Q4 2023 Intapp Inc Earnings Call
Okay.
Hello, and welcome to <unk> fiscal fourth quarter and year end 2023 financial results conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone and you would have automated message advising your hand is right.
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I'd now like to hand, the conference over to David Trone, Sir you may begin.
Thank you welcome to <unk> fiscal fourth quarter and year end 2023 financial results on the call with me today are John Hall, Chairman and CEO of <unk> and David Morton CFO .
During the course of this conference call, we may make forward looking statements regarding trends strategies.
And the anticipated performance of our business, including guidance provided for our fiscal first quarter and full year 2024.
These forward looking statements are based on management's current views and expectations.
Certain assumptions made as of today's date and are.
Subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward looking statements.
<unk> disclaims any obligation to update or revise any forward looking statements, except as required by law.
Further on today's call. We will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results are.
A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8-K furnished with the SEC prior to this call.
With that I'll hand, the conversation over to John .
Thank you David.
Good afternoon, everyone. Thank.
Thank you for joining us.
We're pleased to be here with you to share the results of our fiscal fourth quarter and full year fiscal 2023.
I'm happy to say that we had another strong year with great results across the business, including cloud <unk> growth of 36% year over year.
We added new clients grew existing accounts expanded our larger enterprise clients and expanded our geographic footprint.
We also released new applied AI capabilities to our platform enhanced our product portfolio through organic development and strategic acquisition and delivered our first profitable year.
As I've shared before in tap serves the overlooked and technologically underserved professional and financial services industry, which we believe is a software tam of approximately $24 billion.
Our target industry includes the world's private capital investment banking legal accounting and consulting firms, we deliver applied AI and a purpose built industry cloud platform.
It is highly differentiated from traditional CRM and ERP systems.
Our industry cloud platform is purpose built specifically for this industry.
Our platform provides a unique data architecture that matches the partnership model and operations of these firms and correctly enables each professionals highly specialized market knowledge and expertise.
And it provides specialized compliance capabilities that match the complex requirements of this highly regulated industry.
And tap solution to help clients increase revenues and returns to operate more efficiently and profitably to manage risk and compliance more effectively and to leverage their collective knowledge for competitive advantage.
Looking at our results for Q4 and for fiscal year 'twenty three it's clear that our value proposition is resonating and the demand for our solutions remained steady.
As I noted earlier in Q4, our cloud <unk> grew 36% year over year to $222 million.
Unknown Executive: Hello and welcome to Intapp fiscal fourth quarter and year end 2023 financial results conference call. At this time, all participants on a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone and you will have automated message advising your hand is raised. To withdraw your question, please press star 11 again.
Cloud now represents 67% of our total <unk> of $330 million.
In the quarter, we earn SaaS and support revenue of $68 million up.
Up 29% year over year, and total revenue of 95 million up 25% year over year.
Additionally, we now have 53 accounts with <unk> of more than $1 million a year over year increase of 29%.
David Trone: I would now like to hand the conference over to David Trone. Sir, you may begin. Thank you.
David Trone: Welcome to Intapp fiscal fourth quarter and year end 2023 financial results. On the call with me today are John Hall, Chairman and CEO of Intapp and David Morton, CFO. During the course of this conference call, we may make forward looking statements regarding trends, strategies and the anticipated performance of our business, including guidance provided for our fiscal first quarter and full year 2024. These forward looking statements are based on management's current views and expectations until certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to different materially from those expressed or implied by such forward looking statements.
We continue to have success, serving the world's largest firms and delivering on complex global requirements as well as consistently adding midsize firms across the market.
This gives us confidence in our cloud platform and applied AI strategy to meet the needs of both the broad market and the highest levels of our market.
And fiscal year 2003 was our first profitable year in which we maintained strong revenue growth.
Entering fiscal year, 'twenty, four with optimism and momentum.
Before I run through key highlights from fiscal year 'twenty three.
I'd like to take a moment to thank and recognize in taps outgoing CFO Steve Robertson.
David Trone: Intapp disclaims any obligation to update or revise any forward looking statements except as required by law. Further on today's call, we will also discuss certain non-gap metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8k furnished with the SEC prior to this call.
And to welcome David Morton, who joined US as CFO in August .
Many of you have had the pleasure of meeting Steve.
Whom I've been fortunate to work with for the past eight years.
I am grateful for his essential leadership in preparing to bring <unk> public and introducing us to the public markets.
David Trone: With that, I'll hand the conversation over to John. Thank you, David.
Steve has graciously staying on for a time and an advisory position to ensure a seamless transition.
John Hall: Good afternoon, everyone. Thank you for joining us. We're pleased to be here with you to share the results of our fiscal fourth quarter and full year fiscal 2023. I'm happy to say that we had another strong year with great results across the business, including cloud ARR growth of 36% year over year. We added new clients, grew existing accounts, expanded our larger enterprise clients and expanded our geographic footprint. We also released new applied AI capabilities to our platform, enhanced our product portfolio through organic development and strategic acquisition and delivered our first profitable year.
He is working closely with David who joins US most recently from his role as CFO of <unk>.
And who brings to <unk>, a long track record of leading companies through periods of growth as.
As well as significant strategic capital markets and operational experience.
I hope you'll join me in congratulating, Steve on his well deserved retirement and.
And in welcoming Dave to his first <unk> earnings call.
Thank you very much Steve.
And we're excited to have you Dave welcome aboard.
Okay.
Now I will share a few highlights from <unk> fiscal year 2023.
John Hall: As I've shared before, in-tap serves the overlooked and technologically underserved professional and financial services industry, which we believe has a software tab of approximately $24 billion. Our target industry includes the world's private capital, investment banking, legal accounting and consulting firms. We deliver applied AI in a purpose-built industry cloud platform that is highly differentiated from traditional CRM and ERP systems. Our industry cloud platform is purpose-built specifically for this industry. Our platform provides a unique data architecture that matches the partnership model and operations of these firms and correctly enables each professionals highly specialized market knowledge and expertise, and it provides specialized compliance capabilities that match the complex requirements of this highly regulated industry.
I'll start with innovation, which continued to fuel our growth this year.
As I previously shared interest industry cloud is designed specifically for the unique operating and compliance needs of professional and financial services firms.
Our cloud solutions were built for the way these firms operate.
Their business model focuses on leveraging the partnership's collective specialized knowledge expertise experience and relationships to win business and deliver value for their clients and investors.
As well our industry cloud features a robust set of applied AI capabilities that meet the specific needs and unique challenges of our client firms.
Advances in generative AI have received a fair share of attention over the past year.
But it's important to note that in tap supplied AI strategy predates the current bonds.
John Hall: Intapp solutions help clients increase revenues and returns to operate more efficiently and profitably, to manage risk and compliance more effectively, and to leverage their collective knowledge for competitive advantage. Looking at our results for Q4 and for fiscal year 23, it's clear that our value proposition is resonating and the demand for our solutions remains steady. As I noted earlier, in Q4, our cloud ARR grew 36% year over year to 222 million dollars.
With a series of applied AI technologies like automated time capture AI assisted conflicts checking and self maintaining contacts going back as far as the decade and in wide use across our client base today.
In fiscal year 'twenty, three we continued to advance our applied AI portfolio, releasing new capabilities to consistently grow our value for our clients.
We continue to enhance our relationship intelligence capabilities within the deal cloud solution throughout the year.
We released our new relationship paths capability, which leverages applied AI to help professionals identify the optimal referral pathways to high value contacts across the firm's network.
John Hall: Cloud now represents 67% of our total ARR of $330 million. In the Q4, we earned fast and support revenue of $68 million, up 29% year over year, and total revenue of 95 million, up 25% year over year. Additionally, we now have 53 accounts with ARR of more than $1 million, a year over year increase of 29%. We continue to have success serving the world's largest firms and delivering on complex global requirements, as well as consistently adding midsize firms across the market.
As well as through third party executive and board data provided by our partners.
The new capability enables higher quality outreach.
And that helps our clients to drive growth and greater success in winning new business.
Already more than 250 firms are transforming how they engage with their clients and develop new business using our applied AI relationship intelligence tools.
As just one example, a leading law firm said it helps them to resurrect business with our former clients.
John Hall: This gives us confidence in our cloud platform and apply AI strategy to meet the needs of both the broad market and the highest levels of our market. And fiscal year 23 was our first profitable year, in which we maintain strong revenue growth.
Our list of adopters includes some of our largest clients who see significant value in unlocking the full business potential of their organizations professional network using intest applied AI.
In Q3, we augmented our applied AI E mail signature parsing engine, which leverages large language models to automatically populate and maintain key contact data.
John Hall: We're entering fiscal year 24 with optimism and momentum.
John Hall: Before I run through key highlights from fiscal year 23, I'd like to take a moment to thank and recognize in taps outgoing CFO Steve Robertson. And to welcome David Morton, who joined us as CFO in August. Many of you have had the pleasure of meeting Steve, whom I've been fortunate to work with for the past eight years. I'm grateful for his essential leadership in preparing to bring in tap public and introducing us to the public markets.
To work across multiple languages.
This new applied AI capability helps us to meet the growing needs of our international clients extending our global opportunity.
One of our largest law firm clients with thousands of partners is now using this feature across their global firm in eight languages.
In Q4, we also enhanced the compliance features.
And our applied AI relationship intelligence system to further protect clients working on sensitive engagements with high confidentiality requirements.
John Hall: Steve is graciously staying on for a time in an advisory position to ensure a seamless transition. He is working closely with David, who joins us most recently from his role as CFO of DigiSurf, and who brings in tap a long track record of leading companies through periods of growth. As well as significant strategic capital markets and operational experience. I hope you'll join me in congratulating Steve on his well deserved retirement and in welcoming Dave to his first in tap earnings call. Thank you very much, Steve. And we're excited to have you Dave. Welcome aboard.
The feature will give clients the ability to fully leverage their strongest relationships maintained contact data and promote alignment with their partners work all while complying with complex information governance regulations.
Additionally, we expanded applied AI within our risk and compliance solution this year.
We released a new vendor terms feature which eliminates manual effort and improves data quality versus manually entering and tracking vendor agreements via a spreadsheet.
John Hall: Okay, now I'll share a few highlights from in taps fiscal year 2020. 33. I'll start with innovation, which continued to fuel our growth this year. As I've previously shared, Intapp's industry cloud is designed specifically for the unique operating and compliance needs of professional and financial services firms. Our cloud solutions were built for the way these firms operate. Their business model focuses on leveraging the partnership's collective specialized knowledge, expertise, experience, and relationships to win business and deliver value for their clients and investors.
This is a great example of applied AI, not only eliminating manual tasks, but also adding value in the form of proactive risk mitigation and enhanced client experience.
And <unk> 200 clients using vendor terms told us they have seen a 30% improvement in the efficiency of their vendor process saving the firm time and money while lowering risk.
And in Q4, we expanded our compliance applied AI to identify potential conflicts earlier in the business development cycle at the opportunity level.
Our new early stage alerts help accelerate conflicts decision, making and allows firms to focus resources on the right deals.
John Hall: As well, our industry cloud features a robust set of applied AI capabilities that meet the specific needs and unique challenges of our client firms. Advances in generative AI have received a fair share of attention over the past year, but it's important to note that Intapp's supply AI strategy predates the current buzz. With a series of applied AI technologies like automated time capture, AI assisted conflicts checking, and self maintaining contacts going back as far as a decade, and in wide use across our client base today.
Turning to our partner ecosystem.
I am pleased to share that our partnership with Microsoft continues to evolve and grow.
During fiscal year 'twenty, three we released new products and capabilities that increase the value our clients derive from the Microsoft tools that theyre professionals rely on every day.
For instance, in tap collaboration and content solutions now enables firms to securely share documents with their clients via Microsoft teams.
While meeting stringent compliance requirements.
John Hall: In fiscal year 23, we continue to advance our applied AI portfolio, releasing new capabilities to consistently grow our value for our clients. We continue to enhance our relationship intelligence capabilities within the deal cloud solution throughout the year. We released our new relationship paths capability, which leverages applied AI to help professionals identify the optimal referral pathways to high-value contacts across the firm's network, as well as the new capability enables higher quality outreach that helps our clients to drive growth and greater success in winning new business.
Additionally, our deal cloud solution now features new capabilities using both Microsoft's Azure open AI GPT LLM.
And embedded document management and collaboration which seamlessly integrates Microsoft 365 capabilities into Dealmakers primary deal and client management workflow.
And further our operations and finance solution can now automatically capture usage of teams.
To help time keepers pre populate their timesheets, which advances our zero entry strategy and incorporates Microsoft 365 productivity tools directly into firm specialized operational workflows.
This year in tap was officially recognized as a top tier partner of Microsoft, which fewer than 1% of partners ever achieved.
John Hall: Already, more than 250 firms are transforming how they engage with their clients and develop new business using our applied AI relationship intelligence tools. As just one example, a leading law firm said it helps them to resurrect business with a former client. Our list of adopters include some of our largest clients who see significant value in unlocking the full business potential of their organization's professional network using Intapp's applied AI. In Q3, we augmented our applied AI email signature parsing engine, which leverages large language models to automatically populate and maintain key contact data to work across multiple languages.
Additionally in March our two organizations co hosted an interactive two day summit at Microsoft headquarters in Redmond.
Drew <unk> from the worlds top law firms.
Last quarter in tap completed deployment of all of our solutions to Azure as part of our Microsoft partnership strategy and in Q4, <unk> solutions became available to clients on the Microsoft Azure marketplace.
This new milestone enables professional and financial services firms to more easily discover purchase and deploy and tap solutions.
As one example.
In Q4 PSP investments.
One of Canada's largest pension investors selected deal cloud over a large horizontal CRM competitor.
John Hall: This new applied AI capability helps us to meet the growing needs of our international clients, extending our global opportunity. One of our largest law firm clients with thousands of partners is now using the feature across their global firm in eight languages. In Q4, we also enhanced the compliance features in our applied AI relationship intelligence system to further protect clients working on sensitive engagements with high confidentiality requirements. Armin's. The feature will give clients the ability to fully leverage their strongest relationships, maintain contact data, and promote alignment with their partners' work, all while complying with complex information governance regulations.
To manage deals across their global investment teams.
PSP also purchased our content and collaboration solution.
To extend integration increased productivity and better leverage its Microsoft investment.
This deal is a great example of the way our Microsoft partnership adds outsized value for our clients.
<unk> solutions available via the Azure marketplace.
Simplify the purchasing process and allow PSP to utilize some of their pre committed spend as part of their existing Microsoft Azure agreement to acquire <unk> technology.
We also expanded our partner ecosystem further during the year, including several new third party data sources.
John Hall: Additionally, we expanded apply AI within our risk and compliance solution this year. We released a new vendor terms feature, which eliminates manual effort and improves data quality versus manually entering and tracking vendor agreements via spreadsheet. This is a great example of applied AI, not only eliminating manual tasks, but also adding value in the form of proactive risk mitigation and enhanced client experience. An AML-200 client using vendor terms told us they have seen a 30% improvement in the efficiency of their vendor process saving the firm time and money while lowering risk.
In the professional and financial services industry access to embedded market data coupled with the clients own experiential data is key to generating the best possible information for investment and client selection and growth.
In fiscal year 'twenty, three we integrated more relationship mapping data with new partners like <unk> and <unk>.
We brought in critical property level data for our corporate real estate clients with Sherry.
And we expanded deal clouds ability to support portfolio monitoring with untapped.
I'll turn now to key deals and software implementations.
We've continued to steadily grow our client base through cross sell up sell and the acquisition of new logos, including large enterprise clients.
John Hall: And in Q4, we expanded our compliance apply AI to identify potential conflicts earlier in the business development cycle at the opportunity level. Our new early stage alerts help accelerate conflict decision making and allow firms to focus resources on the right deals.
We ended our fiscal year, serving more than 2300 premier firms across our target verticals.
With our strongest growth at the $100000 and $1 billion levels.
John Hall: Turning to our partner ecosystem. I'm pleased to share that our partnership with Microsoft continues to evolve and grow. During fiscal year 23, we released new products and capabilities that increase the value our clients derive from the Microsoft tools that their professionals rely on every day. For instance, in tap collaboration and content solutions now enable firms to securely share documents with their clients via Microsoft teams, while meeting stringent compliance requirements. Additionally, our deal cloud solution now features new capabilities using both Microsoft's Azure Open AI GPT LLM and embedded document management and collaboration, which seamlessly integrates Microsoft 365 capabilities into deal makers primary deal and client management workflow.
John Hall: And further, our operations and finance solution can now automatically capture usage of teams to help timekeepers pre-populate their time sheets, which advances our zero entry strategy and incorporates Microsoft 365 productivity tools directly into firm specialized operational workflows. This year, in tap was officially recognized as a top tier partner of Microsoft, which fewer than 1% of partners ever achieved. Additionally, in March, our two organizations co hosted an interactive two day summit at Microsoft headquarters in Redmond that drew CIOs from the world's top law firms.
You are a few new logos that we added this year.
In Q4, a large accounting firm based in Canada shows our risk and compliance solution to better manage firm wide risk and improve internal workflows.
We will be replacing our legacy homegrown system as the needs of the firm grow.
They wanted a cloud based solution that leverages applied AI to better serve their partnership.
Additionally, we had a notable win in Q4 that combines a new logo and upsell in one deal.
Nexen Pruitt, our multi specialty law firm and longtime <unk> client recently merged with U S based firm Maynard Cooper and Gail.
Leadership of the newly Dove Maynard Nexen.
While the tremendous value and efficiencies that our solutions provided and chose to expand the use of <unk> solutions across the merged firm significantly increasing the number of licensed users.
Mergers across professional services continues to be a driver of growth given our ability to scale as the platform for our clients and help them consolidate their it strategy.
And to provide a few updates on some deals that we discussed in fiscal year 'twenty three.
A top asset management arm of one of the largest investment banks replaced its horizontal CRM with deal cloud.
John Hall: Last quarter, in tap completed deployment of all of our solutions to Azure as part of our Microsoft partnership strategy and in Q4, in tap solutions became available to clients on the Microsoft Azure marketplace. This new milestone enables professional and financial services firms to more easily discover, purchase and deploy in tap solutions. As one example, into four PSP investments, one of Canada's largest pension investors selected Deal Cloud over a large horizontal CRM competitor to manage deals across their global investment teams.
Recently, they told us that our purpose built solution is helping drive adoption.
Far beyond what they ever achieved with their legacy CRM.
A top global management consulting firm executed a multi year contract for our risk and compliance solution.
We delivered it in less than six months.
Showcasing our ability to apply best practices across our target markets in this case in consulting.
John Hall: PSP also purchased our content and collaboration solution to extend integration, increase productivity, and better leverage its Microsoft investment. This deal is a great example of the way our Microsoft partnership adds outsized value for our clients. Intapp solutions available via the Azure marketplace, simplify the purchasing process and allow PSP to utilize some of their pre-committed spend as part of their existing Microsoft Azure agreement to acquire Intapp's technology. We also expanded our partner ecosystem further during the year, including several new third-party data sources.
