Gloo Holdings, Inc.

Hello, everyone. Hi, I'm Andrew Boone. I cover internet here at Citizens. I'm very pleased to host Scott Beck and Pat Gelsinger. Scott's the founder and CEO of Glue. Scott previously founded Einstein Brothers Bagels and was the CEO of Boston Market and the COO of Blockbuster.

Yeah. Spent a little bit of time in the ancestry.com and Angie's.

Pat is the head of tech for Glue and the executive chair. He was previously the CEO of Intel VMware and CEO of EMC. Point being is you guys know what you're doing. Glue is a technology platform specifically meant for churches that help them to operate more efficiently and Scott, you're going to go over a little brief of what the business is, right?

Yeah, we're going to give you a little quick overview of that.

Yep, and then we'll go into Q&A.

Yeah, that'll be great. Look forward to it. Thanks for having us here.

Yeah, with that, tell us a little bit more about Glue.

Yeah, happy to do so. First of all, just as Andrew was saying, building businesses for the last four decades, CEO of public companies, scaling large businesses, but also had been very active in philanthropy. in the faith and human flourishing ecosystem. About 15 years ago, we saw there was a need to bring technology to this ecosystem. Pat and I joined in together on this about a decade ago.

Yeah, and obviously I've been a tech executive for 45 years. So I started when I was two and have been deeply involved in technology for my career. But putting money philanthropically into the ecosystem saw that there was a gross deficiency in the technology of this community. That's really what led us to really focus on glue. And when you think about faith and flourishing, I think many of you probably don't have a good view of just how incredibly large, complex this ecosystem is. And in the U.S. alone, you have a little bit less than 20,000 Starbucks. You have well over 300,000 churches. There's over 100,000 other what we call network providers who service the church. who have other philanthropic missions as well. So literally, this is enormous ecosystem and extraordinarily underserved. And as we view our TAM, we call the network capability providers, those who are beyond the church, servicing the church, servicing the broader objectives, over 130 billion of TAM members. available to us, and in the churches, 85 billion. So it's large, it's fragmented, and extraordinarily insufficiently technologically served. That's specifically what Glue is stepping into.

When you think about it, it's very important to think about the two sides that Pat just talked about. On the one side, you've got the network capability providers. These are the bigger organizations. Pat will drill down a little bit more on that, but 70 percent of our revenue comes from that side. The churches, that's where about 30% of our revenue comes. We call those churches and frontline organizations because in addition to being a church, you'd also have a recovery program or you would have an anti-human trafficking program, all on the frontline. But it's the network capability providers that's a bigger part of the market for us.

When you think about these network capability providers, these aren't tiny organizations. In Bible translation alone, over $4 billion. You have 14 major campus ministry organizations, the largest of which is over $1 billion. You have humanitarian organizations that are well over $1 billion. All of them are mission-focused. They're philanthropically driven. They get donor dollars, and they're technology-deprived.

When you look at what we're doing for them is a number of different things. Number one, bringing advanced technologies. AI is a big driver in our growth at this point in time. We'll talk a little bit more about that. But we bring that together to be able to power a couple of things. Number one, power tech. Give them the benefit of shaping these technologies as a force for good to help them with their impact. But the other thing that they need is reach. They need to be able to get to more churches, they need to be able to get to more donors, they need to be able to get to more people. So it's reach and tech that's really happening here.

In many cases, as we think about the category, this AI driven engine is becoming the thing that tips these organizations over. In many cases, there's very little outsourcing in this industry. So it's mostly do-it-yourself in the category, but they've been unable to keep that modern. But when AI came, they just simply are rolling over, can't keep up, and that's where Glue is stepping in, and particularly our AI services. We do much of the engineering for them, chat services, agentic services, common data platform. And looking a little bit at the range of offerings that we have, 70% is on the left-hand side of the page. Things like Glue360, where literally we take over the entirety of the technology platform for those organizations. where if they have 30 or 40 people running tech, they become glue employees. We right-size them, we modernize them, and we turn them increasingly into agentic services. Our largest business is the media and the donor reach platform, the middle. That's the largest offering we have today. But then we also have higher margins, SaaS services that specifically are where the minister works, where the staff of the church works in providing the range of services. But again, all of that is being driven by modern tech that's secure, that's scalable, and increasingly becoming AI.

