Good day, and welcome to the Progress Software to acquire Domo's AI and data platform business call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Michael Micciche, Senior Vice President of Investor Relations. Please go ahead. Okay, great. Thanks, Sheree. Good afternoon, everybody, and thank you for joining us today. Yogesh Gupta, our Chief Executive Officer, and Anthony Folger, our Chief Financial Officer, are on the call with me today. As you likely saw, Progress just announced our proposed acquisition of Domo's AI and data platform business. You can find the press release on the investor relations section of our website at investors.progress.com, along with a supplemental slide deck. Before we get started, we need to remind you that during this call, we may discuss forward-looking items, including our outlook, perspective, financial and operating performance, corporate strategies, product plans, cost initiatives, and other information that might be considered forward-looking, including the timing and potential results associated with our proposed acquisitions. This forward-looking information represents Progress Software's outlook and the potential impact of Domo's AI and data platform acquisition only as of today, and it's subject to risks and uncertainties and the actual results may differ. Please review the safe harbor statement regarding this information, which is available in today's release and in the supplemental slide deck. Progress Software assumes no obligation to update forward-looking statements in this call. We also make reference to several non-GAAP measures, including revenue, annual recurring revenue or ARR, NRR or net retention rate, pro forma net leverage, and EBITDA. Please see important information regarding non-GAAP financial information in our public filings for a description of these metrics. With that out of the way, Anthony, I'll turn it over to you for more transaction detail. Great. Thanks, Mike, and good afternoon, everyone. Thank you for joining us today for some exciting news about our latest acquisition as we continue to execute our total growth strategy. Earlier today, we announced that we had entered into an agreement to acquire Domo's AI and data platform business. In this deal, we are acquiring substantially all the assets and assuming only certain liabilities of Domo. I'm going to take just a few minutes to provide some specifics on the deal before handing it over to Yogesh. First, the headline purchase price for these assets is $400 million. Beyond the headline price, we've agreed to pay up to $15 million of seller transaction expenses. The purchase price includes a minimum acquired cash balance of $25 million and an estimated $35 million in net present value of tax benefits from the transaction. All of this results in a net purchase price of approximately $355 million. Based on Domo's fiscal 2026 results, this net purchase price represents a revenue multiple of slightly more than one. We intend to finance this acquisition using cash on hand and a portion of the current capacity on our revolving credit facility. Due to the strong deal economics, we don't expect our pro forma net leverage ratio to be affected materially and believe it will remain under 3x on a pro forma basis. Like past acquisitions, we intend to delever quickly and aggressively post-close. Subject to regulatory approvals and customary closing conditions, we expect this acquisition to close within our current fiscal year ending November 30th, 2026. Lastly, let me conclude by highlighting that in our press release this afternoon, we reiterated our Q3 guidance at or above the high end of the range we provided last quarter. That's all from me. We'll have a lot more information to share after the deal closes. Now I will turn things over to Yogesh. Thank you, Anthony, and hello, everyone. Thank you for joining us on short notice. We are eager to share this exciting news about our latest acquisition. As we've discussed before, enterprises are realizing that context and control are key to AI efficacy, outcomes, and value. AI agents are only as effective as the enterprise knowledge that underlies them, the context. Much of that knowledge lives in systems of record and unstructured content, such as documents, emails, support records, and conversations, which are often disconnected from the systems where AI operates. Structured data itself is fragmented across silos of applications and data stores with different nomenclatures and formats. Ingesting, transforming, and aggregating this data is extremely difficult, and doing it at scale with security and governance is even harder. This is an area where Domo excels. Domo offers an intuitive, scalable, and secure cloud-native AI and data platform that automates the ingestion and transformation of data from a very wide range of sources and allows organizations to store it in either Domo's own cloud platform or in one of their partner cloud data warehouses, or CDWs, like Snowflake or Databricks. These critical data readiness capabilities of Domo will strengthen our AI data platform leadership. Our Progress Data Platform manages structured and unstructured data and brings semantic analysis capabilities across the entire data ecosystem. When combined with Domo's offerings, it will create the most comprehensive solution for aggregating and making sense of all types of knowledge in an enterprise. Bringing all of the data together in a single data warehouse is critical, but not sufficient to address all the challenges related to context and control organizations need to reliably extract value from AI. Just doing this, then asking AI to work across all of an organization's information would be like collecting all the books and then asking someone to search through every page of every book in an entire library each time they needed to look for some information. Providing an extremely large context, which contains both relevant and irrelevant information, makes AI slow and leads to inaccurate outcomes because the large amount of irrelevant information ends up creating hallucinations. This approach is also extremely expensive and wasteful because it uses an inordinately large number of tokens for each request or action. A much more efficient approach is to use AI to automate the categorization and classification of all the information, so that when work is requested, only the relevant subset of information is used to address it. This is what the combination of the agentic RAG capabilities of the Progress Data Platform and