Intapp, Inc.

from those expressed in reply by such forward-looking statements. INTAP disclaims any obligation to update or revise any forward-looking statements except as required by law.

Further on today's call, we will discuss certain non-GAAP metrics that we believe aid With that, I'll hand the conversation over to John.

Thank you, David. Good afternoon, everyone. Thank you for joining us today as we share the results of our fiscal second quarter. I'm happy to share that once again, we've achieved strong quarterly results supported by the addition of new clients and the expansion of client accounts around the world. Our results also reflect our ability to serve enterprise clients, a growing partner ecosystem, and demand for our AI capabilities in the highly regulated industries we serve. I'll share details on these select growth drivers on this call. In Q2, our cloud ARR grew to $434 million. up 31% year over year. Cloud now represents 81% of our total ARR of $535 million. In the quarter, we earned SAS revenue of $102 million, up 28% year over year. and total revenue of $140 million up 16% year over year. Now, I'd like to share some highlights from our fiscal second quarter. We continue to execute our vertical AI roadmap, which is designed to increase adoption of AI in the highly regulated industries we serve. As a reminder, Our industry specific AI solutions automate rote tasks, but more importantly, they deliver actionable insights that are drawn from a firm's proprietary information and are enriched with our industry graph data model and trusted third party sources. These advanced, tailored, Compliance capabilities are what set Intap apart and why firms continue to invest in our technology. This leads me to my first example. You may recall that last quarter we announced a significant new release of Intap Time, which delivers faster, easier, and more accurate timekeeping powered by major new AI features. It's proven to be a catalyst for cloud migration, with large firms like Buchanan, Ingersoll, and Rooney, and multiple AnLaw 100 clients moving their time instances to the cloud. The new time release is also drawing large firms to buy the solution for the first time, sometimes in addition to their other in-tap solutions. Examples include Seifarth Shaw and Burr & Forman. Additionally, we added more than 70 new AI capabilities and enhancements to our DealCloud platform. Among their many benefits, these new advancements save users time, surface personalized actionable data insights, and support infosec by monitoring data access in real time. They come together in DealCloud to boost productivity, support regulatory compliance, unlock firm intelligence, and create a competitive edge. Now let's turn to our partner network. We continue to grow our expansive partner ecosystem anchored by Microsoft and a strategic set of more than 145 curated data technology and services partners. This powerful network continues to drive growth for us and greatly influenced many of our recent logo wins. In Q2, partners were directly involved in seven of our 10 largest deals, reflecting how deeply embedded our partners are in our go-to-market motions. Microsoft in particular continues to be a major growth driver. More than half of our largest wins this quarter were jointly executed with Microsoft, and then several Microsofts even contributed Azure investment dollars to help us accelerate the deals. Our growth was also powered by adding new clients, expanding within existing clients, and migrating clients to the cloud. And we continue to gain traction in newer markets across our verticals, products, and global locations. In our legal vertical, we once again saw some distinct trends across our wins. First, we had some of the largest law firms in the U.S. turn to Intac for AI-powered, enterprise-grade compliance solutions. These clients include several AMLAW 100 firms. For example, Ropes and Gray chose our compliance solutions to modernize their intake and complex checking processes in the cloud. This transaction was completed on the Azure Marketplace with Microsoft providing investment dollars to accelerate the deal. And AMLAW 30 firms added our