AvePoint, Inc. (AVPT) Q3 2025 Earnings Summary

Executive Summary

Q3 revenue was $109.7M (+24% YoY) with SaaS revenue $84.0M (+38% YoY); non-GAAP operating margin expanded to 22.0%, and management reported record net new ARR and record non-GAAP operating income and operating cash flow for the quarter .
The company raised FY 2025 guidance for revenue to $414.8–$416.8M and non-GAAP operating income to $77.3–$78.3M, while maintaining ARR guidance at $412.8–$418.8M; Q4 revenue guided to $110.0–$112.0M and non-GAAP op income to $21.0–$22.0M .
Results exceeded company Q3 guidance with revenue ~3% above the high end; CFO highlighted that ARR was held flat due to timing sensitivity and potential impact from the U.S. government shutdown on deal timing .
Key catalysts: accelerating SaaS mix (77% of revenues), channel contribution (56% of ARR), multi-SaaS protection expansion (Monday.com, DocuSign, Smartsheet, Okta, Confluence, Google VMs), and agentic AI governance focus; public sector softness is a watch item .

What Went Well and What Went Wrong

What Went Well

Record quarterly net new ARR and non-GAAP operating profitability; CEO: “our third quarter results demonstrate our ability to deliver on the growing demand… to tackle the most pressing AI-related data security and governance challenges” .
SaaS momentum: Q3 SaaS revenue $84.0M (+38% YoY), SaaS mix at 77% of revenue (highest ever), and recurring revenue reached 87% of total; strong multi-SaaS product expansions broadened opportunity set .
Efficiency and scale: Q3 non-GAAP operating margin of 22.0% (up from 20.1% last year); CFO highlighted improved sales efficiency and channel leverage toward a long-term 30% S&M ratio target .

What Went Wrong

Public sector softness weighed on retention and North America growth; CFO cited federal downsell/churn and weaker upsell vs Q3’24 as drivers of a one-point GRR step-down (88%) and NRR moderation (110%) .
Gross margin compression YoY (non-GAAP 75.1% vs 77.0% in Q3’24) driven by higher services mix; management emphasized mix effects as the primary cause .
ARR guidance maintained despite revenue and margin raises, reflecting prudence around government shutdown timing effects on deal closings and ARR recognition .

Financial Results

Headline results (Q1–Q3 2025)

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($USD Millions)	$93.064	$102.018	$109.728
SaaS Revenue ($USD Millions)	$68.942	$77.317	$83.982
Gross Profit ($USD Millions)	$69.165	$75.539	$81.583
Non-GAAP Gross Margin %	75.0%	74.8%	75.1%
Non-GAAP Operating Income ($USD Millions)	$13.373	$18.783	$24.142
Non-GAAP Operating Margin %	14.4%	18.4%	22.0%
Diluted EPS ($USD)	$0.02	$0.01	$0.06

Segment revenue breakdown (Q1–Q3 2025)

Segment ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
SaaS	$68.942	$77.317	$83.982
Term License & Support	$11.190	$8.922	$11.143
Services	$10.937	$14.486	$13.766
Maintenance	$1.995	$1.293	$0.837
Total Revenue	$93.064	$102.018	$109.728

KPIs and cash (Q1–Q3 2025)

KPI	Q1 2025	Q2 2025	Q3 2025
ARR ($USD Millions)	$345.5	$367.6	$390.0
Dollar-based Gross Retention Rate (%)	88%	88%	88%
Dollar-based Net Retention Rate (%)	111%	112%	110%
Net New ARR ($USD Millions)	—	—	$22.4
Customers with ARR >$100k (#)	—	—	762
Adds of ARR >$100k customers (#)	—	—	41
Channel % of ARR (%)	—	—	56%
Recurring Revenue % of Total (%)	—	—	87%
Cash, Cash Equivalents & Short-term Investments ($USD Millions)	$351.8	$430.1	$472.0

Company guidance vs actual (Q3 2025)

Metric	Prior Q3 Guidance	Actual Q3	Result
Revenue ($USD Millions)	$104.6–$106.6	$109.7	~3% above high end
Non-GAAP Operating Income ($USD Millions)	$18.0–$19.0	$24.1	Beat (higher margin)

Note: Wall Street consensus via S&P Global for Q3 was unavailable; therefore comparisons are anchored to company guidance .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2025	$406.6–$410.6	$414.8–$416.8	Raised
Non-GAAP Operating Income ($USD Millions)	FY 2025	$68.3–$70.8	$77.3–$78.3	Raised
ARR ($USD Millions)	FY 2025	$412.8–$418.8	$412.8–$418.8	Maintained
Revenue ($USD Millions)	Q4 2025	N/A	$110.0–$112.0	Initiated
Non-GAAP Operating Income ($USD Millions)	Q4 2025	N/A	$21.0–$22.0	Initiated

