AVPT - Earnings call transcript Q2 2022

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Operator

Good afternoon, and welcome to the AvePoint, Inc.

Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Marc Griffin. Please go ahead.

Marc Griffin

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

review this U.S. how for income will should and presentation could or include call operating to open differ non-GAAP that the the the current margin, measures believe GAAP. non-GAAP Please management of We company's These measures, with with presentation presented in non-GAAP describes a you risks and GAAP. cause U.S. provide the financial investors sole isolation that performance. We to superior accordance Please is management's the measures press understanding operating they this expectations. evaluates the as in not and not evaluating with the to will call we statements including our this which in in uncertainties description. the measures The are the considered for all non-GAAP questions. involve means then results note accordance statements that and prepared materially be as company's operating with non-GAAP forward-looking that from from encourage substitutes the release note prepared measures are in up copyright of and actual webcast rights more property safe reserved. AvePoint for All harbor contained certain complete material in

release, June obtain With to that, do of a copy TJ. over you the section by let of the who visiting website. quarter XX ended listeners, turn me call company's Relations Investor have the may the not one For press

Tianyi Jiang

how market entering. important thank prudent uncertain in call last while grow, I that. it the share the to reinforcing ability just its being do and highly amidst today. challenging everyone is show joining with you, call, we're Thank dynamic closed to Today, you pleased our and In I'm by to continue Marc, to expenditures proven to us AvePoint environment, on macroeconomic the

quarter important we data Our revenue not can XXX, and challenges at organizations quarter. and faced our million the users drive the Endowment confidently improve half people can continuity suite cause have driven for solutions its AvePoint, overcome million other guidance compliance by XXXX, to services if between enable recruiting the and our end was is ensure services of and exceeded organizations the operations organization day. sales the the with in with $XX.X infrastructure force real can strong in positioned With XX% total confidence our including and faster, with by per guidance upper threat and of more services, leaders. in speak well services Microsoft accelerate We grow our regulations more cloud recover retention the helps as efficiency strict public the headwind grew spending which using FX and so Act. through today's Organizations for leader delivery of agencies in quickly and workplace. transform strong downtime, data, digital platforms This SaaS modern years-old in for to continue and to would to complying this data choose year-over-year Information range, collaborate there can revenue the confidence purpose-built for AvePoint. collaboration productive to be move from was collaboration services reducing of to and the cloud Federal in which become of We platform, files management confidently AvePoint every ARR policies for to the Every agile, confidence the with AvePoint with on Google, global and regulatory a customer productivity. industry sector. environment adoption role business the I We an across more those predicting total million, $XX.X same than With and additional XXXX. $XXX.X such work do They XX% Salesforce retention opportunity a XX% up organizations freedom latest plays National to cloud are every Technology guidelines. resilience period cloud collaboration, Microsoft €X GDPR Humanities of Gartner industry sustains more believes necessary a platform like ensures million. that dozen secures reduce to resiliency. address business connection costs have technology of with XXX with the and its than

continuity, Development with its to to attacks, business We of Asian Bank protect reputation. mitigate maintain protect its trust continue public's ransomware the our work and ensure XX risks from terabytes data

suite U.S., transformation. transform data food from that the Fidelity worked Our the facilities from migrated capturing Microsoft the migrate production world's users than SaaS and with GDPR to multiple to also modernize systems across legacy during the system privacy acquisition Microsoft all business regulations to of compliance integrating to more streamline next, collaboration all producers one integrity the recognizable to work. with AvePoint data Canada continuity organizations while the one applications way ensuring AvePoint, and With workloads following preserves environment. XXX Bahamas or IRS laws, as adhere to XXX most its for XX the

central services operations Our scale. control suite provides leaders to and differentiated at value delivering infrastructure

organizations and result, users digital a greater licenses, with workspaces. budgets, their can control transformation investments over As the maximize better

for program more sites. XXX in adoption XXX locations SaaS accelerating X,XXX a service increase growing also company, its digital We're delivery are specializing workforce with engineering manufacturing of countries. spread large by company employee adoption We in XX Germany XX manufacturing solutions and manages in for helping XXX Fortune multinational automating a based workplace a operations Microsoft its than across

more businesses public we reinforced help support of added which than Microsoft XX% risks, spend. to quarter, continue drive cloud business-critical with During protect to Azure mitigate commitment all capture our and protecting applications productivity workloads, for the

also our of Microsoft solutions. and their experience business solutions existing creates shortens cycle quicker. of an helps providing them challenges more marketplace, for We This line businesses, and tailored on evolving trends purchasing seamless cloud four a AppSource, online workplace combat added