compliance solutions and chose to migrate time to the cloud after attending an event and seeing them in action. And an AMLAW 75 firm chose our compliance products to automate managing access to sensitive matters across applications. Second, law firms continue to choose DealCloud to strengthen their business development operations and innovate with AI. This quarter, Ford and Harrison and an AMLO 100 firm, among others, moved off their legacy horizontal or bespoke systems to support more strategic new business acquisition with DealCloud. And third, Evolving anti-money laundering and know-your-client regulations are fueling the modernization of intake and conflicts processes globally. A few examples of firms who have chosen our AML solutions in response this quarter include a Netherlands-based firm holding Redlich in Australia and US-based Reed Smith. In the accounting industry, The influx of PE investments and mergers has continued to create disruption and increase competition across the industry. In response, firms, no matter their investment status, are modernizing their compliance practices and extending that modernization to collaboration and business development as well. Among the firms that turned to Intab for AI-driven modernization this quarter, One of the largest public accounting firms in the U.S. deepened its investment in Intap employee compliance to modernize personal independence processes across its global employee base. BKL and Graviton both replaced their legacy systems with Intap collaboration. They needed a scalable cloud-based solution that integrates seamlessly with their Microsoft tools, streamlines collaboration, and sets them up for growth. And a top UK accounting firm chose DeoCloud to establish a scalable foundation for relationship management and business development as it undergoes rapid growth through M&A. In the financial services vertical, Firms are continuing to replace their legacy horizontal CRMs with DealCloud for AI-powered relationship and business intelligence, especially enterprise and mid-market investment banks. For example, one of the most prestigious boutique investment banks in the world chose DealCloud for its after a successful pilot with its private capital advisory team. The firm sees DealCloud as a way to help modernize its business with purpose-built AI, allowing them to unlock key deal and relationship insights more easily. Meridian Capital. chose DealCloud to improve visibility and management of deal origination, active mandates, buyer outreach, and business development and forecasting. Finally, our investments in real assets, including the April 2025 acquisition of Termsheet, continue to attract new clients who are coming to Intap for AI-driven solutions. I'll share a few examples. Neuberger Berman moved off its legacy horizontal CRM and onto DeoCloud to improve reporting, streamline workflows, reduce key person risk, and eliminate duplicative and inaccurate data. A leading mixed-use and multifamily housing developer replaced its existing system with DeoCloud. to improve data quality, user experience, analytics, reporting and optimization. And Smith Douglas replaced multiple legacy systems with deal cloud, which spans all of their divisions and will help them improve workflows and operations so they can deliver homes faster. In conclusion, we're proud of our strong second quarter performance. and we continue to be optimistic about our growth opportunities. As our Q2 performance has shown, we are growing by adding new capabilities and increasing our global enterprise go-to-market reach. We see continued opportunity both to add new clients across a broad TAM and to deliver greater value by expanding our existing client base. We're serving a durable end market, with our subscription revenue model, industry-specific cloud platform, and applied AI and compliance capabilities. We have a great growth opportunity to drive AI, cloud adoption, and modernization across all the industries we serve. As always, I'd like to thank our clients, our partners, our investors, our board, and our global Intap team for their teamwork and dedication. Thank you all very much. Okay, David, over to you.

