Intapp(US:INTA)2025-11-04 23:02Financial Data and Key Metrics Changes - In Q1, cloud annual recurring revenue (ARR) grew to $401 million, up 30% year-over-year, representing 80% of total ARR of $504 million [4][16] - SaaS revenue reached $98 million, up 27% year-over-year, while total revenue was $139 million, up 17% year-over-year [4][17] - Non-GAAP gross margin improved to 77.7%, up from 76.3% a year ago, reflecting cloud efficiency gains [19] - Non-GAAP operating income increased to $20.9 million from $15.1 million in Q1 of the previous year [19] - Free cash flow for the quarter was $13.2 million, with cash and cash equivalents at $273.4 million [19] Business Line Data and Key Metrics Changes - SaaS now contributes 70% of total revenue, up more than five points year-over-year [17] - License revenue totaled $29.2 million, up 2% year-over-year, while professional services revenue decreased by 8% year-over-year to $12.3 million [17] - The company saw strong demand for cloud solutions, driving total revenue growth [17] Market Data and Key Metrics Changes - The company reported a cloud net revenue retention rate of 121%, indicating strong retention and upsell among existing cloud clients [20] - The number of clients with ARR of at least $100,000 increased to 813, up from 707 in the previous year [20] - Total remaining performance obligations (RPO) reached $715.2 million, up 30% year-over-year [19] Company Strategy and Development Direction - The company is focused on expanding its vertical AI capabilities and cloud adoption, leveraging partnerships, particularly with Microsoft [4][9] - The strategy includes enhancing compliance capabilities and integrating AI into workflows to differentiate from competitors [6][31] - The company aims to drive AI, cloud adoption, and modernization across all industries served, with a focus on enterprise-class firms [15][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth opportunities, citing strong demand for cloud solutions and AI capabilities [15][16] - The company is navigating macro trends such as digitalization and compliance-driven demand, which are expected to support sustained, profitable growth [16] - Guidance for Q2 fiscal 2026 includes SaaS revenue between $100 million and $101 million, with total revenue expected in the range of $137.6 million to $138.6 million [20][21] Other Important Information - The company authorized a $150 million share repurchase program, repurchasing $50 million in Q1 [18] - The partner ecosystem is seen as a critical component for long-term cloud growth, with co-sell growth remaining strong [18] Q&A Session Summary Question: What drove the net revenue retention of 121%? - Management attributed the retention to successful upsell and cross-sell efforts, along with low churn rates and strong product adoption [24][26] Question: How is GenAI impacting client behavior? - Management noted that clients are experimenting with various AI tools and are excited about the potential ROI from GenAI, which is driving interest in cloud migration [28][30][32] Question: How much of the ARR acceleration is due to industry-specific changes? - Management indicated that trends such as consolidation in law firms and private equity investments in accounting firms are contributing to ARR growth, alongside macro tailwinds [35][36] Question: What are the common reasons for clients remaining on-premise? - Management highlighted regulatory concerns and the need for trusted partners as key reasons, but noted that AI is capturing attention and could accelerate cloud adoption [41][42] Question: What is the international opportunity for the company? - Management stated that about 30% of business is international, with growth opportunities in regions like Europe and Latin America, supported by partnerships [66][68] Question: What are the key execution levers for reaching the billion-dollar revenue milestone? - Management emphasized the importance of client success, cross-sell and upsell opportunities, and continued innovation as critical factors for growth [60][62]