• Cloud ARR: $331 million, up 29% year over year.
• Total ARR: $437 million.
• SaaS Revenue: $80 million, up 27% year over year.
• Total Revenue: $121.2 million, up 17% year over year.
• License Revenue: $28 million, approximately flat year over year.
• Professional Services Revenue: $13.2 million, up 4% year over year.
• International Revenue Growth: 24% year over year.
• Non-GAAP Gross Margin: 76.7%, up from 73.4% in the prior year period.
• Non-GAAP Operating Income: $18.9 million, up from $7.6 million in the prior year period.
• Non-GAAP Diluted EPS: $0.21, up from $0.11 in the prior year period.
• Free Cash Flow: $25.2 million, 21% of total revenue.
• Cash and Cash Equivalents: $285.6 million.
• Total Remaining Performance Obligations: $615.3 million, up 37% year over year.
• Cloud Net Revenue Retention Rate: 119%.
• Number of Clients: Over 2,650, with 728 having an ARR of at least $100,000.

• Warning! GuruFocus has detected 5 Warning Signs with INTA.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Intapp Inc (NASDAQ:INTA) reported strong cloud ARR growth of 29% year over year, reaching $331 million.
• The company achieved a 27% year-over-year increase in SaaS revenue, totaling $80 million.
• Intapp Inc (NASDAQ:INTA) expanded its partner ecosystem by 20% year over year, now including 137 data, technology, and services partners.
• The company successfully introduced new AI capabilities, such as the AI-powered search feature within Intapp Assist for DealCloud.
• Intapp Inc (NASDAQ:INTA) reported a non-GAAP gross margin improvement to 76.7%, up from 73.4% in the prior year period.

Negative Points

• License revenue remained flat year over year at $28 million, indicating challenges in on-premise revenue growth.
• Professional services revenue grew only 4% year over year, suggesting limited expansion in this segment.
• The company experienced back-end loading of deals, with many deals closing in December, which could indicate potential volatility in deal timing.
• Despite strong cloud growth, the transition from on-premise to cloud solutions may lead to short-term revenue recognition challenges.
• Intapp Inc (NASDAQ:INTA) faces inherent lumpiness in large deal landings, which could impact quarterly revenue predictability.

Q & A Highlights

Q: Has there been any change to your guidance philosophy, and how is the demand environment currently? A: John Hall, CEO, stated that the quarter was strong with a robust pipeline and several large deals. The demand remains high, particularly for AI capabilities. David Morton, CFO, added that the guidance remains prudent with significant visibility, and the company is well-positioned with a strong pipeline.

Q: Can you provide insights into the improvement in gross margins and the trajectory for service gross margins? A: David Morton, CFO, noted that the team has been overperforming, leading to profitability below the line. The focus remains on customer satisfaction rather than just top-line growth, and the company has gained leverage from improved service margins.

Q: How are the additional resources in the enterprise account go-to-market motion assisting, and have there been any incremental hirings? A: John Hall, CEO, expressed satisfaction with the organizational changes, emphasizing more coverage in large enterprise accounts. The changes were completed by mid-quarter, resulting in positive outcomes. The company continues to invest in sales and marketing to support growth.

Q: How do you see partnerships, especially with Microsoft, evolving, and how does your AI strategy fit in? A: John Hall, CEO, highlighted the importance of the partner ecosystem, particularly the strategic relationship with Microsoft. The partnership is crucial for AI development and deployment, providing enterprise-grade solutions that are co-sold and co-demonstrated with Microsoft.

Q: Is there an improving growth trend in the legal side of your business, and how does AI and cloud adoption impact this? A: John Hall, CEO, noted strong trends in legal and accounting sectors, driven by digitalization and cloud adoption. The company is well-positioned to provide industry-specific solutions, and AI capabilities are enhancing the value proposition for legal clients.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.