Q3 2025 Intapp Inc Earnings Call
Speaker Change: Hello everyone and welcome to the Intapp Fiscal 3rd quarter 2025 webcast.
Speaker Change: 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 participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised.
Speaker Change: To withdraw your question, simply press star one more again. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to the senior vice president of investor relations, David Trone. The floor is yours. Thank you very much.
Speaker Change: Thank you. Welcome to Intapp's fiscal third quarter, 2025 financial results.
John Hall: On the call with me today are John Hall, Chairman, and CEO of Intapp, and David Morton, Chief Financial Officer.
John Hall: 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 fourth quarter in four-year 2025.
John Hall: He's forward-looking, statements are based on management's current views and expectations.
Until certain assumptions made as of today's date.
John Hall: Intersubject to various risks and uncertainties, including those described in RSEC 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.
John Hall: Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law.
John Hall: Further on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results including non-GAAP gross margin. Thank you very much.
John Hall: non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income for share and free cash flow.
John Hall: As a reminder, all of our financial figures we will discuss today are non-GAAP except for revenue and revenue growth, catching cash equivalents and total remaining performance obligations.
John Hall: Our GAAP financial results, along with the reconciliations of gap to non-GAAP financial measures, can be found in today's earnings release and its supplemental financial tables.
John Hall: Which is available on our website and as an exhibit to the Form A K furnished with the SEC prior to this call.
John Hall: or a supplemental financial presentation which is available on our website.
With that, I'll hand the conversation over to John .
Thank you, David.
Good afternoon everyone.
Speaker Change: Thank you for joining us today, as we share the results of our fiscal third quarter.
Speaker Change: I'm happy to say that once again, we've achieved strong quarterly results.
Speaker Change: Driven by the launch of new solutions and AI capabilities, an exciting new acquisition
Speaker Change: In Q3, our cloud ARR grew to $352 million, up 28% year-over-year.
CloudNow represents 77% of our total ARR of $455 million.
In the quarter, we earned Sass Revenue of $85M $80M.
Up 28% year over year.
Speaker Change: and Total Revenue of $129 million, up 17% year-over-year.
Speaker Change: Now, I'd like to share some key innovations and growth drivers from our fiscal third quarter.
Speaker Change: In February , we hosted our premier product event, Intapp Amplify in New York.
Speaker Change: which was attended by leaders for more than 400 of our client firms.
Speaker Change: We previewed our latest advancements in alignment with our growth AI strategy.
and we demonstrate our ongoing commitment to tabler innovation.
First, we announced the General Availability of Intapp Deal Cloud Activator.
A research fact, AI-enabled growth platform. [inaudible]
Speaker Change: that gives professionals the tools, insights, and coaching they need to build, scale, and apply the most successful business development behaviors.
Speaker Change: Previewed are transformed Intapp Time Product, scheduled for release this summer.
Speaker Change: The New Intapp Time uses Generative AI and a modernized user experience
Speaker Change: Complete and accurate time entries help firms grow and better realize revenue.
While making clients happier by reducing errors and a non-compliant billing.
We introduced Intapp Walls for AI.
Speaker Change: which offers protection against the oversharing of confidential data by AI tools.
Letting firms constantly deploy AI no matter the provider.
We also added three new features to Intappassist for Deal Cloud.
Helping to uncover more opportunities faster than ever before.
Next is a smart tagging capability.
that further automates data capture.
Speaker Change: and Enhanced's organization ensuring that firm intelligence, like client activity, deal status, and prospective opportunities, is easy to find, understand, and use.
And we delivered a prompt studio feature.
Speaker Change: that helps investors, advisors tailor their AI to generate highly personalized insights specific to their role.
Speaker Change: Intapp assist enables us to include more information on intermediaries and target companies.
Speaker Change: With smart tagging and AI suggestions, information is inputted faster than ever, with 100% accuracy.
Speaker Change: allowing us to include more and get more done in a shorter timeframe.
Speaker Change: Following the success and client response to Intapp amplify a New York, we're looking towards bringing the event to London this May as well.
Speaker Change: We're also pleased to be continuing our success in real assets.
Speaker Change: A key win from this quarter is with a large US base real assets firm.
