Navan, Inc. Class A Common Stock 2027 Q2 Earnings Call

Good afternoon, everyone, and welcome to Navan's second quarter fiscal 2027 earnings conference call. With me on the call today are Ariel Cohen, our Chief Executive Officer and Co-founder, Aurélien Nolf, our CFO, and Michael Sindicich, our President. As a reminder, we publish detailed prepared remarks on our IR website. During the course of today's call, we may make forward-looking statements with the meaning of federal securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks and uncertainties described in our earnings press release, our annual report on Form 10-K with the SEC on April 2, 2026, and our other filings within the SEC.

In addition, on today's call, we refer to non-GAAP growth margin, non-GAAP operating margin, non-GAAP income and loss from operations, free cash flow, which are non-GAAP financial measures that provide useful information for investors. Reconciliations of these non-GAAP financial measures to their corresponding GAAP financial measures, to the extent reasonably available, can be found on our earnings press release. With that, it's my pleasure to turn the call over to Navan's CEO and Co-founder, Ariel Cohen.

Thank you, Erin, and thank you everyone for joining us. I hope you had the chance to review our prepared remarks. In this quarter, you can have only one conclusion about us. We are winning. You can see it with the following. The current usage of the platform and its growth, our new sales and growth of our end-to-end AI platform from business travel, payments and expense, VIP travel, and now meeting and events, and our AI platform leadership. We are simply executing across the board while gaining momentum. Let's talk about the current usage of the platform. This quarter, total GBV, this is travel bookings on the platform, grew by 45% year-over-year to more than $3 billion. We exceeded our expectations for both revenue and non-GAAP operating income, and we are raising our full-year FY 2025 outlook again.

Customer satisfaction remains high, with CSAT of 96 and NPS of 44. Our platform is gaining usage across the board on every use case, in every geo. Let's talk about sales and new customers and us taking share. We are seeing strong sales execution across SLG. SLG is our sales-led growth, which is basically enterprise sales, and PLG, which is our product-led growth, which is our sales cycle. Our enterprise sales motion delivered another strong quarter, with SLG having their strongest sales quarter ever. New signed GBV for SLG was $4 billion in the last 12 months, and that was up 60% compared to Q2 last year. Product-led growth revenue more than doubled year over year again, and comes as an addition to our new sales in SLG. Payment volumes reached $1.3 billion and grew 34%, and subscription revenue was $21 million, with a growth of 39%.

To be clear, our growth is not coming from one isolated part of the company. The entire system is working together. Sales, product, deployments, operations, customer success, and our global travel and fintech infrastructure. At the same time, our own execution is creating more opportunity. The volume of RFPs to Navan has tripled in the first half of the year compared to the first half of last year. We now serve 50 companies in the S&P 500, up from 45 last quarter. We are winning larger and more complex enterprise customers across the globe. The most important thing is that our investment in our sales and marketing is becoming more and more efficient with the help of AI in this huge market. AI obviously is an important part of our strategy, so let me cover that.

As I've explained in our last call, before we even get to AI, it is important to understand the foundation we have built. Navan is connected to virtually every airline, hotel, rail provider, and ground transportation solution that our global customer need. Business travel and fintech connectivity are extremely complex, and we have spent the last 11 years bringing that complexity together on a single real-time global platform. This is not just about booking a trip, it's about managing the entire journey. Finding the right inventory, booking it, paying for it through a physical or a virtual Navan card, supporting the traveler, changing their itinerary where needed, and ensuring the proper credit, refund, reconciliation are handled automatically.

To do that at a global scale, you need supplier relationship and negotiated rates, banking partnerships and credit lines, local entities and licenses, compliance with local law and taxes, payments infrastructure, and operational expertise in markets around the world. We have built all of this into Navan's real-time infrastructure. That foundation is extremely difficult to replicate, and it is what we believe allow us to turn our AI platform to a scalable solution, supporting big enterprises across the globe. We are not treating AI as this feature layered onto traditional travel product. We are rebuilding the travel and expense experience around intelligence, orchestration, and action. Navan Cognition is the intelligence layer that orchestrates specialized AI agents, human experts, data, live inventory, policy, payments, and fulfillment. The important distinction is that Navan does not just provide an answer.

