Good morning Paler Community And if you're waking up to this, you're probably having a great day today. 13 and a half% up in pre-market today. Let me know in the chat that you can hear my Russian accent in your loudspeakers and headphones and wherever you may getting this, let me know in the chat you can hear me because that's like one of the most paranoia things you can have when you're doing a live stream. You never know if people can freaking hear you or not.

Let me know in the chat would appreciate it. In the meanwhile, we're going to. We started a little bit early. H We want to make sure we have stream Health right here.

Hold on. Okay, we want to make sure we have the stream. Health is going on. The flux capacitor is fluxing, everybody's having a good time.

We're pushing 14% up in pre-market Good morning, everybody. Step right in step, right in. We're starting a little bit early. We have an eye on the actual live stream which starts in 8 minutes.

Uh, from the Paler headquarters. We're going to cover that. We're going to cover the earnings Here We go Here we go. It's going to be a beautiful day.

Thank you for letting me know you can hear me. I Appreciate it. Good morning to James Good morning to Jorge to Rodriguez to dieago Good morning Monia Theorin Good morning Abido gar Stan Greg Good morning Everybody Good morning to highly unlikely good morning. it's going to be a great day today.

Whether it's good or bad, we're going to have a good time. Lots of giveaways today. we're gonna have a lot of fun with this. Good morning everybody! Good morning to Stan W Who's excited for for the paler earnings? Who's excited? Let me know in the chat it's going to be epic epic.

Hey good morning too Champ Salvator Good morning Leonard Good Morning Dogo fit like Charles What's up buddy I See you staying in shape? Shout out to everybody who joined in early today. there's seven more minutes ER Good morning to Ali David Kma I Hope nobody puts like a crazy name like bend over in the chat. So I gotta read it. Good morning to Mikel David Jesse da My brother from another mother's here.

Well my morning is already improved. Jesse It's fun to take a break from the geopolitical things. Let allow me to mod you real quick right here. I Just added you as a moderator I Hope that's okay with you.

In fact, I've added you as a managing moderator on the channel I Would love to, uh, have you look over the and be the responsible adult in the room. Um, as it stands right now, we're looking at almost 14% pre-market Jesse 14% in pre-market Of course, it doesn't mean anything about the earnings. It is absolutely meaningless. Good morning Lenny Yeah, Yeah, yeah, definitely definitely definitely.

And but as you know and as I know that 14% is meaningless, we don't know what's going to happen in earnings. Nobody does. It's pure speculation. And as as you can see that 13 and a half, you can also see it evaporate like this.

If the earnings are not good, and we may see this, who knows I Mean we've seen with Paler every possible scenario ever. I mean Piler took us to 40, Pener took us to six, piler doubled and slashed in half so many times. At this point, we're absolutely used to all of this. I agree with this.

Miguel Yeah, NHS would be incredible and I think NHS is around the corner for Paler. I've said it a million times before. at this point it's a done deal. And yeah, let's get it.

Let's get it. We're starting. We're starting. We're getting hot as thank you for showing up early.

I started intentionally 10 minutes before ahead of time good morning Magdalena Uh I started early intentionally so we can get in here and have some fun before the the main event. uh, which starts uh in a little bit according to my clock and I'm going to show you on the screen uh while we look at this beautiful 13 and a half% pre-market uh I am um also here. So we got that going on right now. So 4 and a half minutes through the actual presentation by Paler which is coming up.

um S&P inclusion coming 100% There's still certainties about Palente that have not yet been announced and um I mean at this point 100% certain there going to be S&P 500 inclusion 100% certain about the NHS contract. It's a matter of time it it becomes public. I've talked about it so many times. Uh, been here since DPO Wow, that's an OG H Wow, That's a long time and okay, now is there's any trolls here.

We're going to ban them. They're going to keep on trucking elsewhere. No problem at all. Um, Hello Stalik Crafty Kevco yund I Hope I'm not butchering any names H hello Bill Killian Paul ER Okay, so three and a half minutes and we're going to take a look at the earnings real quick at the news release before the earnings, so we have just a little bit time.

Uh, I'm going to pull it up on the screen. Hold on one second. Okay, uh, while I search for that. Hold on.

give me a second filings. Okay, so you guys want to check out what we got. Okay, let's check out real quick before we go through the I'm going to do it real quick, but we'll vate the time to WS the live stream and then we're going to go back and review it ourselves. Good morning, Aacho! Hey Chad I told you I'm doing a I'm doing a financial content as well.

so we have about two and a half minutes. We can quickly glance uh at the filings real quick here. Hold on I'm bringing it up. The stock is up still 13 and a half% in premarket.

Let's check it out here real quick. So obviously we're not going to Deep dive into this right now. There's two two minutes to the live stream of Palente here. It's literally starting in 2 minutes minutes so we can quickly can check out this thing.

Is this big enough? That's what she said. Okay, let's check it out here. Okay, so November 2nd, let's do the highlights real quick. Gap Net income of 72 million representing 133% margin Four consecutive quarter of Gap profitability that's S&P 500 inclusion right there.

Uh, cool. EPS of S cents Revenue Grew by 177% year-over-year Beautiful Commercial Revenue grew 23% over year, Us commercial grew 33% Beautiful results. Government grew by 12 Customer count grew by 34% Beautiful numbers. Us commercial grew by 37% Fourth quarter expending, adjusted operating margin cash from operations 133 million Whoever said Penter is not profitable can eat their WS I Mean it's pretty pretty obvious.

Um, cash and cash equivalence grew to 3.3 billion Revenue Grw up 16% year of a year to 2.1 billion US Commercial Revenue Grew by 23% a gap income of 36 million 2% margin cash from operations 500 million with 23. that's great margins H Free cash flow 500 million Beautiful. Beautiful. Beautiful.

Uh, the live stream starts in the minute so we can glance real quick before we move on. real quick. Real quick. Okay, so 177% increase in year-over-year growth.

Beautiful, beautiful numbers, beautiful numbers. from Paler. Beautiful numbers from Paler. Uh uh.

we have one more minute so let's do it quickly. Uh, Guidance: Look at the Outlook very important 600 million Beautiful. That's what they're guiding for next quarter. H Positivity gaing Gap positivity.