We also continue innovation. industry to for our garner recognition

representative were we a backup XXXX quarter, Guide a leader service. in software backup as the Market by and This for named being online a GX Gartner vendor

than powering XXX countries. Year education from the awards led Our nominations as of a transformation, the Microsoft our and X,XXX recognition Partner across work, for in categories, chosen business more XXXX to the finalist government

this investments At end support. delivery transformative and platform domain Breakthrough in the learning adoption will but XXXX not of education only and most to learning digital in of also our purpose-built end-to-end prestigious we and experiences development completed recognizing the confident higher of We're United educational to learning robust the accelerate collaboration, corporate advance world's of move inspiring of acquisition us Our the the won outstanding programs, a AdTech a powering lines, expertise award, product education. products. bring our our to modern June, transformation, Kingdom-based and one Combined leader around their award enable Knowledge, customers experience SaaS,

technology small a our XXX effect the see one and same channel over businesses to enterprise-grade powerful launched businesses. with available to business, which from midsized growing year just snowball Fortune continue provides We ago,

in expansion is line Our segment channel our geographic ecosystem expansion. with market continued and

already year-over-year Our with part as a We're focused continue chosen AvePoint business, that MSP growth robust environment finding SMB scale, of be invested as the continues choice consolidation. market, MSPs amidst larger and primarily on its smaller triple-digit the we acquires for efficiency MSPs, security. of sales tremendous to

certification end our quarter and This been partner has that and of to specialists to of technology best continue more resulted more product meet it solutions exceed use channel evolving in teams design X,XXX and of engineers, ecosystem completed. program custom of them industry-leading to We as in to source means competitors. more X,XXX the the our enable have than hours business the presales with training needs AvePoint certifications trained

of and XX-year Fortune over continue $XXX,XXX financial with needs organization create success more to educators own investments. of their We cloud with a Microsoft a with transformation and collaboration known the customer their also increased new across base our customer States XXX from ARR in of as cloud institutions to service our service worked We United XXX unique customers gain its serving existing XX% number for in secure a in year-over-year. nonprofits, XXX up the they to deployment. The ours, QX, look saw value

Jim shares we Through over the numbers, we repurchase the in share million that, our modern to turn Jim times. have amidst mission to $XX approximately financial I'll enable share to over activity. in execute repurchase June it results since XX, collaborate on to discuss goes uncertain detail. organizations plan. I the more announcing confidence with to our our macroeconomic continue touch summary, With on repurchased Before XXXX, workplace to in In want

Jim Caci

and you, afternoon, TJ, Thank good everyone.

our review currency. included second our which in is and be June the XX% today, release, metrics, million, compared non-GAAP total in XX% on XX% XX% SaaS note in XXXX, revenue Total that year-over-year please year. revenue to XX% revenue website. year. came XX% million, to XX, for up total noted. year-over-year otherwise SaaS revenue $XX XX% up total second quarter license Within up earnings quarter revenue, constituted currency. revenues XX% of of revenue A reconciliation at total results unless of total currency ended to XX% referring I I'll came million, in constituted to non-GAAP in constant is of compared $XX.X financials As constant $XX.X and up revenue of XX% GAAP were today's year-over-year available in last revenue Term at and constant up or last

euro British than international than do reminder, predominantly dollar, operations, the a currencies which our from in As revenue Japanese comes more and business the yen, other XX% U.S. of pound.

we quarter, headwind profitability our not strength due of This X%. the metrics to affected exchange due the and and is of our revenue experienced approximately the against the which dollar, by headwind ARR primarily strong to our foreign global metrics operations. revenue During a nature

we XX% of the a from growth impacts. year adjusting FX total ARR of had for of As $XXX.X representing ago million, XX% quarter and end,

Our core ARR $XXX.X ended XX% at million, quarter year-over-year. up the

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

adjusted Our core XXX% XXX% FX for rate the ARR dollar-based impacts. for or net quarter retention was

the million, more year-ago the impact in of the margin period. gross let's review and $XX result Now income is detail. our the the slight in to of The statement Gross quarter decline XX.X% FX. compared profit business a representing in was of XX.X% mix margin

