Intapp Announces Second Quarter Fiscal Year 2023 Financial Results

February 6, 2023
  • Second quarter SaaS and support revenue of $61.6 million, up 31% year-over-year
  • Second quarter total revenue of $84.7 million, up 31% year-over-year
  • Cloud annual recurring revenue (ARR) of $191.8 million, up 42% year-over-year

PALO ALTO, Calif., Feb. 06, 2023 (GLOBE NEWSWIRE) -- Intapp, Inc. (NASDAQ: INTA), a leading provider of cloud software for the professional and financial services industry, announced its financial results for the second quarter of fiscal year 2023 ended December 31, 2022. Intapp also provided its outlook for the third quarter and full fiscal year of 2023.

“We continued to see steady demand for our purpose-built solutions in the second quarter with the addition of new clients and the expansion of existing client relationships,” said John Hall, CEO of Intapp. “Our strong results demonstrate the industry's commitment to investing in digital transformation and our ability to lead the way.”

Second Quarter of Fiscal Year 2023 Financial Highlights

  • SaaS and support revenue was $61.6 million, a 31% year-over-year increase compared to the second quarter of fiscal year 2022.
  • Total revenue was $84.7 million, a 31% year-over-year increase compared to the second quarter of fiscal year 2022.
  • Cloud ARR was $191.8 million as of December 31, 2022, a 42% increase year-over-year compared to Cloud ARR at the end of the second quarter in the prior year. Cloud ARR represented 64% of total ARR as of December 31, 2022, compared to 56% as of December 31, 2021.
  • Total ARR was $301.3 million as of December 31, 2022, a 26% increase year-over-year compared to total ARR at the end of the second quarter in the prior year.
  • GAAP operating loss was ($19.4) million, compared to a GAAP operating loss of ($24.3) million in the second quarter of fiscal year 2022.
  • Non-GAAP operating profit was $2.8 million, compared to a non-GAAP operating loss of ($0.2) million in the second quarter of fiscal year 2022.
  • GAAP net loss was ($19.8) million, compared to a GAAP net loss of ($24.2) million in the second quarter of fiscal year 2022.
  • Non-GAAP net income was $2.2 million, compared to a non-GAAP net loss of ($0.1) million in the second quarter of fiscal year 2022.
  • GAAP net loss per share was ($0.31), compared to a GAAP net loss per share of ($0.40) in the second quarter of fiscal year 2022.
  • Non-GAAP fully diluted net income per share was $0.03, compared to a non-GAAP net loss per share of ($0.00) in the second quarter of fiscal year 2022.

Balance Sheet and Cash Flow Highlights

  • Cash and cash equivalents were $51.6 million as of December 31, 2022, compared to $50.8 million as of June 30, 2022, primarily reflecting net cash provided by operating activities, offset by the last Repstor contingent consideration payment.
  • For the six months ended December 31, 2022, cash provided by operating activities was $13.3 million, compared to cash provided by operating activities of $6.5 million for the six months ended December 31, 2021.

Business Highlights

  • As of December 31, 2022, we served more than 2,200 clients, 561 of which each generated more than $100,000 of ARR.
  • We upsold and cross-sold our existing clients such that our trailing twelve months’ net revenue retention rate as of December 31, 2022 was above our projected range of 110% to 114%. Given that we have been above our original and raised ranges for six quarters in a row, we decided to increase the range a second time, now to 113% to 117%. We note the second quarter net revenue retention rate was within this new higher range.
  • We continued to add new clients and expand existing accounts including venture growth firm B Capital, private equity firms Cuadrilla Capital and LivingBridge, and investment banks GP Bullhound and SEB.
  • In November 2022, we hosted a 2-day “Intapp City Tour” event in New York, which was attended by industry experts, partners, and clients spanning private capital, investment banking, legal, accounting, and consulting firms.
  • As our strategic partnership with Microsoft continues to develop and mature, we were officially recognized as a Microsoft Top Tier Partner, a designation achieved by less than 1% of partners.
  • DealCloud won two industry awards in the second quarter of fiscal year 2023. It won best deal origination technology at the 2022 Private Equity Wire U.S. Awards and enterprise product of the year, financial services for 2022 by Best in Biz Awards.
Third Quarter and Full Fiscal Year 2023 Outlook  
  Fiscal 2023 Outlook
  Third Quarter Fiscal Year
SaaS and support revenue (in millions) $63.0 - $64.0 $246.0 - $250.0
Total revenue (in millions) $87.0 - $88.0 $340.5 - $344.5
Non-GAAP operating profit (in millions) $0.5 - $1.5 $4.5 - $8.5
Non-GAAP net income (loss) per share ($0.01) - $0.01 $0.02 - $0.06

