Intapp, Inc.

Hello, thank you for standing by and welcome to the INTAP first quarter fiscal year 2022 earnings conference call. At this time, all participants are in our listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Barry Hutton, Please go ahead.

Hello, everyone. I am Barry Hutton, Managing Director of the Blue Shirt Group. Welcome to NTAP's first quarter fiscal year 2022 earnings conference call. With me today are John Hall, CEO of NTAP, and Steve Robertson, the company's Chief Financial Officer. During the course of this conference call, we may make forward-looking statements regarding trends, strategies, and the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date, and are subject to various risks and uncertainties described in our FCC filing and other publicly available documents, including those related to the impacts of COVID-19 on our business, the financial services industry, and global economic conditions. INTAP disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics, which we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8K furnished with the SEC prior to this call. With that, I'll hand the conversation over to John.

Thanks very much, Barry. Good afternoon, everybody. Thank you all for joining us today. Shortly after our IPO was completed, we held our first public conference call with you. In that call, I provided an overview of Intap's unique vertical industry cloud strategy targeting the global professional and financial services industry. We provided an overview of our market opportunity, our client base, our technology solution, our founder-led team, and our recurring revenue model. and outlined our mission to enable professional and financial services firms to better connect their people, processes, and data to our AI-powered software solutions. At that time, we reported solid results for our fiscal year, which ended in June. Today, we will discuss our fiscal first quarter, which ended September 30th. This quarter, we continue to see good demand from our target markets, and we executed our business plan with consistency. we had a strong start to our fiscal year, and we made excellent progress along our path to better serve our clients. Our cloud-based offering is the foundation of our recurring revenue business model. So our key business metric is cloud ARR, which grew 56% to $125 million. That now represents 55% of our total ARR, which grew by 27%, to reach $229 million. In Q1, we earned SAS and support revenue of $43.5 million, up 31% year over year, and total revenue of $62.2 million, up 29% year over year. And we now serve more than 1,950 premier firms in more than 40 countries. As we execute our go-to-market, it's clear that our cloud strategy is working. On the whole, firms in our target markets are now moving to cloud-first strategies of their own, preferring cloud-based offerings as they acquire new technology. They're doing so for many reasons, including the need to provide exceptional differentiated experiences for their clients. In order to best serve their clients, our clients require solutions that are purpose-built for their very unique business model. Today, I want to take a deeper dive into the clients that we serve and specifically why Intap is uniquely positioned to meet their needs. Firms in the professional and financial services industry share common needs that are different from the traditional corporations. Our clients are organized and operate in the model of partnerships with multiple investment strategy teams or advisory practice areas or service lines made up of expert practitioners across many fields of expertise. To be successful with modern cloud technology, these firms require very specific purpose-built technology solutions designed by a company with the understanding and the experience to match their partnership-oriented business model. Over our history as a bootstrap private company, Intap focused specifically on this industry for 20 years. Today, as a newly emerging public company, every layer of our portfolio, from our industry graph data model to our knowledge-oriented applied AI to our low-code configurable user experience system has been designed to enable a set of specific use cases that are unique to the way that partner-led, knowledge-based firms do business. This is totally different from traditional B2B, CRM, and ERP software, which at its core was built and intended for product-centric organizations. But financial and professional services firms aren't making and selling widgets. They're capitalizing on and selling their knowledge and expertise. Their ability to win new business and serve their clients hinges on identifying and leveraging the network of professional relationships, their significant portfolio of expertise, and their depth of previous experience, both as individual professionals, but also as a collaborative firm of many experienced professionals working together in teams. These firms differentiate by identifying and applying their unique expertise and experience as a team to each opportunity, client, or deal. Traditional CRM and ERP systems are not designed to address environments with this type of knowledge and experience-oriented complexity across teams of professionals. That gap in the traditional systems has always resulted in relatively low professional user adoption for the firms that have tried to implement them. In contrast, we built our platform by working with these firms for over 20 years. to develop specific knowledge-based use cases in each area of expertise. Areas like fund formation, M&A transactions, corporate finance, private credit, restructuring deals, intellectual property protection and litigation, and real estate. As well as the very complex compliance and conflict issues, that arise for the global multi-strategy firms who participate across these regulated areas of the financial and commercial economy. Our solution captures, analyzes, and provides critical expert information while the firm's professionals work. Using our applied AI, including our recent relationship intelligence release, Our cloud platform can serve up data and predictive information about relationships, deals, counterparties, clients, matters, engagements, and opportunities, accelerating the firm's ability to select and onboard new business in a compliant way and to deliver value throughout the relationship and project life cycles. At the highest level, our cloud platform allows firms to institutionalize and leverage their specialized knowledge and their expertise and experience as a team to gain a greater competitive edge. Okay, let me turn to some examples of some of our clients who are gaining this advantage with us. Greenhill & Company, a New York-based