of confidence. We're also coming into developer season for Gloo, right? We just had Missional AI, and we launched Studio just in front of that on purpose.

We have a virtual developer event over the summer, and then we have our big hackathon in the fall. About every two months, we have a major developer event over the next four months.

It's going to be an exciting time for us to build that momentum. We're measuring the results on this on a daily, weekly basis as we're starting to see token count rising, API calls, revenues start to materialize, just the beginning of an exciting new capability for Gloo.

Since we have kind of a two-headed monster here between myself and Dan, a question from Dan. When you add these capabilities, and clearly you're getting a lot more pull demand as you get more awareness in the marketplace, when you look at the sales cycle, when you get a big contract in a given vertical, does the next win come pretty quickly in a tighter sales cycle? Are people looking to emulate what other guys are doing, and they don't want to be left behind in a certain sense in terms of the implementation of the software and the AI capabilities that you offer?

Yeah. We're definitely seeing that, and that's very much what I was trying to indicate earlier, that we're able to see the sales cycle close, particularly for the next account within a segment, right? As we saw with InterVarsity this quarter, it was in the same segment where we also had other activities with campus ministries. We do expect that we'll see very similar within the university segment. When we have reference accounts, we're able to move across those segments quite effectively. It's land, expand, and expand. Expand in the segment, expand the offerings from Gloo as we build more of our capabilities for those customers. Overall, I'll say the sales cycle and having led major software and SaaS sales models, how rapidly we're able to convert accounts is really pretty impressive so far.

I rather suspect that sales number is going to be light. You won't refrain from more M&A activity. Congratulations. Lots of momentum. Thanks.

Thank you.

Thank you. Our next question comes from the line of Jason Kreyer from Craig-Hallum. Your question, please.

Great. Thank you, guys. I'll echo my congrats on the quarter. I wanted to maybe start on the M&A front. We went into the year expecting a couple of deals and kind of a defined revenue contribution. You've done a couple of deals. It seems like we're in the vicinity of that revenue contribution. Just curious, we're pretty early in fiscal 2026 yet. What are your thoughts on other M&A opportunities that might present themselves over the duration of the year?

Yeah. Thanks, Jason. We've got a significant pipeline from an acquisition standpoint. However, we've been really focused on getting the synergies out of the current transactions that we've done. That's been a big focus of us so far this year, and it's going to be a really important driver to getting to that EBITDA profitability by Q4. That being said, we do have a pretty significant pipeline. We will be super disciplined as a result of that. There may be more this year, but we need no more to be able to hit the numbers that we've got for guidance, and we need no more to be able to get to the EBITDA profitability. We've had the good fortune of being able to do best in breed for this ecosystem. We've been very picky in terms of the transactions that we've entered into.

A great example is the work that we did last year as a result of Masterworks and the great boost that that's been able to give us in terms of massive synergy across the reach. As Paul was talking about a little bit earlier in terms of the organic growth from 360 and the improvement in the margins from 360, we're seeing the same thing in Masterworks. One is Powering Tech, the other one is Powering Reach. We can continue to be very disciplined as the year goes forward, even though we do have a good pipeline.

Thanks, Scott. I want to build on that. You're seeing more profitability flow earlier in the model than we anticipated. Nice guide in terms of improvement for Q1. You're moving forward that profitability for FY 2026.

Maybe just talk about the drivers there. Are you finding you don't need as much OpEx as you thought, or is it more a product of the revenue outperformance and getting scale there? Just any way to define it would be great. Thanks.

Great question, Jason. It's a combination of both. First of all, as we talked about or announced in December, we took a look at our cost structure, removed some redundancies there, and that flows through Q1 as it begins to hit, which helped our guide and the incremental EBITDA improvements. Secondly, the businesses are scaling really nicely across everything we talked about, Reach, Tech, Masterworks, 360, all the different businesses. As those take steps each quarter, you start to see it in Q1, and then each incremental one going forward as we work towards Adjusted EBITDA profitability in the Q4.

