Intapp Inc Aktie

Okay. Hello, everyone, and welcome to JPMorgan Boston TMC Conference. My name is Alexei Gogolev, Head of Vertical SaaS Research. And today, I'm delighted to be hosting Intapp management. We've got John Hall, Company CEO; and Dave Morton, Company CFO. John, Dave, welcome. And if I may begin the conversation framing the story and kind of discussing what to watch out for.

So first of all, there is a debate, obviously, whether AI reduces demand for professional services. So John, what are you seeing that suggests AI is actually a tailwind for your customers, things like project matters and faster turnarounds? And do you agree that it's actually less of a headwind for your business?

Thanks for having us, Alexei. So Intapp focuses on the large financial professional services firms. We were a bootstrapped company focused on this specialized, highly regulated end market for many years, and we've built the company through multiple technology generations. And through that time, these firms have grown. The industries that we serve, the law firms, the accounting firms, the consulting firms, the investment banks, private capital investors, real assets investors, basically the large partnership segment of the economy, which is about 3% of the global economy.

It historically was very overlooked as a sector, but it's quite significant. And it sits at the center of capitalism. These people do incredibly important things to facilitate fundraisings and financings and the allocation of capital, M&A on the other side, litigations and restructurings in difficult times in the cycle.

They are central to the way that capitalism actually functions. And what we have experienced as we've grown the business, is that as the economy develops nationally and globally, these folks win more business. There is more natural demand for their services regardless of how they're fulfilled. And I think what people are kind of focusing on is the efficiency of delivery, but from a demand standpoint, I actually think the demand is a structural component of the way that capitalism functions because the role that these people play are in facilitating all of those types of transactions and dispute opportunities.

And they may go through some very interesting pricing model changes. They may move from hourly to fixed fee in some parts of the market, or they may charge in other ways, but the actual fundamental requirement that you have these folks participating in their highly regulated industry to serve the way that the capitalism happens, capital flows happen and all those things. I don't think it's going away.

Our experience has been, particularly in the enterprise firms, which is where we focus, the top 2,000 firms have about 70% of the TAM for us. That group is actually getting larger. The top 10 private equity firms now raise something like 40% of all private equity raised. The top law firms have gotten bigger over the time that we've worked with them. There's economies of scale. There's also demand from the larger national and global clients to have a better footprint to serve them. And in the accounting industry, very interestingly, the private equity community has come in now, and they're driving a huge consolidation trend under the big 4 of the next 100 firms to try to build up a more and more capable multinational set of businesses.

So we've oriented our whole business towards the enterprise segment because that group is growing much faster than these industries as a whole. And that's where the technology demand and opportunity is to support the growth there. So in good times and bad, even through 2008, 2009, we grew the company and bootstrapped to these firms. And we're experiencing that now as well.

John. And as you execute towards rather robust target of $1 billion ARR by fiscal '29, what are the most important indicators that you would highlight to us? You've talked a bit about demand, so pipeline and bookings, but also maybe some product and AI solutions, maybe some NRR trajectory that you think are worth highlighting?

So fundamentally, the company is growing. Dave can talk to you about some of the numbers. But we have a very strong land-and-expand model for these firms. We have a good footprint, 2,500-or-so clients, a large relationship with many of them, but a lot of expansion inside. So both the land motion and an NRR expansion inside these firms across a range of offerings on our platform, helping with the firms with their go-to-market, their business development activity, helping with their compliance activity.

This is a core part of our story and historic value proposition is serving the highly regulated nature of these firms, and then a whole set of things around their efficiency and use of resources in time management and resource management.

So the way that we are bringing AI into the story is kind of what you would expect in all the business processes that we have been supporting over the years. We have real depth of expertise, and we're bringing a Agentic story now into each of those areas to help these firms as businesses at scale get the benefits of the Agentic opportunity in executing the way that their firm operates.

It's a little bit different from some of the other stories that you're looking at in the market where folks are really focused on the practitioners in the practice areas, which is also by itself a huge opportunity, but the business of the firm is historically our footprint and strategically is a huge opportunity to bring Agentic capabilities in, particularly in a compliant way, which I think is a real differentiation for this market, and we can talk some more about that.

Well, you spoke a lot about Agentic reality. So if I may ask about Celeste. When you say Celeste is Agentic so not just Gen AI embedded, what are the key end-to-end workflows you expect agents to run in production, and what makes those workflows uniquely suited to Intapp versus some of the horizontal automation?