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

by was has in of a total is have million grown by in driven expense $X.X of brand increase driven a our $X.X year-over-year. headcount $X.X XX%. X% benefits. $X.X efforts marketing to in million and salary XX% by or increase revenue $X.X The million primarily and awareness primarily year-ago We period, marketing year-over-year, up million or headcount or marketing spend in events. million compensation, and increase a sales compared year-over-year resulted Programmatic X% in R&D

XX% invest in workplace stay Our and year-ago compared This continue to million people company expense a $X.X evolving year trends versus year-over-year. or was of up approximate our year revenue headcount in The technologies customers competitive million and expense XX% in last an million the G&A that the headcount. operating increase in development an current we million private $X.X increase in year-ago loss an our or in to $X.X was transformation. associated the $XX digital was compared infrastructure-related public with XX% being year the innovative of G&A Non-GAAP million a largely expenses ago, a income operating as XX% being an to increase represents compared amidst including help to increase of in company of period. period. $X.X reflects

while in $X.X Turning cash the short-term investments. ended used to and CapEx cash the quarter, flow, operations cash and the $XXX,XXX $XXX.X balance flow. in was includes million. Cash approximately in with sheet was negative We quarter which million a free

in at our cash quarter full XX, Our we XXXX, repurchased under expectations. in our now through approximately June third stock of our use outlook continued shares the to approximately QX, million. In purchase million line to we I And quarter buyback have was of shares with an price aggregate the X.X would turn and like year to the $XX XXXX. for purchase program.

confident quarter. last are same the in saw be of of we time, predictability to of and want growth. the the in headwinds We cautious long-term durability we recent the given weeks At the our couple macro

XX, of we the $X.X foreign and March on trends guidance assumes strengthening exchange million headwind for to impact continue approximately FX the total on fiscal our these in ARR 'XX. resulting an Since We revised U.S. now in approximately the Our our of year. seen have expect be incremental remainder dollar, revenue. $X will million XXXX, the

approximately to For year-over-year for total Non-GAAP the is proud a adjusted be to in of in to the $X of be operating million. range third constant growth, is of of $X.X to adjusted operating strong million. approximately or ARR to for XX% be XX% million our expected for or for revenue XX% to year-over-year loss expected approximately the And is expected million million be to in the currency. $XXX million or $X of in million XX% income of the range to of XX% growth, million another million range of currency. revenue the FX $XX impact. range total expected full XXXX, is Non-GAAP range $XXX income XX% am team $XXX be year expected million in $X $XX quarter. summary, adjusted to $XXX constant year-over-year growth, to is for the income I quarter, In

continue our on With up solutions we'll see continue organizations strong demand the us. questions. call focused delivering who in for We to we to that, for their put remain to as value open Operator? trust

Operator

first The ahead. from Goldman Essex Sachs. with go Please is Instructions] question Brian [Operator

Brian Essex

question. enterprise regard software that of approval landscape to of the of budgets, expensive super then outside currency out understand And or good layers I of TJ, us needed more could FX, Hi, on products could the you you in with thank afternoon. deals more And on longer lot U.S. uncertainty. becoming results. that And the some guess congrats get the for on backdrop bill macro Jim, performance consistent dollars, extent points more those might U.S. a perhaps taking that Nice cycles, to from sure. - the on perspective? the what you for heard guess I if that seeing macro could point, across Maybe point, U.S. we've the customers frame but understand help I to a you And sales what scrutiny you're the done? of some of would you helpful. be

Jim Caci

Brian, then can it commentary on well. address some and TJ me let And first, as add top Sure.

all some most So said, you what in I different that think obviously, partly seeing of just pieces. or we're various of

The first, that to out is just FX. obviously, in remarks the We the question. called prior

definitely the the see we and see of that year. we're going half as headwind, for So second a continuing to that

see of sales did second some definitely for some an the elongation of quarter that's We at impact. So sure, the end cycles.

