We are reviewing Q1 2026 SaaS company earnings calls. So far we’ve gone through 40+ calls which include Zeta, Freshworks, Procore, Amplitude, Cloudflare, Datadog, Sprout Social, Waystar, Health Catalyst, Klaviyo, Alkami, Certara, DoubleVerify, Dropbox, Figma, JFrog, Kaltura, ZipRecruiter, Zoominfo, Backblaze, Palantir, Fastly, Expensify, Doximity, Dynatrace, Braze, Snowflake, Zscaler, SentinelOne, UIPath, PagerDuty, Salesforce, Crowdstrike, MongoDB, C3, Samsara, ServiceTitan, Docusign, and Rubrik.
Below are the most salient quotes from their respective CEO’s about AI. At the end of the blog are the 8 major themes we’re seeing. In summary, AI is resulting in wonderful tailwinds for incumbent enterprise SaaS companies. We will continued updating this blog as we get through each Q1 earnings call for all the publicly traded software companies.
Rubrik CEO — Bipul Sinha
Agents inadvertently create new markets for software. “Mythos was a powerful breakup call for the cybersecurity industry. AI agents are attacking us. These autonomous agents can intrude, breach and encrypt at machine speed. Mythos has proven that attack detection is near impossible and cyber resilience is now the most fundamental cybersecurity requirement for the AI era. Once compromised, AI agents can potentially inflict 10x more damage in 1/10 of the time.”
AI and hyperscalers only make incumbent software stronger. “Rubrik recently joined Anthropic’s Project Glasswing and received early access to the Claude Mythos research preview — putting the new model to work directly to ensure we can serve our customers better when cyber breaches inevitably happen. This partnership aligns to our vision of agentic cyber resilience, defending a world where AI agents are both the cyber attackers as well as the business executor”
Software provides guardrails to AI. “While AI gives you a better, faster car, you need an intelligent autonomous driving system for control to steer, change lanes and brake safely. We believe enterprises need a comprehensive AI operations platform that can dynamically monitor, control and remediate agentic actions”
Software platforms will win. “Every new product we build makes every other product on the platform more powerful. When a customer adopts Rubrik’s Identity Resilience product, they not only achieve cyber resilience across data and identity but also gain a complete understanding of the blast radius and attack characteristics across data and identity through the Rubrik platform. Customers do not simply use Rubrik. They rely on it to deliver resilient minimal viable business. And the more they use it, the more indispensable it becomes.”
Docusign CEO — Allan Thygesen
Hyperscalers need incumbent SaaS. “We deepened our partnership with Anthropic by integrating IAM with Claude’s new legal tools, so legal professionals can access IAM contracts and connect to IAM workflows from inside Claude.”
AI is benefiting the product velocity of SaaS co’s. “We continue to build new features at the fastest pace in Docusign’s history. That innovation, coupled with our enormous user base and our enduring position as one of the world’s most trusted software companies, positions Docusign to become an essential foundation for the AI-driven enterprise.”
Platforms have the advantage. “A new Deloitte study quantifies this: while AI point products yield a modest 3% increase in ROI, customers deploying an end-to-end AI platform like IAM realize a nearly 30% increase — a 10x difference in value delivered.”
The data edge of incumbent SaaS is insurmountable. “Hundreds of millions of consented private agreements have been ingested into IAM with millions more flowing in every week. We continue to believe we can achieve a 15 percentage point improvement in precision and recall compared to our models trained on public contract data, while operating at incredible cost efficiency. We’ve optimized AI processing costs by more than 50x compared to running direct prompts on LLMs”
ServiceTitan CEO — Vahe Kuzoyan
SaaS companies have agentic product, now. “Year-over-year, call booking rates increased roughly 16 points. Close rate in the field increased more than 9 points. Average ticket size increased more than 30%. And as the compounding result of these improvements, average revenue per technician increased more than 50%. These significant revenue outcomes with minimal incremental overhead are powered by agentic workflows across the platform that complement the work that is required to be touched by humans.””
The rollout of AI is intentionally throttled. “We have way more demand than what we’ve been onboarding, and we expect to continue to be in that same state. But we want to be very, very intentional with the success that we deliver, the brand and reputation of Max and the durability of the customers on the program”
SaaS companies are offering agentic product, and also using AI internally. “Our goal at ServiceTitan is to build a software factory where AI agents play a central role in all code development to accelerate velocity. We are using AI through the full life cycle of product development — from collecting user feedback across forums, to design ideation, to code creation, and bug detection and prevention across both sandbox and production environments”
Samsara CEO — Sanjit Biswas
There isn’t enough labor so AI will augment, not replace, workers. “Our customers are facing unprecedented demand and are constrained by worker capacity. We see a massive opportunity to transform physical industries with Operational AI and AI Agents — automating work, unlocking capacity, and driving greater productivity across the sectors that power the global economy.”
Incumbent SaaS has a serious data edge. “Our platform now captures more than 25 trillion data points annually. This proprietary data is ushering in a new phase of digitization. We are now unleashing AI agents, like our AI Safety Coach, to automate entire workflows and transform our customers’ operations”
We are in the era of AI that does things. “Operational AI is not the same as enterprise AI. Enterprise AI makes knowledge workers more productive at their desks. Operational AI automates the physical work that keeps the global economy running — the driving, the inspection, the maintenance, the dispatch, the compliance. These are not tasks that a copilot or a chatbot can address. They require AI agents that understand the physical environment, act on real-time sensor data, and integrate into the workflows of the people doing the work.”
