This list celebrates changemakers creating meaningful impact through leadership, innovation, fresh perspectives, transformative mindsets, and lessons that resonate far beyond the workplace.
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Cohere raised $500 million in venture funding for a $6.8 billion valuation and hired a CFO and Chief AI Officer.
The funding lands as Cohere North, an agentic AI platform, scales up. The funding round was led by Radical Ventures and Inovia Capital with participation from existing investors such as AMD Ventures, Nvidia, PSP Investments and Salesforce Ventures.
Cohere added that Healthcare of Ontario Pension Plan was a new investor.
As for the new Cohere hires, the company said Joelle Pineau, former head of Meta's Fundamental AI Research, will become Chief AI Officer. Francois Chadwick will become CFO. Chadwick is an alum of KPMG, Uber and Shield AI.
Along with Anthropic, Cohere is one of the leading large language model players focused on the enterprise. "We are at a pivotal moment in accelerating the delivery of secure AI that empowers enterprises worldwide, and we’re excited to enter this new phase of expansion alongside our partners," said Cohere CEO Aidan Gomez.
Cohere said the funding will be used to accelerate agentic AI use cases in businesses and governments primarily through North. The company added that strategic partners such as Oracle, Dell, RBC, Bell, Fujitsu, LG CNS and SAP are using North as a platform.
North uses Cohere's Command A, Command A Vision, Embed 4 and Rerank 3.5 models.
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Five9 said it has integrated its customer experience and contact-as-a-service platform with Epic, one of the top electronic health record providers. The companies will launch Five9 Fusion for Epic in a bid to land more healthcare enterprises.
With the integration, Five9 will be included into Epic's Toolbox. The API integration between Five9 and Epic should enable agents to connect with patients on one screen. Epic has about 42% of the EHR market.
Constellation Research analyst Liz Miller noted that Five9's approach with Epic works well because it combines capabilities for an offering to healthcare. "Five9 has done the hard work around other aspects required of healthcare including security, identity assurance and other requirements," said Miller.
Fusion9 Fusion for Epic, which will be generally available in September, includes the following:
Patient context for every call includes relevant data as soon as a call is received.
One-click outbound calling to enable agents to initiate calls from Epic modules.
HIPAA-compliant call recording controls.
The news lands after Five9 announced second quarter earnings and the retirement of CEO Mike Burkland after a successor is named. Five9 reported second quarter net income of $1.2 million, or a penny a share, on revenue of $283.3 million, up 12% from a year ago.
For 2025, Five9 is projecting revenue between $1.1435 billion and $1.1495 billion with non-GAAP earnings of $2.86 a share to $2.90 a share.
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Cisco said it saw strong orders for AI infrastructure as the company reported a strong fourth quarter.
The company reported fourth quarter earnings of $2.8 billion, or 71 cents a share, on revenue of $14.7 billion, up 8% from a year ago. Non-GAAP earnings in the fourth quarter were 99 cents a share.
Wall Street was looking for fourth quarter earnings of 98 cents a share on revenue of $14.62 billion.
Chuck Robbins, CEO of Cisco, said "the AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target." He added that the company expects to see strong demand form sovereign AI deployments and emerging AI cloud providers. Robbins added that Cisco’s sales scale is boosting its Splunk unit and security strategy.
Cisco rival Arista surged last week after it said revenue growth will be about 25% in 2025 to $8.75 billion due to strong enterprise and AI demand. Jayshree V. Ullal, CEO of Arista, said during the company's second quarter earnings call that "we recognize the potential to build a truly transformational networking company." Juniper, another Cisco rival, has been acquired by HPE.
Here's a look at Cisco by the numbers:
Fourth quarter orders were up 7% from a year ago, across multiple regions. AI infrastructure orders from webscale customers topped $800 million in the fourth quarter for a fiscal 2025 total of more than $2 billion.
Cisco's networking business delivered revenue growth of 12% to $7.63 billion in the fourth quarter.
Security revenue was up 9% in the fourth quarter to $1.95 billion.
For fiscal 2025, Cisco reported earnings of $2.61 a share on revenue of $56.7 billion.