The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

The information presented in this press release includes non-GAAP financial measures such as “non-GAAP operating profit (loss),” “non-GAAP net income (loss),” and “non-GAAP net income (loss) per share.” Refer to “Non-GAAP Financial Measures and Other Metrics” for a discussion of these measures and the financial tables below for reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure. The Company has not included a quantitative reconciliation of its guidance for non-GAAP operating profit and non-GAAP net income (loss) per share to their most directly comparable GAAP financial measures because certain of these reconciling items, including stock-based compensation and amortization of intangible assets, could be highly variable and cannot be reasonably predicted without unreasonable effort. This is due to the inherent difficulty of forecasting the timing of certain events that have not yet occurred and are out of the Company’s control and the amounts of associated reconciling items. Please note that the unavailable reconciling items could significantly impact the Company’s GAAP operating results.

Corporate Presentation

A supplemental financial presentation and other information will be accessible through Intapp’s investor relations website at https://investors.intapp.com/.

Webcast

Intapp will host a conference call for analysts and investors on Monday, February 6, 2023, beginning at 2:00 p.m. PT (5:00 p.m. ET). The call will be webcast live via the “Investors” section of the Intapp company website at https://investors.intapp.com/. A replay of the call will be available through the Intapp website for 90 days.

About Intapp

Intapp makes the connected firm possible. We provide cloud software solutions that address the unique operating challenges and regulatory requirements of the global professional and financial services industry. Our solutions help more than 2,200 of the world’s premier private capital, investment banking, legal, accounting, and consulting firms connect their most important assets: people, processes, and data. As part of a connected firm, professionals gain easy access to the information they need to win more business, increase investment returns, streamline deal and engagement execution, and strengthen risk management and compliance.

Forward-Looking Statements

This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the third quarter and full year of fiscal year 2023, growth strategy, business plans and market position. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” “expand,” “outlook” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our ability to continue our growth at or near historical rates; our future financial performance and ability to be profitable; the effect of global events, such as outbreaks, epidemics, or pandemics involving public health, including the COVID-19 pandemic and Russia’s invasion of Ukraine, on the U.S. and global economies, our business, our employees, results of operations, financial condition, demand for our products, sales and implementation cycles, and the health of our clients' and partners' businesses; our ability to prevent and respond to data breaches, unauthorized access to client data or other disruptions of our solutions; our ability to effectively manage U.S. and global market and economic conditions, including inflationary pressures and economic and market downturns, particularly adverse to our targeted industries; the length and variability of our sales cycle; our ability to attract and retain customers; our ability to attract and retain talent; our ability to compete in highly competitive markets; our ability to manage additional complexity, burdens, and volatility in connection with our international sales and operations; our ability to incur indebtedness in the future and the effect of conditions in credit markets; the sufficiency of our cash and cash equivalents to meet our liquidity needs; and our ability to maintain, protect, and enhance our intellectual property rights. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and any subsequent public filings. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP measures exclude the impact of stock-based compensation, amortization of intangible assets, lease modification and impairment, change in fair value of contingent consideration, acquisition-related transaction costs and the income tax effect of non-GAAP adjustments. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Other metrics include total ARR, Cloud ARR and net revenue retention rate. Total ARR represents the annualized recurring value of all active SaaS and on-premises subscription contracts at the end of a reporting period. Cloud ARR is the portion of the annualized recurring value of our active SaaS contracts at the end of a reporting period. Contracts with a term other than one year are annualized by taking the committed contract value for the current period divided by number of days in that period, then multiplying by 365.

