Press Releases AvePoint Announces Third Quarter 2022 Financial Results

AvePoint Announces Third Quarter 2022 Financial Results

Third quarter SaaS revenue of $30.0 million, representing 34% year-over-year growth, 45% adjusted for constant currency
Third quarter total revenue of $62.7 million, representing 16% year-over-year growth, 26% adjusted for constant currency
Total ARR of $191.7 million, representing 30% year-over-year growth, 34% adjusted for FX impact

AvePoint (NASDAQ: AVPT), the global leader in data security, governance, and resilience, today announced financial results for the third quarter ended September 30, 2022.

“Q3 was another strong quarter for AvePoint despite the uncertain macroeconomic environment, highlighted by 34% ARR growth and 26% revenue growth, both adjusted for the impact of FX,” said Dr. Tianyi Jiang (TJ), CEO and Co-Founder of AvePoint. “Our strong topline performance reflects the ongoing need of companies around the world to secure collaboration data, sustain connections between people and ensure business continuity. At the same time, we continue to thoughtfully invest in a number of strategic growth initiatives while emphasizing robust expense controls across the company. We are excited for a strong close to 2022 and remain well positioned to capture the enormous market opportunity ahead of us.”

Third Quarter 2022 Financial Highlights

Revenue: Total revenue for the third quarter of 2022 was $62.7 million, up 16% from the third quarter of 2021 and up 26% year over year on a constant currency basis. Within total revenue, SaaS revenue was $30.0 million, up 34% from the third quarter of 2021 and up 45% year over year on a constant currency basis.
Gross Profit: Gross profit for the third quarter of 2022 was $45.9 million, compared to $38.7 million for the third quarter of 2021. Gross margin for the third quarter of 2022 was 73.2%, compared to 71.8% for the third quarter of 2021. Non-GAAP gross profit for the third quarter of 2022 was $46.6 million, compared to $41.1 million for the third quarter of 2021. Non-GAAP gross margin was 74.2% for the third quarter of 2022, compared to 76.3% for the third quarter of 2021.
Operating Income/(Loss): GAAP operating loss for the third quarter of 2022 was $(7.4) million, compared to $(28.7) million for the third quarter of 2021. Non-GAAP operating income for the third quarter of 2022 was $2.2 million, compared to $4.0 million for the third quarter of 2021.
Cash and short-term investments: $219.8 million as of September 30, 2022.

Third Quarter 2022 Key Performance Indicators and Business Highlights

ARR as of the end of third quarter was $191.7 million, up 30% year-over-year. Adjusted for FX, ARR grew 34%.
Dollar-based net retention rate was 106% and was 108% adjusted for FX.
The acquisitions of tyGraph, an award-winning platform that allows organizations to organize, measure, and analyze human interactions to accelerate success in the digital workplace, and Essential, a South Korea-based software solutions provider that will advance the Company’s ability to enable large organizations in the country to accomplish their digital transformation goals were both completed.
A new research and development hub in Singapore, which will serve as the Company’s international headquarters and foster local talent to support the growing global demand for B2B SaaS solutions, was announced.
Three rigorous audits (ISO 27001:2013 and 27017:2015 frameworks and CSA STAR Level 2), which reflect the Company’s prioritization of security and privacy and its commitment to help all organizations safely manage their digital collaboration data were completed.
Through September 30, 2022, the Company repurchased approximately 4 million shares under the share repurchase program at a cost of approximately $19.6 million.

Financial Outlook

For the fourth quarter of 2022, the Company expects:

Total revenues of $63 million to $65 million, or 19% year-over-year growth, 22% adjusted for constant currency.
Non-GAAP operating income of $1.5 million to $3.5 million.

For the full year 2022, the Company now expects:

Total revenues of $231.7 million to $233.7 million, or 21% year-over-year growth, 28% adjusted for constant currency.
Non-GAAP operating loss of $(3.2) million to $(1.2) million.
Total ARR of $202 million to $206 million, or 28% year-over-year growth, 32% adjusted for the impact of FX.

Quarterly Conference Call

AvePoint will host a conference call today, November 10, 2022, to review its third quarter 2022 financial results and to discuss its financial outlook. The call is scheduled to begin at 4:30pm ET. You may access the call and register with a live operator by dialing 1 (844) 826-3035 for US participants and 1 (412) 317-5195 for outside the US. The conference ID for the call is 5693960. Investors can also join by webcast by visiting https://ir.avepoint.com/events. The webcast will be available live, and a replay will be available following the completion of the live broadcast for approximately 90 days.

About AvePoint

Securing the Future. AvePoint is a global leader in data security, governance, and resilience, and over 21,000 customers worldwide rely on our solutions to modernize the digital workplace across Microsoft, Google, Salesforce and other collaboration environments. AvePoint’s global channel partner program includes over 3,500 managed service providers, value added resellers and systems integrators, with our solutions available in more than 100 cloud marketplaces. To learn more, visit www.avepoint.com.