As for the outlook, Cisco projected first quarter non-GAAP earnings of 97 cents a share to 99 cents a share on revenue of $14.65 billion to $14.85 billion. Fiscal 2026 revenue will be between $59 billion to %60 billion with non-GAAP earnings of $4 a share to $4.06 a share.
Key items from Robbins during the conference call:
“Our new smart switches are powered by Silicon One and deliver enhanced performance, quantum secure networking and radically simplified cloud native and AI driven operations, all supporting the new realities as AI changes how it work and collaborate. The introduction of our new switches marks the beginning of a major multiyear refresh cycle opportunity for Cisco's large installed campus switching base.”
“AI orders are ramping and we have a growing pipeline in the hundreds of millions of dollars as these customers look to Cisco to provide simple, scalable and secure solutions.”
“The Cisco secure AI factory with Nvidia provides a trusted blueprint for building secure AI ready data centers for enterprises, sovereign cloud providers and newly emerging neo cloud providers.”
“While we have some clarity on tariffs, we are still operating in a complex component environment. Our Q1 and fiscal year 2026 guide assumes current tariffs and exemptions remain in place for the end of fiscal 2026.”
“We're pretty confident that we haven't seen any indication of any pull forwards in AI infrastructure among backend networks of the cloud providers.”
Vice President and Principal Analyst
Constellation Research
Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.
Coverage Areas:
Future of Work
Tech Optimization & Innovation
Background:
Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...
Vice President & Principal Analyst
Constellation Research
About Liz Miller:
Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...
ConstellationTV episode 111 is here! 📺 This week, Liz Miller and Holger Mueller cover major #enterprise news, from SAP’s SmartRecruiters acquisition and Five9’s C-suite shakeup to Salesforce & ServiceNow’s $1.5B Genesis investment.
Next, CR analyst Chirag Mehta highlights why #security 🔒 is the top challenge in #AI adoption and explains how Microsoft is tackling data, identity, and endpoint protection for the AI era.
Finally, R "Ray" Wang Wang and FICO’s Nikhil Behl discuss how FICO’s platform helped Brazilian banks modernize, boost automation, and cut credit defaults through open banking.
Catch the full episode below ??
00:00 - Meet the Hosts
01:21 - Enterprise Tech News
14:19 - Microsoft's AI Security
23:36 - FICO's transformation of Brazilian banks
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Rigetti Computing said its 36-qubit multi-chip quantum computer is generally available and outlined a plan to build a 100-qubit system with 99.5% fidelity by the end of 2025, but quantum advantage is likely 4 years away.
The technology milestones and outlook were outlined as Rigetti reported second quarter results that missed estimates.
Rigetti reported a second quarter net loss of $39.7 million, or 13 cents a share, on revenue of $1.8 billion, down from $3.09 million a year ago. Wall Street was expecting Rigetti to report a second quarter loss of 4 cents a share on revenue of $1.87 million
The company said second quarter revenue was impacted by the expiration of the national quantum initiative and pending reauthorization in the US Congress.
Quantum computing is an immature industry that generates a lot of headlines but many pure plays are just building revenue streams. Contracts--often with government agencies--are lumpy and so are the quarterly results. Given the boom in quantum stocks, many of the quantum computing vendors have been able to fortify balance sheets and raise cash.
For instance, Rigetti ended the second quarter with $576.1 million in cash and equivalents. IonQ also fortified its balance sheet with a $1 billion stock offering in July. IonQ, which has been on an acquisition spree, reported second quarter earnings last week with a net loss of $177.5 million on revenue of $20.7 million. IonQ had $1.6 billion of pro forma cash and equivalents as of July 9.
Speaking on a conference call with analysts, Rigetti CEO Dr. Subodh Kulkarni said the company's chiplet approach is scaling.
The company's Cepheus-1-36Q system is generally available on the Rigetti Quantum Cloud Services Platform and coming to Microsoft Azure. The system has reduced error rates from the Ankaa-3 system that preceded it and hits a median two-qubit gate fidelity of 99.5%.
"Just 6 months after our record performance with Ankaa-3, we've once again halved our error rates with Cepheus-1-36Q. We believe quadrupling our chiplet count and significantly decreasing error rates is the clear path towards quantum advantage and fault tolerance. We intend to continue this momentum with our 100 plus qubit system planned for the end of the year," said Kulkarni.