global that this, We in Those obviously, of customers then we've of you of mix think the have don't degree, what a taking more influencing two mix. the be migration about And I be the we thinking. and in the in So driven. sold conscientious more certain well. a kind is year. the year more and internally, built deliver factors reflecting see it, that's talked And and obviously environment has when also our that the continue in first of I conservative of and maybe the one thinking into about and much us, to to And our seeing of the two to headwind maybe prudent as those in are and our trying that. then now, we the FX for product where more little we're on we actually and focused, second really, about terms impact key macroeconomic bit influences, were second but were migration more And think macro what of half to to include we're thing expect guidance. our we're we're right what into you account that in geopolitical third think product definitely also anticipating, would trying into that half the that expect I half a internally is lot sharing than in which terms we ARR. first thinking third an to

mix since product on satisfy our of it QX and that customers impact but were year. really was and which were obviously actually continue and to it, the QX, ARR. we're great, we has it, saw the the sold that there and So to more second for demanding we expecting shifted, we in half that see And an

which thinking and us. then the is So to guidance macro we've first bit even conditions include a little two also adjusted that both specific on kind into our ARR of also brought more our the and to third,

things kind our of those factored thinking. we've all So of into

Tianyi Jiang

control, we the the macro things Yes, on, that just thanks we control. want overall, are that question. outlined for but that cannot can I conditions to Jim comment things

COVID one pandemic. of our and EMEA, leaders came first Munich partners Tori to EMEA The optimism. as and as our are team overall with bullishness in our since just from management I sales of office back tenure meet So time our Japan, well

ability shift of demand. need our Europeans AvePoint's complex hybrid cloud. across Japan, customers help the are behind especially the they to scenarios, to and deploy there's to There's So of in in terms to couple a where scale cloud for still and years a tremendous also going

of lot partners looking transformation. the a digital to them to help that So are accelerate us

us channel we market in overall, Microsoft the continuing remain that side, But invest the large. us very, think opportunity mitigate of allow to vast by of and is some the very macro in cloud conditions. So macro and front to these scale

Brian Essex

they from Thank helpful. efficiently a of could the How that and pressure as are to and of you I I the perspective? that's super consumption momentum? have deployment costs. over Or But hurdle up mean to ROI compelling have to is already that in if terms scrutiny what's I think you're they TJ. CIOs No, enterprises platform. And Right. that. initial is they maybe more budget particularly that I framework follow when enable and maybe kind a on adoption? kind a mean this ROI committed just thinking the something that operate driving lot you, looking what SaaS-centric get your What under is at are easier of of that that driver? to a platform platform? is looking certainly accelerating cut more migrate they're to, at that's Is going migration are of

Tianyi Jiang

product Microsoft lower one is which But They of provider. to of well well with and as cloud. migrate different fastest drivers. only consolidate environments them to management in momentum and of legacy cloud effective effectively growing platform once as definitely and There we Not cloud. This to and line, running cloud. wheelhouse the cost a Entrust our being plays license efficient course, entitlement, from them our product to on-prem need support very cost There's into both of for new line. in which into administration, allow it do is delegated make do platforms they're our ROI CIOs

consolidation and platform ROI plays So a part. definitely

as through. also been MSP to has there in it's everyone the be ecosystem and in AvePoint shinning know track looking record they're consolidation in, also for are there, course the consistent space platforms Of with strategic our also especially steady and and invest partners

Brian Essex

you very thank it, helpful, much. Got so

Tianyi Jiang

Thanks, Brian.

Operator

go The Please next Jason William from Blair. with question is Ader ahead.

Jason Ader

about thank softness the you. to ask space. I first wanted commentary in Yes, from the afternoon, SMB Microsoft guys. macro Good about

to first cycles, couple also weeks talked just SMB. assuming I'm talked some You July. quarter, in talking enterprise, about slowdown the last I'm a are but also about assuming you elongation of about continued say? of it's sale this you're the six weeks of is through then the clarification, seeing that of And the you fair

Tianyi Jiang

on first more elongation the is comment. are enterprise growing our and bigger SMB make side, Yes, mid-market side the and of percentage cycle, deal increasingly I'll business. fast the our

SMB the on that side. see don't we So,

the fast In picking SMB fact, actually because - continue in again actually and pace of consolidation seek up see growth. three-digit the side, we on that we're the market

and SMB We in are for to over side. partners offering us incentives some faster to campaigns switch even

again, any big So, slowdown SMB for we it's us don't - market. in side see the a

So, share for I'll to we other and it's answer have part. to it a leave market to small Jim sliver the us grab