Management color: ARR guidance maintained due to prudent recognition of public sector uncertainty and ARR timing sensitivity despite revenue and margin increases .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Agentic AI governance	Q2: Launched command centers and agentic AI security features (Risk Posture, Optimization & ROI, Resilience) . Q1: Emphasis on AI-driven data management strategy and platform solutions .	Deepened lifecycle visibility of Copilot Studio agents; unified multi-SaaS protection (Monday.com, DocuSign, Smartsheet, Okta, Confluence, Google VMs); Operational Efficiency Command Center; roadmap toward autonomous governance .	Strengthening narrative; expanding scope and capabilities.
Channel/MSP strategy	Q1: Acquired Ydentic; next-gen AvePoint Elements for MSPs; renewed $150M buyback . Q2: Enhancements to AvePoint Elements for MSPs .	Channel contribution to ARR reached 56%; MSP remains fastest-growing segment; S&M efficiency improving toward 30% long-term target .	Accelerating go-to-market leverage.
Public sector/federal	Q1/Q2: Not highlighted as a headwind in releases .	Softness impacted GRR/NRR and North America upsell; baked conservatism into Q4 outlook due to shutdown .	Persistent near-term headwind.
Multi-cloud expansion (Google/Salesforce)	Q1: Released Google data security solutions . Q2: Continued platform expansion and non-Microsoft support .	Non-Microsoft could be up to 30% of revenue contribution by 2029; deepening Google and Salesforce, evaluating ServiceNow .	Broadening TAM beyond Microsoft.
Contract duration	—	Average contract length improving each quarter in 2025 after two years of decline .	Positive inflection in customer commitment.
Profitability targets	Q1/Q2: Non-GAAP operating margin expansion noted .	Q3 non-GAAP operating margin 22%; rule of 40 midpoint of FY guidance “46” vs “44” last quarter; quarter posted “48” on rule of 40 .	Improving profitability metrics.

Management Commentary

CEO (press release): “Highlighted by record quarterly net new ARR, non-GAAP operating profitability and operating cash flow generation, our third quarter results demonstrate our ability to deliver on the growing demand… to tackle the most pressing AI-related data security and governance challenges” .
CEO (call): Framed agentic AI governance as “a first-class discipline,” outlining lifecycle visibility, unified protection across multi-SaaS/multi-cloud, operational metrics, embedded responsible AI controls, and collaboration with hyperscalers and partners .
CFO (call): “Total revenues… $109.7 million, up 24% year-over-year and 3% above the high end of our guidance… Q3 non-GAAP operating income was $24.1 million, or… 22%” with channel contribution rising to 56% of ARR and recurring revenues at 87% of total .
CFO (call): Maintained ARR guidance given shutdown-related timing risks; raised FY revenue and non-GAAP operating income; referenced rule-of-40 improvements (FY guidance midpoint “46”; quarter “48”) .

Q&A Highlights

AI governance priorities: Buyers are focused on data accuracy, risk controls, and immediate AI readiness; management sees a “massive coming opportunity” in agentic AI deployments and governance .
Federal sector impact: Public sector downsell/churn and weaker upsell vs Q3’24 drove GRR/NRR moderation; conservatism embedded in Q4 outlook due to shutdown .
Non-Microsoft ecosystem: Today ~<10% non-Microsoft; by 2029, non-Microsoft could reach ~30% of contributions; focus areas include Google and Salesforce with potential expansion to ServiceNow .
MSP and contract length: MSP is fastest-growing segment; average contract duration is improving each quarter in 2025 after declines in prior two years .
Product uptake: New command centers (Resilience/ROI) are early but encouraging; enterprise services support embedded deployment and net new IP development for customers .

Estimates Context

Wall Street consensus for EPS and revenue via S&P Global was unavailable at the time of writing, so estimate comparisons could not be shown. Where possible, we benchmarked performance versus company guidance and disclosed beats/misses accordingly .
Target price consensus via S&P Global was also unavailable.

Key Takeaways for Investors

The quarter delivered strong top-line growth (+24% YoY) and margin expansion (non-GAAP operating margin 22%) with a meaningful beat vs company guidance; SaaS mix reached a record 77% and recurring revenue 87% of total, supporting quality of revenue .
ARR reached $390.0M (+26% YoY) with record net new ARR of $22.4M and 762 customers >$100k ARR; the channel contributed 56% of ARR, highlighting efficient go-to-market leverage .
Raised FY 2025 revenue and non-GAAP operating income guidance while maintaining ARR due to shutdown-related timing risks; near-term public sector softness remains the key watch item for Q4 .
Strategic product expansion into multi-SaaS/multi-cloud (Monday.com, DocuSign, Smartsheet, Okta, Confluence, Google VMs) and agentic AI governance should broaden TAM and support the 2029 $1B ARR ambition; non-Microsoft contribution targeted to increase materially .
Gross margin compression vs prior year reflects mix; continued operating leverage from sales efficiency and channel growth underpins profitability trajectory toward long-term targets .
Cash and investments rose to $472.0M, supported by warrant exercise proceeds and disciplined capital allocation (YTD ~$27M share repurchases; $123M remaining authorization), providing flexibility for investment and buybacks .
Trading lens: Narrative strength around AI governance/platform breadth and sustained beats/raises are positive; monitor federal deal timing and services mix on margins for near-term volatility .