Zoom delivers strong Q2, sees AI usage surge

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Zoom Communications reported strong second quarter results and CEO Eric Yuan said the company is seeing customers broaden their AI usage.

The company reported second quarter net income was $358.6 million, or $1.16 a share, on revenue of $1.217 billion, up 4.7% from a year ago. Non-GAAP earnings were $1.53 a share.

Wall Street was expecting Zoom to report second quarter earnings of $1.38 a share on revenue of $1.2 billion.

Yuan said:

"AI Companion Monthly Active Users have grown over four times year over year, with millions using our AI to boost business value throughout the meeting lifecycle and beyond. AI adoption now extends well beyond meeting summaries, with strong momentum in meeting prep and post-meeting task management, call summaries for Zoom Phone, and AI-first meeting integration and content generation capabilities for Zoom Docs. This progress is just the beginning and we look forward to sharing more AI innovations at Zoomtopia next month."

By the numbers:

• Zoom ended the second quarter with 4,274 customers contributing more than $100,000 in trailing 12 months revenue.
• Online average churn was 2.9% for the quarter.
• Enterprise revenue was $730.7 million, up 7% from a year ago. Online revenue, typically smaller businesses, delivered second quarter revenue of $486.6 million, up 1.4% from a year ago.

As for the outlook, Zoom said third quarter revenue will be between $1.21 billion and $1.215 billion with non-GAAP earnings between $1.42 a share and $1.44 a share. For fiscal 2026, Zoom projected revenue between $4.825 billion and $4.835 billion with non-GAAP earnings of $5.81 a share and $5.84 a share.

Workday buys Paradox to build out its recruiting suite, delivers strong Q2

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Workday's AI strategy appears to feature a heavy dose of acquisitions. The company said that it is acquiring Paradox, a startup that features a candidate experience agent to work through the job application process. The Paradox acquisition came just days after it acquired Flowise, a platform to build AI agents and automate workflows.

The latest acquisition landed as Workday reported better-than-expected second quarter earnings.

According to Workday, Paradox will give it an AI-driven talent acquisition suite. Paradox provides agent that provides responses, schedules and provides 24/7 support for recruiting processes. Paradox has powered more than 189 million AI-assisted candidate conversations that have boosted employee conversion rates. Here's a look at how Paradox reaches candidates. 

• Workday acquires Flowise to speed up building AI agents, automated workflows
• Workday aims to be system of record for AI agents, digital labor
• Workday Enters the Era of AI
• Employee Experience Platforms: Workday Peakon

The plan going forward is to add Paradox to the Workday Recruiting suite. Terms of the deal, which is expected to close in Workday's fiscal third quarter, weren't disclosed.

Paradox has integrations with Workday, SAP SuccessFactors and Indeed to name a few. The company focuses on the experiences for candidates, recruiters, hiring managers and franchises. Paradox's core industries are retail, restaurants, healthcare, logistics, manufacturing and financial services.

Recruiting has become a hot area. SAP recently acquired SmartRecruiters to bolster SuccessFactors.

Constellation Research analyst Holger Mueller said:

"Right when you thought Workday had settled on an organic approach to talent acquisition, it acquires Paradox. Granted, Paradox is a good and complimentary acquisition, but with the Workday move and the recent SAP acquisition one thing is clear - the gloves have come off in the talent acquisition game. And it makes sense - as the winners of talent acquisition can redefine how talent management overall will be reinvented in the AI era."

Workday also reported better-than-expected second quarter earnings that were 9 cents a share above Wall Street estimates. The company reported second quarter net income of 84 cents a share on revenue of $2.35 billion, up 12.6% from a year ago. Non-GAAP second quarter earnings were $2.21 a share.

Carl Eschenbach, CEO of Workday, said the company saw strength in AI consumption and international business.

Workday CFO Zane Rowe said the company is raising its fiscal 2026 subscription revenue guidance to $8.815 billion, up 14% from a year ago.

As for the outlook, Workday projected third quarter subscription revenue of $2.235 billion, up 14.1%.

Key takeaways from Carl Eschenbach on the earnings conference call:

• "With Workday Recruiting, Hiredscore and now Paradox, we will be able to deliver an incredibly powerful AI Powered talent acquisition suite, helping customers find, hire and onboard every type of worker for every type of work." 
• "This quarter, roughly 30% of our net new deals were full suite, with that number rising to 50% or more in industries like edu and healthcare."
• "Salesforce, a long time HCM customer, went live on Workday financial management and accounting center in the quarter. They're all in on Workday by unifying their HR and financial data on our platform. They're getting entirely new insights about their business to support their innovation and growth."
• "AI is front and center in nearly every customer conversation. More than 30% of our customer deals and more than 75% of our net new deals included one or more of our AI products."
• "At Workday Rising in a few weeks, we will unveil exciting AI and platform innovations, partnerships and new ways to make it easier for customers to access and get value from our AI solutions."
• "developers are embracing Workday's tools including extend and our AI APIs to expand the Workday footprint in new industries, markets and territories. We now have more than 100 Marketplace apps live on Workday Marketplace, which has doubled since the start of fiscal 2026."

