00:39:37 · Michael Sindicich
[00:39:37] S1: Yeah. Inflation is increasing prices. So I would say probably, in my opinion, you know, this is not based on anything, but I think that, you know, travel inflation is higher than the reported CPI inflation. So that's one piece. You would agree? I mean, it's expensive to fly anywhere and stay somewhere these days. So I think that's a baseline that travel prices are increasing, which, by the way, makes our solution more important because we help you save a lot of money. Our average customer saves about 15% on their entire travel budget, which is not insignificant when you're thinking about, you know, a larger company. But but prices are are increasing there. I also think... And we released a study called the BTB, the Business Travel Benchmark. It's something that we do every six months. And what it does is it basically, first and foremost, compares business travel trends versus TSA line trends. And what the TSA lines or the personal travel trends will show is how personal travel affects travel. And basically what you'll see is December, it skyrockets. And in the summer holidays, it skyrockets. Business travel is very different. It tanks in the summer. It tanks in December. And with the holidays and around Thanksgiving and things like that. And so we did that study first to show here are the trends of business travel, not the trends of what you would normally see on consumer or just general TSA, you know, lines. The other thing it shows is, as a same store sale, how people are prioritizing business travel. And before the pandemic, it was like sales and marketing and executives were traveling. And then after the pandemic or pandemic, no one traveled. After the pandemic started coming back, we saw like a big difference if the type of travel that was happening. So it was a lot of group travel. It was like engineers and product people and all the people that you had hired that were remote for a long time, now you want to bring them back to quarterly off sites and to build the culture of the company and to meet each other. And so that was a big trend. And then we started to see, you know, sales and marketing coming back and meeting customers and things like that. And what I can say today is it just really feels like people are prioritizing in person connections. People are knowing that I need to be out there meeting my customer.
00:42:03 · Michael Sindicich
If I'm not, then I'm going to miss the sale. Or my competition is gonna meet my customer, and I'm gonna miss the sale. One of my friends was in San Francisco this weekend, I was like, How well do you know the groom? He was there for a wedding. He was like, I know him pretty well, but also my competitor is at his wedding too, so I feel like I also really need to go to the wedding. And so, you know, but I just think people know how powerful in person connections, like doing this, is for building relationships, saving the customer, closing the customer, hiring the person. You know what I mean? And so travel just feels like it's more important and being prioritized higher than ever. And we don't see a slowdown in in travel for companies even though prices are are increasing. So that's that's kind of how I think about it. And I believe that if the world moves more and more with AI helping to automate things, then what's kind of left besides in person connections? And we think about it a lot when we're thinking about where we're going as a company and how in this world of technology and and and AI and and all the automation, we actually think our mission becomes more important than ever, which is powering in person connections. And if we can do that, I think we're in a in a good spot.
00:43:23 · Miguel Armaza
[00:43:23] S0: I think you're right. I was talking to a pretty significant leader in human resources in SF, and they were saying that some of the channels that you could rely on before for recruiting are kind of useless now and relationships of the company's employees are more important than ever. Right? So, and I guess that also cascades into travel and personal relationships, exactly what you're talking about. But let's talk about AI. Okay. Because I think this is an interesting topic about you guys. Yeah. You've launched a few solutions. Yep. And I believe you build them in house. Yes. You develop your own models. Does that mean you're also buying your own NVIDIA chips? So maybe tell us to what extent you're doing this in house and also let's talk about the specific solutions. Cool.