Yet another example of SaaS outperformance. “ARR from our largest customers — those spending more than $1 million with us — grew 62% year-over-year, accelerating again this quarter. These customers are not just renewing — they are expanding across applications, across fleets, across geographies. The platform motion is working at the enterprise level.”
Incumbent SaaS will be very difficult to beat. “A predictive maintenance model trained on the actual failure histories of hundreds of thousands of specific engine models, operating in specific climate conditions, under specific load profiles, is categorically more accurate than any model trained on synthetic data or limited samples. We have that data. It compounds with every new deployment, every new sensor, every new failure event recorded. No competitor beginning from scratch can replicate it in any reasonable timeframe.”
C3 CEO — Tom Siebel
Incumbent software providers have edge. “Generic AI cannot replace purpose-built vertical AI applications. A defense contractor managing classified supply chains, a financial services firm managing systemic risk, an energy company managing pipeline integrity — these are not use cases that a horizontal LLM wrapper can address with the precision, security, and domain specificity that enterprises require”
MongoDB CEO — CJ Desai
AI must have infrastructure to be effective at scale. “Adobe’s Journey Agent is a composite multimodal AI agent that unifies Adobe’s marketing suite and orchestrates end-to-end customer journeys, with MongoDB as the agent’s long-term memory and reasoning layer. Adobe leverages Atlas Search and Atlas Vector Search together to power the sub-100 millisecond hybrid search the agent needs to act in real time.”
Crowdstrike CEO — George Kurtz
AI may be software’s best opportunity since covid. “As enterprises rapidly adopt AI, CrowdStrike is mission-critical infrastructure — securing AI across every layer from GPU to agent to prompt. The AI revolution is not a threat to CrowdStrike. It is our largest generational growth opportunity. The question is not whether AI creates new attack surface. It does. The question is who governs it.”
Yet another example of a software company performing well. “FY26 will go down in our history books as CrowdStrike’s best year yet. We achieved $5.25 billion in ending ARR — the fastest and only pure-play cybersecurity software company to achieve this milestone — driven by a record $1.01 billion of net new ARR, our first year exceeding $1 billion of net new ARR”
AI is software’s opportunity. “We have strong conviction to once again raise our FY27 ARR outlook. The AI revolution represents a new, generational growth opportunity for CrowdStrike, and we are confident in our ability to deliver durable, profitable growth as we scale to our goal of $20 billion ending ARR in FY36.”
AI is expanding software’s TAM. “Endpoint business accelerated for the second consecutive quarter amid AI proliferation. The same AI wave that some said would commoditize security is in fact creating more endpoints, more applications, more identities, and more attack surface than any prior technology cycle. CrowdStrike is the platform that governs all of it.”
The hyper-scalers need software. “Nearly $1.5 billion in total contract value was transacted on the AWS and Microsoft partner marketplaces in Q1 — the largest marketplace quarter in our history. The hyperscaler partnerships are not distribution channels. They are co-development relationships that embed CrowdStrike into the AI infrastructure stack at the moment enterprises are building it”
-Crowdstrike CEO George Kurtz on Q1 2026 earnings call
Salesforce CEO — Marc Benioff
What AI is doing to software. “It is not the end of software. It is the end of software that makes humans do all the work. Software that listens. Software that understands. Software that can actually do. And once you see it, there is no going back. Human being, agent doing. This is the Agentic Enterprise….. If you read any industry news, you might have heard about the SaaSpocalypse. They are coming for the big SaaS. Disruption fear. Stop getting slammed. It is not the end of software. It is the end of software that makes humans do all the work”
Agentic is software’s biggest opportunity, not threat. “Agentic AI is the biggest growth opportunity for our customers, and for Salesforce. We’re the #1 Agentic CRM, with Agentforce now powering every Customer 360 application and helping tens of thousands of businesses across every industry transform into Agentic Enterprises. With more than $1 billion in Agentforce ARR, $3.4 billion in combined AI and data ARR, and 3.8 billion Agentic Work Units delivered for our customers, Salesforce has never been more essential.”
PagerDuty CEO — Jennifer Tejada
Incumbent software has the edge. “We didn’t just start building our AI products. We have been building AI into the platform for several years. We built a distinct advantage through the proprietary context in our own model that comes from more than a decade of capturing insights and information from workflows, developers themselves, events that we ingest, and how incidents are resolved”
New AI native companies are having issues. “Some of these native AI companies are scaling really fast, and with that scale comes a significant increase in operational complexity. They are seeing more incidents, more alert noise, more infrastructure dependencies than they anticipated. And they are coming to us because we have the platform that can handle that complexity.”
TAM for software has expanded. “The operations management market is being fundamentally redefined by AI. Every enterprise running AI workloads needs a control plane that can manage the operational complexity those workloads create. PagerDuty is that control plane — and the market we’re addressing is significantly larger than the one we’ve historically competed in”
The edge incumbent SaaS has. “The PagerDuty Advance SRE Agent represents a step change in what operations management can do. It doesn’t just alert — it triages, investigates, and resolves. And because it’s built on PagerDuty’s decade of operational context, it does that with a level of accuracy and judgment that a generic AI agent cannot match”
Gitlab CEO — Bill Staples
What corporate customers are saying about AI. “In my customer conversations, they are navigating it like most of the rest of us — which is every day, every week, there seems to be new innovation, new and exciting opportunities with AI, and they’re excited about the potential, and they’re trying to navigate the many challenges that come with it, starting with the privacy and security concerns with their business, and also the increased costs and expense of investing.”