And practice a fully virtual law firm selected our conflict solutions delivered via the Microsoft Azure cloud.
This client now represents a new generation of professional firms relying on a digital platform to run and grow the firm.
And our cross selling and up selling success in our existing accounts continues to drive strong net revenue retention.
For instance.
This year, a large global financial advisory and asset management firm expanded its deal cloud licenses to their entire financial advisory group, which numbers in the thousands of users. The software it was fully implemented and new users were alive in 90 days.
This is a great example of how delivering client success on our initial sales can lead to large expansion across departments and use cases.
John Hall: In the professional financial services industry access to embedded market data coupled with a client's own experiential data is key to generating the best possible information for investment and client selection and growth. In fiscal year 23, we integrated more relationship mapping data with new partners like FBLR and BORDEX. We brought in critical property-level data for our corporate real estate clients with Cherry, and we expanded Deal Cloud's ability to support portfolio monitoring with Intapp.
One of the world's largest accounting firms and a current <unk> client <unk>.
Selected deal cloud for their corporate development team to foster more effective M&A.
Delivering success here sets us up for future growth and new use cases across the firm.
And in an La top 25 ranked law firm.
Chose to migrate their existing in tap operations and finance solution to the cloud.
And to purchase our risk and compliance solution and our new build stream offering.
John Hall: I'll turn now to key deals and software implementations. We've continued to steadily grow our client base through cross-sell, upsell, and the acquisition of new logos, including large enterprise clients. We ended our fiscal year serving more than 2,300 premier firms across our target verticals, with our strongest growth at the $100,000 and $1 million levels. Here are a few new logos that we added this year. In Q4, a large accounting firm based in Canada shows our risk and compliance solution to better manage firm-wide risk and improve internal workflows.
This is a great example of the opportunity we have to expand our footprint as we migrate our existing clients to the cloud.
Touching briefly on M&A.
During fiscal year 'twenty, three we continued to add important technology capabilities to our cloud portfolio through acquisition.
In Q4 in tap acquired Paragon data labs.
Paragon is cloud based software helps firms to track and monitor employee compliance.
<unk> like personal trading and political donations are centrally managed.
So personal conflicts of interest or policy violations can be spotted an address.
John Hall: We'll be replacing a legacy homegrown system as the needs of the firm grow. They wanted a cloud-based solution that leverages applied AI to better serve their partnership. Additionally, we had a notable win in Q4 that combined a new logo and an upsell in one deal. Nexon Pruitt, a multi-specialty law firm, and longtime Intapp client recently merged with US-based firm Maynard Cooper and Gale. Leadership of the newly dubbed Maynard Nexon saw the tremendous value and efficiencies that our solutions provided and chose to expand the use of Intapp solutions across the merged firm, significantly increasing the number of licensed users.
The product now marketed as intact employee compliance enhances our existing risk and compliance solutions, which are all purpose built for the unique regulatory compliance needs of our client firms.
Already the investment has proven to help differentiate us with further enhanced compliance capabilities for the regulated markets we serve.
Interest in employee compliance is strong and is bolstered by the evolving nature of the regulatory environment.
Including the PC <unk> recent proposal to strengthen auditor requirements to identify and remediate noncompliance.
Recent wins include a global investment bank that will use the solution to automate previously manual workflows and a large national accounting and advisory firm that will replace a homegrown solution with hours to ensure compliance with independence requirements.
John Hall: Mergers across professional services continue to be a driver of growth, given our ability to scale as a platform for our clients and help them consolidate their IT. Tratogy. And to provide a few updates on some deals that we discussed in fiscal year 23. A top asset management arm of one of the largest investment banks replaced its horizontal CRM with Deal Cloud. Recently, they told us that our purpose-built solution is helping drive adoption far beyond what they ever achieved with their legacy CRM.
This year, we also integrated capabilities from our fiscal year 'twenty to build stream acquisition to enhance our entire operations and finance solution.
The broader solution integrates compliance across time entry and pre billing processes in a way that accelerates the work to collect cycle.
John Hall: A top global management consulting firm executed a multi-year contract for our risk and compliance solution. We delivered it in less than six months, showcasing our ability to apply best practices across our target markets, in this case, in consulting. And practice of fully virtual law firm selected our conflict solutions delivered via the Microsoft Azure Cloud. This client now represents a new generation of professional firms relying on a digital platform to run and grow the firm.
Improving realization rates and driving profitability.
These are compelling hard ROI benefits for any firm.
We are pleased with the cross selling we have seen as we grow the value provided to our client base.
In conclusion.
We're proud of our strong performance in fiscal year 'twenty three and we're excited about our continued growth opportunity in fiscal year 'twenty four.
We are serving a durable end market.
With our deeply differentiated industry cloud platform.
With an applied AI and compliance strategy.
John Hall: And our cross selling and upselling success in our existing accounts continues to drive strong net revenue retention. For instance, this year, a large global financial advisory and asset management firm expanded its deal cloud licenses to their entire financial advisory group, which numbers in the thousands of users. The software was fully implemented and new users were live in 90 days. This is a great example of how delivering client success on our initial sales can lead to large expansion across departments and use cases.
Our subscription revenue model is highly predictable.
And we see continued opportunity both to add new clients across a broad Tam.
And to deliver greater value to expand significantly within our existing client base.
We have a great growth opportunity to drive cloud and AI adoption and modernization across all of these industries.
As always I'd like to thank our clients our partners our investors our board and our global in tap team, whose teamwork and dedication led to such a successful second year as a public company.
John Hall: One of the world's largest accounting firms and a current Intel client selected Deal Cloud for their corporate development team to foster more effective M&A. Delivering success here sets us up for future growth and new use cases across the firm. And an AM law top 25 ranked law firm chose to migrate their existing in-tap operations and finance solution to the cloud and to purchase our risk and compliance solution and our new build stream offering.
Thank you all very much.
Okay, now I will turn things over to our CFO , David Morton Dave.
Thanks, John and thanks, everyone for joining us today before I get started I want to express my appreciation to John as well as the entire board and management team are providing me an opportunity to join this great company.
And tap has demonstrated strong resilient growth performance against a tough macro backdrop and I am a firm believer in our growth momentum with our target industry markets.
John Hall: This is a great example of the opportunity we have to expand our footprint as we migrate our existing clients to the cloud. Touching briefly on M&A, during fiscal year 23, we continue to add important technology capabilities to our cloud portfolio through acquisition.
I'm looking forward to working with our team to execute against our untapped growth opportunities and continue to deliver strong profitable growth as the company scales.
As a reminder, all of our financial figures, we will discuss today are non-GAAP , except for revenue and revenue growth.
John Hall: In Q4, Intel acquired Paragon Data Labs. Paragon's cloud-based software helps firms to track and monitor employee compliance. Elements like personal trading and political donations are centrally managed so personal conflicts of interest or policy violations can be spotted and addressed. The product now marketed as intap employee compliance enhances our existing risk and compliance solutions, which are all purpose-built for the unique regulatory compliance needs of our clients. Farms. Already, the investment has proven to help differentiate us with further enhanced compliance capabilities for the regulated markets we serve.
Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures are provided in our earnings release and supplemental financial tables.
Turning to our results I'm pleased to report that for the fourth quarter of our fiscal year.
Cloud <unk> was up 36% year over year, and total IRR was up 22% year over year.
SaaS and support revenue was $67 8 million up 29% year over year, reflecting both new sales to new clients and Upsells and cross sells to existing clients of <unk> purpose built cloud solutions.
<unk>.
Subscription license revenue was $12 2 million down 9% year over year as expected due to a reduction of multiyear renewals as we continue to move more of our clients to the cloud.
John Hall: Interested employee compliance is strong and is bolstered by the evolving nature of the regulatory environment, including the PCAOB's recent proposal to strengthen auditor requirements to identify and remediate non-compliance. Recent wins include a global investment bank that will use the solution to automate previously manual workflows and a large national accounting and advisory firm that will replace a homegrown solution with ours to ensure compliance with independence requirements. This year we also integrated capabilities from our fiscal year 22 build stream acquisition to enhance our intapp operations and finance solution.
Professional services revenue was $14 6 million up 55% year over year, reflecting an accumulation of large clients throughout the year and completion of implementation projects for those large clients coupled with our continued strong attach rate.
Total revenue was $94 6 million up 25% year over year, driven primarily by sales of our cloud solutions as well as by strong growth in professional services revenue, partially offset by an anticipated decline in license revenue.
Q4, total non-GAAP gross margin was 69, 9% as compared to 68, 2% in the prior year period.
Reflecting improved professional services gross margins and a previously mentioned reclassification due to an organizational realignment.
John Hall: The broader solution integrates compliance across time entry and pre-building processes in a way that accelerates the work to collect cycle, improving realization rates and driving profitability. These are compelling hard ROI benefits for any firm. We are pleased with the cross-selling we have seen as we grow the value provided to our client base.
This was partially offset by revenue mix impacts related to license and professional services revenue.
non-GAAP operating expenses were $63 2 million at $7 $9 million increase year over year as we continued to invest in sales marketing and product development to support our growth.
John Hall: In conclusion, we're proud of our strong performance in fiscal year 23 and we're excited about our continued growth opportunity in fiscal year 24. We are serving a durable end market with our deeply differentiated industry cloud platform with an applied AI and compliance strategy. Our subscription revenue model is highly predictable and we see continued opportunity both to add new clients across a broad tan and to deliver greater value to expand significantly within our existing client base. We have a great growth opportunity to drive cloud and AI adoption and modernization across all these industries.
non-GAAP sales and marketing expense was $28 6 million, a $4 million increase year over year as a function of increased head count and related sales commissions to capture new business and our growing markets along with the previously mentioned organizational realignment.
non-GAAP R&D expense was $21 7 million, a $5 $5 million increase year over year, as we increased head count and made investments in our product roadmap.
non-GAAP G&A expense was $12 $9 million.
One 6 million decrease year over year as we harvest some back office cost reductions and continue to see some leverage and scalability in the business.
non-GAAP operating profit was $3 million as compared to our fourth quarter fiscal 2022, non-GAAP operating loss of $3 9 million.
non-GAAP net income per fully diluted share was <unk> <unk> in the fourth quarter of fiscal 2023 as compared to a loss of <unk> <unk> in the fourth quarter of fiscal 2022.
John Hall: As always, I'd like to thank our clients, our partners, our investors, our board and our global intapp team whose teamwork and dedication led to such a successful second year as a public company. Thank you all very much.
Moving to our full year results for fiscal 2023.
Cloud <unk> grew 36% year over year to $222 3 million.
David Morton: Okay, now I'll turn things over to our CFO, David Morton. Dave, thanks John and thanks everyone for joining us today. Before I get started, I want to express my appreciation to John as well as the intapp board and management team up providing me an opportunity to join this great company. Intapp has demonstrated strong, resilient growth performance against a tough macro backdrop and I'm a firm believer in our growth momentum with our target industry markets.
At June 32023, cloud IRR represented 67% of our total IRR up from 60% a year ago, reflecting our cloud first business focus and the market's ongoing shift to the cloud.
Total IRR grew 22% year over year to $332 million.
Overall, we continue to execute our land and expand model ending the quarter with more than 2300 clients 603 of which had <unk> about.
David Morton: I'm looking forward to working with our team to execute against our untaped growth opportunities and continue to deliver strong, profitable growth as the company skates. As a reminder, all of our financial figures we will discuss today are non-gap, except for revenue and revenue growth. Our gap financial results, along with reconciliations of gap to non-gap financial measures, are provided in our earnings release and its supplemental financial tables.
At least $100000 up from 506 in the prior year period.
Trailing 12 months net revenue retention rate was within our expected range of 113% to 117%.
At the end of fiscal year 'twenty, three we have 53 clients of more than $1 million on IRR of 29% from 41 clients at the end of fiscal 2022.
SaaS and support revenue increased 31% year over year to $252 $3 million, reflecting continued strength in the sale and adoption of our cloud solutions.
David Morton: Turning to our results, I'm pleased to report that for the fourth quarter of our fiscal year. Cloud ARR was up 36% year-to-year. Fast and support revenue was 67.8 million of 29% year-to-year, reflecting both new sales to new clients and upsells and cross sales to existing clients of Intapp's purpose-built cloud solutions. Subscription license revenue was 12.2 million, down 9% year-to-year, as expected, due to a reduction of multi-year renewals as we continue to move more of our clients to the cloud.
Subscription license revenue increased 11% year over year to $49 million, reflecting a significant number of multiyear contract renewals and product value base renewal price increases.
Professional services revenue increased 42% year over year to $49 $6 million in part due to strong attach rates for a number of large new clients that we closed during this year, particularly in financial services.
David Morton: Professional services revenue was 14.6 million of 55% year-to-year, reflecting an accumulation of large clients throughout the year and completion of implementation projects for those large clients, coupled with a continued strong attach rate. Total revenue was 94.6 million, up 25% year-to-year, driven primarily by sales of our cloud solutions, as well as by strong growth and professional services revenue, partially offset by an anticipated decline in license revenue. Q4 total non-gab gross margin was 69.9%, as compared to 68.2% in the prior year period, reflecting improved professional services gross margins and a previously mentioned reclassification due to an organizational realignment.
Total revenue increased 29% year over year, it's at $359 million.
non-GAAP gross margin was 71, 1% up from 68, 1% in the prior year as a result of increased services gross margins and the previously mentioned organizational alignment.
Overall non-GAAP operating expense was $238 9 million, a $46 6 million increase year over year as we invested in a variety of resources in support of the growth of the business.
As a result, non-GAAP operating profit was $10 5 million as compared to operating loss of $7 1 million in the prior fiscal year, which also represents our first full year of profitability.
non-GAAP net income per share was <unk> 11 in fiscal 'twenty, three as compared to a net loss per share of <unk> 12 in fiscal 'twenty two.
David Morton: This was partially offset by revenue mix impacts related to license and professional services revenue. Non-gab operating expenses were 63.2 million, at 7.9 million increased year-to-year, as we continue to invest in sales, marketing, and product development to support our growth. Non-gab sales and market expense was 28.6 million, a 4 million increased year-to-year, as it functioned an increased headcount and related sales commissions to capture new business and our growing markets along with a previously mentioned.
In terms of the balance sheet, we ended the quarter with $134 million in cash and cash equivalents, including the proceeds from our follow on common stock offering in may of 2023.
Our cash flow from operations was $27 $5 million for the fiscal 'twenty three as a result of growing profitability at scale.
Now turning to our outlook.
For the first quarter of fiscal 'twenty, four we expect SaaS and support revenue of between 70 and $71 million.
David Morton: Non-gab R&D expense was 21.7 million, a 5.5 million increased year-to-year, as we increased headcount and made investments in our product roadmap. Non-gab TNA expense was 12.9 million, a 1.6 million decreased year-to-year, as we harvest some back office cost reductions, and continue to see some leverage and scale ability in the business. Non-gab operating in profit was 3.9 million, as compared to our fourth quarter fiscal 2022, non-gab operating loss of 3.9 million. Non-gab net income for fully diluted share was $0.4 in the fourth quarter of fiscal 2023, as compared to a loss of $0.4 in the fourth quarter of fiscal 2022.
Total revenue in the range of $96 million to $97 million.
non-GAAP operating profit in the range of two five to $3 5 million.
And non-GAAP per share results of approximately three <unk>.
Using a fully diluted share count weighted for the quarter of approximately 82 million common shares outstanding.
For the full year fiscal 'twenty, four we expect SaaS and support revenue of between 306 at $310 million in total revenue in the range of $419 million to $423 million.
We also expect non-GAAP operating profit to be in the range of 20% to $24 million.
And non-GAAP net income per share in the range of 20 to 24 using.
Using a fully diluted share count weighted for the fiscal year 'twenty four of approximately 83 million common shares outstanding.
David Morton: Moving to our full year results for fiscal 2023. Cloud ARR grew 36% year-rear to 222.3 million. At June 30th, 2023, Cloud ARR represented 67% of our total ARR up from 60% a year ago. We selected our cloud first business focus and the market's ongoing shift to the cloud. Total ARR grew 22% year-rear to 330.2 million. Overall, we continued to execute our land and expand model, ending the quota with more than 2,300 clients, 603 of which had ARR of at least $100,000 of from 506 in the prior year period.
Thank you and with that John and I look forward to taking your questions. Operator. Please go ahead.
Thank you, ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone.
And then wait to hear your name announce to withdraw your question. Please press star one again.
We ask that you limit yourself to one question and one follow up.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Alex Skylar with Raymond James Your line is open.
Great. Thank you.
David Morton: Our trailing 12 months, net revenue retention rate was within our expected range of 113% to 117%. At the end of fiscal year 23, we have 53 clients of more than $1 million an ARR of 29% from 41 clients at the end of fiscal 2022. SAS and support revenue increased 31% year-rear to 252.3 million, reflecting continued strength in the sale and adoption of our cloud solutions. Subscription license revenue increased 11% year-rear to 49 million, reflecting a significant number of multi-year contract renewals and product value-based renewal price increases.
Starting with you I just wanted to follow up on that <unk> 25.
That cloud conversion and cross sell when you talked about in the quarter can you just talk about why the migration to the cloud.
Drove the risk and compliance and then Bill stream cross sells.
And when that doesn't do expansion stories like that at all change your view on accelerating that customer shift to the cloud.
Yeah.
Thanks, Alex.
So.
The migration to the cloud with one pieces the firm's objectives.
And for most of the firms as we've talked about on some earlier calls.
We have agreement and a plan to go to the cloud and that.
It's more of a practical.
David Morton: Professional services revenue increased 42% year-rear to 49.6 million in part due to strong attachments for a number of large new clients that we closed during this year, particularly in financial services. Total revenue increased 29% year-rear to 350.9 million. Non-gap gross margin was 71.1% off from 68.1% in the prior year as a result of increased services gross margins and previously mentioned organizational pre-alignment. Overall, non-gap operating expense was 238.9 million, a 46.6 million increase year-rear as we invested in a variety of resources and supported the growth of the business.
Transition that they've got to work through how are they going to do that and what sequence. Today. So we're past the point I think in the market where the firms are really struggling with the cloud transition is more practical issues in this case bill.
Bill stream was an exciting new offering that we could come back and talk to the firm about that helps create hard ROI.
And then they use that as the driving function to do the whole project to move everything to the cloud. So it's just an example of us bringing up some innovative new offerings. In this case through an M&A transaction that we did.
That provides the project for the firm to prioritize the projects and I think generally as we continue to bring out more and more innovation, particularly AI in the cloud, which is the only way they can get it from us we're seeing more of that and.
David Morton: As a result, non-gap operating profit was 10.5 million, as compared to operating loss of 7.1 million in the prior fiscal year, which also represents our first full-year profitability. Non-gap net income per share was 11 cents in fiscal 23, as compared to a net loss per share of 12 cents and fiscal 22.
And I do think it is having an effect and youre seeing some of that.
Progress on the cloud numbers.
Okay, great color there.
Dave one for you just.
Of the right framework to think about <unk> growth kind of relative to that 20% revenue guide.
And in that $1 13 to 117 <unk> range.