Net revenue retention rate is calculated by starting with the ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period ARR. We then calculate the ARR from these same clients as of the current fiscal period, or current period ARR. We then divide the current period ARR by the prior period ARR to calculate the net revenue retention rate.

We believe these non-GAAP financial measures and metrics provide useful information to investors as they are used by management to manage the business, make planning decisions, evaluate our performance, and allocate resources and provide useful information regarding certain financial and business trends relating to our financial condition and results of operations. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Guidance for non-GAAP financial measures excludes stock-based compensation expense and amortization of intangible assets. Non-GAAP net income (loss) per share is calculated by dividing non-GAAP net income (loss) by the estimated fully diluted weighted average shares outstanding for the period.

Investor Contact

David Trone
Senior Vice President, Investor Relations
Intapp, Inc.
David.trone@intapp.com

Media Contact

Ali Robinson
Global Media Relations Director
Intapp, Inc.
Ali.robinson@intapp.com

 

INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data and percentages)
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
Revenues                        
SaaS and support   $ 61,605     $ 46,970     $ 118,418     $ 90,459  
Subscription license     10,979       9,323       23,227       19,907  
Total recurring revenues     72,584       56,293       141,645       110,366  
Professional services     12,108       8,404       22,585       16,521  
Total revenues     84,692       64,697       164,230       126,887  
Cost of revenues                        
SaaS and support     12,456       12,175       24,854       23,517  
Total cost of recurring revenues     12,456       12,175       24,854       23,517  
Professional services     14,329       11,378       27,265       22,412  
Total cost of revenues     26,785       23,553       52,119       45,929  
Gross profit     57,907       41,144       112,111       80,958  
Gross margin     68.4 %     63.6 %     68.3 %     63.8 %
Operating expenses:                        
Research and development     23,392       17,386       43,071       34,356  
Sales and marketing     33,538       26,840       64,850       52,485  
General and administrative     20,753       21,217       41,163       42,047  
Lease modification and impairment     (348 )           1,601        
Total operating expenses     77,335       65,443       150,685       128,888  
Operating loss     (19,428 )     (24,299 )     (38,574 )     (47,930 )
Loss on debt extinguishment                       (2,407 )
Interest expense     (39 )     (38 )     (78 )     (197 )
Other income (expense), net     179       (419 )     (505 )     460  
Net loss before income taxes     (19,288 )     (24,756 )     (39,157 )     (50,074 )
Income tax benefit (expense)     (466 )     531       (651 )     719  
Net loss   $ (19,754 )   $ (24,225 )   $ (39,808 )   $ (49,355 )
Net loss per share, basic and diluted   $ (0.31 )   $ (0.40 )   $ (0.63 )   $ (0.82 )
Weighted-average shares used to compute net loss per share, basic and diluted     63,287       60,889       63,076       60,487  

 

INTAPP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share data)
             
    December 31,
2022
    June 30, 2022  
Assets            
Current assets:            
Cash and cash equivalents   $ 51,563     $ 50,783  
Restricted cash     1,007       3,528  
Accounts receivable, net of allowance for doubtful accounts of $1,404 and $918 as of December 31, 2022 and June 30, 2022, respectively     68,193       66,947  
Unbilled receivables, net     9,153       6,763  
Other receivables, net     935       3,199  
Prepaid expenses     7,489       5,984  
Deferred commissions, current     10,897       10,187  
Total current assets     149,237       147,391  
Property and equipment, net     14,834       12,283  
Operating lease right-of-use assets     16,890        
Goodwill     269,865       269,103  
Intangible assets, net     42,843       48,430  
Deferred commissions, noncurrent     15,601       14,755  
Other assets     1,853       2,451  
Total assets   $ 511,123     $ 494,413  
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable   $ 6,090     $ 4,220  
Accrued compensation     31,342       40,004  
Accrued expenses     7,915       8,774  
Deferred revenue, net     162,953       142,768  
Other current liabilities     26,712       27,753  
Total current liabilities     235,012       223,519  
Deferred tax liabilities     1,795       2,099  
Deferred revenue, noncurrent     1,300       2,712  
Operating lease liabilities, noncurrent     16,567        
Other liabilities     3,593       10,201  
Total liabilities     258,267       238,531  
Stockholders’ equity:            
Preferred stock, $0.001 par value per share, 50,000 shares authorized; no shares issued or outstanding            
Common stock, $0.001 par value per share, 700,000 shares authorized; 63,651 and 62,739 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively     64       63  
Additional paid-in capital     680,035       643,227  
Accumulated other comprehensive loss     (1,699 )     (1,672 )
Accumulated deficit     (425,544 )     (385,736 )
Total stockholders’ equity     252,856       255,882  
Total liabilities and stockholders’ equity   $ 511,123     $ 494,413  