Right. So the founders of Intapp are still with the company and leading the company. This is not a company that's in the hands of a next-generation executive team. The folks who built these products and met these clients and introduced new technologies to them are running the company today and Celeste is our next offering. It is a from-the-ground-up, AI-native Agentic platform built with compliance in mind. So it's built specifically for the compliance requirements of these highly specialized end markets, the management of conflicts of interest, independence material, nonpublic information, we talk about it as professional compliance.

So it's the issues that really are unique to these high-end professionals and financial services firms. And the Celeste architecture was designed in collaboration with our clients, which is how we built the company all these years working directly with both the IT community, but the risk and compliance community inside these firms to build an architecture that can provide the protections and guarantees for the firm's client information and market-sensitive information that is very different architecturally from some of the other offerings that you might see from some of the horizontal players that are bringing agents to market.

And the simple way to think about this is you have a practitioner in one of these firms who wants to do some AI analysis of documents. And most of the first-generation tools are encouraging them to drag documents out of governed systems and put them in this AI and start to ask it questions, and what the firms are discovering now after trials for a while is that they are accumulating a new repository of ungoverned information that is co-mingling or at risk of co-mingling all their client information, and answering questions about it and encouraging people to share those questions with other parts of the firm, potentially in contravention to the compliance requirements, the ethical Walls, information barriers that need to be in place for professional responsibility and regulatory reasons.

And the Celeste architecture is designed differently. We began with an understanding from our history in the compliance business for these firms that you have to do information governance with an understanding of professional compliance. And so it's a totally different design, co-designed with the firm's compliance departments, in addition to their AI and IT departments, and what enables you to do is to build agents in a whole Agentic strategy that gives you the benefits of AI automation, all the things that everybody is excited about, while respecting from the ground up, the firm's professional obligations that it's signed up to with its clients and its regulators and the courts.

So from this perspective, there is a lot of excitement, because firms have had this real tension with the first generation of AI tools as exciting as they are, how do they protect their traditional and required confidentiality management and information management obligations.

So the application space is across the whole firm. You can be looking at business development activities, you can be looking at compliance activities themselves, you could be looking at the revenue activities of the professionals, but you have a compliance framework that enables you to build that automation in a way that doesn't violate the firm's principles, and it's a huge differentiator.

And John, any proof points that Celeste is actually working? Do you have some data points like reduction in human touches or task completion rates, daily active usage? Like what's something you can share?

Yes. So we launched Celeste this quarter in limited availability. We announced it at our Amplify event in February, about 2/3 of the way through this quarter that we're talking about Q3 or fiscal Q3. And we had very positive responses. We had several launch announcements with that event, including several Celeste clients that were speaking. Starwood Capital was one of them about the success stories they've had. Over time, we will bring it out in general availability. We're working with each of our clients in each of our segments today to make sure that we have enough reps as an organization to be able to show a client success with each and every rollout when we scale it up. So that's the phase we are in today, but some very exciting results from some of these limited availability adopters where they're looking at their labor budgets for some of these programs, like the way that they vet incoming business in their conflicts or compliance department and can plan for agents to take over portions of that work, a meaningful portion of the work.

If you look at the P&L of these firms, there is 20% to 25% of the budget today that goes to a lot of these support functions, not the working professionals in each of the practice areas or each of the investment teams, but the actual supporting team where there's a gigantic opportunity to support with automation. And then you look at the portion of the professionals' time, particularly as you move up to the more senior ranks where they start to shift from working on client work to working on managerial responsibilities for the firm or for their practice area or strategy team, and all the compliance and all of the leadership functions that go along with that, there's a pool of time that those people spend that could be 40%, 50% of their time that we think the Agentic opportunity on the business side of the firm could make a profound difference in how those folks work.

So our engagement today is across each of those functional areas and at both of those levels. And some of our earliest users, actually, the example we gave at our launch event was that the CEO of the firm is interacting with Celeste and getting questions that they previously would have had to ask a person to go and find information and bring it back to them. So a lot of what we're doing is bringing the power of AI in this compliant environment to some of the most senior people who previously were intermediated to their business information through humans. And so I think just the opportunity here on the business side of the firm is gigantic. And a lot of what we've put together working with the firms is about moving into those spaces here as we go to general availability.

Okay. And that's actually pretty fascinating. So you're basically saying you're going beyond your typical IT and software budgets into broader operational value of those firms.

