AvePoint, Inc. (NASDAQ:AVPT) Q2 2023 Earnings Call Transcript

James Caci: More of the latter in terms of additional functionality that they’re receiving. But we had a strong quarter across the board, Nehal, in terms of if we look at it from a couple of different things. It’s really the demand for the SaaS platform, 39% growth was really strong. Geographically, across all 3 segments, we saw strong growth, particularly on the ARR side, where each of the 3 segments really came in just at about the same rate for our consolidated growth rate of that 26%. So really right on target. We talked about channel. We saw 61% of our incremental ARR coming through the channel really strong. So — and again, that existing customer base that I referred to before, a really strong quarter. So we kind of saw it across the board, not just from the existing customer base, but really throughout both new and existing.

Nehal Chokshi: Okay. And then your ARR guidance raise is great to see, but it looks like it’s largely bearing the beat in ARR. And so is that a reflection that the improvement in sales motion you’re taking it as a quarter-by-quarter basis.

James Caci: Yes. I think what we’re trying to factor in for — as we think about our ARR guidance, is that we had a really strong quarter. We had strong growth, meaningful operating leverage, and obviously, we generated a lot of cash in the quarter as well over the first half of the year. And when we think about that ARR guidance, we are trying to take into the fact — take into account that we had a good quarter, but there’s still macro uncertainties out there, and we’re trying to plan accordingly. We talked at the beginning of the year that this year was going to be uncertain. It was going to be bumpy. It was going to be lumpy. And so although we had a very good quarter, we’re excited about that. We’re also trying to really be prudent over the remainder of the year and factor that into our — the remaining guidance.

Operator: [Operator Instructions]. And the next question comes from Jason Ader with William Blair.

Jason Ader: I just wanted to clarify on the comments on demand, said things are not getting worse. I just wanted to see if you meant for all 3 segments of your business, enterprise, SMB and mid-market. Could you talk about SMB and mid-market being — seeing good growth through channel and enterprises seeing elongation as the enterprise piece of the business stabilized? Or is that also — or is that actually getting a little bit worse while the SMB and mid-market are getting better?

Tianyi Jiang: Jason. Yes, so enterprise segmentation, it’s steady as she goes, no different than Q1. So that’s where we see. However, we do — we are remaining cautious. On the mid-market SMB, it continues a faster growth rate just as we’ve seen before. So everything is pretty much — we are being cautious because the macro factors. However, we are not seeing a deterioration. That’s why we talk about stabilization.

Jason Ader: Okay. So — and then, Jim, your comment on bookings, is the implication that bookings actually bookings growth ticked up in Q2 versus Q1? Or it was a similar bookings growth rate as Q1?

James Caci: We actually saw an uptick to your point. We did see significant improvement in bookings in Q2, which was kind of our expectation. We expected Q1 to be on the lighter side. And that was right in line with expectations for Q1, and Q2 was definitely a stronger quarter.

Jason Ader: Great. Okay. And then, TJ, when you think about your product portfolio and 30-plus products. Maybe could you call out a few products right now that are seeing a lot of interest were either existing customers or adding that product on or it’s a key part of some of your wins for new customers.