When you look across this slide, and we'll jump into some financials here in a moment, across this slide, you can think of a contribution margin or a gross margin on average of about 50%. We're on our way there. This year, you'll see quarterly progressions toward that. We feel like by the end of the year, we're gonna be somewhere in the mid 40s. And then as we move into next year, overall gross margin across these offerings will be in the low 50s. And yesterday, as we mentioned, we gave some updates, preliminary financial results for Q4 and provided some more guidance for Q1 as well as 2026. But for Q4, we were able to have a strong quarter, beat consensus both in terms of EBITDA, the range, as well as revenue. Ended up the year around 93 million in revenue. As we looked at 2026, we're giving guidance. We were at 180. We've now increased that guidance to 185.

if you look at that year-on-year compare right obviously the business is growing rapidly we're seeing both that result of acquisitions but importantly we're now seeing strong organic growth and if we ended the year at about 100 million run rate you know that 85 million growth from 25 to 20 Six, a bit of that is because of acquisitions. We assume about half of that growth comes from acquisitions. One of those is already done. But the other half, we're now seeing growth rates organically in excess of 40%. And we'll just say that we're able to now step into the space of these organizations, repeatable sales models, that are resulting in acceleration and growth. But we've also made investments to be able to grow these businesses effectively, and those are now being realized as we turn toward a focus on profitability. And as Scott mentioned, we see an acceleration in getting to EBIT profitability this year.

Yeah, we've made great progress. We sort of hit a high point of investment in Q2 and Q3 last year. Q4, we've had a nice improvement in terms of reducing the negative EBITDA. Q1, we're now giving guidance. Significant improvement. to 12 million negative coming off of, let's say, an 18.5 from this last quarter down to 12. You're basically being able to really see that. The consensus was 14. So we've made good progress there. And we've also publicly stated that we'll be approaching EBITDA profitability on an adjusted basis in Q3 and solidly profitable in Q4.

And with substantial software SaaS elements of our revenue, this needs to be a cash-producing business, right? We do believe that the segment is large enough, right? There's enough profit potential inside of it. And clearly, AI is the superpower, right? And when we turn people into agentic services, that's great for margin and provides better service for our customers. So that's the overview.

So let's go into what you guys announced last night, and then we'll get into the business. But just talk about the outperformance and where that came from in terms of the increase, not only of what is the 4Q numbers versus the guide, but then also help us understand 26 and what that basically raises implying and what's driving that.

Yeah, a couple things. As we go back on the revenue side, basically we just outperformed the base revenue case that we had. And as we look at 2026, Pat talked about that in terms of where the organic is coming from versus the other. But as we look at the EBITDA, the real progress it's taking there is really a combination of three things. Good revenue leverage. Yeah. We're doing more revenue than what was in the plan. We're having some margin improvement that we're being able to see flow through and good cost containment. One of the interesting things is we've done quite a bit of M&A over the last couple of years, and that M&A has been paying off. It's been paying off in terms of efficiency and economies that we've been able to reduce costs and be able to also help those acquired organizations grow faster.

Let's transition to the business. Let's help people understand what you guys do. So just give me an example of how a church works with Glue. Maybe explain the Glue 360 platform and help understand how a network provider works with Glue to help go service what is a constituency of a church.

Again, we want to emphasize the two sides of the ecosystem. Churches, those are typically smaller businesses. For us, thousands of dollars per year, but there's a lot of them. And all of the churches are being served by the network capability providers. And if we're doing thousands of dollars per church over here, we're doing millions of dollars of revenue over here with the network capability providers. So these are much larger organizations, and they wanna reach the church. So these are very reinforcing relationships. And as we think about the network capability provider, We're participating in the campus ministry segment, the recovery segment, the university segment, 900 Christian universities. But maybe a particular example would be Bible translation, where there's over $4 billion going to Bible translation in the U.S., You know, a pretty stunning number when you think about it, right?

I mean, think about that. $4 billion going into Bible translation to new languages that haven't been translated yet.