 

INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
Cash Flows from Operating Activities:                        
Net loss   $ (19,754 )   $ (24,225 )   $ (39,808 )   $ (49,355 )
Adjustments to reconcile net loss to net cash provided by operating activities:                        
Depreciation and amortization     3,621       4,104       7,737       8,156  
Amortization of deferred financing costs     39       37       77       37  
Amortization of operating lease right-of-use assets     1,131             2,404        
Provision for doubtful accounts     518       303       676       594  
Stock-based compensation     20,268       20,440       36,036       39,468  
Lease modification and impairment     (348 )           1,601        
Loss on debt extinguishment                       2,407  
Change in fair value of contingent consideration, including unrealized foreign exchange gain     (85 )     466       (232 )     (489 )
Deferred income taxes     (146 )     (365 )     (304 )     (609 )
Other           3             39  
Changes in operating assets and liabilities:                        
Accounts receivable     (16,754 )     (9,615 )     (1,514 )     7,153  
Unbilled receivables, current     (192 )     114       (2,390 )     (61 )
Prepaid expenses and other assets     2,336       427       1,029       1,532  
Deferred commissions     (1,162 )     (1,726 )     (1,556 )     (3,356 )
Accounts payable and accrued liabilities     7,733       1,803       (8,094 )     (3,678 )
Deferred revenue, net     11,661       9,448       18,773       10,022  
Operating lease liabilities     (986 )           (3,123 )      
Other liabilities     2,252       662       2,035       (5,335 )
Net cash provided by operating activities     10,132       1,876       13,347       6,525  
Cash Flows from Investing Activities:                        
Purchases of property and equipment     (30 )     (84 )     (1,698 )     (116 )
Capitalized internal-use software costs     (1,431 )     (1,107 )     (2,697 )     (1,938 )
Net cash used in investing activities     (1,461 )     (1,191 )     (4,395 )     (2,054 )
Cash Flows from Financing Activities:                        
Payments on borrowings                       (278,000 )
Proceeds from initial public offering, net of underwriting discounts                       292,758  
Payments for deferred offering costs           (969 )           (4,358 )
Proceeds from stock option exercises     3,451       1,622       4,480       3,883  
Proceeds from employee stock purchase plan     1,241             1,241        
Payments related to tax withholding for vested equity awards     (3,447 )           (4,948 )      
Payments of contingent consideration and acquisition-related holdback     (1,816 )           (11,115 )      
Payment of deferred financing costs           (769 )           (769 )
Net cash provided by (used in) financing activities     (571 )     (116 )     (10,342 )     13,514  
Effect of foreign currency exchange rate changes on cash and cash equivalents     617       518       (351 )     303  
Net increase (decrease) in cash, cash equivalents and restricted cash     8,717       1,087       (1,741 )     18,288  
Cash, cash equivalents and restricted cash - beginning of period     43,853       58,664       54,311       41,463  
Cash, cash equivalents and restricted cash - end of period   $ 52,570     $ 59,751     $ 52,570     $ 59,751  
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets                        
Cash and cash equivalents   $ 51,563     $ 56,024     $ 51,563     $ 56,024  
Restricted cash     1,007       3,727       1,007       3,727  
Total cash, cash equivalents and restricted cash   $ 52,570     $ 59,751     $ 52,570     $ 59,751  