Yes, there's really 3 spaces where we can pursue budget. There's the traditional IT budget, where we have a long-standing relationship with the CIOs. And absolutely, there is spend and AI spend coming from there. Many of these firms have created a new AI budget specifically. They know that this is coming and they need to stay competitive. There's often a new AI leader that's been brought in, who's running the program of evaluating all the first-generation tools and trying to figure out where the best opportunities are going to be, and what the issues are going to be. And those groups are particularly exciting to talk to because they have a little bit of experience now with the compliance challenges that come from the first-generation tools. So there's been a couple of years of folks getting some experience with the issues. And when we bring them the Celeste architecture, they say, "Oh, you have addressed a lot of the things that I was experiencing in my previous attempts here over the past 18 months."

And then the third bucket is this labor pool. So that's not traditionally an area that we have pursued, but the opportunity to bring agents in to take over for hiring in certain areas of the support functions, in particular, is hugely attractive to these firms. One of the other things about the labor opportunity, too, is, in addition to comparing our value to what it would cost to hire someone, there are things that the agents can do working around the clock and searching the whole Internet to find information to vet for due diligence or continuously monitoring a particular client, not just at the point of bringing it on board, but throughout its life cycle that no human could have done.

So there is a quality and upside angle to the value proposition in a lot of what we're doing that really is compelling to people, almost on top of the cost savings story that a lot of people talk about with the Agentic pitch, which we definitely have, but I really think one of the most interesting things is how powerfully you can accelerate the firm's ability to manage its quality and output for clients at its risk management program quality at a very reasonable price.

John, one of the key themes that has been coming up a lot at the conference at all of my meetings has been this governed AI notion. So can you talk about what's compelling about it? What are the key concrete technical and process controls that create this defensibility? How do you prove to a CRO that it's working? And maybe talk about some Walls enforcement and data, provenance, model rerouting, how can you make sure that consumption is in this governed way.

Right. So we use this phrase too, governed AI. And when we talk about governance, we're talking about the professional responsibility compliance of the professionals in these firms that we talked about earlier. One of the most important things to understand about this set of industries that is very different from any other normal business is that for every investor that they work with or every client that they take on, they custom negotiate an engagement letter or engagement terms for the client relationship overall and for each engagement or matter thereafter.

And in those letters, they are making commitments to how the deal will be staffed, who will be able to have access to the nonpublic information associated with that deal, they make commitments about what level of person, and they're very interested -- each client is very interested in what other clients does the firm have? What other information does the firm have? You also end up making a list of people that you have to keep away from your deal and your engagement team.

And then, as that team changes over time, if you have a long-running engagement or a long-running deal or a long-running matter, the people at the firm who are working on that are not the same at the end of the engagement as they were at the beginning. So there is a rotation of humans through these projects. The information management associated with this simple fact. And these rules follow from the duty of loyalty and the duty of independence and all these professional obligations that people have.

When that translates into procedure, the information richness of the body of promises and negotiations that have been made with each and every client in each and every matter over the course of 10 years back. And then every deal that comes in has to be compared and contrasted against all those obligations. This is the information set, the proprietary information set that Intapp has historically managed for these firms. We are very unusual in having command and an infrastructure that really understands this. It is truly industry specific and it is directly tied to the compliance obligations of the firm. It is an existential issue if you leak your clients' information in the wrong way. So it's not just a slap on the risk. The reputation of the firm is on the line. So they take this extraordinarily seriously.

And we have always been the people that are trusted to manage that incredibly bespoke universe of client obligations. If you have 100,000 clients running 10 or 20 engagements or matters a year, it's a gigantic number of overlapping requirements. The whole design of Celeste is to ensure that you can deploy agents into that environment, and it will understand and respect, each agent will understand and respect that detailed universe of expectations about who's allowed to know what, including the agents. It's very difficult from an information governance and design point of view to keep all of that running successfully.

And we are leveraging our years of study and history to become the experts in this compliance area in our design for Celeste. So regardless of the business process, you could be working on client research, you could be working on client due diligence, you could be working on the financials of the client, you could be working on your possession of material nonpublic information on the part of the deal. All of that has to have this governance framework in place.

And so it's just a real trick. How is AI going to work for these firms and they have such a unique compliance set of obligations that there's a special design that you have to put in place. But if you can do it, then they can benefit from the AI revolution in the same way that some of the more traditional companies can. And so there's a lot of excitement and a lot of interest, but there's also a lot of design that has to go into being able to do that successfully.

