Summary
AvePoint closed fiscal 2022 with fourth-quarter revenue of $63.6 million, up 18.1% from the prior-year quarter. Full-year revenue was $232.3 million, up 21.1%. The top line kept growing, but the mix and margin profile showed pressure. Annual recurring revenue reached $201.7 million as of December 31, 2022, up 27% year over year. On an FX adjusted basis, ARR rose 32%. Core trailing-twelve-month dollar-based net retention was 105% for 2022 and 110% for 2021. On an FX adjusted basis, that retention rate was 108% and 109%, respectively. The retention figure matters because it measures expansion with existing customers, while new business and pricing also feed ARR.
Profitability was mixed. Fourth-quarter gross profit was $45.4 million, up 16.7%, and gross margin was 71.3%, down 0.9 percentage points. For the full year, gross profit was $167.2 million, up 20.1%, while gross margin was 72.0%, down 0.6 percentage points. The fourth-quarter operating loss was $8.0 million, and the loss widened. The full-year operating loss narrowed to $41.1 million. Operating margin was -12.7% in the fourth quarter, up 1.6 percentage points, and -17.7% for the full year, up 10.2 percentage points. Net loss was $12.7 million in the fourth quarter, and the loss widened by 58.0%. For the full year, net loss was $41.6 million, and the loss widened by 18.2%. On a non-GAAP basis, the full-year operating loss was $2.9 million, compared with non-GAAP operating income of $6.0 million in 2021.
Cash generation weakened. Fourth-quarter operating cash flow was $6.1 million, down 32.0% from the prior-year quarter. Full-year operating cash flow was negative $0.8 million, down 115.4%. Capital expenditures were $0.4 million in the fourth quarter, down 57.4%, and $3.9 million for the full year, up 56.6%. Deferred revenue at December 31, 2022, was $101.5 million, up 23.3% from the prior year end. The company had no borrowings outstanding under its $30.0 million revolving line of credit, which includes a $20.0 million accordion feature and matures on April 7, 2023.
Operational activity stayed busy. AvePoint completed four acquisitions during 2022 and announced a 100 million SGD international research and development hub in Singapore. It also refined how it reports recurring revenue. Beginning in 2023, the company will include migration products in ARR; for 2022 and 2021, ARR from those products totaled $13.0 million and $8.0 million. Management plans to report the net retention metric for its entire customer base starting in 2023. The filing also notes that third and fourth quarters have historically been the highest revenue quarters, though that pattern is not necessarily indicative of future results.
Risks remain familiar for a software company in a transition. AvePoint faces intense competition and rapid shifts in cloud preferences. Global macroeconomic and geopolitical conditions are dynamic, and the Russia-Ukraine conflict and related sanctions could raise costs, disrupt operations, or reduce sales. Foreign exchange movements matter because a significant portion of revenue and expenses is denominated in currencies other than the U.S. dollar. The company also expects maintenance and perpetual license revenue to keep declining as it shifts customers to SaaS. Management warns that continued investment in infrastructure, research and development, marketing, and geographic expansion will increase operating costs and may reduce operating margins. It remains an emerging growth company until at least June 30, 2023, and it has not borrowed under its credit facility.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $63.6M | $62.7M | +1.4% | $53.8M | +18.1% |
| Gross profit | $45.4M | $45.9M | -1.2% | $38.9M | +16.7% |
| Gross margin | 71.3% | 73.2% | -1.9 pp | 72.2% | -0.9 pp |
| Research & development | $7.3M | $9.0M | -18.8% | $4.1M | +76.0% |
| Sales & marketing | $28.4M | $27.2M | +4.3% | $27.0M | +5.0% |
| General & administrative | $16.6M | $16.4M | +1.7% | $15.0M | +10.7% |
| Total operating expenses | $53.4M | $53.3M | +0.1% | $46.6M | +14.7% |
| Operating income (loss) | -$8.0M | -$7.4M | -8.4% | -$7.7M | -4.9% |
| Operating margin | -12.7% | -11.8% | -0.8 pp | -14.3% | +1.6 pp |
| Net income (loss) | -$11.6M | -$6.8M | -71.6% | -$7.5M | -55.5% |
| Net margin | -18.3% | -10.8% | -7.5 pp | -13.9% | -4.4 pp |
| Diluted EPS | -$0.07 | — | — | -$0.06 | -$0.01 |
| Net retention rate | 108.0% | 106.0% | +2.0 pp | 110.0% | -2.0 pp |
Risks
The significant majority of customers integrate with third-party solutions, especially Microsoft Azure, SharePoint, and Office 365, and Microsoft or other providers could acquire competitors, develop competing features, end co-sell arrangements, or restrict API calls. The company states this could cause it to lose customer acquisition momentum and fail to secure renewals or growth targets.