independent investment bank, is an example of a firm who experienced the limitations of traditional technology solutions when attempting to apply them for their financial services business model. Greenhill's success relies on the way that its bankers leverage their transactional expertise across the many industries and geographies that the firm serves. To that end, it has built a very collaborative culture centered around close coordination of expertise among professionals regardless of geography or team, Because it had a large dispersed workforce, the firm struggled to share knowledge and information about deals in real time. Greenhill was using a combination of spreadsheets and a traditional CRM to try to track and manage deals. But neither solution allowed for the effective sharing of data across multiple teams and locations. Firm leadership decided it was time for a purpose-built cloud-based solution that could successfully enable its bankers to collaborate and gain better access to the data needed to pursue deals. Greenhill selected our DealCloud solution earlier this year. Using DealCloud, the firm will replace multiple disparate data sources with a single source of truth. The software provides a centralized repository to share institutional knowledge and to harness and share collective expertise across the firm. Regulation and compliance are also key requirements for our market. Solutions that embed compliance capabilities directly in the professional workflow are critical for our clients and for this industry as a whole. Our professional and regulatory compliance capabilities are a great example of what it means for our platform to be truly purpose-built for these industries. One key area that drives compliance requirements is the way that these firms onboard new business. In most cases, new business must go through a due diligence process, including screening for a host of potential conflicts and other risks. Many professionals in the industry have become our clients after they discover the hard way that opportunities for lucrative new projects can be won or lost based frustratingly on the firm's ability or inability to get through conflicts and compliance clearance faster than the competition. Unlike traditional CRM or ERP, InCAP's platform understands these risks and compliance requirements and has been purpose-built from the ground up to ensure compliance while accelerating the firm's and each professional's ability to win new business competitively. Building on the same firm knowledge and experience graph data embedded in the Intac platform, we leverage applied AI to speed compliance analysis and clearance so the firms can onboard new business quickly and with lower compliance risk and beat the competition to saying yes to a new client. A great example of the need for purpose-built compliance capabilities comes from one of our clients, a leading UK-based law firm. The firm's professionals are under constant pressure from the firm's leadership and their international growth ambitions, as well as shifting client expectations, rising transaction volumes, and a stringent regulatory regime. To help its professionals better compete in their sophisticated market, the firm sought to improve its entire approach to project due diligence and screening, new and existing business for compliance risk. As we frequently see, The firm's existing conflicts clearance and business acceptance process had developed slowly over many years. It was labor intensive, disjointed, and highly manual. It required several FTEs working across a half dozen disparate IT systems just to move potential business through due diligence and the ethical and regulatory conflicts checks and intake processes that the firm faced. The entire approach was inefficient, error prone, and impossible to scale as the firm grew and took on more and more new business. The firm sought out a modern, cloud-first approach to adopting consistent and automated due diligence practices and risk management processes across the firm. To meet this need, they selected Intep's OnePlace software to enable the full workflow associated with onboarding risk and compliance. Using our applied AI, including machine learning and predictive analytics, the software comprehensively scans multiple internal firm experience databases and third-party market data sources to significantly reduce the time it takes to conduct conflicts checks and accept new business. Using OnePlace, the firm standardized conflicts checking within a single system that not only modernized the process but significantly improved the client experience during the business acceptance phase. They reduced exposure to ethical and regulatory risk and increased staff efficiency, enabling the shifting of staff resources to other valuable business projects. And they improved the firm's competitiveness and ability to respond successfully and timely to lucrative new opportunities, helping to accelerate the firm's market share gains. These are just two examples, but they illustrate just how specialized these markets are. and also help to explain why these firms have been so historically underserved by traditional CRM and ERP technology that were never intended to support their differentiated professional partnership style operating models. It's always been part of INTAP's DNA though. Right back to our founders who are still leading the organization today, to build our platform from the ground up to meet these specific issues faced by these premier financial and professional services firms. Our unique history, understanding, and experience with these firms is the core reason that we are so well positioned to continue growing and winning business in these highly attractive vertical markets as their move to the cloud accelerates. In summary, we continue to see strong momentum in our overall business and particularly strong growth in cloud ARR as our markets continue to embrace digital transformation and move to the cloud. We are making the investments needed in our products and our go-to-market to lead our clients through this transformation. We believe the industries that we serve will be significantly aided in their business by the move to our purpose-built cloud platform. Finally, As our land and expand strategy rolls forward, our solutions become more and more integral and integrated into our clients' business operations, making Intap a critical, increasingly strategic, and long-term partner. We are building a sticky, reliable revenue base in a differentiated market with a large growth opportunity for us as we execute our strategies. I'll now turn it over to our CFO, Steve Robertson, to provide you some more details about our quarter's performance.