Rigetti is betting on superconducting qubits as the ultimate leading technology for quantum computing. Other vendors have bet on competing technologies.
Kulkarni has been largely hype free when it comes to quantum computing. He noted that there are multiple challenges before quantum advantage is reached including dilution refrigerators and cabling as well as error correction.
He said:
"At this point, we believe we are still about 3 to 4 years away from getting to the 1,000-plus qubit, 99.9% fidelity with error correction and gate speeds of less than 50 nanoseconds, which is when we achieve quantum advantage. If we can accelerate that time line using our strengthened balance sheet we will obviously look at that. We are still looking at roughly about 4 years to get to that quantum advantage point."
"It's our view that superconducting qubits are the leading modality for quantum computers due to their ability to scale and their ability to achieve gate speeds more than 1,000x faster than other modalities like ion traps and pure atoms."
"Transitioning from a monolithic chip to chiplets enables greater control over chip uniformity, which in turn improves performance. Leveraging chiplets also reduces manufacturing complexity and improves fabrication yield."
"While we are pleased with our sequential growth in quarterly revenues, we believe achievement of our technology milestones remains a key metric to achieving our long-term success."
"Our focus continues to be on R&D development. We will obviously look at every opportunity to accelerate our time line. Right now, we believe we are funding R&D adequately to hit the milestones that we have laid out. Our plan for the end of the year is to deliver a multichip 100- plus qubit system with 99.5% 2-qubit gate fidelity. And from there on to continue to increase the fidelity as well as qubit count using chiplet approach. Every opportunity we get to accelerate that time line, we continue to look at it and we will do so."
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
CoreWeave is building its AI infrastructure so it can easily switch back and forth from training to inference workloads as it works through strong demand and supply constraints.
The AI infrastructure provider reported a second quarter net loss of $290.51 million, or 60 cents a share, on $1.21 billion, up 207% from a year. Wall Street was looking for a loss of 49 cents a share on revenue of $1.08 billion.
The company exited the second quarter with a revenue backlog of $30.1 billion, double the backlog from a year ago. CoreWeave landed a $4 billion expansion deal with OpenAI in addition to a previously announced $11.9 billion contract.
CoreWeave raised its 2025 revenue guidance to $5.15 billion to $5.35 billion. "We ended the quarter with nearly 470 megawatts of active power, and we increase the total contracting power approximately 600 megawatts to 2.2 gigawatts. We are aggressively expanding our footprint on the back of intensifying demand signals from our customers," said CoreWeave CEO Michael Intrator.
Here's a look at the takeaways.
Overall demand. CoreWeave signed expansion contracts with both of its hyperscale customer in the past eight weeks. "Our pipeline remains robust, growing and increasingly diverse, driven by a full range of customers, from media and entertainment to healthcare to finance to industrials and everything in between," said Intrator. "The proliferation of AI capabilities into new use cases and industries is driving increased demand for our specialized cloud infrastructure and services."
Financial services demand. CoreWeave said it inked big bank deals with banking giants Morgan Stanley and Goldman Sachs for proprietary trading.
Healthcare scaling AI. "We're also seeing significant growth from healthcare and life science verticals, and are proud of our partnership with customers like Hippocratic AI who built safe and secure AI agents to enable better healthcare outcomes," said Intrator.
Training and inference. Intrator said CoreWeave is working with customers to easily transition between training and inference. "We're helping these customers redefine how data is consumed and utilized globally as their critical innovation partner, and we are being rewarded for our efforts," said Intrator. "As they shift additional spend to our platform, we continue to execute and invest aggressively in our platform, up and down the stack to deliver the bleeding edge AI cloud services, performance and reliability that our customers require to power their AI innovations."
Intrator said:
"We really build our infrastructure to be fungible, to be able to be moved back and forth seamlessly between training and inference. Our intention is to build AI infrastructure, not training infrastructure, not inference infrastructure."
Storage workloads. CoreWeave said it is gaining storage share for AI-centric workloads. "Customers are shipping petabytes of their core storage to core week in the form of multiyear contracts. We are providing support for additional third party storage systems," said Intrator.