Thank you, John, and thanks to everyone for joining us today. I'm pleased to share our fiscal second quarter results, which reflect continued strength in our cloud business and disciplined execution across the organization. Demand for our SaaS solutions remain strong, particularly among existing clients driving solid growth and a higher mix of recurring revenue as we progress through our cloud transition. Our enterprise-focused go-to-market motion is working as intended. We're seeing strength both in net new logo acquisition and expansion within our installed base. As a vertical SaaS company, we have deep domain expertise and a clear understanding of the highly regulated markets we serve. Clients in these markets continue to value the application-specific capabilities we provide from compliance workflows to applied AI, which reinforces the durability of our ARR growth. This is evident in the continued expansion of our 100,000 plus ARR client base and our 124% cloud net revenue retention rate. At the same time, we continue to operate the business with a focus on margin expansion, cash generation, and capital discipline. Gross margins improved year over year, operating income increased meaningfully, and free cash flow remained strong. Combined with our share repurchase activity during the quarter, these results reflect our confidence in the long-term opportunity while maintaining a strong balance sheet. Before we get to the income statement, cloud ARR hit $433.6 million this quarter, up 31% year-over-year, driven by enterprise clients deepening their relationship with Intap, stronger co-sell activity, and growing adoption of our applied AI offerings. Turning to our fiscal second quarter results, SAS revenue came in at $102.5 million, up 28% year-over-year, now representing 73% of total revenue, reflecting strong demand and a continued shift to our cloud offerings. Bison's revenue was $25.4 million, down 9% year-over-year, consistent with our stated strategy and ongoing cloud migration efforts. Professional services revenue totaled $12.3 million, down 7% year-over-year. Our partner ecosystem continues to support cloud growth through co-sell execution, client satisfaction, and efficient implementations. Total revenue was $140.2 million, up 16% year-over-year, driven by strong growth in our cloud solutions. Turning to our capital allocation, as announced in August 2025, our board authorized 150 million share repurchase program. During the second quarter, we repurchased 100 million or approximately 2.3 million shares. Combined with our first quarter activity, this authorization was fully utilized, resulting in approximately 3.4 million shares repurchased. In January 2026, our board authorized an additional 200 million share repurchase program, further reflecting our confidence in the long-term value of the business. Our partner ecosystem remains a key driver of long-term cloud growth. In Q2, we co-sold with partners on many new logo ends and participation in the Microsoft Azure marketplace increased meaningfully year over year. We see this as a durable, repeatable motion, especially for supporting larger enterprise deployments. Service partner certifications rose 35% year-over-year, reinforcing Intap's position as a growth engine within the ecosystem. Turning to margins and profitability, Q2 non-GAAP gross margin was 78.1%, up from 76.7% a year ago, driven by favorable mix and cloud efficiency gains. Non-GAAP operating expenses were $81.8 million compared to $74.1 million in the prior year period, largely reflecting ongoing investments in our product-led growth organization and go-to-market spend. Non-GAAP operating income was $27.7 million, up from $18.9 million last year, and non-GAAP diluted EPS was $0.33. Free cash flow was $22.2 million for the quarter, and we ended Q2 with $191.2 million in cash and cash equivalents, reflecting the $100 million share repurchase. Turning to our key metrics, cloud ARR increased 31% year-over-year, while total ARR grew 22%. Remaining performance obligations were $777.1 million of 26% year over year, providing strong revenue visibility. Our enterprise focus motion continued to show progress with 834 clients now generating at least 100,000 in ARR up from 728 a year ago, representing 30% of our total client base. Now turning to our outlook, For the third quarter of fiscal 2026, we expect SAS revenue between 105 and 106 million. Total revenue between 143.8 and 144.8 million. Non-GAAP operating income between $23.1 and $24.1 million. This Q3 outlook includes incremental spend for targeted marketing campaigns associated with our upcoming product showcase at Intap Amplify, as well as targeted investments to increase the rate of pace of delivery on our AI suite of offerings. Non-GAAP EPS between $0.27 and $0.29 based on approximately 83 million diluted shares. For the full fiscal year, we expect SAS revenue between $415 and $419 million. Total revenue between $570.3 and $574.3 million. Non-GAAP operating income between $99.9 and $103.9 million. Non-GAAP EDS between $1.20 and $1.24 based on approximately 83 million diluted shares. And finally, I'd like to remind everyone of our upcoming Investor Day in New York City, followed by our annual INTAP Amplify event, where we'll share our latest AI-powered innovations. You can find details on our investor relations website. Thank you, and I'll now turn the call back to the operator.

