Good morning, everybody. It's Keith Bachman here. We're on a little delayed start, nevertheless, happy to have ServiceNow here. Josh, I'm going to let you give some introductions about your background with the opportunity to focus on where your real focus is within the business solution context of ServiceNow.
Yeah.
Why don't I open the floor up to you?
Yeah, absolutely. First of all, apologies for being late today. It's kind of a slow news day anyway, right?
Yeah.
I've been at ServiceNow for 10 years. I run one of our workflows. I've spent most of the year, my time here building different businesses. We put those into product divisions we call workflows. Most of the time I spent growing what you call the Creator Workflows business, which we grew to be the second ServiceNow workflow over $1 billion several years ago. More recently, I've been focused on Core Business Workflows or the back office. So, I ran the HR business for a period of time and now intensely focused on finance, procurement, legal, and facilities. At ServiceNow, we tend to kind of have one core platform that we build specific applications and use cases for different personas. So, those are the new personas that I'm after.
Okay. If we think about those personas, so you have the front end, so to speak. Do you also own responsibilities for what I would loosely call the back end, i.e. R&D?
Yeah.
Do you have a dedicated R&D team, and do you have a dedicated go-to-market team?
Yeah. So actually, at ServiceNow, the workflow leaders like myself, it is me and a few other folks that run the different workflows, we actually own the product resources, and then the rest of ServiceNow is matrixed. We have dedicated sales teams, marketing teams, services teams, and we act as the cross-functional leader for those. The reason we like that model is it gives us an intense focus on specific markets and personas, and it allows our teams to have sort of functional world-class excellence and live in a functional team that they live in. So, the job at ServiceNow is cross-functional, but the actual, if you looked at the org chart, it would look a little different.
Okay. So let us go into, world is changing, we talked about today, AI is good or bad depending on the day. What is your focus? What are your key strategic priorities over the next 12 + months?
Yeah.
What do you have to get right in order for Bill to say nice things about you?
We need to keep getting deeper and deeper into these buying centers. What that means is sometimes selling specifically to those personas. I am focused on the head of procurement, focused on the head of accounts payable, accounts receivable, different personas in the finance department. We have products that we take to market to them. A lot of what we do is actually creating better together solutions across ServiceNow.
Okay.
One of the first focuses is in conjunction with our EmployeeWorks—
Okay.
—product line. That is the product we created when we put Moveworks, which we acquired last year, together with the rest of ServiceNow. EmployeeWorks is really a way for all employees to get the productivity they want. "Hey, my paycheck is wrong. What is the travel policy?" Any of those kinds of things. My business is building what I call better together solutions with those. If they want to go in and they need something from procurement, we want that to be an amazing conversational experience. In the old world, what it was is they go in and they fill out a form, and they do not know half the information, and it goes to procurement, and there is a back and forth by email. In this new world, it says, "Oh, you need 30 sweatshirts for your team offsite? Okay, here are the three suppliers we have.
This one has the highest rating. What is your budget? Okay, well, that takes this level of approval." It becomes a much more interesting back and forth discussion. We are going into those buying centers, but we are also trying to make sure we bring the power of the ServiceNow platform together to create more and more value for our customers. Rather than just one plus one, it is one plus one equals five.
Okay. How about infusing with the AI capability? You mentioned Workfront, but I am thinking also strategically about enhancing the product to candidly try to spur adoption of your higher-end SKUs.
Yeah.
What do you need to do there?
Yeah. There's a lot going on, obviously, in the world of AI. We have a couple different things. I talked about one, which is, there's a lot of AI in that EmployeeWorks and how employees get engagement. There's also big opportunities for what we call autonomous workers, and we're building a lot of autonomous workers. Two areas today that I'll or actually, I'll talk about three areas. One is in the service desk capacity. Everybody knows ServiceNow for ITSM, for Customer Service Management, for HR service. All these are service desks where people come in and make requests. We've built autonomous workers to take the requests and just resolve them.
Yeah.