UIPath CEO — Daniel Dines
AI and SaaS automation co-exist. “AI creates automation. Sometimes maybe even on the fly. You will run those automations — it is very cheap to run, very deterministic, reliable, auditable — and only when these scripts break you can invoke again AI to fix the scripts”
Software continues to outperform. “We delivered a strong start to fiscal 2027, once again exceeding our guidance across all key financial metrics. Before I dive into the results, I want to take a moment to reflect on our progress over the last year. In May of last year we launched our agentic and business process orchestration products into general availability.”
Without software, AI is rudderless. “I think we all recognize the huge impact of coding agents on the entire ecosystem. AI creates automation sometimes even on the fly — and UiPath is the platform that makes those automations run reliably, at scale, in the enterprise environments where they actually need to work.”
SentinelOne CEO — Tomer Weingarten
Only software can protect companies from AI attacks. “We are actively pushing the frontier of autonomous, agentic defense across AI, Data, Cloud, and the Endpoint. Enterprises recognize that securing the AI era requires machine speed defense which only truly modern infrastructure can deliver, and they are choosing SentinelOne as the foundation to build upon.”
Another SaaS company posting a record quarter. “We had a solid start to the year, highlighted by record net new ARR growth and a landmark milestone as our emerging solutions reached half of our total company ARR. We are actively pushing the frontier of autonomous, agentic defense across AI, Data, Cloud, and the Endpoint”
Software continues to innovate for and benefit from AI.“Securing the AI era requires machine speed defense which only truly modern infrastructure can deliver. Legacy architectures were not built for autonomous agents operating at scale with elevated permissions. The threat surface has changed fundamentally, and only platforms built natively for this environment can keep pace”
Zscaler CEO — Jay Chaudhry
Agents create a new market for software. “Today, users are the weakest link in cybersecurity. But soon, AI agents will be the weakest link. Because they operate at far greater speed and have far less oversight. Even a single compromised agent can move from access to data theft in minutes, inflicting catastrophic damage on enterprises”
Agents reveal new vulnerabilities, that need to be addressed by software. “New powerful frontier AI models like Meta’s are finding security vulnerabilities in software at machine speed — significantly diminishing the effort, skill, and time needed to breach enterprises. All enterprises already have thousands of known vulnerabilities that they have not been able to patch. Frontier models are multiplying these unremediated vulnerabilities by as much as 10x”
Again agents expand the market for software. “We expect it will not be long before millions of AI agents have access to organizations’ mission-critical applications and sensitive data. We are now expanding our exchange to secure AI agents….. We expect AI and frontier models to be one of the strongest tailwinds our business has ever seen. Our Zero Trust SASE solution enables us to hide applications and make them invisible to attackers while also eliminating lateral movement. With frontier models uncovering vulnerabilities at unfathomable speeds and AI agents becoming the weakest link in cybersecurity, these differentiators have never been more important than they are today.”
Snowflake CEO — Sridhar Ramaswamy
Software is needed for AI readiness. “AI transformation of workflows and how enterprises interact with their customers is critically dependent on getting their data in a place that’s AI-ready. And that’s where Snowflake comes in. Data that is in Snowflake is increasingly AI-ready — both for access by cognitive layers like Cortex Analyst or Cortex Search, but also by agentic layers like Snowflake Intelligence.”
Software drives AI readiness. “Data modernization is just the beginning of the journey. The feedback that I get from our customers is that this data modernization journey is even more important than before because they realize that AI transformation is critically dependent on getting their data in a place that’s AI-ready.”
Software companies have AI product now. “Cortex Code compresses migration timelines that once required 18 months and 100-person teams into weeks. We had one partner report 21,000 operations completed in 20 days.”
AI workloads creating sticker shock. “We are seeing some customers work through the economics of AI consumption — what we sometimes call sticker shock — as they discover that AI workloads consume significantly more compute than traditional analytics. We are working with those customers on demand planning to help them realize the value and manage the cost”
Braze CEO — Bill Magnuson
Software companies have agentic product now. “These are not just road map commitments. They are AI solutions that are in the wild and in our customers’ hands, earning their place in how some of the world’s most demanding brands engage with their customers.”
Software infrastructure underlies AI that is actually useful to clients. “Brands are moving quickly to transform their businesses with AI and to further leverage their first-party data and direct-to-consumer relationships. The legacy replacement cycle remained a fertile source of new business this quarter, and demonstrated the market’s preference for AI driven solutions paired with high performance first party data activation. The combination required to execute modern cross channel customer engagement at scale.”
Another argument that software underlies useful enterprise AI. “Customers across industries and scale are finding that our AI delivered what general purpose tools cannot. It operates directly on their first party data, inside their existing workflows, and against their specific goals.”
The hyperscalers buy software. “We achieved a milestone new business win with a prominent AI lab, further expanding our presence across high-scale data intensive workloads.”
Dynatrace CEO — Rick McConnell
Software is required to take AI from probabilistic to accurate. “Adopting autonomous operations requires organizations to trust the accuracy of the data that fuels agents to take action. Deterministic and causal insights from Dynatrace allow our platform to become the system of record, so development and SRE teams and increasingly AI agents can act with confidence to deliver what we refer to as answers, not guesses.”