Jim Caci

that second assuming, so the of was and that be if and the That's the of some then I two still at saw seeing going in. last for into continuation may to year and change, that on again, as but the conservative. we're in we've continue baking planning, seeing the, continues the may bake of and quarter. of It we're guidance. it's the end think We're that we're what it kind Yes, turn for the elongation planning Jason, the piece to we're Yes, now. we terms we're trying other half Yes, of weeks. that

Jason Ader

do of Good, accelerating something COVID or there to TJ, going just thank kind it impact the is is shift interpret linearity momentum there? products, then increased on you the the you. And how migration in of else cloud,

Tianyi Jiang

across our quite, of in driven. ROI Yes, that pace increased is in big migration to think migration up platforms. consolidation a continued We customers. There EMEA. across really enterprise hybrid It's pick especially lot interesting momentum bit of in it's get we of is there deals deployments demands part

very So it's phenomenon. it's a interesting yes,

Jim Caci

But right and in in products of which focused this think customers our the a spear element a past. we saw of a particularly a on And new is two it the little second on quarter, in of cases. unusually, some tip be and using was saying TJ as Jason, Yes our little more migration, of and we of - focused migration to where key I existing coming customers what be the year in there, migration see and in quarters being us trying their goes first to more lot end coming the it able is to bit of solution what have and a do engaging again, different to than more de-risk hybrid they're that.

Jason Ader

you you So interpreted - as just just acceleration to cloud?

Jim Caci

Yes exactly...

Tianyi Jiang

Yes.

Jason Ader

So, that the we to maybe kind the cloud, just but they're saying customers, know in customers now of bit existing just you faster? already, got there a little what get

Tianyi Jiang

Yes consolidation so and absolutely. as well,

Jason Ader

SKUs Got one for you, doing for me, just know are kind and set? last I a you TJ, above specific of the really what you've in kind real-time your of - view in on the most past talked you, momentum. well that product okay. then seeing about which And is

Tianyi Jiang

momentum. along cloud product and whole management. portfolio, control is Yes, once part better We're line control delegation control access continue as to It's into customers real of our in multi-tenant are essentially good this suite Entrust also invest costs they and increasingly better that management. in the which to area to gain mentioned help and I patterns SaaS of

topic. becomes sprawl very get a into the cloud nuances important customers as So data that realize of and

So, be we continue SKU. to suite a see fast growing to control

of capabilities, with be couple said especially our as a service, to continues Of the backup is ransomware our by the revenue. mentioned a that our so business, course, in quarters that, XX% as a of piece resiliency is of having detection led suite which and last we big recovery before

Jason Ader

Very good, thanks good guys, luck.

Tianyi Jiang

you, Thank Jason.

Jim Caci

Thanks, Jason.

Operator

Please Wood Cowen Company. ahead. The next with Derrick and question is from go

Derrick Wood

progression I and model or just a headwinds congrats about potential new the Great tailwinds. of to hunter-farmer the to and quarter. trying think on thanks, wanted solid ask of

up So changes. changes upsell setting I How account through retention then two, sell-in you is most these been guess have assuming kind for, And are second cross one, stronger sales feeling half? the made. of in how trending been about

Tianyi Jiang

mentioned introduce model earlier are It accounts the hunter-farmer themselves upsell time question. allocated. so do Okay the account the cross-sell. patched we existing specialization to establish take and all owners to yes, new The for great to customers relationship the does and of as

take of It time will dollar that cross-sell expect absolutely you're year. and upsell in the the do right. does uplift the to second So and half values that we

Of course a We more upsell the occurrence Jim that customers. into projects in accounts. lot also of existing the migration migration were talk about existing part of see

of AR the equation, number that's doesn't our that necessarily even to though So part contribute today.