Bleeding edge expansion. Intrator said customers are focused on the latest hardware--Nvidia systems--to remain on the bleeding edge. "Clients are purchasing hardware that is appropriately state of the art for their use case. And as new hardware comes out, as new hardware architectures are released, they tend to come back in and purchase the same top tier infrastructure their next renewal," said Intrator.
Power and supply constraints. Intrator said the AI infrastructure market is "structurally constrained." "It is a market that is really working hard to try and balance and there are fundamental constraints at the power shell through the grid to the supply chains that exist within the GPUs to the mid voltage transformers," said Intrator. "There are a lot of different pieces that are constrained, but ultimately the most significant challenge right now is accessing power shells."
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Platform9 launched the latest release of its Private Cloud Director with AI hardware support and enhanced its vJailbreak migration tool so it can convert entire VMware vSphere clusters in place.
The vJailbreak capabilities can speed up VMware migrations at much lower costs, said Platform9.
Platform9's latest product releases land as VMware's rivals continue to court customers since the acquisition by Broadcom. VMware Explore, a flagship conference for customers Aug. 25 to Aug. 28. Nutanix, which is growing at a rapid clip due, will have more to say on poaching VMware customers when it reports earnings Aug. 27. HPE and Dell have offerings aimed at migrating VMware workloads via alliances and their own technologies.
And in the meantime, AWS continues to leverage AI agents for VMware migrations via AWS Transform.
Madhura Maskasky, co-founder and Chief Product Officer at Platform9, said in a statement that vJailbreak is designed to address concerns about the cost and complexity of migrations. "We can convert cluster nodes in place while workloads are automatically migrated, keeping services online and minimizing business disruption," said Maskasky.
According to Platform9, VMware migrations on average can take 18- to 48 months to complete with costs ranging from $300 to $3,000 per virtual machine. Platform9 said vJailbreak can now turn weeks into days at one-tenth of the cost. Key points:
vJailbreak can migrate fleets of the underlying hypervisor hosts using full-stack hypervisor migrations.
The migration tool works in-place on an existing vSphere cluster.
Hosts are handled one at a time in rolling fashion.
The tool take down a host, re-images it as a KVM hypervisor, configures storage and network and brings it up as a Private Cloud Director Cluster.
Virtual machines are migrated into Private Cloud Director via vJailbreak.
Holger Mueller, an analyst at Constellation Research, said the vJailbreak additions are interesting and notable, but the real cost with VMware migrations are the re-testing. Businesses have to re-test applications that are migrated to gain trust.
The Private Cloud Director updates include:
The ability to let workloads share AI hardware as customers ramp AI applications.
Support for both GPU passthrough mode and as vGPUs.
A Terraform-based app catalog that provides DevOps automation for multi-virtual machine applications.
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Anthropic said it is offering Claude for Enterprise and Claude for Government to all branches of the US government for $1 per year in a move that matches OpenAI.
In a blog post, Anthropic said Claude's $1 for one year deal will be available through the General Services Administration. Anthropic said that it will also offer technical support for agencies adopting Claude for productivity and mission workflows.
OpenAI US government deal is also offered through the General Services Administration. That offer included OpenAI for Government for $1 per agency for the next year.
Both Anthropic and OpenAI are betting that near freemium deals today will equate to profitable contracts with the US government in the future. Anthropic, OpenAI and Google are already part of a Department of Defense contract that has a $200 million ceiling.
What remains to be seen is whether these discounts for the US government result in similar discounting for large enterprises that also have scale. Or whether the discounts lead to larger bundled deals across agencies.
Vice President and Principal Analyst
Constellation Research
Chirag Mehta is Vice President and Principal Analyst focusing on cybersecurity, next-gen application development, and product-led growth.
With over 25 years of experience, he has built, shipped, marketed, and sold successful enterprise SaaS products and solutions across startups, mid-size, and large companies. As a product leader overseeing engineering, product management, and design, he has consistently driven revenue growth and product innovation. He also held key leadership roles in product marketing, corporate strategy, ecosystem partnerships, and business development, leveraging his expertise to make a significant impact on various aspects of product success.
His holistic research approach on cybersecurity is grounded in the reality that as sophisticated AI-led attacks become…...