These autonomous workers have the ability to reason, say, "Oh, what's this person really looking for?" They have a set of tools that they can call to resolve it. If it doesn't work, they can reason again and solve it. We call that zero-touch service desk. That is one big area of investment in autonomous. In the case of finance, there's a tremendous amount of work in finance today that's done very, very manually. Even across the Core Business departments as a whole, they're really often cost centers. They perform a function for the organization, but the goal is to perform that function as well as possible for as little money as possible. There's a lot of opportunities in there to use autonomous workers in three ways.
One is we're building autonomous workers to do things humans didn't do before because it was beneath the value of human effort. I'll give you one example there is, a lot of companies have unpaid invoices, and at some point, that invoice is small enough that it's just not worth having a person go try to collect on it. But if you put an AI agent on it, all of a sudden, it changes the economics, and you can start going further down and actually collect from previously uncollectible invoices. The second is actually replacing humans, and there's work that humans do today that is probably they shouldn't be doing in the future. It's beneath the level of human effort. Then the third is amplifying human work, and that's where autonomous workers can do things to make people better at their jobs.
A lot of that comes down to analytics, prioritization. If you're a category manager in a procurement department, being able to analyze all the company's spend, what's been under management, what's been kind of rogue spend, and make suggestions about new categories to create negotiated spend on, that's something that can be done in the background and the category managers don't have to do, so they can manage 10 categories instead of two.
Right.
Across that spectrum, we are using agentic AI and turning them into autonomous workers to really focus across the board.
Mm-hmm. Well, maybe if I could push you a little bit. When you think about the next 12 - 18 months, what could drive incremental net new dollars, i.e., what could accelerate growth? What do you think are your biggest opportunities? And then conversely, when you think about what may get pressured a little bit, whether for whatever reason those forces might be, is there anywhere in your business you think, "Eh, you know, it may be pressured a little bit," either competition, AI, what have you, but sort of just ranking your opportunities?
Yeah. That employee engagement layer—
Okay
—is a huge driver. EmployeeWorks reached $100 million in the first three quarters. Last quarter in Q3, we did 10 deals over $1 million, and the customer count grew by 60%. I think we are already seeing proof that that business is really on fire. The other part is the backend of that, and it is those automation things I just talked about. So, helping the procurement teams, the HR teams, the finance teams, the legal teams. We put all of that into a package that we call the Core Business Suite.
Okay.
We did that just because our customers often think about optimizing the back office as a whole. They have different priorities, they start in different places, but we were making it too hard for them to actually go wall-to-wall because they had to do transaction here, here—
Right.
—and know exactly what order they wanted to go in. So we just said, "Look, we're going to put this into a suite, and we're going to let you automate the back office." That product is doing incredibly well. We had 24 deals over $1 million last quarter, and it was in a huge percentage of our largest—
Right.
—deals. So, the EmployeeWorks on the front end, the Core Business Suite on the backend—
Okay.
—are really, really driving a lot of success. You asked about headwinds.
Yeah.
I probably should have started with headwinds and ended on the good stuff.
No.
Look, it's a super competitive market out there. I mean, especially if I look at the Core Business d epartments, finance, there are a ton of small companies that now can create a tremendous amount of code with a very small number of engineers. So you've got companies that are 20 people, and I look at the pace of progress that they're making, and it's pretty impressive. Our customers are hearing from us, "Hey, here's what we can do for you," and they're hearing from four other small companies, "Here's what we can do for you." So, our ability to differentiate is really important. We do that with our governance capabilities, with our enterprise workflow capabilities, with our data capabilities.
I mean, there's a lot of things we bring to compete, but I would just say that noise level is really rising for our customers as they make decisions.
Okay. When I think about the employee side, if I wanted to understand the growth dynamics associated with the business, is that a new land opportunity, or is your stream of solutions, is that pretty much expand opportunity? In other words, can you drive new logos?