Steve, over to you. Thanks, John, and thanks, everyone, for joining us today. Before I go through the numbers, I'd like to quickly review a few fundamentals of our financial model. As John discussed, the professional and financial firms that we serve are rapidly adopting purpose-built cloud solutions. Today, nearly all of our new customer wins are for cloud solutions, and recurring revenue makes up approximately 85 to 90% of our total revenue. We believe cloud ARR and total ARR metrics are good indicators of the consistent growth of our annual recurring software business. For the first quarter of fiscal 22, as John mentioned, our cloud ARR grew 56% year over year, and our total ARR grew 27% year over year. In terms of revenue recognition, Cloud ARR is recognized as SAS revenue, ratably, following a new sale or renewal. On-premises ARR is recognized in two parts, 50% as subscription license revenue, recognized upfront at the time of the sale or renewal, and 50% as support revenue, recognized ratably and included in our SAS and support revenue line. Because it is recognized ratably, SAS and support revenue will generally be more predictable quarter to quarter. In contrast, subscription license revenue can vary quarter to quarter because it is recognized as revenue episodically when the subscription licenses are initially delivered or renewed. Okay, moving on. Q1 was a strong quarter as follows. Total revenue was $62.2 million, up 29% year over year, driven primarily by increased sales of our cloud solutions as well as by solid growth in professional services revenues. SaaS and support revenue was $43.5 million, up 31% year-over-year, reflecting the ongoing trend of adopting cloud solutions in our marketplace, and specifically the sale of Intab's purpose-built solutions for those professionals. Subscription license revenue was $10.6 million, as compared to $10 million in the prior year period, reflecting renewals of on-premises subscription license business. As noted earlier, this revenue line item is expected to be somewhat variable on a quarterly basis. Professional services revenue is $8.1 million as compared to $5 million in the prior year period, reflecting implementations of new software in a more normalized market as compared to the COVID-influenced prior year period. Overall, we continue to execute our land and expand model as we ended the quarter with more than 1,950 clients, 446 of which have ARR of more than $100,000, and we upsold our clients such that our trailing 12 months net revenue retention rate was above our expected range of 108 to 112%. Before discussing gross margins, expenses, and profitability, please note that I will be discussing non-GAAP results going forward. As a reminder, our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings press release and its supplemental financial tables. For the first quarter, gross margin was 68.4%, down slightly from 68.9% in the prior year period, reflecting a slight mixed shift to lower margin professional services revenue in the current period. Gross margin on our recurring revenue solutions was up modestly year-over-year. Operating expenses were $43.4 million, a $13.8 million increase year-over-year as we invested in sales, marketing, and product development to support our growth and incurred expenses required to become a publicly traded company. As a reminder, expenses in the first quarter are in comparison to those in the first quarter of fiscal 21 and which were constrained at the time to manage the uncertainty of the COVID pandemic. Sales and marketing expense was $17.9 million, a $5.2 million increase year over year as a function of increased headcount and commission investments to capture new business in our growing markets. We invested a portion of our revenue performance for the quarter in sales and marketing to capture new business in our growing markets. R&D expense was $12.6 million, a 1.7 million increase year-over-year, as we increased headcount and invested in our product roadmap. G&A expense was 12.8 million, a 6.9 million increase year-over-year, primarily as a result of increased expenses related to becoming a public company. Non-GAAP operating loss was 0.9 million, as compared to our first quarter fiscal one operating profit of 3.6 million, primarily reflecting the year-over-year increase in operating expenses just discussed. Non-GAAP net loss per share was 4 cents in the first quarter of fiscal 22, as compared to a loss of 10 cents in the first quarter of fiscal 21, reflecting the impact of a year-over-year reduction in pre-IPO expenses for interest and accrued cumulative preferred dividends, as well as an increase in the weighted average share count. Turning to the balance sheet, We ended the first quarter with $54.9 million in cash and cash equivalents, an increase of $17.3 million from the fourth quarter of fiscal 21. Accounts receivable decreased by $16.9 million, reflecting both the seasonality of our billings and particularly strong collections in the current quarter. Our debt was reduced to zero as we used the proceeds from our IPO to pay it off. Turning now to our guidance, Given our strong Q1 results, we are raising our FY22 revenue guidance while leaving our profitability guidance for FY22 relatively unchanged as we see opportunities to invest in the continued growth of the business. For the second quarter of fiscal 22, we expect SaaS and support revenue of between $43 and $44 million and total revenue in the range of $58 to $59 million. we expect a non-GAAP operating loss in the range of $4 to $5 million, and a non-GAAP net loss per share in the range of $0.07 to $0.09, using a basic share count of approximately 61 million common shares outstanding. For the full year fiscal 22, we expect SAS and support revenue of between $177 and $181 million, and total revenue in the range of $248 million to $252 million. We also expect a non-GAAP operating loss in the range of $13 billion to $17 billion and a non-GAAP net loss per share in the range of $0.29 to $0.33 using a basic share count weighted for fiscal year 22 of approximately 61 million common shares outstanding. With that, John and I look forward to taking your questions.