AI is changing the way organizations work. It helps teams write code, detect fraud, automate workflows, and make complex decisions faster than ever before. But as AI adoption increases, so do the risks, many of which traditional security tools were not designed to address.
Cybersecurity leaders are starting to see that AI security is not just another layer of defense. It is becoming essential to building trust, ensuring resilience, and maintaining business continuity. Earlier this year, after many conversations with CISOs and CIOs, I saw a clear need to bring more attention to this topic. That led to my report on AI Security, which explores how AI-specific vulnerabilities differ from traditional cybersecurity risks and why securing AI systems calls for a more intentional approach.
Why AI Changes the Security Landscape
AI systems do not behave like traditional software. They learn from data instead of following pre-defined logic. This makes them powerful, but also vulnerable.For example, an AI model can:
Misinterpret input in ways that humans cannot easily detect
Be tricked into producing harmful or unintended responses through crafted prompts
Leak sensitive training data in its outputs
Take actions that go against business policies or legal requirements
These are not coding flaws. They are risks that originate from how AI systems process information and act on it.
These risks become more serious with agentic AI. These systems act on behalf of humans, interact with other software, and sometimes with other AI agents. They can make decisions, initiate actions, and change configurations. If one is compromised, the consequences can spread quickly.
A key challenge is that many organizations still rely on traditional defenses to secure AI systems. While those tools remain necessary, they are no longer enough. AI introduces new risks across every layer of the stack, including data, networks, endpoints, applications, and cloud infrastructure. As I explained in my report, the security focus must shift from defending the perimeter to governing the behavior of AI systems, the data they use, and the decisions they make.
The Shift Toward AI-Aware Cyber Resilience
Cyber resilience is the ability to withstand, adapt to, and recover from attacks. Meeting that standard today requires understanding how AI is developed, deployed, and used by employees, customers, and partners.
To get there, organizations must answer questions such as:
Where is our sensitive data going, and is it being used safely to train models?
What non-human identities, such as AI agents, are accessing systems and data?
Can we detect when an AI system is being misused or manipulated?
Are we in compliance with new AI regulations and data usage rules?
Let’s look at how Microsoft has evolved its mature security portfolio to help protect AI workloads and support this shift toward resilience.
Microsoft’s Approach to Secure AI
Microsoft has taken a holistic and integrated approach to AI security. Rather than creating entirely new tools, it is extending existing products already used by millions to support AI workloads. These features span identity, data, endpoint, and cloud protection.
Source: Microsoft
1. Microsoft Defender: Treating AI Workloads as Endpoints
AI models and applications are emerging as a new class of infrastructure that needs visibility and protection.
Defender for Cloud secures AI workloads across Azure and other cloud platforms such as AWS and GCP by monitoring model deployments and detecting vulnerabilities.
Defender for Cloud Apps extends protection to AI-enabled apps running at the edge
Defender for APIs supports AI systems that use APIs, which are often exposed to risks such as prompt injection or model manipulation
Additionally, Microsoft has launched tools to support AI red-teaming, content safety, and continuous evaluation capabilities to ensure agents operate safely and as intended. This allows teams identify and remediate risks such as jailbreaks or prompt injection before models are deployed.
2. Microsoft Entra: Managing Non-Human Identities
As organizations roll out more AI agents and copilots, non-human identities are becoming more common. These digital identities need strong oversight.
Microsoft Entra helps create and manage identities for AI agents
Conditional Access ensures AI agents only access the resources they need, based on real-time signals and context
Privileged Identity Management manages, controls, and monitors AI agents access to important resources within an organization
3. Microsoft Purview: Securing Data Used in AI
Purview plays an important role in securing both the data that powers AI apps and agents, and the data they generate through interactions.
Data discovery and classification helps label sensitive information and track its use
Data Loss Prevention policies help prevent leaks or misuse of data in tools such as Copilot or agents built in Azure AI Foundry
Insider Risk Management alerts security teams when employees feed sensitive data into AI systems without approval
Purview also helps organizations meet transparency and compliance requirements, extending the same policies they already use today to AI workloads, without requiring separate configurations, as regulations like the EU AI Act take effect.