John, how about the fact that Intapp sits on this highly sensitive firm data? How are you balancing more context improves AI notion that obviously, a lot of firms do with data minimization and client confidentiality, because obviously, when you think about training AI on customer data to benefit other customers in the industry, like how do you draw this line?

This is so central. The encouragement of all the AI systems is to drag everything in there. And as exciting as that may be, it is a terrible risk to the firm's compliance posture. And so the reality is each firm is making a trade-off in their risk management posture, how much do they want to co-mingle information in order to get the potential benefits of co-mingling it for the purposes of AI analysis and how much risk are they introducing to each client. So this is a policy decision that a firm risk management committee and AI committee have to make together.

One of the things that we're finding is our experience in this and information governance in the earlier generations, which had analogous issues. The document management generation had the same set of theoretical issues where you're going to put everything together into a document management system? Or are you going to segregate it out? And how did you balance the needs of knowledge management versus risk and compliance management and client confidentiality management? So we have a lot of history and language and a grammar and a whole infrastructure technologically to help people from a policy standpoint, capture all these commitments and measure those and weigh those and Celeste inherits all of that.

So we're doing the same maneuver, but now with the Agentic opportunity. I actually think that the benefits are enormous, but it's not going to be the same as you see in one of the corporate environments where you can just throw everything in there and it's not as big an issue what it's talking about.

At the same time, the value of the work that these professionals are doing is so enormous to the facilitation of deals that I think there's a lot of value that you can unlock with this design and still protect the professional obligations of the firm.

John, how about Walls for AI? It seems like it's becoming a stand-alone platform capability, and it does expand your reach beyond your own app. So maybe talk to us about how do you monetize that without cannibalizing existing module pricing. So I'm talking about covering Copilot, and then your partnership with Claude, your partnership with Harvey.

Right. So this is an interesting and exciting opportunity in addition to Celeste itself. This is taking our compliance and governance capabilities and allowing firms to extend those into some of these other AI-based generation tools. So Walls for AI is a governed AI offering that if firms have our platform, they can extend its governance protections into many of the AI technologies that they may also want to work with. And we have always been a centerpiece company, a platform company for the firm with a wide ecosystem of technology and services partners to serve them. We have an open architecture that encourages people to look Intapp as the centerpiece of firm governance and operational management on the business side of the firm, and then extend to many of these other data sources and data repositories. So Walls for AI continues in that tradition, and there's incredible demand, as you can expect from folks who need to manage many of these first-generation tools to get the better value out of them.

Moving to your partnership with Microsoft. So more than half of your latest deals have involved Microsoft sales teams. What is structurally different about Microsoft-influenced deals, and how repeatable is things like Azure investment dollars as an accelerator?

We have a long-standing partnership with Microsoft, mainly because these firms in these markets tend to be very Microsoft-oriented. If you think about lawyers and Word and consultants in PowerPoint and bankers in Excel, not to oversimplify, but people are in Office 365 all day long. So that Microsoft has an incredible position, not just in the front office there, but in the whole back office infrastructure, with the CIOs that support it. So this was a big input to us as we built the company was that Microsoft was a central pillar of the way that these firms had chosen their IT architecture strategy.

So we have a long-standing relationship there. There's a technology partnership. We worked with the head of Copilot as Walls for AI was being developed, for example. There's a sales and marketing go-to-market partnership, and several of the aspects of that have enabled us to co-sell with Microsoft into many of these firms. We can take advantage if the firm has a Microsoft Azure spend commitment, these MAC agreements where they sign up to spend a certain minimum amount with Azure every year, which many, many of these firms do. They can now buy 100% of Intapp's offerings off of the Azure marketplace under that agreement.

So in many ways, Microsoft has taken the budget issue off the table for us because the firms are already committed to spending X with them, and they can buy the Intapp platform or expand their Intapp platform through that Microsoft contract. Because of that, the Microsoft sales team is highly incentivized to collaborate with us because they get full quota relief for helping us deploy our software there.

So our sales team and the Microsoft sales team work very closely together on these accounts because the interests are aligned. So we're very happy about the long-standing Microsoft partnership. And the CIOs and the firms are too, because they really need our platform to interoperate with their whole Microsoft investment. So that's been a big part of our story. And as we move more into the enterprise, where more of these firms have larger Mac agreements in place and larger commitments, that's helped us with the enterprise, both land and expand motions with the Microsoft firms.

Dave, maybe this is more of a question for you. So as John was saying, as you go more into this enterprise and co-sell with Microsoft, do you expect ARR to become a bit lumpier because of things like stage conversion and partner source mix?