Okay, so 2.2 billion unchanged. That's the guidance for full year and raising adjusted income from operations to 607 to 611 and GAP income profitability for the entire year. Beautiful now. I'm going to move back because the live stream is starting.

Hold on One second. It's literally starting right now. We'll go back to analyzing the numbers ourselves in a second. But I want to make sure we got this unlock right here and so we can watch this thing together One minute.

Wait a second. This should be better. I Don't think it started yet, but I think it's starting any second? Hold on. Yeah.

I have it on full volume so you guys should be able to hear it. He If: if you haven't yet before this thing starts, make sure you punch that like and the Subscribe button if you haven't yet. because uh, at this point we have to play the algorithm game. There's not two ways about it.

h While we wait I'm going to say a few more hellos right here for some of our Ogs. ER Good morning to Janine Good morning to Jordy Good morning to Carsten Good morning to Beverly Hills H Four are enough. Good morning I'm Anna Saro from Pal team and I'd like to welcome you to our third quarter 2023 earnings call. We'll be discussing the results announced in our press release issued before the Market Open and posted on our Investor Relations website.

During the call, we will make statements regarding our business that may be considered forward-looking within applicable Securities laws, including statements regarding our fourth quarter and Fiscal 2023 results, Management's expectations for our future financial and operational performance, and other statements regarding our plans, prospects and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties which would cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed before the market open today, and in our SEC filings. we undertake no obligation to update forward-looking statements except as required by law.

Further, during the course of today's call, we will refer to certain adjusted Financial measures. These non-gaap Financial measures should be considered in addition to not as a substitute for or an isolation from Gap measures. Additional information about these nonap measures, including reconciliation of non-gaap to comparable Gap measures is included in our press release and investor presentation provided. today.

our press relase investor presentation and SEC filings are available on our Investor relations website at Investors. Pal.com Over the course of the call, we will refer to various growth rates when discussing our business. These rates reflect year-over-year comparisons unless otherwise stated. Joining me on today's call are: Alex Karp Chief Executive Officer sham SAR Chief Technology Officer Dave Glazer Chief Financial Officer and Ryan Taylor Chief Revenue officer and Chief legal officer I'll now turn it over to Ryan to start the call volunteers up 14% We pleased to report that our company achieved Gap profitability for the fourth consecutive quarter and we continue to drive strong results across our company.

In Q3 we closed 80 deals of $1 million or more across 30 Industries 29 deals of $5 million or more across 16 Industries and 12 deals of $10 million or more across 11 Industries our Us Commercial Business Accelerated last quarter, growing 33% year-over-year excluding strategic commercial contracts. it grew 52% year-over-year and 19% sequentially and 34s of our quarter over quarter growth is from customers that started with us in 2023. our Us Commercial customer account Rose 12% quarter over quarter and is now tenfold what it was just 3 years ago Deal account for our Us Commercial Business is 2.4x what it was in Q3 of last year and US Commercial Tcv closed at $252 million up 55% year-over-year on a dollar weighted duration basis. We're also seeing the acceleration of larger deals and shorter times to conversion and expansion, including a multi-year deal in excess of $40 million with one of the largest home construction companies in the US The start a pilot and converted all within Q3 This growth is in part due to Aip's continued transformation of the way we partner with and deliver value for our customers, and we expect Aip's impact to continue to intensify the rapid expansion of AIP at both our existing and new customers.

and the impact it is having on their operations is nothing short of remarkable. In the last quarter, we reoriented our goto Market approach around AIP boot Camp S, which has allowed us to deliver real workflows on actual customer data in five days or less versus our traditional Pilots which generally take 1 to 3 months. We're seeing different stakeholders at the table, including tangible engagement from it, a quicker time to value for customers, a wider range of organizations partner with us, and the ability to have multi-organization boot camps. Early indications point to vast improvements on our unit economics from initial contact to customer conversion, all while accelerating new customer negotiations.

Boot camps are also driving contract expansions. We're on track to conduct boot camps for more than 140 organizations by the end of November. Nearly half of those are taking place this month alone, which is more than the number of us commercial pilots we conducted all of last year. In these boot camps, our customers attack problems that have immediate impact and learn how to deploy AI into their unique operating environment in a matter of days.

Our customers' results speak for themselves. One attendee said that we achieved more in one day for them with AIP than one of the top three hyperscalers had accomplished over the last four months, and then presented their work with paler instead of the hyperscaler to to the CEO. The very next day, another attendee said we basically build 10x faster with 3x less resources, and yet another claimed we've built in a day. What? they wouldn't be able to get internally in months and then it probably still wouldn't meet the requirements.

AIP is being used for a multitude of workflows at customers across the globe. Just a few examples include the following: Our partners in the healthcare space, including Tampa General HCA and Cleveland Clinic are using AIP for dynamic scheduling, turning software from a place of data entry into a provider of operating leverage. Aramark is using AI to procure more efficient ly generating custom, proactive negotiating strategies. Panasonic North America is using AIP to scale its Workforce and accelerate how quickly new Engineers can level up.

Eaton is using AIP to more efficiently deploy fixes by identifying available materials across different plants or assembly patterns. KFOR Brazil is increasing the fill rate of online grocery orders with higher accuracy. The energy and engagement around AI IP is unlike anything we've ever seen. The potential market for AIP and the trajectory of possible AIP growth for our business is massive.

We almost tripled the number of AIP users last quarter and nearly 300 distinct organizations have used AIP since our launch just five months ago. We will continue investing meaningfully in boot camps as our go toar market strategy for AIP. Through all of this, we never forget that we are a company built on a foundation of counter terorism. In response to recent world events, we continue to be dedicated to our founding principles of supporting the most important missions in the world, including providing intelligence and defense capabilities to Global allies.

