IOT: F1Q Results - Fast Track to $2Bn & No Sign of Slowing Down

Research evidence excerpt

IOT: F1Q Results - Fast Track to $2Bn & No Sign of Slowing Down

ns: IOT posted op margin of 19.0% representing a Prior 454.9 E 480.3 E 501.2 E NC 1.97B E

~400bps beat vs. the 1Q guide and raised its FY OM guide by 100bps to 20%. Leverage 2028E 577.0 E 579.6 E 611.4 E 637.1 E 2.41B E

was primarily driven by efficiency in G&A, which improved ~600bps y/y. GM of 76.5% Prior 548.2 E 576.4 E 599.0 E NC 2.36B E

(down 200bps y/y) was driven by incremental AI and Cloud investment offset opex

efficiency gains. Mgmt expects GM to stay roughly flat in FY27. Lastly, IOT posted a Source:NA = NotCompanyAvailable,Data,NC =WellsNo Change,Fargo SecuritiesNE = Noestimates,Estimate and Factset.

record FCF margin of 15.3% which was above consensus ests of ~13.5%.

Michael Turrin, CFA

Key Metrics: 1) Customers >$100K ARR grew 37% y/y and accounted for 62% of total Equity Analyst | Wells Fargo Securities, LLC Michael.Turrin@wellsfargo.com | 628-629-7565

ARR (+1pt q/q / +4 pts y/y) reflecting third seq quarter of acceleration; 2) Wholesale

Austin Williamsand retail trade vertical contributed its 2nd highest net new ACV mix and posted 3rd

Associate Equity Analyst | Wells Fargo Securities, LLC

consecutive quarter of sequential growth acceleration; 3) Emerging products contributed Austin.R.Williams@wellsfargo.com | 628-629-7572

20%+ of net new ACV for the second consecutive quarter & 42 transactions included > Camden Levy

$100K of emerging-product net new ACV; & 4) 15th consecutive Rule of 40+ Q. Associate Equity Analyst | Wells Fargo Securities, LLC

Camden.Levy@wellsfargo.com | 415-834-4725

Est Changes: FY27 rev to/from $2,009M/$1,972M, Op margin 20.0%/19.0%, EPS $0.71/ Rachel Chang

$0.67. FY28 rev $2,405M/$2,361M, Op Margin 21.4%/20.4%. EPS $0.91/$0.84.