AVPT - Earnings call transcript Q4 2021

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Operator

Good afternoon and welcome to the AvePoint's Fourth Quarter and Full Year 2021 Earnings Call.

For opening remarks and introductions, I will now turn the call over to Marc Griffin, Investor Relations. Please go ahead.

Marc Griffin

Thank you. Good morning and welcome to AvePoint's fourth quarter and year end 2021 earnings call. the market in close. discussing issued press be the after we'll results our announced release Today With is Dr. on me the call this afternoon Jiang, and TJ Officer; Chief Executive Officer. Financial Jim Caci, Chief of begin the quarter a full December ended XXXX. year will TJ brief and business for the with results fourth XX, review Jim the fourth and first followed will full-year financial the by of the review for the quarter company's then XXXX. highlights quarter outlook for

forward-looking the website. do me copy Relations over not accordance Investor superior copy measures release of a the the company's visiting the a non-GAAP who let should in and from a this statements they up open with provide turn to how reserved. ended are and all GAAP. call including questions. prepared call the for operating AvePoint to of with Harbor which with uncertainties XXXX have means note, sole considered Please in will press in that non-GAAP could These be you to of include by non-GAAP Listeners expectations. section Statements we margin, a that involve not We certain actual substitutes not will complete this company's presented call December press then obtain webcast our or Safe investors prepared financial are as encourage release property operating that as The All more that copyright Please TJ. non-GAAP presentation the for review rights company's operating the and management's for risks may description. with U.S. presentation results management the note materials believe the measures evaluates this understanding We quarter contained the performance. of to measures describes evaluating cause in in non-GAAP and differ U.S. current materially measures GAAP. from accordance income XX, are isolation in the With the measures

TJ Jiang

Thank to and was you year customers, company. everyone It thank trusts the to finish performance joining the very the a to that pleased us fourth report strong Marc, quarter on our a place on became great and confidence in in privilege I'm committed how shareholders see partners company us profound what When for as a committed and and to a you, trusts. AvePoint's earning to to monumental see call public today. is collaborate we a to employees honor holding is enable with AvePoint's that skill. July, to hard organizations our and mission fulfill I was are

quarter, year-over-year of period XX% fourth $XXX.X our we revenue total delivered For SaaS $XX.X to ARR grew same and XX% up from million. million, XXXX, the

sustain our better continue Type the customers X better to Our ISO our teams, growth helped for right customers to security II compliance. to operate secure between adapt ones. innovation foundation by In people digitally become XXXX, and continuity. to collaboration connections business expanding We industry ensure the and existing need evolving to By world leading and solutions work. hybrid resilient reflects data, for the introducing build and and business as I'm under decisions. insights controls as IT and ourselves, and partners. proud security certifications operators authorization of make for leaders providing SOC received commitment our well We're security FedRAMP can

collaboration support and clouds. Salesforce to Google Our extends Microsoft, on

million, our SaaS expansion ecosystem free as value platform the up of core were for results positive. year. acquisitions, of of XXXX million we to the while on of of year This XX% SaaS logo $XX.X the strength with flow driven values. ongoing last our year team fiscal that Revenue for proposition, grew our by metrics strong strong and cash results across well a were a $XXX.X These go-to-market character XX% resilience revenue demonstrates balanced and partner remaining strategy Our customers. our growth is new key over existing delivered the and solid operating the growing

working the in AvePoint to efforts, we partner in One enterprise advancing roots network. of our amplify organizations. global a our partners been our deepen go-to-market to tailwinds this global with XXXX, with our expanding introduced efforts our has approach And have program and existing strong our has been designed who relationships recruitment partner disruptor market.