We will now start the question and answer sessions. In order to ask a question, press star 1 on your telephone keypad. Our first question comes from the line of Kevin McPhee from UBS. Your line is live. Kevin, your line is live.

terms of how you're positioning and tap for just the kind of news flow out of Anthropic today.

Hey, Kevin. It's John. I think I just caught the tail end of that. Your voice was silent, but I think you were asking about the Anthropic news today.

Yes, that's it. I apologize if I'm breaking up on you.

Sure. No, that's a great question. So, They've released some open source plugins for the corporate legal department. And it's a good segment of legal opportunity. They are doing things like contract review and NDA triage. You can look up the plugins. Just to be clear, we have never been in the category of contract review. Our strategy has been differentiated over the long development of technology in these industries because we focused on the firms in professional financial services. Sometimes you hear people distinguish between the practice of law and the business of law, but it applies across all the types of firms that we're selling to. So we focused on the senior leadership of the firm, how to help them grow their business, how to help their people pursue fundraising for new funds or new clients or new engagements. the compliance of how the firms do business and operate internally with all of the sophisticated information governance around managing non-public information, insider trading information, or other information that needs to be kept confidential in a variety of ways in these complex institutions, profitability, how the firms actually execute that successfully or drive returns, talent management. So the business of these firms has been our emphasis. And there's huge opportunity for AI in all the contract review type things. The LLMs are great at it. We're using a lot of it too. But I think from the value proposition of the company standpoint, we're chasing a giant underserved category that we spent a long time working with the firms to grow. And we've had some great response to our offerings here. And we've really been paying attention to how the firms have the best opportunities to deploy AI. So you're not really, in this space, although it is very complementary to what we do. And the firms actually have come to us and said, can you help us with the whole compliance infrastructure for the agents and everything to help them succeed as they deploy these different use cases to the individual users of the firm? So I actually think our history and our relationship with these firms gives us a tremendous position to be a big influence over how the firms deploy AI in our own products and how they deploy AI generally.

Very helpful. Thank you.

Your next question comes from the line of Alexey Gogolev from JP Morgan. Your line is live.

Hi. This is Bella. I'm for Alexey. Just one question from us. So, you announced a partnership with Decimal Point Analytics last month. And in light of that, I wanted to ask, how do you balance utilizing third-party partnerships to advance your data strategy? while also safeguarding the proprietary data that gives you a competitive advantage in this ecosystem.

Yeah, thanks, Bella. We have a very significant investment in an ecosystem strategy that we talk about each quarter because we're bringing a whole product to each of the firms in each of the industries. And part of that is all the professionals have a very rich set of market information or present information that they're looking to bring into their environment to make better decisions about the clients or the deals that they take on and how they execute that work. So we have a strong program. You mentioned one of our important partners, but we absolutely have a program of managing data for the firms, each of whom views their experience and their expertize in the particular area as their intellectual property that helps them compete. And this is actually one of the areas of information governance that we are first in the world in, is to help the firms manage and safeguard their proprietary information so that they can reuse it to win new deals competitively, serve those clients successfully. And we have a wide range of data partners that we work with to enable the firms to do that. But we're also focused on helping the firms themselves protect their data. We have some proprietary data that we enable them to use as well. But our fundamental goal is helping each firm differentiate itself using their own expertise. That's how the industry works. And we're sort of at the center of that. And I think it's one of the reasons why our compliance program has been so successful in making its way through the market. And the same is true of the AI era, by the way. The firms are going to use their proprietary knowledge and expertise and experience to differentiate themselves in how they go and win new business.

Got it. Very helpful. Thank you for taking the question and congrats on the quarter.

Your next question comes from the line of Parker Lane from Stiefel.

Your line is live. Hey, guys. Good afternoon. Thanks for taking the question. John, for the customers that have been receptive to your early AI offerings here from Intep, particularly Intep Assist, what has been the primary hook or motivation point that you've seen from them to get them across the goal line in using this? Is it a desire to do more with less? Is it just drive efficiencies in their business. What are the implications for headcount amongst the customers that are using this as well?

