Intapp, Inc. Q2 FY2025 earnings

Intapp's fiscal 2025 second quarter total revenue was $121.2 million, up 16.6% from the prior-year quarter. Gross profit rose to $88.7 million, up 21.3%, and gross margin expanded to 73.2% from 70.4%. The company still reported a GAAP operating loss of $10.2 million, narrowed from $11.1 million, and a GAAP net loss of $10.2 million, widened from $9.2 million. Diluted EPS was -$0.13, flat with the prior-year quarter. Operating cash flow was $25.2 million, up 109.7%, while capital expenditures were $0.06 million, down 70.9%. Deferred revenue was $238.0 million, up 20.7%, and remaining performance obligations were $615.3 million, up 37.5%. Operating margin was -8.4%, up from -10.7%. The quarter showed solid top-line momentum but a wider net loss.

The cloud business drove the quarter. Cloud ARR was $331.1 million as of December 31, 2024, up 29% year-over-year. Total ARR was $437.1 million, up 20%. Cloud ARR represented 76% of total ARR, compared with 70% a year earlier. Trailing twelve months cloud net revenue retention rate was 119%, and total net revenue retention rate was 113%, within the expected range of 113% to 117%. Intapp served more than 2,650 clients, including 728 with contracts greater than $100,000 of ARR. New client wins included accounting firm Milsted Langdon and consulting firm Alvarez Marsal. The company was named to Forbes America's Most Successful Mid-Cap Companies listing for 2024. Intapp DealCloud won bronze in the Enterprise Product of the Year Software category at the 2024 Best in Biz Awards. The company continued to see clients migrate from on-premise license solutions to cloud solutions. Non-GAAP operating income was $18.9 million, compared with $7.6 million in the prior-year quarter. Non-GAAP net income was $17.4 million, compared with $8.8 million. Non-GAAP diluted net income per share was $0.21, compared with $0.11.

Guidance points to continued growth. For the third quarter of fiscal 2025, Intapp expects non-GAAP operating income of $18.5 million to $19.5 million and non-GAAP diluted net income per share of $0.21 to $0.23. For the full fiscal year 2025, the company expects non-GAAP operating income of $70.2 million to $74.2 million and non-GAAP diluted net income per share of $0.83 to $0.87. The third-quarter guidance is for the next quarter, while the fiscal year guidance is for the full fiscal year. The guidance excludes stock-based compensation and amortization of intangible assets. Intapp has not provided a quantitative reconciliation of the non-GAAP guidance to GAAP because some items are highly variable.

Risks remain. The company's ability to continue growth at or near historical rates is uncertain. Future profitability is not assured, and operating losses could continue as Intapp invests in the business. Global economic conditions, inflationary pressures, and volatility in the financial services industry could hurt demand. Data breaches or unauthorized access to client data could disrupt operations. The sales cycle is long and variable. Competition is intense, including in AI products. International sales add complexity. Acquisitions carry integration risk. The company also faces risks related to attracting and retaining talent, managing international operations, incurring future indebtedness, and protecting intellectual property. Intapp has a $100.0 million revolving credit facility with no outstanding borrowings as of December 31, 2024. It believes existing cash and the facility will meet working capital and capital expenditure needs for the next twelve months and beyond. The company maintains a full valuation allowance on its federal and state deferred tax assets.