David Morton: In terms of the balance sheet, we ended the quarter with 130.4 million in cash and cash equivalents, including the proceeds from our follow-on common stock offering in May of 2023. Our cash flow from operations was 27.5 million for the fiscal 23 as a result of growing profitability at scale.
<unk> delivered in FY.
<unk> 23 is that still the right framework for 'twenty 'twenty four thank you.
Thanks, Alex.
Yes.
Similarly, our per.
<unk> quarter by quarter, but that is that is the correct framework that we're working under.
And as John articulated in where a lot of our prepared remarks is that continued expansion motion that we continue to work through.
David Morton: Now turning to our outlook. For the first quarter of fiscal 24, we expect fast and support revenue of between 70 and 71 million in total revenue in the range of 96 to 97 million. Non-gap operating profit in the range of 2.5 to 3.5 million. William, and non-gap per share results of approximately three cents using a fully deluded share count weighted for the quarter of approximately 82 million common shares outstanding. For the full year fiscal 24, we expect fast and support revenue of between 306 and 310 million in total revenue and the range of 419 to 423 million.
And our model continues to be very beneficial from that as we continue to land and that have really good stay in motion, which then obviously is reflected in our commentary as well.
Our results that we posted for the quarter end of the year.
Okay. Thank you Bob.
Thank you.
Please standby for our next question.
Our next question comes from Kevin Mcveigh with Credit Suisse. Your line is open.
Great. Thanks, so much and let me add my congratulations to Stephen welcome Dave as well.
Hey.
Impacting the 24 guidance a little bit it seems like fusion.
David Morton: We also expect non-gap operating profit to be in the range of 20 to 24 million. And non-gap net income per share in the range of 20 cents to 24 cents using a fully deluded share count weighted for the fiscal year 24 of approximately 83 million common shares outstanding.
Just really really nice leverage on the EBIT line operating line given our revenue growth.
Is that all just kind of the revenue where you shouldnt see maybe some of the benefits.
So the legacy cost starting to run off and just again, just really really nice outcome from a leverage perspective, we can unpack that a little bit.
David Morton: Thank you, and with that, John and I look forward to taking your questions.
Unknown Executive: Operator, please go ahead. Thank you. Ladies and gentlemen, and the reminder to ask the question, please press star 1-1 on your telephone and then wait to hear your name announced. To withdraw your question, please first star 1-1 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.
Yes, Kevin Thank you Sean.
We're excited about the progress that the company is making as you know we came public.
Showing the non-GAAP operating profit in this year, we did so we felt that was important.
Milestone for us to achieve in 'twenty three and we've also said that we've got our profitable growth strategy generally so we're going to be consistently pursuing that as we grow the business and some of this is scalability.
Alexander Sklar: Our first question comes from the line of Alex Skyler with Raymond James. The line is open. Great. Thank you. John, I'm starting with you. I just wanted to follow up on that AMLOT 25 that cloud conversion in Crossel when you talked about in the quarter. Can you just talk about why the migration of the cloud drove the risk and compliance and then build streamed Crossels. And with that, does it do expansion stories like that at all change your view on accelerating that customer shift to the cloud?
And Dave can talk to you a little bit more about that I think some of it is some important work that Dave's group is doing on.
Different operational improvements that we can make now that we've achieved some more scale to.
To improve efficiency further so it's a it's a.
Combination I think.
Revenue growth good progress in the marketplace consistent demand real transformation opportunity to grow a big company here.
And those scaling the coast from that and then some conscious work.
Alexander Sklar: Thanks, Alex. So the migration to the cloud was one piece of the firm's objective. And for most of the firms, as we talked about in some earlier calls, we have a agreement and a plan to go to the cloud with them. It's more of a practical transition that they've got to work through. How are they going to do that in one sequence today? So we're past the point I think in the market where the firms are really struggling with the cloud transition.
Internally as now that we're bigger to get some efficiencies inside of the operation.
Great.
And then just you've got a fair amount of cash on the balance sheet, particularly given some of the recent proceeds any thoughts as to use is that continued M&A or.
Maybe some additional investments just any thoughts on the cash because obviously.
It's a nice part of the story as well.
Okay.
Thank you.
Alexander Sklar: It's more of a practical issue. In this case, build stream was an exciting new offering that we could come back and talk to the firm about that helps create harder ROI benefits and then they use that as a driving function to do the whole project to move everything to the cloud. So it's just an example of us bringing up some innovative new offerings in this case through an M&A transaction that we did that provides the prompting for the firm to prioritize the project.
We don't have any immediate uses per se.
Obviously, we're just trying to be really really good stewards of shareholder capital be very smart about future investments, making sure we're seeing the right return.
And as John had articulated this comes from a very agile, but yet bootstrap company from its infancy and so.
The investment in growth narrative is really rooted here.
From top to bottom.
Alexander Sklar: And I think generally as we continue to bring out more and more innovation, particularly AI in the cloud, which is the only way they can get it from us, we're seeing more of that. And I do think it's having an effect and you're seeing some of the progress on the cloud numbers. Okay, great color there. Dave, one for you, just in terms of the right framework to think about ARR growth, it's kind of relative to that, that 20% revenue guide.
Terrific. Congrats again on just a really really nice outcome.
Thank you.
Please standby for our next question.
Our next question comes from the line of Koji Ikeda with Bank of America. Your line is open.
Hey, John .
Congrats Steve you, probably listening out there and welcome David.
For taking the questions just a couple from me.
Alexander Sklar: And in that 113 to 117 NRR range, for value that you delivered in FY23, is that still the right framework for 2024? Thank you. Thanks, Alex. You don't want to seriously go in NRR, per se, quarter by quarter, but that is the correct framework that we're working under. And if John had articulated and where a lot of our prepared remarks is, that continued expansion motion, that would continue to work through. And our model continues to be very beneficial from that, as we continue to land, and then have a really good span motion, which then, obviously, reflected in our commentary as well as our results that we posted for the quarter end of the year. Okay, thank you both. Thank you. Please stand by for our next question.
I wanted to ask on the billings in the fourth quarter did notice there was a bit of a deceleration in the fourth quarter.
Really trying to triangulate that billings exit growth rate with the fiscal 'twenty revenue guide starting point.
But also realizing too that when you look at billings from maybe.
Second half perspective, the growth does look fairly similar from a second half last year perspective, but really trying to figure out if there's anything specific to call out in the billings exit growth rate or any sort of mechanics in the fourth quarter Billings result.
No there was nothing abnormal.
Abnormal about it I would say it was in line and fairly consistent across the year, obviously youll have.
Various points of time.
The actual transactional nature of when both billing shows up and how some of that FERC work Dr. Dr. But as far as year over year comps I think everything was pretty straightforward.
Kevin Mcveigh: Our next question comes from the loans, Kevin McVeigh, with Credit Flush, Yolani Soltan. Great. Thanks so much.
Got it thanks, David and maybe a follow up for you.
Realizing or just maybe you could comment on.
Kevin Mcveigh: And let me head my congratulations to Steven. Welcome Dave as well. Hey, I'm packing the 24 guidance a little bit. It seems like there's just really, really nice leverage on the EBIT line, operating line, given the revenue growth. Is that all just kind of the revenue, or are you sure you see maybe some of the benefits of, you know, some of the legacy cost starting to run off and just again, just really, really nice outcome from a leverage perspective.
If theres going to be any change or any things that we should be thinking about in the way you are approaching the guidance methodology versus the prior guidance methodology. Thank you.
No.
No none whatsoever.
This organization by design is very prudent.
And I will continue to.
To carry that flag as we move forward so no.
Looking for no immediate changes here.
Kevin Mcveigh: We get to unpack that a little bit. Kevin, thank you. We're excited about the progress that the company is making. As you know, we came public, not showing a non yet, offering profit in this year. We did. So we felt like that was important milestone for us to achieve in 23. And we've also said that we've got a profitable growth strategy generally. So we're going to be consistently pursuing that as we grow the business.
Taking the questions.
Thank you.
Please standby for our next question.
Okay.
Our next question comes from the line of Terry Tillman with <unk> Securities. Your line is open.
Great. Good evening guys. This is <unk> on for Terry I. Appreciate you taking the questions I just wanted to start with one I believe in the past we've talked about the $1 billion revenue opportunity.
Kevin Mcveigh: And some of this is scalability. And they can touch you a little bit more about that. I think some of it is some important work that Dave's group is doing on. Different operational improvements that we can make now that we have achieved some more scale can improve efficiency further. So it's a combination, I think. The revenue growth, good progress in the marketplace consistent demands, real transformation opportunity to grow a big company up here.
Just like we saw in the entire products added to existing customers I'm just curious as we move into the new fiscal year. How we should continue to think about GTS growth investment as we kind of focus on accelerating the share of wallet gains inside your ex stall base for selling additional products and then I had a follow up for Dave.
Yes, Thanks Connor.
One of the things that we think is really exciting about our growth opportunities that we have over the years landed.
Our position in so many of the very largest professional and financial services firms. So the hard work of winning the relationship has happened and now we have the opportunity to expand within them and you're right. We've talked about the fact that just in the top 100 clients that we already have today, if they bought everything that we make.
Kevin Mcveigh: And the scaling the cost from that and then some conscious work internally is now that we're bigger to get some efficiencies inside the operation. And then just, you know, you've got a firm on the cash on the balance sheet, particularly given some of the recent proceeds. Any thoughts as to use is that, you know, continue to M&A or, you know, maybe some additional investments, just any thoughts on the cash because it's a nice part of the story as well.
$1 billion of IRR, So theres a whole growth story, just from cross sell and upsell within the client relationships that we have what you are seeing and you can see a little bit of this in the million dollar plus clients that we gave the number four in the $100000 clients that we've given them before there is some good upsell and cross sell happening.
Kevin Mcveigh: Thank you. We don't have any immediate uses per say. You know, obviously we're just trying to be really, really good stewards of shareholder capital, be very smart about future investments, make sure we're seeing the right return. And as John had articulated, you know, this comes from a very agile, but yet bootstrapped company from its infancy. And so the investment and growth narrative is really rooted here from top to bottom.
In those accounts and some of those Upsells and cross sells because the firms are so fast are quite large in and of themselves.
So I think the emphasis to your question about go to market I think we are looking carefully at strategic accounts.
Putting together in fiscal 'twenty for a little bit of a larger group to make sure that we're focused on capitalizing on the opportunity to go we had in cross sell inside. These these large firms. So it's a good and state that's definitely part of our growth strategy.
Unknown Executive: Christopher Thick, congrats again on just a really, really nice outcome. Thank you. Please stand by for our next question.
Got it that's great to hear.
Follow up Dave Welcome aboard you came from the outside just curious what you think might be the most underappreciated about the company at this point by investors and then going forward. What's your thoughts on the balance of top line growth and profit expansion or maybe just said another way should we continue to we expect steady margin expansion over time. Thank you.
Koji Ikeda: Our next question comes from the line of Koji Ikeda with Bank of America. Yalan is open. Hey, John, congrats, Steve. You're probably listening out there and welcome, David. Thanks for taking the questions. Just a couple from me. I wanted to ask on the billing in the fourth quarter, you know, did notice there was a bit of a deceleration in the fourth quarter. Really trying to triangulate that billing's exit growth rate with the fiscal 24 revenue guide starting point.
Koji Ikeda: But also realizing too that when you look at billing from maybe a second half perspective, you know, the growth does look fairly similar from a second half last year perspective. But really trying to figure out if there's anything specific to call out in the billing's exit growth rate or any sort of mechanic in the fourth quarter. No, there was nothing abnormal about it. I would say it was in line and fairly consistent across the year.
So a couple of things.
And I can probably go on for the rest of this call just asset the untapped potential here at intact, but when I think about.
Not only the product set not only the end resilient clients that we're selling into not only as we're at a very infancy of this nature as well as as you think about how some of these larger expand opportunities can continue and even if you look at that million dollar and above cohort and that those shortly.
Behind that that were looking to expand and provides a lot of strong.
A strong opportunity.
And to not only 24, but beyond.
As I think about the model itself.
Koji Ikeda: Obviously, you'll have various points of time of the actual transactional nature of when both billing shows off and how some of the first work on DR to DR. But as far as year of year of comps, I think everything was pretty straightforward. Got it. Thanks, David. And maybe a follow up for you, you know, realizing or just maybe you could comment on if there's going to be any change or any, you know, things that we should be thinking about in the way you're approaching the guidance methodology versus prior guidance methodology. Thank you. No, no, not whatsoever. I think this organization by design is very prudent. And I'll continue to carry that flag as we move forward. So no looking for no immediate changes here. Thank you.
Sure.
There could be some leverage.
Going forward and obviously, we want to continue to be very very prudent.
About our investments and making sure we're seeing the right return.
Notwithstanding the backdrop and so.
Unknown Executive: Can you stand by for our next question?
We're very cautious about that but then we also get excited about the opportunity as we think about going the go forward plan.
Great. Thank you.
Thank you.
Please standby for our next question.
Our next question comes from the line of Parker Lane with Stifel. Your line is open.
This is Matthew kicker for Parker, Thanks for taking my questions and let me first congrats to Stephen welcome David to the team.
I'm wondering now that a meaningful share of the air.
From a cloud solution how are you thinking about the pricing on those hard solutions versus on Prem and do you anticipate.
Some of those price actions might play a meaningful role in the <unk>. The next few years.
Connor Passarella: Our next question comes from the line of Terry Tillman with true securities. Your line is open. Great. Good evening, guys. This is Connor Besser along for Terry. Appreciate you taking the questions. I just wanted to start with one I believe in the past. We talked about the $1 billion revenue opportunity. I just simply saw the entire product set into existing customers. I'm just curious as we move into the new fiscal year, how we should continue to think about GTM or growth investment as we kind of focus on accelerating the share of all things inside your install base for for selling additional products.
Thanks, Matthew I think this is a topic that we have.
Discussed with you all and there's definitely opportunity there one of the things that we're finding is that the applied AI innovations that we're bringing out are very well received and have strong value with them.
And so one of the things we're excited about as we bring more and more together and we talked a little about some of the Microsoft connections that we had come live this past quarter or two quarters is that we do have a real opportunity as we move people to the cloud not just to move them, there, but to help them achieve higher value from what we're delivering in a lot of that is in.
Connor Passarella: And then I had a follow up for this. Thanks, Connor. One of the things that we think is really exciting about our growth opportunity is that we have over the years landed a position in so many of the very largest professional financial services firm. So the hard work of winning the relationship has happened. And now we have the opportunity to expand within them and you're right. We've talked about the fact that just in the top 100 clients that we already have today.
Connor Passarella: If they bought everything that we make, it's a billion dollars of ARR. So there's a whole growth story just from cross sell and upsell within the client relationship that we have. What you are seeing and you can see a little bit of this in the million dollar plus clients that we gave the number four and the $100,000 clients that we gave the number four. There's some good upsell and cross sell happening in those accounts and some of those upsells and cross sells because the firms are so fast or quite large in and of themselves.
We applied AI technologies that are embedded in the platform and more and more come out each quarter.
We haven't officially.
<unk> anything, but our experience has been that people do appreciate the value that we're bringing to them and we're going to continue to focus on that.
Okay got it and then you mentioned the <unk>.
Acquisition of Paragon data labs, and your <unk>.
I'm wondering if you could get lumped them separately the integration process for that company.
A part of their go to market strategy right now and then secondly, how widely adopted do you think that your employee comp compliance tools will be over time is that every customer can potentially buy those solutions or just a subset.
Yes, we're very excited about the progress that we've made with the Paragon data labs acquisition. It was just a few months ago that we did that and the team that's come over it's just a fantastic group of people that really have mastered this.
Connor Passarella: So I think the emphasis, your question about go to market, I think we are looking carefully at strategic accounts and putting together in fiscal 24, a little bit of a larger group to make sure that we're focused on capitalizing on the opportunity to go, we in and across all inside these large firms. So it's a good instinct. That's definitely part of our growth strategy. Got it, that's great to hear. They just followed Dave, welcome aboard.
Subject matter and the issues of employee compliance across all the types of firms that we sell to and yes. It absolutely is part of our go to market today, and we've had very encouraging progress already in wins with that product even in areas that weren't necessarily part of our original bid.
Connor Passarella: You came from the outside, just curious what you think might be the most underappreciated about the company at this point by investors and then going forward, maybe what's your thought on the balance of top wine growth and profit expansion, but maybe just another way should we continue to expect steady margin expansion over time. Thank you. So a couple of things and I could probably go on for the rest of this call just as the, you know, the untapped potential here at Intapp, but when I think about, you know, not only the products that not only the end resilient clients that we're selling into, not only as we're at a very infancy of this nature as well as you think about how some of these larger expand opportunities can continue.
Business plan for example, we're making great progress in the accounting industry.
And this is before this PCA Ob policy actually becomes real it is just a proposal right now, but a lot of the interest that we're getting to your question is from the entire.
Community affirms that we sell to some of them have a little bit of a different regulatory requirement today. Some of them are looking more from a risk management perspective, but all of them increasingly realize this is a key category for that so this general area of compliance with its highly regulated set of industries. It's something that I think is a cornerstone of our whole strategy and the more that we.
Experienced in the marketplace, where we realize this is a fundamental differentiator for us that we've been doing for a long long time and then the employee compliance offering today is is an expansion of that an enhancement of that gives us a little bit richer story to tell and something that has a lot of strength of the business.
Connor Passarella: And even if you look at that million dollar and above cohort and then those, you know, shortly behind that that we're looking to expand, it provides a lot of strong opportunity heading into not only 24 but beyond. As I think about the model itself, you know, there could be some leverage going forward and obviously we want to continue to be very, very prudent about our investments and making sure we're seeing the right return, you know, notwithstanding the backdrop.
Terrific. Thank you very much.
Thank you.
Please standby for our next question.
Okay.
Our next question comes from the line of Brian Schwartz with Oppenheimer. Your line is open.
Connor Passarella: And so we're very cautious about that. But then, you know, we also get excited about the opportunity as we think about going to go forward plan. Great, thank you. Thank you. Please stand by for our next question.
Yes, hi, thanks for taking my questions today.
John I wanted to follow up I was going to ask you. If you had made any changes to the sales organization as we start a new fiscal year and then you did answer one of the questions that it does look like you are making an investment on the inside sales force can you maybe provide a little more color.
In terms of how big of an investment that's going to be in terms of increasing the capacity and maybe your thoughts in terms of the duration of the.
Matthew Kikkert: Our next question comes from the line of Parker Lane with Steve. The line is open. This is Matthew Kicker for Parker. Thanks for taking my questions.
The increase in.
And the capacity of the organization.
Matthew Kikkert: And let me first say congrats to Steve and welcome David to the team. I'm wondering now that a meaningful share of your air is coming from cloud solutions, how are you thinking about the pricing, those cloud solutions versus Prem. Do you anticipate some of those price actions might play a meaningful role in the growth serve in the next few years? Thanks, Matthew. I think this is the topic that we've discussed with you all.
Yeah. Thanks, Brian we're focused as we always have been on working with the clients that we have to cross sell and upsell and simultaneously winning new clients. So the.
