Summary
AvePoint reported third-quarter 2022 total revenue of $62.7 million, up 16.3% from the prior-year quarter. On a constant-currency basis, total revenue rose 26%. The company also reported total ARR of $191.7 million, up 30% year over year, or 34% adjusted for foreign exchange. Core ARR was $177.5 million, up 27%, and MRR was $14.2 million, up 80%. Gross profit was $45.9 million, up 18.6%, and gross margin expanded to 73.2%, up 1.4 percentage points from the prior-year quarter. Management said demand for SaaS and services drove the top line, while maintenance and perpetual license revenue continued to decline as the business shifts toward recurring offerings.
GAAP operating loss narrowed to $7.4 million, an improvement of 74.1% from the prior-year quarter. Operating margin improved to negative 11.8%, up 41.4 percentage points. Non-GAAP operating income was $2.2 million, compared with $4.0 million a year earlier. Net loss attributable to AvePoint narrowed 27.9% to $7.4 million for the quarter. For the first nine months of 2022, total revenue rose 22.2% to $168.7 million. Net loss attributable to AvePoint for the nine-month period widened 6.4% to $28.9 million.
Operating cash flow was up 85.5% to negative $0.3 million for the quarter. For the nine months, operating cash flow was negative $6.9 million, down 73.8% from the prior-year period. Capital expenditures rose 116.4% to $1.2 million in the quarter. Deferred revenue was $86.0 million, up 10.1% from a year earlier. The core trailing-twelve-month dollar-based net retention rate was 106%, down from 110% a year earlier, and the company said the rate was 108% adjusted for FX. AvePoint completed the acquisitions of tyGraph and Essential, announced a new research and development hub in Singapore, and completed three security audits. It says more than 9 million cloud users rely on its solutions, and its platform manages more than 175 PB of content across 14 global data centers. Through September 30, 2022, it repurchased approximately 4 million shares at a cost of approximately $19.6 million.
For the fourth quarter of 2022, management guided total revenue growth of 19% year over year, or 22% adjusted for constant currency, with non-GAAP operating income of $1.5 million to $3.5 million. For the full year 2022, the company guided total revenue growth of 21% year over year, or 28% adjusted for constant currency, and a non-GAAP operating loss of $(3.2) million to $(1.2) million. It also guided total ARR of $202 million to $206 million, or 28% year-over-year growth. Risks include macroeconomic uncertainty, foreign exchange headwinds, competition, continued declines in perpetual license and maintenance revenue, and the need to attract and retain employees. The company also noted that a substantial valuation allowance could be required if it incurs significant losses and reduces projected taxable income. It maintains a $30.0 million revolving line of credit with HSBC that matures on April 7, 2023, bears interest at LIBOR plus 3.5%, and remains undrawn. AvePoint is compliant with all covenants under the line.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $62.7M | $55.7M | +12.6% | $53.9M | +16.3% |
| Gross profit | $45.9M | $40.3M | +14.0% | $38.7M | +18.6% |
| Gross margin | 73.2% | 72.3% | +0.9 pp | 71.8% | +1.4 pp |
| Research & development | $9.0M | $7.9M | +13.4% | $19.6M | -54.4% |
| Sales & marketing | $27.2M | $27.2M | +0.1% | $25.2M | +8.0% |
| General & administrative | $16.4M | $16.3M | +0.3% | $22.2M | -26.4% |
| Total operating expenses | $53.3M | $52.0M | +2.5% | $67.4M | -20.9% |
| Operating income (loss) | -$7.4M | -$11.7M | +36.8% | -$28.7M | +74.1% |
| Operating margin | -11.8% | -21.1% | +9.2 pp | -53.2% | +41.3 pp |
| Net income (loss) | -$6.8M | -$9.2M | +26.3% | -$9.8M | +30.4% |
| Net margin | -10.8% | -16.5% | +5.7 pp | -18.1% | +7.3 pp |
| Net retention rate | 106.0% | 100.0% | +6.0 pp | 100.0% | +6.0 pp |
Risks
MD&A states investments in infrastructure, research and development, marketing, and geographic expansion will continue to increase operating costs and may decrease operating margins. Non-GAAP operating margin for the nine months ended September 30, 2022 was (2.8)% compared with 3.4% for the nine months ended September 30, 2021.
Revenue from perpetual license and maintenance offerings is expected to continue declining as the company shifts to SaaS and term licenses. For the three months ended September 30, 2022, maintenance revenue decreased 29.1% to $3.8 million and perpetual license revenue decreased 53.6% to $0.3 million, partially offset by total revenue growth of 16.3% to $62.7 million.
MD&A describes the markets for software and cloud-based services as dynamic and highly competitive, with competitors developing new software and deploying competing cloud-based services. The company must continue to evolve and adapt in pace with this changing environment.
MD&A states that success is highly dependent on the ability to attract and retain qualified employees and that the company competes for talent globally. It hires a mix of university and industry talent worldwide and relies on compensation and benefits to compete.
International operations provide a significant portion of total revenue and expenses, many denominated in currencies other than the U.S. dollar. MD&A notes changes in foreign exchange rates may significantly affect revenue and expenses despite a natural hedge.
MD&A discloses that if the company incurs significant losses and reduces projected taxable income, a substantial valuation allowance to reduce its US deferred tax assets may be required. That could materially increase the tax provision in the period the allowance is recognized.
MD&A cites Russia's ongoing military action against Ukraine as creating general macroeconomic uncertainty, though the company reports only limited and largely immaterial exposure to Russia or Belarus. It continues monitoring developments.
MD&A states quarterly revenue typically grows sequentially from the first quarter through the fourth quarter and resets to a lower level in the first quarter of the following year. Historically, the third and fourth quarters have been the highest revenue quarters.
SaaS KPIs
All quarters →Non-GAAP operating margin
Total ARR
Dollar-based net retention rate
Dollar-Based Net Retention Rate (FX-adjusted)
Summary, forecast, risks and KPIs are extracted from AvePoint, Inc.'s SEC filings for Q3 FY2022 (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.