Eric Suppiger

Eric Suppiger from B. Riley Securities inquired about the relatively flat operating margin guidance for fiscal 2026 and the strategy to expand margins towards the 2029 target, as well as whether growth in larger customers is driven by seat expansion or new services.

Answer

CFO Jim Cassie expressed confidence in future margin expansion due to past execution and operational efficiency investments, despite outsized marketing investments in 2026. He noted that growth in larger customers historically comes from cross-selling additional products rather than seat expansion, except for MSP channels, and expects this trend to continue.

Eric Suppiger from B. Riley Securities asked about the strategy to expand operating margins to the 2029 target, given the relatively flat guidance for fiscal 2026, and what gives confidence that this won't lead to a slowdown in ARR growth. He also questioned whether the strong growth in larger customers (>$100K and >$250K ARR) is primarily driven by seat expansion, layering on new services, or a combination of both.

Answer

Jim Caci, Chief Financial Officer, expressed confidence based on AvePoint's three-year history of profitable growth and significant ARR expansion. He explained that 2026 involves outsized investments, particularly in marketing, to capitalize on the current environment and strengthen go-to-market positioning. He also noted operational efficiency investments in 2025 and 2026 will yield future benefits, setting up for expanded margins beyond 2026. He clarified that historically, net retention rate (NRR) growth is mostly from cross-selling additional products rather than seat expansion, with the exception of MSP channels. He stated that the adoption of additional platform components has been and continues to be the key driver for larger customer growth.