Domo's AI workflow and agentic app capabilities will deliver. AI agents created by these capabilities leverage just the data necessary to get the job done. The end result is more accurate and more verifiable outcomes at dramatically lower costs. In addition to controlling costs, which is key, organizations need control over data security and governance for their AI initiatives. The capabilities of the offerings of our two companies will also deliver the security and governance control that enterprises need at every layer of their AI data architecture, from access and integration to use and action. Organizations are rightly concerned about the risk of their proprietary data being misused by AI. The security capabilities of both Domo and Progress products are designed to address this concern and keep proprietary information under the control of the customer. In a nutshell, the combination of Domo's cloud-native AI and data platform and Progress' own capabilities in structured and unstructured data management, data semantics, and agentic RAG will deliver the trusted foundation organizations need to deploy AI, automation, and agents at scale. Domo's successful transformation to an AI platform is evidenced by the fact that now over 85% of Domo ARR is consumption-based. Their 2,400 customers love their product, which has led to strong net retention rates for their consumption-based business. Domo has also embraced a very valuable partner strategy with CDWs, and those early but growing relationships give customers the freedom of choice that they are looking for. This strategy also enables a go-to-market motion that can create meaningful value over time. In addition to Domo's product capabilities, their team's expertise in cloud data architecture and analytics are highly complementary to our expanding Progress Data Platform capabilities that significantly improve the security, governance, and cost for our customers. We believe that this acquisition will deliver significant benefits to Domo as well as Progress customers. To summarize, the reasons why we're excited about this acquisition are that it fits squarely in our AI product strategy, the team will extend our team's skills, and when combined, we will be able to better serve both our customer bases. By being able to acquire Domo for a little more than one times revenue, as Anthony mentioned, makes it financially very attractive too. Finally, with respect to capital allocation and our total growth strategy, this transaction demonstrates our ongoing commitment to highly disciplined financial execution, and we're confident this acquisition will create meaningful value for our shareholders. The highly attractive deal economics, combined with our ability to drive strong cash flows through a proven integration process, will allow Progress to generate strong returns that we expect will meaningfully exceed our cost of capital. As Anthony mentioned, our pro forma net leverage ratio is expected to remain below 3x. I look forward to welcoming Domo's AI and data platform employees, customers, and partners into the Progress family. I'm incredibly excited about how this combination will extend our leadership in the AI data platform market. With that, Sheree, let's open the floor for Q&A. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of John DiFucci with Guggenheim Securities. Your line is open. Hi, can you hear me? Yes, Lawrence. Hi. This is Lawrence Vensko on for John DiFucci. Thank you for taking our question, and congrats on the acquisition. Just reading the press release, the acquisition is structured as an asset purchase of substantially all assets and certain liabilities. Are you able to comment on what specifically is being left behind at Domo and what Progress isn't taking? I just have a quick follow-up after. Anthony, you want to take that? Yeah, sure. Maybe I'll give a high-level summary on that, Lawrence. What's being left behind are net operating losses that Domo has accumulated. Obviously, their debt is being left behind. That's really it. Now, obviously, the debt is a significant liability, which is why we said we're acquiring pretty much all the assets of the business and a good portion of their liabilities, excluding the debt. Got it. Okay. That's helpful. Just as a follow-up. If I recall correctly, ShareFile added about 86,000 customers, and that was a different customer profile. You talked about Domo adding over 2,400 customers. I guess the question is: what are the net revenue retention and gross retention rates, and how did you think that'll compare to Progress over time? As I mentioned, Lawrence, the 85% of the ARR of Domo now comes from consumption-based business. Right? This is according to their own previously announced results. Right? The net retention rate and the gross retention rate on those is very similar to overall Progress. We actually feel that those strong net retention rates, those strong gross retention rates, combined with, as you know, with our efforts on an ongoing basis to do more with our customers, do more with the customers of businesses we acquire, I think enables us to continue to grow, and continue to make sure that the net retention rate stays strong. The fact that they have 2,400 customers is quite interesting as well. Right? This is much more of the kind of type of customers we have in our application and data platform business, which has products such as SmartLogic and Semaphore as part of the Progress Data Platform. It has things like OpenEdge. You're looking at similar type of customers. You know that data platform businesses are sticky businesses. I think it's evidenced by their net retention rates on their consumption business as well. We're really excited about this. There's time between now and close. We're eagerly looking forward to getting to that point. Once we are there, we will share more about how we see this evolving going forward. That's very helpful. Thank you, congratulations again. Thank you, Lawrence. Thank you. One moment for our next question. That will come from the line of Eric Martinuzzi with Lake Street Capital Markets. Your line is open. Yes. Curious to know the business relationship that the two companies had prior to today's news. Was this something where a large portion of the Progress customers were using Domo before or were familiar with it before? Is this really there was not a lot of overlap in the customer base? There isn't a lot of overlap, Lucky. There is some overlap. There's always some overlap among enterprise customers. It's hard to