AvePoint, Inc. (AVPT) Q2 2025 Earnings Summary

Executive Summary

AvePoint delivered a milestone quarter with total revenue of $102.0M (+31% y/y), SaaS revenue of $77.3M (+44% y/y), and non-GAAP operating margin of 18.4%; management flagged outperformance on the top and bottom line and raised full-year guidance across ARR, revenue, and operating income .
ARR reached $367.6M (+27% y/y) with record net new ARR of $22.1M, and retention metrics improved to FX-adjusted GRR 89% and NRR 112%—the highest NRR the company has delivered .
Q3 2025 guidance was set at $104.6–$106.6M revenue and $18.0–$19.0M non-GAAP operating income; FY 2025 guidance was raised to $412.8–$418.8M ARR, $406.6–$410.6M revenue, and $68.3–$70.8M non-GAAP operating income, reflecting momentum while prudently accounting for public sector uncertainty in Q3 .
Management emphasized platform innovation in AI governance and multi-cloud resilience (new Risk Posture, Optimization & ROI, and Resilience command centers; agentic AI governance), channel momentum (56% of ARR via channel; 62% of incremental ARR via channel), and strong regional growth; these themes are likely catalysts for sentiment and estimate revisions .

What Went Well and What Went Wrong

What Went Well

Record revenue milestone: “first quarter to surpass $100,000,000 in revenues,” driven by broad-based execution and SaaS mix reaching 76%—a quarterly high .
Accelerating ARR and NRR: ARR grew to $367.6M (+27% y/y); net new ARR hit a record $22.1M (+42% y/y); FX-adjusted NRR reached 112%, the highest ever, underscoring successful cross-sell across the platform .
AI governance and platform innovation: Launch of Risk Posture, Optimization & ROI, and Resilience command centers plus agentic AI governance for Microsoft 365 Copilot; CEO highlights positioning “at the intersection of data, security and AI” .

What Went Wrong

Gross margin pressure: GAAP gross margin declined to 74.0% from 75.7% y/y, primarily due to higher mix of low-margin services revenue, despite strong subscription momentum .
Services outperformance in Q2 contributed to the beat but is inherently nonrecurring; management cautioned about prudence in second-half guidance due to public sector uncertainty in Q3 .
GRR remains burdened by migration products: migration served as a two-point headwind to GRR; reported GRR was 88%, highlighting ongoing mix headwinds in renewal dynamics .

Financial Results

Core Financials vs Prior Periods

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$89.2	$93.1	$102.0
GAAP Diluted EPS ($USD)	$(0.09)	$0.02	$0.01
GAAP Gross Margin (%)	75.5%	75.0%	74.0%
Non-GAAP Operating Margin (%)	16.2%	14.4%	18.4%
SaaS Revenue ($USD Millions)	$64.847	$68.942	$77.317
Services Revenue ($USD Millions)	$12.228	$10.937	$14.486
Recurring Revenue Mix (%)	86%	88%	86%

Segment Breakdown

Revenue Segment ($USD Thousands)	Q4 2024	Q1 2025	Q2 2025
SaaS	64,847	68,942	77,317
Term License & Support	9,432	11,190	8,922
Services	12,228	10,937	14,486
Maintenance	2,676	1,995	1,293
Total	89,183	93,064	102,018

KPIs and Retention

KPI	Q4 2024	Q1 2025	Q2 2025
ARR ($USD Millions)	$327.0	$345.5	$367.6
Net New ARR ($USD Millions)	$18.1	$18.5	$22.1
GRR (FX-adjusted) (%)	89%	89%	89%
NRR (FX-adjusted) (%)	111%	111%	112%
Customers with ARR >$100k	666	689	721

Actual vs Guidance (Q2 2025)

Metric	Q2 Guidance (from Q1)	Q2 Actual	Result
Revenue ($USD Millions)	$95.3–$97.3	$102.0	Beat by $5.8M
Non-GAAP Operating Income ($USD Millions)	$13.2–$14.2	$18.8	Beat by $5.3M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues ($USD Millions)	Q3 2025	N/A	$104.6–$106.6	Set
Non-GAAP Operating Income ($USD Millions)	Q3 2025	N/A	$18.0–$19.0	Set
Total ARR ($USD Millions)	FY 2025	$411.8–$417.8	$412.8–$418.8	Raised
Total Revenues ($USD Millions)	FY 2025	$397.4–$405.4	$406.6–$410.6	Raised
Non-GAAP Operating Income ($USD Millions)	FY 2025	$61.4–$64.4	$68.3–$70.8	Raised

