Summary of AvePoint (AVPT) FY Conference Call - June 04, 2025 Company Overview - AvePoint is the largest SaaS data governance and security player in the Microsoft Office cloud ecosystem, focusing on unstructured data, which constitutes 80% of all data [4][5] - The immediate addressable market is estimated at $19 billion, covering governance, risk, compliance, data replication, and protection [5][6] Core Business and Strategy - AvePoint operates a singular SaaS platform with 15 instances running in Microsoft Azure, GCP, and AWS, emphasizing a multi-cloud strategy [9][10] - The platform includes three major areas: resiliency (backup as a service), control (data governance), and modernization (data analytics, integration, migration) [11][13] - Resiliency accounts for over 50% of recurring revenue, while control is the fastest-growing suite due to AI deployments [11][13] - The company aims to reduce service revenue from 20% to under 10% to focus on recurring revenue streams [16] Market Position and Competitive Landscape - AvePoint differentiates itself by providing a vertical stack solution within the Microsoft ecosystem, unlike competitors like Commvault and Varonis, which take a horizontal approach [44][45] - The company serves a diverse customer base, with 53% of recurring revenue from companies with over 5,000 employees and 47% from small to medium-sized businesses [18] - The competitive landscape is described as complex, with multiple point competitors, but AvePoint maintains a unique position due to its comprehensive data management solutions [17][48] Financial Performance - Total ARR growth of 26% year-over-year, with net new ARR of $18.5 million, reflecting 85% year-over-year growth [24][25] - SaaS revenue increased by 34% on a constant currency basis, and total revenue rose by 25% [25] - Gross retention stands at 89%, and net retention is at 111%, with targets to improve these figures [27] - Operating margin is reported at just under 14.5%, with a strong start to the year [28] Growth Potential and Future Outlook - AvePoint aims for a long-term target of $1 billion in ARR with a 25% CAGR [21] - The company is focused on profitable growth, with improvements in gross margins from 72% to nearly 76% [35] - Capital allocation strategy includes investing in business growth, pursuing M&A opportunities, and share repurchases [39][40] Customer Engagement and Value Proposition - AvePoint emphasizes the importance of data governance and quality in the context of AI and security, positioning itself as an advocate for customers navigating multi-cloud environments [54][55] - The company has established a strong relationship with Microsoft, leveraging its position within the ecosystem while addressing customer needs for diverse data management solutions [52][56] Key Takeaways - AvePoint's diversified approach across industries and customer segments is a significant strength, allowing for scalability and resilience in a competitive market [30][61] - The company has successfully built a global organization with a focus on profitable growth, setting the stage for future expansion and innovation [62][63] - Continuous investment in technology and customer relationships is crucial for maintaining competitive advantage in the evolving landscape of data management and governance [40][65]

AvePoint (AVPT) Conference Call Summary Company Overview - **Company**: AvePoint (AVPT) - **Industry**: Data governance and data security software Key Takeaways 1. **Consistent Performance**: AvePoint has achieved nine consecutive quarters of outperformance, indicating strong business momentum [2] 2. **Growth Metrics**: The company reported double-digit growth across its enterprise segment (companies with over 5,000 employees), mid-size, and SMB (500 employees and below) [2] 3. **Geographic Performance**: - North America accounts for 43% of recurring revenue - EMEA contributes over 30% - APAC represents over 20%, with Japan being the fastest-growing country [2][3] 4. **APAC Growth**: The APAC region has seen SaaS growth exceeding 40%, with a strong focus on localizing services to meet regional demands [4][5] 5. **AI Readiness**: The fastest-growing vertical is AI readiness data governance and control, reflecting strong demand in this area [3] Regional Insights 1. **Japan**: - AvePoint has been operating for over ten years, establishing itself as a local vendor - The company is seeing growth in the SMB sector due to increased cloud adoption driven by GenAI [5][6] 2. **Singapore**: - 12% of revenue comes from services, primarily in Singapore, leveraging government contracts for IP generation [7] 3. **North America**: - The company is transitioning from a direct sales approach to a channel-focused strategy, which is expected to enhance market penetration [11] - The public sector represents 25% of the business, with strong performance in defense and local government sectors [13][14] Financial Performance 1. **Profitability Goals**: AvePoint aims to achieve GAAP profitability by the end of FY 2025 and has already reached GAAP profitability a year ahead of schedule [20] 2. **Rule of 40**: The company is on track to achieve the Rule of 40 by the end of FY 2025, which combines growth and profitability metrics [19][21] 3. **Cash Position**: AvePoint has approximately $350 million in cash, indicating strong cash flow generation and no immediate need for external financing [42] Competitive Landscape 1. **Market Position**: AvePoint does not face a singular competitor but rather point competitors across different segments and geographies [38] 2. **Product Strategy**: The company emphasizes a platform approach, aiming to sell multiple products to increase customer stickiness and net revenue [39][40] Capital Allocation Strategy 1. **Investment Focus**: The company plans to invest in staffing, technology, and potential M&A opportunities, with a focus on acquiring innovative technology rather than revenue [45][48] 2. **Share Repurchase Program**: AvePoint has a program in place to repurchase up to $150 million worth of stock over the next three years [47] AI and Data Governance 1. **AI Integration**: The company emphasizes the importance of proper data governance before deploying AI solutions to mitigate risks associated with data mismanagement [28][30] 2. **Collaboration with Microsoft**: AvePoint has a long-standing partnership with Microsoft, positioning itself as a complementary player within the Microsoft ecosystem [32][34] Conclusion - AvePoint is well-positioned in the data governance and security market, demonstrating strong growth across various regions and sectors. The company's focus on AI readiness, strategic partnerships, and disciplined capital allocation are key drivers of its ongoing success.

