AVPT Q1 2025: 40 $100K+ Deals Fuel Revenue Beat
- Robust AI Adoption: 80% of AvePoint’s customers are actively testing Copilot, and while full deployment remains modest (<10%), there's a clear acceleration in AI functionalities across enterprises, demonstrating a strong, mission-critical need for their integrated data management solutions.
- Strong Large-Deal Performance: The company recorded 40 deals over $100K, marking a 43% year-over-year increase, highlighting significant traction in securing expansive, high-value enterprise contracts globally.
- MSP and Partner-Driven Growth: AvePoint’s newly launched MSP platform and Elements offering are gaining momentum, enhancing their channel strategy and expanding their footprint in both small to medium business and large enterprise markets, positioning the company for scalable recurring revenue growth.
- Macroeconomic Uncertainty: Executives repeatedly noted the fluidity of the current environment and the caution around monitoring potential second-order impacts, suggesting that a deteriorating macro or geopolitical outlook could dampen customer spending and extend sales cycles.
- Reliance on FX Tailwinds: Guidance and full-year revenue beats are significantly attributed to favorable foreign exchange movements. If these FX benefits reverse, it could negatively impact revenue and margins.
- Dependence on Large, One-off Deals: The strong performance partly stemmed from a surge in large deals over $100K. This heavy reliance exposes the company to risk if the frequency of such deals declines amid tougher market conditions.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +25% (from $74.53M to $93.064M) | Total revenue increased by approximately 25% YoY, driven by a strong uptick in SaaS revenue and improvements in key regions. This growth reflects the company’s continued strategic shift towards SaaS, building on previous periods where similar dynamics began to emerge. |
SaaS Revenue | +34% (from $51.31M to $68.942M) | SaaS revenue jumped by 34% YoY due to robust customer demand and a deliberate strategic focus on recurring cloud-based subscriptions. This increase builds on prior trends of shifting away from perpetual licenses, reinforcing the company’s commitment to SaaS offerings. |
Term License and Support Revenue | +12% (from $10.01M to $11.190M) | Term License and Support Revenue grew moderately by 12% YoY, indicating a gradual migration of customers from perpetual licenses towards subscription models. Although this growth is modest compared to SaaS, it confirms ongoing customer transition trends noted in previous periods. |
Maintenance Revenue | -27% (from $2.74M to $1.995M) | Maintenance revenue declined by 27% YoY, reflecting the company’s strategic move away from perpetual licenses. As customers shift to SaaS and term license models—a trend already evident in previous periods—the opportunity to secure maintenance contracts has naturally diminished. |
North America Revenue |
| North America revenue rose significantly from $29.9M to $36.452M, driven largely by a robust increase in SaaS revenue within the region. This growth also builds on a strong previous period performance and underscores the region’s continued importance in the overall strategy. |
EMEA Revenue | 29% increase | EMEA revenue climbed from $22.8M to $29.484M, primarily due to strong SaaS adoption and supportive market conditions. The region’s performance shows an accelerated trend over previous periods, highlighting increasing customer demand for the company’s cloud solutions. |
APAC Revenue |
| APAC revenue increased from $21.8M to $27.128M, driven by a notable surge in SaaS revenue, complemented by gains in term license and support revenue. This momentum, reflective of previous growth patterns, indicates robust regional demand and successful execution of the company’s expansion strategy. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenues | Q1 2025 | no prior guidance | $87.8 million to $89.8 million (growth of 18% to 21%) | no prior guidance |
Constant Currency Revenue Growth | Q1 2025 | no prior guidance | 19% to 22% | no prior guidance |
Non-GAAP Operating Income | Q1 2025 | no prior guidance | $11.1 million to $12.1 million | no prior guidance |
Total ARR | FY 2025 | no prior guidance | $401.3 million to $407.3 million (growth of 23% to 25%) | no prior guidance |
Adjusted for FX (ARR Growth) | FY 2025 | no prior guidance | ARR growth of 24% to 26% | no prior guidance |
Net New ARR | FY 2025 | no prior guidance | $77.3 million (year-over-year growth of 24% at the midpoint) | no prior guidance |
Total Revenues | FY 2025 | no prior guidance | $380 million to $388 million (growth of 15% to 17%) | no prior guidance |
Constant Currency Revenue Growth | FY 2025 | no prior guidance | 17% to 19% | no prior guidance |
Non-GAAP Operating Income | FY 2025 | no prior guidance | $52.3 million to $55.3 million | no prior guidance |
Rule of 40 (Reported Basis) | FY 2025 | no prior guidance | 37% to 39% | no prior guidance |
Rule of 40 (Adjusted for FX) | FY 2025 | no prior guidance | 38% to 40% | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Total Revenue | Q1 2025 | $87.8 million to $89.8 million | $93.064 million | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Robust AI Adoption and Integration in Data Governance | Q2–Q4 2024 discussions focused on data readiness, early AI experimentation, and challenges around data quality and security ( – ) | Q1 2025 emphasized a shift from experimental to practical, enterprise-scale AI implementation with strategic customer wins and responsible deployment ( ) | Evolved from pilot initiatives to full-scale, strategic implementation |