Thanks, Parker. Yeah, the in-app assist take-up has been strong. We've been excited to see how many users at many levels of the firm are interacting with assist and our AI offerings. Part of the book is absolutely efficiency. The firms don't want to add tons and tons of headcount if they can get some help from the AI. But a lot of it too, and I think people may miss this, is that with the right AI and agentic setup, you can bring a universe of information to each person, whether they're an early career business development person, or a practitioner in the middle of their career or a later stage partner, you can bring a universe of information to them that would have been cost prohibitive to try to assemble with a human universe of researchers for them. So really the firms that are deploying ASSIST most successfully are getting much richer, better, clearer answers in a compliant way, more comprehensively to all of their people. And they're using that for competitive advantage. So there is absolutely an efficiency angle to that. But part of it is a capability that's difficult to imagine doing in a totally human powered world. And I think this is a huge focus of the firms because they're all focused on the fact that they don't do what someone else will. And they need to have this capability to compete as the world becomes more competitive with AI powering everybody.

Got it. And I appreciate the answer earlier on anthropic, you know, being focused on the practice of law versus the business of law. You know, clearly a lot of anxiety around not what that looks like today, but the future state of these models and where they can go over the long run. Are you starting to see instances of your customers or potential prospects testing these tools themselves, trying to develop things on their own with any level of success? Or are they primarily going to some of the incumbent vendors like yourself to figure out how to fully make this pivot to an AI first world?

Well, you know, when we first started building the company in the market, it was a self-built technology universe. All the firms could not get technology that met the unique needs, including compliance of the industry. And so they were investing in big IT departments to develop everything themselves. The whole history of the company has been working to provide them with a commercial enterprise-grade secure environment. now ai enabled set of capabilities to replace all those and we've built a business doing that it's been very successful i think as these ai tools come out they're absolutely encouraging people to try and the forward-looking i.t departments absolutely are experimenting with them one of the things that we've been studying over the past two years is what are the reactions of the firms to this are they going to change their posture from what they've developed over the past few years, which is to work with specialist providers who really understand the issues and can provide a supportive environment, or are they going to go back to building it on their own? I think they're going to experiment, but I don't think that that's economically the right answer. I think the right answer is to have somebody who can really provide this to them and support this with them, bringing together the best practices that are being developed around the market, which is the whole point of the company. And we've got a lot of clients who are saying to us, oh, that's what you're doing? Thank God I don't have to do it myself. And so I think that kind of response, you're going to see more and more. So we actually encourage the experimentation because it gives people more of a feel for what it's going to take to really get the valuable solutions out of this. And then we come in and say, here's what we can do for you. And it turns into a continuing growth partnership.

Got it. Thanks for the feedback, Doug.

Your next question comes from the line of Koji Ikeda from Bank of America. Your line is live.

Hi. It's George McGreen. I'm for Koji. I appreciate you guys taking our questions today. I wanted to ask one as it relates to CRPO. And when you kind of look at that metric on a two-year stack, you know, that metric actually accelerated. George Malavasic, You know that's kind of in line with with the sequential step up and then are that we're seeing, so I wanted to ask over the last few months how customer conversation sounded. George Malavasic, And is there any change in tone. George Malavasic, And, and maybe, particularly as it relates to adopting Ai products generally versus a few months ago, thank you.

George Malavasic, yeah thanks George the conversations have. continue to accelerate. We announced the first versions of this generation of AI just 22 months ago, and then a second version in February of last year. We have our new event coming up here in about three weeks. But people have moved from curiosity to experimentation, and now there are a few places where we're really seeing people able to articulate, here is the business value. that I can achieve by deploying assist and AI technologies in these areas, in these parts of my business process. Here's the efficiency I'm getting in people. Here's the increased visibility that those people are having in their decision making. And here's how that's flowing through to create a better experience for the senior folks who are working with clients or working with investors. And so I think you are seeing really positive reactions. Now, you're also seeing continued experimentation all over the place. So I think in the big picture, it is still relatively early. But what we're excited about are these youth cases that are coming out that are really starting to pull forward some of our sales and some monetization opportunities that we were very focused on from the very beginning. I mean, we've long felt that the way you bring a next generation of, true next generation of technology out is you have to get to those early, filler apps that really make a difference that people can point to and say, of all the infinite imaginings that we could do, that's the thing that I can put money behind and buy it and bring it in. And that's what we've been focused on doing. When we talk about applied AI, that's really the emphasis of that strategy.