Existing software architecture makes AI more valuable. “Our advantage is architectural, not feature-based. Dynatrace has been built as a real-time context engine that operates at massive scale across millions of monitored entities and exabytes of data — all connected and all in real time. By combining deterministic AI with agentic capabilities, we deliver faster, more accurate insights than approaches that rely on agentic AI alone. This level of intelligence, speed and efficiency cannot be achieved with point solutions that offer visibility without causality.”
Agent led environments are a new market for software companies. “We believe the winner in observability will be the provider that can meet the needs of both human-led and agent-led environments with a shared system of truth that spans both modes across AI, cloud native and traditional workloads. This is the moment for which the Dynatrace platform has been built.”
Agents open up a new market for software. “AI adds yet another layer to the software stack, increasing the need for more observability. Enterprises are deploying new agents, models, orchestration layers and agentic architectures that behave differently than traditional systems. Their environments generate dramatically more telemetry, connect decisions across agents and introduce probabilistic behavior that must still operate safely, securely and at enterprise scale”
Only software systems can take AI from guessing to accurate. “What separates Dynatrace’s agents from others is the deterministic foundation underneath — real root cause analysis, anomaly detection and forecasting grounded in Grail. That’s not AI that guesses. It’s AI that reasons from facts.”
Doximity CEO — Jeff Tangney
Nice acceleration of AI adoption. “We’re thrilled to announce that we reached a new engagement record of over 800,000 active prescribers using our workflow tools in Q4. Nearly half of those providers used our clinical AI last quarter, while our prompts per user nearly doubled from January to April alone”
The guardrails for AI in healthcare are very high. “People should be worried about their AI security and AI chaos. Especially when you’re dealing with a lot of patient information. Each of these has been a full process — AI steering committees, exhaustive reviews — but again, we’re at 140 health systems now and we continue to grow.”
AI in healthcare needs a human. “Our physician-led AI is different. PeerCheck brings credentialed physicians into the loop to review AI-generated clinical answers before they’re surfaced to users. This is not a feature — it is a foundational architecture decision about how AI should work in clinical settings”
AI can supplement and drive SaaS. “Our newsfeed had more than 1 million quarterly active prescribers, our workflow products had 720,000, and our nascent AI products had over 300,000. The addition of AI features across our platform has made us more useful than ever”
Pubmatic CEO — Rajeev Goel
AI is expanding software TAM. “I see AI as more than just a technical revolution; it is a value chain revolution. We can connect the buyer and the advertiser much closer together and increase our TAM. That will cut across every ad format — not just the high-growth formats we are participating in like CTV, mobile app, or commerce media. Even within display and online video, as we reshape the value chain with agentic execution, there is an opportunity for us to deliver more value across the ecosystem”
Existing software incumbents are adapting. “Agentic advertising is transforming the industry. It is the third transformation after RTB and mobile, and I think it will be bigger than those two. It is creating automation and workflow that no longer require a software interface and will materially change the value chain of our industry. We are scaling Agentic faster than our peers, and each additional transaction compounds our data advantage and drives superior performance.”
Fastly CEO — Kip Compton
AI creates new revenue opportunities for SaaS. “AI is not a single workload — it is a new architectural pattern that touches every layer of the stack. Inference happens at the edge. Agents call APIs at the edge. Security decisions need to be made at the edge, in real time, before malicious traffic reaches origin infrastructure. Fastly sits at exactly that intersection, and every AI trend we are watching accelerates demand for what we do”
Another record quarter for a SaaS company. “Our first quarter performance demonstrates continued discipline and velocity as we delivered record revenue, gross margin, and RPO. Driven by an accelerated innovation roadmap, we delivered 47% year-over-year security revenue growth”
Another example of AI creating an opportunity for SaaS. “AI agents generate traffic patterns that traditional security tools were not built to handle. An agent making API calls looks fundamentally different from a human browser session — different frequencies, different payloads, different behavioral signatures. Our edge security layer is where those decisions need to be made, in real time, before that traffic reaches your origin. That is a new and growing security requirement that did not exist two years ago”
A concrete example of new AI markets expanding SaaS economics. “Net retention rate improved to 113% from 100% a year ago. That 13-point improvement in twelve months reflects customers expanding their use of Fastly as AI workloads grow — not just renewing, but deepening their platform commitment”
AI is driving SaaS performance. “We raised full-year revenue and operating margin guidance. The AI tailwinds we described are not theoretical — they are showing up in our RPO, in our compute revenue, in our security bookings, and in our NRR. We are investing ahead of demand because we believe the demand is real and durable”
Palantir CEO — Alex Karp
Software is the backbone of usable AI. “We are focused on enterprise autonomy, not on dazzling demos. We have, in the ontology, the no-slop zone. The ontology is the body to the AI brains. You cannot actually interact with the enterprise or affect the world; your agents can go nowhere without ontology. And you are seeing that with our customers.”
