Prepared remarks
Thank you for standing by, and welcome to Gloo's Fiscal First Quarter 2026 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *1 on your telephone. To remove yourself from the queue, you may press *1 again. I would now like to hand the call over to Oliver Roll, Chief Marketing and Communications Officer. Please go ahead.
Thank you, operator. And thank you to all of you for joining our fiscal first quarter earnings conference call. We will be discussing Gloo's performance for the first quarter ended April 30, 2026, as well as providing guidance for our Q2 and full year 2026. Joining me on today's call are CEO and cofounder Scott A. Beck and CFO Paul Seamon. Our executive board chair and head of technology, Patrick Gelsinger, will also join the Q&A session. Before we begin, please be reminded that this call will contain forward-looking statements, including statements related to our business, future growth, strategic initiatives, key priorities, and our financial outlook for Q2 and fiscal year 2026. These statements are based on Gloo's current expectations but are subject to risks and uncertainties relating to future events and the future financial performance of Gloo. Gloo assumes no obligation to update or revise them, whether as a result of new developments or otherwise. Actual results could differ materially from those anticipated in these forward-looking statements. A discussion of some of the risks that could cause actual results to differ materially from our forward-looking statements can be found in today's press release and are disclosed under the caption Risk Factors and elsewhere in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended January 31, 2026. Our SEC filings are also available on Gloo's Investor Relations website at investors.gloo.com and on the SEC's website. In addition, during today's call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from our GAAP results. Reconciliations of these non-GAAP metrics to the most directly comparable GAAP measures, as well as the definitions of each measure, their limitations, and our rationale for using them are included in today's press release and will be included in our Form 10-Q to be filed for the quarter ended April 30, 2026. And now I will turn the call over to Scott.
Thanks, Oliver, and thank you for joining our 2026 first quarter earnings call. Q1 was another strong quarter for Gloo. We exceeded our guidance and sell-side consensus on both revenue and adjusted EBITDA. Revenue came in at $41.5 million, growing 3x over the prior year. This is also 13% above guidance and consensus. Adjusted EBITDA was negative $11.5 million, also ahead of guidance and consensus, and representing more than a $7 million sequential improvement from Q4 2025. This represented our third consecutive quarter of sequential adjusted EBITDA improvement. This progress reinforces our confidence in delivering against our adjusted EBITDA profitability goals, with adjusted EBITDA expected to approach breakeven in Q3 of 2026 and reach profitability in Q4 2026. Our Q1 results demonstrated that our strategy is working. We are seeing growing demand from large strategic customers, our recent acquisitions are delivering compounding value, and AI is becoming an increasingly important accelerator across the business. Before turning to the specific drivers for the quarter, I want to connect our results to the broader opportunity. Gloo is building the leading technology platform for the faith and flourishing ecosystem, with applied AI becoming a defining capability across the platform. This is a large, durable, and highly fragmented ecosystem spanning education, social impact, Bible translation, churches, and the denominations that serve them. Donations remain the economic engine of the ecosystem, funding the mission-driven work of faith and flourishing organizations. In 2025, revenues for faith-based organizations grew 8.2% to more than $265 billion, underscoring both the scale of the opportunity and the importance of donor development. Across these segments, organizations consistently need two things: they need to modernize technology and they need to expand marketing reach to attract more donors and more constituents. That is how we have organized the Gloo platform: powering technology and powering reach. Applied AI has become an increasingly important capability of the platform. Our powering technology business is designed to take over the customer's technology operations, modernize them, and then apply agentic AI to deliver significantly better outcomes at lower cost for our customers while creating higher margins and durable revenue streams for Gloo. With powering reach, applied AI helps customers better understand their audiences, personalize engagement, and strengthen donor development. That combination is what makes Gloo distinct. We are not simply providing software or services. We are bringing applied AI into the workflows that matter most to the organizations that we serve. We can do this because Gloo has earned a position of trust within the faith and flourishing ecosystem. Over decades, we