Your next question comes from the line of Terry Tillman from Truist Securities. Your line is live.

Great. Good evening, Tim. Connor Passerell on for Terry. Thank you for taking my question. Just wanted to touch on Microsoft for software. So you just defined them as a major go-to-market partner over the past several years, Azure Marketplace execution, joint wins continuing in this quarter. I'm just kind of curious, in more of a risk-off type environment like today, does that partnership help to, I guess, de-risk the deal cycles or shorten time to close? Or is that more of an impact to more visible in terms of expansion of solid customers or lives on the platform?

Yeah, thanks, Connor. No, we're very appreciative of the ongoing strategic partnership with Microsoft. We have talked about some of the ways that we're working with them. Their sales team is aligned with ours on the firms in our target market. They actually get quota relief. when we sell. So there's a lot of alignment in the field. But more recently, we've been doing more of these Azure Marketplace agreements. I mentioned a few of them on the call. And interestingly, they tend more towards the enterprise firms. So it's very consistent with our enterprise strategy. We're doing larger deals. They are shortening the sales cycle when the folks already have a Microsoft minimum Azure spend commitment in place. And we've actually won some very large business that we talked about on the call today from some firms that are brand new to us that came to us through an introduction or a relationship with Microsoft and others that are our longtime partners who want to grow their relationship. So it's working in both growth dimensions for us. We've had folks who had those agreements with Microsoft and it helped us move them to the cloud. So a lot of the key parts of our overall growth strategy have worked really well with that program. And as we've learned about it and the sales team has done more of it and the clients have gotten used to it and are talking to each other, it's actually growing as part of our overall go-to-market. So it's really helped us a lot.

That's helpful. Thanks, John. And just as a follow-up, looking at the macro environment, just particularly around the backdrop and financial services with the potential for M&A activity to pick up, is there typically a tailwind associated with the growing deal pipeline as firms maybe look to check the box on tech enablement prior to an elevated period? Thank you.

Yes, I think so. The banks have been doing good business with us. We emphasized quite a bit of that on the call today, particularly large ones, in fact. We also have a lot of compliance support for firms that want to increase their volume. There's this interesting trend happening in the accounting industry itself where private equity is coming in and changing the form of the business from partnerships to corporations and putting capital to work. And those firms are then going on an M&A program themselves. And all of those things are driving demand for upgrading and modernizing the technology infrastructure. So there's a lot of larger macro style trends or industry trends that we think we're really playing into with the strategy here. And as people do this, they want to have an AI-forward approach to do all that. So I think we've got a great position to benefit from those trends.

Your next question comes from the line of Steve Anders from Citi. Your line is live.

Okay, great. Thanks for taking the questions here. I guess maybe just to start, I do want to ask a little bit about the guidance for the full year and some of the change there. I think particularly looking at the revenue side, you know, it looks like the full beat wasn't really rolled through. And so just wanting a little bit of clarity on maybe if there was some revenue that kind of shifted around or if it's a reflection of, you know, customers converting more to the SaaS solution faster than expected. Yeah, just getting any kind of clarity around some of those dynamics would be helpful to start.

Yeah, thanks for the question, Steve. No, we continue to operate on our strategy that we articulated over two years ago to our investor day. You know, that being we are cloud first. And so, you know, clearly that's what drives a lot of our key activity. With respect to everything else flowing through, obviously we'll have puts and takes both with services as well as license. That being said, we continue to be successful and continue to orient more and more migrations. And so we'll talk more about how that is not only being modeled by our success vectors coming up here at Investor Day. And then even within our own services, Clearly, we've discussed just broader on the whole partner ecosystem, and it's always going to be a delicate balance there as we continue to make investments, as well as take that opportunity and more prone to items in and around our customer set and items that will clearly drive our cloud offerings even more so. So, you know, I don't view it as... evergreen change to kind of the mix of revenue, we've always been cloud first and the orientation of that, of which I do believe the full guide was passed through.