In that vein, our impact has never been more compelling. We have the products now that the world needs, we expect our US Government business to re accelerate beyond the current growth rate of 10% year-over-year given increasing demand for those products to support support our allies around the world. while we continue to expect near-term uncertainty given budgetary environments, we were encouraged by the pickup in activity at the end of the US government fiscal year and we feel well positioned for long-term growth through our evolving strategy, which Sham will speak to further. Just several weeks ago, it was announced that the Army awarded us a new contract worth up to $250 million over 3 years to provide additional capabilities in support of Cocoms Armed Services Intelligence Community and Special Forces as they continue to test utilize and scale Ai and Ml capabilities.

As we enter the final months of the year, we are steadfast in our focus on AI and unlocking the impact it can have for our customers. We look forward to continued business momentum through year end and are excited for the opportunities to continue delivering unmatched impact for our customers into the new year. I'll now turn it over to Sham Thanks Ryan at AIP Con 2 this past September I unpack some of the foundational engineering challenges that we've solved to deploy Llms that are anchored in your data on your private network and to safely orchestrate your Enterprise with tools, actions, and other AI models. The core concept of the Kllm kernel enables you to reliably harness Llms for critical workflows, to manage the risks in the underlying models changing out from underneath you, and to create the shortest and safest path to put your own fine-tune models into production.

Why use one Llm when you can use K The art is in synthesizing the outputs from this Committee of experts to create a rich topology of answers to the prompt Llms are statistics, not calculus. It's more like predicting the weather than predicting an eclipse. And that's why we're focused on proof not proofs of concept. AIP gives our customers the infrastructure they actually need to ship production use cases quickly.

This difference has been so profound that we ship shifted the entire commercial organization to focus on one to 5 day long customer boot camps where organizations exit with a scalable use case on their actual data that they built for themselves. Customers leave so excited with this definite optimistic view of what can be accomplished and how they'll drive transformation in their organizations. And these boot camps have created enormous Tailwinds with it attendees for two reasons: First, we're defining the most advanced and valuable reference architecture for Gen AI in the Enterprise and second, with the release of virtual tables in Foundry, its's primary objection of data duplication is eliminated. We're running more boot camps per month than we had us commercial pilots all last year.

These boot camps really allow the customer to experience three magic moments for themselves. First, that you really can't use Llms without tools that elegant integration of algorithmic reasoning to unlock the full potential. Second, Second, that the object in other words, the rich representation of your Enterprise and its state and not chat is the prompt or said differently. The boot camp experience enables them to transcend chat and finally, the power of live integration of expert feedback through the AIP infrastructure to efficiently generate adaptive models.

At the end of the boot camp, customers say things like once you see it, you can't unsee it. As Ryan mentioned, it's common to hear attendees Express that they could do in days what they couldn't Previously with other AI Technologies and months in September, we also launched Pter Government Web Services to expand Pal's Mission by supporting and growing today's Nent but inspiring Defense Tech ecosystem. Through Pter Gws were providing emerging and existing companies in the Defense industrial base with the enabling software to quickly operationalize their mission critical capabilities at scale, all aimed at minimizing the value of death and bringing the best of America's greatest Advantage Software to the fight. Fed Start and Apollo are the first offerings in Gws.

Fed Start's platform accreditation as a service offering radically compresses the timeline and cost of unlocking I5 markets and Beyond Apollo's Autonomous Software Delivery platform is the most technically mature and sophisticated approach to continuously delivering complex, modern software to the thousands of edge environments required to deter and defeat threats. In the Pacific Fedar, customers like Calypso Ai and Primer Ai and Apollo customers like Lock Heat shared their acceleration. Journeys At our Software for Government conference hosted in our DC offices in September the reaction to Penter Gws has been amazing. VCS Defense Tech Entrepreneurs and Government PMS are responding to the investments in a big tent ecosystem and the efficiency and scale that we're providing.

We also launched our mixed Reality Service and Immersive C2 an application that was built on the mixed reality service at the Army's A USA Conference in October It was met with brave reviews. Our immersive C2 application showed how command and control could be done on the Move in the back of a vehicle, leveraging mixed reality headsets built on Gws infrastructure. and our mixed reality service will mean that any application that builds on or integrates with Gws can instantly enable their own mixed reality offering. Finally, our products could not be playing a more Central role for real world events.

It's incredibly rewarding to see the products that we've built over the last 20 years meet their moments often a new and impactful ways. from Meta Constellation which is enabling tactical overhead imagery in the field to Gaia for Mission planning to even Foundry for complex video imagery and audio analysis and automation from the Mission Data platform and its real-time cross doain collaboration across Allied Nations to Maverick for Target effect repairing and advanced fires execution These real world events validate the Investments that we have made over the last 5 years and strengthens our conviction and what we are building now for the future. And with that I'll hand it over to Dave to talk us through the financials. Thanks Sean We had an exceptional quarter Revenue growth re accelerated on the back of our Us: Commercial Business Driven by our intense focus on AIP while margins continued to expand demonstrating the transforming unit economics of our business, we beat the high end of our guidance range on both Top Line and bottom line and increased our rule of 40 score 800 basis points, quarter over quarter to 46 while simultaneously delivering our fourth consecutive quarter of Gap profitability The first time ever that we are Gap profitable on a trailing 12-month basis, we also delivered our third consecutive quarter of Gap operating profit and over a half billion dollars in adjusted free cash flow over the last four quarters, turning to our Global top Plan results: Third quarter Revenue Re accelerated to 558 million up 17% year-over-year and 5% sequentially exceeding the high end of the range of our prior guidance.

excluding impact of revenue from strategic Commercial contracts. Third Quarter Revenue grew 21% year-over-year and 6% sequentially. Revenue from our largest customers continues to expand, trailing 12-month Revenue per customer from our top 20 customers increased 13% year-over-year to 54 million per customer. Customer count grew 34% year-over-year and 8% sequentially to 453 customers as we remain focused on Landing new accounts now moving to our commercial segment.

Third Quarter Commercial Revenue grew 23% year-over-year and 8% sequentially to 251 million I'd like to congratulate the entire commercial org for reaching a $1 billion annualized run rate Milestone This quarter, it's quite an achievement, excluding the impact from strategic Commercial contracts. Commercial Revenue grew 34% year-over-year and 11% sequentially in the third quarter. Us Commercial Revenue Re accelerated to 116 million up 33% year-over-year and 133% sequentially excluding revenue from strategic Commercial contracts. Us Commercial Revenue grew 52% year-over-year and 19% Sequentially, we continue to see the impact of our intense focus on AIP on our Commercial Business both through the adoption of new customers and the expansion of opportunities at existing customers.