have built the relationships and credibility needed to convene leaders, understand their most important workflows, and apply AI in ways that are practical and mission-aligned. In Q1, we saw strong momentum across the platform. On the powering reach side, Masterworks, Barna, and Westfall delivered one of their best revenue quarters ever. That performance demonstrates the value of combining donor engagement with media research and fundraising capabilities all on one platform. On the powering technology side, customers are increasingly selecting Gloo to take over, modernize, and transform core technology operations through offerings like Gloo 360. In Q1, that momentum showed up in larger strategic wins, including five new customers contributing more than $1 million in annual contract revenue. These larger strategic wins show growing traction across both existing and new segments of the faith and flourishing ecosystem. Assemblies of God is an example of a denomination choosing Gloo. They are leveraging Gloo 360 across their enterprise by modernizing legacy systems to better serve their 13,000 churches within the United States. Indiana Wesleyan University is another example. We are partnering with Wesley Seminary at IWU to build ViaJourneys, an AI-powered ministry life cycle ecosystem that connects ministry leaders with personalized resources and mentors. We believe this points to a broader transformation in how universities will equip students and the communities where they lead. For example, our work with Jessup University announced earlier this year is progressing extremely well and running ahead of schedule. Beyond the customer examples, we continue to build broader ecosystem momentum around applied AI. Our 2026 fourth annual Gloo Hackathon will bring together more than 700 developers, engineers, and mission-driven builders in Boulder this October for 48 hours of hacking and building mission-aligned apps and technology. This quarter, we announced the general availability of Gloo AI, a comprehensive set of AI tools and capabilities for developers in the faith and flourishing ecosystem. This release includes support for over 80 LLM models. It includes new safety capabilities, varied subscription options to pay for token usage, and a free sandbox for developers to experience our values-aligned guardrails. The goal is to accelerate practical AI solutions that advance human flourishing. Moving now to acquisitions, which remain a key part of how we are strengthening the Gloo platform. Our strategy is to add best-in-class providers that expand our ability to power tech and to power reach. Q1 provided strong evidence that strategy is working. Westfall Group and Masterworks both delivered one of their best quarters ever. That validates the strength of those businesses and the compounding value of bringing them onto the Gloo platform. During Q1, we signed a purchase agreement to acquire EMD, which we closed at the beginning of Q2. EMD expands our powering technology portfolio with Workday consulting, implementation, and support capabilities for nonprofit, small, and mid-market organizations. EMD also aligns directly with our broader strategy that I mentioned earlier: we take on and modernize critical customer workflows, then apply specialized engineering talent and agentic AI to deliver better outcomes at a lower cost. Over time, this creates a strong customer value proposition while also improving Gloo's margin profile. Today, we are also announcing the acquisition of the remaining stake in Midwestern, bringing our ownership to 100%. Midwestern increases our investment in the cost-effective global talent capability area. We believe this will continue to be a significant growth opportunity as we combine lower-cost delivery capabilities with agentic AI. This also eliminates the call option, which will result in a one-time improvement by removing the associated $12.1 million liability from Gloo's balance sheet. Together, these acquisitions strengthen the platform, expand customer value, and reinforce the flywheel that we are building. Our approach with acquisitions is always disciplined. We continue to see a strong pipeline, but we will only pursue opportunities that are best in class, strategically aligned, and accretive to the Gloo platform. Even though we have a strong pipeline, as we previously stated, our current plan does not depend on additional acquisitions to achieve our revenue or adjusted EBITDA profitability guidance. As we look ahead, our priorities remain clear. We are focused on deepening strategic customer relationships, scaling our platform, and applying AI in ways that improve outcomes for our customers while creating durable value for Gloo. At the same time, we will keep integrating acquisitions with discipline and executing against our path to profitability. Q1 was a strong start to the year. We remain confident in our strategy, our 2026 plan, and the long-term opportunity to build the category-defining technology platform for the faith and flourishing ecosystem. Paul, I will turn it over to you to walk through the numbers in more detail.