High-Value Large Enterprise Deal Performance and Dependency Risks | Limited details in Q2 2024 (general enterprise conservatism) and no mention in Q3/Q4 2024 ( ) | Q1 2025 provided clear evidence of strong performance with 40+ deals over $100K and highlighted geographic diversification ( ) | Emerging prominence with detailed performance metrics and reduced dependency risks |
MSP and Partner Channel Expansion Including Strategic Acquisitions | Q4 2024 discussed the acquisition of Ydentic and expanding MSP offerings as a fast-growing vertical ( ); no mention in Q2/Q3 2024 | Q1 2025 reiterated strong MSP momentum and channel expansion with new platform enhancements and acquisition integration ( ) | Consistent focus with deepening strategic investments in MSP and partner channels |
Operational Efficiency Trends and Shifting Margin Guidance | Across Q2–Q4 2024, AvePoint highlighted improved sales efficiency, rigorous cost management, and rising margins ( – ) | Q1 2025 confirmed continued operational improvements with higher operating margins and updated full-year guidance ( ) | Steady and positive improvement in operational efficiency and margin expansion |
Customer Retention Challenges and Flat Gross Retention Rates | Q2 2024 noted flat GRR linked to challenges (especially around migration products) ( ), while Q3/Q4 2024 reported steady improvements ( – ) | Q1 2025 reported modest but positive gains in GRR and NRR, with retention metrics slightly improved over prior figures ( ) | Moving from retention challenges to incremental improvements in customer metrics |
Macroeconomic Uncertainty and FX Tailwind Reliance Risks | Q2 2024 acknowledged uncertainty with a focus on “controlling the controllable” and noted FX-adjusted metrics ( ); Q3 and Q4 provided little detail | Q1 2025 maintained a cautious tone amid ongoing macroeconomic uncertainty while transparently detailing reliance on FX tailwinds in guidance ( ) | Consistent cautious sentiment with increased clarity on FX contributions |
Increased Competition in the Data Security Market | Q4 2024 provided a detailed look at the competitive landscape (notably in DSPM) and analyst engagement ( ); Q2/Q3 contained little mention | Q1 2025 briefly referenced the competitive environment via the broader context of AI and data governance excellence ( ) | Discussion remains present, with a shift from detailed competitive analysis to emphasizing product differentiation |
Multi-Cloud Expansion and New Product Innovations | Q2 2024 highlighted strategic multi-cloud partnerships (e.g., with SADA) and product integration for regulated industries ( ); Q4 2024 introduced innovative IP and expanded Google offerings ( ) | Q1 2025 emphasized enhanced multi-cloud capabilities integrated with AI-powered solutions to drive deeper product integration ( ) | Consistent expansion with evolving innovations that further integrate AI and broaden multi-cloud strategies |
ARR vs Revenue Growth Discrepancies Driven by Declining Term License Revenue | Q2 2024 acknowledged declines in term license and maintenance revenue ( ), and Q4 2024 detailed how declining term license revenue widened the gap between ARR and revenue growth ( ) | Q1 2025 explained that a mix shift—where term license revenue came ahead—helped the revenue beat while clarifying that ARR remains unaffected ( ) | Management’s narrative has evolved to clearly articulate revenue mix nuances despite ongoing declines in term license revenue |
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MSP Growth
Q: How is your MSP business performing?
A: Management is very bullish on the MSP segment, expanding capabilities with the new Elements platform and noting a strong historical growth with MSP ARR at 14% of total ARR and a 60% CAGR from 2020 to 2024. -
Copilot Adoption
Q: What’s the Copilot deployment versus testing rate?
A: Approximately 80% of customers are actively testing Copilot while actual deployment remains below 10%, though deployment has improved recently. -
Data Modernization
Q: How advanced is your data modernization journey?
A: Management emphasized being in the early innings of data modernization, highlighting the complex reengineering required for AI deployment which suggests tailwinds will persist longer. -
Demand Environment
Q: Is customer demand changing this quarter?
A: Demand remains steady with critical focus on AI and security, and no notable slowdown despite caution over potential second-half macro impacts. -
Sales Strategy
Q: Any shifts in direct sales versus channel tactics?
A: Direct sales continue targeting large enterprises while the channel efficiently serves SMBs, with both teams staying agile in a volatile environment. -
License Performance
Q: What drove the license outperformance?
A: The quarter saw a notable increase in large deals, with 40 deals over $100K (up 43% YoY), demonstrating strong global performance and favorable mix shifts. -
FX & AI Impact
Q: Is FX the sole driver behind the Q1 beat?
A: FX contributed to the beat and raised guidance, yet management also noted that companies continue robust AI implementation with no slowdown in customer interest.
Research analysts covering AvePoint.