SMBs help amid digital to enable is serve grade technology, secular That Our in capabilities means medium transformation. that XXX our companies their it's us businesses our I the available growth versatility collaborate business beyond. five a same them in and want partners trends years discussing to confidence use sustained our for ways. gives few SaaS a are platform, with Very the helping our next now ability sized small few native of our with and cloud enterprise to achieve and this clients minutes spend Fortune partners BXB accelerating how in few business confidence. early success the

market. business expand SaaS shifting much while margin highly marketing MSPs the ended partners MSP or total primarily touch X,XXX customer revenue service partners, the integrators, and providers, our of SMB distributors. with including value-added have a system year service managed to our high As the partners resellers, consultants, cloud Serving DevOps vast is our focused on points MSPs, we sales, partners. recently, of majority to over efficient way AvePoint and announced The

distributors AppXite, of force a a able working for the with partners seeing cloud distributor, are technology from key us. a hundreds marketplace. onboard equivalent this and transact. XXX% with incredible to prefer this new was vendors an however supporting up cloud reach of example, managing wherever transacting channel XX to quickly are million for possible The they continued commitment year. is is of our As now to we of of last QX, because to and distributor additional in ARR, We're growth $X.X users. portion thousands In white label integration able provider multiplier By Nordics. year-end, they our an business to of our we're MSPs to create This for thanks technology

that onboard enterprise helping in multi-tenant to our demand provides and able help for excited onboarding our integration partner partners medium drive two and One their for for XX sustained extraordinary was growth to to months. of solutions. streamline achieve onto scale clients simple protection customers. unique cloud We're it's their MSPs small, The data our within just business services experience MSP Sweden

solutions wrap software lever the choose flexibility Another and ability may for services in a presence the co-sell motion. from market. growth not purchase is our relationship has situations, established and the a our their client in to these distributor. and the In our empowers to partner our us an end enable partner expand partner the SaaS This directly to with

is sector, external health recurring a powered client for a insights. related The services service, service in insights in help and our the SII. ongoing users data. large a geographies These to their Australia opportunity going created potential information partner, to oversharing, across action example, through partner and identifies by revenue able For local multiple with to sensitive users with global concerns market partner security check platform In XX,XXX are remediation. we supporting Canada, our Confidence

sovereignty AvePoint satisfy multiple agreements to I co-sale Now and to want they're Furthermore, lines partners many clients. data through as able our on that depending protection and of backup. have with our SaaS support add business their requirements managed such of both data services and

their sales enterprise market trusted to our Half is Collectively, America, our partners. Europe, opportunities. organizations, scale logos true the our this forward. if highly larger to to into from their clients direct come is Japan, Western increased dividends. In presence North cloud to premium global partner onto we source continues Singapore, capacity. of all in our paying our platform momentum Korea team as approach and With we our continues customers MSPs expect sales new strong AvePoint's grow growth our to climate, software provider geopolitical continue, To significantly reach we drive Our In partners through global and enterprise AvePoint segment services. markets more XXXX, channel business. today as today's our and accelerate going onboard support disrupted across viewed not BXB enterprise

is for optimized team large need platform example, disposition and with was storage solve to way problems. information sales with designed customer to collaboration to a proactive customers business trends manufacturing market keep a records better a quickly In retention cloud direct rising With respond complex data costs, Germany, to program. Our their management. help and evolving concerned they

being are automate classification solutions deployed SaaS to life Our and cycle policies.

requirements of over As compliance, is a XX,XXX protection stories strength users. a ransomware help reduced increased with also both XXX,XXX to to were and in a through up teams storage platform. storage accountability In ensure ability costs. enterprise retention XX% way plus for SaaS in was requirement. improved The to ransomware North America, to can able the to The requirements unified transparency, forward properly of our result, company IT needed number a data content together XXX The they demonstrate a to market We customers must-have set QX, recover to our of satisfy and look cloud event year-over-year. their and work archived data segment. satisfy were able our our in life ARR These attack we disposed. insurance better

base our value as investments. We on to We own the saw existing transition cloud financial helped consolidate the the customer their in gain of their also from our milestone on-prem transformation success they XXX managed help reached with to as look by infrastructure continuing In them international SaaS platform to grow. for cloud continue more cloud. QX, to Microsoft and are QX institution to users and we example, continue cloud number vendors another their

December a from XX, As XXXX, users, up X.X million X million we managed XX% year ago. of

year, introduced few new our Resilience in our our with November more platform, product Now release suite technology suites. license depth and suite and shipped across a control our highlights. efficient called and in to management additional operations I Workspace solution more Google we Sense like SaaS QX, Confidence We breadth. offering. Last and make would data provide management with easier In capabilities expanded strengthened to platform backup a our MXXX resulting

on Our control the improved better with SaaS even costs. license global our suite to maximizes presents now admins delegated This management recommendations how on portfolios. customer manage features and or ROI budget

our overhauled which also streamline management with platform Elements more and for them multi-tenant do improved management supports less. MSPs, to help customer and We

to been support of XX,XXX private our regulated channels highly U.S. channels. Another is A without key their solution. to have users critical customers. not release would highlight support for our was for contractor defense the private release our This able Teams

