AvePoint outlines $1B ARR target for 2029 with expanded AI governance and SaaS momentum

Earnings Call Insights: AvePoint, Inc. (AVPT) Q3 2025

MANAGEMENT VIEW

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CEO Tianyi Jiang emphasized AvePoint's "differentiated platform-driven approach to governing and securing critical enterprise data," noting outperformance of guidance for both revenues and non-GAAP operating income. Jiang highlighted urgency in AI governance, referencing AvePoint’s recent research: "86% of organizations have delayed AI rollouts by up to 12 months because of security and governance concerns." He detailed product enhancements to the AvePoint Confidence Platform for agentic AI visibility and lifecycle control, stating, "We now enable organizations to monitor where agents originate, what data they access, what permissions they hold and how they evolve over time." Jiang also cited new customer wins in the financial services, food and beverage, and telecommunications sectors, and outlined future strategic goals in autonomous governance, ecosystem governance, and elevating governance from compliance to strategic enablement.

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CFO James Caci reported, "Our third quarter results underscore our ability to execute in a dynamic environment and deliver the robust top line growth and margin expansion that we have been committed to for many years." He highlighted quarterly records for net new ARR, $100,000 ARR customer adds, operating cash flow generation, and non-GAAP operating income. Caci stated, "We ended the third quarter with total ARR of $390 million, representing year-over-year growth of 26%."

OUTLOOK

* Caci shared updated Q4 expectations, stating, "For the fourth quarter, we expect total revenues of $110 million to $112 million or growth of 23% to 26%." He noted that "our guidance also importantly factors in the potential impact to deal timing from the ongoing government shutdown." Full-year ARR guidance remains at "$412.8 million to $418.8 million or growth of 27% at the midpoint." Full-year revenue guidance is now "$414.8 million to $416.8 million or growth of 25.8% at the midpoint," with non-GAAP operating income guidance raised to "$77.3 million to $78.3 million."

FINANCIAL RESULTS

* Total Q3 revenues were reported as $109.7 million, with SaaS revenue of $84 million, representing 77% of total revenues. Services revenues reached $13.8 million. Regional performance included North America SaaS revenue growth of 36%, EMEA 42%, and APAC 34%. Net new ARR for Q3 was $22.4 million. Gross profit was $82.4 million, with a gross margin of 75.1%. Non-GAAP operating income was $24.1 million, with an operating margin of 22%. Cash, cash equivalents, and short-term investments ended at $472 million. Share repurchases for the quarter totaled 528,000 shares for $8.4 million.

Q&A

* Shrenik Kothari, Robert W. Baird: Asked about the most urgent AI governance use cases and agentic inflection. Jiang responded that "the urgency today is really about AI readiness to roll out AI deployments across the organization with specific use cases," emphasizing risk control and data accuracy, while pointing to the "massive coming opportunity when it comes to agentic AI deployments."
* Rudy Kessinger, D.A. Davidson: Inquired about federal sector impact and ARR guidance conservatism. Caci explained, "the impact for the step down we had of 1 percentage point going from 89% to 88% in the quarter was really attributable to what we saw coming from public sector," and confirmed conservatism in Q4 guidance due to government shutdown.
* Joseph Gallo, Jefferies: Asked about non-Microsoft business and sales capacity. Jiang stated, "just over 90% is coming from the Microsoft tech stack and then less than 10% come from multi-cloud sources," with potential for non-Microsoft ARR to reach 30% by 2029. Caci added, "we're definitely going to be expanding the teams... our long-term goal is to improve on the current kind of operating profitability to continue to see that improve."
* Erik Suppiger, B. Riley: Asked about MSP vertical and contract duration. Jiang confirmed MSP as "our fastest-growing segment." Caci stated, "each quarter, we've seen a slight improvement in the average contract length."
* S. Kirk Materne, Evercore: Asked about agent deployment readiness and federal sector run rates. Jiang noted customers are "super, super careful right now with actually instantiating and deploying" full-fledged digital employees, which are not widely deployed yet. Caci added, "I don't think we are back to the normal kind of spend maybe from a year ago" in the federal sector.

SENTIMENT ANALYSIS

* Analyst tone was probing and slightly cautious, especially regarding public sector volatility and the durability of growth, with questions focusing on ARR guidance, contract duration, and AI adoption pace.
* Management maintained a confident and measured tone in both prepared remarks and Q&A. Caci’s reiteration of "profitable growth" and Jiang’s emphasis on "massive long-term opportunity" underscore continued optimism, though they acknowledged public sector headwinds and were prudent in guidance updates.
* Compared to Q2, analysts were more focused on federal sector risks and the sustainability of enterprise and multi-cloud growth, while management's tone remained consistent, emphasizing innovation and disciplined execution.

QUARTER-OVER-QUARTER COMPARISON

* Revenue grew from $102 million in Q2 to $109.7 million in Q3. SaaS mix rose from 76% to 77% of revenue. Net new ARR increased slightly from $22.1 million to $22.4 million. Gross retention rate declined from 89% to 88%, and net retention rate from 112% to 110%. Operating margin improved from 18.4% to 22%. Management’s tone continues to highlight innovation and platform expansion, while Q3 guidance was more cautious regarding the public sector, compared to a broadly optimistic Q2.
* Analysts in Q3 focused heavily on federal sector uncertainties and the pace of multi-cloud and non-Microsoft ecosystem growth, whereas Q2 focused on broader macro demand and sales efficiency.

RISKS AND CONCERNS

* Management cited ongoing uncertainty in the public sector and government shutdown as factors influencing guidance and deal timing. Caci stated, "we have factored the uncertainty its impact may have on deal timing into our updated outlook for Q4."
* Gross retention rates were impacted by public sector churn and weaker upsell in that segment.
* Analysts questioned the durability of growth outside the public sector and the timeline for wider agentic AI deployment.

FINAL TAKEAWAY

AvePoint’s Q3 results demonstrate continued momentum in platform innovation and SaaS revenue growth, supported by strong execution and expanding enterprise relationships. Management remains focused on achieving its $1 billion ARR target by 2029, with strategic investments in AI governance, multi-cloud capabilities, and channel expansion. While public sector headwinds persist and are reflected in a more prudent outlook for ARR, AvePoint’s platform approach and operational discipline position it for sustained growth and long-term value creation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/avpt/earnings/transcripts]

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