Navan (NASDAQ:NAVN) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
Navan Inc. reported a strong first quarter for fiscal 2027 with gross bookings reaching $3.1 billion, a 50% increase year over year, and revenue of $220 million, up 40% year over year.
The company is accelerating its go-to-market strategy, particularly in its sales-led and product-led growth motions, while leveraging its strong balance sheet to boost its travel payment business.
Navan is focusing on AI integration, enhancing its platform with AI-driven innovations, which is expected to improve customer satisfaction and operational efficiency.
Management highlighted the successful transition of customers from acquired platforms and the benefits of their AI model, which is more cost-effective and efficient.
For fiscal 2027, Navan raised its revenue guidance to $907-$913 million, reflecting a 30% growth at the midpoint, and expects a non-GAAP operating profit of $76-$80 million.
Welcome to Navan Inc.'s first quarter fiscal 2027 earnings call. this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11. Again, we ask that you please limit yourselves to one question each.
As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Aurélien NOLF. Chief Financial Officer. Please go ahead sir.
As a reminder, we published detailed prepared remarks on our IR website so you can read them over there. So with that behind us, it's my pleasure to turn the call over to Navan CEO and Co founder Ariel Cohen.
Ariel Cohen (Chief Executive Officer and Co-Founder)
Hi welcome everyone and thank you for joining us today. I really hope that you had the opportunity to review our prepared remarks. This was an amazing quarter for us across the board. As you can see in our results we delivered on every business metric but more importantly we continue to innovate, continue to execute our vision of defining the future of travel. The second thing that I want to highlight is our go to market across the board. On every segment, on every activity we over delivered.
And lastly I'm going to talk about our AI leadership and our platform and the most important thing we are doing all of this. We are winning while innovating and the entire team is having fun while doing so. So first I will talk about our go to market. So we accelerated our go to market both in our sales led growth motion and in our product led growth motion. We've done an exceptional quarter in every geography, in every industry and in every company size.
And this is a continued momentum that has been around in Navan for quite some time. In addition, as we've discussed in the past, we are now using our strong balance sheet to accelerate our travel payment business. The attachment rates in this business have been growing, including on every customer base. And this actually emphasizes how strong the value of the integrated platform is. Our goal there is to be the best partner for our customers when it comes to travel and to travel payments.
And now we can actually do that. In addition to this, there is another thing that drove us forward and this is really the consolidation in the market. As you know, as you can see read food and used, a lot of our competitors are consolidating, changing their position, which actually drives all of the customers out there to reevaluate their solution to include us in a lot of RFPs. We reported it in the past that we see a massive growth in the RFPs and eventually to actually move to Navan.
They are sticking to a better performance from the system and to get an integrated solution that cover their entire travel payments and expense needs. And the last thing that drives our go to market is actually AI. Every company right now, every serious enterprise, every serious company in the world is having an AI initiative. This is driven from the top. It's a man that is coming from the C level, usually from the CEO. And the CEO is expecting to see more and more initiative in the company.
This actually means that Navan is one of the only AI vendors that is leading on an enterprise scale in the market. This makes us being included in the RFPs and we are also winning. And we can see that more and more customers are just choosing to migrate to our platform. In the product led growth, we also saw AI pushing us forward because it makes our marketing significantly more efficient. It actually allows us to scale faster and because of it, we're actually accelerating our customer acquisition there while staying efficient.
Now I want to talk about our platform, our product and our leadership around AI. So first of all, I want to remind you how complex the connectivity to the travel industry and the fintech industry is to build the global travel fintech solution. This is super, super, super complex. And Avan is the leader in that. As you can see across the quarter, we've announced More Direct connects NDCs to many more airlines, to many more hotels and many vendors that is out there.
And this actually improved the customer experience on the system. The second thing, as we've explained in the previous call, we are an generic platform. It means that we can reuse the same capability, the same connectivity to travel industry, the same wisdom, the same knowledge of everything that we've gathered over the years and we can deliver it to an AI agent across our platform and across many other platforms. The last thing I wanted to mention in the context of AI is really our platform.
We are the only ones that are actually doing an orchestration between AI agents and live people, live agents. This creates the best service that is out there, the best capabilities around personalizing whatever you need as a traveler, as a cfo, as an executive assistant, as a procurement leader, as an accountant, everybody that are participating in this fairly complex travel and expense execution. And the thing is that we are now doing it more and more using our own model.
This is an Navan model that is based on millions of interactions that we've gathered over the years. And recently we grew our usage of our own model to 30% from 20% and this has happened in few weeks. What it gives us is way more accurate, which means that actually our customers are happier. It also improves the efficiency, which means that gross margins are better and it allows us to grow much faster with AI use cases. So using our own model allows us to do that and probably one of the benefits that it's actually cheaper than the frontier model.
So the combination of real time connectivity to a world that is super complex, that the infrastructure is extremely fragmented with the AI technology allows us to define the future of business travel while accelerating our market penetration globally. I want to take this opportunity in this call really to thank the Navant team. The Navant team is really focusing on innovation, execution and making sure that our customers are super successful. I also want to thank our customers, our partners, our investors that are continuing to support us in this mission to make travel amazing for every frequent traveler.
And this was actually great time to spend time with Everybody in navigate 2026 where we have the opportunity to bring everybody together and really share our vision with you. So together we are not simply building a better travel company, we are defining the future of the travel industry. So thank you. And with that I will turn it over to our CFO Aurelian who will provide more details on our financial results and our outlook.
So this acceleration in our business was driven by a super robust and resilient corporate travel environment, the ongoing strength of our PSG sales, the momentum. We have seen our SLG sales motion as well in the past quarters and all the new customers that have been ramping on the platform. During the quarter we had a non GAAP operating margin of 11% which was up 900 basis points compared to Q1 of last year, another quarter of significant margin expansion.
