Intapp Announces Second Quarter Fiscal Year 2023 Financial Results

February 06, 2023 at 16:05 PM EST

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