 

INTAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share data and percentages)
             
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:
             
Non-GAAP Gross Profit            
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
GAAP gross profit   $ 57,907     $ 41,144     $ 112,111     $ 80,958  
Adjusted to exclude the following (as related to cost of revenues):                        
Stock-based compensation     1,691       1,190       2,724       1,938  
Amortization of intangible assets     917       1,963       2,413       3,927  
Non-GAAP gross profit   $ 60,515     $ 44,297     $ 117,248     $ 86,823  
Non-GAAP gross margin     71.5 %     68.5 %     71.4 %     68.4 %

 

Non-GAAP Operating Expenses            
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
Research and development   $ 23,392     $ 17,386     $ 43,071     $ 34,356  
Stock-based compensation     (4,646 )     (4,285 )     (6,780 )     (8,635 )
Non-GAAP research and development   $ 18,746     $ 13,101     $ 36,291     $ 25,721  
                         
                         
Sales and marketing   $ 33,538     $ 26,840     $ 64,850     $ 52,485  
Stock-based compensation     (6,352 )     (6,888 )     (12,105 )     (13,357 )
Amortization of intangible assets     (1,467 )     (1,240 )     (2,931 )     (2,479 )
Non-GAAP sales and marketing   $ 25,719     $ 18,712     $ 49,814     $ 36,649  
                         
                         
General and administrative   $ 20,753     $ 21,217     $ 41,163     $ 42,047  
Stock-based compensation     (7,579 )     (8,077 )     (14,427 )     (15,538 )
Amortization of intangible assets     (122 )     (107 )     (243 )     (213 )
Change in fair value of contingent consideration     232       (390 )     232       (727 )
Acquisition-related transaction costs     (42 )           (201 )     (81 )
Non-GAAP general and administrative   $ 13,242     $ 12,643     $ 26,524     $ 25,488  

 

Non-GAAP Operating Profit (Loss)            
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
GAAP operating loss   $ (19,428 )   $ (24,299 )   $ (38,574 )   $ (47,930 )
Adjusted to exclude the following (including the portion related to total cost of revenues):                        
Stock-based compensation     20,268       20,440       36,036       39,468  
Amortization of intangible assets     2,506       3,310       5,587       6,619  
Lease modification and impairment     (348 )           1,601        
Change in fair value of contingent consideration     (232 )     390       (232 )     727  
Acquisition-related transaction costs     42             201       81  
Non-GAAP operating profit (loss)   $ 2,808     $ (159 )   $ 4,619     $ (1,035 )

 

Non-GAAP Net Income (Loss)            
             
    Three Months Ended
December 31,
    Six Months Ended
December 31,
 
    2022     2021     2022     2021  
GAAP net loss   $ (19,754 )   $ (24,225 )   $ (39,808 )   $ (49,355 )
Adjusted to exclude the following (including the portion related to cost of revenues):                        
Stock-based compensation     20,268       20,440       36,036       39,468  
Amortization of intangible assets     2,506       3,310       5,587       6,619  
Lease modification and impairment     (348 )           1,601        
Change in fair value of contingent consideration     (232 )     390       (232 )     727  
Acquisition-related transaction costs     42             201       81  
Income tax effect of non-GAAP adjustments (1)     (244 )           (481 )      
Non-GAAP net income (loss)   $ 2,238     $ (85 )   $ 2,904     $ (2,460 )
                         
GAAP net loss per share, basic and diluted   $ (0.31 )   $ (0.40 )   $ (0.63 )   $ (0.82 )
Non-GAAP net income (loss) per share, diluted   $ 0.03     $ (0.00 )   $ 0.04     $ (0.04 )
                         
                         
Weighted-average shares used to compute GAAP net loss per share, basic and diluted     63,287       60,889       63,076       60,487  
Weighted-average shares used to compute non-GAAP net income (loss) per share, diluted     72,067       60,889       70,080       60,487  

(1) The income tax effect of non-GAAP adjustments for the three and six months ended December 31, 2021 were immaterial.