Non-GAAP Financial Measures

To supplement AvePoint’s consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (including percentage of revenue figures), non-GAAP operating income and non-GAAP operating margin. In order for AvePoint’s investors to be better able to compare its current results with those of previous periods, the company has included a reconciliation of GAAP to non-GAAP financial measures at the end of this press release. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense. AvePoint believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of its historical financial performance. The presentation of AvePoint’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for its financial results prepared in accordance with GAAP, and AvePoint’s non-GAAP measures may be different from non-GAAP measures used by other companies.

Disclosure Information

AvePoint uses the https://ir.avepoint.com/ website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Investor Contact

AvePoint
Jamie Arestia
ir@avepoint.com
(551) 220-5654

Media Contact

AvePoint
Nicole Caci
pr@avepoint.com
(201) 201-8143


AvePoint, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue:
SaaS	$	29,959		$	22,410		$	84,131		$	61,255
Term license and support		18,288			17,477			42,501			37,292
Services		10,458			8,143			29,231			21,361
Maintenance		3,754			5,293			12,262			16,160
Perpetual license		280			604			606			2,003
Total revenue		62,739			53,927			168,731			138,071
Cost of revenue:
SaaS		7,011			4,866			18,651			13,870
Term license and support		515			211			1,573			714
Services		9,113			9,435			25,922			21,528
Maintenance		189			710			739			1,608
Total cost of revenue		16,828			15,222			46,885			37,720
Gross profit		45,911			38,705			121,846			100,351
Operating expenses:
Sales and marketing		27,201			25,186			81,429			73,488
General and administrative		16,365			22,230			48,229			44,186
Research and development		8,953			19,648			23,247			27,633
Depreciation and amortization		819			326			1,959			863
Total operating expenses		53,338			67,390			154,864			146,170
Loss from operations		(7,427	)		(28,685	)		(33,018	)		(45,819	)
Gain on earn-out and warrant liabilities		913			13,650			6,848			13,650
Interest income, net		16			56			50			80
Other income (expense), net		48			(299	)		(822	)		(300	)
Loss before income taxes		(6,450	)		(15,278	)		(26,942	)		(32,389	)
Income tax expense (benefit)		336			(5,521	)		99			(6,633	)
Net loss	$	(6,786	)	$	(9,757	)	$	(27,041	)	$	(25,756	)
Net income attributable to and accretion of redeemable noncontrolling interest		(626	)		(517	)		(1,870	)		(1,413	)
Net loss attributable to AvePoint, Inc.	$	(7,412	)	$	(10,274	)	$	(28,911	)	$	(27,169	)
Deemed dividends on preferred stock		—			608			—			(32,928	)
Net loss available to common shareholders	$	(7,412	)	$	(9,666	)	$	(28,911	)	$	(60,097	)
Basic and diluted loss per share	$	(0.04	)	$	(0.05	)	$	(0.16	)	$	(0.47	)
Basic and diluted shares used in computing loss per share		180,732			176,621			179,563			126,738


AvePoint, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except par value) (Unaudited)

	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	217,781		$	268,217
Short-term investments		2,003			2,411
Accounts receivable, net of allowance of $1,808 and $838 at September 30, 2022 and December 31, 2021, respectively		56,777			55,067
Prepaid expenses and other current assets		9,370			8,461
Total current assets		285,931			334,156
Property and equipment, net		5,610			3,922
Goodwill		18,186			—
Other intangible assets, net		11,260			—
Operating lease right-of-use assets		16,913			—
Deferred contract costs		42,364			38,926
Other assets		14,577			11,734
Total assets	$	394,841		$	388,738
Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable	$	2,017		$	1,824
Accrued expenses and other liabilities		39,134			35,062
Current portion of deferred revenue		78,034			74,294
Total current liabilities		119,185			111,180
Long-term operating lease liabilities		12,459			—
Long-term portion of deferred revenue		7,997			8,038
Earn-out shares liabilities		4,074			10,012
Other non-current liabilities		5,730			3,943
Total liabilities		149,445			133,173
Commitments and contingencies
Mezzanine equity
Redeemable noncontrolling interest		12,684			5,210
Total mezzanine equity		12,684			5,210
Stockholders’ equity
Common stock, $0.0001 par value; 1,000,000 shares authorized, 184,455 and 181,822 shares issued and outstanding, at September 30, 2022 and December 31, 2021, respectively		19			18
Additional paid-in capital		655,968			625,056
Treasury (TSRMF) stock		(21,293	)		(1,739	)
Accumulated other comprehensive income		2,226			2,317
Accumulated deficit		(404,208	)		(375,297	)
Total stockholders’ equity		232,712			250,355
Total liabilities, mezzanine equity, and stockholders’ equity	$	394,841		$	388,738