Go to market organization, a bowl of each year as we put the business plan together for 'twenty for one of the specific objectives that we have in one of the choices that we made in increasing the investment in the sales and go to market machine a little bit more generally is what we're calling strategic accounts the large.
Matthew Kikkert: And there's definitely opportunity there. One of the things that we're finding is that the applied AI innovations that we're bringing out are very well received and have strong value with them. And so one of the things we're excited about is we bring more and more together and we talked a little bit about some of the Microsoft connections that we had come live this past quarter or two quarters. Is that we do have a real opportunity as we move people to the cloud, not just to move them there, but to help them achieve higher value from what we're delivering.
Enterprise class firms, where there is so much upsell and cross sell potential we're just upsell and cross sell can be measured in billions of dollars in some of these accounts. So we're excited about the opportunity. There I'm also very excited about some of the talent that has joined the company in the past year or so bringing incredible history selling to this class of firm from some of that.
Our friends in the software industry and from some of the firms themselves real experts, who know how to do this so we're seeing the success that we're having and who are inspired by the vision that we have for digital transformation inside these terms and want to represent that so it's just been a very positive year in terms of bringing talent in a little bit of organization into that in terms of how much.
Matthew Kikkert: And a lot of that is in the apply AI technologies that are embedded in the platform and more and more come out each quarter. So I think we haven't officially announced anything, but our experience has been that people do appreciate the value that we're bringing to them and we're going to continue to focus, on that. Okay, got it.
Are we putting their relatively speaking I don't know that were talking specifically about that but I think you.
We will see particularly in December .
Matthew Kikkert: And then you mentioned the acquisition of Paragon data labs in your intro. I wonder if you could give an update on simply the integration process of that company. Is it a part of your gold market strategy, you know, right now? And then secondly, how widely adopted do you think that your employee compliance tools will be over time? Is it every customer could potentially buy those solutions or just to subset? Yeah, we're very excited about the progress that we've made with the Paragon data labs acquisition.
Anything about the firms coming on more and more of these large accounts stories coming in and I think that's a real opportunity for the company for all sorts of reasons.
Thanks, John and then one quick follow up for Dave welcome to the call.
Notice, saying that the delta between the cloud growth and the SaaS and support revenue growth has been narrowing here for almost two years now which is a good trend is there any reason that that trend should not continue as we kind of think about our forecast the business in the future. Thanks.
Matthew Kikkert: It was just a few months ago that we did that and the team that's come over, it's just a fantastic group of people that really have mastered this subject matter and the issues of employee compliance across all the types of firms that we sell to. And yes, it absolutely is part of our go to market today and we've had very encouraging progress already in wins with that product even in areas that weren't necessarily part of our original business plan, for example, we're making great progress in the accounting industry.
Good question Brian .
And I am.
Just.
Thinking out loud here.
As we.
Cogitate R 24 plan and the implied guide.
<unk>.
We definitely have SaaS is.
Got it.
Canyon grow and then obviously to support will have a tail.
Matthew Kikkert: And this is before this PCOB policy actually becomes real. It's just a proposal right now, but a lot of the interest that we're getting to your question is from the entire community of firms that we sell to. Some of them have a little bit of a different regulatory requirement today. Some of them are looking more from a risk managed with perspective, but all of them increasingly realize this is a cute category for them.
Kind of a flatline right, it's not going to grow at the same rate of pace.
So from there you can kind of see.
The implied linear where those two are starting to have a crossover.
Perfect.
Does that makes sense.
Yes, that's helpful, Dave and congratulations on real nice quarter.
Matthew Kikkert: So this general area of compliance for this highly regulated set of industries. It's something that I think is a cornerstone of our whole strategy and the more that we experience in the marketplace and where we realize this is a fundamental differentiator for us that we've been doing for a long, long time. And then the employee compliance offering today is an expense of that and enhancement of that gives us a little bit richer story to tell it's something that has a lot of strength for the business.
Okay.
Thank you.
Please standby for our next question.
Our next question comes from the line of Matt Vanvliet with <unk>. Your line is open.
Yes, Thanks for taking my question and welcome David Congrats soon.
I guess as you look at some of the recent success <unk> had in the financial services World is that sort of a newer area.
Matthew Kikkert: Terrific, thank you very much. Thank you.
Thinking about not only investments in go to market is there an expectation for sort of an outsize.
Unknown Executive: Please stand by for our next question.
A portion of those investments you are talking about coming in this area.
Brian Schwartz: Our next question comes from the line of Bryant Swartz with Oppenheimer. The line is open. Yeah, hi. Thanks for taking my questions today. John, I wanted to follow up. I was going to ask if you had made any changes to the sales organization as we started new fiscal year, and then you did answer one of the questions that it does look like you are making an investment on the inside sales force.
Or how do you feel about your market coverage in general and then kind of.
Part b to that as you've mentioned before that sometimes as things slow down somewhat it gives some of these organizations and operate.
The new technology, rather than just trying to keep their head above water. So curious how the current market environment, especially with the slower capital markets activity may or may not be impacting overall deal cycles.
Brian Schwartz: Can you maybe provide a little more caller in terms of how big of an investment that's going to be in terms of increasing the capacity and maybe your thoughts in terms of the duration of the increase in the capacity of the organization? Thanks, Brian. We're focused as we always have been on working with the clients that we have to cross on us on simultaneously winning new clients. So the code of market organization of all of each year as we put the business plan together for 24, one of the specific objectives that we have and one of the choices that we made in increasing the investment in the sales and the market machine a little bit.
Yes.
It's Matt.
First of all you are right, we have talked about the fact that.
We've had a lot of progress in the financial services.
Industry also in the professional services targeting the street, both grow for us, but the financial services group is.
Newer <unk>.
Starting from a smaller base and it has really been growing.
We've also had a lot of success, we've talked about this in both the private capital markets firms.
Private capital asset managers of various strategies as well as the investment banks and the other advisory firms and we've even talked about some of the other segments like the pension funds I talked about PSP.
Brian Schwartz: Where generally is what we're calling strategic accounts, the large enterprise class firms where there's so much upsell and cross sell potential where just upsell and cross so can be measured in millions of dollars in some of these accounts. So we're excited about the opportunity there. I'm also very excited about some of the talent that has joined the company in the past year or so bringing incredible history selling to this class of firm from some of our friends in the software industry and from some of the firms themselves real experts.
In the prepared remarks, so there's a lot of excitement about the range of classes of firms that are picking up our geo cloud solution.
Brian Schwartz: Who know how to do this who are seeing the success that we're having and who are inspired by the vision that we have for digital transformation inside these firms and want to represent that. So it's just been a very positive year in terms of bringing talent and a little bit of organization. In terms of how much are we put in there relatively speaking, you know, I don't know that we're talking specifically about that, but I think you will see, particularly some of the aiming about the first coming on more and more of these large account stories coming in and I think that's a real opportunity for the company for all sorts of reasons.
Collaboration and content solution are compliant solution, so really across the board.
We are going to feed that because it's such a.
Our growth industry itself.
Regardless of the.
Cycle of the economy. The general macro trend is a shift of investment dollars from the traditional public markets more and more to these private capital models and it's a growth industry, just structurally and I think we've really benefited from that and are continuing to benefit from that.
As the company scale, so we're going to support that.
Make sure that we take advantage of the opportunity there.
<unk>.
Brian Schwartz: Thanks, John. And then one quick follow up for Dave, welcome to the call. But noticing that the deltop between the cloud ARR growth and the staff and support revenue growth has been narrowing here for almost two years now, which is a good trend. Is there any reason that that trend should not continue as we kind of think about our forecast and business in the future. Thanks. Good question, Brian, and I'm just thinking out loud here, as we cogitate our 24 plan and the applied guide, we definitely have sasses going to grow.
The second question you asked about how do we.
Are we impacted by the market generally I think the one thing that we've said is that if there is a part of our target market that might be more sensitive to the capital markets. Its the investment banking group.
The rest of the industries that we sell even though private capital firms themselves have been remarkably stable and growing.
Growing their spend for digital transformation and for cloud and for applied AI, because they are trying to modernize themselves, they're trying to do that internationally.
So theres a lot of opportunity for us that hits that our growth through some sort of uncertain times over the past couple of years and the investment banks Interestingly some of our largest deals that we've talked about here in this year's <unk>.
So we are making very good progress there and I think they're kind of coming from behind there is an opportunity for them to modernize with technology. That's purpose built for their industry for the first time. So there's a lot of tailwind there, but we have been transparent about that if there is a market signal that we experienced one day, it's probably investment banking.
Brian Schwartz: And then obviously the support will have a tail, kind of a flat line, right, it's not going to grow at the same rate of pace. And so from there, you can kind of see the implied linear where those two are starting to have a crossover fact. Does that make sense, right? Yeah, that's helpful, Dave, and congratulations on real nice quarter. Thank you. Please stand by for our next question.
Thank you.
Please standby for our next question.
Our next question comes from the line of Sakic EMEA with Barclays. Your line is open.
Okay, Great Hey, good afternoon, guys. Thanks for taking my questions and glad to be on the call here.
Brian Schwartz: Our next question comes from the line of Matt Van Thelete with CTIG. The line is open.
John maybe first for you.
Helpful.
Matthew Van Kikkert: Yeah, thanks for taking the question and welcome, David, congrats to you. I guess as you look at some of the recent success you've had in the financial services world as that's sort of a newer area. You know, thinking about not only investments and go to market, is there an expectation for sort of an outsize portion of those investments you were talking about coming in this area. Or how do you feel about your market coverage in general?
Examples that you gave on the call and called out some some displacement of other in house or horizontal.
Applications I was wondering if you just go one level deeper into the competitive environment, a little bit, particularly with those horizontal SaaS providers, maybe you could just touch on qualitatively of course, a little bit on just on competitive win rates and sort of what you hear from customers about.
We're very purpose built platform versus other kind of more horizontal solutions out there so that makes sense.
Matthew Van Kikkert: And then kind of a part B to that is, you've mentioned before that sometimes as things slow down somewhat, it gives some of these organizations an opportunity to ask the new technology rather than just trying to keep their head above water. So curious how the current market environment, especially with the slower capital markets activity, may or may not be impacting overall deal cycle. Yeah, thanks Matt. First of all, you're right. We have talked about the fact that we've had a lot of progress in the financial services target industry.
You bet.
Welcome to the group.
Thank you guys. Thank you.
Yeah.
So there's a there's.
There is an interesting dynamic that we've talked about a little bit.
I can go into.
When comparing us to the traditional large horizontal.
Suppliers.
Matthew Van Kikkert: Also in the professional services target industry, both grow for us by the financial services group is newer and starting from a smaller base and it has really been growing. We've also had a lot of success. We talked about this in both the private capital markets firms. Private Capital asset managers of various strategies, as well as the investment banks and the other advisory firms. And we need to talk about some of the other segments like the pension funds I talked about PSP in the prepare remarks.
The firms are sort of in two classes, they're either coming off of there.
In house built.
Bespoke system.
And they are trying to decide do we go with one of these classic horizontal players that everybody is known for many years or do we go with a purpose built company like UN tap in their first move and in the early days, we were a small company and were not well known and we want kind of more in the mid sized firms and fewer in the large because they felt like the big guys where the face.
Beth.
As we have grown in one more market share in mid size and start to move up and added some real capabilities to the platform that met both the technology requirements and the security requirements for the more enterprise class firms. We now have more and more references that have successfully picked us in the first instance, and the win rate there is pretty good and getting better.
Matthew Van Kikkert: So there's a lot of excitement about the range of classes of firms that are picking up our deal cloud solution, our collaboration and content solution, our compliant solution, so really across the board. I think we are going to feed that. Because it's such a growth industry itself, regardless of the cycle of the economy, the general macro trend is a shift of investment dollars from the traditional public markets, more and more to these private capital models.
The flip side is there's a whole generation of firms that already went to.
To the classic horizontal players for.
For reasons that are very logical.
But they're not getting good adoption.
And this is the big knock us even after people go through all the pain and effort to try to put the thing in and try to customize it to make it work for the unique business model that it wasn't really designed for.
Matthew Van Kikkert: And it's a growth industry just structurally. And I think we've really benefited from that and are continuing to benefit from that as the company scales. So we're going to support that and make sure that we take advantage of the opportunity there.
At the end they don't get the users to run with it because it's too clunky and it's not a knock on the software because the software is excellent. That's why these firms are running.
All over the place in other industries, but in this industry. The professionals really have a very specific workflow very specific data model that they need to model for their deals and their engagements. They have to look at the market data coming in from third parties to really try to orient themselves with the types of strategies. They want to pursue the types of clients. They want us to they have to use.
John Hall: The second question to ask about how are we impacted by the market generally. I think the one thing that we said is that if there's a part of our target market that might be more sensitive to the capital markets, it's the investment banking. The rest of the industries that we sell, even the private capital firms themselves, have been remarkably stable and growing and growing their spend for digital transformation and for cloud and for applied AI because they're trying to modernize themselves.
John Hall: They're trying to do that internationally. So there's a lot of opportunity for us that has fed our growth through some uncertain times over the past couple of years. And the investment banks, interestingly, are some of our largest deals that we've talked about here in this year's report. So we are making very good progress there. And I think they're kind of coming from behind. There's an opportunity for them to modernize with technology that's purpose built for their industry for the first time. So there's a lot of tailwinds there, but we have been kind of transparent about that if there's a market signal that we experienced one day, it's probably investment banking.
Very moderate applied AI, if they want to compete on networking to the right client Theres all kinds of things now that are available in our platform that are so natural to the end user in this market that when they see it and they can compare it to their experience with their experience has been with the previous generation the horse.
Unknown Executive: Thank you. Please stand by for our next question.
Assistance, they say Oh.
Finally, somebody built something for me and they buy it and so our win rate when people are looking at adoption problems or those things come up for renewal is actually higher.
Then in the first instance, when they're trying to figure out whether they should go with us or go with one of the big horizontal players. So as we March forward I think both of those numbers should move in the right direction for us and it's just the natural purpose built value proposition as people become more comfortable and we get bigger and we become more capable it's easier and easier to trust.
Yes.
Their environment to us and one of the great quotes I loved and this quarters.
<unk> was actually the adoption change that one of these big firms experienced when they put us in and moved off with the traditional horizontal things that's ultimately the proof and the stickiness for the purpose built system.
Saket Kalia: Our next question comes from the line of fact, it could be with Mark, why is she line is open? Okay, great. Hey, good afternoon, guys. Thanks for taking my questions and glad to be on the call here. John, maybe first for you, a lot of helpful deal examples you gave in the call and called out some displacements of other in house or horizontal applications. So many of you just go one one level deeper just into the competitive environment a little bit, particularly with those horizontal staff providers.
Yes, absolutely.
<unk> Center chose David maybe for you for my follow up.
I'm wondering if you could just digging a little deeper on the professional services business.
Touched on a little bit in your prepared remarks, but I'm wondering what you how you kind of think about the growth there as well as the margin.
<unk> seen kind of the gross margin there are narrow quite a bit I'm wondering how you're thinking about the services business in 'twenty for both from a growth and margin expense perspective to the extent you could disclose.
Saket Kalia: Maybe you just touch on qualitatively, of course, a little bit on just on competitive wind rates and sort of what you hear from customers about, you know, your very purpose built platform versus other kind of more horizontal solutions out there. Does that make sense? Do that and welcome to the group. So I think we're very appreciative that you guys are covered. So, you know, there's a there's an interesting dynamic that we've talked about a little bit and I can go into.
Outside of the prepared remarks, first and foremost we've done a lot of work on the margin and I'd like to commend.
The team here.
That's at the heart.
Quarter, and so I believe over this past year. There has been material improvements that have brought that up and we still have some work to do as.
As we continue forward into 'twenty, four and beyond but.
Pretty pretty happy at what's been done thus far as far as the growth.
Saket Kalia: When comparing us to the traditional large horizontal. Suppliers. The firms are sort of in two classes they're either coming off of their. In house built. The spoke system. And they're trying to. Trying to decide do we go with one of these classic horizontal players that everybody has known for many years, or do we go with the purpose built company. Like Intapp in their first move. And in the early days, we were a small company and we're not well known and we want kind of more in the mid size firms and fewer in the large because they felt like the big guys were the safe bet.
Obviously, it's not going to scale as fast as SaaS.
But there are but there are some growth plans in place.
That obviously mirror.
Rapid deployments across our various clients and so I'm pleased with what we've done here and what I've been able to learn about the team themselves and how they are deployed and so.
I think we get a lot of good grades from from that service offering.
Got it very helpful. Thanks, guys.
Saket Kalia: As we have grown and one more market share in the inside and start to move up and added some real capabilities to the platform that met both the technology requirements and the security requirements for the more enterprise class firms. We now have more and more references that has successfully picked us in the first instance and the win rate there is pretty good and getting better. The flip side is there's a whole generation of firms that already went to the classic horizontal players for reasons that are very logical but they're not getting good adoption.
Thank you.
Ladies and gentlemen, im showing no further questions in the queue I would now like to turn the call back over to John Hall for closing remarks.
Okay. Thanks, everyone. We appreciate your attention and your questions and we have a great Q4 behind us and we're excited about our continued momentum in 'twenty four.
Thanks again for your time today, and we look forward to talking to you just a little one next quarter. Thanks.
Thanks, so much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Saket Kalia: And this is the big knock is even after people go through all the pain and efforts try to put the thing in and try to customize it to make it work for the unique business model that it wasn't really designed for. At the end, they don't get the users to to run with it because it's too clunky and it's not a knock on the software because the software is excellent. That's why these firms are running all over the place in other industries, but in this industry that the professionals really have a very specific workflow, very specific data model that they need to model for their deals and their engagements, they have to look at the market data coming in from third parties to really try to orient themselves for the types of strategies they want to pursue or the types of clients they want to stream.
Saket Kalia: They have to use very modern applied AI if they want to compete on networking to the right clients, there's all kinds of things now that are available in our platform that are so natural to the end user in this market that when they see it and they can compare it to their experience, what their experience has been with the previous generation, the horizontal systems, they say, oh, finally somebody built something for me. And they buy it and so our win rate when people are looking at adoption problems or those things come up for renewal is actually higher than in the first instance when they're trying to figure out whether they should go with us or go with one of the big horizontal players.
Saket Kalia: So as we march forward, I think both of those numbers should move in the right direction for us, and it's just the natural purpose built value proposition as people become more comfortable and we get bigger and we become more capable, it's easier and easier to trust their environment to us. And one of the great quotes I loved in this quarter's report was actually the adoption change that one of these big firms experience when they put us in and moved off with the traditional horizontal thing is that that's ultimately the proof and the stickiness for the purpose built system. Yeah, absolutely.
Saket Kalia: It makes sense that shows David maybe for you for you for my follow up. I believe you could just dig it a little deeper on the professional services business. You touched on a little bit in your prepared remarks, but I'm wondering what you know how you kind of think about the growth there, as well as the margin. We've seen kind of the gross margin there are narrow quite a bit. I'm wondering how you're thinking about their services business in 24 both from a growth and margin perspective to the extent you could disclose.