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by as we compile the Q&A roster. Our first question comes from Koji Akita with Bank of America. You may proceed with your question.

Hey, guys. Thanks for taking my question. Really nice quarter, John and Steve. I wanted to really hit on this cloud revenue growth here, this 56% year-over-year. Really, really spectacular growth there. And I was wondering if we could unpack that a little bit. And could you talk about where it's coming from? Is it conversions of legacy? Is it a lot of new logos or maybe bigger new logos? I mean, the net expansion was pretty good there. So any sort of qualitative commentary on where that good growth from the cloud side is coming from?

Yeah, well, Koji, I think it was really across the board, honestly. We had a pretty balanced contribution this quarter from both financial services and professional services, fairly equal. And in addition, pretty balanced contribution from both upselling our clients to new cloud capability and from new logo sales, cloud only. A little bit more upsell, perhaps, the new logo this quarter, but fairly balanced. So really across the board, nothing in particular other than, I would say, just reflecting the momentum we're seeing in the marketplace right now across the whole business.

Got it, got it. And then one follow-up here, if I may. For John or Steve, the Q2 staff and support guidance, looking for some help here. It looks like it's about 43.5 at the midpoint, which is essentially flat with Q1. Can you help us understand the puts and takes there? Is there some sort of uniqueness of the on-prem related support revenue forms of the model there that could be causing this or anything else we should be aware of that would be causing kind of a flat at the midpoint here on the Q2 guide? Thank you.

Well, as we've said before, yes, our on-premises business is a little bit variable quarter to quarter. Our guidance is up from before for SaaS and support here. We've had some business we might have pulled in a little bit this past quarter versus the one we're guiding to, and support is a small portion of the SaaS support. So I think that we're trying to give you a set of numbers that we feel good about going forward, and I don't have any more color on that, honestly, at this point.

Got it. Thanks, guys. Thanks for taking my questions. Congrats on a great quarter.

Thank you. Thanks, Koshy.

Thank you. Our next question comes from Kevin McVeigh with Credit Suisse. You may proceed with your question.

