Navan, Inc. Q3 FY2026 earnings call

• Ariel highlighted that Q3 was a strong quarter with 29% revenue growth and 13% non-GAAP operating margin. The company's mission to make travel easy for frequent travelers remains unchanged. Amy's departure was discussed, with Anne Giviskos assuming interim CFO role.
• AI is central to Navan's strategy, with Navan Cognition being a homegrown AI agentic framework for travel. Ava, the AI support agent, handles over half of user interactions. Non-GAAP gross margin expanded from low 60s to over 70% due to AI.
• Key AI advantages include Cognition, extensive data from over 10,000 customers, and the Navan Cloud. Navan Edge, an AI-powered travel booking experience, is in development.

Total revenue for the third quarter was $195 million, representing a 29% increase year-over-year. Usage revenue was up 29%, while subscription revenue grew 26% year-over-year. Gross booking volume reached $2.62 billion in the quarter, growing 40% year-over-year. Payment volume processed through Navan cards was $1.13 billion, up 12% year-over-year. Revenue from international customers represented 37% of total in Q3. Non-GAAP gross margin expanded to 74% in Q3, an all-time high, driven by AI-driven automation and scale.

• For Q4, revenue is expected to be in the range of $161 million to $163 million, representing 23% year-over-year growth at the midpoint. Non-GAAP loss from operations is between $15.5 million and $14.5 million.
• Full year 2026 revenue is expected to be in the range of $685 million to $687 million, up 28% year-over-year at the midpoint. Expecting free cash flow positive for fiscal 2027.

• Seasonality in business travel, with fiscal Q4 typically being slower than Q3. Minor impact from travel disruptions like the FAA flight cancellations in November, but volume rebounded quickly. Competitive landscape and need to maintain market share against consolidating competitors.

Q: Steve Enders of Citi asks about enterprise growth and capturing share from managed incumbents.

A: Ariel Cohen responds that enterprise is accelerating due to customer satisfaction, market consolidation, and AI adoption. Examples of recent enterprise wins like CAC40, Axel Springer, Visa, and health care provider are mentioned.

Q: Noah Naparst of Goldman Sachs asks about large enterprise deals and margin sustainability.

A: Amy Butte Liebowitz says large enterprise deals attach multiple products at launch, and gross margin sustainability is due to AI support agent Ava deflecting 54% of interactions. OpEx growth is 17% vs 29% revenue growth in Q3.

Q: Siti Panigrahi of Mizuho asks about Navan Edge investment and guidance philosophy.

A: Ariel Cohen explains Navan Edge is based on Cognition for hyper-servicing frequent travelers. Amy Butte Liebowitz says guidance considers seasonal trends and prudent approach, incorporating existing customer trends and seasonality.

Q: Samad Samana of Jefferies asks about Q3 trends and IPO impact on enterprise top of funnel.

A: Amy Butte Liebowitz notes Q3 trends are positive but seasonality is a factor. Ariel Cohen mentions IPO boosts market awareness, with sales teams facing fewer questions about the company and more leads.