Speaker Change: They recently replaced a legacy horizontal CRM with Deal Cloud to access better investor relationship data and accelerate fundraising as they established new investment lines.
Speaker Change: We're continuing to grow and enhance our real assets offering through the strategic acquisition of Term Sheet.
a software provider for real estate teams.
Speaker Change: Bringing together Deal Cloud and Term Sheet as additional capabilities and expands our ability to serve new personas within real assets.
Combined, Ilkzad in term sheet will deliver a powerful operating system.
Speaker Change: Taylor for every aspect of the real assets investment life cycle.
Speaker Change: One of our clients told us that this strategic move differentiates Intapp from more narrow Tillmanagement solutions.
Speaker Change: Validating that we've chosen the partner who will innovate to help us grow.
Speaker Change: We're pleased to welcome the term sheet teamed Intapp, further building our uncaroled team of industry experts.
Speaker Change: Our partner ecosystem also continues to be an important cornerstone of our company's strategy.
Speaker Change: We're continuing to achieve strong growth, signing eight new partners this quarter, and bringing our partner ecosystem to more than 140.
New Partners, Span Technology Integration, Services, Data, and Software Companies
Speaker Change: Additionally, in March, we co-hosted our third annual CIO leadership summit with Microsoft.
for a group of select, legal accounting, and consulting CIOs.
Held at Microsoft's Redmond Campus. [inaudible]
Speaker Change: The Summit focused on driving innovation and accelerating productivity through AI and cloud technologies.
Speaker Change: It also highlighted the power of our partnership, including the many key integrations that enable operational transformation and enhanced collaboration.
Okay, I'll turn now to Q3 wins.
Both new clients and expansions as well as cloud migrations.
Speaker Change: First, I'm pleased to share that we're continuing to grow through the addition of new clients.
Here are a few examples from the corner. [inaudible]
New Forests
Speaker Change: A Global Investment Manager of Nature-Based Real Assets and Natural Capital Strategies
Chose Deal Cloud to streamline its reporting and communications.
Next, Amnesty Capital.
a private equity firm dedicated to energy transition.
Replaced a Legacy Horizontal CRM with Deal Cloud. [inaudible]
To Increase Adoption and Better Manage Investor Relations and Communications
Next.
Australian Law firm, Gatins,
Trose Intapp Intake and Intapp Conflicts.
Speaker Change: to improve compliance with new anti-money laundering and counter-terrorism financing regulations.
and next, a global law firm based in Europe .
Speaker Change: Selected Intapp Conflicts, Intake and Terms to support its strategic growth with improved data quality and streamlined processes for regulatory adherence.
Speaker Change: This quarter, we also continue to see a keen focus on independence in accounting.
with first choosing Intapp employee compliance.
to replace home grown or legacy solutions and manual processes.
These include Crowe [inaudible]
A top 20 US-based accounting firm.
and Cohen and Company.
a top 50 accounting firm.
Speaker Change: As well as this quarter, upselling and cross-selling success in our existing accounts.
Continue to drive strong, cloud, net revenue retention.
I'll share some notable examples.
First, Existing Client DNB.
Norway's largest financial services group and bank. [inaudible]
Speaker Change: Increased its number of deal thought seats after acquiring Carnegie Bank.
and standardizing on our platform.
Next, a US-based global alternative investment firm, Arvind Ramnani, David Trone,
added additional deal thought seats.
Speaker Change: to bring all deal teams onto the same platform and create one central point of information.
Next, an Amla 200 client.
focused on M&A transactions.
Replace its legacy horizontal CRM.
Thiel Foud,
Speaker Change: This furthers their goal of creating a legal ecosystem in the cloud, along with Intapp time, conflicts, intake, terms, and walls.
and next, accordion.
A private equity focused consulting firm, [inaudible]
Speaker Change: that I mentioned in the past when they purchased DealCloud. [inaudible]
added Intapp Conflicts.
Speaker Change: to help them bring on new business without conflicts of interest among their clients and PE investors.
Finally, we continue to help more legal clients.
including Phenomore,
Glazer-Wile, Jackson Lewis,
and Smith Gambrow,
Migrate Intapp Time to the Cloud.