Saket Kalia: You know, outside of the prepared remarks, first and foremost, we've done a lot of work on the on the margin. And I'd like to commend the team here because that's that's a hard order. And so I believe over this past year, there's been material improvements that have brought that off. And you know, we still have some work to do as we continue forward into 24 and beyond, but pretty pretty happy at what's been done.
[music].
Saket Kalia: As far as the growth, obviously, it's not going to scale as fast as fast, but there are some growth plans in place that obviously mere, you know, rapid deployments across our various clients. And so, you know, I'm pleased with what we've done here and what I've been able to learn about the team themselves and how they're deployed. And so, I think we get a lot of good grades from from that service offering, so. Got it. Very helpful. Thanks, guys. Thank you. Ladies and gentlemen, I'm showing no further questions in the queue.
John Hall: I will now like to turn the call back over to John Hall for closing remarks. Okay. Thanks, everyone. We appreciate your attention and your questions. And we have a great queue for behind us. And we're excited about our continued momentum in 24. Thanks again for your time today, and we look forward to talking to you just a little while. Next quarter. Thanks so much.
Unknown Executive: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you very much.
[music].
The conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone and you would have automated message advising your hand is race to withdraw your question. Please press star one again.
I would now like to hand, the conference over to David Trone, Sir you may begin.
Thank you welcome to <unk> fiscal fourth quarter and year end 2023 financial results on the call with me today are John Hall, Chairman and CEO of <unk> and David Morton CFO .
During the course of this conference call. We may make forward looking statements regarding trends strategies and anticipated performance of our business, including guidance provided for our fiscal first quarter and full year 2024.
These forward looking statements are based on management's current views and expectations.
Certain assumptions made as of today's date and are.
Subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward looking statements.
<unk> disclaims any obligation to update or revise any forward looking statements, except as required by law.
Further on today's call. We will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.
A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8-K furnished with the SEC prior to this call.
With that I'll hand, the conversation over to John .
Thank you David good afternoon, everyone. Thank.
Thank you for joining us.
We're pleased to be here with you to share the results of our fiscal fourth quarter and full year fiscal 2023.
I'm happy to say that we had another strong year with great results across the business, including cloud <unk> growth of 36% year over year.
We added new clients grew existing accounts expanded our larger enterprise clients and expanded our geographic footprint.
We also released new applied AI capabilities to our platform enhanced our product portfolio through organic development and strategic acquisition and delivered our first profitable year.
As I've shared before in tap serves the overlooked and technologically underserved professional and financial services industry, which we believe is a software tam of approximately $24 billion.
Our target industry includes the world's private capital investment banking legal accounting and consulting firms, we deliver applied AI and a purpose built industry cloud platform.
It is highly differentiated from traditional CRM and ERP systems.
Our industry cloud platform is purpose built specifically for this industry.
Our platform provides a unique data architecture that matches the partnership model and operations with these firms and correctly enables each professionals highly specialized market knowledge and expertise.
And it provides specialized compliance capabilities that matched the complex requirements of this highly regulated industry.
<unk> solutions to help clients increased revenues and returns to operate more efficiently and profitably to manage risk and compliance more effectively and to leverage their collective knowledge for competitive advantage.
Looking at our results for Q4 and for fiscal year 'twenty three it's clear that our value proposition is resonating and the demand for our solutions remained steady.
As I noted earlier in Q4, our cloud <unk> grew 36% year over year to $222 million.
Cloud now represents 67% of our total IRR of $330 million.
In the quarter, we earn SaaS and support revenue of $68 million.
Up 29% year over year, and total revenue of $95 million up 25% year over year.
Additionally, we now have 53 accounts with IRR of more than $1 million a year over year increase of 29%.
We continue to have success, serving the world's largest firms and delivering on complex global requirements as well as consistently adding mid sized firms across the market.
This gives us confidence in our cloud platform and applied AI strategy to meet the needs of both the broad market and the highest levels of our market.
And fiscal year 2003 was our first profitable year in which we maintained strong revenue growth.
We are entering fiscal year, 'twenty, four with optimism and momentum.
Before I run through key highlights from fiscal year 'twenty, three I would like to take a moment to thank and recognize in taps outgoing CFO Steve Robertson.
And to welcome David Morton, who joined US as CFO in August .
Many of you have had the pleasure of meeting Steve.
Whom I've been fortunate to work with for the past eight years.
I'm grateful for his essential leadership and preparing to bring in tap public and introducing us to the public markets.
Steve has graciously staying on for a time and an advisory position to ensure a seamless transition.
Unknown Executive: Hello and welcome to Intapp fiscal fourth quarter and year end 2023 financial results conference call.
He is working closely with David.
Who joins US most recently from his role as CFO of <unk>.
Unknown Executive: At this time all participants on a listen only mode. . Carter.
And who brings to <unk>, a long track record of leading companies through periods of growth as.
As well as significant strategic capital markets and operational experience.
I hope you'll join me in congratulating, Steve on his well deserved retirement and.
And in welcoming Dave to his first <unk> earnings call.
Thank you very much Steve.
And we're excited to have Dave welcome aboard.
Okay.
Now I'll share a few highlights from <unk> fiscal year 2023.
David Trone: These forward-looking statements are based on management's current views and expectations until certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to different materially from those expressed or implied by such forward-looking statements. Intapp disclaimed any obligation to update or revise any forward-looking statements except as required by law.
I'll start with innovation, which continued to fuel our growth this year.
As I've previously shared Intest industry cloud is designed specifically for the unique operating and compliance needs of professional and financial services firms.
Our cloud solutions were built for the way these firms operate.
Their business model focuses on leveraging the partnership's collective specialized knowledge expertise experience and relationships to win business and deliver value for their clients and investors.
As well our industry cloud features a robust set of applied AI capabilities that meet the specific needs and unique challenges of our client firms.
Advances in generative AI have received a fair share of attention over the past year.
But it's important to note that in tap supplied AI strategy predates the current bonds.
With a series of applied AI technologies like automated time capture AI assisted conflicts checking and self maintaining contacts going back as far as the decade and in wide use across our client base today.
In fiscal year 'twenty, three we continued to advance our applied AI portfolio, releasing new capabilities to consistently grow our value for our clients.
We continue to enhance our relationship intelligence capabilities within the deal cloud solution throughout the year.
We released our new relationship paths capability, which leverages applied AI to help professionals identify the optimal referral pathways to high value contacts across the firm's network.
As well as through third party executive and board data provided by our partners.
The new capability enables higher quality outreach.
That helps our clients to drive growth and greater success in winning new business.
Already more than 250 firms are transforming how they engage with their clients and develop new business using our applied AI relationship intelligence tools.
As just one example, a leading law firm said it helps them to resurrect business with our former clients.
Our list of adopters includes some of our largest clients who see significant value in unlocking the full business potential of their organizations professional network using intest applied AI.
In Q3, we augmented our applied AI E mail signature parsing engine, which leverages large language models to automatically populate and maintain key contact data.
David Trone: Further on today's call, we will also discuss certain non-gap metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and adds an exhibit to the form 8k furnished with the SEC prior to this call. With that, I'll hand the conversation over to John. Thank you, David. Good afternoon, everyone. Thank you for joining us.
To work across multiple languages.
This new applied AI capability helps us to meet the growing needs of our international clients extending our global opportunity.
One of our largest law firm clients with thousands of partners is now using this feature across their global firm in eight languages.
In Q4, we also enhanced the compliance features.
And our applied AI relationship intelligence system to further protect clients working on sensitive engagements with high confidentiality requirements.
The feature will give clients the ability to fully leverage their strongest relationships maintained contact data and promote alignment with their partners work all while complying with complex information governance regulations.
Additionally, we expanded applied AI within our risk and compliance solution this year.
We released a new vendor terms feature which eliminates manual effort and improves data quality versus manually entering and tracking vendor agreements via a spreadsheet.
David Trone: We're pleased to be here with you to share the results of our fiscal fourth quarter and full year fiscal 2023. I'm happy to say that we had another strong year with great results across the business, including Cloud ARR growth of 36% year-over-year. We added new clients, grew existing accounts, expanded our larger enterprise clients, and expanded our geographic footprint. We also released new applied AI capabilities to our platform, enhanced our product portfolio through organic development and strategic acquisition, and delivered our first profitable year.
This is a great example of applied AI, not only eliminating manual tasks, but also adding value in the form of proactive risk mitigation and enhanced client experience.
David Trone: As I've shared before, Intapp serves the overlooked and technologically underserved professional and financial services industry, which we believe has a software tab of approximately $24 billion. Our target industry includes the world's private capital, investment banking, legal, accounting, and consulting firms. We deliver applied AI in a purpose-built industry cloud platform that is highly differentiated from traditional CRM and ERP systems. Our industry cloud platform is purpose-built specifically for this industry. Our platform provides a unique data architecture that matches the partnership model and operations of these firms, and correctly enables each professional's highly specialized market knowledge and expertise.
And <unk> 200 clients using vendor terms told us they have seen a 30% improvement in the efficiency of their vendor process saving the firm time and money while lowering risk.
David Trone: And it provides specialized compliance capabilities that match the complex requirements of this highly regulated industry. Intapp solutions help clients increase revenues and returns to operate more efficiently and profitably, to manage risk and compliance more effectively, and to leverage their collective knowledge for competitive advantage. Looking at our results for Q4 and for fiscal year 23, it's clear that our value proposition is resonating, and the demand for our solutions remains steady. As I noted earlier, in Q4, our cloud ARR grew 36% year-over-year to $222 million.
And in Q4, we expanded our compliance applied AI to identify potential conflicts earlier in the business development cycle at the opportunity level.
Our new early stage alerts help accelerate conflicts decision, making and allows firms to focus resources on the right deals.
David Trone: Cloud now represents 67% of our total ARR of $330 million. In the quarter, we earned staff and support revenue of $68 million, up 29% year-over-year, and total revenue of $95 million, up 25% year-over-year. Rear. Additionally, we now have 53 accounts with ARR of more than $1 million dollars, a year-over-year increase of 29%. We continue to have success serving the world's largest firms and delivering on complex global requirements, as well as consistently adding mid-size firms across the market.
Turning to our partner ecosystem.
I am pleased to share that our partnership with Microsoft continues to evolve and grow.
During fiscal year 'twenty, three we released new products and capabilities that increase the value our clients derive from the Microsoft tools that theyre professionals rely on every day.
For instance, in tap collaboration and content solutions now enables firms to securely share documents with their clients via Microsoft teams, while meeting stringent compliance requirements.
David Trone: This gives us confidence in our cloud platform and applied AI strategy to meet the needs of both the broad market and the highest levels of our market. And fiscal year 23 was our first profitable year in which we maintain strong revenue growth. We're entering fiscal year 24 with optimism and momentum.
Additionally, our deal top solution now features new capabilities using both Microsoft Azure open AI GPT LLM.
John Hall: Before I run through key highlights from fiscal year 23, I'd like to take a moment to thank and recognize Intapp's outgoing CFO, Steve Robertson, and to welcome David Morton, who joined us as CFO in August. Many of you have had the pleasure of meeting Steve, whom I've been fortunate to work with for the past eight years. I'm grateful for his essential leadership in preparing to bring Intapp public and introducing us to the public markets.
And embedded document management and collaboration which seamlessly integrates Microsoft 365 capabilities into Dealmakers primary deal and client management workflow.
And further our operations and finance solution can now automatically capture usage of teams.
To help time keepers pre populate their timesheets, which advances our zero entry strategy and incorporates Microsoft 365 productivity tools directly into firm specialized operational workflows.
This year in tap was officially recognized as a top tier partner of Microsoft, which fewer than 1% of partners ever achieved.
Additionally in March our two organizations co hosted an interactive two day summit at Microsoft headquarters in Redmond.
Drew <unk> from the worlds top law firms.
Last quarter in tap completed deployment of all of our solutions to Azure as part of our Microsoft partnership strategy and in Q4, <unk> solutions became available to clients on the Microsoft Azure marketplace.
This new milestone enables professional and financial services firms to more easily discover purchase and deploy and tap solutions.
As one example.
In Q4 PSP investments.
One of Canada's largest pension investors selected deal cloud over a large horizontal CRM competitor.
To manage deals across their global investment teams.
PSP also purchased our content and collaboration solution.
To extend integration increased productivity and better leverage its Microsoft investment.
John Hall: Steve is graciously staying on for a time in an advisory position to ensure a seamless transition. He is working closely with David, who joins us most recently from his role as CFO of DigiSurf, and who brings Intapp a long track record of leading companies through periods of growth, as well as significant strategic capital markets and operational experience. I hope you'll join me in congratulating Steve on his well-deserved retirement, and in welcoming Dave to his first Intapp earnings call. Thank you very much, Steve, and we're excited to have you, Dave. Welcome aboard.
This deal is a great example of the way our Microsoft partnership adds outsized value for our clients.
<unk> solutions available via the Azure marketplace.
Simplify the purchasing process and allow PSP to utilize some of their pre committed spend as part of their existing Microsoft Azure agreement to acquire <unk> technology.
John Hall: Okay, now I'll share a few highlights from Intapp's fiscal year 2023. I'll start with innovation, which continued to fuel our growth this year. As I previously shared, Intapp's industry cloud is designed specifically for the unique operating and compliance needs of professional and financial services firms. Our cloud solutions were built for the way these firms operate. Their business model focuses on leveraging the partnership's collective specialized knowledge, expertise, experience, and relationships to win business and deliver value for their clients and investors.
We also expanded our partner ecosystem further during the year, including several new third party data sources.
John Hall: As well, our industry cloud features a robust set of applied AI capabilities that meet the specific needs and unique challenges of our client firms. Advances in generative AI have received a fair share of attention over the past year, but it's important to note that Intapp supplied AI strategy predates the current buzz. With a series of applied AI technologies like automated time capture, AI assisted conflicts checking, and self-meeting contacts going back as far as the decade, and in wide use across our client base today.
In the professional and financial services industry access to embedded market data coupled with the clients own experiential data is key to generating the best possible information for investment and client selection and growth.
In fiscal year 'twenty, three we integrated more relationship mapping data with new partners like <unk> and <unk>.
We brought in critical property level data for our corporate real estate clients with Cherry.
And we expanded deal clouds ability to support portfolio monitoring with untapped.
I'll turn now to key deals and software implementations.
We've continued to steadily grow our client base through cross sell up sell and the acquisition of new logos, including large enterprise clients.
We ended our fiscal year, serving more than 2300 premier firms across our target verticals.
With our strongest growth at the $100000 and $1 billion levels.
You are a few new logos that we added this year.
In Q4, a large accounting firm based in Canada shows our risk and compliance solution to better manage firm wide risk and improve internal workflows.
We will be replacing a legacy homegrown system as the needs of the firm grow.
They wanted a cloud based solution that leverages applied AI to better serve their partnership.
Additionally, we had a notable win in Q4 that combines a new logo and an up sell in one deal.
Nexen Pruitt, our multi specialty law firm and longtime <unk> client recently merged with U S based firm Maynard Cooper and Gail.
Leadership of the newly Dove Maynard Nexen.
While the tremendous value and efficiencies that our solutions provided and chose to expand the use of <unk> solutions across the merged firm significantly increasing the number of licensed users.
Mergers across professional services continues to be a driver of growth given our ability to scale as the platform for our clients and help them consolidate their it strategy.
And to provide a few updates on some deals that we discussed in fiscal year 'twenty three.
A top asset management arm of one of the largest investment banks replaced its horizontal CRM with deal cloud.
Recently, they told us that our purpose built solution is helping drive adoption.
Far beyond what they ever achieved with their legacy CRM.
A top global management consulting firm executed a multi year contract for our risk and compliance solution.
We delivered it in less than six months.
Showcasing our ability to apply best practices across our target markets in this case in consulting.
And practice a fully virtual law firm selected our conflict solutions delivered via the Microsoft Azure cloud.
This client now represents a new generation of professional firms relying on a digital platform to run and grow the FERC.
And our cross selling and up selling success in our existing accounts continued to drive strong net revenue retention.
For instance.
This year, a large global financial advisory and asset management firm expanded its deal sub licenses to their entire financial Advisory group.
Which numbers in the thousands of users the software it was fully implemented and new users were live in 90 days.
This is a great example of how delivering client success on our initial sales can lead to large expansion across departments and use cases.
John Hall: In fiscal year 23, we continue to advance our applied AI portfolio, releasing new capabilities to consistently grow our value for our clients. We continue to enhance our relationship intelligence capabilities within the deals out solution throughout the year. We released our new relationship paths capability, which leverages applied AI to help professionals identify the optimal referral pathways to high value contacts across the firm's network, as well as through third party executive and board data provided by our partners.
One of the world's largest accounting firms and a current <unk> client selected deal cloud for their corporate development team to foster more effective M&A.
Delivering success here sets us up for future growth and new use cases across the firm.
And in an La top 25 ranked law firm.
Chose to migrate their existing in tap operations and finance solution to the cloud.
And to purchase our risk and compliance solution and our new build stream offering.
This is a great example of the opportunity we have to expand our footprint as we migrate our existing clients to the cloud.
John Hall: The new capability enables higher quality outreach that helps our clients to drive growth and greater success in winning new business. Already, more than 250 firms are transforming how they engage with their clients and develop new business using our applied AI relationship intelligence tools. As just one example, a leading law firm said it helped them to resurrect business with a former client. Our list of adopters includes some of our largest clients who see significant value in unlocking the full business potential of their organization's professional network using Intapps applied AI.
Touching briefly on M&A.
During fiscal year 'twenty, three we continued to add important technology capabilities to our cloud portfolio through acquisition.
In Q4 in tap acquired Paragon data labs.
Paradigms cloud based software helps firms to track and monitor employee compliance.
John Hall: In Q3, we augmented our applied AI email signature parsing engine, which leverages large language models to automatically populate and maintain key contact data. To work across multiple languages. This new applied AI capability helps us to meet the growing needs of our international clients extending our global opportunity. One of our largest law firm clients with thousands of partners is now using this feature across their global firm in eight languages. In Q4, we also enhanced the compliance features in our applied AI relationship intelligence system to further protect clients working on sensitive engagements with high confidentiality requirements.
Elements like personal trading and political donations are centrally managed.
So personal conflicts of interest or policy violations can be spotted an address.
The product now marketed as intact employee compliance enhances our existing risk and compliance solutions, which are all purpose built for the unique regulatory compliance needs of our client firms.
John Hall: The feature will give clients the ability to fully leverage their strongest relationships, maintain contact data and promote alignment with their partners work all while complying with complex information governance regulations. Additionally, we expanded applied AI within our risk and compliance solution this year. We released a new vendor terms feature which eliminates manual effort and improves data quality versus manually entering and tracking vendor agreements via spreadsheet. This is a great example of applied AI not only eliminating manual tasks, but also adding value in the form of proactive risk mitigation and enhanced client experience.
Already the investment has proven to help differentiate us with further enhanced compliance capabilities for the regulated markets we serve.