Management clarified the FY ARR raise includes a $3M operational raise partially offset by a $2M FX headwind; FY revenue and non-GAAP operating income also increased, with Q2 beat amounts rolling into guidance .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
AI governance / Copilot readiness	Emphasis on data governance as prerequisite for AI; control suite highest growth; AI adoption shifting from experimentation to implementation	Expanded agentic AI governance (prompt tracking, access controls, policy enforcement); customer expansions tied to Copilot rollout	Strengthening; demand broadening
Multi-cloud resilience	Introduced Google security solutions; NIS2 and broad resilience use cases	New Resilience Command Center (M365 coverage; foundation for Google Workspace/Salesforce), multi-cloud governance plans	Expanding capabilities and TAM
Channel and MSP	MSP fastest-growing vertical; Elements platform upgraded; 55% total ARR via channel	56% of total ARR via channel; 62% incremental ARR via channel; new MSP features (marketplace integration, risk user insights)	Mix rising; efficiency tailwind
Public sector/macroeconomic prudence	Seasonality and macro caution; federal exposure ~2% ARR	Prudent outlook for Q3 public sector; no deterioration observed; commercial demand strong	Cautious stance maintained
Services mix and margins	Services nonrecurring; gross margin supported by SaaS mix	Q2 services outperformance helped beat; weighed on gross margin y/y	Near-term tailwind, margin headwind
Contract duration	Pressure in prior periods; duration improved in Q2 (future GRR support)	Average contract length increased; expected to benefit future GRR	Improving renewal dynamics

Management Commentary

CEO: “Q2… our first quarter to surpass $100,000,000 in revenues… marks another step on our path to $1,000,000,000 in ARR by 2029,” highlighting platform positioning “at the intersection of data, security and AI” .
CEO: “We introduced… Risk Posture… Optimization & ROI… and Resilience command centers… and expanded agentic AI governance… shaped directly by customer needs,” underscoring strategic innovation cadence .
CFO: “Total revenues for Q2 were $102,000,000… SaaS $77,300,000… subscription revenues grew 33% y/y… 86% of total Q2 revenues were recurring,” emphasizing durable revenue quality .
CFO: “Q2 operating income was $18,800,000… operating margin 18.4%… more than 700 bps y/y expansion… S&M at 32% of revenue vs 36%,” highlighting operating leverage .
CFO: “We are raising expectations for… total ARR, total revenue, and non-GAAP operating income… while prudently accounting for potential uncertainty in the public sector in Q3,” detailing guidance philosophy .

Q&A Highlights

Macro/public sector: Management embedded prudence into guidance from the start of the year; no worsening observed; commercial demand remains strong with healthy growth across regions and segments .
ARR vs revenue guide dynamics: FY ARR guide raised operationally but FX offsets lead to similar FX-adjusted growth percentages; services contributed to Q2 beat, while SaaS momentum remains robust .
Multi-cloud governance: Governance for Google Workspace and Salesforce is in early stages but adds meaningful TAM beyond Microsoft; backup already meaningful outside Microsoft (~<10% of revenue) .
Agentic AI governance: Customers moving from preparation to production are increasing spend on governance; agentic governance expected to be a sustained growth theme .
MSP momentum: SMB ~19% of recurring; MSP is major portion and fastest-growing vertical; Elements enhancements benefit both MSPs and large enterprises via multi-tenant configuration management .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2025 EPS, revenue, and EBITDA was unavailable through our data pull; we therefore benchmarked results against company guidance and disclosed actuals. Values retrieved from S&P Global were unavailable.
Q2 actuals beat guidance materially: revenue beat by $5.8M and non-GAAP operating income beat by $5.3M; management rolled these beats into higher FY revenue and operating income guidance, with ARR raised despite FX headwinds .

Key Takeaways for Investors

Strong execution and milestone crossing $100M quarterly revenue with expanding non-GAAP margins position AvePoint as a share gainer in data security/governance for AI-era workloads .
Broad-based ARR growth (+27% y/y) and record net new ARR ($22.1M) signal durable demand and effective land-and-expand across suites (control and resilience) .
Channel leverage is increasing (56% of ARR; 62% incremental ARR) and S&M efficiency improved to 32% of revenue, supporting profitable growth trajectory toward 30% S&M target .
Platform innovation in agentic AI governance and new command centers should sustain product differentiation, with multi-cloud expansion (Google, Salesforce) enlarging TAM .
Near-term watch: services mix can boost revenue but pressure gross margin; monitor sustained SaaS mix and margin trajectory as Q3 guidance prudently accounts for public sector uncertainty .
Capital allocation: warrant exercises and redemption added cash (Q2 ~$70.4M; July ~$8.7M), share repurchases continued ($19M YTD), and >$130M authorization remains—providing flexibility for organic investment and M&A .
Narrative likely to drive estimate revisions: raised FY ARR, revenue, operating income guidance; highest-ever NRR (112%) and improved contract duration underpin forward growth quality .