An extraordinary comment. “Almost every single highlighted example of AI that actually is producing results in the U.S. is actually Palantir. And one of the ways to pen test what we are saying is just dig into the examples of AI actually transforming an enterprise. Call the client. Talk to them. They look the same to nontechnical people, but they do not look the same to practitioners — whether you are on the battlefield, or whether you are an insurance company, or whether you are a hospital, or whether you are a manufacturer — what they discover is the reality of doing this requires a platform like ontology, currently executed on top of Foundry with FDEs. And currently, that combination is available from one company, and that is us”
Palantir wants you to try and use AI without software guardrails. “The best thing that can happen to this company — and maybe this country — is, of course, they should go out and flirt with all this slop. Mostly they come home to Palantir. They do not have to all come home to Palantir. We have limits. But go test it out. Go see how easy it is to make these things work”
Software is the picks and shovels of AI. “There seems to be a rotation amongst AI model companies who engage in an intensely competitive race in which we have seen token costs suffer a thousandfold decline over just a few years and where winners and losers swap places every six months. Our path has been different, building a juggernaut of a business that is delivering results to our partners in the world as it is today.”
Backblaze CEO — Gleb Budman
This is going to drive storage demand. “As AI models move from text to multimodal, incorporating video, audio, and images, the volume of data required to train and run those models grows by orders of magnitude.”
Another example of AI expanding TAM for software co’s. “The Neocloud market was $25 billion in 2025 and could grow to about $400 billion by 2031. Backblaze’s opportunity to support Neoclouds is $14 billion by 2030. We are engaged with most of the top Neoclouds, and we characterize our role as providing the data lake layer that sits behind lower-latency flash storage near the GPUs.”
Why AI won’t be used to replicate enterprise software. “It is a little bit like the question we were always asked for almost two decades: what happens if AWS lowers their price to match you? We are two decades in, and that has not happened. The challenge is it is not easy to build the type of IP that we have built over the last two decades. It requires scale and expertise and focus over a long period of time. For the Neoclouds, spending all their resources to try to replicate what we have built is probably not the best place for them to invest when time to value is so much faster by using Backblaze.”
Software will benefit from serving AI loads. “AI customers are growing about three times faster than our average customer, and that’s just a function of their inherent data growth driven by their AI use cases”
Another example of SaaS having excellent earnings this Q. “Q1 was a proof point. We beat on revenue, beat on EBITDA, B2 is growing 24%. The deal size has more than doubled. The AI customer is up 76% year-over-year. We are not just riding the AI wave, we’re building the infrastructure that supports it. We are key for the Neoclouds, key for the AI builders, and we’ve had nearly two decades of optimizing performance per dollar at scale, which makes us ideal for the needs of AI. We raised guidance. We’re on track for our first full year of free cash flow positivity as a public company, and we’re picking up steam”
Zoominfo CEO — Henry Schuck
AI has caused a pause in some software purchasing decisions. “As macro conditions worsened at the end of the quarter, we experienced a regression in our downmarket and upmarket growth trajectory. We are seeing customer confusion regarding AI and product differentiation, leading to a pause in purchasing decisions — especially among software customers facing a confusing purchasing landscape compounded by the threat of their own growth disruption.”
More customer confusion. “We saw some headwinds in Q1 particularly from our software vertical customers who are seeing some confusion in the marketplace about what to buy and what not to buy given AI”
Ziprecruiter CEO — Ian Sigel
AI should be used to accelerate the product roadmap, not cuts. “AI is permeating really every department within our company. It is driving extraordinary efficiencies across the board, which we have not looked at as a cost-saving opportunity as much as we have looked at it as a mechanism by which we can realize and increase our ambition. So if anything, it has accelerated our roadmap as opposed to saved us money.”
LLM Marketing is the next SEO. “The new app went live on ChatGPT and on a percentage basis, the growth of LLMs in general has been impressive as a new traffic source. Overall, LLMs still represent a tiny contributor in the overall mix of where traffic comes from to ZipRecruiter. But it is good to be there at the beginning and to enjoy the ride up with them as they become an ever more popular way for job seekers to look for work.”
JFrog CEO — Ben Haim
AI needs software. “As AI generates more code, more models, and more artifacts at a speed no human team can manually govern, the need for a universal platform that tracks provenance, enforces policy, and ensures that only trusted software reaches production becomes existential”
AI Labs can’t replicate many core enterprise needs. “AI labs may offer binary reverse engineering, but they do not replace the need for a universal governance tool and system of record. No single vendor’s tools can govern artifacts across every language, every framework, every cloud, and every AI model provider simultaneously. That universality is what JFrog provides.” A company running Python, Java, and Go microservices across AWS and Azure, pulling from three different AI model providers, needs one governance layer that spans all of it. No AI lab can provide that.
More AI code means the need for more SaaS tools. “AI coding tools are dramatically increasing the rate at which developers pull open-source dependencies. AI-generated code tends to rely heavily on external libraries. As that dependency rate increases, the attack surface for supply chain attacks grows proportionally — and the value of JFrog Curation grows with it.”
Figma CEO — Dylan Fields
AI needs humans. “More design tools are launching, more people are creating, more software is now being built than ever before. And in this world where bits are abundant, what’s scarce is human creativity, actual point of view, care and craft and judgment. This is what makes a product, a company, a campaign cut through the noise.”
The hyper-scalers need software. “Google is a long-time Figma customer. Many of their most iconic products have been designed and built on our platform. As they build the next generation of AI-native products, they’re doubling down on Figma. The team designing agentic Gemini experiences for millions of enterprise customers uses Figma end to end, as their single source of truth, from the earliest concept work all the way through to shipping.”
