Gloo Holdings, Inc. Class A Common Stock 2027 Q2 Earnings Call

We will be discussing Gloo's performance for the second quarter ending July 31, 2026, as well as providing guidance for our Q3 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 Q3 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 ending January 31, 2026, and in our subsequent quarterly reports on Form 10-Q. 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, 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 ending July 31, 2026. Now I'll turn the call over to Scott.

Thank you, Oliver, and thank you for joining us today. Q2 was another solid quarter, with revenue increasing 188% year-over-year to $46.6 million. Since becoming a public company, we've been able to improve our financial performance every quarter. We have met or exceeded guidance each time and are raising our full year revenue guidance once again. Our progress continues to demonstrate that our strategy and our execution is on track. One of the key drivers is our leadership in applied AI for the faith and flourishing ecosystem. This strengthens every layer of our platform, from trusted AI capabilities like Gloo AI Studio, to AI-powered solutions like Gloo 360, to helping customers transform their organizations through agentic workflows. Our approach to applied AI reflects a broader shift in how AI-native companies are creating value.

We are increasingly delivering the work and the outcomes our customers need, rather than simply providing a better tool. As AI models improve, that work becomes faster and more efficient to deliver, creating greater value for our customers and expanding operating margins for Gloo. That makes continued advancement in the frontier models a powerful tailwind to our overall strategy and growth. When the models get better, we get better. We are seeing that in our customer momentum. Customers are trusting Gloo with more of their technology and growth needs. They're engaging with more solutions across our platform, as well as adopting capabilities that we've added through acquisitions. All of this is translating into strong top-line growth while we continue to operate with cost discipline and make meaningful progress toward adjusted EBITDA profitability.

Since becoming a public company, we've improved adjusted EBITDA every quarter and continue to approach breakeven in Q3 and are committed to achieving adjusted EBITDA profitability in Q4. Our full year guidance more than doubles revenue in 2026 year-over-year, while holding operating expenses approximately flat in absolute dollars. To support that growth and profitability trajectory, we completed meaningful cost actions in Q2, building on the actions that we took last year. We are demonstrating that we can integrate new capabilities, meet significantly greater customer demand, and grow revenue without building a proportionately larger cost base. Behind these results is a large, growing, fragmented, and underserved market. According to Kentley Insights, faith-based organizations generated over $265 billion in revenue in 2025. That's up 8.2% from $245 billion in revenue in 2024, roughly double the pace of U.S. GDP growth. At the same time, organizations are under increased pressure to modernize technology operate more efficiently, strengthen donor development, and scale their missions.

Our customer needs align directly with our strategy to power technology and to power reach with applied AI. Powering technology helps organizations modernize their systems, data, and workflows so they can spend more time focusing on their mission. Powering reach helps organizations strengthen marketing and engagement, expand awareness, and build the donor relationships that fund their missions so that they can increase their impact in the world. Underpinning both is our leadership in applied AI for the faith and flourishing ecosystem. Organizations are choosing us because they want a trusted partner that can deliver better outcomes with the resources they already have. That's exactly where Gloo is positioned to add value. The people and organizations that we serve are amazing.

They are changing lives for good and transforming communities in thousands of different ways around the country and around the world. These strategic customer relationships matter. We are closing larger, more strategic relationships that expand both the value that we deliver and the markets that we serve. We now have more than 30 customers representing over $1 million each in annual contract value. In Q2, we reached another important milestone with our first customer exceeding $10 million in annual contract value. In addition, with the acquisition of Cedarstone, we have added over 250 new mid-market network capability providers or customers who are well-positioned for cross-selling. We also expanded further into social services and youth-serving organizations where our technology engagement donor development capabilities lift the technology burdens and help them scale.

There are many people and youth in this country who are really struggling, and these organizations are making an enormous difference in their lives and are better able to serve them in partnership with Gloo. These relationships create significant long-term growth opportunities as customers adopt more of the Gloo platform. Universities continue to emerge as a strong growth vertical with over 40 universities in our current client portfolio. Universities face many of the same challenges we see across the broader ecosystem. They have complex technology environments and fragmented data, they have pressure to operate more efficiently, they need to increase enrollment, and they need to strengthen their donor development. Those needs align very well with our platform capabilities. We have added and expanded several university relationships during this quarter, and we have a strong pipeline of additional opportunities ahead.

We are not only adding customers, we are also deepening the relationships we already have. In this market, trusted relationships are a non-negotiable. Each capital partner we add to our platform brings its own deep, trusted customer relationships into Gloo. This creates an increasingly powerful ripple effect within our customers and within the segments. This supports our overall strategy that we call land, expand, and expand. This means once we land with a customer, we not only expand with that specific customer, but we also expand across the segment as well. For example, we already have many of our million-dollar-plus customers adopting solutions from multiple Gloo business units and capital partners. This is an important indicator of the opportunity that lies ahead. AI is another strong tailwind for Gloo.

More organizations are turning to us to apply AI in practical ways that advance their mission, grow their revenue, and make their operations more efficient. We are bringing the power of agentic workflows to organizations in areas like donor engagement, Help Desk automation, project management, and many more. These are tangible applications of AI that also give customers better insights into their enterprises while reducing repetitive administrative work and allowing them to focus more on their mission-aligned outcomes. Importantly, as we increasingly deliver the work itself, we rapidly embrace the AI model improvements to even more efficiently deliver the work. Through our forward deployed engineering model, we work alongside customers to solve specific operational challenges, and then we turn what works into capabilities that can scale across the ecosystem.

On September 8th, the company announced Gloo Code, a new agentic building capability within the Gloo AI Studio that helps developers get more from their tokens by pairing purpose-built agents with the right models for each task. Developers will have the opportunity to use Gloo Code at our annual Gloo AI Hackathon in October, when we expect hundreds of developers to build new applications for the faith and flourishing ecosystem. Our acquisition strategy is a core part of building a stronger, more durable company. Since becoming a public company, we have completed five additional acquisitions. Westfall Gold, XRI, EMD or Enterprise Market Desk, our remaining ownership stake in Midwestern Interactive, and Cedarstone. That is with EMD closing in Q2, and Midwestern and Cedarstone, which have closed in Q3.

Cedarstone is a good example of the cross-selling opportunities that we discussed earlier, with Masterworks providing a natural channel to bring Cedarstone capabilities to more customers. Each one adds capabilities, expertise, customer relationships, or market access that strengthens the broader Gloo platform. As we integrate them, we create new growth opportunities and reduce duplication as we integrate their operations. Our acquisition synergies are working. They improve revenue, financials, and expand what we can do for customers while driving synergies across our platform. This is a powerful flywheel that will ultimately drive meaningful profitability for Gloo. When I look at Q2, I see significant momentum. Our market is massive, growing, and technologically underserved. Our largest relationships are getting bigger and broader. New verticals are opening up. Applied AI is moving into meaningful operational workflows. And the capabilities that we have added across Gloo are increasingly working together as one platform.