Our solution channels. now are secures cloud. their access top remain Information management that transition Teams Microsoft a matter no and mind and challenges provides the of security process to governs organizations compliant access where to and private request in

are years, a in live shift the hybrid to with still aftershock cloud organizations of While the are choosing over already world. dealing the some to last are transitioning some of couple rapid or

well no matter positioned We their are customers to resides. partners and data our support where

processes to the burden on-prem applications. management information As now, their legacy content customers infrastructure and can extend of self-hosted without

to we repurchase exciting proud backup a to leader Workspace reception share are the by our earnings enhancements these customers experts. releases Data I also speak Wave couple in goes and in groundwork the January in want AvePoint excited in of a rating November XXX, for months, to We very laid two numbers, of Jim and Forrester's as for as on report the very Microsoft SaaS only release. first New Through was that backup And cloud made we'll finally, vendor and the of receive QX. touch release, industry quarter our Google in lot the by update. we a before Salesforce in capabilities recognized that our announcement a differentiated over March Protection and Application for our

as authorized Our million an return XXXX outstanding will record and Directors of to publicly shareholders. saw for a revenue transformative traded Board company growth three-year we that was the year and program a became $XXX repurchase have to up company.

positioning is strong. financial Our

foundation scaling We continue are positive offerings it beyond. to to With and XXXX that, sustained results free maintaining channel, in and Jim more through new the growth cash accelerating detail. in over financial turn for our investing to while discuss I’ll flow product business building our

Jim Caci

you, everyone. TJ, good and afternoon, Thank

non-GAAP earnings reconciliation results is today, quarter today’s note be release, that referring otherwise of I’ll fourth is to metrics which A our available in included financials on non-GAAP GAAP review I to unless also please our noted. website. As

of adjust of our the quarter should over quarter term revenue for revenue timing additional of fourth to contract is We our the term we change license determined revenue to made resulted discuss attributable in the to relating I in of our recognized that the term that and I want more Before results, contracts. our contract. results. a the shift contracts, deferral recognition This to fourth of an $X.X recognized of percentage license reflected we highlight the million PCS, the is license upfront which value change in

annualized it impacts revenue. has Although of timing on our recognition, revenue recurring no impact this the change

majority additional eight quarters. deferred We recognize of next the to the revenue expect this over

contract million, amount constituting term revenues of in XX% license Additionally, million, and the December in license affect of revenue XX, came recognition XXXX, values XX% to revenue the were upfront total $XX.X revenue ended came total XX% adjustment recognize timing SaaS license decline in revenue in the year-over-year at up allocation at will the change to contracts. the will of for the of our on revenue. beyond. we fourth XXXX term due revenue, Total Term $XX.X Within a year-over-year year-over-year. million, XX% and up $XX.X of quarter

been total have would revenues $XX.X been and term the license or revenue up and quarter year-over-year. change, XX% have million fourth XX% $XX.X million would Excluding for our up this year-over-year,

of from year ago. total million, we had ARR quarter-end, grew a As of $XXX.X the XX% which

Our SMB quarterly ARR at an dollar growing records $XXX.X core on SMB core and our with year-over-year. XXX% XX% and had million. basis absolute ARR our ARR ARR growing year-over-year year ended Both the ARR growth our core

expand operations, over up average XX% growth was customers SaaS account our represents an ARR As their quarter-end, the their average This as from continues well. was $XXX,XXX, transformation At of core year driven the increase per grow cloud ARR account XXX period. which of to XX% by customers prior continue per $XX,XXX, with ARR approximately year-over-year. and core

since revenue retention customer and and sales year of continued line slight created organizations. across our improvement, accountability in out metric. our Overall, fluctuations core versus forward. point existing For to we further It is sharpens points We improvement last with with sales percentage net existing upsell. X quarter. focus across rate our moving in the we quarter an on last and to increase important organization quarter-to-quarter XXX%, This and do recently was and anticipate ownership year, expect dollar-based we’re this pleased farmer customer hunter year-over-year improvement the success our dedicated customer roles from