Speaker Change: What's implemented, they'll have access to a more modern web client, new AI features, and continuous innovation, including the new Intapp Time announced at Amplify.
Speaker Change: In conclusion, we're proud of our strong third quarter performance and we continue to be optimistic about our growth opportunities.
Speaker Change: As our Q3 performance has shown, we are growing by adding new capabilities and increasing our global enterprise go-to-market reach.
We see continued opportunity.
Speaker Change: Oak to add new clients across a broad tab and to deliver greater value by expanding our existing client base.
Speaker Change: We're serving a durable end market with our subscription revenue model, industry-specific cloud platform, and applied AI and compliance capabilities.
We have a great growth opportunity.
Speaker Change: to drive AI, cloud adoption, and modernization across all the industries we serve.
Speaker Change: As always, I'd like to thank our clients, our partners, our investors, our board, and our global Intapp team for their teamwork and dedication. Thank you all very much.
Okay, David, over to you.
David Trone: Thank you, John , and thanks to everyone for joining us today. A special thank you as well to those who turned into our Amplify keynote in February to hear about Intapp's latest product advancements and roadmap strategy across our vertical specific solutions. As a product-led growth company, our rate of pace of innovation over the past year has been exceptional.
David Trone: With that, I am pleased to report a solid third quarter performance.
David Trone: The durability of our cloud business was evident in Q3, driven by progress with large accounts across verticals and geographies as well as success and transitioning client spend to the cloud. We also continue to demonstrate improving efficiencies and leverage within the model.
David Trone: We are confident in our ability to deliver profitable growth as we close out fiscal 2025 and enter fiscal 2026, well positioned to capitalize on a positive digitalization in cloud native trends in front of us.
Let's begin with fiscal Q3 results.
Sass revenue was $84.9 million.
David Trone: and the migration of on-premise products to the cloud. As of March 31st, 93% of our clients have at least one cloud module of one point sequentially.
David Trone: License revenue was $31.7 million in fiscal Q3, up 2% year-to-year
David Trone: Positive contributions continue to be on-prem price increases and contract expansions and renewals, and these were largely offset this quarter by our steady pace migrating clients to the cloud and onto our SaaS offerings.
David Trone: Professional Services revenue total $12.5 million, down 6% year-to-year. A strategic decision to outsource more activities that the partners have allowed us to place greater emphasis on enhancing client satisfaction and driving co-cell pipeline generation supporting our long-term reclawed growth objectives.
David Trone: Total revenue was $129.1 million, up 17% year-to-year, driven primarily by sales of our cloud solutions.
David Trone: Revenue from our international operations accountant for over a third of our total revenue
International revenue grew 20% year-over-year in Q3.
David Trone: We kicked off our calendar 2025 with note-worthy execution on our acquisition and partnership growth strategies.
John Hall: First, as John mentioned earlier, the acquisition of term sheet marks an important next step in deepening our expertise of real assets, building on strong organic momentum, including multiple new logo wins this quarter.
David Trone: This combination will broaden our capabilities to fully serve real estate teams across their investment life cycles and personas.
David Trone: With this acquisition, we continue to reinforce the core tenets of our ecosystem expansion track record, strengthening the breadth and depth of our vertical specific offerings and delivering long-term value to our end markets.
David Trone: On that note, our broader alliances and partner ecosystems saw progress this quarter, with the newly signed Infabode, a real estate data partner, complimentary to our term sheet acquisition, our partner network grew to over 140 in Q3.
David Trone: Arcosel Motion continues to build the client-pilot blind, drive wins and strengthen retention as a long-term growth leader.
David Trone: We are often mystic about our investment in the increasing impact of Intapp's enhanced partner program to strengthen our capabilities across deal generation, technology, data, and implementation.
David Trone: As partner certifications have increased 75% year to year, we're on a strong pace for our partner ecosystem and platform to become more of a material contribution to fiscal 2026, the man generation and greater assistance on revenue realization. . .
David Trone: As we continue to focus on our margin and operational efficiencies,
David Trone: Q3, 9 gap gross margin with 77.9% off from 75.1% in the prior year period, reflecting continued progress toward breakeven professional services gross margins and reducing the relative top line contribution from that business.
