Summary
AvePoint reported first quarter fiscal 2023 total revenue of $59.6 million, up 18.5% from the prior-year quarter. On a constant currency basis, total revenue rose 23%. SaaS revenue grew 34% year over year, or 39% on a constant currency basis. SaaS revenue represented 60% of total revenue, up from 53% in the prior-year quarter. GAAP gross profit rose 17.4% to $41.7 million, and GAAP gross margin was 70.0%. The mix continues to shift toward cloud offerings, and management said demand for SaaS products stayed strong. Total ARR was $222.4 million as of March 31, 2023, up 26% year over year. Adjusted for foreign exchange, ARR grew 31%. Dollar-based gross retention was 84%, while dollar-based net retention was 102%. Those rates were 87% and 106% on an FX-adjusted basis. On a constant currency basis, EMEA revenue increased 35% and APAC revenue increased 25%, while North America revenue increased 13%.
GAAP operating loss narrowed to $8.8 million, and GAAP net loss narrowed to $9.2 million. GAAP operating margin was negative 14.8%. On a non-GAAP basis, operating loss was $0.3 million, compared with a non-GAAP operating loss of $5.5 million in the prior-year quarter. Non-GAAP operating margin was negative 0.6%. Non-GAAP gross profit was $42.6 million, and non-GAAP gross margin was 71.5%, compared with 71.8% in the prior-year quarter. Non-GAAP sales and marketing expense was 41.1% of revenue, down from 49.1% in the prior-year quarter. Non-GAAP general and administrative expense was 17.2% of revenue, down from 22.1%. Operating cash flow was $1.25 million, up from the prior-year quarter. Capital expenditures were $0.22 million. Deferred revenue was $99.2 million, up 18.1% from the prior-year quarter. Remaining performance obligations were $238.6 million.
The company launched first-to-market governance, management, data protection and migration support for Microsoft Power Platform. AvePoint expanded its FedRAMP moderate authorization for public sector customers. In Australia, it achieved the Protected security classification under the Information Security Registered Assessors Program (IRAP). It also won 2023 Microsoft Singapore Partner of the Year awards in the Education Industry and Future of Work Transformation, Modern Work categories. More than 17,000 customers worldwide rely on its solutions, and its global channel program includes over 3,500 managed service providers, value added resellers, and systems integrators. These milestones could help AvePoint win larger regulated and public sector accounts.
Management raised its full year outlook for total ARR, total revenues, and non-GAAP operating income. For the second quarter of 2023, AvePoint expects non-GAAP operating income of $0.8 million to $2.0 million. For the full year 2023, the company now expects total ARR of $255.0 million to $261.0 million and non-GAAP operating income of $13.9 million to $16.2 million. Management said the raise reflects confidence in continued top-line growth and margin expansion, while noting the uncertain macro environment.
The macro backdrop remains uncertain, and management described the software market as dynamic and highly competitive. Foreign exchange movements affect reported revenue and ARR, so the company provided constant currency and FX-adjusted figures. The maintenance revenue base keeps declining as customers move to SaaS and term licenses. AvePoint also faces execution risks tied to hiring, product introductions, and global operations. The company holds a $30.0 million revolving line of credit with HSBC, with no borrowings outstanding as of March 31, 2023, and it remains compliant with all covenants. That facility matures on July 7, 2023. AvePoint operates in one segment and sells through direct and indirect channels worldwide. Management also noted that future valuation allowances could affect the company's tax position. The company said it is monitoring Russia's military action against Ukraine but does not believe the impacts are material at this time.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $59.6M | $63.6M | -6.3% | $50.3M | +18.5% |
| Gross profit | $41.7M | $45.4M | -8.1% | $35.7M | +16.9% |
| Gross margin | 70.0% | 71.3% | -1.4 pp | 70.9% | -0.9 pp |
| Research & development | $9.0M | $7.3M | +24.0% | $6.4M | +40.8% |
| Sales & marketing | $26.9M | $28.4M | -5.4% | $27.1M | -0.8% |
| General & administrative | $14.6M | $16.6M | -12.0% | $15.5M | -5.8% |
| Total operating expenses | $50.5M | $53.4M | -5.4% | $49.5M | +2.0% |
| Operating income (loss) | -$8.8M | -$8.0M | -9.7% | -$13.8M | +36.2% |
| Operating margin | -14.8% | -12.7% | -2.2 pp | -27.5% | +12.7 pp |
| Net income (loss) | -$9.2M | -$11.6M | +21.2% | -$11.1M | +16.9% |
| Net margin | -15.4% | -18.3% | +2.9 pp | -22.0% | +6.6 pp |
| Customers | 17,000 | — | — | — | — |
| Net retention rate | 102.0% | 108.0% | -6.0 pp | 100.0% | +2.0 pp |
Risks
MD&A describes the software and cloud-based services markets as dynamic and highly competitive, with competitors developing new software and deploying competing cloud-based services and rapidly evolving customer preferences that can shift which cloud suite users adopt. AvePoint must continue to evolve and adapt over an extended time, and management states the investments in infrastructure, research and development, marketing and geographic expansion will continue to increase operating costs and may decrease operating margins; research and development expenses increased 37.5% to $9.0 million in the quarter ended March 31, 2023.
MD&A states aggregate demand for the company's software and services is correlated to global macroeconomic and geopolitical factors that remain dynamic, citing Russia's ongoing military action against Ukraine, and notes that the impact on operational and financial performance may depend on future developments that cannot be predicted. Management says exposure to Russia and Belarus is limited and largely immaterial but is monitoring developments.
MD&A states services revenue is not inherently recurring and is subject to more period-to-period volatility than other elements of the business, and maintenance revenue decreased 26.1% to $3.4 million in the quarter ended March 31, 2023. Management expects maintenance revenue to continue declining as the company shifts away from perpetual licenses toward SaaS and term licenses, leaving limited opportunities to sell maintenance contracts to new customers.
MD&A states the company's success is highly dependent on its ability to attract and retain qualified employees, and that it competes for talented individuals globally on working environment, customer reach, resource scale, career growth and compensation and benefits. Headcount increases in research and development drove the rise in that expense line.
The company's $30.0 million HSBC revolving line of credit matures on July 7, 2023, bears interest at SOFR plus 0.1% with a 0.5% unused fee, and requires maintenance of a specified adjusted quick ratio and minimum annual recurring revenue tested each quarter, secured by a security interest in subsidiary shares, future proceeds and certain assets. MD&A notes future additional equity financing would be dilutive and additional debt could bring more restrictive covenants.
MD&A states the company is subject to income taxes in the U.S. and numerous foreign jurisdictions whose statutory rates differ and whose tax laws may change, and that the effective tax rate was (27.46)% for the quarter ended March 31, 2023 versus (2.88)% in the prior-year quarter, primarily due to the mix of pre-tax income and loss by jurisdiction and tax losses for which no benefit can be taken. Management notes a future valuation allowance on deferred tax assets could result in income tax expense.
MD&A states quarterly revenue fluctuates and does not necessarily grow sequentially, that historically the third and fourth quarters have been the highest revenue quarters driven by customers' fiscal year ends, and that new product introductions and operating expense growth from personnel expansion can significantly affect results.
SaaS KPIs
All quarters →Non-GAAP operating margin
Total ARR
Dollar-based net retention rate
Total customers
Non-GAAP Gross Margin
Dollar-based gross retention rate
Summary, forecast, risks and KPIs are extracted from AvePoint, Inc.'s SEC filings for Q1 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.