Google Cloud's Gemini for Government ups the LLM price war

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Google launched Gemini for Government, an AI platform priced at less than 50 cents per US government agency for a year. For those keeping score, Google Cloud just undercut the $1 General Services Administration (GSA) plans from OpenAI and Anthropic.

As noted previously, the large language model (LLM) price competition is brutal--and all about gaining usage and market share. OpenAI kicked off the value pricing plans for its models and Anthropic matched.

Google Cloud's Gemini for Government plans include:

• An AI platform that includes Google's enterprise search and video and image generation tools as well as NotebookLM and AI agents for Deep Research and ideation. US government employees can also build their own AI agents.
• Less than 50 cents per government agency for a year pricing.
• FedRAMP high-authorized security and compliance with built-in security features for identity and access management, threat protection, AI threat protection, data privacy and SOC2 Type 2 compliance and advanced compliance (with Sec4, FedRAMP).
• AI Agent Gallery with connectors to agents, data sets and communications protocols. Agencies also get Google Cloud Vertex AI and the ability to tune and ground their own models.

Also see:

• LLMs on sale: What happens when OpenAI, Anthropic offer Feds value meal pricing?
• Anthropic matches OpenAI $1 deal for US government
• Frontier AI companies land Department of Defense deals

For Google Cloud, the Gemini for Government offerings build on an already-strong position as a vendor for public sector agencies.

• Google Public Sector: A look at the strategy
• Google Public Sector lands new clearances for Gemini, authorizations for Air Force Cloud One
• Google Public Sector Summit: 9 takeaways you need to know
• Google Public Sector 2024: US Space Force General Saltzman on innovation, scale, leadership
• How Google Public Sector and NASA aim to bring generative AI to aircraft ground traffic control

Microsoft rolls out quantum safe plan, timelines

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Microsoft laid out its plans to roll out post-quantum cryptography across its products and platform in a multi-year effort.

In a blog post, Microsoft introduced its Quantum Safe Program (QSP), which is a broad transformation to secure its infrastructure, customers and ecosystem against future quantum threats.

Holger Mueller, analyst at Constellation Research, said:

"The real quantum use case in 2025 is to make data centers quantum safe, which is a top priority for CxOs who need to fear that state actors will be spying on them. Microsoft is now making a key move by making all of Azure quantum safe. This move will make deployments for enterprises easier and get every Azure customer to the top level of safety. It also simplifies things for Microsoft as it can manage all its datacenters consistently."

Microsoft's QSP components include the following:

• Integrating post-quantum cryptography into foundational components.
• Updating products and services to prevent future quantum risks. Microsoft said it will integrate post-quantum cryptography across Azure, Entra Authentication, Microsoft 365 and more.
• Align QSP with US government requirements and timelines for quantum safety.
• Complete the transition to post-quantum cryptography by 2033, two years ahead of the deadline set by most governments.

In the blog post, Microsoft noted:

"Migration to post quantum cryptography (PQC) is not a flip-the-switch moment, it’s a multiyear transformation that requires immediate planning and coordinated execution to avoid a last-minute scramble.

It is also an opportunity for every organization to address legacy technology and practices and implement improved cryptographic standards. By acting now, organizations can upgrade to modern cryptographical architectures that are inherently quantum safe, upgrade existing systems with the latest standards in cryptography, and embrace crypto-agility (the ability to easily change algorithms) to modernize their cryptographic standards and practices and prepare for scalable quantum computing."

Here's a look at where Microsoft sits today and the roadmap ahead.

Dayforce goes private with Thoma Bravo $12.3 billion deal

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Human capital management software provider Dayforce is going private in a deal with Thoma Bravo valued at $12.3 billion.

The news, which had leaked out earlier this week, comes as Dayforce plays in a crowded HCM space. Thoma Bravo has a broad portfolio of enterprise software vendors including Coupa, Flexera, Conga, Darktrace and others.

Under the terms of the deal, Dayforce shareholders will get $70 per share in cash, good for a 32% premium over the August 15 closing price. The Thoma Bravo purchase includes a minority investment from the Abu Dhabi Investment Authority.

