AvePoint Inc

Bull points

• Total revenues in Q1 were $117.2 million, representing 26% growth year over year and above the high end of our guidance. On a constant currency basis, total revenues grew 20% year over year.
• SAS revenues were $93.4 million, growing 35% year over year and representing 80% of total Q1 revenues, surpassing last quarter's record and exceeding our mixed expectations.
• Our healthy momentum is also evident when we look at revenue performance by regions. In North America, total revenue growth was 21% year over year, driven by SAS revenue growth of 32%. In EMEA, total revenue growth was 30% year over year, driven by SaaS revenue growth of 39%. And in APAC, total revenues grew 28% year over-year, driven by SaaS revenue growth of 37% and services revenue growth of 46%.

Bear points

• Term license and support revenues declined 29% year over year and represented 8% of Q1 revenues, compared to 12% a year ago.
• And even in our guidance for not only Q2 but Q3, we've kind of assumed that this new paradigm for at least what we saw in Q1 would be fairly consistent for the rest of the year. And as a result, the revenue is not going to be what we expected it to be, which is why you see me not raising guidance. I would have liked to have been in a position to raise guidance for revenue matching what we did with ARR. But because of this mix, I'm actually going to see less of that revenue anticipated growth. So we've kind of left guidance the same because we're actually seeing, as TJ mentioned, some additional services revenue, which is nice and it's above what we had budgeted. So that's a little bit of an offset. But this mixed shift definitely will result in less revenue coming from the products in the short term. And then obviously long term, it all evens out. You can even see it in Q1, the step up in our marketing spend. Definitely been a key focus. both sales and marketing. TJ mentioned, obviously, we're getting really good leverage from the channel, but that doesn't mean that we're not continuing to invest in our direct teams as well, because we are. So we're actually able to do both. So we're making nice investments there, both in people, technology, and really looking to scale that group. Our goal is not to execute just for 2026, but to get to this goal of 2029. So we're making investments really this year that are going to propel the business well beyond 26. And so we're doing that across the board. And it's some of the marketing initiatives that we're invested in as well. Everything from the account based programs that we have all the way to some brand initiatives that we've taken on this year. And so, you know, again, it's a it's a big focus for us, again, focused on really delivering for twenty twenty nine. and taking advantage of the market opportunity that you mentioned. So we're doing that. In terms of ROI, obviously some of these are more tangible than others, but we review these on a periodic basis to make sure that we're getting the expectations. Some of that translates to immediate results. Some of it is more other maybe softer metrics today that lead to those harder metrics later. So again, we're on top of it. We're making those investments. We believe they're required today to hit those goals in the long term. So, you know, when we think about capital allocation, we've talked about this a bunch, right? We really think of it as three different pillars. Obviously, we want to invest in the business itself to make sure that our teams are well-equipped well-staffed, and can execute to the absolute maximum that they can. So we want to first ensure that the business has the resources to do that. And that's first and foremost. Second is we do want to look at opportunities to supplement our internal growth with M&A activities. We've done small acquisitions in the past. We've talked about potentially doing larger acquisitions.
• And even in our guidance for not only Q2 but Q3, we've kind of assumed that this new paradigm for at least what we saw in Q1 would be fairly consistent for the rest of the year. And as a result, the revenue is not going to be what we expected it to be, which is why you see me not raising guidance. I would have liked to have been in a position to raise guidance for revenue matching what we did with ARR. But because of this mix, I'm actually going to see less of that revenue anticipated growth. So we've kind of left guidance the same because we're actually seeing, as TJ mentioned, some additional services revenue, which is nice and it's above what we had budgeted. So that's a little bit of an offset. But this mixed shift definitely will result in less revenue coming from the products in the short term. And then obviously long term, it all evens out. You can even see it in Q1, the step up in our marketing spend. Definitely been a key focus. both sales and marketing. TJ mentioned, obviously, we're getting really good leverage from the channel, but that doesn't mean that we're not continuing to invest in our direct teams as well, because we are. So we're actually able to do both. So we're making nice investments there, both in people, technology, and really looking to scale that group. Our goal is not to execute just for 2026, but to get to this goal of 2029. So we're making investments really this year that are going to propel the business well beyond 26.