Financial Data and Key Metrics Changes - The company reported a strong quarter with 19% ARR growth, an increase from 18% in the previous quarter, indicating accelerating growth [12] - The SaaS mix reached 61%, allowing the company to raise its SaaS mix guidance for the year from 78% to 80% [13] - Free cash flow is projected to be between $120 million and $125 million, a significant increase from just over $50 million a year ago [54] Business Line Data and Key Metrics Changes - The MDDR platform is the fastest-growing product in the company's history, with a high attach rate for new sales [27] - The company is seeing increased average selling prices (ASPs) and a growing footprint with new customers, driven by the ease of use of the SaaS offering [26] Market Data and Key Metrics Changes - There is a notable increase in activity and interest in data security, with more organizations recognizing the need to protect their data [16] - The transition to SaaS has opened new markets and customer segments that were previously inaccessible due to hardware and headcount concerns [50] Company Strategy and Development Direction - The company aims to complete its transition to a fully SaaS model by the end of the year, reducing the transition period from five years to three [14] - The company is focused on delivering automated outcomes in data protection, emphasizing the importance of understanding data access and usage [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the data security market is gaining renewed interest as organizations seek to protect their data amidst increasing breaches [17] - The company is preparing for the eventual mass deployment of generative AI, recognizing the need for robust data security measures to prevent data exposure [30][32] Other Important Information - The company has made strategic investments to enhance its offerings, including the acquisition of technology to monitor database activity [51] - The company is optimistic about reaching a billion dollars in revenue by 2027, supported by ongoing improvements in free cash flow and profitability [54] Q&A Session Summary Question: Can you decompose the NRR improvements in terms of upsell, pricing, etc.? - The SaaS NRR is driven primarily by additional platforms sold, with no conversions factored in [46] Question: How has your TAM evolved over the past few years? - The SaaS offering has significantly increased the total addressable market by attracting new customers who prefer not to deal with hardware [50]

Company Overview - Varonis' Annual Recurring Revenue (ARR) reached $664.3 million, representing a 19% year-over-year growth[8,44] - SaaS ARR constitutes approximately 61% of the total ARR[8,44] - The company's Year-To-Date (YTD) Operating Cash Flow is $68.0 million, and YTD Free Cash Flow is $65.3 million[8,44] Market Trends - The amount of data created globally is projected to grow at a compound annual growth rate of 24% by 2028, with unstructured data accounting for over 90% of the total data generated[18] - It is expected that 90% of organizations will adopt a hybrid cloud approach by 2027, and over 80% of enterprises are expected to use Generative AI by 2026[18] - The global average cost of a data breach in 2024 was $4.9 million, with 40% of breaches involving data stores across multiple environments[18] Financial Performance & Guidance - The company anticipates Annual Recurring Revenues (ARR) between $742.0 million and $750.0 million for the full year 2025, indicating a year-over-year growth of 16% to 17%[53] - The company projects total revenues between $610.0 million and $625.0 million for the full year 2025, representing a year-over-year growth of 11% to 13%[53] - The company expects Free Cash Flow between $120.0 million and $125.0 million for the full year 2025[53]

Core Insights - AvePoint is a global leader in data security, governance, and resilience, providing solutions that enable organizations to collaborate confidently [2] - The company has over 25,000 customers worldwide utilizing the AvePoint Confidence Platform across various collaboration environments [2] - AvePoint's global channel partner program includes approximately 5,000 managed service providers, value-added resellers, and systems integrators [2] Upcoming Events - AvePoint will present at several investor conferences, including the TD Cowen 53rd Annual Technology, Media & Telecom Conference on May 29, 2025, and the Jefferies Public Technology Conference on the same day [5] - The company will also participate in the 20th Annual Needham Technology, Media & Consumer 1x1 Conference virtually on May 12, 2025 [5] - Additional participation includes the Evercore ISI Software 1x1 Day and the Morgan Stanley Virtual ASEAN Conference, both on May 29, 2025 [5] Investor Relations - A live and archived audio webcast of all presentations will be available on the AvePoint Investor Relations website [1] - The company uses its website for disclosing material non-public information and for compliance with disclosure obligations under Regulation FD [4]

