Intapp, Inc. — Form 10-Q Summary
Business context and reporting period
This filing reports the quarter and nine months ended March 31, 2024, Intapp’s fiscal 2024 third quarter. The request labels the period “2023 Q3,” but the filing itself covers 2024 Q3. Intapp provides vertical SaaS and related software and services to professional and financial-services firms.
Financial and operating metrics
| Metric | Three months ended March 31, 2024 | Nine months ended March 31, 2024 |
|---|---|---|
| Revenue | $110.6 million | $316.1 million |
| Gross profit / margin | $80.1 million / 72% | $223.2 million / 71% |
| Operating loss | $7.4 million | $32.5 million |
| Net loss | $6.9 million; $0.09 per share | $31.4 million; $0.44 per share |
| Operating cash flow | Not separately presented for the quarter | $40.2 million |
- Quarterly revenue rose 20% year over year; nine-month revenue rose 23%. Recurring revenue grew 22% and 25%, respectively. SaaS and support revenue grew 22% in the quarter and 25% for the nine months.
- Gross margin improved from 69% to 72% for the quarter and from 69% to 71% for the nine months. Professional services remained loss-making: nine-month gross loss was $8.6 million.
- Non-GAAP operating profit, as defined by the company, was $11.2 million for the quarter and $25.2 million for the nine months, versus $2.9 million and $7.5 million, respectively, a year earlier. These figures exclude specified items, including stock-based compensation.
- Cash, cash equivalents and restricted cash totaled $187.6 million at March 31, 2024, up from $131.2 million at June 30, 2023. Nine-month investing cash outflow was $6.9 million; financing cash inflow was $23.6 million.
- No borrowings were outstanding under the $100 million revolving credit facility; the company reported compliance with its covenants. Total liabilities were $298.2 million, including $26.0 million of operating lease liabilities at present value.
- ARR was $382.7 million, up 21% year over year; Cloud ARR was $274.2 million, up 33% and 72% of ARR. Net revenue retention was 115%; the company had over 2,450 clients and 673 clients with contracts exceeding $100,000 ARR.
Material changes versus prior comparable periods
- Net loss narrowed to $6.9 million from $18.1 million for the quarter and to $31.4 million from $58.0 million for the nine months. Operating losses also narrowed.
- Nine-month operating cash flow increased to $40.2 million from $16.8 million. Management attributed the improvement partly to collections, higher accounts payable and accrued liabilities, and deferred-revenue timing; deferred-revenue cash inflow was lower than in the prior-year period.
- Research and development expense increased 23% for the nine months, while sales and marketing rose 5% and general and administrative expense rose 7%. Stock-based compensation remained significant at $49.3 million for the nine months.
- Existing shareholders sold shares in secondary offerings in November 2023 and March 2024; Intapp received no proceeds. Intapp recorded related offering costs in general and administrative expense.
Outlook, commentary, risks and unusual items
- Management said existing cash and the credit facility should meet working-capital and capital-expenditure needs for at least the next 12 months. It expects continued investment in research and development and sales and marketing; operating losses could continue. The filing provides no quantified revenue or earnings guidance.
- Remaining performance obligations were approximately $467.9 million, with about 59% expected to be recognized over the next 12 months; this is contracted revenue, not a forecast of total future revenue.
- After quarter-end, Intapp completed the delphai acquisition for $13.3 million initial cash consideration plus a $1.7 million holdback, and the TDI acquisition for $1.6 million initial cash consideration plus up to $3.3 million in deferred and contingent consideration.
- A new six-year New York office lease has approximately $7.3 million of undiscounted base rent. Separately, the company has $98.5 million remaining on its Microsoft cloud-services minimum-spend commitment through December 2028, with an option to extend the commitment period.
- Management cited risks including growth and profitability execution, economic conditions in target industries, variable sales cycles, competition including AI, cybersecurity and data protection, talent retention, international operations, acquisitions, and liquidity. The company disclosed no litigation it believes would have a material adverse effect and reported no material changes to previously disclosed risk factors.
- Intapp expects to become a large accelerated filer as of June 30, 2024, ending its emerging-growth-company accommodations, including the extended accounting-standard transition and exemption from auditor attestation of internal controls.
Important facts for investors to verify
- Confirm the reporting period: this is fiscal 2024 Q3, not 2023 Q3.
- Track whether ARR and Cloud ARR growth translate into recognized revenue, and whether 115% net revenue retention is sustained.
- Assess the drivers and durability of positive operating cash flow, including billing, collections, deferred revenue and working-capital timing.
- Monitor GAAP losses, professional-services gross losses, stock-based compensation and potential share dilution.
- Review acquisition integration, purchase consideration and any subsequent effects on cash, expenses or results.
- Monitor the transition to large-accelerated-filer status and related internal-control attestation requirements.