No. I think we've done a good job in balancing both the linearity within the quarter as well as within the year. Traditionally, our biggest renewals will be around the December and June quarters. With that said, with our rate of pace of innovation, what we continue to deliver to our end clients, we see that aptitude continue to grow. And you've seen that accordingly in our results. And so as we think about how we continue to scale to $1 billion and beyond, we feel like we've got a great coverage model, especially going into next fiscal year, that will continue on with that growth.

Okay. Perfect. John, back to you. So with those multiple AI partners that we just discussed, how do you maintain a model-agnostic posture in practice, and while obviously still going deep technically to deliver the best-in-class outcomes?

Yes. So one of the important design inputs to Celeste as we worked with the CIOs in the market, one of their key requests was, please help us maintain flexibility with the models because the investment pace is so torrid and the pace of model development is so fast. If you just look back at the last 12, 18 months, which model is in the lead has really moved a lot. And I think that's heavily influenced the decision-making of these firms.

So we built Celeste as a model-agnostic Agentic system. You can use OpenAI's models behind it. You can use Copilot or Azure's models behind it, you can use Anthropic's models behind it. And that was an important decision. We also have an Anthropic partnership that we announced in February because, obviously, there's a lot of attention there right now. And a lot of the firms have asked us, can you please have that capability and Anthropic was on stage with us with that announcement in February, we are very excited about that. So we're trying to maintain a capability for each of the firms to use their own model choice.

Many of them, by the way, have large Copilot contracts. Microsoft is very successful getting them to sign up as part of their minimum Azure spend to have Copilot in there. So that's an important component of this market as much excitement as there is in some other areas. I think it's important for people to appreciate in this market how strong that footprint is. There are also enterprise ChatPT agreements, the ChatGPT agreements, there are also Anthropic agreements. And so we allow the firms to use the one that works best for them. At the same time, a lot of the emphasis that we're bringing in is this compliance capability for the agents that are being built, independent of which model that you're choosing to work with.

Maybe that's another question for you, Dave. So seats are now less than 50% of ARR and Celeste enables this platform plus consumption pricing. So how do you expect this mix to evolve over time? And what's the buying center or procurement motion for consumption-based AI for these firms?

Yes. I would maybe step back and just orient around that we do have the ability to match our clients' requirements for how they view their own payment motion. And so clearly, we've got a lot of enterprise arrangements where it's just beyond the seat. DealCloud has traditionally been seat-based. But then even as we've started introducing Celeste, yes, clearly, there's some material platform fees that get into fair usage, and then consumption on top of that. And so we've got 3 or 4 main ways of how we can specifically orient around our pricing and packaging that help reflect the value that we're delivering to each of these end clients. So longer term, will that evolve? Certainly. Do I have a depiction of what I view that as 3 to 5 years from now, not at this point in time? But just know that Intapp has on its ability to adapt and be flexible and work with our end clients.

Makes sense. And John, maybe a question related to that to you. So what design choices are you making so that consumption pricing doesn't create some budget anxiety?

Yes. I think, this is one of the other pieces of feedbacks that we have received from the market and the CIOs in the market. As exciting as the LLM approach is, there is a difference between problems that are well suited for probabilistic answers and problems that might be easily solved with deterministic methodology. And so there's an opportunity in Celeste agents to both use all of the Agentic capabilities that people are talking about, but also to tie it into deterministic workflows for areas that don't necessarily drive token consumption, and you can get a lot better price performance. And I think this has been less of a conversation over the past few years, but I think going forward, the price performance discussion about when is it appropriate to deploy probabilistic techniques and drive token usage to solve the problem or part of the problem and when can you deploy deterministic methodologies with technology to really get the best answer, correct answer but also cost-effective answer for the user or for the process.

It's going to be part of the art of how these things are incorporated into the business process. And I think our history, working with multiple generations of technology across a range of areas, causes us to an intimacy with this end market, its compliance issues, causes us to be a little bit more pragmatic about what the design should be to help firms get the best, most accurate answer with the conversational experience or the Agentic workflow experience at the right time. And I think there's been very positive feedback from firms, particularly as they're starting to see these token bills come in, about how are they going to manage this as the firm's usage scales? And that's a key design principle in Celeste as to help people be able to control that as best they can.