It can understand intent, take action, complete a transaction, manage the trip, reconcile the expense, and bring in a human expert with the full content when judgment is required. Ava is our AI customer support agent who is already demonstrating the value of this architecture. In Q2, Ava handled approximately 60% of customer interaction, and our customers love it. To be clear, Ava is not doing simple things like resetting your password. She is rebooking your trip when you are stranded in an airport, changing your hotel when you are not happy, taking care of your refunds, and many more complex business travel support tasks. The perfect orchestration between human and AI agents improve the traveler and our corporate customers' experience by supporting them more accurately and faster. Since servicing business travel and payments requires massive travel agency and operation support, it is very hard to scale fast.

By utilizing our AI platform, we are able to support Navan usage growth without jeopardizing the quality of our service. This is one of the reasons that we are so confident to raise our guidance for the second time this year to 32% year-over-year. We are also taking increasing control of our technology stack. Approximately 50% of our Ava AI model calls now run on Navan-owned models, up from 30% in Q1. These models are purpose-built for travel and expense and trained on our own data. Over time, we believe that should give us greater accuracy, faster response time, and lower cost. AI is not just a product investment. We believe it is also an opportunity for a structural gross margins expansion and greater operating leverage. By bringing Navan capabilities directly where travel intent begins, Navan MCP extends our Navan Anywhere strategy.

It provides conversational access to data across travel, expense, booking, and policy in ChatGPT, Claude, Copilot, and separately, we are adding agent capabilities in key collaboration tools like Gemini and Slack. Navan Edge is our flagship AI product. Edge is a full travel assistant who deeply understands you like a real person. It not only plans your trip, but also books everything from flights, hotels, restaurants, and events, and make the changes when needed. Simply, it is the best travel agent in the world. To summarize our AI platform, travel and fintech infrastructure are the key. Ava, Navan Anywhere, and Edge are creating the application layer value, and using our own model give us unique value proposition based on our own data. These three components allow us to grow our revenue faster with better economics while creating massive value for our customers.

The last thing that I wanted to talk about is M&A and the expansion of our platform. As we have explained in the past, business travel has endless needs, and our goal is to bring every need into our AI platform. Travel is still an entry point, but is increasingly connected to payments, expense, meeting and events, VIP travel, and leisure. Each of these additional products allows us to manage more of the customers' spend, replace more fragmented workflows, and become more strategic inside the enterprise. That is flywheel we are building. Better inventory and connectivity drive better experiences, better experiences drive adoption, and broader adoption creates more opportunities across the platform. This is why we build new products and make acquisitions, and why I am so excited about our acquisition of BoomPop. This expands our capabilities in meeting and events, an enormous category that remains largely unmanaged and messy.

Together with BoomPop, we expect these opportunities to make Navan more valuable to our existing customers and expand the universe of customers we can serve. BoomPop is already a partner. Our joint AI platforms allows us to plan events using conversational AI in an efficient way that was never seen before. I am super excited to welcome the BoomPop team to the Navan family. Stepping back, this quarter gives us an evidence across every layer of our business. We are growing in a resilient market. We are winning larger customers and taking share. SLG, PLG are scaling. Customers love the product. AI is improving the experience, increasing efficiency, and creating a margin advantage, and we are raising our full year outlook because our execution is strong, our visibility is improving, and the opportunity ahead is large. I want to close this by thanking the Navan team, our customers, and investors.

The team is firing on all cylinders, and we are having a great time while winning. We are still in the early innings of a large opportunity, and we are building the best travel agency on the planet for the agentic era, and we are only just getting started. With that, I will turn it over to Aurélien.