We booked 200 152 million of Us Commercial Tcv representing growth of 55% year-over-year on a dollar weighted duration basis. Our Us Commercial customer count grew to 181 customers, reflecting 37% growth year-over-year and 12% sequentially benefiting from the increase in velocity of our AIP go To Market motion. This represents a 10-fold increase in US commercial customer count from when we went public just three years ago. our International Commercial Business was at 15% year-over-year and 4% sequentially to 134 million.

As we continue to capitalize on targeted growth opportunities in Asia the Middle East and Beyond While conditions remain challenging in Continental Europe revenue from strategic commercial contracts was 15 million or 2.6% of quarterly Revenue down from 19 million in the prior quarter, We anticipate fourth quarter revenue from these customers to continue to decline to between 13 to 15 million, representing 2.3% of expected Fourth quarter. Revenue Shifting to our government segment, Third quarter, government revenue grew 12% year over-year and 2% sequentially to 308 million US Government revenue grew 10% year-over-year and 2% sequentially to 229 million. While it's hard to predict exactly when our government revenue will Recon converge at historically high kres as Sean mentioned, our products PG Gaia meta constellation and AIP are needed in battlefields across the world, and even more so in the current geopolitical landscape. International government revenue grew 21% year-over-year and 2% sequentially to 78 Million Bolstered by our Contin continued work in healthcare and defense.

moving to bookings, Tcv booked was 830 million up 29% sequentially. Net dollar retention was 107% impacted primarily by headwinds from our Commercial Business in Continental Europe Net dollar retention does not include revenue from new customers that we acquired in the past 12 months, and is therefore not reflective of the recent acceleration in our Us. Commercial Business We ended the third quarter with 3.7 billion in total remaining deal value and 988 million in remaining performance obligations. As reminder, RPO is primarily comprised of our Commercial Business as it does not take into account contracts with an initial term of less than 12 months and contractual obligations that fall Beyond termination for convenience Clauses both of which are common in most of our government business.

Our Us Commercial Business saw total remaining deal value growth of 23% year-over-year and 27% sequentially when excluding the impact from strategic commercial contracts. Highlighting the acceleration of our go to market motion, turning to margin and expense. adjusted gross margin which excludes stock-based compensation expense was 82% for the quarter adjusted income from operations which exclude stock-based compensation expense and related employer payroll taxes was 163 million representing an adjusted operating margin of 29% 400 basis points ahead of the high end of our prior guidance and marking the fourth consecutive quarter of expanding adjusted operating margins Q3 Adjusted expense was 395 million down 1% sequentially and flat year-over-year In short, we've been able to Flatline expenses for four consecutive quarters while investing significantly in our products including AIP and reaccelerating our Revenue. This drives home the efficiency and operating leverage of our software At scale R&D adjusted expense was up 9% year-over-year and 11% sequentially demonstrating our commitment to continuously drive forward product Innovation and invest in technical Talent Over the past year, we have emphasized our unwavering dedication to sustain Gap profitability and GAP operating income.

Our four consecutive quarters of improving Gap operating income enable us to more aggressively invest in AIP Looking ahead to the fourth quarter and Beyond, we remained focused on calibrating expense growth below Revenue growth even as we increase investment and resourcing to AIP and in specific geographies around the world. In the third quarter, we generated Gap operating income of 40 million. Our third consecutive quarter of Gap operating income, we also generated Gap net income of 72 million representing a 133% margin Our fourth consecutive quarter of Gap profitability. This is a first time we have ever achieved both Gap net income and GAP operating profitability on a trailing 12mon basis while we continue to manage our stock-based compensation expense.

As I mentioned in previous quarters, we expect it to Trend up in Q4 as we continue to invest in AIP Third quarter adjusted earnings per share was 7 cents and GAP earnings per share was 3 cents. Additionally, our combined revenue growth and adjusted operating margin accelerated to 46% an 800 basis point increase to a rule of 40 score from the prior quarter. We will strive to maintain this exceptional balance of top and bottom line performance. Turning to our cash flow in the third quarter, we trated 141 million and adjusted free cash flow representing a margin of 25% and 133 million in cash from operations representing a margin of 24% Over the past four quarters, we've generated 490 million in cash flow from operations and 52 million in adjusted free cash flow.

marking the first time we've exceeded a half billion dollars in adjusted free cash flow on a trailing 12month basis. We ended Q3 with 3.3 ion in cash, cash equivalents, and short-term Us Treasury bills. We retain access to additional liquidity of up to 500 million through a revolving credit facility, which remains entirely undrawn. No De.

Now turning to our Outlook No De. for Q4 2023, we expect revenue of between 599 and 63 million, adjusted income for operations of between 184 and 188 million, and GAP net income for full year 2023, we are raising our Revenue guidance to between 2.26 and 2.22 billion. We are raising our adjusted Income for Operations guidance to between 607 and 611 million and we continue to expect Gatman income in each quarter of this year. With that, I'll turn it over to Alex for a few remarks.

Uh, welcome, Um, I don't think the camera is working. Um, uh, welcome, uh to our earnings. Uh, it obviously. um, current events and the performance of our business are an absolute validation of our strategy of building the world's most, world's most aligned.

and Powerful Enterprise Products years, sometimes decades before they're needed. Uh, before you could imagine. uh, their power AIP in US Commercial Not only is disrupting the market, it's setting a standard that I don't believe any other software company will be able to reach. Partly because they've misunderstood the value of Uh Llms and their relative importance and lack of importance.

Partly because they don't have Decades of experience on the front line as we do in the military with managing uh, the core um ways in which you make these things precise, the way in which you provide governance. Um. also because the Playbook backed by venture capitalist and supported by analysts has always been make the thinnest technology possible that is misaligned with your Enterprise and hire the most and best salespeople. So the Enterprise gets moderate value while having its high Revenue exported in a parasitic manner to to To to the cheers of insiders and the the the the pain of retail investors and we obviously rejected that.