Here's a video that explains the above Microsoft security products:
Securing AI Is Now a Strategic Priority
AI is evolving quickly, and the risks are evolving with it. Traditional tools still matter, but they were not built for systems that learn, adapt, and act independently. They also weren’t designed for the pace and development approaches AI requires, where securing from the first line of code is critical to staying protected at scale.
Microsoft is adapting its security portfolio to meet this shift. By strengthening identity, data, and endpoint protections, it is helping customers build a more resilient foundation.
Whether you are launching your first AI-powered tool or managing dozens of agents across your organization, the priority is clear. Secure your AI systems before they become a point of weakness.
Editor in Chief of Constellation Insights
Constellation Research
Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...
Monday reported strong second quarter results, progress in landing enterprise accounts and AI products that are resonating. But a conservative outlook and other moving parts put the kibosh on the results.
The company reported second quarter earnings of 3 cents a share on revenue of $299 million, up 27% from a year ago. Non-GAAP earnings were $1.09 a share, 23 cents a share better than estimates.
Monday projected third quarter revenue of $311 million to $313 million, up 24% to 25%, vs. Wall Street estimates of $313 million. Non-GAAP operating income will be $34 million to $36 million. For fiscal 2025, Monday projected revenue between $1.224 billion to $1.229 billion, up 26%. Wall Street was looking for $1.22 billion in revenue for the year. Non-GAAP operating income for fiscal 2025 will be between $154 million to $158 million.
Shares fell nearly 30% on Monday.
Monday is expanding its product lineup. In the second quarter, Monday saw 46 million AI driven actions since launching AI products. During the quarter, the company launched Monday Magic, Monday Vibe, and Monday Sidekick, three tools Co-CEO Roy Mann said, "mark a major step forward in our evolution from work management to work execution."
In July, Monday said the launch of the new products was the beginning "of a longer-term evolution" focused on enabling AI for all aspects of work.
AI-based products are also driving consumption revenue. Monday executives said more customers are surpassing the 500 AI credit limit and buying more for AI usage.
Monday is looking upstream to enterprise accounts. Co-CEO Eran Zinman said Monday saw a record number of new net adds of customers paying more than $100,000 annually. Much of this move into the enterprise revolves around Monday CRM, which hit $100 million in annual recurring revenue. "This achievement underscores the strong demand for a flexible, customizable CRM platform," said Zinman.
The company is retooling its management team to sell enterprise accounts. Monday named Google, Waze and Vimeo alum Harris Beber as CMO, and appointed Adi Dar as Chief Customer Officer. Dar is Monday's chief operating officer until a successor is named. In April, Monday named Casey George as Chief Revenue Officer. George had been at Qlik as well as Talend and Verint.
Monday is projecting headcount growth of 30% in fiscal 2025.
Zinman said:
"While work management is very mature for enterprise customers and kind of high end of mid-market, the newer products, the CRM, dev and service are currently more serving the SME segment. So, on one hand, we feel the multiproduct strategy really help bundling and selling more products to kind of more of the lower-tier SMB mid-market part of the business, while the changes we've done to go- to-market team and organization and a lot of other things is driving upmarket expansion."
Google search changes are hampering low-funnel activity for smaller accounts. Mann said Monday has seen fluctuations due to Google algorithm changes before. The company is now optimizing AI Mode.
Mann said the impact from Google changes isn't big but is part of a funnel for smaller businesses. There's also an impact for larger customers too. He said:
"The better, high- quality customers still click on Google and ads. If you're looking for solution such as a CRM or project management, you're going to reach us. So, the drop that we see is just on volume because they are experimenting with AI on top. And it's not that significant for the higher quality of customers. It's more volume than quality."
CRM growth. Wall Street analysts asked multiple questions about traction in CRM. Executives said that customer counts for CRM may not be a perfect indicator since Monday is landing larger accounts. Mann said Monday CRM is becoming more of a suite and that is landing larger accounts after a start focused on smaller businesses. Mann said Monday CRM is selling well because it offers the flexibility to "build anything you want with it."
"The platform is open. It's built out of building blocks. It's all modular. And that gives us a huge head start into building enterprise- grade applications that really work seamlessly. And that is also connected to the rest of your workflow," said Mann.
What's next? The company said that it will hold its Investor Day in New York Sept. 17 when it will outline more on its strategy and roadmap.