Certainly. And ladies and gentlemen, I just asked to remind you that please limit yourselves to one question each. Our first question comes from the line of Chris Quintero from Morgan Stanley. Your question please.
Hey, Ariel. Hey Aurelian. Thank you for taking the questions here and congrats on a really solid quarter. I wanted to ask about cognition and what you've built here with this orchestration layer. Clearly seems like there's some special sauce in there. And so I'm curious how you thought about potentially selling that to other players in this space, given all the investments you've made into that layer to ultimately help your business.
So we realized that the best way to serve our customers on something that is very complex, business travel, complex travel, frequent travel, is Very complex when you're going to a business trip when the entire New York area is getting shut down for a few. The ability to combine the two perfectly is really the Navant secret sauce and that's why we are going so fast. This is why our NPS is at 45. This is why CSAT is at 97. This is the reason for that.
They can use Gemini. They can basically use us from anywhere that they want to. So this is the first integration. This is the first time that we are doing it. But many more will come and this is really using the Cognition platform behind the scenes.
Excellent. Thank you so much.
So this is absolutely going to contribute and be a tailwind down the road.
Great, thanks for taking my question.
Thank you. And our next question comes from the line Nanoa Naperis from Goldman Sachs. Your question please. Great, thanks for taking your question. On the point of go to market and sales productivity, we're curious what levers you can pull to keep the pipeline high. I mean the RFP stats that you've been disclosing with these triple digit growth rates, we're wondering how do we interpret those in the context of gbv?
That makes sense. Thank you both.
What, what makes it hard to convert, you know, a big Fortune 500 company to Navon.
And we see our ASPs and our win rates increasing year over year. So we see great signs and we're excited. But there's no, unfortunately no magic wand to just rip out and replace really quickly. It takes work and justification and proof points and joint evaluation plans as we, as we usher people through the sale.
And maybe one stat to add. Sorry, but the companies you mentioned around Amex we actually saw in Q1, 38% of our customer wins came from their cohort of companies. And so we do see ourselves accelerating further upmarket and taking market share from more of the legacy enterprise players.
Okay, thank you very much for all that perspective.
And then beyond that, we assume some stability there. But we will keep you updated on the way as we see new data. But for now, this is what is included in our 30% over year revenue guidance.
We didn't see any spike of cancellation. We did see some people changing the day of the trip, which by the way, this is again where AI and Ava, our chatbot are so important because if I can change my trip easily, I can actually very easily book another trip. So I'm maintaining the trips on the system. So seeing a quarter like this would so many interruptions and obviously providing these results gave us a lot of confidence regarding our guidance.
So depending on how we construct our commercial relationship with our customers, there could be an impact on yield as well, up or down. And then lastly, I would mention the recent macai customers migration and the pace of that migration will have an impact on yield, but also would be very beneficial for gross margin. So in summary, we are very, very pleased with what we are seeing right now. Very fast market share gains that has an impact on yield.
But overall what we are doing as a management team and as a company is clearly driving a bigger, stronger and a more profitable business model over time.
That's great color. Thank you for taking the questions.
Thank you. And our next question comes from the line of Sitif Hanagariki from Mizzou. Your question please.
So I'm very, very excited to be able to expand margin, raise our guidance for operating margin going forward. But also we are very focused on our number one goal, which is to keep getting share and grow this business very, very fast. So very pleased to be able to achieve both at the same time.
It allows us to sometimes combine your wi fi and your club access and your flight obviously in the time of booking. And this is unique to Novan. It allows us to have information that usually you don't get on a platform that says book your trip, such as are you likely to have a flight delay? And information like that. So it is very powerful technology, but our approach is to just connect to everything that provide really good services for our customers.
Now, when you provide NDC infrastructure with everything that I've mentioned earlier about AI, you are creating something really, really powerful for our customers.
Thank you. And our next question comes from the line. Jared Levine from TD Cowan. Your question please. Thank you. To start, can you talk about some of the traction you've seen so far with Navon Edge and how that's contributing to growth so far this year?
Are we bringing users to the system and we see the trends there better than what we were expecting. But then comes the next thing, are we converting them and the most important thing, are they coming again? So all of our internal stats are ahead of our plan for Navanage. So we are very, very happy of what we see them. And I'm just looking forward in the future to start to show some navon edge numbers. But right now we are still keeping it internally.
And then the key question we've gotten from investors in terms of the, you know, healthy large enterprise signings that you did in the second half of last year, how those are going to layer into GBV growth this year? Any color you can kind of provide in terms of thinking about that growth impact this year from those signings.
Like the team now has a very structured program to accelerate this, these ramps and this will fuel the growth going forward. But again, every customer is different, some of them are very large. And so if we are able to ramp them up quickly, then there's a pretty fast impact on our top line.
Great, thank you. Thank you.
So what I would say is really we are focusing on growing both and so we're not going to choose between the two again. Different characteristics, different speed to market, different return rate, but both being very, very attractive.
Got it. And if I can squeeze another one. So you guided Q2 to slightly slower growth. 28% growth. Yoy. How much is that? How much of that is purely seasonality versus building in any conservatism on the demand aspect?
Thank you. I'd now like to hand the program back to Orlean Nouf, Chief Financial Officer.
Great, thank you. Very exciting vision. So next question is from Terence S for you, Michael. And Terence is asking us, does Navan look to acquire or partner with any companies in the near future?
Now I'll ask you this one Aurelian, but this is from Amna F who said what are your long term plans for the company that would bring some dividends to your investors.
I really want to thank you all for listening and for your interest and support to Nagana.
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.