Constellation ShortList™ Global HCM Suites

David Ossip, CEO of Dayforce, said the move to grow private will "accelerate our business - with our focus, resources, and product innovation all laser-pointed on leaping forward as the HCM leader for a world of work shaped by AI."

The deal is expected to close in early 2026.

Dayforce was formerly known as Ceridian. In 2012, Ceridian acquired Dayforce, a cloud HCM player. In 2018, Ceridian went public with a focus on Dayforce. The company took on the Dayforce brand in 2024.

The company reported second quarter net income of $21.3 million on revenue on $464.7 million, up 10% from a year ago. Dayforce has 6,984 customers on its platform.

Dayforce projected 2025 revenue between $1.935 billion and $1.955 billion.

Constellation Research's take

Holger Mueller, an analyst at Constellation Research, said:

"The investment from Thomas Bravo comes somewhat as a surprise - as Dayforce is on a roll. With its interational expansion Dayforce has quickly become an alternative to the larger SAP, Oracle and Workday - three giants that all do not offer as in depth workforce managment. On the other side, Dayforce is on a massive investment jouney, adding compliance, workforce management and payroll for 40 countries. The additional funding from Thomas Bravo may be be able to accelerate the R&D effort and possibly go beyond. Building sales and marketing presence is not a small investment either. The bottom line is - if the strategy remains largefly unchained, we will see a turbocharged Dayforce soon."

Wipro buys Harman DTS from Samsung for $375 million

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Constellation Research's take

Constellation Research analyst Chirag Mehta said:

“Engineering R&D (ER&D) fueled by AI is now a primary battleground for global enterprises seeking to accelerate innovation and stay competitive in a fast-evolving market. Wipro’s acquisition of Harman’s DTS business—bringing over 5,600 engineers across the Americas, Europe, and Asia—significantly enhances their digital engineering capabilities with deep domain-led design, connected-product expertise, AI-native platforms, and proprietary accelerators .

The broader industry context underscores why GSIs are doubling down here: Cognizant’s recent acquisition of Belcan, an established aerospace and defense engineering leader, reflects the same urgency to capture high-value ER&D opportunities where domain depth and scale matter. By merging specialist strength with global reach, GSIs are positioning themselves to deliver end-to-end engineering services that combine consulting, design, and AI-native execution.

In this light, Wipro’s move is not just about capacity—it’s about competing in a new wave of engineering services where clients demand agility, IP-rich platforms, and the assurance of global scale. The ER&D market is evolving into the next frontier of growth for services firms, and this acquisition marks a critical step in redefining how engineering innovation is delivered worldwide.”

Target gets new CEO, continuity in tech, AI strategy

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Target's incoming CEO Michael Fiddelke is betting that AI, technology and process optimization will return the company to growth while navigating economic uncertainty.

Fiddelke's earnings call debut coincided with a disappointing second quarter. Fiddelke is currently chief operating officer and has been in various roles at Target for 20 years. Wall Street wasn't pleased an insider got the job and current CEO Brian Cornell will stay through the end of the year. Fiddelke takes over at the start of Target's fiscal 2026 in January.

To be sure, Target faces more than a few challenges. Target reported second quarter earnings of $2.05 a share on revenue of $25.2 billion, down 0.9% from a year ago, but slightly ahead of Wall Street estimates. Same store sales in the second quarter were down 1.9%, but digital comparable sales were up 4.3% due to same-day delivery via Target Circle 360.

More retail:

• Shopify unveils Target partnership, new AI features
• Target launches Store Companion, genAI app for employees
• A look at Walmart’s platform approach to data, AI, optimization
• Walmart’s fiscal 2026 bets: Supply chain optimization, AI, automation
• Lowe's eyes AI agents as home improvement companion for customers

As for the fiscal 2025 outlook, Target said it expects a low-single digit decline in sales and earnings of $8 a share to $10 a share. Adjusted earnings will be $7 a share to $9 a share due to litigation settlements.

Target plans to spend about $4 billion in capital expenditures to open new stories, remodel existing ones and invest in supply chain and technology.

Fiddelke, who has led Target's Enterprise Acceleration Office, said he's stepping in as CEO with "a clear and urgent commitment to build new momentum in the business and get back to profitable growth."

The topline plan for Target includes the following:

• Reestablish merchandising authority to improve product selection.
• Create an "elevated experience" to give guests "a sense of joy from every trip to Target."
• Use technology to improve speed, guest experience and efficiency.

Technology, with a heavy dose of AI, will span everything from sourcing to supply chain and customer experience. "While technology is at the core of all our operations today, it will need to play an even stronger role going forward," said Fiddelke. "As we continue investing in our future growth, we'll be making key technology investments throughout our stores, supply chain, headquarters and digital operations to power our team and our business."