David Trone: non-GAAP Operating Expenses totaled 80.3 million compared to 71.9 million in the prior year period reflecting our continued investment in our product-led growth.
David Trone: non-GAAP Operating Income was 20.3 million, as compared to 11.2 million in the prior year period.
David Trone: Non-Gaptaluted EPS was 26 cents and that third quarter of fiscal 2025 as compared to 14 cents in a prior year period.
David Trone: Free Cash Flow, which is defined as our cash flow from operations, less capital expenditures, was 35.1 million for the third quarter, or 27% of total revenue.
David Trone: We exited the quarter with 323.2 million of cash and cash equivalents.
David Trone: Furniture Team metrics, cloud ARR was up 28% year-to-year, while total ARR was up 19% year-to-year.
Total remaining performance obligations were 621.5 million, up 33% year-to-year.
David Trone: We remain committed to executing our land and expand go-to-market model, which yielded a quarter and 748 clients with annual recurring revenue of at least 100,000.
David Trone: Up from 673 in the previous year are 100,000 K plus ARR clients now comprise 28% of our total clients of over 2650.
David Trone: Our 119% cloud net revenue retention rate in Q3 highlights the consistency with which we retain and steadily grow business with existing cloud clients.
David Trone: Now turning to our outlook for the fourth quarter of fiscal 2025, we expect that's revenue between 89 and 99.
David Trone: As these are newly provided revenue outlook metrics, we are also providing the implied year-to-year growth outlook of between 26 and 27 percent.
Total Revenue in the range of 131.5 and 132.5 million.
David Trone: Nongap, Operating Income in the range of 20 and 21 million, and Nongap EPS results of 22 cents to 24 cents using a diluted share count weighted for the quarter of approximately 85 million common shares outstanding.
David Trone: For the full fiscal 2025, we expect that's revenue between 330.8 and 331.8 million.
David Trone: These are newly provided revenue outlook metrics. We also provide the implied year-to-year growth outlook of 28 percent.
Total revenue in the range of 500.6 and 501.6 million.
David Trone: We also expect non-GAAP operating income in the range of 74.3 and 75.3 million.
David Trone: And non-depth EPS on the range of 88-90 cents using a diluted share count weighted for the fiscal year 2025 over approximately 84 million common shares outstanding.
David Trone: Thank you, and I'll now turn the call back to the operator.
Speaker Change: Thank you and as I reminder to ask a question simply press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. One moment while we compile the Q&A roster.
Speaker Change: Our first question comes from Alexei Gogolev with JP Morgan. Please proceed.
Speaker Change: Hello, everyone. John , first question for you. For a while, I like that much of your business is a cyclical
Speaker Change: Can you talk about various indicators of that in your recent client conversations and how much does the de-lactivity drive grow for your business?
Sure. Thanks, Alexei.
Speaker Change: As you know, we bootstrap the company all the way to IPO, serving this traditionally underserved and market-specific platform.
Speaker Change: The law firms, the accounting firms, the consulting firms, the investment banks, the private capital firms have a pretty steady demand to move to the cloud and to adopt AI.
Speaker Change: That fuels the company's consistent growth. The indicators that we watch...
Obviously, Pipeline, We Watch, Cell Psycho, We Watch, We Overall.
Speaker Change: Deployment time that helps folks to get to the next stage where they can expand further the platform for us.
and we've had that experience through previous.
Economic Psycholes,
Speaker Change: We grew right through the 2008 recession and right through COVID.
Speaker Change: So, overall, I think that the fundamental driver here is the need for these firms to catch up with the rest of the industries.
Speaker Change: To finally get to the cloud, and they have an unusual opportunity to take advantage of AI given the type of work that they did.
David Trone: Great, thank you, John . And Dave, a quick question for you about international revenue. All the growth and constant currency plays.
Dave: Yes, primarily USD, so it's almost one and the same.
Okay, thank you.
Thank you, one moment for our next question, please.
And it's from Parker Lane, Wistifal. Please proceed.
Dave: Hello, this is Matthew Kikkert, I'm for Parker, thank you for taking my questions. So first last quarter you talked about solid traction, selling deal cloud into the legal vertical. We could just talk a little bit about, you know, if you saw any continuation of that activity there this quarter and the pipeline around that specific motion.