Great. Thanks so much, and let me add my congratulations as well. Hey, I wonder if you could give us a sense of, you know, beyond the cloud transition and you know, the stepped-up investment in terms of some of the overperformance, where some of that growth is coming from on the expense side, and could you maybe desegregate broadly how much would be R&D versus G&A versus sales and marketing? Because obviously it seems like there's an amazing amount of incremental revenue to be had and just where some of those incremental investments are going.

So I think one of the key areas that we're focused on is sales and marketing, obviously. And, Steve, if you could talk a little bit about how we did that this quarter. We see a lot of opportunity in front of us. The demand in the market is proving to be pretty strong, and we want to make sure that we're positioned to take advantage of that. That's one of the things that we've been talking about from time to time as we've gone through this public process. Steve, do you want to add any color there?

Yeah, I think – Primarily, I think we'd highlight sales and marketing investment. We are adding headcount and expense in sales and marketing to capture the momentum we see. And, in fact, we've hired a fair amount of the people already that we were going to hire for the year. So we've sort of front-loaded a bit some of that here in Q1 because we've seen opportunities to do so in the marketplaces. And that's part of the spend. You know, it's a little bit more expensive to hire people in the start of the year than towards the middle or back end of the year. And we expect the productivity of those folks as they ramp up and become fully productive to be quite good going forward. So we took opportunities here in the first quarter there primarily in sales and marketing.

That makes a lot of sense. And then it seems like you picked up 50 quarters sequentially and obviously almost, you know, over 500 since 2020. any sense of where the client dynamics coming from and, you know, the client mix, is it more, you know, down market as opposed to mid and just, is it pretty balanced between kind of legal and professional? Cause obviously a nice job there in terms of the incremental client additions, as well as, you know, the overall growth.

We've had some good results up and down the chain. Obviously there are more firms that are smaller, so you can get to more of those in a quarter, but we've been doing a good job. at all firm sizes so far. Steve, are there things you'd add to that?

Yeah, no, I think we do tend to add on balance more new clients in financial services than in professional services where there's a little bit more new logo sales in financial services and a little bit more upsell in the professional services firms we've done business with for many, many years. Fairly balanced across, I mean, we tend to do some small, medium, and large deals in every quarter, and there's more revenue opportunity, you know, often at the larger firms, but it's reasonably balanced.

Congratulations again. Thank you.

Thank you. Our next question comes from Brian Peterson with Raymond James. You may proceed with your question.

Thanks for taking the question, gentlemen, and congrats on a really strong quarter here. You launched something for the real estate investment management market. Maybe help us chide that potential opportunity. What are you currently replacing when you go in and really win a customer in that market?

We think this is an important segment within the private capital universe. A lot of firms are in multi-strategy models where they include real estate as one of the several investment strategies that they're overseeing across several funds. But they're also obviously real estate specialists that we're selling to. We're replacing the classic three categories that we've talked about. So a lot of in-house solutions, some legacy on-premises solutions that have been relatively undercapitalized companies that have not necessarily made it to the cloud generation with AI capabilities. And from time to time, we'll compete with some of the very large horizontal players like Salesforce to try to provide solutions for these folks. But our platform is purpose-built for this style of business, and we've done some important advances this period in more of the features and capabilities that the real estate segment needs in particular. For example, bringing in more geographic data to help the firms do more real estate-oriented analysis of potential deal opportunities as they go to build out their portfolio. And those types of capabilities, when embedded in our larger platform, whether the firm is a multi-strategy firm or a single-strategy firm, are quite differentiated from what you might get from a traditional CRM. I'm excited about this, basically.

Okay, that's great. Maybe just a quick follow-up. Just on the NRR, obviously they came in above the expectations of 108, 112. It sounds like you guys have a lot of investments. The upsell motion is going really well. Does the bogey on that move up? Is that maybe a recurring narrative that we could hear about you outperforming that target, or should we still think about that 108, 112 range going forward?

Thanks, guys. You're talking about the net revenue attention gap. Yeah, look, we were better this quarter, and it's possible that that is something we could come back to down the line. I don't think we want to do that on a quarter's performance here, to be honest, but we're going to watch that very carefully. There's good momentum, and if we see a pattern that feels pretty sustainable there, we might well revisit that.

Good to hear. Nice job, gentlemen. Yeah. Thanks, Brian.