Thank you, Scott. We delivered strong first quarter results with both revenue and adjusted EBITDA meeting guidance. This performance reflects solid business momentum and disciplined execution, giving us a solid financial start to the year. Q1 revenue was $41.5 million, an increase of 238% compared to the same period last year, and 23.5% sequential growth compared to Q4 2025. Year-over-year revenue growth was driven by momentum in several business lines, most notably Gloo 360 as well as acquisitions of capital partner businesses such as Masterworks and Midwestern. Platform revenue totaled $24.1 million, an increase of $15.6 million from Q1 of last year and up 19.9% over Q4 2025. Platform solutions revenue was $17.4 million, up $13.6 million from the same period in 2025 and about 29% sequentially. Cost of revenue in the quarter was 67.7% of total revenue, an improvement from 72.1% in the prior year period. That improvement was driven by margins in our Workspace and Outreach business lines as well as a full quarter contribution from Westfall Group. We expect improvement to continue through the year. Adjusted EBITDA improved $7.1 million sequentially to negative $11.5 million. This significant improvement reflects the impact of our cost-saving actions implemented in Q4 along with the growth already mentioned. In particular, our operating expenses decreased $8.4 million sequentially, while revenue grew 24%. Also note that general and administrative expenses include acquisition costs related to the EMD acquisition, which closed in the second quarter. We do not adjust for these costs in our non-GAAP results. We expect continued sequential improvement in Q2 as we aim to achieve adjusted EBITDA profitability in Q4. As Scott described earlier, we recently agreed to purchase the remaining 20% of Midwestern that we did not previously own, as well as eliminate the call option permitting the holder of the remaining 20% from reacquiring a controlling interest in Midwestern from us. We anticipate closing the transaction later this quarter. The elimination of the call option will result in no longer having large swings in the financial statement reporting line titled gain or loss from change in fair value of financial instruments. As of April 30, 2026, we had $33 million of cash and cash equivalents. We believe that we have the liquidity to reach positive adjusted EBITDA in Q4, which we expect will put us on a path of sustainable, positive free cash flow growth in future quarters. With significant momentum across the business, we also believe we have multiple options to further strengthen the balance sheet, fund our growth, and support future acquisition opportunities, should we choose to pursue them. I would like to now turn to our full year 2026 and Q2 outlook. For full year 2026 revenue, we are increasing our outlook $5 million to $195 million. In the second quarter, we expect revenue to be $44 million and adjusted EBITDA loss to narrow to negative $8.5 million. We continue to expect adjusted EBITDA to approach breakeven in Q3 2026 and reach profitability in Q4 2026. We expect a weighted average share count of approximately 81 million shares for Q2. With that, I will turn this call back to Scott.
Thanks, Paul. With that, operator, we are ready to take the first question.
Questions and answers
Star *1 on your telephone. To remove yourself from the queue, you may press *1 again. Please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please standby while we compile the Q&A roster. Our first question comes from the line of Daniel Kurnos of Benchmark. Your line is open, Daniel.
Yeah. Great. Thanks. Good afternoon. Scott, Paul, congrats on another great quarter. I guess first question: the revenue cadence implies a bit of a reacceleration in the back half — not to say that the growth has not been impressive. I just want to get a sense from you guys: you said in the last call you were starting to see larger customer wins. You flagged the $5 million annualized contracts this quarter. How much line of sight do you have into deals like that, and how much is coming from the more recently acquired businesses? How has that mix changed since the April guidance?
Thanks, Daniel. Good to hear from you. We have continued acceleration consistent with what we have been seeing. We have been very pleased with the growth, which has been a combination of scaling some of the core Gloo offerings like Gloo 360 and Gloo AI, and driving synergies across our capital partners that we have acquired over the years. We have driven strong organic growth in our core offerings as well as strong organic growth in the offerings from those capital partners. One of the great things we are excited about is seeing the cross-sell synergies taking place. More and more organizations we serve start with one offering. When they adopt a second offering, we often see a significant step up — roughly two times the revenue. When they adopt three or more offerings, we sometimes see that expand to five to ten times the volume of a single offering. So it's a combination of both — organic growth from core offerings and the newer acquisitions. Overall, we are seeing more than 30% of growth coming from organic expansion tied to recent acquisitions and cross-sell motion.
Scott, that segues nicely into my next question about land and expand. When you win one of these larger contracts, are customers taking multiples of your offerings at once, or do they typically dip their toe in and then expand over time? How quickly can these major deals expand, given the large TAM and your leadership position?
Thanks, Daniel. As we noted earlier, 30% of our customers over $1 million now have more than one product, which implies the large majority still start with one product. Typically, a sale will be a single product area that we then expand one or two quarters later. Some deals do land with more than one product area at the same time, and I expect that will increase as our sales offerings mature. For now, it's mostly one landing per quarter followed by subsequent offers later in time.
That is super helpful. You are already putting up the numbers, so excited to see what you do next. Thanks, guys.
Thank you. Thank you.
Our next question comes from the line of Richard Baldry of Roth Capital. Your line is open, Richard.
Thanks. From Q4 to Q1, the revenue increase had about a 70% gross margin contribution on the quarter. I'm curious if you can dig into how much of that was organic growth and how much was due to cost realignment. That margin step-up is about two times where your normal gross margins are sitting today. How sustainable is that level moving forward?
Great question, Richard. There's a balance between the two drivers this quarter. We got significant benefit from overall reductions in operating expenses, which flowed through to adjusted EBITDA. But we also saw leverage across the cost basis tied to cost of goods sold and contribution margin. I'd estimate somewhere between 50% and 60% of the improvement came from operating expense reductions, and the remainder came from continued leverage in contribution margin and cost of revenue.