Speaker Change: Thanks, Matthew. Yes, we are excited about what's happening with bringing.
Deal Cloud to Legal, as we are with.
the other industries as well.
Speaker Change: This was a question that the investors had when we came public and we've been highlighting firms that have been taking up deal cloud in legal specifically to help.
Speaker Change: Answer that question. There's a lot of enthusiasm in these firms, particularly the large multi-practice firms talking specifically about legal, who are looking to grow by winning new clients but also through cross-selling.
Speaker Change: Their services into their existing client base. There's also an underlying trend in legal, where the firms grow through what they call lateral hiring they bring in.
Law from Partners from Other
Firms, and with them. [inaudible]
Speaker Change: A group of clients and a lot of the objective there is to bring that person's expertise into their existing client base or vice versa bring the firm's variety of expertise into clients they bring with them so that all drives an interest in a much more industry specific.
Speaker Change: Business Development Approach, and Yokata's purpose built for that style of business development, so there's a lot of demand and in fact replacing of legacy, horizontal, CRM systems that don't understand how these professionals actually go to market to their network. [inaudible]
Speaker Change: Okay, got it. And then secondly, with the company lean more into AI, you know, recently, how should we think about level of incremental spend related to those features as it relates to your margin expansion targets over the next two to three years?
Well, I think the overall...
Speaker Change: Point we would make is that we are doing applied A.I. We are doing applied A.I.
So we are not...
Building Data Centers, or Running.
Models that would drive a lot of...
Kaephex, or other
Expand, Steve, you can add some color here.
Speaker Change: but the opportunity for us is to take this next generation of...
Speaker Change: AI technologies and apply them to specific applications based on our years of experience and expertise in this market where we can really...
Speaker Change: Helped the firms achieve the value potential inherent in this generation of technology. We've done that through several generations of technology. And so that's why you hear us talking about intelligence applied in the brand overall and applied AI. Thank you very much.
Speaker Change: Incident part of our story, and the firms really appreciate that because the general purpose systems as exciting as they are meet some real attention in order for these firms to.
Speaker Change: Adopt specific applications that fit with their workflows, their personas, and the compliance needs in particular that these special firms have in the way that they use AI.
Terrific. Thank you.
Speaker Change: Thank you. Our next question comes from Alex Klar with Raymond James, please proceed.
Speaker Change: Hi, thank you. This is John from the carry on for Alex this evening. So, I'm going to touch on the amplified product launch event. There's some really interesting new functionality there.
Speaker Change: particularly with the Intapp Assist use cases. What can you tell us about the event in terms of demand? Is there any quantification in terms of pipeline build or customers re-engaged? After that, I know you give the 400 customers attending count, but is there any way you can give us any quantifiable sense for that?
Thanks, John . We...
Speaker Change: We're very excited about the way that Intapp amplify, came together. This was our second year of doing an event in New York in February since COVID and we had tremendous turnout both in person and online. Thank you very much.
We, Master. So.
Range of new capabilities across the platform.
Speaker Change: We talked about some of them in the prepared remarks there. Your question about the Intapp Assist specifically. One of the things we highlighted with Intapp Assist was our new origination. Thank you.
Speaker Change: Capability, so this is AI that helps firms who are seeking out either new investors.
or New Investment Opportunities, or New Clients.
Speaker Change: To use AI to pattern match opportunities that look a lot like the types of opportunities that they want to pursue and they've had success with over the past in the past. And the reception has been.
Speaker Change: Fantastic. We've had a lot of enthusiasm from the folks that were there, but also across our client base because we've gone out with the Intapp Amplify. Thank you very much.
Speaker Change: Story and all of the content of it and been meeting with clients around the world. We're also going to do a second edition of Intapp Amphi this year in London in May. So that whole program continues. The pipeline has had a strong response.
Speaker Change: It wasn't specifically what you asked about with Intapp Assist, but one of the things that we really saw incredible response was the next generation of our Intapp Time product, which is very...
Speaker Change: Well taken up in the marketplace and now we're able to bring this next generation of AI.
Speaker Change: There was a line out the door at Amplify for folks to see demos and talk to us about taking that next step and then we highlighted several of the law firms that have successfully moved from on-prem to the cloud and are very excited about the opportunity to take up this new AI. Bye.