statement a XX.X%, gross detail. margin in the XX.X% ago This in Gross little million, the let’s quarter of review income result margin the year a primary $XX.X of in is more compared Now was factors. two period. to representing decline the profit

the The revenue services second margin first margin from in the I impact increase in the of. is is our the negative revenue, recognition change spoke lowest business. just And

both invested and in expanded as driven of organizations efforts revenue revenue personnel-related channel revenue At our percentage to increase of increase million as to the continuing success expenses toward fastest-growing compared customer Sales XX%. direct ago. represents solutions. as overall stream, decline spend we of by additional are by improvement. an $X.X in or time, year strategies. our XX% to our we in year-over-year forward, Going as sales million service services marketing SaaS more an were drive and our a as marketing expect same revenue, sales This channel partners, our revenue was This and to resulting revenue we headcount a well of or we XX% $XX.X and expenses transitioning margin our overall sales

year-over-year marketing efforts marketing in year is total We up in million nearly sales across benefits. expense have year-over-year, by revenue, brand million X% functions spend by period. and primarily marketing count our increase head as primarily of customer $X.X the ago Programmatic R&D headcount grown and our or well compensation, was success with as to $X.X in and driven X% functions. compared in resulted million driven by salary awareness events. evenly $X.X has hires and in This increase marketing a sales XX% distributed

breakthroughs. insights quarter an allocation was the support in our These the R&D with customer associated but associated business in in increase increase practice to run environment. the market product a headcount cost team. also people product research income timing highlights revenues. to of remained up our and or expense absolute largely XX%. to through and On expense in our the priority year-over-year, disruptive for projects. critical company differentiated million offerings remain cost public growth rotate This allows innovation readiness of was expenses increases million to G&A development included ways fuel expenses we implementation in markets. we are in XX% rate participation creates cost participate an flat. projects implementations the decrease future reflects help they will X.X% expense This accruals the year the personnel Non-GAAP connected was the the which expense R&D’s of of ensures due feedback basis, in project as to to This revenue reposition to headcount of technologies dollar Our revenue an platforms competitive, bonus of us we a periods. period. for increase our including compared was in and mechanism the of infrastructure-related year-ago efforts, ago increased our projects our compared program approximately is $X.X XX% for real that The these period. with $XX.X us quarter drive to and The time G&A to in to provide and and million XX% in services of in ramp-up or our To It operating promising in expect development quarter. new $X.X remain of to approximately

with flow. the the from of flow. in the million cash $X.X flows I cash to significant like flow, ended quarter. million. CapEx in cash our $X.X cash and saw quarter $XXX the in with for year, business includes Turning investments which first million the Cash was strong investments. generated now free and the short-term in from in and $X.X to flows quarter were quarter, year turn would while cash flows the the outlook operations We the million balance full cash sheet on XXXX. to We operations the $X.X Despite we year a million free throughout

for well outlook first quarter expenses the as our quarter primarily operating current Our marketing to accelerating seasonality relating reflects as operating an additional revenue profit first investments.

total $XX the loss $X.X a revenue million of operating million For quarter, $X million. we to first expect $XX of million and to non-GAAP

to expect of revenues $XXX For year, we the full million million. total $XXX

range to of non-GAAP to be $X income of a range We expect of loss $XXX million year-end we in million million, to our of ARR profitability expect in the the to $X.X and $XXX million. be

from We about new products are our partner as existing strong demand last pandemic global our well the inflation growth generate macro positions ability of advantage additional and capitalize balance cash continue take of spent excited on the for year We’ve uncertainties our the concerns opportunities to positive and sheet strong products strong geopolitical our us of vision they to With strong financial of the executing and building rising become release program. to our our and the flows see also on reception overall and evolving and our environment, to and strategic position. available. much strategy

opportunities to authorization million of $XXX announced of AvePoint next recently our up over repurchase those of to the is from shares Board the One Directors three years.