Okay, gotcha. That's helpful there. And then maybe shifting gears just in terms of the buyback program, I guess good to see that we upped here. Just, you know, how are you kind of viewing kind of the forward cadence for those plans and putting that into place. And then I guess anything to read into, I guess, broader capital allocation and kind of the ramifications of investing in the business and other areas versus utilizing the buyback.

Yeah. We've never had a formal articulation of our capital allocation strategy. You know, that will come forward. More in earnest, again, at Investor Day, but just for the near term, we have been putting capital to work. We've been focused more so on anti-dilution measures and offsetting that. I think we've done a good job at that. And so, you know, clearly we've got a lot of confidence, not only in our ability, but in the strength of our balance sheet that the board authorized an additional $200 million, and we'll put that to work. to offset for dilution as well.

Okay, perfect. Thanks for the questions and looking forward to hearing more in a few weeks.

Great, thank you. Your next question comes from the line of Alex Sklar from Raymond James. Your line is live.

Thank you. John, I wanted to start, follow up on your answer to George's question earlier, just in terms of what you're seeing on broader IT budgets and AI budgets, maybe within your named accounts going to 2026. Any sense if these accounts are dedicating distinct spend to AI this year, just as you're bringing more solutions to market? And then Dave called out doing more in terms of increasing spend around delivering AI offerings. Can you just talk about how that fits into your strategy there? Thanks. Thanks, Alex.

It varies across firms. A lot of firms do absolutely have specific AI budgets or innovation budgets that they're looking to make sure that their firms figure out how to take advantage of the change here. That's benefiting us. We've had several deals that are being funded out of AI budgets. There are also firms that are looking at their IT budgets generally, and saying, how do they bring AI in to more traditional ways of budgeting and procuring, and it becomes part of the procurement process. So we've won things in that category as well. Internally, this is a huge focus for us, and it has been for several years. We've tried to be both responsible and forward-leaning in investing in R&D for this generation of technology we've brought the company through and benefited from each of the previous technology generations from on-prem the cloud to mobile and now ai coming up here at our event in february with investor day and our marketing event is called intap amplify this is the single largest release that we've ever done this is the most consequential relief that the company is setting up to bring to everybody. And it's been in the works for two years since this whole generation started to break. And we spent a lot of time working directly with our clients and all the folks who helped us build the company across the marketplace to really appreciate what is it that the potential of AI can do to drive success for these firms financially and in their business, the compliance area with all the professionals, how do they become much more capable of using AI, applying it in the most successful possible way to compete? And I think there's really interesting learnings from this first couple of years of experimentation. And we've integrated that all into our strategy here. And so I really could not be more excited about the February event because the early responses that we're getting from the folks on our Ambassador program and our advisory board program could not be more positive about where we're headed here, because I think these firms do have a disproportionate opportunity in how they can benefit from AI deployments. I also think for the enterprise platforms, it's doubly complex because they have such significant work that they do. for all of the world's capital markets transactions, M&A, litigations. I mean, these are serious projects that these firms execute, and we've grown up working with them and increasingly are the folks that they're turning to for AI. So I'm really excited about what's coming here, and I think the R&D investment has been fantastic and something that we're really excited to keep doing.

All right, great. Yeah, the product velocity is Definitely picked up, so look forward to more there. Dave, just maybe a quick follow-up for you. Can you just expand on some of the drivers NRR stepped up pretty notably this quarter? What were kind of the big one, two, three things behind that? Thanks.

