Gloo (GLOO) Q1 FY27 earnings call: guidance and Q&A

Asked about the implied reacceleration in H2 revenue, the line of sight into larger customer wins, and the contribution from recently acquired businesses, specifically if the mix has changed since April guidance.

Management stated continued acceleration, driven by scaling core Gloo offerings (360, AI) and synergies from capital partners. Noted strong organic growth in both core and acquired offerings, with cross-sell leading to significant revenue step-ups (2x for two offerings, 5-10x for three+).

“We've been super pleased with the growth. And the growth has been a combination of scaling some of the core Gloo offerings like 360 Gloo Blue AI. At the same time, we've also been able to continue to scale and get synergies across the different capital partners that we've acquired over the years as well.”

asked by Daniel Kurnos · answered by Scott Beck

Inquired about the land and expand strategy, specifically if larger contracts involve multiple products initially or if they expand over time, and how quickly major deals can expand.

Pat Gelsinger explained that most sales start with a single product area, with expansion occurring 1-2 quarters later. Some deals land multiple products, and this will become a larger part of the sales motion as offerings mature. Each new deal improves their processes and Agentic workflows, making subsequent expansions easier.

“typically, a sale will be a single product area that we then expand 1 or 2 quarters later over time. But most of them start with one, right, in some of our sales strategies to keep things simpler and moving forward.”

asked by Daniel Kurnos · answered by Patrick Gelsinger

Asked about the 70% gross margin contribution from the Q4 to Q1 revenue increase, seeking to understand the split between organic growth and cost realignment, and its sustainability.

Scott Beck attributed 50-60% of the contribution to overall reduction in operating expenses, with the remainder coming from leverage across the cost of goods sold or contribution margin. He noted a balance between the two factors.

“I would say that you've got somewhere between 50% and 60% of that probably came from the operating expense and the remainder came from just continuing to get leverage across the cost basis associated with what you would think of as the cost of goods sold or a contribution margin.”

asked by Richard Baldry · answered by Scott Beck

Inquired about the playing out of earlier large Gloo 360 deals, specifically regarding headcount synergies and early cross-selling/upselling opportunities.

Pat Gelsinger stated that every deal contributes to their maturity, improving expertise, Agentic workflows, and HR systems. He emphasized that while still early, each deal makes the next one easier and faster, creating a repeatable engine for growth and margin improvement.

“But the good aspect of this is, is that every 1 of those that we do, we're now creating the Agentic workflows that the next 1 is just easier and faster. So we just see this as an engine that we're going to be able to rinse and repeat over and over again and each 1 of those is showing more maturity in the offering.”

asked by Richard Baldry · answered by Patrick Gelsinger

Asked for an update on EMD's progress since acquisition and whether non-faith-based customers are expected to grow, or if the focus is primarily on faith-based organizations.

Scott Beck confirmed that both faith-based and non-faith-based segments of EMD are growing, with obvious synergies in the faith-based sector and independent growth plans for the non-faith-based. He noted similar dynamics with Midwestern, where about 1/3 is faith-based and 2/3 is not, and cross-sell opportunities exist for Gloo 360 to non-faith-based customers.

“Additionally, Midwestern, which we just went to 100% ownership from 80%, those guys have pretty much the same growth plan. They have -- a significant amount of Midwestern is also non faith-based, and pretty much about the same percentage, about 1/3 faith-based and about 2/3 not faith-based.”

asked by Yun Suk Kim · answered by Scott Beck

Asked about the go-to-market strategy for cross-selling new solutions to existing customers (e.g., Westfall or EMD), how quickly customers get interested, and the upsell process.

Pat Gelsinger stated there's a strong, aggressive effort led by their Chief Revenue Officer to drive cross-selling, seeing good effects and finding the process surprisingly easy. He highlighted replicability and scalability of motions like Westfall Gold with Masterworks 360 into Masterworks accounts. They are building more sales capacity and rigor in managing pipelines and cross-sell mechanisms.

“We're seeing a good effect from that already. And I'll say we're pleasantly surprised how easy it is to get that process underway. So we do see that Westfall Gold with Masterworks 360 into Masterworks accounts swerve into our 360 accounts. These motions are ones that we think have a lot of replicability, a lot of scale.”

asked by Jason Kreyer · answered by Patrick Gelsinger

Inquired about any changes in customer budgets or appetite for digital offerings across the ecosystem.

Scott Beck noted that the ecosystem's revenue grew 8.2% last year, leading to more budget for digital offerings. He also highlighted that younger people are re-engaging with spirituality and faith, which bodes well for the market. Pat Gelsinger added that Gloo is not particularly vulnerable to cost issues as they also offer cost savings, and they see a clear line of sight to rapidly growing revenue.

“I mean you think for a very significant, what is an old ecosystem to be able to have that kind of growth is remarkable. And yes, as a result of that, you get more budget out to work with.”

asked by Ryan Meyers · answered by Scott Beck

Asked about the traction with the Catholic segment and if its hierarchical nature could lead to a faster tipping point for broad product acceptance compared to more grassroots denominations.

Pat Gelsinger stated it's too early to confirm repeatability of sales patterns but believes the hierarchical nature suggests referenceable relationships and high repeatability. He noted initial success in 'powering tech' and good affinity for AI opportunities within the Catholic sector, which represents a very large market.

“That said, given the hierarchical nature that you point to, we think that you actually have very referenceable relationships across them. And as you get success in one, it will be very repeatable across others. So we do -- for that very reason, I think that we will have good sales productivity as we engage.”

asked by Matthew Harrigan · answered by Patrick Gelsinger