and yes controlling in so, in churn actually terms question. come tech churn though retention, shedding workforces. of freezes higher either QX all like So of are peers though, churn We market we're for those said industry some a see than very do year. see we're we QX historical terms companies that's companies than even Having tech much cooling than see our industry our us Historically, hiring in because the though, below peers or higher compared that better We experiencing still is high rates. churn. down, but do good and this to that of we've now announcing QX to starting usual

the second that pressure see churn of down, its we going So, year. half

Derrick Wood

that that historically one Jim kind full sequential But helpful flat year-end. growth you, at look a dynamic revenue guidance saw revenue QX last XX% accentuate teens last did the exiting Can and in dynamics if just then thanks to at you strength revenue just the would think guidance for QX we year. QX know was your year, did QX? you're on growth, that come for progression you TJ attenuates with and it the historically, yeah, quarter-on-quarter. in of back and AR time year I mid-upper but I have talk color. about about one Okay. kind decent I you're similar guiding of obviously you

that So delta, about big delta XXXX? could such how converging it's should about that's a a why pretty and potentially think talk you we big in

Jim Caci

piece - QX first, of maybe thinking about that first so in of the terms Yes, QX. and

and we're QX think, because the strong I and cautious and do the, public software to historically being So to just looking macro that what think being and QX being key would be we're bigger what's environment and conscientious again terms right stronger of sector about in historically really that is this in of driver, QX there trying then driver industry. you're of be somewhat really being quarter trying QX, as to is a a happening. a where we be our conscientious

our so little conservative bit And get over far. to not there a too and trying just be out SKUs

and really So, about the a still to, trying - no again, But be would just that more QX now, that longer-term in the QX this and than based have pullback stronger. trying then then in same in strong be just shift. of be mix would it year revenue. way seeing ARR would ultimately so the thinking so it what right that's in is we terms to way that this nothing again, environment we're really in there address our terms in conservative. market ARR, be to major definitely on And our we're We

XX%, of roughly so as that have XX%, year, impact impact. will out that without bit getting a of about again, the FX mix the do And we're little just FX forecast to rest show that XX% the seeing and assuming we then us for the we lay about

can I XX%. we of mentioned, to what think we forecast we're FX got think we're see conservative going and dynamics. revenue I ARR the as So as to the being that there's that's really And ARR. those the where on We've being just the get and impacts. on three conservative impacts We're but as are still side, in we on side

to We to we little And is ARR. shift that don't component macroeconomic in then environment the our have third the we're a the component bit trying business include that downward. migration

pretty think strong and that into three we FX about I But So getting to XX%. again, impacting. feel the account getting are XX% components pre-FX then to taking those

Derrick Wood

right, Okay, all thank you.

Jim Caci

Thanks, Derrick.

Operator

question Materne go is The next Evercore. with from Kirk Please ahead.

Kirk Materne

sure can approval aside the are of too some all type for, that don't up? have have are from I would from And trying sense the or very sensitivity price that it get help Two to Thanks get out I'm about additional Are there if out cycles? started perspective you from talk on guess and much. if ones elongated buyer? Is things maybe to that seeing guess, driving close six months? I little there - July. in Yes. saw a can what questions you any of the elongation settle don't saw those long are enterprise close me. Is maybe you three, make bit? I in hire do say, of pushed little a TJ, to get just deals pushed those June factors guess, sales it of there to for a you a deals to bit more just start, started those sales just some

Tianyi Jiang

the pretty is Right. the to to approval Great question. actually continued due happy continue The us help the our process. around with focus we're in our are accounts elongation additional some additional of we Overall, momentum actually of enterprise business. think security. What

So level recently, we actually, obtained another security just of certification.

instances data So around those along security and really move large ops along world. process the cloud sovereignty multiple cloud helps of with and validation enterprises, obviously approval in type this

accelerate some of find the And to So is yes, streamline including to able process another leveraging agreements. to side, clickers avenue approval our process we channel. we're also on be new working

happened typically we key a large businesses, channel this a through So have prenegotiated. leverage What leveraging agreement has enterprise now have to customers. small partner, also but medium large to enterprise those at customers channel already for for those is looking when procurement and we're

really a way leverage a out potential abstract deal that good on actually cycles. the our it negotiation side. accelerate try We're to of to to So channel. way that's We as well going kind as think

Kirk Materne

that That's guess you think you have those you you a trying to renewal right that pulling guess, deals there about alone? Are lay for remind, if you I a product [indiscernible] perspective, product them right now helpful. from use? I Or to us can up you're is have going you SaaS when I guess, are sense now? And from just give of come you perspective? guys Jim, can kind of how levers just pricing a us,

Jim Caci

Sure. Kirk. Good question,

and. little bit think there, your a You got I around contracts the were pricing but our question I renewal, of gist breaking on up for end up

will doing things tell couple you, of I we're a So there's there.