Speaker Change: Triving Attempt Time. So, several things came out of the amplifier and it's part of our overall program, as Dave mentioned, increased product R&D that is bringing more and more applied AI applications out for their clients.
Great. Thank you.
Speaker Change: Thank you. Our next question comes from Terry Tillman with through his securities, please proceed.
Speaker Change: Great, thanks for taking me a question. This is Bobbie Dionne for Terry. Just a couple on term she, firstly, can you expand on how the acquisition enhances your vertical strategy and real outsets? And what does early feedback from clients from prospects look like since the announcement? And then I'd one follow up. Thank you.
Thanks Bobby.
Speaker Change: We're very excited about joining forces with the turn sheet team.
Speaker Change: First of all, it's a tremendously expert group of people that really know.
Speaker Change: The Real Assets, Industry and the software needs of the real assets industry to incredible depth and that's always been a theme of our company is to bring the world's experts in each of these industries and their business operations and what makes them unique.
Speaker Change: So, the team there is fantastic. They have developed some technologies that are really...
Speaker Change: Incredible that expand deal clouds, capabilities to serve additional personas in the real assets industry. As you all may recall, we announced our [inaudible]
Speaker Change: Expansion into real assets a little over a year ago at the New York event in February in 2024.
Speaker Change: We had been led into that industry because our multi-strategy asset manager clients wanted to use Deal Cloud across all of the asset classes that they invested in both for fundraising and raising new funds, as well as deploying capital and managing.
Speaker Change: Assets Over Their Life, and we had made some important developments in Deal Cloud.
Like
Mapping Technologies, and some of the geographic information systems.
Speaker Change: Integrations in order to enable those asset managers to do that. And as we did that, we found that we were in a better and better position to serve the broader community of real asset investors, the whole asset class both. [inaudible]
Investors, Advisors, as well as operators.
Speaker Change: The Turb sheet team brings us technology to serve even more of those roles inside the real assets industry, which is very parallel. It's traditionally underserved. They have a...
Speaker Change: Unusual operating model that is not well suited to the traditional horizontal CRM.
Speaker Change: and a lot of the technology that we're bringing from term sheet is going to allow us to penetrate further and further into that market. So it's a really exciting opportunity for us. And it's a big industry that that means cloud and AI technology has not been able to succeed with that from the traditional horizontal system historically. It's a really exciting opportunity for us to be able to do that.
Speaker Change: Great, I appreciate the color. Just secondly, I'm curious, what are the key integration milestones for the unified solution with term sheet? And once we expect initial go to market activity or financial contribution, thank you very much.
Speaker Change: Thank you. Yes, we're already in the integration program, the teams are working together.
Speaker Change: We had a summit last week in New York. I was there for a board meeting and we got to meet some of the team members. It's an exciting group that has a lot of energy to go win this market.
Some of the integration milestones have to do with...
Speaker Change: bringing together the brands, bringing together the products for the clients in real assets. As I mentioned in the scripts, we have...
some really positive feedback.
Speaker Change: from firms who had looked at term sheet and looked at the ill cloud and said this was a great move for Intapp to make and it validated their choice.
Speaker Change: For us as an overall platform for their business and we're getting a lot of encouragement from the clients to bring the products together as fast as we can. So we're excited about where this is going.
Thank you.
Thank you
Speaker Change: Our next question is from George Kurosawa with City, please proceed.
Speaker Change: Hi, I'm on for Steve Enders. Thanks for taking the questions. You know, and I'm looking across the metrics for the quarter. I did notice how good the buildings came in a little below our estimate. You know, I know that can be a lumpy metrics anything one time in nature or timing related that we should keep in mind when we're interpreting that metric. Thank you very much.
Speaker Change: You know, we look more to our remaining performance obligation to give you kind of the forward leading indicators which was very nice. Thank you very much.
Speaker Change: But coming off the buildings itself, you also have to remember we're coming off a high in FQ2, so there's going to be not only seasonality coming off of that, as well as some timing. So there's nothing else to narrate on that specifically. Let's go away.
