We’ve now reviewed 34 publicly traded software company earnings calls this quarter including Palantir, Salesforce, CrowdStrike, Snowflake, MongoDB, Atlassian, Cloudflare, Datadog, ServiceTitan, Samsara, Rubrik, Zscaler, Okta, SentinelOne, Workday, etc. The SaaSpocalypse narrative was wrong as not one of the companies we reviewed is struggling. Every company is doing some combination of beating estimates, raising guidance, improving margins, and setting records. As importantly, AI isn’t threatening these businesses rather it is the primary driver of their acceleration. Below are the 12 themes we’re seeing.
Theme 1. SaaS product has AI embedded. AI is a core requirement in nearly all large enterprise deal discussions. Freshworks, Klaviyo, and Atlassian’s all reported that some form of their AI infrastructure, vision, or interoperability was a factor in deals. From Atlassian’s CEO: “The Teamwork Graph and AI come up in every single conversation I’ve had. It’s one of the top two reasons quoted by our customers for their reason to upgrade to the cloud and to upgrade to the Teamwork Collection.” At FIVN, every million-dollar deal that goes out the door has 100% attach of AI. Over half Workday’s new bookings in the quarter included their AI offering. Asana’s AI products crossed 25% of net new ARR ahead of schedule. At DocuSign, their AI product grew from 12.6% to 15.1% of total ARR in a single quarter.
Theme 2. The model is a commodity. The context and data are the moat. At Shopify, Catalog-powered AI searches convert at 2x the rate of scraped data from generic AI. At Atlassian, for agents grounded in the Teamwork Graph, customers realize up to 44% more accurate answers while consuming 48% fewer tokens. “It’s thanks to context, not the model.” Zeta’s CEO: “Nothing you rent can be a moat around your business.” Palantir’s Karp: “An organization’s data is its treasure. In its richness is the alpha. We are fully aligned with our customers, building a stack that enables the compounding of their alpha.” From Kalviyo: “Delivering meaningful customer experiences at scale requires AI grounded in real data. We built the ability to understand the structure of data, the ontology, and semantics into Composer to improve our agents’ reasoning abilities.” Doximity’s anecdote was also striking: “our winning model demonstrated a 4.8% error rate, while others like Anthropic’s best model finished with a 13.6% error rate. We believe our outperformance is due mainly to our unique built-in drug reference, a model within the model, which is 100% expert verified, and our over 12,000 physician PeerCheck editors.” In summary the model is available to everyone; the proprietary context built over years is available to no one else.
Theme 3. Historical data is a moat, but that data must be constantly updated to be relevant. MongoDB’s CEO said the following about the real-time data advantage argument: “The data an agent actually needs is live operational data, not a stale copy sitting in a warehouse.” That converts the data moat from a training corpus argument into a data freshness argument. Samsara made a similar comment: “This is proprietary time series data captured by sensors operating in the physical world. It can’t be replicated or found on the internet. Each year of operating history compounds its value.” SaaS companies that have the historical data but also add to that dataset and refresh it will maintain the moat.
Theme 4. Data must be protected from models. Palantir’s CEO was combative (again): “People sign up for token self-pleasurings, paying for the right for them to migrate your IP, your know-how, your expertise to their model so that they can build a competitive business that doesn’t require your business, your people. They deserve to colonize your enterprise. You deserve to be colonized.” Zeta’s CEO was less dramatic but clear: “OpenAI powers the voice component of Athena. No large language models ever see the data in our Data Cloud. The decisions run on our models.” Doximity disclosed that nearly 30% of clinical AI prompts include protected health information. Health systems cannot allow PHI to flow to unauthorized AI systems without an enterprise privacy agreement. Data security and confidentiality is becoming a customer requirement. At the same time, AI deployed correctly can further unlock the value of SaaS. Salesforce’s Benioff: “Customers have put hundreds of billions of dollars into Salesforce. There is a huge amount of value that has been trapped. Claudeforce unlocks it.”
Theme 5. Agents are a new customer for software companies. Datadog’s CEO sited numbers: “MCP tool calls quadrupled again quarter-over-quarter and grew more than 22x when compared to Q4 2025.” Every MCP call is an AI agent executing a tool that requires monitoring, governance, and security. Dynatrace’s CEO: “AI workloads do not simply add volume. They behave differently. They can operate perfectly and still produce incorrect results. That’s a problem observability has never had to solve before.” Agents have also dramatically increased the attack surface; ServiceNow says there are 2.2bln agents entering the workforce globally, and every ungoverned agent increases the blast radius for cyber attacks. CrowdStrike’s Kurtz: “AIDR grew more than 5x in its first weeks and nearly tripled sequentially in Q2. AI DR could be bigger than EDR because agents create seven attack surfaces instead of one.” EDR built CrowdStrike’s first $5 billion in ARR. If Kurtz is right, AIDR represents a larger category than the one that got them here. AI is generating its own demand for the governance, observability, and security layers that enterprise software provides.