Operator? We With of we’ll years to up open confident the and call are questions. to continue the that, come. levels increasing strong profitability our growth ability to in for generate in

Operator

with Evercore question. session. you. Materne Thank our a ISI. this question-and-answer we’ll [Operator first question conducting comes Instructions] with of your from proceed And Kirk line the At Please time, be

Kirk Materne

the Is Jim, XXXX calendar just you when thanks. Yes, what guidance, rev guidance due revenue the just below changes a looks thinking rev ARR look from very perspective, I off it maybe if but to quantify revenue the at on rec guidance still at a the obviously, guys strong, start rec I any to very just look way that is you were for changes? solely much. I could that? earlier. mean bit what Thanks with, little your

Jim Caci

affect Kirk, revenue like biggest for And it the Yes. ARR. That’s definitely factor, and the obviously question. forward. biggest factor affecting you That’s thanks doesn’t said, the going

forward. obviously just really is good of that about moving This revenue. feeling the We’re timing

Kirk Materne

just you. then for That’s helpful. TJ, maybe, And

terms you’re You in talk right mentioned push ratio growth and seeing to of continue been do in enhancements both about net pipeline about retention what feel of customer sort you some of putting your being How just you’ve higher able here? new expansion? the from Can the to go-to-market you in now net place.

TJ Jiang

question, great a that’s Kirk. Yes,

actually So on net new very are strong. the we growing side,

So continue the growth. the customers ARR the existing strong see new for pipeline, And high XX-XX year then new on we from that’s and predictability. plan, from ARR and is the to from very customers,

working On and aggressively have already XXX%, the we’re towards marching still NRR, we indicated we are that that. towards that

of Some time, sales, for Jim earlier have the example, around that first across for specialization shared versus hunter things upsell whole we farmer farmers actually this quotas. the

partner side, account customer So I between on and on the ownership that as we’re And that of alignment launched sharpens just the success our actually the organization, today new remember, last NRR result very the proud sourced was shared of are logos better in side. to you of retention sales by new partners. organization program taking our global the XXXX. also, And logo fact July half year, our in

the momentum. This the those perspective, forecast very may see of continue the acceleration business you slight recognition, the our while to all strong side to that believe growth in continued strongly ARR overall revenue So a revenue continues. gain the And and growth. have indicate is due why but we of from

Kirk Materne

That’s guys. great. Thanks,

TJ Jiang

you. Thank

Jim Caci

Kirk. Thanks,

Operator

the question. Blair. proceed Please comes of question next from Our with line with Jason William Ader your

Jason Ader

in anything term the Has mix terms of had Hey, SaaS? Thanks. between expectations license that guys. changed, and around you’ve TJ,

TJ Jiang

So yes, I can first. go

where mix shift, gone up. we’re more also So seeing SaaS the actually, SaaS the This lot is mix. a has positive

growth SaaS XX%. America, SaaS example, in up For our went North mix –

overall, the with is So very going and The stated. term continue But be the business of down going revenue, the momentum as the to mix predicted SaaS It’s revenue recognition. strong. yes, is mix – impacted for Jim up.

Jason Ader

Great.

fair that revenue shift some rec, differential on faster-than-expected ratable? also but be could guide to of the is rev mix is of most the it say from to overall to So there kind impact due then just the

TJ Jiang

the think head. Absolutely. hit you it Jason, right on I

impact, the as piece SaaS I And a having also SaaS more faster doing, we’re on you shift. revenue but the think know, relating is predominantly obviously rev than as rec this ARR recognition to there’s SaaS but seeing growing slower to intact, opposed term. the we’re the it’s it’s we’re little

we’re that little in a for forecast have than we seeing prior. our So would XXXX more bit

Jason Ader

guess, talk a then would can pre-IPO? follow-up the how for forecast, through us what’s guys you, And is place and uncertainty as Jim. tack Great. you where know of a happening you bar wondering just let’s you company as you philosophically, taking kind you any I philosophically more the an given just you aside, a just say there in But your are I I’m into setting in CFO. are thinking setting as – there? factoring over about on just if business, then And say, your were macro especially guidance, weren’t European guidance? conservative

Jim Caci

Yes.