Yeah, I'd jump in and add, just a lot of operating discipline as well, which we're excited about. We couldn't be more proud of our capital partners, the organizations that we've made investments in, and the organizations that we've acquired. It's just like the leadership have stayed. They're invigorated. We're bringing synergies to the table in terms of on technology and in terms of cross-selling and channel. The capital partners are doing great. It's super exciting to see the synergy that's coming from that, the enthusiasm that continues to be there, and we're super grateful for them.

That's great to hear. Thank you, guys.

Thank you. Our next question comes from the line of Ryan Meyers from Lake Street Capital Markets. Your question please.

Hey, guys. Thanks for taking my questions today. I guess the 1st question, are there any material cost pressures or risks we should be aware of in fiscal year 2026?

I don't think anything significant that we haven't talked about before that's not normal. Nothing stands out in terms of cost pressures.

Got you. I know you don't disclose the actual number, but are you seeing more of the revenue base becoming recurring, or how is that shaping up?

Yeah, as you look at the work that we're doing with Gloo 360, as you look at the work that we're doing with Masterworks, more and more of that is just locked in recurring revenue. I just love what we've been doing in terms of this idea of taking over work. There's been some really good commentary on that as well. Recently, there's been an article, some research published by Julien Bek, a Partner at Sequoia. The title of that is "Service Is The New Software." What he's pointing out there is a little bit of the older model was sell tools in and let people do work on top of those tools. Whereas at this point, what you're able to do is actually pull work out.

When you pull those tools and you pull that work out, then you're able to sell that work back into the organizations. Well, not only is it much bigger because you got the tools revenue and you've got the work revenue, you got that labor revenue on top of it, but it is incredibly sticky, right? It's very, very durable, which we like to see. He makes a quote that says, "A company might spend $10,000 on QuickBooks and $120,000 on the accountant to close the books.

The next legendary company will just close the books." Right? That's really what we're focused on with a lot of what we're doing, not just at 360, but also at Masterworks, where we're forward deploying people into those organizations.

We're pulling work out of those organizations, being able to deliver them better results at a lower cost, being able to then set ourselves up for really good long-term relationships, very recurring in their nature, and then really freeing them up to be able to focus more of their energy on going out and chasing and scaling their mission, which is what it's all about at the end of the day. It's about helping those organizations help people flourish, help communities flourish, and be able to enable those organizations to thrive.

All of that then becomes more recurring by its very nature. Even if some of that you think of as a service, it is a very deeply embedded long-term agreement that delivers services or work back into those organizations.

Yeah, that sounds awesome. Thanks for answering my questions.

Yep.

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Scott Beck, Co-Founder and CEO, for any further remarks.

Yeah, thanks a lot. Let me start by saying I couldn't be more excited by where we're at today. We've been on a long journey here. We've spent more than a decade building the foundation for this business, investing in the platform, in the trusted relationships, and in the mission that continues to guide our work. Today, I believe that Gloo is better positioned than ever as the leading technology platform for this ecosystem and as the leader in applied AI for this ecosystem. All of this is pointed toward being able to use technology as a force for good. Our aim has always been that, and it's just we've made tremendous progress toward that. Also, super thankful, I just got to say, we're super thankful for the organizations that trust us with that. We do this wholly imperfectly, right? We're getting better every day.

They trust us with it, they journey with us on it, and we're super grateful for that. We're also thankful for the team, for our capital partners, I talked about them earlier, as well as the investors. We've got a lot of investors that got us to this point and new investors that are on the journey. With all of this, our goal remains really clear, to build a large, profitable, mission-driven business that serves those who served. We're committed to doing that with discipline, transparency, and a focus on long-term value creation for our shareholders, but also for the customers that we serve.

Personally, I thank God for the opportunity to be able to serve this ecosystem, to best ensure that the organizations can thrive, and so that they can go into their communities, they can work with the people, and help them flourish to become all that they're born to be. Thank you all for taking time today to listen to our call. As always, we remain available to answer questions. Feel free to reach out at any time. With that, Operator, that concludes our time.

Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.