The company depends on subscription renewals, and customers may renew for fewer products, shorter terms, or lower pricing. Core TTM dollar-based net retention rate was 105% for 2022 versus 110% for 2021, and FX adjusted was 108% versus 109%.
Unfavorable global economic conditions or reductions in IT spending could cause customers to delay or cancel purchases and lengthen sales cycles, particularly given significant customers in financial services, public sector, and pharmaceutical and manufacturing industries. The filing also cites the military conflict between Russia and Ukraine as a factor in deteriorating general economic conditions.
Management identified material weaknesses in internal control over financial reporting related to completeness and accuracy of financial accounting, accounting for nonroutine transactions, and segregation of duties. The company is implementing remediation and must furnish a management report on internal control effectiveness as of December 31, 2022, and failure could lead to restatements or missed reporting obligations.
International operations expose the company to political and economic instability, sanctions, export controls, and currency fluctuations, and the ongoing Russia-Ukraine conflict could increase costs, disrupt sales, and impair capital raising. EMEA revenue increased 22.9% to $71.6 million and APAC revenue increased 16.0% to $58.7 million for the year ended December 31, 2022.
The company expects investments in infrastructure, research and development, marketing, and geographic expansion to continue increasing operating costs and may decrease operating margins. Non-GAAP operating margin was (1.2)% for 2022 versus 3.1% for 2021, which MD&A attributes to higher personnel costs, increased Azure costs, normalized travel, and public-company expenses.
Maintenance revenue decreased 24.5% to $15.9 million and perpetual license revenue decreased 67.2% to $0.8 million for the year ended December 31, 2022. The company expects perpetual license and maintenance offerings to continue declining as it shifts to SaaS, with limited opportunities to sell maintenance to new customers.
The majority of SaaS offerings are served from Microsoft-operated third-party data centers, and increases in hosting costs, interruptions, or poor service could impair delivery and reduce revenue. Cost of revenue increased 23.7% to $65.1 million for 2022, driven in part by an $8.8 million increase in aggregated hosting costs from higher SaaS revenue.
The company states that recent growth rates may not be indicative of future growth and that it may not sustain revenue growth. Total revenue increased 21.1% to $232.3 million for 2022 and total ARR increased 27% year-over-year to $201.7 million as of December 31, 2022, but achieving future growth depends on hiring, partner relationships, new customer acquisition, and expansion sales.
The company completed four acquisitions during 2022 and may pursue more strategic transactions. Acquisitions could divert management attention, disrupt the business, require significant integration resources, and result in dilution or unknown liabilities; investing activities used $21.5 million in 2022, including $18.6 million for acquisitions.
Growth depends on recruiting, integrating, training, and retaining employees, including sales, technical solutions, customer success, and engineering personnel. A reduction in workforce announced in December 2022 drove one-time expenses of $1.9 million in sales and marketing and $0.5 million each in general and administrative and research and development for 2022.
Cyberattacks and data breaches could compromise customer data or the company's systems, and the filing notes heightened state-sponsored cyber activity and increased cyberattack risk arising from the Russia-Ukraine crisis. The scope of internal information controls is limited to the ISMS, and failure by subsidiaries or employees to abide by it could increase vulnerabilities and liability.
The company plans to continue expanding its sales force and strategic partners and relies on search engine and digital marketing, where competition for key search terms, algorithm changes, and advertising policy changes could raise costs or reduce traffic. Failure of sales and marketing efforts to generate corresponding revenue increases would harm operating results.
SaaS KPIs
All quarters →Non-GAAP operating margin
Total ARR
Summary, forecast, risks and KPIs are extracted from AvePoint, Inc.'s SEC filings for Q4 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.