00:44:22 · Michael Sindicich
[00:44:22] S1: Yeah, so first thing to know when I joined in 2016 was the first time I heard the word machine learning at Navan. It's the first time I heard it in my life and it was at Navan. So the thing that I don't think people necessarily appreciated as much when we first IPO ed is like the story that we told them. We were really focused on machine learning and AI from day one. And the way that that translated into the product is think about this massive marketplace with all of these inventory sources. Now 80% plus of our bookings happen in the first three results that we show a user. And that relates to our average time to book is seven minutes in the platform to book a trip compared to, you know, with legacy systems, forty five minutes plus. And so the way that we filter all this inventory is we learn who you are, what's your loyalty clubs, your past booking behavior, what your company policy is, where your coworkers are staying, what's your office locations. And what we were doing is we were basically saying, okay, Michael always takes the United flight out of SFO into Newark at 9PM. He does the red eye and this is his kinda thing. And so that's what it's gonna show in the results. And and that was how we started using machine learning early days. Then we even started with chat support. We called it in the beginning. It was Cohen, Ariel, Twig, Elon, our co founder's names. We called it Kati. And so that was us basically saying, you know, we were the first ones to launch chat as a travel agent. And so people could chat into us instead of just call. But what if we could use natural language processing and basically automate the answers to a lot of the questions that were happening? And what if we could even connect it in so that it could basically manually, like, change or cancel a flight or push a hotel by a day or whatever? And then when ChatGPT came out and this entire agentic thing happened, we were like, holy shit. Like, this is this is massive, and we can do so many good things for our users. And that translated to a couple of the different products that you're talking about. You know, one thing that we're doing is we are always attacking the travel management space in a really efficient way.
00:46:29 · Michael Sindicich
If you look at some of the other public players, there's not many anymore in the travel management space, but the gross margins are more like a 50, mid-50s percent or something like that. And we wanna be, you know, really efficient and have tech multiples and tech margins and things like that. And so we were leveraging AIVA, which is the evolution of CATI, and it offsets more than 50% of all of our support interactions. And it's not that it offsets, it resolves. We say it's resolution. It's actually users are reaching out to it. It can respond in any language in seconds, twenty four seven, three sixty five, and it can help you out. And it achieves human level CSAT scores. And it continues to improve and grow. And so by doing that, our gross margins went from 50% to, you know, 70 something. And I think that helps us a lot because then we can take that profit, we can invest it back into better solutions, products, and keep building. So that's kind of the use case that a lot of people know. But then it's like throughout everything at the company. So if I swipe my card at a Starbucks, like, I can now reconcile it automatically. I know that I'm on a trip. I know that it's a merchant for meals. I know, okay, here's the three policies and GL codes that have to do with meals. But because Michael's on a trip, this is probably the meals while traveling policy. And this is the, you know, this is the approval workflow. And if it's within this and all these realms, I can automatically expense that transaction without making the employee do anything. So there's that. There's like an admin companion where I can go into the product and if I'm a travel manager and I can say, you know, tell me the average hotel booking from directors of sales compared to directors of marketing in New York. And boom, it gives you like immediate like spit out and you can, you know, analyze your program or it can give you ideas and benchmark and figure out how to drive more savings. So it's really throughout our products. And then the biggest one is we have this enterprise product and we have this product led growth product, but now we've launched Navan Edge, which is an entire travel agent, like, EA dedicated to you for individual travelers. So we always distributed our products by selling to a CFO or a company admin, then they launch it to the company.
00:48:44 · Michael Sindicich, Miguel Armaza
But now what we've done is a fully agentic individual traveler product called Navan Edge, where you can just fill out some some information about who you are, how you like to travel. You can connect your email. It'll load all your loyalty programs and tell you how to optimize them and how far you are away from the next status and tier. And then you can chat with it and it can book your hotels, your restaurants, your airlines, your hotels, your car rentals, and even experiences. So you can say, Hey, I'm in New York this weekend. What's going on? You can actually see concerts or different events and things like that. And it monitors your entire trip for you. So if it knows I like window seats on the flight but none are available, it can actually keep watching that flight and change me when a window seat becomes available. Or I can ask it to, hey, can I get a late checkout for the hotel? It'll email the hotel and ask on your behalf if you can do a late checkout. It's a really incredible experience. [00:49:42] S0: With Edge, is the goal to go after much smaller companies? Or actually, are you targeting the consumer?