Core Viewpoint - The ongoing discussions regarding TikTok's operations in the U.S. involve potential deals to ensure user data security while maintaining the app's functionality, with Oracle being a key player in these negotiations [1][3]. Group 1: Proposed Deal Structure - One proposal includes Oracle taking a small stake in TikTok and collaborating with U.S. buyers to prevent Chinese government access to user data [1]. - The proposal aims to keep TikTok's algorithms in China while ensuring that a U.S. version of the app does not have vulnerabilities that could be exploited by the Chinese government [2]. - The proposal's security measures are questioned in comparison to an existing partnership known as Project Texas, which also focuses on securing U.S. user data [3]. Group 2: Stakeholders and Bidders - Oracle is reportedly in advanced talks to manage TikTok, but concerns remain regarding the influence of the app's Chinese founders on its U.S. operations [4]. - Three known bidders for TikTok's U.S. operations include a group led by billionaire Frank McCourt and Reddit co-founder Alexis Ohanian, a group with tech entrepreneur Jesse Tinsley and YouTube star MrBeast, and a merger offer from Perplexity AI [5]. Group 3: Regulatory and Political Context - Vice President JD Vance indicated that a deal is expected to be reached that would allow TikTok to continue operating in the U.S. while addressing national security concerns [6]. - A U.S. law mandated TikTok's sale or ban by January 19, but the deadline was extended by President Trump upon taking office [6].

Financial Data and Key Metrics Changes - Total ARR growth accelerated to 24% year-over-year, and 25% when adjusted for foreign exchange [31][40] - Total revenues for Q4 were $89.2 million, representing year-over-year growth of 20% [35] - Non-GAAP operating margin for Q4 was 16.2%, a significant improvement from the previous year [44][50] - Cash generated from operations for the full year was $88.9 million, with free cash flow of $85.9 million, more than doubling the previous year's figures [46] Business Line Data and Key Metrics Changes - SaaS revenue for Q4 was $64.8 million, growing 43% year-over-year and representing 73% of total Q4 revenues [36] - Term license and support revenue declined to $9.4 million, representing 11% of Q4 revenues [37] - Maintenance revenue also declined year-over-year, representing 3% of total Q4 revenues [37] Market Data and Key Metrics Changes - In North America, SaaS revenues grew 46% year-over-year, while EMEA and APAC saw growth rates of 37% and 50% respectively [38] - North America ARR grew 21%, EMEA ARR grew 24%, and APAC ARR grew 29% [39][40] Company Strategy and Development Direction - The company aims to become the world's leading data management software company, focusing on durable, profitable growth at scale [8][9] - The "Beyond Secure" philosophy addresses traditional data management inadequacies, promoting a comprehensive approach to data security and governance [27][28] - The strategic acquisition of Ydentic aims to enhance automation and IT management capabilities for Microsoft Managed Services Providers [28][82] Management's Comments on Operating Environment and Future Outlook - Management highlighted the growing demand for data management solutions amid digital transformations and AI adoption [10][17] - The company is positioned to capitalize on the urgent need for data modernization and governance as businesses navigate complex regulatory environments [15][18] - Management expressed confidence in the demand environment and plans to invest in sales, marketing, and R&D for long-term growth [100][101] Other Important Information - The company ended Q4 with $290.9 million in cash and short-term investments [45] - The full-year 2024 results showed total revenues of $330.5 million, representing growth of 22% [48] Q&A Session Summary Question: What is the U.S. Federal exposure and outlook? - The company's federal business exposure is around 2% of total ARR, with ongoing discussions about digital transformation and AI readiness with agencies [58][59] Question: What is causing the gap between ARR growth and revenue growth in 2025? - The gap is influenced by foreign exchange impacts and a shift in revenue mix, particularly the decline in term license revenue [60][92] Question: How are pricing changes impacting ARR and NRR? - The primary driver for NRR growth is customers consuming more of the platform, with price increases contributing minimally [67][68] Question: What is the significance of the new data security solutions for Google? - The expansion into Google enhances the company's multi-cloud capabilities, positioning it as a strategic partner for customers [72] Question: How is the competitive environment evolving in data security posture management? - The market remains competitive, but the company is confident in its platform approach and ability to expand into mid-market segments [78] Question: What are the integration goals for the Ydentic acquisition? - The acquisition aims to enhance managed services offerings and expand into SMB and medium-sized customers [82][84] Question: What are the expectations for seasonality in the next fiscal year? - Seasonality is expected to remain similar to previous years, with Q1 typically being the lowest ARR quarter [113][115]