Thank you. Our next question comes from Terry Tillman with Truist Securities. You may proceed with your question.

Hey, guys. This is Connor Besser. I'm on for Terry. Thanks for taking my questions, and congrats on the quarter to start. Just curious, what are some of the benefits you've seen to brand and awareness that you've seen since the IPO, and what's kind of been resonating with customers in both professional and financial services?

We actually have had a very good response to our customers transition to a public company position. The clients have more visibility into us as an organization. They can appreciate our scale. They can contrast our scale with some of the private companies that are smaller and more on premises that they might have as an alternative option. They also have been able to get into our community a little bit more. We've seen more of the referral network working as our visibility has come up a little bit. So I think there's a lot of benefit already to folks starting to talk about what we're doing. I think one of the important things that people are also excited about is our access to the capital markets and our stability as a company of this scale that is cash flow positive, and they feel secure investing in us as a long-term partner for them, and we have an independent business. path as an organization, which gives them a lot of confidence that we're going to be there for them. So I'm very excited about what the IPO has done for us so far. And, you know, obviously there's a long road ahead to continue to grow the company, but I think it's been a very positive move. Steve, do you want to add anything?

No, I think that's right. I think we're seeing on the margin real interest is developed because of the awareness that people have now for the business. Perfect.

Yeah, that definitely Makes all the sense. And then just as a quick follow-up, so across the different segments of the business, law firms, banks, consulting firms, I do see that demand has been pretty balanced. I'm just curious if you've seen any emerging trends coming from any particular sectors and maybe if that could affect demand going forward or maybe cause a shift. Thanks, guys.

Well, one of the things that we've talked about is how strong the private capital markets segment is. has been doing as an industry. It's a growth area. The professional firms, the advisory firms are riding along with that, providing a growing amount of services to that industry. But we're very well positioned to benefit from a secular growth trend in that segment. So we're excited about that and the pull effect that that has on our whole advisory business. So it's an exciting time given what's happening in the wider world.

Great. Thank you. Thank you. Our next question comes from Brian Schwartz with Oppenheimer. You may proceed with your question.

Yeah, hi. Thanks for taking my questions. Real nice start to the year here, John and Steve. Just wanted to dive into a little bit of the bookings momentum, maybe what's behind it. John, how much of it is coming from the top of the funnel, is just filling up faster, you're getting more at-bats out there, versus, say, the cycles? Are the cycles compressing as they're moving their way through the funnel, whether it's the cloud computing and digitization wave permeates throughout your end markets?

Yeah, I would say both. There's definitely, and you know, we're looking back into the COVID year when a lot of these firms did pause when, when COVID first hit. So there's definitely an acceleration relative to that. I think more generally, the industries are doing better. Many of these firms are having fantastic years of their own and are investing forward to take advantage of that, to improve their own operations and the digital transformation trend, the cloud trend, and putting in systems like ours to create a better environment for their people to be informed and compete in the marketplace and collaborate together more effectively is a big theme. A lot of the firms coming out of COVID have shifted some of their priority spending from the traditional real estate in city centers to a more IT oriented approach that allows for more work flexibility and some hybrid or work from home portion where technology is a really important part of enabling that whole revised work culture. And I think we're benefiting from that and there's a broader set of forces at work that are pulling us along. So we're excited about what's happening. There is some opportunity that we're seeing for some parts of the market to buy in shorter sales cycles. We're excited about that. We're also seeing good strength in the funnel, to answer your question.

Thank you. And it kind of leads me into the next question about the current quarter here, the December quarter end. Do your end markets have buying seasonality? I know with enterprise software up in the enterprise market, typically Q4 is a big buying quarter for them. Is that similar with – With your end markets, do they have a similar seasonality with 4Q?

Well, I think there are different populations inside our target market that might have some seasonality and might have some different seasonality. We do, you know, 30% or so of our business outside the United States, so financial year ends are different in several countries. Some of the firms that we sell to operate on a cash basis themselves, and so December is important, but there's other parts of our market that have different year ends, often in June or March or April. So you could argue that there's the seasonality, but you could also argue across the target markets that we're serving, it's pretty well distributed. Steve, do you have anything there?

No, I think... I think that's right. I think traditionally in the professional services, there's been some more seasonality than we see in financial services right now. But I think that's right, John.