Interest in employee compliance is strong and is bolstered by the evolving nature of the regulatory environment.
Including the PC <unk> recent proposal to strengthen auditor requirements to identify and remediate noncompliance.
Recent wins include a global investment bank that will use the solution to automate previously manual workflows and a large national accounting and advisory firm that will replace a homegrown solution with hours to ensure compliance with independence requirements.
John Hall: An ML-200 client using vendor terms told us they have seen a 30% improvement in the efficiency of their vendor process saving the firm time and money while lowering risk. And in Q4, we expanded our compliance applied AI to identify potential conflicts earlier in the business development cycle at the opportunity level. Our new early stage alerts help accelerate conflict decision making and allow firms to focus resources on the right deals.
This year, we also integrated capabilities from our fiscal year 'twenty to build stream acquisition to enhance our entire operations and finance solution.
The broader solution integrates compliance across time entry and pre billing processes in a way that accelerates the work to collect cycle.
Improving realization rates and driving profitability.
These are compelling hard ROI benefits for any firm.
We are pleased with the cross selling we have seen as we grow the value provided to our client base.
In conclusion.
We're proud of our strong performance in fiscal year 'twenty three and we are excited about our continued growth opportunity in fiscal year 'twenty four.
We are serving a durable end market.
With our deeply differentiated industry cloud platform.
With an applied AI and compliance strategy.
Our subscription revenue model is highly predictable.
And we see continued opportunity both to add new clients across a broad Tam.
And to deliver greater value to expand significantly within our existing client base.
We have a great growth opportunity to drive cloud and AI adoption and modernization across all of these industries.
As always I'd like to thank our clients our partners our investors our board and our global in tap team, whose teamwork and dedication led to such a successful second year as a public company.
Thank you all very much.
Okay, now I will turn things over to our CFO , David Morton Dave.
Thanks, John and thanks, everyone for joining us today before I get started I want to express my appreciation to John as well as the entire board and management team are providing me an opportunity to join this great company.
And tap has demonstrated strong resilient growth performance against a tough macro backdrop and I'm a firm believer in our growth momentum with our target industry markets.
I'm looking forward to working with our team to execute against our untapped growth opportunities and continue to deliver strong profitable growth as the company scales.
John Hall: Turning to our partner ecosystem. I'm pleased to share that our partnership with Microsoft continues to evolve and grow. During fiscal year 23, we released new products and capabilities that increase the value our clients derive from the Microsoft tools that their professionals rely on every day. For instance, Intapp Collaboration and Content Solutions now enable firms to securely share documents with their clients via Microsoft Teams while meeting stringent compliance requirements. Additionally, our deal cloud solution now features new capabilities using both Microsoft's Azure Open AI GPT LLM and embedded document management and collaboration, which seamlessly integrates Microsoft 365 capabilities into deal makers primary deal and client management workflow.
As a reminder, all of our financial figures, we will discuss today are non-GAAP , except for revenue and revenue growth.
Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures are provided in our earnings release and supplemental financial tables.
Turning to our results I'm pleased to report that for the fourth quarter of our fiscal year.
Cloud <unk> was up 36% year over year, and total IRR was up 22% year over year.
SaaS and support revenue was $67 8 million up 29% year over year, reflecting both new sales to new clients and Upsells and cross sells to existing clients of <unk> purpose built cloud solutions.
<unk>.
Subscription license revenue was $12 2 million down 9% year over year as expected due to a reduction of multiyear renewals as we continue to move more of our clients to the cloud.
Professional services revenue was $14 6 million up 55% year over year, reflecting an accumulation of large clients throughout the year and completion of implementation projects for those large clients coupled with the continued strong attach rate.
Total revenue was $94 6 million up 25% year over year, driven primarily by sales of our cloud solutions as well as by strong growth in professional services revenue, partially offset by an anticipated decline in license revenue.
Q4, total non-GAAP gross margin was 69, 9% as compared to 68, 2% in the prior year period.
John Hall: And further, our operations and finance solution can now automatically capture usage of teams to help timekeepers pre-populate their time sheets, which advances our zero entry strategy and incorporates Microsoft 365 productivity tools directly into firm specialized operational workflows. This year, Intapp was officially recognized as a top tier partner of Microsoft, which fewer than 1% of partners ever achieved. Additionally, in March, our two organizations co hosted an interactive two-day summit at Microsoft headquarters in Redmond that drew CIOs from the world's top law firms.
Afflicting improve professional services gross margins and a previously mentioned reclassification due to an organizational realignment.
John Hall: Last quarter, Intapp completed deployment of all of our solutions to Azure as part of our Microsoft partnership strategy. And in Q4, Intapp Solutions became available to clients on the Microsoft Azure marketplace. This new milestone enables professional and financial services firms to more easily discover, purchase and deploy Intapp Solutions. As one example, in Q4, PSP investments, one of Canada's largest pension investors selected deal cloud over a large horizontal CRM competitor to manage deals across their global investment teams.
It was partially offset by revenue mix impacts related to license and professional services revenue.
non-GAAP operating expenses were $63 2 million at $7 $9 million increase year over year as we continued to invest in sales marketing and product development to support our growth.
John Hall: PSP also purchased our content and collaboration solution to extend integration, increase productivity and better leverage its Microsoft investment. This deal is a great example of the way our Microsoft partnership adds outsized value for our clients. Intapp Solutions available via the Azure marketplace, simplifies the purchasing process and allow PSP to utilize some of their pre committed spend. As part of their existing Microsoft Azure agreement to acquire Intapp's technology. We also expanded our partner ecosystem further during the year, including several new third party data sources.
John Hall: In the professional financial services industry access to embedded market data coupled with a client's own experiential data is key to generating the best possible information for investment and client selection. Anderson and Grove. In fiscal year 23, we integrated more relationship mapping data with new partners like FBLR and BORDEX. We brought in critical property level data for our corporate real estate clients with Cherry, and we expanded deal clouds ability to support portfolio monitoring with Untapp.
non-GAAP sales and marketing expense was $28 6 million, a $4 million increase year over year as a function of increased head count and related sales commissions to capture new business and our growing markets along with our previously mentioned organizational realignment.
John Hall: I'll turn now to key deals and software implementations. We've continued to steadily grow our client base. Through cross cell, upsell and the acquisition of new logos, including large enterprise clients. We ended our fiscal year serving more than 2,300 premier firms across our target verticals with our strongest growth at the $100,000 and $1,000,000 levels. Here are a few new logos that we added this year. In Q4, a large accounting firm based in Canada, shows our risk and compliant solutions to better manage firm-wide risk and improve internal workflows.
non-GAAP R&D expense was $21 7 million, a $5 $5 million increase year over year, as we increased head count and made investments in our product roadmap.
John Hall: We'll be replacing a legacy homegrown system as the needs of the firm grow. They wanted a cloud-based solution that leverages applied AI to better serve their partnership. Additionally, we had a notable win in Q4 that combined a new logo and an upsell in one deal. Nexon Pruitt, a multi-specialty law firm, and longtime Intapp client recently merged with US-based firm Maynard Cooper and Gail. Leadership of the newly dubbed Maynard Nexon saw the tremendous value and efficiencies that our solutions provided and showed to expand the use of Intapp solutions across the merged firm, significantly increasing the number of licensed users. Mergers across professional services continue to be a driver of growth, given our ability to scale as a platform for our clients and help them consolidate their IT strategy.
non-GAAP G&A expense was $12 9 million, a $1 6 million decrease year over year as we harvest some back office cost reductions and continue to see some leverage and scalability in the business.
non-GAAP operating profit was $3 million as compared to our fourth quarter fiscal 2022, non-GAAP operating loss of $3 9 million.
John Hall: And to provide a few updates on some deals that we discussed in fiscal year 23. A top asset management arm of one of the largest investment banks replaced its horizontal CRM with deal cloud. Recently, they told us that our purpose-built solution is helping drive adoption far beyond what they ever achieved with their legacy CRM. A top global management consulting firm executed a multi-year contract for our risk and compliance solution. We delivered it in less than six months, showcasing our ability to apply best practices across our target markets, in this case, in consulting.
non-GAAP net income per fully diluted share was <unk> <unk> in the fourth quarter of fiscal 2023 as compared to a loss of <unk> in the fourth quarter of fiscal 2022.
John Hall: And practice, a fully virtual law firm, selected our conflict solutions delivered via the Microsoft Azure Cloud. This client now represents a new generation of professional firms relying on a digital platform to run and grow the firm. And our cross-selling and upselling success in our existing accounts continue to drive strong net revenue retention.
Moving to our full year results for fiscal 2023.
John Hall: Friends. Edence. This year, a large global financial advisory and asset management firm expanded its deal cloud licenses to their entire financial advisory group, which numbers in the thousands of users. The software was fully implemented and new users were live in 90 days. This is a great example of how delivering client success on our initial sales can lead to large expansion across departments and use cases. One of the world's largest accounting firms, and a current Intapp client selected deal cloud for their corporate development team to foster more effective M&A.
Cloud <unk> grew 36% year over year to $222 3 million.
John Hall: Delivering success here sets us up for future growth and new use cases across the firm. And an AM law top 25 ranked law firm chose to migrate their existing Intapp operations and finance solutions to the cloud and to purchase our risk and compliance solution and our new build stream offering. This is a great example of the opportunity we have to expand our footprint as we migrate our existing clients to the cloud.
At June 32023, cloud <unk> represented 67% of our total IRR up from 60% a year ago, reflecting our cloud first business focus and the market's ongoing shift to the cloud.
John Hall: Touching briefly on M&A, during fiscal year 23, we continue to add important technology capabilities to our cloud portfolio through acquisition. In Q4, Intapp acquired Paragon data labs. Paragon's cloud-based software helps firms to track and monitor employee compliance. Elements like personal trading and political donations are centrally managed so personal conflicts of interest or policy violations can be spotted and addressed. The product now marketed as Intapp employee compliance enhances our existing risk and compliance solutions, which are all purpose-built for the unique regulatory compliance needs of our client firms.
John Hall: Already, the investment has proven to help differentiate us with further enhanced compliance capabilities for the regulated markets we serve. Interested employee compliance is strong and is bolstered by the evolving nature of the regulatory environment, including the PCAOB's recent proposal to strengthen auditor requirements to identify and remediate non-compliance. Recent wins include a global investment bank that will use the solution to automate previously manual workflows and a large national accounting and advisory firm that will replace a homegrown solution with ours to ensure compliance with independence requirements.
Total IRR grew 22% year over year to $332 million.
John Hall: This year, we also integrated capabilities from our fiscal year 22 build stream acquisition to enhance our Intapp operations and finance solution. The broader solution integrates compliance across time entry and pre-building processes in a way that accelerates the work to collect cycle, improving realization rates and driving profitability. Kennedy. These are compelling hard ROI benefits for any firm. We are pleased with the cross-selling we have seen as we grow the value provided to our client base.
Overall, we continue to execute our land and expand model ending the quarter with more than 2300 clients 603 of which had about.
John Hall: In conclusion, we're proud of our strong performance in fiscal year 23, and we're excited about our continued growth opportunity in fiscal year 24. We are serving a durable end market with our deeply differentiated industry cloud platform with an applied AI and compliance strategy. Our subscription revenue model is highly predictable, and we see continued opportunity both to add new clients across a broad tan and to deliver greater value to expand significantly within our existing client base.
At least $100000 up from 506 in the prior year period.
Trailing 12 months net revenue retention rate was within our expected range of 113% to 117%.
John Hall: We have a great growth opportunity to drive cloud and AI adoption and modernization across all these industries. As always, I'd like to thank our clients, our partners, our investors, our board, and our global Intapp team whose teamwork and dedication led to such a successful second year as a public company. Thank you all very much.
At the end of fiscal year 'twenty, three we have 53 clients of more than $1 million on IRR of 29% from 41 clients at the end of fiscal 2022.
David Morton: Okay, now I'll turn things over to our CFO, David Morton. Dave? Thanks, John, and thanks everyone for joining us today. Before I get started, I want to express my appreciation to John, as well as the Intapp board and management team up providing me an opportunity to join this great company. Intapp has demonstrated strong, resilient growth performance against a tough macro backdrop, and I'm a firm believer in our growth momentum with our target industry markets.
SaaS and support revenue increased 31% year over year to $252 $3 million, reflecting continued strength in the sale and adoption of our cloud solutions.
David Morton: I'm looking forward to working with our team to execute against our untapped growth opportunities and continue to deliver strong, profitable growth as the company scales. As a reminder, all of our financial figures we will discuss today are non-GAP, except a revenue and revenue growth. Our GAP financial results, along with reconciliations of GAP to non-GAP financial measures, are provided in our earnings release and its supplemental financial tables. Turning to our results, I'm pleased to report that for the fourth quarter of our fiscal year.
David Morton: Cloud ARR was up 36% year-to-year, and total ARR was up 22% year-to-year. Fast and support revenue was 67.8 million, of 29% year-to-year, reflecting both new sales to new clients and upsells, and cross sales to existing clients of Intapp's purpose-built cloud solutions. Subscription license revenue was 12.2 million, down 9% year-to-year, as expected, due to a reduction of multi-year renewals as we continue to move more of our clients to the cloud. Professional services revenue was 14.6 million, up 55% year-over-year, reflecting an accumulation of large clients throughout the year, and completion of implementation projects for those large clients, coupled with a continued strong attachment.
Subscription and license revenue increased 11% year over year to $49 million, reflecting a significant number of multiyear contract renewals and products value based renewal price increases.
Professional services revenue increased 42% year over year to $49 $6 million in part due to strong attach rates for a number of large new clients that we closed during this year, particularly in financial services.
Total revenue increased 29% year over year, it's at $350 9 million.
non-GAAP gross margin was 71, 1% up from 68, 1% in the prior year as a result of increased services gross margins and the previously mentioned organizational realignment.
David Morton: Tray. Total revenue was 94.6 million, about 25% year-to-year, driven primarily by sales of our cloud solutions, as well as by strong growth and professional services revenue, partially offset by an anticipated decline in license revenue. Q4 total non-gab gross margin was 69.9%, as compared to 68.2% in the prior year period, reflecting improved professional services gross margins and a previously mentioned reclassification due to an organizational realignment. This was partially offset by revenue mix impacts related to license and professional services revenue.
Overall non-GAAP operating expense was $238 9 million, a $46 6 million increase year over year as we invested in a variety of resources and supported the growth of the business.
As a result, non-GAAP operating profit was $10 5 million as compared to operating loss of $7 1 million in the prior fiscal year, which also represents our first full year of profitability.
non-GAAP net income per share was <unk> 11 in fiscal 'twenty, three as compared to a net loss per share of <unk> 12 in fiscal 'twenty two.
In terms of the balance sheet, we ended the quarter with $134 million in cash and cash equivalents, including the proceeds from our follow on common stock offering in may of 2023.
David Morton: Non-gab operating expenses were 63.2 million, at 7.9 million increased year-to-year, as we continue to invest in sales, marketing, and product development to support our growth. Non-gab sales and market expense was 28.6 million, a 4 million increased year-to-year, as it functioned increased headcount and related sales commissions to capture new business and our growing markets along with a previously mentioned organizational realignment. Non-gab R&D expense was 21.7 million, a 5.5 million increase year-to-year, as we increase headcount and made investments in our product roadmap.
Our cash flow from operations was $27 5 million for fiscal 'twenty three as a result of growing profitability at scale.
Now turning to our outlook.
For the first quarter of fiscal 'twenty, four we expect SaaS and support revenue of between 70 and $71 million in.
In total revenue in the range of $96 million to $97 million.
non-GAAP operating profit in the range of two five to $3 5 million.
And non-GAAP per share results of approximately three.
David Morton: Non-gab G&A expense was 12.9 million, a 1.6 million decrease year-to-year, as we harvest some back office cost reductions and continue to see some leverage and scale ability in the business. Non-gab operating profit was 3 million, as compared to our fourth quarter fiscal 2022 non-gab operating loss of 3.9 million. Non-gab net income for fully diluted share was 4 cents in the fourth quarter of fiscal 2023, as compared to a loss of 4 cents in the fourth quarter of fiscal 2022.
Using a fully diluted share count weighted for the quarter of approximately 82 million common shares outstanding.
For the full year fiscal 'twenty, four we expect SaaS and support revenue of between 306 at $310 million in total revenue in the range of $419 million to $423 million.
We also expect non-GAAP operating profit to be in the range of 20% to $24 million.
And non-GAAP net income per share in the range of 20 to 24 user.
Using a fully diluted share count weighted for the fiscal year 'twenty four of approximately 83 million common shares outstanding.
David Morton: Moving to our full year results for fiscal 2023, cloud ARR grew 36% year-to-year to 222.3 million. At June 30, 2023, cloud ARR represented 67% of our total ARR up from 60% a year ago. We've left in our cloud first business focus and the market's ongoing shift to the cloud. Total ARR grew 22% year-to-330.2 million. Overall, we continue to execute our land and expand model ending the quarter with more than 2,300 clients, 603 of which had ARR of at least $100,000 of from 506 in the prior year period.
Thank you and with that John and I look forward to taking your questions. Operator. Please go ahead.
Thank you, ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone.
And then wait to hear your name announce to withdraw your question. Please press star one again.
We ask that you limit yourself to one question and one follow up.
Please stand by while we compile the Q&A roster.
Our first question comes from the line of Alex Skylar with Raymond James Your line is open.
Great. Thank you.
David Morton: Our trailing 12 months net revenue retention rate was within our expected range of 113% to 117%. At the end of fiscal year 23, we have 53 clients of more than $1 million an ARR of 29% from 41 clients at the end of fiscal 2022. SAS and support revenue increased 31% year-to-year to 252.3 million, reflecting continued strength in the sale and adoption of our cloud solutions. Subscription license revenue increased 11% year-to-year to 49 million, reflecting a significant number of multi-year contract renewals and product value-based renewal prices, and Creases.
Starting with you I just wanted to follow up on that <unk> 25.
Cloud conversion and cross sell when you talked about in the quarter can you just talk about why the migration to the cloud.
Drove the risk and compliance and then Bill stream cross sells.
And with that doesn't do expansion stories like that at all change your view on accelerating that customer shift to the cloud.
Thanks, Alex.
So.
The migration to the cloud with one pieces the firm's objectives.
And for most of the firms as we've talked about on some earlier calls we have agreement and a plan to go to the cloud it's.
It's more of a practical.
David Morton: Professional Services Revenue increased 42% year-to-year to 49.6 million, in part due to strong attachments for a number of large, new clients that we closed during this year, particularly in financial services. Total revenue increased 29% year-to-year to 350.9 million. Non-Gabbrose Margin was 71.1% up from 68.1% in a prior year as a result of increased services, gross margins, and previously mentioned organizational pre-alignment. Overall, non-Gabbrose operating expense was 238.9 million, a 46.6 million increase year-to-year as we invested in a variety of resources in support of the growth of the business.
Transition that they've got to work through how are they going to do that and what sequence. Today. So we're past the point I think in the market where the firms are really struggling with the cloud transition is more practical issues in this case bill.