Speaker Change: Okay, that's helpful. And then, I guess, a little related. I know I'm a quarter early here, but I did want to ask about, you know, if there's any kind of color, you can give us early view into FY26, you know, and we're trying to triangulate our models between RPO growth, ARR growth, Billings growth. And then I, you know, I guess on the margin side, whether you're thinking about FY26 is more of a margin harvesting year or more of an investment year. Thank you.
Well, we'll always continue to invest. So,
Speaker Change: and will continue to drive leverage in our model as well.
Speaker Change: But it'd be far too early and probably not prudent for us to articulate anything as we get into 26 at this point in time.
Speaker Change: With that said, we continue to work very hard on building up our demand gen. We continue to drive pipe across all of our leading platform of offerings. We like how that continues to develop not only for this interquarter, but then also for the back half of the year. And so as you've seen our continued investment not only in the go-to market, but also in our product and engineering. Thank you.
Speaker Change: You've seen with the advancement of our new product offerings, with Amplify, the John Mayerated on.
and you continue to also...
Speaker Change: Kira's talk about our partner ecosystem, which continues to drive.
Kosell, Emotions on that as well, so we like...
Speaker Change: Where things are being positioned, we think it's a good setup, but as far as quantifying anything heading into 26 it'd be far too early for us to do that at this time.
Speaker Change: Fair enough, appreciate the color and thanks for taking the questions. Thanks.
Brian Schwartz: Thank you. Our next question comes from Brian Schwartz with Open Himer. Please proceed.
Brian Schwartz: Yeah, hi. Thanks for taking my questions this afternoon. John , what is to see if you could just give us an update in terms of the arc of improvement you're seeing from the sales reorganization that you did at the beginning of the year to target large accounts?
Brian Schwartz: I'm just wondering if you're starting to see some of the fruits from those changes you made at the beginning of the year, or if that's still on the common for the business, and then I have a follow up for David.
Thanks Brian .
Speaker Change: Yes, we did make an adjustment to the sales organization at the beginning of the fiscal year to move more resources to the large and larger end of our market.
Speaker Change: which will enter price accounts versus Arvind market accounts, 70% of our time.
is in firms of that class.
Speaker Change: And there's a tremendous opportunity for us both to win new clients and to expand within our existing clients.
and the team has done an excellent job of…
Speaker Change: Getting out and covering, even deeper, the accounts at that end of the market, we've also had some very good...
Speaker Change: Success with a lot of the technology investment that we made over the past couple years to do things around scalability and interoperability and security and compliance for firms of that class. Obviously larger deals.
Speaker Change: High Six Figure, Seven Figure Deals, are slower from a fill cycle process but they also pay off when they land.
Speaker Change: So we're seeing a very strong pipeline there and I'm excited about the move that we made. It was well executed and a lot of the team has developed pipeline there that's really. [inaudible]
Speaker Change: and great shape, so it's an exciting time for us in the enterprise.
Speaker Change: Thanks, John , and then the follow-up questions just on the model I have for David. Just one on the near term, just on the revenue guide and
Speaker Change: and 4Q. What are you expecting from Term Sheet? And then as we think about calibrating our model, can you give us any directional advice on how you think stock-based compensation should trend? It's just kind of varied as a percentage of revenue over the last two years. I'm sure it's done.
Speaker Change: Just wondering, anything that you could help us, directly with the model for fiscal 26. Thanks for taking my questions this afternoon.
Speaker Change: Yeah, no, for sure. Termshape for FQ4 is going to be very immaterial.
Speaker Change: Contribution. We can talk more about the contribution specifically for FY 26 on our next earnings call. Then as far as SPC, that will continue to trend down as a percentage of revenue. And so you should continue to see that there's stuff down. [inaudible] And so you should continue to see that there's stuff down. And so you should continue to see that there's stuff down.
as it did this quarter. [inaudible]
Thank you.
Thank you. One moment for our last question. Please
Speaker Change: It comes from Kohi Ikeda, with Bank of America. Please go ahead.
Kohei Ikeda: Yeah, hey guys, thanks so much for taking the questions. A couple from me here, I wanted to ask a question on SAS revenue. And so when I look at the performance in the quarter, it looks like it came in slightly below the high end of the guide. And when I look at the last three quarters, the three quarters that you've given this guide, you beat the high end once and you were below the high end twice.