Um, uh And then on the the mission side we have been saying and building products for a world that is violent disjoint did irrational. A world in which you have to show strength. A world in which if you do not show strength, people who are biased xenophobic, dare I say antiemetic will rear their head. Um, a world in which you really have to pick sides.

Paler is the first major company to in my view to have said from the beginning a thing that is obviously true. There is no such thing anymore of being on all sides. Paler only supplies its products to Western allies. We've never supplied our products to enemies.

We proudly support the US government. I Am proud that we are supporting Israel in every way we can and we we also support plain English speaking. So when when when people are massacred to the equivalent of almost 50,000 people in Israel we view it as a terror act. We call it terrorism.

We Supply our product to people who are fighting terrorism and we have no problem with describing as it is or sticking up for our allies. And you know and and we don't provide false context all of a sudden you need a lot of context for describing what it means to kill Jews or persecute Jews across the world I Believe in context and where we and In In In in places where you need to actually provide it. But at Palente here we have seen that our view of the world which is that there really are people that are violent and not in conformant with morality need to be fought and we are supplying these products that we've built over the last 20 years to our allies. Um, and we are proud of the results and I would say person Also, even commercially, you are going to see that our alignment with our client our alignment with our society pays major dividends.

And for those of you who are along for the ride, we really celebrate you and we are going to bring our Warrior culture to our products to our Market fit and the results of which we are going to bring to our allies. With that, we'll begin with a few questions from our shareholders before we open up: I Love Alex Our first question is from Christopher The current situation in Israel has opened the eyes of other Allied countries around the globe. Specifically, are there current or future plans of supporting our Allied Partners in Asia with paler products? Absolutely. The short answer is yes, I Think not only can we look at Israel but we can look even before that at Ukraine and the lessons that we've learned there and I would distill that down simply to that.

You must preposition data software and Hardware well ahead of the fight there uh and create a partner mesh network of command and control nodes uh to really provide a difference here so that that's one major thing. And so we're spending a lot of our time and our energy thinking about how do we get as much mass west of the International Date Line as possible? Uh, to be be prepared to meet those moments And make no mistake, there's a lot to be done there. The other lesson specific from Israel is how much faster you can move move when you create a big tent Tech ecosystem that allows you to bring a lot of other defense Tech startups along with you the capabilities that we were able to give the Israeli government by bringing in other Israeli startups as well as International startups was incredible and that's a key lesson that we're taking forward with us as well. And it's it's embodied and enabled by Pounder Government web services.

Thanks Sham! Our next question is from Sony Congrats on well executed AI Boot camps delivering tangible value very quickly. Could you kindly attempt to synthesize the top three observations from those boot camps for Enterprises to launch AI enabled decision Management Systems to power forward the critical objectives? Sure, I'll take a first stab at this I I would say um. one, it's about the magic moments. So the first bit of this that I think people get out of it is what does it viscerally mean to understand that you can't really use these Llms without tools.

So how do you bring that tool bench forward? Two, it's a a realiz that the semantics of your business ought to be the prompt and we are uniquely positioned there because the best way to do that is to serialize those semantics into your ontology to use the object model that we have to do that. And so getting we we, we, we' already built and deployed. What one of the most interesting things about the Commercial Market is there are all these tools we built that basically not only allow you to manage LMS but they are they. They basically pentest your Enterprise So is de facto what in the past where you were selling was misaligned with your Enterprise AI forces an alignment with your Enterprise and so you begin to ask really business relevant questions and then because of essentially our ability to take the knowledge of your business and put it into the LM and then extract from the LM something relevant and then manage it.

You get both the power of the LM and you get the shock M of the Enterprise actually saying wait a minute, you're providing me something that actually is good for my Enterprise. Quite frankly, it's almost like taking an alcoholic off alcohol and saying here's your health drink and it's like and and and the reason why it just is very, very hard to compete against. That is because the other enter the other players in the space are actually built to take you away from what is good for your Enterprise. How do you make better margins? How do you make your products more safe, safer.

How do you take the tacit knowledge of a Japanese manufacturing company and build in America with all the advantages of America and the tacit knowledge of J Japanese manufacturing like? That's what we're actually doing with these things. And then there's all these things we've built that would take decades, years and years and years to build even if you understood them that we'd already built. And to add on to that, the Japanese example shows it: I think the third major Magic Moment that's impactful. There is this incorpor ation of realtime, expert feedback and thinking about feedback as a data type unto itself, not having to retrain or upgrade the parametric knowledge of the model, but actually being able to use feedback dynamically live to create an Adaptive model.

And then and I'm sure Ryan will talk about this. the scale function of this. It's like one of the logical question is is if you're doing well, why are you so happy that you have 40 million in operating income? Well, it's because the the unit economics are so good. Moving from boot camp from from Pilots that took 6 months to boot camps that take officially two days I was in one that took 6 hours are so efficient we don't It's like we're just.

we're like there's a limit to how much resources we can pour into this. So we're like doing all these things and we're educating people. and we're doing it at a scale that is equivalent to already. one month is as much as we did all year last year.

Yeah, and we're with our Relentless execution. We're seeing the ability and how much easier it is. lowering the barrier for customers to see our product applied against their data in real workflows. And so we're seeing the network effects of that.

We're seeing customers who have used AIP in one context, going to new companies, adopting it at new companies and converting quickly. We're seeing customers that were with us years ago who are coming back to us because we have the product now that works for what they need and we're seeing that in a way where um, we're you know they maybe tried to build themselves and and failed and they're now able to implement it effectively and quickly in that environment. Um, and the vast kind of expansion and uh, advancements of our products are showing that at our and one of the things that I mean I'm very bullish on the US and quite frankly a little bit less bullish on every place else. But one of the things that's amazing about the US is people change jobs and people know how good our products is are and the minute they change their job they call us.

and some of the results of if you if you disambiguate and normalize the results to take out Spcs us grew is growing 52% 52% off of a large base which is why I think we can accelerate it to uh a billion dollar run rate by by 25 but it's because the the the the Dynam how Dynamic America is and people moving around taking the product combined with uh our ability to execute in a new commercial motion that is just literally uh a a G a game Cher for how we go to market and by the way, we always kind of neglect to mention this, it's a it's also a game Cher internally like, culturally right now. partly because we're on the front line fighting what amounts to evil. Uh, uh. partly because a lot of people don't agree with us and those that do realize that they need to stand up and stand with us.