Details were sparse, but the big picture is that Fiddelke wants to move faster, reevaluate strategies continuously and be nimble enough to react to the tariff and consumer landscape. Target's enterprise acceleration office is designed to scale best practices and technologies.

"We've identified the biggest challenges that slow us down, legacy technology that doesn't meet today's needs, manual work that can be automated, unclear accountabilities, slow decision-making, siloed goals and a lack of access to quality data. For example, it's clear that at our headquarters, team structures and processes have significant opportunities to improve," said Fiddelke. "We started redesigning large cross-functional processes like how our teams build our merchandising and inventory plans to clarify roles and access the right data to make more effective decisions."

Fiddelke said Target is doing the following:

• Embedding more technology and data to evaluate initiatives with the highest returns.
• Leverage AI and other tools for better forecasting.
• The company has deployed more than 10,000 new AI licenses across its employee base.

"Solving these challenges will require changes, both big and small, across technology and data, process and structures and organizational behaviors," said Fiddelke.

Fiddelke moved to address the perception that he isn't an agent of change. He said, "there's real power in drawing on 20 years of knowing what makes Target, Target."

"Having seen us at our very best in different chapters gives me a clear focus on who we are in retail and what our unique path is that's going to lead to growth. And it centers on style and design," said Fiddelke.

Now all Fiddelke has to do is leverage technology to revamp Target's store fulfillment "in a capital light way" and offset tariffs by becoming more efficient.

Quantinuum fleshes out quantum software stack with open source Guppy, Selene

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Quantinuum launched new open source software as it builds out its quantum computing stack.

The company launched two software components that it has open sourced. The launches include:

• Guppy, an open-source language hosted inside Python. Guppy enables quantum computing programming above the gate level using conditional logic and the ability to incorporate any quantum error correction code.
• Selene, which is an emulator that models realistic, entangled quantum behavior. The goal is to make quantum software research and development easier.

Quantinuum is prepping its software stack for the launch of Helios, the company's next-gen quantum computer. Helios will require a new software stack that can speed up quantum computing use cases.

Guppy and Selene will join TKET, an open-source tool kit for developers and Nexus, a platform to access quantum computing systems. Going forward, Guppy will run software applications on new systems. TKET will be used to optimize Guppy programs. Nexus will be the primary vehicle to accessing Quantinuum hardware, support Guppy and provide access to Selene.

• 2025 is the year of quantum computing (already)

• Quantinuum, partners create true verifiable randomness, eye quantum computing for cybersecurity
• Quantinuum launches generative AI quantum framework, sees quantum computing as synthetic data generator

Key points:

• Guppy treats quantum programs as structured and dynamic software and features common programming constructs.
• Guppy optimizes qubit resource management automatically.
• Selene is designed to help developers build quantum applications when hardware access is limited.
• Selene also supports multiple simulation options including Nvidia GPUs and cuQuantum.

Research: Constellation ShortList™ Quantum Computing Platforms | Quantum Computing Software Platforms | Quantum Full Stack Player

Databricks valued at $100 billion

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Read more

Databricks said it raised more funding in a Series K round with a valuation topping $100 billion.

The company said the funding was from existing investors. In a release, Databricks, which has more than 15,000 customers, didn't disclose how much it raised or its annual revenue run rate, which was put at $3 billion late last year.

According to Databricks, the new capital will accelerate its AI strategy via expanding Agent Bricks and investing in its Lakebase database. CEO Ali Ghodsi said the company is "seeing tremendous investor interest.

Databricks launched Agent Bricks in June and Lakebase, which is optimized for AI agents. The company said that the new funding will also be used for future AI acquisitions and AI research.

Databricks has been busy expanding partnerships with the likes of Microsoft, Google Cloud, Anthropic, SAP and Palantir.

• Databricks natively integrates Google Cloud Gemini models
• Databricks launches Mosaic Agent Bricks, Lakeflow Designer, Lakehouse
• Databricks acquires Neon, sees Postgres scaling key to agentic AI
• Databricks forges partnership with Anthropic, adds innovative system to enhance open source LLMs
• Databricks, Palantir forge integration pact
• SAP launches Business Data Cloud, partnership with Databricks: Here's what it means

Constellation Research analyst Holger Mueller said:

"Data is the foundation for AI and Databricks' strong data story is driving its valuation. Beyond the data Datbricks will now have to demonstrate it is not only about analytics, but can also be the platform for AppDev and Agent building. Another aspect will be whether Databricks can be successful with its SAP partnership - and repeat similar partnerships with other key data sources - starting with the ERP vendors."