Gloo Holdings, Inc. (GLOO) Earnings

Management highlights

- Overall Business Strategy * GLUE is building a category-defining technology platform for the faith and flourishing ecosystem, organized around two core value propositions: powering technology to modernize customer operations, and powering reach to expand donor and constituent outreach. * Applied AI is a core differentiator across the platform: it reduces operational costs for customers, improves margins for GLUE, enables personalized donor engagement, and powers mission-aligned AI workflows. * Acquisitions are a key disciplined strategic lever to expand platform capabilities; the current profitability and revenue guidance does not depend on additional future acquisitions. - Customer and Product Momentum * GLUE secured five new large strategic customers in Q1, each contributing over $1 million in annual contract revenue, including a multi-enterprise deal with Assemblies of God to modernize systems for 13,000 U.S. churches. * Key partnerships are progressing ahead of schedule, including the AI-powered Via Journeys ministry ecosystem with Indiana Wesleyan University and the ongoing work with Jessup University. * Glue AI Studios, a set of values-aligned AI development tools for the ecosystem, launched in general availability with support for over 80 LLM models, pay-as-you-go token subscriptions, and a free developer sandbox; it already has over 1,000 developers on the platform. * The 2026 fourth annual Glue Hackathon, bringing over 700 mission-aligned developers to build faith and flourishing ecosystem AI tools, is scheduled for October 2026 in Boulder, Colorado. - Acquisition Updates * Previously acquired businesses Masterworks, Barna, and Westfall delivered one of their strongest ever revenue quarters in Q1, validating the compounding value of integrating acquisitions into the Glue platform. * GLUE closed the acquisition of EMD at the start of Q2, adding Workday consulting, implementation, and support capabilities for non-profit and small-to-mid-market organizations, expanding the powering technology portfolio. * GLUE announced an agreement to acquire the remaining 20% stake in Midwestern, taking ownership to 100% and eliminating a $12.1 million balance sheet liability associated with the previous call option; Midwestern expands GLUE's cost-effective global delivery capabilities, with ~one-third of its revenue from faith-based organizations and two-thirds from non-faith-based clients.

Guidance

- Full year 2026 revenue guidance was revised upward by $5 million to a new target of $195 million. - Q2 2026 is expected to deliver $44 million in revenue, with an adjusted EBITDA loss narrowing to negative $8.5 million, and a weighted average share count of approximately 81 million shares. - Management maintained prior long-term profitability guidance: adjusted EBITDA is expected to approach breakeven in Q3 2026 and reach full profitability in Q4 2026. Management expects continued sequential improvement in adjusted EBITDA throughout 2026, leading to sustainable positive free cash flow growth in future quarters after profitability is achieved.

Segment performance

Total Q1 2026 revenue was $41.5 million, a 238% year-over-year increase and 23.5% sequential growth from Q4 2025. Platform revenue (core technology and solutions) totaled $24.1 million, a $15.6 million year-over-year increase and 19.9% sequential growth. Platform solutions revenue was $17.4 million, a $13.6 million year-over-year increase and ~29% sequential growth. Adjusted EBITDA was negative $11.5 million, representing a $7.1 million sequential improvement from Q4 2025, marking the third consecutive quarter of sequential adjusted EBITDA improvement. Cost of revenue was 67.7% of total revenue, an improvement from 72.1% in the year-ago period, driven by margin improvements at workspace and outreach business lines and a full quarter of contribution from acquired Westfall Group. As of April 30, 2026, GLUE held $33 million in cash and cash equivalents.

Risks & headwinds

- Forward-looking statements, including all financial and profitability guidance, are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations; key risks are disclosed in GLUE's SEC filings, including the 2026 Form 10-K and Q1 2026 Form 10-Q. - Large enterprise deals for Glue 360 are still early in maturity, and the business has not yet fully captured all expected margin and onboarding efficiency synergies from these new engagements. - Penetration of new large market segments like faith-based universities and the Catholic segment is still in very early stages, and the pace and scale of future growth in these segments remains unproven.

Analyst Q&A

• Q: What is the mix of revenue acceleration between organic growth of core offerings and growth from recently acquired businesses, and how has this mix changed? /

  A: Growth is a combination of scaling core offerings like Glue 360 and Glue AI, and capturing synergies from previously acquired businesses. Strong organic growth is seen in both core and acquired business lines, with significant cross-sell synergies: customers that adopt multiple offerings see revenue that is 2x for two offerings, and 5-10x for three or more offerings, compared to single-offering customers. More than 30% of current growth comes from organic expansion of new acquisitions. Overall growth acceleration is consistent with prior trends.

• Q: When winning large new contracts, do customers adopt multiple offerings at once, or do they start with one offering and expand over time? /

  A: The vast majority of large new customers start with only one product offering, with expansion to additional offerings occurring one to two quarters after the initial land. A small number of customers have adopted multiple offerings at closing, and this is expected to become more common as product lines mature. The company's core go-to-market motion remains land-and-expand, with an additional layer of expansion into new industry categories after gaining traction in a segment.

• Q: How sustainable is the recent sequential improvement in gross margin, and what portion comes from organic growth versus cost realignment? /

  A: Roughly 50-60% of the Q1 margin improvement came from prior operating expense reduction actions, with the remaining 40-50% coming from organic leverage in cost of goods sold. Early large Glue 360 deals are already driving incremental maturity: each new deal builds repeatable agentic AI workflows that make future onboarding faster and more cost-efficient, with significant remaining margin improvement upside as the business scales.

• Q: What is the growth plan for EMD's non-faith-based customer base, and can Glue 360 be cross-sold to these customers? /

  A: EMD has both faith-based and non-faith-based customers, and GLUE plans to grow both segments. There are immediate cross-sell synergies for faith-based EMD customers, and non-faith-based customers have the same core technology and AI workflow needs as faith-based customers, so Glue 360 cross-sell is a viable opportunity for this segment. EMD also has synergies with 100% owned Midwestern, which also has a two-thirds non-faith-based customer mix.

• Q: What is the penetration of GLUE's existing customer base, and how much long-term growth runway remains? /

  A: The total addressable market for GLUE's platform exceeds $100 billion, and GLUE's current penetration is very low across all segments. For example, the company has closed several faith-based university deals, but there are over 900 faith-based universities in the U.S. that remain untapped. Even in segments where GLUE has some traction, there is significant room to expand within existing accounts and across the broader segment, with no near-term risk of market saturation.