Institutional knowledge is edge. “We expect more tools to emerge, some complementary and others competitive. Figma focuses on deep understanding of designer workflows and quality, shipping faster than ever. We aim to integrate with complementary tools and maintain strong partnerships”
Dorpbox CEO — Drew Houston
No software company is standing still. “We are evolving from file storage to AI-powered content management. Dash brings content from Dropbox and other cloud applications into a single experience — and we’ve built a context engine that gathers context across content and apps and connects it to AI models for faster and more accurate results”
Existing customer base gives incumbent SaaS a huge headstart on AI product rollouts. “18 million subscribers is our home-field advantage. We are investing heavily in deeply integrating Dash into the core Dropbox experience — and that’s where we have the most leverage.”
But some AI rollouts are not going great. “More than 30% of weekly engaged users used Dash’s AI features again the following week, and more than 50% of monthly engaged users used them again the following month. Retention patterns have been stable as we expand access to new cohorts.”
Opening a new market for old school SaaS. “Protect positions Dropbox in the security and governance conversation for the first time. In the AI era, where employees are sharing sensitive content with external AI tools in ways that IT cannot see or control, content governance becomes a security imperative — and that’s a new budget category for us.”
DoubleVerify CEO — Mark Zagorski
AI opening new markets for incumbent SaaS. “Slop Stopper is now being applied on the measurement side to about 40% of all of our impressions — one of the fastest scaling attach rates we have seen.”
Again on more markets. “AI is driving demand for our solutions in three distinct ways: it is generating more content that requires verification, it is powering more sophisticated fraud that requires detection, and it is enabling more efficient advertising that requires measurement. Every AI development that creates risk for our customers creates opportunity for DoubleVerify”
AI is driving more fraud, fast. “AI-powered bot scheme variants increased 140% in the first quarter of 2026 compared with the first quarter of 2025”
Certara CEO — Jon Resnick
The AI use case is velocity. “AI doesn’t replace biosimulation — it supercharges it. Our models are built on 30 years of validated pharmacokinetic and pharmacodynamic science. An LLM trained on general scientific literature cannot replicate that. What AI can do is make our scientists dramatically more productive, reduce the manual steps between simulation runs, and allow us to explore more of the design space in a fraction of the time. The result is better drug development decisions, faster — and that is what our customers are paying for.”
AI opens a new market. “We want to democratize biosimulation. Today, the most sophisticated quantitative pharmacology is accessible only to large pharmaceutical companies with deep scientific teams. AI-assisted biosimulation can make those capabilities available to biotech startups and smaller organizations that currently cannot afford or staff a full modeling and simulation function”
AI also is forcing a restructuring. “Regulatory writing and medical writing are areas where AI-assisted tools are advancing rapidly. By divesting those businesses, we are reallocating resources to our core biosimulation platform — the part of our business that AI cannot replicate and where our validated scientific models create the most durable competitive advantage.”
Alkami CEO — Alex Shootman
Incumbents are trusted. “Once on the Alkami platform, our investments in service and reliability, the mission-critical nature of our platform, and high switching costs drive gross retention rates 8 to 10 points above typical SaaS companies”
The data moat. We have had 39 client meetings since February where AI has been on the agenda, and every one of those clients has a specific, concrete use case they want to pursue. This is not exploratory conversation anymore. These are financial institutions that have identified workflows they want to automate, compliance processes they want to accelerate, and member experiences they want to improve — and they want to do it on our platform because their data is already here.”
Software side is still wonderful. “Every five years, our clients grow by more than 100% of their original platform investment, with our 2021 through 2023 cohorts spending above 2x their landing ARR and clients 2016 and older spending close to 4x their landing ARR”
Klaviyo CEO — Andrew Bialecki
Data-less AI is useless. “Delivering meaningful customer experiences at scale requires AI grounded in real data. Agents are only as good as the systems beneath them, and we’ve spent 14 years building exactly that foundation”
What AI means for software. “We have entered the era of agents and infrastructure, at least so far as software is concerned.”
Software that is revenue facing always wins. “Unlike most enterprise software, we are focused on revenue generation. If you can help grow top line and profits, there is insatiable appetite to spend more, and we see that constantly.”
AI makes the software customer smarter. “When we think about Composer, ultimately what we are providing is intelligence, delivered in the form factor of tokens. Customers are using it to review who their customers are, the effectiveness of their marketing, and then figure out what to do next. Those sessions are incredibly valuable — generating thousands, even hundreds of thousands of dollars in incremental revenue. We can go much deeper because our agents have access to internal benchmarks and best practices that are not publicly available. That intelligence is an entirely new revenue stream.”
Service providers have a place. “What you can do with Klaviyo and the infrastructure that we built is actually a lot more than our customers and businesses are taking advantage of. Our agencies have always helped close that gap. Now, with our agents — Composer and Customer Agent — agencies are accelerating the adoption of both”
Agent timing. “The company anticipates that AI agents will become standard and ubiquitous within the year, creating a positive feedback loop where agent usage generates data that further improves the underlying infrastructure.”
HealthCatalyst CEO — Ben Albert
More data moat arguments. “We have 18 years of proprietary healthcare improvement data — the largest such repository in the world — and we are building AI models on top of that foundation that no competitor can replicate. AgenTeq is not a generic AI layer. It is intelligence built from the specific clinical, operational, and financial patterns of healthcare delivery at scale.”
Internal dev performance is doubling. “Our initial pilots using new development pods and proprietary AI agents resulted in up to 100% more story points delivered per developer. We are applying the same intelligence we are building for clients to our own engineering operations.”