Yeah, absolutely. Absolutely, we can drive new logos with that. There is a lot of companies out there that are looking for an employee engagement solution, and it is actually interesting. Sometimes we find two different parts of one organization that have these initiatives to use AI to improve the employee experience. Say that five times fast. Oftentimes, in one Fortune 100 financial services company, the HR organization had a big initiative that said, "We have got to make it easier for employees to do business, get the things they need, do what they want to do." The IT organization said, "Hey, we are going to use AI to drive everyday productivity." Because we sell to both the HR team with our traditional product and the CIO with our Technology Workflows, we were able to bring those two things together into a single initiative.
You said, "Hey, can we get new logos?" Absolutely.
Okay.
I use that as an example. It is an existing customer, but I use it as an example to indicate how pervasive the need for that employee productivity is.
Yeah.
Definitely see the potential for that. I think on the finance side, the reality right now is it is early in some of our autonomous workers for accounts payable and accounts receivable. I think there will be an opportunity to get new logo lands right in that area.
Yeah.
Today, it's primarily customers that are successful with procurement that are going autonomous as a next step, customers that are successful with finance case management that are going to the accounts receivable capabilities.
My next question touches on some of the things you highlighted, but I want to come at it more directly, is where do you see, over the course of calendar year 2027, from a customer's perspective, thinking about the strongest demand for autonomous work? In other words, where is the highest value you think going to be generated from AI in terms of the workflows that you have?
Yeah. So they're going to be in the places where the impact is bigger than just displacing work, workers, humans.
Yeah.
There will be some of that, clearly. If you look at accounts payable, our autonomous worker for accounts payable gets incredible metrics on autonomously processing an invoice, pulling the data out of it, matching it in the ERP system, clearing any exceptions that come up, and getting it freed for payment. And so, there are big teams of people that do that today in our customers and around the industry. But what really moves the needle in those areas is things like better identification of duplicate invoices, better identification of fraud in the process, better processing timelines so that you can make intelligent decisions about how to deploy your cash for better discounts or when to pay different invoices. And so, we could talk about the same thing on the accounts receivable side, is there's a lot of stuff that just doesn't get collected today.
Improving days sales outstanding by doing a better job of collections is really important. I think the biggest opportunities are going to be in those areas where it's not just about saying, "Hey, we don't need as many people to do this job," but it's saying, "We can do this better. We can get better. We can have amplification of business outcomes.
Okay. Sort of leads naturally into the next question, which, on the last conference call, the notion of FDEs came up.
I think investors were a little surprised about it, candidly.
How does FDE fit into your workflows? How does it help?
Yeah.
Or does it really fit into your workflows?
Yeah, there's a lot of use cases that are really easy to deploy out of the box.
Yeah.
It's just an existing customer can turn on, for example, our zero-touch service desk for customers that have a service desk set up in IT and HR. Those are things that are pretty readily deployable, and you don't need a lot of detailed expertise to get that set up and get that running. In those cases, we're doing great. Customers come to us with other use cases that are going to move the needle in a big way, these kinds that have big business impact that I described before, where it's not exactly going to be just an out-of-the-box application of our existing product. It's a little bit of an exploration. It's taking our agents and our agentic workers and our harness and our Context Engine and building it into a new use case. We don't do that with all of our customers.
We do it with a handful of very strategic customers. But those are the kinds of places where we're deploying our FDE resources. I have one today where, in a couple of the products that I run, they both support a common use case, but they're not integrated yet. That was on our roadmap. It was down the road. We have a customer who wants that integration right now. So we're saying, "Great. You get this deployed, you get this deployed, and then we're going to build that connection out, and we'll package it up, and it becomes part of the product.
I imagine that this will be your largest customer. If you had $100 of revenue in calendar year 2027, would FDEs be applied against 10% of those or 5%, or is it a small portion?
I think at a company level, that would be a good question for somebody else to answer. I do not have visibility across that. In my organization, and the sort of Core Businesses area, it is on the order of 10%-20%. Do not take that as a number for ServiceNow as a whole. I think ServiceNow as a whole is a much different answer.