Uh, and partly because we were right about what you should. Supply To us, commercial, it's just a really good vibe internally. Uh, it's just. it's like we're really.

You know, it's really fun to crush it. Um, and quite frankly, it's occasionally fun to watch your, you know, apparently perfect. uh, fake competitors deliver things that don't work, and to watch us walk in in with our crazy show and deliver things that do thank you. Our next question is from: Sid Who asks? Does paler view the USG Hardware primes as allies Or competitors? We view the primes as allies.

Um, and government. You know, Pter government web services? It really enables this. So two of the primes are customers of Apollo Two of the primes are using Foundry to improve internal production and systems integration. Another Prime Northr has joined our Titan team.

uh, and I I Think from our perspective, America needs her primes like our national security depends on them. There's a lot of talk in defense Tech circles about disrupting the primes, and I think there's incredible opportunity to transform what's possible with software, which in my opinion, we're leading, but fundamentally, they're They're crucial to our national security. And that's because production does matter. Uh, you have to bend metal at the end of the day and using 10 years of Munitions in 10 weeks in Ukraine really underscores that point.

But increasingly production is itself software defined and optimized. In fact, that's most of our Commercial Business helping Airbus with the A350 and single AIS ramp up helping BP produce more hydrocarbons. Um, helping Panasonic build more batteries for Tesla cars like that sort of transformation efficiency is what we want to bring to the primes as well as they Bend metal. The the maybe.

um, what Sham has done a really magnificent job of is it's fair to say the primes thought we were competitive with them until recently and and and not just primes. But but it it because really, to get access to the kinds of data that the Dep Pentagon has, you're going to be able to. you're going to need either paler or be able to build something like paler. And I think in all modesty, people have realized it's pretty damn hard to do what we've done.

And so there was this kind of perceived misalignment and what Sham has been building out with Fed Ramp is giving people a way to partner with us where they can extend what they're doing without having to try which everybody still does and it but but is commonly known will not work. The ability to have access to the underlying data for reasons that are, you know, highly technical. it's it's crazy hard to do and so getting that full alignment is both much better for paler and much better for the nation. and Um.

And then we're of course interested in it because we're pretty Mission focused and we want the nation to function better and we're also realistic. It's not good for us to be fighting battles. we know we're much better at software we have no interest in going into Hardware I Think increasingly they know they should not fight us on software, although some still do, which is largely stupid. Thank you both! Our next question is from Mariana with Bank of America Mariana please turn on your camera and then you'll receive a prompt to unmute your line.

Morning Everyone! So I have two questions for you. Number one is on the government side. All these geopolitical events, we have seen all these countries moving really fast to actually enhance Readiness and modernization is a key asset. What is your expectation for the US actually moving at this need of speed or like speed of need? um, and a more bureaucratic, usually more bureaucratic environment.

And the other one is A. You have discussed already how it changed or it was a catalyst for customers to be able to adopt data analytics and data infrastructure. But I'm interesting to understand Beyond boot camps. What else is changing internally? How you face customers, how you do things with AIP and how that is impacting your margins because they look like 30% operating margins Now versus the 25 that you were printing before.

Maybe to start with the the second one here with um AIP I Think you should really think you know the boot camp is more than just what's happening in the boot camp because you're exiting the boot camp with a series of use cases that are produ ready or near production ready that you can go forward with. You're exiting the boot camp with as the customer and usually it with enough hands-on experience with the product that you can actually keep going and compounding it going forward. So there's this exit velocity that's fundamental to it. Where it's it's not just to go to market motion.

it actually now becomes the implementation motion. It becomes the way in which you engage with partners Because now Partners can run their boot camps Partners can drive use case growth for themselves. Uh, around what came out of the boot camp and the exit velocity around that? Uh, so I think it, it's It's quite profound and why you're seeing both our emphasis of it and um, the impact that it's having on both the financials and the operating reality of the business. Yeah, as we mentioned on the last earning call, we were focused on usage and value of AIP and we're seeing that you know by the end of November 140 organizations will have delivered boot camps uh, to and we're seeing that in and then the conversions that flow from that as well.

And to put that number of perspective, I think roughly 70 of those boot camps will happen this month in November which is more than the number of commercial pilots we did all of last year. So the the velocity and we're just starting. So like we're ramping up to doing them, it's it's um, yeah. and then Gu on the on the margin side, what you're seeing is like we are investing.

you know, pretty significantly. R&D is up. uh, sequentially. Uh, 11% I Think the thing that is confusing is our go to motion.

now in Uscom is so efficient so you could basically look at as 10x more efficient and we are ramping it up. But there. this is the most efficient way for us to go to market. So it's like there's a it's not constrained by dollars, it's constrained by do we have people that actually know the product? Do we have? We train them.

There's there. There's not a way in which we can efficiently because if you're growing a business 52% The the obvious thing is, you should be dumping money on it like a bonfire. especially if it's the only Market that actually really matters in the world. And by the way, if you're recalibrating the standard, one of the things we did with PGA we did with Gia we did with Meta Constellation.

It's not just that we win clients, it's that we set a standard that the competition can never meet and that this is really important for our go to market strategy. It's like you. you can pretend you're going to build. PJ The French government announces they're going to rebuild it for $40 million.

You can't rebuild PG For $40 million. You can't rebuild it for a billion. You need us. You can't rebuild Foundry You can't reild when we go to Market with AIP the clients are learning two things they're learning.

Oh, I could use this. They're learning how to use it. They're also now going to go to every other vendor and say, but I want my thing to provide operational results and Paler has done this in six hours. I Like you better I'll give you six days I prefer you.

Your steak dinner is better, your suit is better, your backing from the analyst is better. You don't have the madman sticking up for things that are good and right in the world despite them being being unpopular and you get all that. I'll give you an extra 10 days. Well try that with PG.

