Summary
AvePoint reported total revenue of $64.9 million for its fiscal 2023 second quarter ended June 30, 2023, up 16.5% from the prior year quarter. SaaS revenue grew 39% year over year and represented 59% of total revenue. Total ARR reached $236.2 million as of June 30, 2023, up 26% year over year, or 30% adjusted for foreign exchange. Gross profit was $45.1 million, up 12.4%. Gross margin fell to 69.5% from 72.0% in the prior year quarter, a decline of 2.5 percentage points. Operating loss narrowed to $7.1 million from $11.7 million, and operating margin improved to negative 10.9% from negative 21.1%. Net loss widened to $12.6 million from $9.8 million.
Operating cash flow was $8.0 million for the quarter, up from negative $0.5 million in the prior year quarter. For the six months ended June 30, 2023, operating cash flow was $9.3 million compared to negative $6.6 million in the prior year period. Capital expenditures were $0.6 million for the quarter, down 55.4% from the prior year quarter. Deferred revenue was $102.9 million as of June 30, 2023, up 27.2% from the prior year quarter. Remaining performance obligations stood at $266.7 million. The company had no borrowings under its $30.0 million revolving line of credit with HSBC, which matures on September 7, 2023.
Non-GAAP operating income was $2.9 million, compared to a non-GAAP operating loss of $1.2 million in the prior year quarter. Non-GAAP gross margin was 71.1%, down from 73.4%. The company continued to invest in its channel program, expanding its certification program and launching a new Partner Locator. It added AvePoint Cloud Backup for Salesforce, a FedRAMP (moderate) authorized solution on Salesforce AppExchange, to serve public sector customers. Adjusted for FX, dollar-based gross retention was 87% and dollar-based net retention was 107%. On an as-reported basis, gross retention was 85% and net retention was 104%. These metrics suggest that customers are expanding their use of the platform, though gross retention remains below historical levels.
Management raised full-year guidance for total ARR, total revenues and non-GAAP operating income. For the full year 2023, the company now expects total ARR of $258.0 million to $263.0 million, or 21% year-over-year growth at the midpoint. Total revenues are guided to $261.9 million to $265.9 million, or 14% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be $15.9 million to $17.4 million. For the third quarter of 2023, total revenues are expected to be $67.6 million to $69.6 million, or 9% year-over-year growth at the midpoint, and non-GAAP operating income is expected to be $5.0 million to $6.0 million. Risks include ongoing macroeconomic uncertainty, foreign exchange headwinds, and the decline in maintenance revenue as the business shifts to SaaS and term licenses. The company also faces competition and the need to attract and retain qualified employees. Historically, the third and fourth quarters are the strongest for revenue, driven by customers' fiscal year ends. Because the market value of its common stock held by non-affiliates exceeded $700.0 million as of June 30, 2023, AvePoint will cease to be an emerging growth company as of December 31, 2023, and will become subject to large-accelerated filer regulations.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $64.9M | $59.6M | +8.9% | $55.7M | +16.5% |
| Gross profit | $45.1M | $41.7M | +8.1% | $40.3M | +11.9% |
| Gross margin | 69.5% | 70.0% | -0.5 pp | 72.3% | -2.8 pp |
| Research & development | $9.3M | $9.0M | +2.9% | $7.9M | +17.5% |
| Sales & marketing | $27.7M | $26.9M | +3.1% | $27.2M | +1.9% |
| General & administrative | $15.2M | $14.6M | +3.7% | $16.3M | -6.9% |
| Total operating expenses | $52.2M | $50.5M | +3.3% | $52.0M | +0.3% |
| Operating income (loss) | -$7.1M | -$8.8M | +19.8% | -$11.7M | +39.7% |
| Operating margin | -10.9% | -14.8% | +3.9 pp | -21.1% | +10.2 pp |
| Net income (loss) | -$12.5M | -$9.2M | -36.4% | -$9.2M | -36.1% |
| Net margin | -19.3% | -15.4% | -3.9 pp | -16.5% | -2.8 pp |
| Net retention rate | 107.0% | 102.0% | +5.0 pp | 100.0% | +7.0 pp |
Risks
MD&A says markets for software and cloud-based services are dynamic and highly competitive; competitors are developing new software and deploying competing cloud-based services, customer preferences evolve rapidly, and investments in infrastructure, R&D, marketing, and geographic expansion will continue to increase operating costs and may decrease operating margins.
MD&A says success is highly dependent on ability to attract and retain qualified employees; the company hires globally and competes for talent on working environment, customer reach, scale, career growth, and compensation.
MD&A states aggregate demand is correlated to global macroeconomic and geopolitical factors, which remain dynamic; Russia's ongoing military action against Ukraine has created general macroeconomic uncertainty, though exposure is limited and largely immaterial.
Maintenance revenue decreased 23.1% to $3.2 million for the three months ended June 30, 2023, and MD&A expects it to continue declining as the company shifts away from perpetual licenses toward SaaS and term licenses; without perpetual license sales, there will be limited opportunities to sell maintenance contracts to new customers.
MD&A discloses that because the market value of common stock held by non-affiliates exceeded $700.0 million as of June 30, 2023, the company will meet conditions to be deemed a large-accelerated filer as of December 31, 2023, and will no longer be an emerging growth company as of that date, subjecting it to large-accelerated filer regulations.
MD&A states quarterly revenue fluctuates and does not necessarily grow sequentially; historically the third and fourth quarters are the highest revenue quarters due to customers' fiscal year ends, and new product or service introductions and their timing can significantly impact revenue.
SaaS KPIs
All quarters →Non-GAAP operating margin
Total ARR
Total customers
Non-GAAP Gross Margin
Dollar-Based Gross Retention Rate (as-reported)
Non-GAAP operating income
Dollar-based Net Retention Rate (as-reported)
Summary, forecast, risks and KPIs are extracted from AvePoint, Inc.'s SEC filings for Q2 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.