Kohei Ikeda: And so, just kind of wondering how we should be thinking about the performance of SAS revenue, the visibility in SAS revenue, and how we should be thinking about upside potential in this line item going forward.
Speaker Change: I think a lot of that, Koji just gets into when the deals have been exercised.
Natalie Seind, but then provided for.
Speaker Change: And so, that gets into the timing of the quarter. And so, anytime you come in with that level, I mean, obviously the visibility, it comes into month one, month two, execution and revenue yield.
Speaker Change: And so yeah, that range is very narrow and obviously there's pros and cons pros and puts and takes as to how we can over achieve that on any given point in time.
Speaker Change: So that's kind of the prudence we put into it. Obviously we're trying to execute even more, to get even more upside off of that, but it's always going to be within that envelope.
Hopefully that answers your question on that, yeah.
Speaker Change: No, that's super helpful, and maybe a follow-up here. I wanted to ask-
Speaker Change: about how your customer conversations are going broadly in the uncertain macro environment, maybe split.
between professional services and financial services and...
Speaker Change: Take it from that view, but even if you could, you could get more granular if you like if you want to talk specifically about
Speaker Change: Law firms versus consulting, versus investment banking, versus private equity. I mean, any sort of deeper granularity in the demand environment would be greatly appreciated. Thank you.
Speaker Change: Sure, Koji. Thank you for the question. The private capital investment community.
Tase Valper, Bill,
out of their management fee.
Ravuthan
out of any particular deal.
Transaction Fee. So we have a very stable...
Speaker Change: in growing demand from those firms as they're trying to modernize their operation and compete with each other, a dot day eye pursue.
Origination Opportunities in the marketplace.
Speaker Change: and very steady pipeline build from those firms, both new clients and expansion. I mentioned a few examples on the call specifically to emphasize that firms standardize on deal cloud when they put it in. They start with one group and expand over time and that's so that they can continue to raise funds and deploy funds.
Speaker Change: Consistently, and get the insights across all of that activity for the benefit of the management team and their overall firm strategy and fund strategy.
on the advisor side looking at. [inaudible]
accounting, consulting,
Speaker Change: differential advisors like investment banks, and then the legal firms.
They have had a very steady.
Speaker Change: Paul to digitalize their operation because they have not succeeded with the traditional horizontal systems. So I gave several examples and tried to do it each quarter of us replacing very well-known.
Horizontal
Speaker Change: CRM Systems, because we have the purpose-built platform that's getting more and more traction and credibility across even the very largest firms in the enterprise class. So I think it's an exciting...
Vertical Industry Cloud, Category Creation.
Speaker Change: Situation that we're in, where we're really following the example of pioneers like Siva for each of their industries, those firms industries, to bring the next generation cloud and AI platform to these folks.
Speaker Change: We have said over the years that if there's any of our end markets, that's more sensitive to the cycle, it might be the investment bankers themselves, but we've had some very good and large wins. I give an example with DNB and Norway where they actually did an acquisition and standardized. I'd like to invite you to join us.
Speaker Change: Ronning Tatielka out across the whole firm as part of that and that's really the awesome situation where people have really said this is the platform for our future and so I think that's where we are at an important time in the overall industries move to be more. [inaudible]
Speaker Change: Cloud-based in their technology and more AI, enabled and also compliant, a really important part of our overall story is the fact that our platform is built to be compliant with the unique. [inaudible]
Speaker Change: Requirements both ethical, professional, and statutory, regulatory for this industry and it really sets our overall platform apart. So, you know, we've grown the company through Direct. [inaudible]
Client funding for all these years because... [inaudible]
Speaker Change: We actually understand the idiosyncrasies of how this very large underserved industry works and that's what's driving our business.
Thank you.
Speaker Change: Thank you, and this concludes our Q&A session, and I will turn it back to John Hall for final comments.
John Hall: Okay, well thanks everyone. We appreciate your attention and your questions. We have a great Q3 behind us and we're very excited about our continued momentum in fiscal 25. Thanks again for your time today and we look forward to talking to you next quarter. Thank you for your time today and we look forward to talking to you next quarter.