It's ridiculous. Try it with Foundry It's ridiculous. try with medic consolation. No one even bothers trying that.

No one tries this on Gaia And they're not going to try it on AIP either. And that's one of the most important things we do as a company because in the end it is actually very attached to our mission. My view of what we should do is build products that are so good that the competition stops competing whether that's in commercial or on the battlefield. and that's what we're doing and that's what we're seeing in AIP and I Haven't seen something like this since PG which is our first anti Terror product.

No one bothers even like currently PG is blocked in Germany That's because somebody doesn't. Whatever, it's like they're waiting for a terror attack so the off day can win. It's like it's like insane. So any case, no one's bothered saying we should build another.

PG You can't build it so you can just opt to not have the product. There'll be people who do that, and that's the aspiration for every single one of our products. And that's what I see in P in in AIP Thank you all! Alex Is there anything you'd like to say before we end today's call? As usual, it's a it's a wild ride if you're an investor or if you're an employee internally. Um, we.

There's this term Mission driven culture which I increasingly don't like because almost everyone's saying it is just waiting to get tendies and and drop their mission and be a sophist. But in fact we are believers. We are Fighters and we are a mission driven culture and we welcome everybody who wants to participate that as an investor or as a palarian or someone who follows us. Thank you! That concludes Q&A for today's call.

say attack Attack come on man yo yo D I Was waiting for him to to go with the attack thing I'm pumped man. ah dude. look at all the notes that I've taken like I couldn't take them fast enough I need I need a copy of the transcript? Uh man I'm I'm a proud, proud shareholder today. very very prer.

So let me introduce you first of all to the 1500 people in the in the chat today. Uh, first of all, the stock is up 16% last time I checked uh which is not something we're used to seeing every day. 17% currently up in pre-market Uh Dominic Renaldi is in the house. The main flaw of Dominic is he's a Cowboys fan but nobody's perfect.

Hey, it's been a sad 30 years. It's been a sad. it's been a sad career. Uh Dominic uh comes from the same um world.

He works for a big company I'm not going to name any names for big company. he's A. he's an executive in this specific field Paler is operating in. Uh, he's very well versed in data and SAS and he's been doing this for a living.

He called the Nvidia Spike Very early on he called the Paler Spike when it was at the very bottom. He is the most underrated, under subscribed underf followed account on social media with actual Hands-On Managerial experience in the field. uh and with without further do Dom if you took some notes the floor a very kind kind intro I would love to hear your thoughts about these earnings and then we can have a discussion. Yeah, yeah, where to begin? Well, first off, let me just say uh I'm a proud shareholder for the honesty and transparency that he spoke up about Israel Let me just put that out there right there.

100% calling a spade a spade um 100% And And you know they said this years ago that the world was going to get more disjointed and and and uh, evil growing in the world. Let's just call it what it is. Uh, and their product helps stop that. So I'm definitely a proud shareholder from that perspective.

Um, they had a beat on every single metric I was cross referencing Q2 from every single metric. um big one that I was looking for was what was the customer growth like and then show me that the time to value and Adoption of the product is speeding up and they specifically are doing that with these boot camps going from one to five days which the retail Community has been saying this for a long time, right? Uh, just get hands on keyboards like Cod Trap. We've had many conversations about this just get people's hands on keyboards uh to to see the technology in action right with real data. uh and then from you know one to three month Pilots to one to five days.

Huge difference and I love the quote how he ended he said we're not St strapped by dollars in this activity to grow our business. We're strapped by the amount of people that know the technology to get customers using it right? Um, because it is a it is a process to ensure they have very well educated forward deployed Engineers Helping these companies use their data and build these apps. Um, coming from this world I will tell you and why I became Aest an investor in the beginning of all this was their software model is unlike anything else and what I mean by that is that they show quantifiable value right? proven value that I will deliver to your business and I will help you solve those problems in an inquire scale or expand scale phase. I'm willing to lose money on my first two parts of my business because I am that confident our technology is that good.

you will receive that value and then we will discuss contract NE negotiations because you will not want to leave that. Uh, and that has not changed. Um, no other software company that I've seen in the market does it just like that to that degree. I Think we're seeing uh, the market understand that customers are wanting problem solvers and also the amount of um the amount of it now being transformed into being responsible for transforming the business and that shift that.

Paradigm Shift It's not about keeping the lights on, it's about how are you driving the business forward. um, and adding value And their product does that? ER Dom I I Want to ask you a question and I think you you know when I was younger I met a guy I don't want to say his name but he was the CCO at the fund that was working on CCO Chief compliance officer um former D1 athlete standup guy H taught me a lot of lessons about life when I was really like a kid and he told me look, if you want to get ahead in this business, you you have to bring more answers than questions. Going to come back with questions? you're not adding any value. Bring more answers than questions which is exactly what Palente has been doing.

And you know the longer you wait, the longer you wait, right? Uh, the faster the fundamentals and the stock price converge, it's they can be sometimes misaligned, but eventually the longer you wait, it's going to catch up. So my question to you right as somebody who comes from this industry and who, uh, who works for a living and and in working with SAS Uh, where do you see paler go for the next five 10 years Like more in the long Horizon Yeah, I mean not in the stock price, just in general the business. Uh, we don't care about the stock price. No.

and that's why I'm invested in like I mean I've really? Consolidated my portfol folio to like I mean at the end of the day my top three positions are like 70% of my net wealth. Uh, it's Nvidia Paler. Tesla Um, very very highly concentrated and by the way, every time you talk the stock goes up by another percent it's ready. Keep talking.

Uh I Think they will be one of the most important software companies in the world? Period. Uh I Don't see our our world getting any uh more congr ruin or aligned from a geopolitical perspective? Uh I Love the question that they asked. would Paler help out in Asia with Western allies? because we know the the challenges that Taiwan and others uh are facing um and their government business is Lumpy Government will always be lumpy, but the amount of impact that they have for the world and that that's that steady Cash Cow that will continue to grow Um I Could see them being a a true competitor to a Uh, a Microsoft or someone. They may not be widely diverse in everything, but they're like the picks and shovel of AI and actual getting value from AI So that's what I would say to that.