So great question.

terms now, lot in factors and to there’s in put tried a we we’ve uncertainties the we’re Obviously, think I some guidance have macro, monitor. of have of consider overall of to right we that something the forward. that and continuing plan

business have really in don’t Russia. we Fortunately, any

So impacted very at sanctions we’re our team place, not and that managing all tightly. any is of legal in the put by

we region. ARR have think to of $XX,XXX I that related

So and we’ve we’re bit tried our you factor there’s the little European But obviously impact in said, on directly for indirect impacted. not to a that. business, as

we I into can. be can. And we to think we’ve so taken I account. philosophically, we as as predictable be And say accurate to that as We as want that would want

around we’re and that numbers trying externally that of the and of we’re cadence both providing some that of have frankly, to internally. kind so kind And rigor

around We’re of business sure putting the lot doing we’re that in to rigor the a make that. more operations

as philosophically, that’s our So and internally. it as both and I strategy plan, think well our externally goes

Jason Ader

luck, Good lot. a Thanks guys.

Jim Caci

you. Thank

Operator

Please of from And Goldman your Sachs. comes question. with Essex the line next question Brian our with proceed

Brian Essex

like you drivers. Thank proliferation guess from observations security office? front step to afternoon. with side of question. and a ransomware seeing environment environment transformation here. overall for Good office of from what have playing kind of and you regard backup are with security post-pandemic your you one might to Maybe the terms acceleration transformation is the your back of taking back, just overall, you Maybe end then I a couple a versus particularly helpful. role as driver got in a on just with the the any Hi. of TJ, of I’ve start your And to the business? be would in material take mentioned

TJ Jiang

Yes, partners on security The amount definitely our released that’s features product. Brian, significant are a on ransomware concerns. see us question. backup attacks a of relating increasing that detection our why This to our clip. We uptick fast we a ransomware is great also in the is

fact, resiliency product, our of That’s quickly. In suite XX% now and very, actually backup, about includes it’s compliance business. growing record our that very total

While the each we fidelity about of and control side X/X, last year, XX%. – of situation. Previously X/X, X/X it are at were

restores. user This in put also security proper concerns cases also to business is and time restore vendor there end-user is massive given be to do increase So so advanced the speed essentially the in backup our Forrester why SaaS able user-driven in to a capabilities can top do us SaaS a backup that recovery. as and use customers application and the

that’s So important very, new very phenomenon. yes,

Brian Essex

your in your would all at expect I And efforts for given authorization expectations FedRAMP federal that the marketing. just helpful. focus Do same And for across balanced sales growth. reps Jim, change count and to sales think at it. fiscal was Nice the I and quota-bearing to any head And color marketing, switching and you you maybe Got what’s it guess, on sales – space? That’s to gross, relatively on marketing. then rate? embedded XXXX? and Maybe noted

Jim Caci

Yes.

same won’t expect see rate the in we of to next growth So year.

than probably we this what actually year. somewhere anticipating far growth, around incurred We’re is XX% to XX% which headcount less

combination have are of And reps So a need. pace. quota we’re point the growing, giving not still this that’s we a at capacity but that ramped-up quota right? producing lot and nearly same at of us We factors, that

to we already embrace we’ve sales obviously to start and partner had some TJ the leverage in the We including which of mentioned, our strategy, people. also, really marketing, as channel investments previously made

see past still made group. we’ve obviously, But of we’re some those year. same investments growing won’t that this we So the

Brian Essex

you much. Thank helpful. That’s Got very it.

Jim Caci

you. Thank

Operator

Please Our of Knoblauch next with question your with Fitzgerald. comes from Cantor question. Brett line the proceed

Brett Knoblauch

you me? hear Can Hi.

TJ Jiang

Yes.

Brett Knoblauch

guide, Perfect. Would my guess year? Thanks just to, in been headwind the TLS. the closer it, Is rec revenue call quantify change for taking the I much – also for million? question. so the guide on would $XX the have rev that without million, full can it guess, $XX you just what I

Jim Caci

Yes.

factors look net into budgeting So our internal in when potential there’s guidance, that at it’s it, impact. $XX around of kind obviously, lots kind million and But roughly of of we that. of go

So that’s kind factored in. of what we’ve

about should for probably purpose. that’s think your it you So how

Brett Knoblauch

on of user kind And the guess maybe base. can year I going is million you Perfect. was you the your rate? that? a think cloud into baked I then a Do that $X for Do think the accelerate you of year? number. assumptions really strong just kind what’s full that thought one

TJ Jiang

continue Right now, to the of projects be our plan business business. rate the

is the forecasted So at is ARR XX%. midpoint

So time, to new forecast same we we to are product. user the the continue that. at grow Obviously, rate layering