Yeah, and we still have 6,000 languages that aren't finished yet. So it's really, you know, a lot of work, and AI is accelerating that. But a Bible translation organization, their mission is Bible translation. They suck at technology. Let's imagine a couple hundred million dollar organization. They might have 40 people in their technology department. Literally, they have become glue employees. We've taken them over and we've done some downsizing, we've done some right skilling, and then modernizing of that platform. So these are customers for life, as I like to say, because they are now relying on us for all of their technology. Furthermore, right now as we turn more of that into modern technology and AI services, we're able to bring more margin and deliver a better service. But it's not one viable organization, there's 14 major ones in the US. And when you win one, they want to have you win the other ones, right? Cuz they work together a lot. So we are able to move across that segment quite effectively. So now most of them are on our platform. And we're now able to cross-sell other opportunities, bring them in for our media opportunities. So we have category selling, but then we also have cross-selling of different services in the platform. And those churches, or those network providers, they are largely funded through the church. So that relationship becomes reinforcing. Most of our church offerings are what we'd call product-led, much more digital offerings. You can't sell directly. This is direct sell, and that's largely a product-led motion where we're delivering SaaS-like services to churches.

I think that translates nicely into the next question in terms of you guys have announced 20 customers with a million dollars of ACV. Just help us understand kind of the relationship of how that grows, right? Is the maturation of the platform in terms of really bringing a network provider up? How do you guys execute on that?

Well, first of all, it's super exciting to be able to start to get this scale. And not only we've got 20 over a million, but we've got a couple now that are approaching 10 million. So significant. And they can come through a number of different doors. They can come through a door because, hey, they want donor services and they want to be able to get more donors. So they may come through the media network or they may come through the door of Masterworks. Or they may be, hey, I need help with AI and they're coming through the 360 door.

And, you know, when we think about those relationships, you know, typically they're starting with some use cases. We're now very regularly signing, you know, hundreds of thousands of dollar contracts. These are typically one- or three-year ARR agreements. But, you know, I mean, it's now becoming pretty common that we're landing million-dollar-plus deals. And as we say, we're able to cross-sell to other elements of the market. And when you have million dollar deals, you can build a real sales organization, right? And now we're just hiring more sales people to go execute. And we're also opening new segments, right? Like we just started winning the Christian universities. Between Christian and Catholic universities, there's 900 in the US, right? So it's large segments that we're moving into.

Scott, you mentioned the Gluce360 platform. Just flesh out what that is for somebody who's newer to the story.

Yeah, so Glue360 is basically, literally, us taking chunks of their infrastructure. We may start by, let's say, taking over their donor management systems, or we may take the entire infrastructure over. And literally, that is us taking over those infrastructures, modernizing them, stabilizing them, modernizing them, productizing them. And then what do they end up with? Lower cost, better performance, higher security, being able to now benefit from AI instead of, you know, playing catch-up.

And we're doing everything for the larger customers here. You know, we're running their Workday, their Salesforce, their Oracle databases. You know, we're running their help desk, their 7x24, right, call services. And more of that's becoming AI services. You know, there's no outsourcing in this category, so when we take it over, right, it really is their first experience for us a modern experience as well. And then more of that's becoming AI agents.

So I think that segues really nicely into thinking through M&A for you guys, right? You guys are already deeply integrated. How do you guys think about moving what is maybe a third party partner to be a first party and really transitioning them to being on platform where you guys own the property?

Yeah, when we think about M&A, there's a lot of organizations servicing this community for it. And we've successfully brought a number of these companies in. When we bring them in, we're typically able to accelerate their growth. I say nominally, we're sort of doubling their organic growth rates. Because we have better network and capacity, we're able to then accelerate our growth rate that we have and really become that environment where all of our data services, all of our customer databases allow us to provide more value to both sides of the ecosystem. And we've done a good amount of acquisition successfully. This year is more focused on profitability right now than acquisitions. We have completed one. This year, Westfall Gold is the one that we've completed. As we said, about half of the growth this year over last year is acquisition, so we're well underway to have that in place. We do see a rich candidate of future targets, even though this year is much more about integrate and drive profitability of the things we already have in the family.

So use Westfall as an example, right? Pat, you just mentioned the doubling of organic growth, right? Use that as an example to help us understand how you guys are bringing revenue synergies to an acquired product.