AvePoint, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)

	Nine Months Ended
	September 30,
	2022			2021
Operating activities
Net loss	$	(27,041	)	$	(25,756	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,255			863
Operating lease right-of-use assets expense		4,602			—
Foreign currency remeasurement loss (gain)		3,026			(161	)
Provision for doubtful accounts		1,058			(880	)
Stock-based compensation		28,287			50,475
Gain on disposal of property and equipment		(18	)		(15	)
Deferred income taxes		(154	)		(1,008	)
Change in value of earn-out and warrant liabilities		(6,754	)		(13,650	)
Changes in operating assets and liabilities:
Accounts receivable and long-term unbilled receivables		(9,931	)		(7,002	)
Prepaid expenses and other current assets		(1,486	)		(10,775	)
Deferred contract costs and other assets		(5,166	)		(3,269	)
Accounts payable, accrued expenses and other liabilities		(4,227	)		1,836
Deferred revenue		8,656			5,377
Net cash used in operating activities		(6,893	)		(3,965	)
Investing activities
Maturities of investments		180,837			—
Purchases of investments		(180,495	)		(638	)
Net assets acquired from business combinations and asset acquisitions, net of cash acquired		(18,574	)		—
Capitalization of internal use software		(1,165	)		—
Purchase of property and equipment		(3,420	)		(1,445	)
Net cash used in investing activities		(22,817	)		(2,083	)
Financing activities
Proceeds from recapitalization of Apex shares		—			441,573
Redemption of redeemable convertible preferred stock		—			(130,925	)
Redemption of Legacy AvePoint common stock		—			(106,169	)
Payments of transaction fees by Legacy AvePoint		—			(2,998	)
Purchase of common stock		(19,554	)		(1,631	)
Payment of net cash settlement for management options		—			(7,530	)
Proceeds from stock option exercises		1,817			4,555
Proceeds from sale of common shares of subsidiary		—			753
Repayments of finance leases		(23	)		(20	)
Net cash (used in) provided by financing activities		(17,760	)		197,608
Effect of exchange rates on cash		(2,966	)		32
Net (decrease) increase in cash and cash equivalents		(50,436	)		191,592
Cash and cash equivalents at beginning of period		268,217			69,112
Cash and cash equivalents at end of period	$	217,781		$	260,704
Supplemental disclosures of cash flow information
Income taxes paid	$	421		$	2,823
Noncash acquisition	$	5,635		$	—


AvePoint, Inc. and Subsidiaries Non-GAAP Reconciliations (In thousands) (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Non-GAAP operating income
GAAP operating loss	$	(7,427	)	$	(28,685	)	$	(33,018	)	$	(45,819	)
Stock-based compensation expense		9,609			32,676			28,287			50,475
Non-GAAP operating income (loss)	$	2,182		$	3,991		$	(4,731	)	$	4,656
Non-GAAP operating margin		3.5	%		7.4	%		-2.8	%		3.4	%



Non-GAAP gross profit
GAAP gross profit	$	45,911		$	38,705		$	121,846		$	100,351
Stock-based compensation expense		667			2,428			1,948			2,790
Non-GAAP gross profit	$	46,578		$	41,133		$	123,794		$	103,141
Non-GAAP gross margin		74.2	%		76.3	%		73.4	%		74.7	%

Non-GAAP sales and marketing
GAAP sales and marketing	$	27,201		$	25,186		$	81,429		$	73,488
Stock-based compensation expense		(2,847	)		(2,171	)		(8,705	)		(13,073	)
Non-GAAP sales and marketing	$	24,354		$	23,015		$	72,724		$	60,415
Non-GAAP sales and marketing as a % of revenue		38.8	%		42.7	%		43.1	%		43.8	%

Non-GAAP general and administrative
GAAP general and administrative	$	16,365		$	22,230		$	48,229		$	44,186
Stock-based compensation expense		(5,060	)		(13,020	)		(14,825	)		(19,375	)
Non-GAAP general and administrative	$	11,305		$	9,210		$	33,404		$	24,811
Non-GAAP general and administrative as a % of revenue		18.0	%		17.1	%		19.8	%		18.0	%

Non-GAAP research and development
GAAP research and development	$	8,953		$	19,648		$	23,247		$	27,633
Stock-based compensation expense		(1,035	)		(15,057	)		(2,809	)		(15,237	)
Non-GAAP research and development	$	7,918		$	4,591		$	20,438		$	12,396
Non-GAAP research and development as a % of revenue		12.6	%		8.5	%		12.1	%		9.0	%