Generic AI won’t suffice. “Generic AI can tell you what the literature says about reducing readmissions. Our models can tell a specific hospital which interventions have worked for patients with their specific case mix, in their specific market, given their specific operational constraints — because we have seen those patterns play out across hundreds of health systems over 18 years”
AI makes incumbent software even more powerful. “Health Catalyst exists to be the intelligence layer of the American health system. AI makes that mission more achievable than ever — and more urgent than ever.”
Waystar CEO — Matt Hawkins
Some software companies see an expanding TAM with AI. “That shift unlocks a much larger opportunity — the approximately $100 billion in annual revenue cycle labor services performed across the industry today. We believe we are well-positioned to automate a meaningful portion of this labor pool through new AI-powered capability launches like denials, prior authorization, and recoupment. We’re building toward what we believe is the future of this industry: the autonomous revenue cycle platform.”
AI is increasing bookings velocity. “AI traction is accelerating. AI-powered capabilities drove roughly 40% of new bookings in Q1. Our clients leaned into the platform for prevention, automation, and visibility rather than downstream rework.”
AI will lead to tool consolidation. “I was with a CIO of a very large system not long ago — very impressive lady. She said, ‘Matt, can you help us? I currently use more than 12 point solutions just to manage our revenue cycle process.’ And of course, that’s where the platform approach really comes to play.”
SproutSocial — CEO Justyn Howard
On why Sprout Social is doing a $50mm share repurchase: “We have a meaningful disconnect between current valuation levels and the long-term value we expect to create….We are seeing customers making longer-term commitments to Sprout with multiyear contracts now representing nearly half of our contract mix, up from about a third two years ago. This reflects growing confidence in Sprout as a strategic platform.”
Cloudflare — CEO Matt Prince
They did a 20% RIF while achieving 34% YOYG. “Just because you are fit does not mean you cannot get fitter. Over the last six months especially, the productivity gains from the people directly talking to customers and directly creating code have been incredible, and a lot of the support roles behind them are not going to be the roles that drive companies going forward.”
On internal use of AI: “internal AI usage increased more than 600% in a single quarter….97% of Cloudflare’s R&D employees use AI coding tools….with productivity gains of “two, ten, even 100 times”
Software is the backbone of AI: “Cloudflare is now processing hundreds of billions of agentic requests per month” according to their latest earnings call. Every AI agent calling a tool, querying an API, or taking an action on the internet is generating a request that may pass through Cloudflare’s network.
Datadog — CEO Olivier Pomel
AI training is becoming production infrastructure. “AI training was very new a couple of years ago. It was something that was only done by very few companies, and it was, in a way, very artisanal — it was not a production workload. It was something that researchers were building, and it was very one-off. And now it’s turning into production. It’s turning into something that many more companies are doing. It’s scaling by orders of magnitude, and it’s becoming something that has to be on all the time, reliable — and every minute you lose, or every failure you have in your training round, is a week you give away to the competition.”
The dual strategy. “We’re talking about our AI efforts in two buckets: AI for Datadog and Datadog for AI. AI for Datadog — these are AI products and capabilities that make the Datadog platform better and more useful for our customers. Datadog for AI — this includes Datadog capabilities that deliver end-to-end observability and security across the AI stack.”
Hours to seconds. “We’ve seen Bits AI Security Analyst reduce investigations that could take hours to as little as 30 seconds.”
The cloud still matters. “We showed broad-based acceleration of revenue growth across cohorts, including both our AI and non-AI customers. Non-AI customer revenue growth accelerated again this quarter — we think this is a sign of strong continued cloud migration, greater adoption of our products, and customers of all kinds accelerating their use of AI.”
Amplitude
The most honest confession from any CEO we’ve seen. “It is much more important to get there with a lot of speed for a lot of different reasons than it is to say, ‘Hey, let’s try to protect some existing thing we have.’ The existing thing we have, frankly, isn’t valued much.”
The goal of Amplitude’s AI. “We’re entering a new era of analytics — one where AI can monitor your product around the clock, and free up your team to focus on improving the experience. The real advantage is how quickly a team can learn, iterate, improve, and automate. Agentic analytics is the key.”
AI generated code means you need more software. “AI has dramatically lowered the barrier to building and shipping software, boosting productivity for experienced engineers and enabling non-traditional roles to become AI builders. While teams can generate more code than ever before, the software development life cycle remains bottlenecked in many other places. AI builders are generating code faster than they can understand its impact. The challenge is now evaluating code before it’s released, tracking what’s working after release, knowing when you need to roll things back, and turning behavioral signals into what to build next.”
On their own coding. “Over 90% of the code our team ships today is written by AI.”
On the internal adoption of AI. “We paused normal work across the entire company so that every function could build and ship AI-powered workflows to reimagine their daily jobs and functions. The team shipped hundreds of amazing demos, including automatically creating custom demo websites per customer, automating part of the quarter close process, and automating how we create new creative assets in marketing.”
Gross margin is compressing, but that means…“The inference cost growth is a leading indicator of how much our customers are actually using our AI tools. That is what we want.”
Zeta
AI’s impact on the market now. “AI is no longer a feature. It is driving a replacement cycle where enterprises are demanding fewer systems, measurable results, and applied intelligence that works today.”
We can’t just talk about AI anymore. “Customers want to invest in applied AI, not road map AI.”