So we increase are looking to ARPU.

our yes, forecast So XX% increase. plan that but is business

Brett Knoblauch

one just Maybe helpful. That’s more.

you excited are medium and three the products new contributor over term? kind I of those guess Confide, I Entrust. as to which growth you most maybe of Detection for months or over guys three launched last products so, a think Ransomware one the

TJ Jiang

for excited nicely. of actually them. very come We’re together They all

a by So reference for tenant in do – virtual the Entrust, organizations even have used actually we is tenant quote management. example, customer to release large

course, of Ransomware management. the into delegation security it. of And Detection goes side that’s So

And specific recover then to use the and the the an we tenants, in point points in year. the to short case alerted all Confide very, last data of detect Google to second half is to super now, and ransom and to extension quickly. signatures the includes early support own access data. a collaboration Microsoft XXX within area So customers tenancy can industry Microsoft road attack able data of right the where recovery be they customers when XXX, resides then be very map don’t an even secure that of IT have And users very

workflows manage business users do the to and project. a by a controlled XXX% manage So with collaboration internal/external to deal

and business product security confidence They well hand-in-hand we’re three story. around So excited releases. about actually with business user, go platform all data, our governance

Brett Knoblauch

it. Appreciate TJ. Thanks, Welcome.

TJ Jiang

you. Thank

Jim Caci

Brett. Thanks,

Operator

from comes question. with Nehal of question line Please next proceed Capital our your Northland with the Chokshi And Markets.

Nehal Chokshi

drivers Nice how of linearity ARR the growth quarter there. well? result Yes. And XX%? as in ARR in What also Thank then acceleration of the the were you. is

Jim Caci

Yes.

question. So great

terms broke prepared out really by grown. I we we of at but in in SMB tremendously our growth, remarks, sector, – saw So if the – terms it’s partly has the really growth think driven look it that in of you right,

XXX% up there. We’re

up was then that a core our And So ARR was big XX%. even driver.

So the also ARR growth. another overall driver of big

growth growth good and in So Asia. ARR. world, We significant we saw saw the particularly Europe a in around

kind of one driver. it No So again, over. particular all seeing we’re

to as We’re seeing ARR recently, concerns seeing a some our mentioned, as well. be and adding a TJ driver we’re of more – security that kind shift to more to and seems around

kind having we’re now see focus continue So I our it’s world. to is seeing clearly, think an of of SMB that and definitely XXXX the effect, expect as across growth there, into well. and But lots to we

Nehal Chokshi

much that Great. was And the up just quarter, year-over-year? ARR to in be September how core clear,

Jim Caci

the and XX% up was ARR core SMB The was up XX%. XXX%.

Nehal Chokshi

the quarter, December was for September but for quarter. about That what Yes.

Jim Caci

September The one on Hand sec. quarter?

me of on have numbers one. back because you – you – Let but those on right to front me, respond I that one I in that get let don’t that can to me back

Nehal Chokshi

a other All from couple product the percent right. What actual to of I PCS that’s was term-based the got licenses? shifted being the for questions. Okay.

Jim Caci

Great question.

– from will which XX going was upfront, would down be what used So we upfront. mean was an XX% And are XX% PCS. that forward, from average to to to the average go deferred going XX%

And XX shift even will upfront. as as to another points contract, be of be the depending under could the to going low length and PCS. of then going those of XX% just and greater we’re So XX% some on

shifted almost PCS. of XX% kind as much we shift to to as So

will think, significant it the – it the be where change kind on the a much revenue for a in But pretty of been. I we’ve it and from So of good helps think eliminate again, long the and us. in have smooths lumpiness I term we little out. term, it currently big bit spreads actually some based And

Nehal Chokshi

your $XXX Great. of expectations definitely It’s repurchase awesome. then And What’s program, move of very utilization pace bold on applaud that? the the on million that.

TJ Jiang

couple yet, that more to stay have and a So to weeks. a bit do flexible so concrete rollout and of get of mechanics a or to to the to and to next that of strategy Obviously, specific now, exact just we're over we because a plan trying over done going in figure on have the the week Right things haven't got working early but expect kind time make discussions that – little it out it's next question a committed we're to we've now, in here sure flexible be out great we're the place. to of lays in we're couple it But on remaining that. not frames. right

Nehal Chokshi

you. Okay. Great, thank

TJ Jiang

Thank you.