Yeah, and when we think about a company like Westfall Gold, they're running the campaigns for some of the largest organizations in the world. But then they also... Donor campaigns. Donor campaigns. The yearly fundraiser campaign for the Bible or for the campus ministry. They're doing that job. But then they need to turn to who's going to actually do the marketing programs for that? Who's going to do the advertising programs? Well, that's Masterworks. So we're able then to cross-sell for another portfolio element that we have. When those relationships are in place, we get to cross-sell Glue 360. In the many cases, they're looking for new AI capabilities as well, so we bring Glue AI. So every one of those becomes an incremental cell opportunity. As we have just recently finished the Masterworks integration, Sell 360, 360 introduced Masterworks into those. So we do see that we just get sales synergy across all of these. And Westfall Gold, we're super excited because that combined with Masterworks, our largest business segment today. And this ecosystem runs on donor dollars. And if you're in the position of having the best reach to donor dollars, that's the most valuable thing that can be provided to the entire faith and flourishing ecosystem.

One more comment I would make on the M&A. None of the M&A that we do, these folks are new to us. We know them. They've been already on our platform. We've been partnering with them in market for years. So number one, super low risk. Number two, the donors stay. I mean, I'm sorry, the CEOs stay. Those CEOs, they want to keep growing their businesses. They basically see us as that growth propellant and the growth partner. And number three, they bring in their trust. These are 20, 30, 40-year-old organizations that have massive trust networks that we then continue to weave into our overall trust.

Maybe just to add one point, it's largely done with equity as well. So they're also then deeply invested in the success of Glue. So their brand, their company, and now largely co-owner of Glue. It's a pretty powerful cycle.

Pat, you talked about AI as a tipping point earlier in terms of churches finally making the realization that, oh, okay, all right, we need to change something. Talk about AI within the ecosystem, one, as that tipping point and trigger point for change, and then two, how are you guys utilizing it within the platform in terms of creating a new set of products?

Yeah, and for it, many of these organizations, they were laboring to keep up. Okay, we don't trust somebody else to run our database, so we'll run it ourselves. We'll have a small IT team laboring to run their own security services, their own help desk services. But AI has just blown them away. And the other thing with AI is, is it trusted by this community? So we've taken our trust brand, we're doing flourishing AI benchmarks. We're building the guard rails that this ecosystem would expect and want to have confidence in AI. So they look at us as, maybe I do or don't trust those foundational models. But when they come through Glue AI, now I can trust them and use them. And we're also then forward deploying our engineers, building the data pools that allow all of these services to come together that then enable many of these agentic services to start emerging. And all of a sudden, they're getting a trusted, modern AI experience that is enabling them to do things they couldn't have ever imagined before. A pastor could ask a simple question like, how many people were here on Sunday? He doesn't know how to go into his CRM or find the data. Now he just asks his chat interface, and he gets the information. You're looking at these organizations who are seeing 10x returns from their marketing campaigns using modern AI services. And as we say, the big three for us is the data services, the chat services, and the agentic services. services, combining that with our 360 and forward deployed engineering models is pretty magic for this ecosystem that they're going from worst to first on many of their technology capacities.

Really cool. I think that just segues into kind of like an overarching question is talk to me about what's the vision in two to three years in terms of what does the platform look like, right? Like you guys are clearly building and building something larger, adding adjacencies through M&A. Talk to me about kind of the overarching vision, you know, taking a multi-year view.

Yeah, sure. First of all, the network effects that are kicking in are really awesome. It's really unbelievable. This ecosystem, by its nature, cooperates at the same time that they compete. And so that's basically driving a bunch of this increased scale. But we see ourselves just continuing to gobble up more and more of the ecosystem in terms of those different opportunities.

um capabilities uh the scale you know and then you know within a couple years we're looking at the the global opportunities as well yeah and you know if you look at the businesses that we've talked about glue 360 that should be a billion dollar plus business in a few years you know our media and donor platform that should be a billion dollar plus business our church platform that should be a billion dollar plus you know business and these become very cash productive over time We're out to build not a mission-driven organization, but one that's highly profitable, highly cash-generative, because without profit, there is no purpose. That is the essence of what we're working to build.

Scott, you laid this out earlier in terms of financial guidance, but just talk me through profitability at various stages as you guys get there. How do we think about balancing margin expansion versus further investments?

Well, as we stated very clearly this year, we are very focused on getting to that EBITDA profitability. And once we've got that, we've got a lot of choices then ahead of us. We've got a stock that will reflect that type of value, this type of growth. We have more M&A that then starts to open up for us. But we will continue to be focused on generating our own cash, being efficient, and growing with this ecosystem. But at that point, the sky's the limit.

So the sky's the limit. Great way to finish. Thank you guys so much. Thank you.