I am just curious how you think also about, okay, Accenture is out there. We can partner with Accenture. We can bring in our own FDEs. This is candidly a question broader than your organization. I think the whole software industry is thinking about this, looking at the success of Palantir and whatnot. How do you decide, because you run heavily involved in go-to-market solutions, where it is appropriate to bring in FDE, where it is appropriate to bring in Accenture?
Yeah. A lot of that has to do—
I use Accenture because they are here at our conference.
—Okay. Yeah, great. Look, a lot of our customers have really important partnerships and relationships with partners. They often come to us and they say, "I have chosen to use your product, and my partner in the finance department is Accenture or whoever.
Yeah.
A lot of times they will have all the expertise they need, and they come in, and they get a great outcome. Sometimes they say, "Hey, this is a new product area." So I am running more or less some emerging products, and so it is common for there to not necessarily be as much deep expertise, which is why my ratios are unique to the business I am running. So, if we do not feel confident together making that decision that they have all the resources they need, we will have some of our product success people ride alongside on that particular deal. So, back to your question of like, how do we make those decisions? We make those decisions together with the sales team, and we have a meeting every week across our product team, our product leaders, and our sales leaders for these functions.
We know exactly what deals are in the pipeline. We know exactly what customers are in what process of being deployed. When risks show up, we jump on them. When opportunities show up, we decide how to prioritize the resources. So, we really operate very much like a tight team of applying those resources and actually all of our resources to the most high-impact opportunities, partly for the current quarter. Like we—
Yeah.
—biggest deals in the quarter, but really for the long-term build of this business. This is a multi-hundred -billion -dollar TAM over time if you zoom out across finance, procurement, legal, facilities, supply chain. We need to build those marquee relationships with customers where they're really getting incredible value out of this. It's a short-term and a long-term view that we balance.
Okay. We all live with metrics.
Yeah.
You're going to be given a metric for calendar year 2027, excuse me, on revenue.
Yep.
How does AI change the unit economics or business economics of your business? In other words, part of the driver for growth would be mix-up, presumably on higher-level SKUs.
Part of the concern Wall Street broadly on ServiceNow is seats.
Maybe bring in these dynamics as you think about how you make your quota next year.
Yeah. This is interesting because I think first of all, seats are not eroding. Our seats were up year-over-year. The rate is accelerating. That part is good.
Which is what investors don't believe because your multiple is pretty low. Anyway, keep going.
Agentic use is up 13x year-over-year, and that is what is really going to drive consumption. You have the seats remaining in a growing pattern. You have agentic growing. Over half of our revenue in Q3 was non-seat based.
Yeah.
How is this possible?
Yeah.
It is possible because we are tapping into dollar pools that are outside of just traditional software and IT budgets.
Right.
You look at what companies spend on services, BPO, business process outsourcing, for example. When you look at autonomous workers and you start evaluating what it would cost you to run autonomous workers yourself versus your current BPO contracts, some people are starting to decide to shift dollars into spend with ServiceNow instead of those kinds of arrangements they had in the past. I think if you said, "Look, there is this fixed pie and the dollars are going to change between these things," that would be one thing. But you have to realize that agentic and autonomous opens up entirely new pools of funding for this.
Yeah, I think that is underappreciated. If you think about your business, just a definitive statement, will seats grow in your business line next year?
Yes.
Okay. Let me open it up for investors for questions because I have to take a look at my next set of questions. Was that a question there?
No.
Okay. Okay, I am going to resume my march. When you think about your dependencies, you already mentioned a little bit, but if you could bring a little more granularity to the co-dependencies. What I am thinking about is things, we wrote a deep dive on Control Tower. If anybody has trouble sleeping, we are happy to get it to you. But it was a very deep dive on what Control Tower is, and I am just worried when you think about RaptorDB or AI Control Tower, what are your core dependencies as you think about your growth objectives next year?