James Caci

organic I program, with add And, growth. that other still both in that are the want business, investments just and inorganic doing to we

generate You our to have seen continue cash. business

flow positive So business. cash we're a

with the stock the continue if to this business. buyback, go do even to other to aggressively not to, grow So we on program investments

Nehal Chokshi

wet had that right. being Right, cash initial sort M&A your talked right? sub that, plenty of conference call, getting have do the on prior so $XX of I you feet believe million, to about you should

James Caci

Exactly. correct. That's

TJ Jiang

any not clearly are mutually These exclusive by stream.

Operator

And proceed next Derrick of with Please the our comes line your questions. Cowen. question with Wood from

Andrew Sherman

of Hey I thanks. be on of quarter the think. that. did Derrick. drove XXXX, I And that on sales half for out fully guys, second improve hired XXXX, Great, and productivity, to by ask should in these reps of second what last it's wanted ramped TJ you've the would versus Andrew half

in that could back the So accelerate you half? help

TJ Jiang

Great question.

the last into lags have on deep practices. productivity to management call replicate our out ramp-up our since this best earnings So call, dived in

see logic specifically and The regions. When in and we Nordic business Western is productivity shortened with pretty in our came [indiscernible] reps much faster deals time comparison to remotely. work reps our all from best partners, ramp-up new having the simple. when Europe, are deal thereby example, everything ramp-up For longer from than who a and work direct start existing scratch, in sales-focused discovery they had motion time, especially channel-centric

North are prepared co-sell partner now speech focused best same as America commission with applying been also motions which we across teams, directly plans. to very comp the much neutrality incentivize we our practices sales has So the earlier historically aggressively mentioned in

we all lot opportunities cost. our a segment, to So go partners. service in are hand also growth hand the In much our passing to lower also the of and mid-market faster drive these things overall

of also effort our part will revenue. this what reduce of go Jim service So business as into percentage the in stated our to

revenue will ARR mix, to you more therefore, So see healthier, overall, profitable, be side. growth the on much continue with the continued strong

Andrew Sherman

retention. other for you Jim, improvement, for on about what this then any the would you're rev the that guidance order how but and And year you're embedding that any? drivers there's in forecasted Great. XXX%, And get net rank color if moving towards I earlier of

Jim Caci

for referred Yes. We're NRR ago, not now. providing bit probably little hunter, of to think of focusing and I them the of that past didn't on that really and them opportunities would is kind our biggest the on I driver any TJ making predominantly we of the group us that But over because focus right products. guidance have that gives aware say couple additional really selling farmer years a cross-sell specialization that

I And to us on greatest think NRR. so the the improve opportunity that gives

see expecting rates what this The and to have to other seen year thing both is overall improving we're gross nicely. continue retention is that we've been our

have should forward. that impact positive moving a real again, so And

Andrew Sherman

Great, thanks guys.

Jim Caci

Thank you.

Operator

back for the question-and-answer end I'll turn And over closing call Jiang the of TJ reached we now session, to remarks. the have

TJ Jiang

questions, where forward The adjustments thank want you, just we very – business to good we call are look for and Great. I Well, the stated. the more with one-on-one. the is strong. everyone, off discussion cap to momentum

here conscious on is telling reflect us. the a effort what to it's market management So the team

software market Given SaaS profitable. only but is are the not the current high conditions, looking growth, for also companies, macro

that we to heart. So took feedback

we Going reach are as endeavor so in a cash part are company. reach to profitability. both to positive, that we're are software taking term budgeting high our we a to forward, committed actually profitability Not here profitable stock-based SaaS and medium flow we're growth of only to be cash we looking process, continuing the and comps generating, but

So that's partners our global very very of listen achieving customers, our and to We business. continue investors. build robust to our highly confident goal. And and are on resilient, that state this to and we listen we

thank and the with a hope much, very So of I week. that, everyone rest great you have

Operator

your today's this concludes conference, and this you lines your disconnect participation. time. And may for you Thank at

AvePoint (AVPT) 18 Mar 222021 Q4 Earnings call transcript