Bill stream was an exciting new offering that we could come back and talk to the firm about that helps create hard ROI.
And then they use that as the driving function to do the whole project to move everything to the cloud. So it's just an example of us bringing up some innovative new offerings. In this case through an M&A transaction that we did.
That provides the prompting for the firm to prioritize the projects and I think generally as we continue to bring out more and more innovation, particularly AI in the cloud, which is the only way they can get it from us we're seeing more of that and.
And I do think it is having an effect and youre seeing some of that.
David Morton: As a result, non-Gabbrose operating profit was 10.5 million, as compared to operating loss of 7.1 million in the prior fiscal year, which also represents our first full-year profitability. Non-Gab net income per share was 11 cents in fiscal 23, that's compared to a net loss per share of 12 cents in fiscal 22. In terms of the balance sheet, we ended the quarter with 130.4 million in cash and cash equivalents, including the proceeds from our follow-on common stock offering in May of 2023. Our cash flow from operations was 27.5 million per the fiscal 23 as a result of growing profitability at scale.
Progress on the cloud numbers.
Okay, great color there.
Dave One for you just in terms of the right framework to think about <unk> growth kind of relative to that 20% revenue guide.
And in that $1 13 to 117 <unk> range for debt.
That you delivered in FY.
FY2023 is that still the right framework for 2024. Thank you.
Thanks, Alex.
Yes.
Secondly, our per.
Per say quarter by quarter, but that is that is the correct framework that we're working under.
And as John articulated in where a lot of our prepared remarks is that continued expansion motion that we continue to work through.
David Morton: Now turning to our outlook. For the first quarter of fiscal 24, we expect sass and support revenue of between 70 and 71 million. In total revenue in the range of 96 to 97 million, non-Gabbrose operating profit in the range of 2.5 to 3.5 million. And non-Gabbrose share results of approximately 3 cents using a fully diluted share account weighted for the quarter of approximately 82 million common shares outstanding. For the full year fiscal 24, we expect sass and support revenue of between 306 and 310 million.
Our model continues to be very beneficial from that as we continue to land and that have really got to stay in motion, which then obviously is reflected in our.
Commentary as well.
Our results that we posted for the quarter end of the year.
Okay. Thank you both.
Thank you.
Please standby for our next question.
Our next question comes from Kevin Mcveigh with Credit Suisse. Your line is open.
Great. Thanks, so much and let me add my congratulations.
David Morton: In total revenue in the range of 419 to 423 million. We also expect non-Gabbrose operating profit to be in the range of 20 to 24 million. And non-Gab net income per share in the range of 20 cents to 24 cents using a fully diluted share account weighted for the fiscal year 24 of approximately 83 million common shares outstanding. Thank you.
Stephen Welcome Dave as well.
Hey.
Taking the 24 guidance a little bit it seems like.
Just really really nice leverage on the EBIT line operating line given the revenue growth.
Is that all just kind of the revenue where you're starting to see maybe some of the benefits.
So the legacy cost starting to run off and just again, just really really nice outcome from a leverage perspective.
Unknown Executive: And with that, John and I look forward to taking your questions. Operator, please go ahead. Thank you. Ladies and gentlemen, and to remind you to ask the question, please press star 1-1 on your telephone. And then wait to hear your name announce. To withdraw your question, please press star 1-1 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.
<unk> that a little bit.
Yes, Kevin Thank you Sean.
We're excited about the progress that the company is making as you know we came public.
Showing the non-GAAP operating profit in this year, we did so we felt that was important.
Milestone for us to achieve in 'twenty three and we've also said that we've got our profitable growth strategy generally so we're going to be consistently pursuing that as we grow the business and some of this is scalability.
Alexander Sklar: Our first question comes from the line of Alex Skylar with Raymond James. The line is open. Great. Thank you. John, starting with you, I just wanted to follow up on that AMLOT 25, that cloud conversion in Crossill when you talked about in the quarter. Can you just talk about why the migration to the cloud drove the risk and compliance and then build streamed Crossills? And with that, does it do expansion stories like that at all change or view on accelerating that customer shift to the cloud?
And Dave can talk to you a little bit more about that I think some of it is some important work that Dave's group is doing on.
Different operational improvements that we can make now that we have achieved some more scale to.
To improve efficiency further so it's a it's a.
Combination I think.
The revenue growth good progress in the marketplace consistent demand real transformation opportunity to grow a big company here.
And those scaling that comes from that and then some conscious work internally as now that we're bigger to get some efficiencies inside of the operation.
Alexander Sklar: Thanks, Alex. So the migration to the cloud was one piece of the firm's objectives. And for most of the firms, as we talked about on some earlier calls, we have a agreement and a plan to go to the cloud with them. It's more of a practical transition that they've got to work through. How are they going to do that in what sequence today? So we're past the point I think in the market where the firms are really struggling with the cloud transition.
Great.
And then just you've got a fair amount of cash on the balance sheet, particularly given some of the recent proceeds any thoughts as to use is that continued M&A or.
Maybe some additional investments just any thoughts on the cash because of Jupiter.
It's a nice part of the story as well.
Okay.
Thank you.
Alexander Sklar: It's more of a practical issue. In this case, build stream was an exciting new offering that we could come back and talk to the firm about that helps create harder ROI benefits. And then they use that as a driving function to do the whole project to move everything to the cloud. So it's just an example of us bringing up some innovative new offerings, in this case, through an M&A transaction that we did, that provides the prompting for the firm to prioritize the project.
We don't have any immediate uses per se.
Obviously, we're just trying to be really really good stewards of shareholder capital be very smart about future investments, making sure we're seeing the right return.
And as John had articulated this comes from a very agile, but yet bootstrap company from its infancy and so.
The investment in growth narrative is really rooted here.
From top to bottom.
Alexander Sklar: And I think, generally, as we continue to bring out more and more innovation, particularly AI in the cloud, which is the only way they can get it from us, we're seeing more of that. And I do think it's having an effect and you're seeing some of the progress on the cloud numbers. Okay, great color there.
Terrific. Congrats again, I'm, just really really nice outcome.
Thank you.
Please standby for our next question.
Our next question comes from the line of Koji Ikeda with Bank of America. Your line is open.
David Morton: Dave, one for you, just in terms of the right frameworks to think about ARR growth, it's kind of relative to that, that's 20% revenue guide. And in that one 13 to 117 NRR range, for that you delivered in FY23, is that still the right framework for 2024? Thank you. Thanks, Alex. You don't want to simply go in NRR for saying quarter by quarter, but that is the correct framework that we're working under.
Hey, John .
Congrats Steve.
Listen it out there and welcome David Thanks.
Thanks for taking the questions just a couple from me.
I wanted to ask on the billings in the fourth quarter did notice there was a bit of a deceleration in the fourth quarter.
It's really trying to triangulate that billings exit growth rate with the fiscal 'twenty revenue guide starting point.
But also realizing too that when you look at billings from maybe a.
David Morton: And John had articulated in where a lot of our prepared remarks is that continue to expansion motion that we continue to work through. And our model continues to be very beneficial from that as we continue to land and then have a really good span motion, which then obviously reflected in our commentary as well as our results that we posted for the quarter end of the year. Okay, thank you both. Thank you.
A second half perspective, the growth does look fairly similar from a second half last year perspective, but really trying to figure out if there's anything specific to call out in the billings exit growth rate or any sort of mechanics in the fourth quarter Billings result.
No there was nothing abnormal.
Abnormal about it I would say it was in line and fairly consistent across the year, obviously youll have.
Various points of time.
The actual transactional nature of when both billings shows up and how some of that FERC work Dr. Dr. But as far as year over year comps I think everything was pretty straightforward.
Kevin Mcveigh: Please stand by for our next question. Our next question comes from the lungs, Kevin McVeigh with Credit Flush. Yalan is open. Great, thanks so much. And let me head my congratulations to Steven. Welcome Dave as well. Hey, I'm packing the 24 guidance a little bit. It seems like there's just really, really nice leverage on the EBIT line, operating line, you know, given the revenue growth. Is that all just kind of the revenue or are you sure to see maybe some of the benefits?
Got it thanks, David and maybe a follow up for you.
Realizing or just maybe you could comment on if theres going to be any change or any things that we should be thinking about in the way you're approaching the guidance methodology versus the prior guidance.
Thank you.
No.
No none whatsoever.
This organization by design is very prudent.
And I'll continue.
Kevin Mcveigh: You know, some of the legacy costs starting to run off and just again, just a really, really nice outcome from a leverage perspective. We get to unpack that a little bit. Yeah, Kevin, thank you, Sean. We're excited about the progress that the company is making. As you know, we came public, not showing a non yet offering profit in this year. We did. So we felt like that was important. Milestone for us to achieve in 23.
To carry that flag as we move forward so no.
Looking for no immediate changes here.
And the questions.
Thank you.
Please standby for our next question.
Okay.
Our next question comes from the line of Terry Tillman with choice Securities. Your line is open.
Great. Good evening guys. This is <unk> on for Terry I. Appreciate you taking the questions I just wanted to start with one I believe in the past we've talked about the $1 billion revenue opportunity.
Kevin Mcveigh: And we've also said that we've got a profitable growth strategy generally. So we're going to be consistently pursuing that as we grow the business. And some of this is scalability. And they can touch you a little bit more about that. I think some of it is some important work that Dave's group is doing on. Different operational improvements that we can make now that we have achieved some more scale can prove efficiency further.
Just simply selling the entire product added to existing customers Im just curious as we move into the new fiscal year. How we should continue to think about GTS growth investment as we kind of focus on accelerating the share of wallet gains inside your install base for selling additional products and then I had a follow up for Dave.
Kevin Mcveigh: So it's a combination, I think. Revenue growth, good progress in the marketplace consistent demand, real transformation opportunity to grow a big company up here. And the scaling the cost from that. And then some conscious work internally is now that we're bigger to get some efficiencies inside the operation. Great.
Yes, thanks Conor.
One of the things that we think is really exciting about our growth opportunities that we have over the years landed.
Our position in so many of the very largest professional and financial services firms. So the hard work of winning the relationship has happened and now we have the opportunity to expand within them and Youre right. We've talked about the fact that just in the top 100 clients that we already have today, if they bought everything that we make it's $1 billion of IRR, So theres a whole grow.
Kevin Mcveigh: And then just, you know, you've got a firm on the cash on the balance sheet, particularly given some of the recent proceeds. Any thoughts as to use is that, you know, continued M&A or, you know, maybe some additional investments, just any thoughts on the cash because I was. It's a nice part of the story as well. Thank you. We don't have any immediate uses, per se. You know, obviously, we're just trying to be really, really good stewards of shareholder capital.
Story, just from cross selling upsell within the client relationships that we have what you are seeing and you can see a little bit of this in the million dollar plus clients that we gave the number four and $100000 clients that we given it before there is some good upsell and cross sell happening in those accounts and some of those.
Upsells and cross sells because the firms are so fast are quite large in and of themselves.
Kevin Mcveigh: Be very smart about future investments, make sure we're seeing the right return. And it's not articulated. You know, this comes from a very agile, but yet bootstrapped company from its infancy. And so the investment and growth narrative is really rooted here. From top to bottom. Congrats again. I'm just really, really nice outcome. Thank you.
So I think the emphasis to your question about go to market I think we are looking carefully at strategic accounts.
Putting together in fiscal 'twenty for a little bit of a larger group to make sure that we're focused on capitalizing on the opportunity to go in and cross sell inside these large firms. So it's a good instinct, that's definitely part of our growth strategy.
Got it that's great to hear maybe just a follow up Dave welcome aboard you came from the outside just curious what you think might be the most underappreciated about the company at this point by investors and then going forward. What's your thoughts on the balance of topline growth and profit expansion or maybe just said another way should we continue should we expect.
Koji Ikeda: Please stand by for our next question. Next question comes from the line of Koji Akita with Bank of America. The line is open. Hey, John. Congrats, Steve. You know, you're probably listening out there and welcome, David. Thanks for taking the questions. Just a couple from me. I wanted to ask on the billing in the fourth quarter. You know, did notice there was a bit of a deceleration in the fourth quarter. It's really trying to triangulate that billing's exit growth rate with the fiscal 24 revenue guide starting point.
<unk> steady margin expansion over time, thank you.
Koji Ikeda: But also realizing too that when you look at billing from maybe a second half perspective, you know, the growth does look fairly similar from a second half last year perspective. But really trying to figure out if there's anything specific to call out in the billing's exit growth rate or any sort of mechanic in the fourth quarter. No, there was nothing abnormal about it. I would say it was in line and fairly consistent across the year.
So a couple of things.
And I can probably go on for the rest of this call just asked that the untapped potential.
Here at intact, but when I think about.
Not only the products that not only the end resilient clients that we're selling into not only as we're at a very infancy of this nature as well as as you think about how some of these larger expand opportunities can continue and even if you look at that million dollar and above cohort and that those shortly.
Behind that that were looking to expand and provides a lot of <unk>.
Strong opportunity heading into not only 24, but beyond.
As I think about the model itself.
Koji Ikeda: Obviously, you'll have various points of time of the actual transactional nature of when both billing shows off and how some of the deferreds work DR to DR. But as far as year of year of comps, I think everything was pretty straightforward. Scott, thanks David, and maybe a follow-up for you, you know, realizing or just maybe you could comment on if there's going to be any change or any, you know, things that we should be thinking about in the way you're approaching the guidance methodology versus the prior guidance methodology. Thank you. No, no, not whatsoever. I think this organization by design is very prudent. And I'll continue to carry that flag as we move forward. So no looking for no immediate changes here. Thank you.
There could be some leverage.
Going forward and obviously, we want to continue to be very very prudent.
About our investments and making sure we're seeing the right return.
Notwithstanding the backdrop and so.
We're very cautious about that but then we all.
Also get excited about the opportunity as we think about going the go forward plan.
Great. Thank you.
Thank you.
Please standby for our next question.
Our next question comes from the line of Parker Lane with Stifel. Your line is open.
This is Matthew kicker for Parker, Thanks for taking my questions.
First congrats to Stephen welcome David to the team.
I'm wondering now that a meaningful share of the era.
From a cloud solution how are you thinking about pricing those hub solutions versus on Prem do you anticipate.
Connor Passarella: Please stand by for our next question. Our next question comes from the line of Terry Tillman with true securities. Your line is open. Great. Good evening, guys. This is Connor Passarella on for Terry. I appreciate you taking the questions. I just wanted to start with one I believe in the past. We talked about the $1 billion revenue opportunity by I just simply saw the entire product set into existing customers. I'm just curious as we move into the new fiscal year, how we should continue to think about GTM or growth investment as we kind of focus on accelerating the share of all games inside your external base for some additional products and then I follow for this.
Some of those price actions might play a meaningful role in the grille sort of the next few years.
Thanks, Matthew I think this is a topic that we have.
Discussed with you all and there's definitely opportunity there one of the things that we're finding is that the applied AI innovations that we're bringing out.
Our very well received and has strong value with them and so on.
One of the things we're excited about as we bring more and more together and we talked a little about some of the Microsoft connections that we had come live this past quarter or two quarters is that we do have a real opportunity as we move people to the cloud not just to move them, there, but to help them achieve higher value from what we're delivering in a lot of that is in the appeal.
Connor Passarella: Thanks, Connor. One of the things that we think is really exciting about our growth opportunity is that we have over the years landed a position in so many of the very largest professional financial services firms. So the hard work of winning the relationship has happened. And now we have the opportunity to expand within them and you're right. We've talked about the fact that just in the top 100 clients that we already have today.
AI technologies that are embedded in the platform and more and more come out each quarter. So I think we haven't officially announced anything but our experience has been that people do appreciate the value that we're bringing to them and we're going to continue to focus on that.
Connor Passarella: If they bought everything that we make, it's a billion dollars of ARR. So there's a whole growth story just from cross sell and upsell within the client relationships that we have. What you are seeing and you can see a little bit of this in the million dollar plus clients that we gave the number four and the $100,000 clients that we gave the number four. So there's some good upsell and cross sell happening in those accounts and some of those upsells and cross sells because the firms are so fast are quite large in and of themselves.
Okay got it and then you mentioned the acquisition of Paragon data labs and your <unk>.
So I'm wondering if you could give update on simply the integration process of that.
Company.
A part of your go to market strategy right now and then secondly, how widely adopted do you think that your employee compliance tools will be over time.
Every customer could potentially buy those solutions or just a subset.
Yes, we're very excited about the progress that we've made with the Paragon data labs acquisition. It was just a few months ago that we did that and the team that's come over it's just a fantastic group of people that really have mastered this.
Connor Passarella: So I think the emphasis your question about go to market. I think we are looking carefully at strategic accounts and putting together in fiscal 24, a little bit of a larger group to make sure that we're focused on capitalizing on the opportunity to go. We in and cross sell inside these large firms. So it's a good instinct. That's definitely part of our growth strategy. Got it. That's great to hear.
Subject matter and the issues of employee compliance across all the types of firms that we sell to and yes. It absolutely is part of our go to market today, and we've had very encouraging progress already in wins with that product even in areas that weren't necessarily part of our original bid.
Connor Passarella: I just followed up Dave. Welcome aboard. You came from the outside and just curious what you think might be the most underappreciated about the other company at this point by investors and then going forward, maybe what's your thought on the balance of top one growth and profit expansion. Maybe just another way should we continue to expect steady margin expansion over time. Thank you. So a couple of things and I could probably go on for the rest of this call just as the, you know, the untapped potential here at in tap.
Business plan for example, we're making great progress in the accounting industry.
And this is before this PCA Ob policy.
Italy becomes real it's just a proposal right now, but a lot of the interest that we're getting to your question is from the entire community affirms that we sell to some of them have a little bit of a different regulatory requirement today. Some of them are looking more from a risk management perspective, but all of them increasingly realize this is a key category for that so this general <unk>.
Connor Passarella: But when I think about, you know, not only the product set, not only the end resilient clients that we're selling into, not only as we're at a very. The infancy of this nature as well as you think about how some of these larger expand opportunities can continue. And even if you look at that million dollar and above cohort and then those, you know, shortly behind that that we're looking to expand it provides a lot of strong opportunity.
<unk> of compliance with its highly regulated set of industries. It's something that I think is a cornerstone of our whole strategy and the more that we experienced in the marketplaces, where we realize this is a fundamental differentiator for us that we've been doing for a long long time and that the employee compliance offering today is is an expansion of that an enhancement of that.
US a little bit richer story to tell and something that has a lot of strength of the business.
Connor Passarella: We're going to be heading into not only 24 but beyond. And as I think about the model itself, there could be some leverage going forward. And obviously, we want to continue to be very, very prudent about our investment and making sure we're seeing the right return, notwithstanding the backdrop. And so we're very cautious about that. But then we also get excited about the opportunity as we think about going to go forward planned. Great. Thank you.
Terrific. Thank you very much.
Thank you.
Please standby for our next question.
Okay.
Our next question comes from the line of Brian Schwartz with Oppenheimer. Your line is open.
Yes, hi, thanks for taking my questions today John .