Yeah. So, customers can get value out of an individual product. A lot of our customers will buy, for example, our Customer Service Management product, get tremendous value from that. But there are things in the platform that are really sort of the amplifiers of value. You hit on one, which is the Control Tower, the Super Intelligence Control Tower.
We call it Control Tower.
Yeah, great. The Control Tower manages our agents, third-party agents, gives you the ability to gives you a kill switch so you can turn them off. I think this is one of the big friction points with people—
Yeah.
—deciding to adopt AI is they're worried about this. Everybody hears about agents. We're pacing the frontier. People hear about agents that are collaborating together, leaving messages on billboards. That's where the Control Tower becomes really, really important. It helps you govern, it helps you manage your risk posture, and it'll help you manage your economics that you're getting. Because look, AI spend is going up, and a lot of people are asking, "Am I getting an ROI?" Across the board, Control Tower is one of those things, whether you're using one of our products, all of our products, and third-party products, it's going to be a force multiplier on all of that. Data is another big factor in getting value out of AI.
Especially in agentic and autonomous, they have to reason, and they're only going to reason as well as the data and the context that they have to solve what they're being asked to do. That's where our Workflow Data Fabric can not only give you the data that's within ServiceNow, but data from other sources. We put that together with a Context Engine, and the Context Engine is an ability for an agent to get just the right information from across all the different ServiceNow products and other sources. Let me give you an example of why that's helpful. Our Context Engine knows about IT assets from the CMDB, and we'll get to the CMDB in a second. It knows about employees from the HR information.
When someone goes in to whether it is ITSM or procurement and says, "Hey, I need a privacy screen," they do not have to say, "Oh, what laptop do you have? What size?" You are up there looking and trying to figure it out yourself. I do not know all those answers. It just says, "Oh, great. Is this for your MacBook Pro 13 inch? Okay, great. Do you want to send to your home or work? Okay, great. It will be there. Is it urgent? Yeah, I am leaving tomorrow. Okay, great. We will have it there. We will courier it over tonight." So that Context Engine stuff, I am giving you an example of an employee productivity use case where it is a delighter for the employee.
Yeah, there are some minutes that they saved in there, but you apply that to any kind of business process where you get just the right context and you give the agent what it needs to make the decision, super powerful. There is a CMDB, which is super important because that is a collection of all your devices, assets, people, identities, everything across the organization. When you look at our push into security, for example, I mean, that is just one example. You look at where we are going in security, that kind of connection and that kind of information about assets is incredibly important to not only providing security upfront, but being able to do things like remediation when you find out about a new type of vulnerability, understanding all the assets that are exposed.
I think those are some of the big areas of sort of cross-enterprise amplification that we have in the portfolio.
When you think about Control Tower, going back to that for a second, is how meaningful, if you think about your business in calendar year 2027, how meaningful of enabler would that be? To say it a different way, any sense about what your customer base adoption rates may be? Is it a lot or a little? Is it 5%, 10%?
Yes. It's up 6x year-over-year. We're seeing a tremendous amount of interest in it. I think every time there's a new news story about agents breaking out of their sandbox or something, people get a little bit more intently focused on this. That's also the nature of our customers in the enterprise. A lot of the smaller startup companies that I talked about earlier, they're in smaller companies, they're in mid-market companies. There's a little bit less rigor around and consequence, to be honest, around some of the need for AI governance and control. Our customers, it's extremely important to them, and it's growing in importance.
Okay. Let's transition a little bit to EmployeeWorks. It does sound like an incredibly exciting area. If you think about, if you did a histogram, what are the most frequent use cases? What's really driving adoption on EmployeeWorks, and is that sustainable as we look into calendar year 2027?
Yeah. I mean, what it really is just about, like, all the things that employees need every day from the many different systems they need them in. I think probably everybody actually have Moveworks or EmployeeWorks in their company today? I know it's big in finance.
We're wall-to-wall ITSM, but we are not EmployeeWorks.