The data and software flywheel. “As adoption increases, Athena learns from more data, outcomes improve and usage deepens, driving ARPU expansion and ultimately reinforcing the same flywheel that has powered our growth. That flywheel is powered by more than just Zeta’s AI models. It’s driven by the data and infrastructure behind them.”
The data moat. “Zeta SuperGraph, our proprietary identity and intelligence graph, unifies data across the enterprise and enables a complete deterministic view of the consumer that we believe is difficult to replicate at scale.”
Freshworks
The AI conversation is about impact. “AI is not causing sales delays — it has become a core requirement in nearly all large enterprise deal discussions. Customers are not asking whether we have AI. They are asking which AI, how it works, and what outcomes it delivers. Freshworks is winning those conversations because Freddy AI is embedded in the platform, not bolted on.”
AI is the last thing listed. “We had our biggest deal ever — a large nutrition company that was a 10-year customer of one of our competitors — that is moving over to us for all the reasons we have discussed: enterprise-grade scale, much faster time to value, easier to manage the platform, and AI capabilities.”
Procore
A big advantage of the incumbents. “Procore AI is a reasoning engine purpose-built for construction. It understands the language and logic of the project — how an RFI connects to a submittal, how a submittal connects to a drawing, how a change order gets approved. It works as a multi-step system that holds context across multiple steps. It doesn’t just answer a question — it understands the thread.”
The data moat. “This data and context can only be accessed within a system of record and collaboration like Procore. Building on our flagship system of collaboration with nearly 3 million active users and a massive proprietary dynamic data set, Procore AI can deliver outcomes simply not possible with traditional software.”
A real ROI use case. “By leveraging Procore AI, Crest has taken a manual process that could span weeks of effort down to an automation that can take as little as 20 minutes. This isn’t just an incremental improvement in speed. It is a fundamental shift in their competitive advantage.”
There is more to come. “It is still early. As we continue to develop Procore AI, going deeper into our proprietary data and broader across project types, the reasoning engine will only become more capable. We expect our solution to continue to improve with every layer we unlock, and we have a long runway ahead of us.”
Our big take-aways are below.
Theme 1. AI conversations in enterprise software are now about the actual agentic offerings they have in-market, and most of the publicly traded SaaS companies have very compelling SaaS offerings. If you’re offering is not in market, you may be behind. Zeta’s CEO put it well when he said “customers want to invest in applied AI, not road map AI”. At the same time, rushed or shallow AI without systems, workflows and data is slop, as Palantir’s CEO alluded to. The model is the commodity while the data and underlying workflow layer from enterprise software are what matters. As Klaviyo’s CEO put it: “agents are only as good as the systems beneath them” and Dynatrace’s CEO refers to customer requirements for “answers, not guesses.” Incumbents like Braze, Snowflake, and JFrog are benefitting from thoughtful architecture which allows enterprises to have real use cases for AI.
Theme 2. CEOs are being candid about AI’s impact on their organizations. For instance Amplitude’s CEO said “the existing thing we have, frankly, isn’t valued much” and paused the entire company to rebuild workflows from scratch. Others, like Palantir’s CEO sounded angry about the disrespect of software. No software company is standing still, and betting against software’s evolution and value is to bet against technologists like Karp. We actually agree with the comment “software will be built by machines, directed by people,” which came from Gitlab’s CEO.
Theme 3. AI is splitting companies into distinct camps: i) you’re either using AI as an excuse to cut headcount (looking at you Cloudflare, Freshworks, Health Catalyst, Block); or ii) you’re using it to drive the product roadmap faster (ZipRecruiter, Figma, Datadog) or expand into new markets. Bet on those in the second category. Those in category one sound like they’re coyly still shedding employees from covid over-hiring.
Theme 4. One of the things we didn’t appreciate until now is the TAM expansion argument. Agents that access software are now users, and are being charged as such. Traditional services TAMs are also becoming markets software can serve with their own agents. AI proliferation that theoretically threatens to commoditize software is creating new markets for it. Theme 5 expands on this below.
Theme 5. AI is simultaneously creating more of the problems that incumbent software solves which expands the market for solutions. For instance, AI generated content requires more brand safety software (Double Verify), AI coding tools need more observability software (Datadog, Dynatrace), AI agents need more permissions and governance that software provides (Sailpoint), more agentic traffic across the internet means more edge infrastructure from incumbent software (Fastly, Cloudflare). The same AI wave that allegedly threatens these businesses is actually driving their product offerings.
Theme 6. We’re seeing lots of repositioning; MongoDB is repositioning as “the memory layer for AI agents.” PagerDuty is repositioning as “the control plane for AI operations.” ZoomInfo is repositioning as a data infrastructure layer rather than a seat-based platform. One way to make the market understand software’s importance is to reposition it. Financial performance largely supports the repositioning as most of these companies are posting record quarters.
Theme 7. Software companies are putting up excellent numbers, beating estimates, accelerating growth, and raising guidance. ServiceNow, Zeta, Freshworks, DigitalOcean, Procore, Amplitude, Datadog, Cloudflare, Klaviyo, Figma, JFrog, Backblaze, Dynatrace, Braze, Zscaler, SentinelOne, UIPath, and MongoDB did one or all of the above.
Theme 8. The data edge incumbent SaaS companies have may be insurmountable by new players. For instance Docusign’s AI draws from hundreds of millions of consented historical agreements and Samsara’s is based on 25 trillion data points captured annually from hardware devices. And the edge from that corpus of data only grows with each day.
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. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.