Theme 6. Agentic product built by software companies is very popular. Atlassian’s “Rovo-assisted actions grew 50% QoQ, MCP calls grew 400% QoQ. MCP and CLI users passing 1 million now, I think it’s one of the biggest MCP servers that exist. More than doubling in the quarter.” Klaviyo: 95,000 Composer users in the first month of GA, credit consumption growing 30% week-over-week, nearly a quarter becoming recurring weekly users. Customers that are using Composer are the ones that end up being more successful with Klaviyo literally in the first few weeks.” Datadog: $115 million sequential revenue add, a record by a wide margin, with 58% of customers now using four or more products.” Zeta: “AI super users growing four times faster than other customers, accounting for 70% of revenue, with NRR 400 basis points above the company average.” Shopify’s Sidekick handled 34 million conversations in Q2, growing 4.8x in daily sessions year-over-year. Five9’s AI revenue is now 15% of total subscription revenue. Paylocity reported AI interactions nearly doubling quarter-over-quarter. Salesforce’s Agentforce ARR reached $1.5 billion up from $1 billion last quarter. At SentinelOne, AI security ARR tripled year-over-year in Q2, on track to be the company’s fifth nine-figure ARR category. At Workday, 5,500+ customers are using organic agents, up 35% from last quarter. AI drove more than $100 million of new ACV which was 25% of all new ACV in the quarter. AI product from software companies is driving measurable financial acceleration.
Theme 7. AI is really accelerating product velocity. At Zeta, “90% of our new code generated was automated. Development cycles that would have taken years are now months, and new products inside ZBI to hours. We added engineers. We did not eliminate engineers. We increased operating margin by 170 basis points.” Freshworks is experiencing “30% faster cycle times. We are shipping on a two-week cycle now. We implemented our AI email agent internally and saw about 30% of billing inquiries completely handled through AI when we turned it on.” At Salesforce, “our engineering teams are shipping faster than ever. Our sales teams are using AI to identify and close deals.” Their operating margin reached a record 34.8% while simultaneously launching Claudeforce and raising guidance. At ServiceTitan, “features previously estimated to take quarters are being delivered in months with escaped defects meaningfully down and bugs identified and resolved automatically.” Velocity and profitability are improving simultaneously thanks to AI. The best SaaS companies are not using AI to cut costs, they’re using it to ship more product faster.
Theme 8. The financial results this quarter are exceptional, a trend which started in Q4 2025. Palantir: revenue +93% YoY, Rule of 40 of 155, $1.22 billion in adjusted free cash flow, largest guidance raise in company history. Cloudflare: revenue +36% YoY, 986 large customer net additions in 12 months, a record by a wide margin. Datadog: first $1 billion revenue quarter, $115 million sequential revenue add, fastest sequential growth since Q2 2022, 13% of customers now using 10 or more products up from 7% a year ago. Atlassian: EPS 24% above consensus, RPO +44%, $3M+ ARR customers growing 50% YoY. Zeta: 20th consecutive beat-and-raise. Freshworks: first ever GAAP profit. Klaviyo: largest deal in company history. Snowflake had it’s third consecutive quarter of growth acceleration to 37% YOY. MongoDB’s revenue grew 30% YoY, the fastest since fiscal 2024. Zscaler’s revenue grew 25% while achieving a record operating margin 24.3%. Samsara had record $100K+ and $1M+ customer additions. Rubrik’s revenue was up 38% YOY, it’s 10th consecutive quarter of outperformance. Procore had its first ever GAAP operating profit and raised guidance. Of the companies we’ve reviewed so far, none are struggling. They’re all achieving some combination of beating estimates and guidance, raising forward guidance, improving growth and margins, and setting records.
Theme 9. AI is expanding the addressable market for software companies. This builds on theme 5, but goes beyond just the fact that an AI agent is a user that needs software. For instance, at Shopify, AI searches are opening the long-tail merchant discovery market that traditional search never reached; long tail makes up a lot of Shopify stores. According to Twilio, less than 5–6% of voice interactions are AI-driven, which means more business for Twilio as that figure climbs. Five9 says AI is converting contact center spend away from labor and toward mission-critical software. Procore’s digital coworkers compete for staffing budget, in an industry with a 350,000 worker shortage. New markets and budget categories are opening up for SaaS, in ways that go beyond just adding users that are agents.
Theme 10. Platforms over point solutions. From Five9’s CEO: “Being early with a feature is not the same as being trusted as an operating platform.” That’s putting it simply, but more succinctly, enterprise class customers are not interested in bolting things on and taking risk with new vendors with shiny AI. From Workday’s CEO: “I have yet to meet a single customer that wants to do things in a lawless way.” The AI decision for the enterprise customer is not a model decision or a feature decision, and most definitely not a vendor-of-the-month decision. Enterprises want to standardize on platforms they trust, and the platforms with the most proprietary context, the most integrated governance, and the most proven production deployments (incumbent SaaS) are winning.
Theme 11: SaaSpoca-who? That non-sense is over. Revenue multiples are up 35%+ in the span of two months, and for those companies growing above the median it’s even higher. Our favorite quote came from the sherpa of SaaS himself. Benioff said “Skeptics said seats would decline; Agentforce sales grew year-over-year. Skeptics said pricing power would erode; A1E and A4X bookings more than doubled. Skeptics said frontier models would eliminate the need for CRM; instead they depend on it.” MongoDB is also experiencing a dynamic that surprised the haters: the AI tools that theoretically compete with MongoDB’s data layer are actively referring customers to it. Claude and Codex recommending MongoDB’s Voyage product to new MongoDB customers is one more data point that AI proliferation benefits incumbent software.
Theme 12: Incumbent software owns ever infrastructure layer AI depends on. MongoDB owns the memory layer. UiPath owns the automation execution layer. PagerDuty owns the operations control plane. Rubrik owns the recovery layer. Okta owns the identity layer. Zscaler owns the network security layer. CrowdStrike owns the endpoint and AI detection layer. Snowflake owns the data platform layer. Samsara owns the physical operations layer. ServiceTitan owns the trades operating system layer. None of these positions were built for AI agents or were replicated/built by agents. All of them are now essential to AI agents operating safely in enterprise environments.
We will continue to update this post as we get through the rest of earnings season.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.