Okay, last question for me, and then I'll hop back into the queue. You announced in the press release that you have a new analytics capability, the relationship intelligence functionality throughout the platform. I'm just trying to understand, is there a monetization path with that capability as Or should we think about it as more strengthening the value proposition and hopefully improving your win rates as we move forward? Thanks for taking my questions.

Well, it's certainly the latter. As we go and meet new clients and we bring more and more of the applied AI capabilities into the sales process, people are saying, wow, this is more and more of a purpose-built system that really understands the way that our organization works. I think we also have an opportunity with our installed base. We do several releases a year, and we have a land and expand model for many of them. Lots of opportunity ahead. I think we talked as far back as the S1 about the fact that just with our top 100 clients, we have a billion dollars of upsell that we could achieve if we sold through our whole platform and one thing on the roadmap. So we're excited about relationship intelligence and our roadmap of capabilities that take advantage of applied AI. As our platform grows and becomes more and more capable, a lot of the areas that the firms have been coaching us over the years they really need help in, we see as a huge opportunity for us to deploy the applied AI system. And relationship intelligence is a great new capability that looks at the whole organization's relationship footprint and helps individual professionals take advantage of the firm's overall relationships strategically if they're pursuing new deals and helping them to understand areas where they can do better client development and better client care, actually. So we're excited about that one, and we're seeing some good interest across the market, both in new and existing clients.

Thank you very much.

Thanks. Thank you. Our next question comes from Tom Roderick with Equal. You may proceed with your questions.

Yeah, great. Hi, John. Hi, Steve. Thanks for taking my questions. Congrats on the nice results. So I'm looking at a few of these metrics, and I think it might have been Brian earlier to highlight the net revenue retention above the traditional range. I'm looking at the customers with over $100,000 ARR, bumping up another 26. And it's a highlighted point that not only are your customers getting bigger, it seems like they're buying more solutions, which brings me back to the point of question, customer success. you're clearly doing more with the customers you have and getting new customers onboarded in a successful manner. What I'd love to hear is how your partner community is helping you do that from the practices they're building around you. And then from your own perspective of hiring professional services and implementation teams, talk a little bit about that investment that you've made and how that's coming along.

Yeah, thank you, Tom. So the partner community, ecosystem that Intap has cultivated over the years has grown up with us. A lot of people who may have history working with Intap itself or working with many of our client firms and struck out on their own to build some of these partner firms have been very successful and are an important part of our strategy. We have a mixed strategy. We have our own client services and client success teams that engage with our clients and make sure that that they're successful with our platform, and we also work with a partner ecosystem, and our clients have a choice and options about how they approach that. We have done a lot over the past two or three years as we've grown to invest in our client success organization. There's always more to do, but I think we've got a very strong reputation and strong success record across the board as we've grown the business. And a lot of our growth is coming from existing clients who are happy and also from the referrals that our existing clients are providing. And then because we have a strong ecosystem of partners who are working with us, they're also successfully supporting our clients and also referring us in to clients that are interested in improving their environment. So there's a lot of opportunity for us. For internal hiring you asked about, I've been very excited about the reaction that the potential recruiting population has had to us going public. We've raised our visibility, and a lot of people who have incredible skills and knowledge about this market in particular have reached out to us and said, you know, you guys are a public company. You're growing quickly. We want to be part of the team. And something about the IPO has helped us to start to bring on some very significant talent that I think is a really good sign for reinforcing the company's deep industry expertise that I think is one of the pillars that sets us apart. It's true at the technology level, but it's also very true at the team level. And so from our partners, from our clients, from the ecosystem itself, we're bringing a lot of that expertise to help us continue to differentiate going forward, and I think it bodes well for us.

Fantastic. Great to hear on that front. Second question for you, I just wanted to touch on international in a little bit more detail. I know UK has always been a very strong market for you. I think APAC in particular has been kind of a rising and emerging sector. As the world opens up, some pockets more slowly than others. I'd love to hear how the reopening is going for you in those regions and how the end demand is looking in those regions as reopening has been a little slower in parts of Europe, for instance, but APAC demand across software seemingly has been pretty strong lately. So I'd love to hear maybe the dichotomy across those two regions, what you're seeing there.