Okay. It's a great opportunity. I'd love all your contact info. No, I'm kidding. When you go, whatever problem you have, you're like, "Hey, I got to take a client out to dinner. I need to brush up on the business, on our policy around that." "Hey, I'm going to some country. I need to know which countries are on the list of high-risk countries, so I shouldn't take any of my devices in." "Hey, I just got married. I want to change my address." All of these things require employees to stop in their day, go figure out where the information is, find the information, read the information, process it. This EmployeeWorks basically gives them one place where they just describe what they want, and it will go out and find the place that the information exists. If it's information they need, it surfaces it back.
Here's the travel policy. Here's the relevant paragraph from that travel policy. If you want the whole doc, click here. It can also drive action, and that's one of the really important things, is the ability to drive action, like the example I gave. I want to update my address.
Right.
We use Workday. I cannot figure out Workday to save my life. Fortunately, at my level, I have an HR business partner. I'm like, "Please help me." I don't know what the rest of the employees do. They use our version of EmployeeWorks. Just changing your address, something like that can be a five-second thing instead of a five-hour thing. Now, I want to draw a really sharp contrast on what's different in a lot of the other options that you have for this kind of employee engagement. If I go in and I say, on just a general, if I go into my frontier model and I say, "How do I change my address in Workday?" They'd be like, "Well, you go into Workday," and it'll give me a step-by-step instruction to navigate Workday's interface and find the place and click on it and do all that.
It won't say, "What address do you want?" Then let me click and pass it through.
Right.
That's what EmployeeWorks really does. CVS Health is a great example of this. They deployed it within 30 days. They had a 50% reduction in phone calls to their service desk. They've had over 2.5 million conversations through Moveworks, EmployeeWorks, and 75% of the people have come back to do it again. I think that last one is the one that really hits on why it's growing. People love it. It works, and it gets them what they need.
Yeah. I think we could use it at Bank of Montreal. Okay. Let's talk about competition for a second. We're coming down to the closing stretch here, and I want to break this down into a couple different areas. You manage a number of products. Today, what is the most frequent competition? If you want to go product line by product line, what are those competitors? If you look at calendar year 2027, you highlighted what I was going to ask, is how are frontier models going to change those competitive dynamics or not?
Let me answer the second one first. We use the frontier models in our product. We have defaults that we use to build the product. Then we test across multiple different models to see if we can improve the results or improve the cost economics. We love the frontier models, and we're using them in our product today. Now, in terms of how we need to On the employee work side, there is a little bit of a like, "Hey, if I just want general information from out in the universe, it's not about automating.
Yeah.
Then employees can choose between the two, but you can use our EmployeeWorks offering to get any kind of information you want. It doesn't have to be about your company. We use it ourselves to build ways to help our salespeople prepare for sales calls by gathering, among other things, information from out on the internet. I think the frontier models for us are a great partner. We have incredible partnerships, and they're an important part of our core product. We build a lot of loops and harnesses and Context Engines to make those models perform in our specific use cases. What are the other competitive forces—
Yeah.
—for the business I run? Well, in a lot of cases, it's incumbent legacy software. It's the systems that people were thinking about getting rid of for years that now they're like, "Well, maybe I can just stick something else on top of it and let it be a data model.
Yeah.
We have to spend a lot of time really being clear with people about the value we provide in the layer that we're building, which has context, which has business policy, which has business rules, and really is the connective tissue between those underlying systems that have the data and the conversational experience they're using. Let me give you a really specific example of this. In our procurement product today, if you go into EmployeeWorks and you want to describe, you need to procure some new laptops or sweatshirts for your offsite. It'll basically guide you conversationally through filling out a form directly in Ariba or Coupa or whatever you use.