Yeah, for sure. You know, first and foremost, our enterprise motion is working. Secondarily, we also oriented around, you know, some successful talk tracks about our partner ecosystem. And so if you think about how not only our lands are getting bigger, but also our expands because of those two motions. And so in theory, it was both upsell and cross-sell that we're seeing good uptake, but we still have a lot more room to go.

Your next question comes from the line of Brian Schwartz from Oppenheimer. Your line is live.

Yeah, hi, thanks for taking my question this afternoon John wanted to ask you a question about different pricing models You know clearly the the forecasts are out there that we're expected slow labor growth here You know on the heels of AI through the second half of it the decade I think you talked about in your comments how you're working with your customers and experimenting on on different types of AI use cases and solutions and What about internally at Intap in terms of the pricing model? Are you experimenting at all in introducing a more consumption or value-based pricing model? Just wondering if there's any testing of that going on and that potentially could be a new growth factor for the business in the future.

Thanks very much, Brian. We do have today multiple pricing models in the business, just for clarity. We do have part of the business and some of the relationships, a historical per user model. It has worked very well. And we are not fully penetrated in almost any of our firms. We have a lot of growth that we achieve each quarter in that NRR number from getting more people onto the platform using the technology, including the AI capabilities of the platform. So that's absolutely a continued growth for us. But we also have today, and for a long time, a firm-based pricing model for enterprise agreements. This originally started in our compliance business, but we offer it in other areas and have relationships in many other areas where the firm pays based on its size or other metrics that are not for users. So we just wanted folks to understand that. And then from there, so I think we've got a good relationship with firms where the contracts allow us to price to value, and historically we've been able to do that. From there, we are very interested in what the opportunity is for consumption-based or other metric-based pricing that aligns well with the way that the clients are thinking about the value they're receiving. I think fundamentally, you know, the software companies have always been able to price value The mechanisms have changed over the years. But if you can get yourself in a position that they really see what it is that you're doing for them and they benefit and they want to grow from that, they're happy to pay for it. And we benefited, you know, bootstrapping our company in this particular end market because these firms, in comparison to many industries, they're very financially well off. And that's really helped us. They always pay their bills. They're very honorable folks, which I appreciate. And if we can come up with a value agreement that they're happy with, they're happy to pay it. And so we've grown the company for many years working with them. And I'm very interested in this question that you're raising because I think there is an interesting angle as we grow and take more of the AI services into our own product. How do we monetize that and manage the financials and economics of that? So we're very open to that and we're experimenting a little bit.

Yeah, I agree. Thanks, John, for that explanation. That was really helpful. One follow-up for David, just thinking about kind of tracking the progress of the AI SKUs. In relation to the AR growth, how do you think about the monetization of AI, how that will play out for INTAP in the second half of the fiscal year? Is there anything that investors that we should look to

to um to be able to uh you know better gauge um you know how the ai products are doing for the business thanks david yeah for sure um you know these are things that we've been working through obviously not only at our annual updates both from direct arr or attach rates and something that will have meaningful updates on um coming forward in our upcoming investor day so i don't want to steal all of our thunder with that, but obviously the success has been far and wide for us. I'm very pleased with both the application from our go-to-market teams, as well as our own internal development and the uptake. And so more to come on that.

Sounds good. I think we'll find out pretty soon at your investor meeting this month. Thanks for taking my questions today.

Your final question comes from the line of Kevin McVey from UBS. Your line is live.

Mine's already been answered. Thank you.

There are no further questions for the question and answer session. I would now like to turn the call back over to John Hall for final comments.

Okay. Well, we appreciate everybody's time today and the questions. We are very excited to have you all at our Investor Day event in a few weeks in February in New York City. There's a lot of opportunities to share all the things that we've been working on. And then later that day is our InTap Amplify program where we're going to be making some pretty important announcements. So we're excited to have you. And we'll look forward to chatting with you there. And then we'll talk to you again next quarter. So thanks, everyone. We appreciate it.

Thank you. And with that, we conclude our program for today. We thank you for participating and you may not disconnect.