So I mean I'm not going to make any price predictions, but I definitely expect in 10 years to make 10x on this. so that's a bold prediction. And it's whole order. Very bold prediction it is.

But Dom I Wanted to introduce you to one of my good friends, our friend uh Mika he's here. Nice Me: he's a wonderful, another under subscribed under underrated Channel on YouTube Dom is in a very similar position. so uh, since you've been so kind to join us for a few minutes and I know you're super busy I would like to get your kind of raw comments raw reaction about the the earnings from Penter actually the story of Paler. Before we talk about the earnings which you did a stellar job going over.

Um I didn't start by being a YouTuber actually I started by or my previous career was managing one of the analytics business in uh, one of the biggest companies in Israel called Nice and the fierce competitor always was Paler. Their level of when people didn't even talk about AI machine learning all that they already they already had that. we were lucky that at that time that's I Want to say six? seven years ago they were focused on Military so we were focused on on let's call them regular companies they were focused on Military and we were lucky. but we knew that they had very, very strong product and one of my first videos on the channel was saying that Paler is an amazing company.

Now the biggest challenge all that investors have retail investors mainly is to distinguish between a company. Again, not even talking about fundamentals, talking about the product and the stock price stock especially in a company called Paler. And Tom if you go back, let's say just click the five years there and everyone would see the fluctuation between the high price of the Roaring 2020s versus today. you might say oh, it's a crappy company because the stock went down.

But basically anyone that sees or looks at Paler product customers and I want to even give give everyone a hint on the fact that probably and and you you talked about that three to four months from now, they're going to be probably and this is not an not a promise but probably they're going to be included in the S&P 500. Now in four months you're going to see the push notification saying SN P is rebalancing and Paler is going to be included. It's going to go up 15% The question is will it go up 15% from 14. 92 or actually right now probably around 20 or from 40 And if you ask me, it's probably going to be from the ladder.

So a Amazing fundamentals. They keep delivering and I'll end with one thing that Alex Karp said he stands by Israel Period. He's not blinking. He's not saying ah, we support everyone, we, He's saying it Point Blank He's on the side of truth of civilized people, not of terrorists.

He's not trying to sugarcoat anything. He's a straight shooter and just like I like the craziness of Elon Musk The craziness of Alex Karp is the same. I'm right there with you I'm right there with you I didn't see any uh other CEOs buy an ad in New York uh the newspaper and say we stand by Israel Yeah spent money of his own company just to let you know where we stand. Um, and both of those gentlemen have made a a very extremely positive impact on the world.

So it it's great to be a shareholder and I'm Amazed by the fact we have a a Cowboys fan and a Jets fan in the same room, that's what Paler does. It brings together all the losers we we can have. Hasn't won a title in a while? Tom Michigan hasn't won a title in a while. That is true.

that is true. We can have a long discussion which I wouldn't really understand, how come the Cowboys still have fans? But that's a different discussion. Hey, you can't call me a bandwagon fan. It's been a long, sad 30 years exactly.

But the value of the franchise is still going up. and and you know, except an Amazon series which was very nice. Yeah yeah, he's a good businessman. He just needs a let his players play.

Yeah, that's true. Involved in doing a YouTube channel like that's what got me started in doing YouTube was was Nvidia and Paler sorry Tom catch you off I think I put the wrong channel for you H that's not the right. that's that's not your English Channel right? The one I have on the screen ER you have the charts on the screen it's Le what? I see uh I have a Hebrew and an English Channel The English Channel is uh, it's called stock Talk with Michael stocks where I cover weekly summary every week so anyone that wants to look it up, it's a weekly summary. about 20 30 minutes covers the news, the headlines, um, anything you want to hear and we you know in the future I might do more videos than that but Tom you're doing an amazing job.

first of all, explaining to everyone that if you support uh from The River To The Sea It means that you're basically uh, supporting the elimination of the Israeli country and you're basically aligning yourself with the Nazis. So congratulation to everyone that's standing there and protesting and saying that you've just became a Nazi and you know rules around the world say that you're supposed to be in jail. Let's go back to Palente. So paler is up.

How much? Uh, premarket? 18 and a half percent? Why not 20? Tom Everyone's calling for 20 I'm not gonna say no to that, but uh, we haven't sold at six. We haven't sold at 20. Not at 30, not at 40. So for us it's before he jumped on Dom said he, you know you heard just the intent of what he said which was like a 10x.

uh we're not looking to sell before 150 200 at minimum so it's pretty much irrelevant. but it's It's kind of fun to see you get get you get more validation for mainstream media and mainstream kind of fans. But we're not surprised. The people who've been following Paler from day one and I know mic you've been following Palente from day one and D you wrote numerous articles by the way Micah Dom called the entire Nvidia pop way from the from the 80 all the way to the he works actually in the In SAS he in ex so you guys come from similar Industries so we're not surprised.

but I want to pose a question to you gentleman here. so uh, what are the chances that uh, this uh, macro environment where we're seeing right now uh impacts Paler a little bit negatively. You know if the entire Market takes a poop, uh, will we see? will we see paler drop and if so, what's what's the new floor? What in new ceiling in your opinion? I I Can you know I can go first since I have another live stream in three minutes and I'm sorry I'm going to drop off uh by then if if the markets will go down, Paler with a high beta will probably go down even more. Not because of their fundamentals, not because of risk of business, just because that's how.

uh, the technicals of the market work. It doesn't even matter matter if you're a good company. or a Bad Company If the S&P goes down 2% and you have a beta higher than one, then you will go more than that. It doesn't really matter.

and Paler is a volatile stock. Three I Think they have three beta or something crazy. It's a volatile stock. So if you're A, you cannot be a short-term holder of Paler, at least from my perspective.

Again, this is Not Financial advice. But shortterm holders of Paler will always jump on their stop losses and probably always going to see losses versus gains. That's that's the type of stock. Now if you're a longterm shareholder, if you understand the value that they can provide in the AI machine learning world, if you understand that the world is going to a place where artificial i