in renewal, building escalations when an are for most and escalation. for there's that the is last back up into they one we in going contracts even our in a built already year, are So so of contracts new effectively price feature into

in suites, are So that's are can there areas our competitive. about areas And we when so pricing, And then where there not as one. other product where number pricing, improve we then where certain think it's competitive. is it

product to So not? a each And building at year that at us looking product best the again, the board consider at just That across into hey, renewal. pricing started our up for do that. when engagement, really in Again, where we're in what's then margin, us upfront. continues those we built of by basis, the we up look things it's value and having as was the the and, It's we're for now. account, we and more for and can individual literally looking on key is all they're it or chance we renewal, not prices last can product something contracts But biggest gives improve pricing the a proposition, more basis. it the by raise them product to

Kirk Materne

way they products Do on you think SaaS change in impact rec. actually, to versus, helpful. to way right government seeing rev on different would they that sort any answer customers the the an that's want in say, sold? Derrick's maybe see have obviously of if could deals in And term Or year? about terms your your anything Are be the this XQ. XQ, That's question now you I or of

you curious So thinking guys about how just I was are kind of that?

Jim Caci

Kirk. Thanks, Yes.

a not over That's that not as So right now, historically hybrid there. seeing - has a I changes group we're so I overall, well no. would that migration done SaaS. mean complete to and some any think say I

of our and of when splits going So be piece, kind trends when revenue I similar think look QX. allocation percentage, would think QX and see to in I you at our which term, QX you're our hybrid SaaS between

expect to expect similar I QX. wouldn't significant would to there. be it I So any change

Kirk Materne

you. Thank

Operator

Group. Nehal Maxim is Chokshi with from The next question Please go ahead.

Nehal Chokshi

Yes. right. Thanks. That's actually Northland Capital Markets. all That's

that for And been growth 'XX. XH updated about year-over-year So that, your flat ARR in ARR XX% 'XX. accelerates has implies incremental incremental to XH guidance for

acceleration starting So have is in incremental that to yet play ARR evidence that, you seen through?

Jim Caci

Yes.

it are We already. seeing

of of and pipeline leading seeing are at saw we slowdown end kind the are call build of that and the but those the of alluding strong. some of we the into to of kind going QX QX, indicators QX in see all let's really So terms we would

And numbers are give QX QX confidence to us so that that and very that alluded just for you attainable. those

Nehal Chokshi

marketing a And sales a year-over-year. was quite sales terms and What's Great. your in of on trajectory marketing? basis, But down. on a up going year-over-year there it. then the it bit and basis, Got Q-o-Q was on on QX

Jim Caci

right? actually One there's the from. is on component to elements, So an that it right, expense FX there's benefit we, side, two

then And of timing component. one the way that's of the component, So some expenses just second the our work.

see of and in then of - sales, we impact business, saw actually areas for to a the now just some turnover them as going of bigger as rectified, but of a TJ up they're obviously, QX had higher-than-expected that's some expenses have also, a in that some in in incurred. And you're we tick timing expenses, well. alluded including some obviously, when of of So terms our have marketing to those kind issue to, been

And to see there part you're improvements of of again, timing, it part in So - you'll it going FX. is QX. obviously, is see

continued related You're timing. But more investments, including marketing again, to going see to spend. just that was

Nehal Chokshi

hedging not presume I FX do And in that have programs place, Great. correct? Okay. you any

Jim Caci

We we no. it, bit hedge hedging programs QX. a in as if and currently, think expenses, built of on. working you that any have a have about don't we're in natural even little between our We revenue seen you've And

Nehal Chokshi

Great.

you. thank Okay,

Operator

question with Fitzgerald. Knoblauch go next ahead. Please The Brett Cantor from is

Brett Knoblauch

for you questions a me. Hi, Tianyi Jiang, couple how are of doing? Just

segments year-over-year that on think First, you're growth that now? basis. do headcount you headcount expect Do to kind to has of you do been positioned robust? off? expect pretty level How remain of big pace increases a you kind of across all Or

Tianyi Jiang

Yes.

the of regions. into our investment lower-cost lot a So headcount is growth

we, as office of So office as example, for our in well expanded operation of R&D terms support. headcount Philippines terms our Vietnam in

So headcount a lot there. from the come of

looking here. are doing at and the redundancy some climate derisking creating macro current in We

some as potentially - towards the So is think function consolidate we time, roles. in it's same a The we would market term to situation efficiency that business the over of so nice front longer But at is of us the at a but massive. short-term clip. - the growing yes, drive

growth. down not we're at looking our slowing business So

Jim Caci

Yes.

