Q2 results were in line with expectations, primarily driven by strong growth in BASE44 and significant cost optimization from the deployment of its proprietary LLM, Base1.

Revenue grew +15% year over year, and bookings rose +12%; BASE44 gross margin is expected to rise from approximately 0% at the beginning of the year to approximately 60% in the second half.

The company launched Base1, its proprietary LLM, which substantially reduces inference costs and improves BASE44 gross margin; it also shut down InkFrog, a low-monetization business, to focus on high-return products.

Management maintained its full-year guidance for low-to-mid double-digit revenue growth and low-double-digit bookings growth, and expects to reinvest the second-half gross margin improvement into BASE44 sales and marketing, with the TROI target moderately extended.

The signals are positive but warrant close observation: management shows a strong commitment to investing in BASE44, but partner migration to BASE44 is still in its early stages, and sustainability remains to be verified.