find two enterprise software companies that don't have some overlap, it isn't significant. It isn't something that I would consider a meaningful thing one way or the other. Okay, just a clarification on the press release from the Domo side. Is it correct that at close, the payout, if I were a Domo shareholder holding until transaction close, that I would receive $4.84 per share in cash? I am not sure about that because really that's a question for Domo. We are buying the assets. What Domo does with the cash is up to them. Anthony, if you want, please add more. No, I was going to say the same thing. Eric, we're buying, like we said, pretty much all the assets and a portion of the liabilities. What's done with the business that remains is really it's up to the team that'll remain at Domo. I think it's a question, yeah, certainly for them. Great. Thanks for taking my questions. Sure. Thanks, Eric. One moment for our next question. That will come from the line of Lucky Schreiner with D.A. Davidson. Your line is open. Great. Thanks for taking the question. It feels like, candidly, another unique acquisition. Their latest growth outlook was just flat growth year-over-year. Margin profile, obviously, a lot maybe to improve there with roughly barely break even free cash flow. Maybe starting with there, where do you feel like are some key areas of cost synergies that you guys can take out on the Domo side? What would you highlight up front? Thanks. Lucky, I think I'd rather wait until the deal closes before we talk about what we might do. You know we have a track record of acquiring companies that were barely break even. We've done this before, and bringing the margins over time to our margin, right? That has been one of the key strengths of our execution, and our ability to make these things work for our shareholders. It is a little premature to start identifying where, but historically we've done this stuff before. Yeah, you're right. Some of them have had higher margins, when they came in. Higher in the sense of maybe 10%-20% margins or around 20% margins, but we have acquired companies that were barely break even. Not new to us, Lucky. It takes hard work. You know that within about a year or so, we are able to make it happen. I'd love to talk more when we get to the close of the deal rather than now. Yeah, that makes sense. Maybe last one from me and maybe also a premature question, 85% of ARR with Domo is on consumption pricing. Do you plan to move the rest of the customer base over to that consumption pricing moving forward? Maybe can you give some commentary around some of the customers that are still on that legacy pricing model, some of the legacy credits that I believe they're still running on, any impact or how you view that moving forward? Again, I would love to wait until the deal closes to truly answer that question as to what we're going to do there. I just want to share with you what Domo has already been doing, right? This is something that they've publicly shared in their earnings calls, that they have been moving their customers from their seat-based licensing model to their consumption-based model, right? That is a move they started nearly, I want to say two and a half years ago. Maybe closer to three, somewhere in that timeframe. They have rapidly been able to take a business that was all seat-based and get 85% of the ARR to be consumption-based, with very healthy net retention rates. I think, to us, we will talk more when we talk about it once the deal closes. Yeah, the consumption-based business is the more exciting one. Got it. If I could sneak in one more. Honestly, if we look at the business intelligence peers, growth from those companies hasn't necessarily trended that well recently. I guess, what gives you confidence with this Domo acquisition in terms of your ability to at least drive a little bit of growth moving forward? Thanks. I think, when we see what is happening with the consumption customer base, Lucky, I think there is an opportunity there. I also think that we look at the combination of the two product sets, and I think we solve a bigger problem, and that sort of goes to your earlier question of how much overlap. We have rather limited overlap, I think there are some opportunities to be able to bring about the rest of Progress' portfolio into the existing Domo customer base or vice versa. I think, again, more to come when we close. We feel confident that we can get this to our profile of business, right? You know we are not a gangbusters growers, right? We've been upfront about the fact that this year we are expecting round numbers, approximately 2% ARR growth, right? I think that over time, we will get this there, too. Really appreciate it. Thanks, guys. Thanks, Lucky. Thank you. As a reminder, if you would like to ask a question, please press star 11. Our next question will come from the line of Nolan Jenevein with Oppenheimer. Your line is open. Hi. Thank you for taking my question. I just have a quick sort of dotting i's and crossing t's type of question, just around the definition of ARR from Domo. Is there anything we should be aware of in terms of how you guys define ARR versus how they might define ARR, sort of the eventual contribution of this on a pro forma basis and just sort of the relative growth profiles of those two metrics? Thank you. I can probably just mention, Nolan, that I'm not sure if Domo puts out an ARR number specifically. I think they maybe do put out an NRR number. As Yogesh mentioned a bit earlier, probably until we get to the close, maybe a little bit premature for us to sort of give anything forward-looking, especially with a metric that's not out there already. Obviously the consumption-based pricing model is something that I think has a lot of very positive characteristics, at least from our view, in terms of retention and opportunities for growth. So I think that's where a lot of our efforts are focused. I think we'll probably have more specifics as we get to the closing of the deal and as we get to our Q3 earnings readout, which will be in September. Got it. Thank you. Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back to Mr. Yogesh Gupta for any closing remarks. Thank you everyone for joining this call. We truly are excited about Domo's AI and data platform business, and we look forward to speaking with you again when the deal closes, to share more. Thank you, and have a good evening. This concludes today's program. Thank you all for participating. You may now disconnect. Thank you so much.