I just maybe one additional comment think on that.

same. - keeping of of obviously on thinking that operating put we the think if the based kind - QX think already the we down guidance income revenue So we're of kind - QX and I that brought have you we but illustrated, we've just our guidance out, to

And is what we're expenses. those so that manage actually thinking we're there going to

of conscious where in need think that the like the going because, understanding on and on to will understanding obviously impacts understanding expenses. terms about environment the be that also growth, take much could revenue to this and operating percentage right and there's So be be, we question also if we we're being that the same we investing targets expenses prudent conservative more income. And your economic to to decline for non-GAAP being what revenue recognize answer of we're want original now, our and approach manage a how the there, we're in conservative on as here again, I to we're it's it important those kind that

so again, and doing QX. you'll that, And we're see in that so reflected QX and

Brett Knoblauch

on EduTech then can that maybe maybe rebrand that you MaivenPoint, growth medium to us or ranks a the And how and remind driver of business over of term? priority the as is where a Understood. a big

Tianyi Jiang

We're that. a that's growing Yes. about disclose business actually growth very our the We excited is specific those always one but for it's currently verticals, don't business nicely solutions vertical We really said of us. drivers.

Viva corporate So showcases addition much and bigger pivot to training learning Learning LinkedIn, market is Integration. a the much, in we're towards at rebranding development, looking management a which also and

on as one increase of platform, confidence our it's now are So to accounts we and extend governance said of orchestration, top that data platform, yes, way verticals. We a our high-growth and solutions to vertical this ARPU. showcasing continue into and increased always security

So the there. shiny of really is education success space a example

Brett Knoblauch

the end repurchase helpful. buy forward? quarter, you that we on That's the more going And the schedule activity. I guys think of how Is continued maybe since a to should more share then bit guess predetermine about or just have AdHoc? one

Tianyi Jiang

question. Yes. Good

we year of cash did it It's do in gives we to June us been that do flexibility. in we systematic to looking right subsequent a program. through do have million did we in flexibility that things variety And flexibility is to the restart place, the It June. buyback more but one well, this expect it's of this point, program it of or until implementing a good we XX, I until up gives beauty little and spent I adjust. flexibility. up So end end expect, may about you a And as $XX program of about We know, kind will discontinue, that uses the other well roughly us continue bit QX. of had now, quarter would we have like that spend over that $XX flexibility but the systematic, as would the have next of things, the - of and to was as think were that about little the a more we in million bit be as

Brett Knoblauch

Thanks helpful. it. Appreciate very guys. That's

Tianyi Jiang

you. Thank

Operator

would conference to the TJ over closing now remarks. like turn back I to any This for concludes the question-and-answer session.

Tianyi Jiang

history, that on our we our and with dynamic company's you. environments by make expenditures. I'd just being growing, say geopolitical strategic we shown like uncertain continue ability strong our progress weather to market to priorities prudent Throughout in to this while Thank economic have environment.

a us whom today. customers growing ongoing go-to-market for service strategy deliver positions to new well acquisitions, expansion existing partner the logo we Our ecosystem and exceptional of

in last across initiatives. providing about speaks COVID how SaaS Thank just execution solutions met for our transformation. growing earlier, to and to spend value our the was customers partner their and partners and are accelerate mentioned we And conditions, as firsthand first ecosystem. with Tokyo it's consistent trust they know are on of our their deliver for since privilege advise a AvePoint digital ability we focus faith transformation deployment I leadership all I complex to scenarios This saw you. pandemic, in long-term where navigate team and strong of opportunity time from talk week, as ultimately Munich continued in the our I to our the with and Japanese and quarter, I have This value. well had We shareholder with them being shareholder robustness able see our the top time excited our market partners, the current as the demand to help with EMEA the

Operator

The today's conference has now concluded. Thank attending presentation. you for

now disconnect. may You

AvePoint (AVPT) 11 Aug 222022 Q2 Earnings call transcript