You're still early into some of the larger deals on the Gloo 360 side. As those deals remain under your umbrella longer, are you seeing incremental headcount synergies? Are early cross-selling and upselling opportunities materializing? How are the early large deals playing out?
Every one of these deals is making us more mature, Richard. We are getting more proof points for different offerings as we add customers. We are building expertise on tools we've picked up, maturing agentic workflows, and improving our HR systems and onboarding processes. We are not fully mature yet because several offerings are still being integrated and learned, so there is more margin improvement ahead and faster onboarding over time. Each deal creates agentic workflows that make the next integration easier and faster. We view this as a repeatable engine where every new customer improves our capability.
If I can squeeze one last one in: regarding the five deals over $1 million, are there commonalities across those, or are there multiple distinct pockets where you can now win those? How extensible is that going forward?
We are seeing more pipeline in the university segment in particular, which we've highlighted. William Jessup was an early example, and we're now closing more in that area — there are over 900 faith-based universities in the U.S. so the runway is long. We have critical mass in sectors like Bible translation, campus ministry, and rescue missions. We also noted early success in the Catholic segment, which is very large and just getting started for us. These are replicable, sizable opportunities that make land-and-expand an enormous pathway.
To add, we are landing and expanding within accounts, and when we enter a new category — like campus ministry or faith-based universities — that category itself also expands. So we get expansion at the account level and category level. The commonality is they want the same thing: better technology and more reach to get more donors, constituents, students, and volunteers. By applying AI, we can deliver lower cost and better benefits while improving our margin profile.
Thanks, Scott.
Our next question comes from the line of Yun Suk Kim of Loop Capital Markets. Your line is open, Yun.
Great. Thank you and congrats on a strong quarter. On the EMD business, can you update us on progress since the acquisition closed? For EMD customers, I know some are not faith-based. Do you expect the non-faith-based customer base to show growth, or is your near-term go-to-market primarily focused on faith-based organizations?
As you're aware, EMD has both faith-based and non-faith-based customers, and we are growing both segments. There are immediate cross-selling synergies in the faith-based base, but the non-faith-based side also has its own growth plan. The acquisition closed at the beginning of the quarter, so we're about five to six weeks in and we like what we're seeing. Midwestern, which we moved to 100% ownership from 80%, has a similar mix — roughly one-third faith-based and two-thirds non-faith-based. It's helpful to see synergies between Midwestern and EMD on the non-faith-based side. So yes, both sides are growing and we're committed to growing them both.
Is there an opportunity to cross-sell Gloo 360 to EMD's non-faith-based customers?
Yes, there's no question. Small and medium organizations face the same issues: help me with tech, help me with reach. Those value propositions apply whether an organization is faith-based or not. Many workflows — including employee engagement and ongoing organizational workflows — are the same across types of organizations, so there is a lot of commonality to sell against.
Okay. And then maybe this is for Patrick: it's early, but what's the early feedback on Gloo AI Studio? Was that part of your hackathon activity?
Early feedback on Gloo AI Studio has been strong. As with any new service, there are learnings as developers come on and as we build more efficiency around onboarding and billing. We had a notable customer, Hello Bible, move a consumer chat service to Gloo Studio and publicly shared a good experience. We're starting to see real customers bring workloads onto the platform. We'll have more to announce during our virtual hackathon events and the big in-person hackathon in the fall, where Studio will be heavily featured. We now have over 1,000 developers on the platform, but we need to grow much faster and larger. We believe Studio is now a mature offering that will enable that growth.
Okay. Great. Looking forward to it. Thank you very much.
Thank you.
Our next question comes from the line of Jason Kreyer of Craig-Hallum. Your line is open, Jason.
Great. Thanks, guys. Scott, great to hear the early success with cross-sell in Q1. Wanted to ask about the go-to-market for cross-selling new solutions to existing customers. For example, with a Westfall or an EMD account, how quickly can you get customers interested in new solutions and get them up and running? What does that upsell process look like?
We have a strong effort led by our Chief Revenue Officer, Rebecca, to drive cross-sell across sales teams. We're already seeing good effects from that and have been pleasantly surprised by how straightforward it can be to start the process. Motions like Gloo 360 into Masterworks accounts, or Masterworks into 360 accounts, are replicable and scalable. We are building more sales capacity, bringing sales teams on, getting more rigorous in managing large account pipelines, and building more cross-sell mechanisms across the portfolio. We see ourselves at the beginning of the cycle, and each element of the portfolio increases cross-sell opportunity.