Yeah, so our international growth has been in line with our overall growth. We're excited about that. That's about 30%, 31%. we've seen, to your question, good demand from both Europe and Asia Pacific, also parts of the Middle East. We're winning business in the Middle East as well as in various parts of Europe, in Singapore, in Japan, in other parts of Asia Pacific. So I don't know that I would point to the work from home or the opening up issue as something that has had a huge negative or positive impact on us. I think we've gotten a lot of business because firms have been looking to better enable themselves to work in a more hybrid format as they've learned the lessons from COVID and how to enable people. And we've actually done well through the entire work from home period. We're starting to give folks the option to work from the office and open up ourselves. But the demand side, we haven't really seen a lot of effect of that negatively in any particular area, I would say.

Great detail. Thank you. Nice job. I appreciate it. Thank you.

Thank you. And our last question comes from Jackson Ader with J.P. Morgan. He may proceed with your question.

Great. Thanks, guys, for taking our questions. If we think about some of the catalysts for people to actually pull the trigger and make the jump to your platform, does it vary depending on either the end market or the size of the customer for reasons people are ready to switch off of their probably horizontal platform?

So the question is, are there catalysts based on or do the catalysts vary depending on the size or the end market for people to make a choice? So I think on the size front, there's an interesting far end of the size. We're actually doing some good business with people who are starting new firms who have been using our platform now at some of the larger organizations and know that it's the right answer for this style of firm. So we have a small growing part of our business that is new firms where people just say, this is the system that we need to get our firm off the ground. We're excited about that because those firms grow and raise new funds or start new services, and it's a sign of the brand and the reputation that we have and the trust that people have in the platform. So that's sort of at one end as a catalyst. It's not so much they're switching off of something as they're starting with it. At the other end, the large organizations, I've actually been excited to see some of the firms at the very highest end of the market, the most prestigious firms, who a year ago had a very strict policy to say, we're still going to be on premises for a long time. We have these questions about the cloud. And just through COVID in the past 12 months, some of the top firms in the world have made a 180-degree switch and said that they're going to cloud first, cloud only in a reasonable period of time. So there have been serious catalysts, I think, from the COVID period that have converted some of the last holdouts at the very top of the market. So I'm optimistic that this digital transformation trend, the cloud trend, and the capabilities of platforms like ours to really meet the security and compliance and confidentiality needs when the firms need them are there and they're ready to go now. And the same logic that drove the cloud transformation through some of the other industries that didn't have some of these specialized impediments are melting away and the firms are actually making the switch. So that's size. And as far as market goes, you know, I don't think it's mysterious. The most conservative firms were folks like the law firms who had a lot of responsibility around compliance, a lot of rules from the banks themselves about how they had to manage their client information. And that has really changed. I mean, there's been a lot more interest in the past two or three years with firms that said, you know what, this technology capabilities are there, we're ready to make the switch. So I think some of the industries are cloud-first already, and then that's probably the one that has historically had a little bit of ways to go, but I think it's flipping over now.

That is great. Thank you for the call. Steve, a quick follow-up on professional services. When we look at either both revenue and maybe costs of professional services and that negative gross margin, how should we think about that level as we maybe move through the rest of the year?

Well, I think services is back, you know, this is a normalized quarter. Last quarter year over year was kind of a COVID quarter. So that's a good part of, you know, the difference in those numbers. And this business will grow going forward, services. I think, look, we are growing into an infrastructure that we've built for a services business. It's probably close to twice the size we have. So we feel we're on track pretty well as we grow into that and should should generate some better margins over time. It does continue to be part of our support of our SaaS software business, truly, the services effort. So that's part of the equation, too, for us. But we're happy with where we are and expect to get better over time here.

All right. All right. Thanks for squeezing me in, guys. Thanks, Jeff.

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to John Hall for any closing remarks.

Okay. Well, thanks, everyone. We appreciate your attention and questions. I'd like to thank the INTEP team for a great quarter and all the work that continues to go into supporting all of our clients. We have a great Q1 behind us to kick off the year, and we're excited about the continued momentum. Thank you all for your time today, and we're looking forward to talking to you next quarter.

Thank you. This concludes today's conference call. Thank you for participating. You may now