If you plug in our product, the Source-to-Pay Operations product, it'll be able to give you information about approval timelines, budget impact, the suppliers and their ratings, and all kinds of business process and context that isn't available, and it'll automate the submission of the purchase req. Now, what we've also done is we've done that through our Action Fabric. If you're using EmployeeWorks, great. But if you're using Claude, no problem. You can get a very similar experience—
—by using Claude because we're that layer in between. The procurement department, they're going to have a Coupa or an Ariba and 10 or 15. One of our customers had 50 different systems they used to power procurement, and that's where our layer comes in. For us, the competition is really just explaining to people the value that we provide in being that additive layer and connecting it to business.
Would an example of competition be something like Pendo or WalkMe, which was bought by SAP, which sort of guided tour? I mean, yours sounds more like action, right?
Exactly.
Those are suggestions.
Yeah.
Although they argue that you can take it the next step. Would that be an example?
They're great at telling you how to get something done or what something is on a screen, but they don't actually go through and get it done. I think that's where we're really unique. There's some smaller companies out there that are working to get into this space, but they don't have things like the Control Tower and the Workflow Data Fabric and the Context Engine that we do.
Okay. Let's finish up with talking about go-to-market. What are your key potential go-to-market strategy or changes that you're contemplating as we're looking over the horizon here to 2027?
Yeah. We have a number of big bets, and our goal is to grow those big bets as fast as we possibly can. Security is a great market for us. We're trying to scale the security business, scale the CRM business, the employee business. We've got a bunch of big bets like that. We're also just trying to get people to get value out of AI as fast as they possibly can. Part of that involves a mindset and an incentive shift with our sales organization so that they actually have a motivation on an ongoing basis to drive that consumption. Because in the old world of enterprise selling, you sold a deal, and you wanted the customer to get value, but that wasn't the way the company really got paid until three years later when you got a renewal.
Yeah.
Now it's a part of how the company gets paid. We need our sellers to think creatively about how to motivate the go-to-market teams, not just for the initial customer transaction, but for that continued growth and getting them live and successful.
And do you need to, I mean, we always act how we're measured. Do you think you need to change comp levels, or maybe you have done, to foster consumption behavior versus seat behavior?
Yeah, I think there definitely need to be financial incentives. I think it is dangerous to sort of say, "Hey, it is all consumption today." I think what we are doing, and this again, is not really. This is happening at the top level. These are decisions that Paul Fipps and his team are making about how he compensates his team, which is part of the value of being functional and matrixed. They are definitely looking at how do we increasingly incentivize people. It does not have to be your whole comp is based on that. You can put particular motivators in there around Winner's circle and things like that for people who really excel in driving consumption. Our customers, it is an evolution, not a revolution for them in going from seat-based to consumption.
It is an evolution for us on the go-to-market side as well in evolving that.
All right, last question, because we are officially at four zeros. When we think about 2027, how is the nature of AI changing the pricing discussion with customers? Part of it is consumption-based, but there are lots of different metrics that go into. Frankly, as you said, there is more competition.
Yeah.
Everybody is chasing AI dollars right now.
Yeah, absolutely. I think the biggest change I see is about value. They want to know what they are going to get for what they are spending, and making sure that somewhere in this model is a commitment to see the value that they are spending money to realize. I think a big part of this came from the evolution of the frontier models, where everybody was tokenmaxxing, and we had leaderboards. All of a sudden everybody is like, "Whoa, how did we get this bill?
Yeah.
This is insane. Stop using it for this, only use it for that." I see a lot of that with customers as saying, "Hey, look, I" I haven't had a lot of people who really say, "I just want to go to an outcome-based model right away." It's evolving in that direction where it's more about the outcome that they are seeking. I mean, you look at accounts payable, it's invoice-based pricing, as a proxy for how much value you are creating is how many invoices you are processing. Things like that are starting to come up more often, but it has not been a tidal wave of change from that.
It's just been people really looking at their spend and saying, "Are we getting the value we expected out of this?" That's where we're really very, very focused in go-to-market, but also in product on making sure our customers are getting that value.
Okay, perfect. Since somebody seems to be cutting off my mic, I think that's a sign that we are concluded. Thank you, Josh—
All right, thank you.
—for coming out. We appreciate it.