Perfect. One follow-up on M&A: acquisitions have expanded your addressable market. For the bigger customers you have today, what do you think your penetration is into the existing base? How much runway is ahead given the large addressable market?
The runway is enormous, which is why we talk about TAMs in excess of $100 billion. Even where we have penetration in a few accounts, we are not well penetrated across the portfolio. Our effective SAM is in very low single-digit percentages at this point. The TAM and reachable SAM are both very large, and we are nowhere close to saturation on any dimension of the business.
Thank you.
Our next question comes from the line of Ryan Meyers of Lake Street Capital Markets. Please go ahead, Ryan.
Hey, guys. Thanks for taking my questions. First, have you seen any changes in customer budgets or other major changes across the ecosystem in terms of appetite for digital offerings?
Yes. As I noted in my prepared remarks, the ecosystem grew revenue 8.2% last year, which is significant for a mature ecosystem. That growth increases budgets and gives organizations more dollars to deploy. Also, younger people are reengaging in spirituality and faith at higher rates, which bodes well for the market. That demographic trend adds to the positive momentum in the ecosystem and gives us more opportunity to serve.
Thanks. Second question: you mentioned 30% organic growth. How much of that do you think comes from new customer wins versus expansions from existing customers?
We are above 30% organic growth and comfortable with that trajectory. A big driver is new customer acquisition — bringing new names into Gloo 360, Gloo AI, Masterworks, Barna, and Westfall. Both new customer wins and expansions are happening, but new names are super important.
To add, as we build our salesforce, we get more account coverage over time. We're adding salespeople to Gloo 360, Masterworks, and Westfall Group, increasing capacity to sell and deliver. We don't see budget limitations that hurt us; many customers are looking for cost savings, and we present cost savings as well. This is a good time for our offerings, and we see a clean line of sight to rapidly growing revenue, customer base expansion, and continued land-and-expand for many quarters.
Alright. Thanks so much. That was super helpful.
Thank you.
Our last question comes from the line of Matthew Harrigan of Benchmark Stonex. Your line is open, Matthew.
Thank you. You referenced traction with Catholics. You've been focused more on evangelicals historically. The Catholic Church is a hierarchical global organization with unique educational reach. If you gain traction on the Catholic side or other less-penetrated denominations, could you hit a tipping point with faster adoption of a broad bouquet of products compared to grassroots denominations? Thank you and congratulations on the results.
It's early to know repeatability of sales patterns in the Catholic segment — we need more customers and sales motion experience. That said, because of the hierarchical nature, success in one referenceable relationship can be repeatable across others, which could lead to strong sales productivity. We have had success enabling tech in that sector and see potential for the full range of our offerings at scale. The size of the Catholic portion of the marketplace — archdioceses and large institutions — represents a large addressable opportunity with substantial technology needs.
Could that extend into the university side as well, or is that a different animal?
It is replicable into the university side. Of the roughly 900 faith-based universities we track, about two-thirds are evangelical and one-third are Catholic. We hope to have successes in the university side of the Catholic community as well.
Great. Thank you.
Thank you.
I would now like to turn the conference back to Scott A. Beck for closing remarks. Sir?
Yes. Thanks a lot. I appreciate that. As you could tell from the call, we are very excited about the performance and the progress. The faith and flourishing ecosystem needs what Gloo is providing: technology and marketing reach powered by AI. Timing is excellent, but we are still early in our journey as a public company. Momentum is strong and growing. We have an opportunity to build a category-defining technology platform for this ecosystem, and one of the things that excites us most is the ability to shape technology as a force for good. The intensity of technological change right now is one of the most consequential periods in our lifetime. To be on the front lines with these organizations is very encouraging. As we do this, we always remember we are serving those who serve: the minister, campus minister, rescue mission, world child development organizations, global water organizations, faith-based universities, churches, and denominations that serve them. They are out on the front lines changing lives, families, and cities. We pursue our work so that we can accomplish our vision: a world where every person can flourish and be all they were born to be. That is what motivates us and gets us out of bed in the morning. You, as shareholders, are part of that — you are helping provide capabilities and capital that allow these organizations to scale their missions. We are grateful for the champions we serve and the shareholders who serve with us. On behalf of all of us, thank you for tuning in today. God bless you and your efforts and Gloo's efforts as well. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.