Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AvePoint Inc (AVPT, Financial) reported record net new ARR of nearly $19 million in the quarter, showcasing strong growth.
- The company achieved a record quarterly non-GAAP operating income of $17.8 million, indicating improved profitability.
- SaaS revenue grew 45% year over year, marking the highest growth rate in 11 quarters.
- AvePoint Inc (AVPT) surpassed the $300 million mark in total ARR, reflecting a 23% year-over-year growth.
- The company raised its full-year guidance for total ARR, total revenues, and non-GAAP operating income, demonstrating confidence in future performance.
Negative Points
- Term license and support revenue continued its expected decline, which could impact overall revenue growth.
- Maintenance revenue, tied to legacy perpetual licenses, also declined year over year.
- The company anticipates higher operating expenses in Q4, which may affect short-term profitability.
- Despite improvements, the gross retention rate is still below the company's medium-term target of 90%.
- The impact of foreign exchange reduced reported ARR growth by approximately 1%.
Q & A Highlights
Q: Can you provide relative growth rates across the different suites you sell?
A: We expect the suites to perform similarly to last year, with a bit more focus on the control suite due to increased customer interest in governance and security. - James Caci, CFO
Q: What is driving the strong net new ARR performance?
A: Our focus on managed service providers in the SMB segment is driving strong net new logo acquisitions and ARR. The platform's strength in governance and security is also a key factor. - Tianyi Jiang, CEO
Q: What factors are contributing to your growth across all regions and customer sizes?
A: The need for data governance, control, security, and resiliency are strong growth vectors. Our data migration and integration play also opens doors, especially with the uptake in Microsoft gen AI capabilities. - Tianyi Jiang, CEO
Q: What drove the improvement in gross retention rate, and what is your target timeline for reaching 90%?
A: The improvement is due to strong performance in public sector and changes in servicing the long tail of our ARR base. We aim to reach the 90% target in the next couple of years. - James Caci, CFO
Q: How does generative AI transform privileged access from user-centric to data-centric, particularly in your control suite?
A: Generative AI, especially with Microsoft 365 copilot, ties closely to data access and permissions, which are crucial for AI recommendations. Our control suite supports this by managing permissions and maintaining high-quality data states. - Tianyi Jiang, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