John I wanted to follow up I was going to ask you. If you had made any changes to the sales organization as we start a new fiscal year and then you did answer one of the questions that it does look like you are making an investment on the inside sales force can you maybe provide a little more color.
Matthew Kikkert: Please stand by for our next question. Our next question comes from the line of Parker Lane, which is evil. The line is open. This is Matthew Kikkert for Parker. Thanks for taking my questions. Let me first say congrats to Steven. Welcome, David to the team. I'm wondering now that a meaningful share of your error is coming from cloud solutions. How are you thinking about the pricing, those cloud solutions versus from due to state.
In terms of how big of an investment that's going to be in terms of increasing the capacity and maybe your thoughts in terms of the duration of the.
The increase in the capacity of the organization.
Yes. Thanks, Brian we are focused as we always have been on working with the clients that we have to cross sell and up sell and simultaneously winning new clients. So the.
Go to market organization evolve each year as we put the business plan together for two for one of the specific objectives that we have in one of the choices that we've made in increasing the investment in the sales and go to market machine a little bit more generally is what we're calling strategic accounts the large.
Matthew Kikkert: Some of those price actions might play a meaningful role in the grocery store the next few years. Thanks, Matthew. I think this is the topic that we've discussed with you all. And there's definitely opportunity there. One of the things that we're finding is that the applied AI innovations that we're bringing out are very well received and have strong value with them. And so one of the things we're excited about is we bring more and more together and we talked about some of the Microsoft connections that we had come live this past quarter or two quarters is that we do have a real opportunity as we move people to the cloud, not just to move them there, but to help them achieve higher value from what we're delivering.
Enterprise class firms, where there is so much upsell and cross sell potential we're just upsell and cross sell can be measured in billions of dollars in some of these accounts. So we're excited about the opportunity. There I'm also very excited about some of the talent that has joined the company in the past year or so bringing incredible history selling to this class of firm from some of our.
Our friends in the software industry and from some of the firms themselves real experts, who know how to do this so we're seeing the success that we're having and who are inspired by the vision that we have for digital transformation inside these firms and want to represent that so it's just been a very positive year in terms of bringing talent and a little bit of organization into that in terms of how much.
Matthew Kikkert: And a lot of that is in the apply AI technology that are better than the platform and more and more come out each quarter. So I think we haven't officially announced anything, but our experience has been that people do appreciate the value that we're bringing to them, and we're going to continue to focus on that. Okay. Got it.
Are we putting their relatively speaking I don't know that were talking specifically about that but I think you.
We'll see particularly.
Matthew Kikkert: And then you mentioned the acquisition of Paragon data labs in your intro. I wonder if you could give an update on simply the integration process with that company. Is it a part of your gold market strategy, you know, right now. And then secondly, how widely adopted do you think that your employee comes compliance tools will be over time is that every customer gets potentially by those solutions are just some set. Yeah, we're very excited about the progress that we've made with the Paragon data labs acquisition.
Anything about the firms coming on more and more of these large accounts stories coming in and I think that's a real opportunity for the company for all sorts of reasons.
Thanks, John and then one quick follow up for Dave welcome to the call.
Notice, saying that the delta between the cloud our growth and the SaaS and support revenue growth has been narrowing here for almost two years now which is a good trend is there any reason that that trend should not continue as we kind of think about our forecast the business in the future. Thanks.
Matthew Kikkert: It was just a few months ago that we did that in the team that's come over. It's just a fantastic group of people that really have mastered this subject matter and the issues of employee compliance across all the types of firms that we sell to. And yes, it absolutely is part of our go to market today. And we've had very encouraging progress already in wins with that product, even in areas that weren't necessarily part of our original business plan, for example, we're making great progress in the accounting industry.
Good question Brian .
And.
Just.
Thinking out loud here.
As we.
Cogitate R 24 plan and the implied guide.
<unk>.
We definitely have SaaS is.
Got it.
Opinion grow and then obviously the support we will have a tail.
Matthew Kikkert: And this is before this PCOB policy actually becomes real. It's just a proposal right now, but a lot of the interest that we're getting to your question is from the entire community of firms that we sell to some of them have a little bit of a different regulatory requirement today. Some of them are looking more from a risk managed with perspective, but all of them increasingly realize this is a cute category for them.
Kind of a flat line right, it's not going to grow at the same rate of pace.
So from there you can kind of see.
The implied linear where those two are starting to have a crossover.
Perfect.
Does that makes sense.
Yes, that's helpful, Dave and congratulations on real nice quarter.
Matthew Kikkert: So this general area of compliance for this highly regulated set of industries is something that I think is a is a cornerstone of our whole strategy and the more that we experience in the marketplace, we realize this is a fundamental differentiator for us. And we've been doing for a long, long time, and then the employee compliance offering today is an expense with that and enhancement of that gives us a little bit richer story to tell it's something that has a lot of strength to the business. Christopher, thank you very much. Thank you.
Okay.
Thank you.
Please standby for our next question.
Our next question comes from the line of Matt Vanvliet with <unk>. Your line is open.
Yes, Thanks for taking my question and welcome David Congrats soon.
I guess as you look at some of the recent success <unk> had in the financial services World is that sort of a newer area.
Thinking about not only investments in go to market is there an expectation for sort of an outsize.
Brian Schwartz: Please stand by for our next question. Our next question comes from the line of Brian Schwartz with Oppenheimer. The line is open. Yeah, hi, thanks for taking my questions today. John, I wanted to follow up. I was going to ask if you had made any changes to the sales organization as we started a new fiscal year. And then you did answer one of the questions that it does look like you are making an investment on the inside sales force.
A portion of those investments you are talking about coming in this area.
Brian Schwartz: Can you maybe provide a little more caller in terms of how big of an investment that's going to be in terms of increasing the capacity and maybe your thoughts in terms of the duration of the increase in the capacity of the organization. Thanks Brian. We're focused as we always have been on working with the clients that we have to cross on us on simultaneously winning new clients. So the code of market organization evolved each year as we put the business plan together.
Or how do you feel about your market coverage in general and then kind of a.
Part b to that as you've mentioned before that sometimes as things slowdown somewhat it gives some of these organizations and operate.
First the new technology, rather than just trying to keep their head above water. So curious how the current market environment, especially with the slower capital markets activity may or may not be impacting overall deal cycles.
Yes.
Matt.
First of all Youre right, we have talked about the fact that.
We've had a lot of progress in the financial services.
Good industry also in the professional services targeting the street, both grow for us, but the financial services group is.
Newer.
Starting from a smaller base and it has really been growing.
Brian Schwartz: For 24, one of the specific objectives that we have and one of the choices that we made in increasing the investment in the sales and code of market machine a little bit, where generally is what we were calling strategic accounts. The large enterprise class firms where there's so much upsell across sell potential where just the upsell and cross sell can be measured in millions of dollars in some of these accounts. So we're excited about the opportunity there.
We've also had a lot of success, we've talked about this in both the private capital markets firms.
Private capital asset managers of various strategies as well as the investment banks and the other advisory firms and we've even talked about some of the other segments like the pension funds I talked about PSP.
In the prepared remarks, so theres a lot of excitement about the range of classes of firms that are picking up our deal cloud solution.
Brian Schwartz: I'm also very excited about some of the talent that has joined the company in the past year or so bringing incredible history selling to this class of firm from some of our friends in the software industry and from some of the firms themselves real experts who know how to do this who are seeing the success that we're having and who are inspired by the vision that we have for digital transformation inside these firms and want to represent that. So it's just been a very positive year in terms of bringing talent and a little bit of organization into that.
Collaboration and content solution are compliant solution, so really across the board.
We are going to feed that because its such a.
Our growth industry itself.
Regardless of the.
Cycle of the economy. The general macro trend is a shift of investment dollars from the traditional public markets more and more to these private capital models and it is a growth industry, just structurally and I think we've really benefited from that and are continuing to benefit from that.
Brian Schwartz: In terms of how much are we put in there relatively speaking, you know, I don't know that we're talking specifically about that, but I think you will see particularly some of the aiming about the firm coming on more and more of these large account stories coming in. And I think that's a real opportunity for the company for all sorts of reasons. Thanks, John.
As the company scale, so we're going to support that.
Make sure that we take advantage of the opportunity there.
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Brian Schwartz: And then one quick follow up for Dave. Welcome to the call. Been noticing that the deltop between the cloud ARR growth and the staff and support revenue growth has been narrowing here for almost two years now, which is a good trend. Is there any reason that that trend should not continue as we kind of think about our forecasts and business in the future? Thanks. Good question, Brian. And I'm just thinking out loud here as we concentrate our 24 plan and the applied guide.
The second question you asked about how do we.
Are we impacted by the market generally I think the one thing that we've said is that if there is a part of our target market that might be more sensitive to the capital markets. Its the investment banking group.
The rest of the industries that we sell even though private capital firms themselves have been remarkably stable and growing.
Growing their spend for digital transformation and for cloud and for applied AI, because theyre trying to modernize themselves, they're trying to do that internationally.
So theres a lot of opportunity for us that hits that our growth through some sort of uncertain times over the past couple of years and the investment banks interestingly, our some of our largest deals that we've talked about here in this years.
Brian Schwartz: We definitely have sasses going to continue to grow. And then obviously the support will have a tail. Kind of a flatline, right? It's not going to grow at the same rate of pace. And so from there, you can kind of see the implied linear where those two are starting to have a crossover fact. Does that make sense? Right? Yeah, that's helpful, Dave, and congratulations on real nice quarter. Thank you.
So we are making very good progress there and I think they are kind of coming from behind there is an opportunity for them to modernize with technology. That's purpose built for the industry for the first time, so there's a lot of tailwind there, but we.
We have been transparent about if theres a market signal that we experienced one day, it's probably investment banking.
Thank you.
Please standby for our next question.
Our next question comes from the line of socket EMEA with Barclays. Your line is open.
Unknown Executive: Please stand by for any questions. [inaudible] The rest of the industries that we sell, even the private capital firms themselves have been remarkably stable and growing and growing their spend for digital transformation and for cloud and for applied AI because they're trying to modernize themselves, they're trying to do that internationally. So there's a lot of opportunity for us that has fed our growth through some sort of uncertain times over the past couple of years.
Okay, Great Hey, good afternoon, guys. Thanks for taking my questions and glad to be on the call here.
John maybe first for you.
A lot of helpful. Deal example, that you gave on the call and called out some some displacements of either in house or horizontal apps.
Applications I was wondering if you just go one level deeper into the competitive environment, a little bit, particularly with those horizontal SaaS providers, maybe you could just touch on qualitatively of course, a little bit on just on competitive win rates and sort of what you hear from customers about your very purpose built platform versus other.
We're kind of more horizontal solutions out there does that makes sense.
You bet.
Welcome to the group.
Appreciate it. Thank you guys. Thank you sure.
So there is.
There is an interesting dynamic that we've talked about a little bit.
I can go into.
When comparing us to the traditional large horizontal.
Suppliers.
The firms are sort of in two classes, they're either coming off of there.
In house built.
Bespoke system.
And they are trying to decide do we go with one of these classic horizontal players that everybody is known for many years or do we go with a purpose built company like UN tap in their first move.
And in the early days, we were a small company and were not well known and we want kind of more in the mid sized firms and fewer in the large because they felt like the big guys with a safe bet.
As we have grown in one more market share in mid size and start to move up and added some real capabilities to the platform that met both the technology requirements and the security requirements for the more enterprise class firms. We now have more and more references that have successfully picked us in the first instance, and the win rate there is pretty good and getting better.
The flip side is there is a whole generation of firms that already wins.
To the classic horizontal players for.
For reasons that are very logical.
But they're not getting good adoption.
And this is the big knock us even after people go through all the pain and effort to try to put the thing in and try to customize it to make it work for the unique business model that it wasn't really designed for.
At the end they don't get the users to run with it because it's too clunky. It it's not a knock on the software because the software is excellent. That's why these firms are run.
All over the place in other industries, but in this industry. The professionals really have a very specific workflow very specific data model that they need to model for their deals and their engagements. They have to look at the market data coming in from third parties to really try to orient themselves for the types of strategies. They want to pursue the types of clients. They want us they have to use.
Very moderate applied AI, if they want to compete on networking to the right.
There's all kinds of things now that are available in our platform that are so natural to the end user in this market that when they see it and they can compare it to their experience with their experience has been with the previous generation the horizontal assistance they say oh.
Finally, somebody built something for me and they buy it and so our win rate when people are looking at adoption problems or those things come up for renewal is actually higher.
Unknown Executive: And the investment banks interestingly are some of our largest deals that we've talked about here in this year's reports. So we are making very good progress there. And I think they're kind of coming from behind. There's an opportunity for them to modernize with technology that's purpose built for their industry for the first time. So there's a lot of tailwinds there, but we have been kind of transparent about that. If there's a market signal that we experienced one day, it's probably investment banking. Thank you.
In the first instance, when they're trying to figure out whether they should go with us or go with one of the big horizontal players. So as we March forward.
Both of those numbers should move in the right direction for us and it's just the natural purpose built value proposition as people become more comfortable and we get bigger and we become more capable it's easier and easier to trust.
Their environment to us and one of the great quotes I loved in this quarters.
John Hall: Please stand by for our next question. Our next question comes from the line of Saket Kalia with Barclays, Shilane is open. Okay, great. Hey, good afternoon guys. Thanks for taking my questions and glad to be on the call here. John, maybe first for you, a lot of helpful deal examples you gave in the call and called out some displacements of other in house or horizontal applications. So when we just go one level deeper just into the competitive environment a little bit, particularly with those horizontal staff providers, maybe you just touch on qualitatively, of course, a little bit on just on competitive wind rates and sort of what you hear from customers about, you know, your very purpose built platform versus other kind of more horizontal solutions out there.
Report was actually the adoption change that one of these big firms experienced when they put us in that moved off of the traditional horizontal thing because that's ultimately the proof and the stickiness for the purpose built system.
Yes, absolutely it makes sense that shows David maybe for you for my follow up.
I'm wondering if you could just digging a little deeper on the professional services business.
You touched on a little bit in your prepared remarks, but I'm wondering what you how you kind of think about the growth there.
As long as the margin we've seen kind of the gross margin there are narrow quite a bit I'm wondering how you're thinking about the services business in 'twenty for both from a growth and margin expense perspective to the extent you could disclose.
Outside of the prepared remarks, first and foremost we've done a lot of work on the margin and I'd like to commend.
John Hall: Does that make sense? You bet. And welcome to the group. We're very appreciative that you guys are covering us. Thank you. Sure. So, you know, there's a, there's an interesting dynamic that we've talked about a little bit and I can go into. When comparing us to the traditional large horizontal suppliers. The firms are sort of in two classes. They're either coming off of their in house built. The spoke system. And they're trying to decide do we go with one of these classic horizontal players that everybody has known for many years, or do we go with the purpose built company.
The team here because that's at the heart.
And so I believe over this past year. There has been material improvements that have brought that up and we still have some work to do.
As we continue forward into 'twenty, four and beyond but.
Pretty pretty happy at what's been done thus far.
As far as the growth.
Obviously, it's not going to scale as fast as SaaS.
But there are but there are some growth plans in place.
That obviously mirror.
Rapid deployments across our various clients and so.
I am pleased with what we've done here and what I've been able to learn about the team themselves and how they are deployed and so I.
John Hall: Like in tap in their first move. And in the early days, we were a small company and we're not well known and we want kind of more in the mid size firms and fewer in the large because they felt like the big guys were the safe bet. As we have grown and one more market share in the size and start to move up and added some real capabilities to the platform that met both the technology requirements and the security requirements for the more enterprise class firms.
I think we get a lot of good grades from from that service offering.
Got it very helpful. Thanks, guys.
John Hall: We now have more and more references that has successfully picked us in the first instance. And the win rate there is pretty good and getting better. The flip side is there's a whole generation of firms that already went to the classic horizontal players for reasons that are very logical. But they're not getting good adoption. And this is the big knock is even after people go through all the pain and effort to try to put the thing in and try to customize it to make it work for the unique business model that it wasn't really designed for.
Thank you.
Ladies and gentlemen, im showing no further questions in the queue.
I would now like to turn the call back over to John Hall for closing remarks.
Okay. Thanks, everyone.
Appreciate your attention and your questions and we have a great Q4 behind us.
We're excited about our continued momentum in 'twenty four thanks.
Thanks again for your time today, and we look forward to talking to you.
A little luck next quarter.
Thanks, so much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
John Hall: At the end, they don't get the users to to run with it because it's too clunky and it's not a knock on the software because the software is excellent. That's why these firms are running, you know, all over the place in other industries, but in this industry that the professionals really have a very specific workflow. Very specific data models that they need to model for their deals and their engagements, they have to look at the market data coming in from third parties to really try to orient themselves for the types of strategies they want to pursue or the types of clients they want to.
John Hall: They have to use very modern applied AI if they want to compete on networking to the right clients, there's all kinds of things now that are available in our platform that are so natural to the end user in this market that when they see it. And they can compare it to their experience, what their experience has been with the previous generation, the horizontal systems, they say, oh, finally, somebody built something for me and they buy it.
John Hall: And so our win rate when people are looking at adoption problems or those things come up for renewal is actually higher than in the first instance when they're trying to figure out whether they should go with us or go with one of the big horizontal players. So as we march forward, I think both of those numbers should move in in the right direction for us and it's just the natural purpose built value proposition as people to come more comfortable and we get bigger and we become more capable.
John Hall: It's easier and easier to trust their environment to us. And one of the great quotes I loved in this quarter's report was actually the adoption change that one of these big firms experience when they put us in and moved off with the traditional horizontal thing is that that's ultimately the proof and the stickiness for the purpose built system. Yeah, absolutely.
David Morton: It makes sense that shows David maybe for you for you for my follow up. I love if you could just dig it a little deeper on the professional services business. You touch on a little bit in your prepared remarks, but I'm wondering what you know how you kind of think about the growth there as well as the margin. You know, we've seen kind of the gross margin there are narrow quite a bit.
David Morton: I'm wondering how you're thinking about the services business in 24 both from a growth and margin expect perspective to extent you could disclose. You know, I'll find of the preparing marks for some foremost we've done a lot of work on the on the margin and I'd like to commend the team here because that's that's a hard. Or and so I believe over this past year there's been material improvements that have brought that up and you know, we still have some work to do as we continue forward into 24 and beyond, but pretty, pretty happy at what's been done this far as far as the growth.
David Morton: Obviously, it's not going to scale as fast as fast, but there are some growth plans in place that obviously mere, you know, rapid deployments across our various clients. And so, you know, I'm pleased with what we've done here and what I've been able to learn about the team themselves and how they're deployed. And so, I think we get a lot of good grades from that service offering. Scott, very helpful. Thanks, guys.
Unknown Executive: Thank you. Ladies and gentlemen, I'm showing no further questions in the queue.
John Hall: I will now like to turn the call back over to John Hall for closing remarks. Okay, thanks everyone. We appreciate your attention and your questions and we have a great queue for behind us and we're excited about our continued momentum in 24. Thanks again for your time today and we look forward to talking to you just a little while next quarter. Thanks so much.
Unknown Executive: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.