That makes sense. And maybe a final question to you, John. So cloud migration, it looks like there's about $100 million still remaining on-prem. What are the top blockers today? And what has changed such that you now expect urgency to accelerate this cloud migration? Are you seeing maybe some organizational inertia or maybe some implementation disruption like what could reaccelerate that cloud migration?

So the key for us is that the firms that still have some on-prem from us that are some of our original customers also have cloud. So it's not that -- there was a time when the industry was nervous about cloud. That time has long passed. Everybody has cloud in some way in their system, it is a pragmatic question, when do they move off of an installed system to a cloud-based system? We've been making great progress. We report numbers on this progress each quarter since our IPO. The AI opportunity, the Agentic opportunity, I think, is causing those last stragglers to say, "Oh, we have to do this now." So I think we have a driver for those folks for whom this had not been a top priority pragmatically to say, I need to move to the cloud, so I can take advantage of Celeste and the Agentic opportunity that you guys are bringing. So I'm very encouraged by the response there, and we're grateful to the clients who have supported us for so long.

And I'm excited that we can bring them such a new generation of technology, and they're going to be able to move into this new generation with an AI story for their firm and an experience for their partners that is just mind-blowing. So I'm comfortable with where this is going and the pace that we're going to be able to get folks there.

Great. Well, thank you very much, John. Thank you, Dave, for being with us today, and appreciate your time.

All right. Thank you very much, Alexei.

Thanks.

Hello, everyone, and welcome to the Intapp Third Quarter Fiscal 2026 Earnings Webcast. [Operator Instructions]

Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to Senior Vice President, Investor Relations, David Trone. The floor is yours.

Thank you. Welcome to Intapp's Fiscal Third Quarter 2026 Financial Results. On the call with me today are John Hall, Chairman and CEO, Intapp; and David Morton, Chief Financial Officer.

During the course of this conference call, we may make forward-looking statements regarding trends, strategies and the anticipated performance of our business, including guidance provided for our fiscal fourth quarter and full year 2026. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income per share and free cash flow. Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures can be found in today's earnings release and its supplemental financial tables, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call, or a supplemental financial presentation, which is available on our website.

With that, I'll hand the conversation over to John.

Thanks, David. Good afternoon, everyone. Thank you for joining us. Q3 was a strong quarter, one that reflects both the health of our core business and the momentum building behind where Intapp is headed.

Today, I'll share our Q3 results, reflect on what we put in motion at Investor Day at Amplify in February and walk through the client wins and early signals that speak to the opportunity ahead.

First, the numbers. We achieved solid quarterly results in Q3, supported by the addition of new clients and the expansion of client accounts around the world. Our cloud ARR grew to $459 million, up 31% year-over-year. Cloud now represents 82% of our total ARR of $560 million. In the quarter, we earned SaaS revenue of nearly $108 million, up 27% year-over-year and total revenue of $146 million, up 13% year-over-year.

February was a significant month for Intapp. We brought Amplify, our annual client and product showcase to New York and London, and we hosted our second Investor Day. Together, those events put a single thesis on the table. Intapp is entering its most consequential chapter with strength, and we have a tremendous road map ahead to unlock new value for our clients.

If you weren't there, I'd encourage you to watch the recordings. I want to use the next few minutes to revisit that thesis. Demand for the professional firms we serve is growing, and we expect that to continue. As the economy expands, companies need outside counsel for high-stakes litigation, bankers for acquisitions and auditors for assurance.

These firms provide functions that are fundamental to capitalism, expert advice and accepted third-party accountability that clients can't replicate internally. Their core economic value has nothing to do with technology, but their staying competitive does. These firms must transform and the opportunity to use AI to become more efficient, more capable and more competitive is significant.

And the firms that move decisively will be the ones that win. But they're also learning something after experimenting with first-generation horizontal tools. Generic AI wasn't built for how these highly regulated firms actually work or for the professional trust and compliance standards they're required to uphold.

For these firms, professional compliance is an existential issue. That's why we built Celeste, an AI-native agentic platform designed from the ground up for professional firms. Celeste delivers expert agents directly into the workflows that drive firm performance, business origination, deal and asset management, business intake and compliance and revenue management, built for firms not adapted from tools built for everyone else.

Celeste works as a stand-alone platform and as a context and compliance layer that makes other leading AI tools more effective inside a firm, giving them the firm-specific context and professional compliance protections they need to operate in a highly regulated environment. Leading AI companies joined us on stage at Amplify as we launched Celeste.

We are re-architecting our core business applications to run as expert agents powered by Celeste. We demonstrated expert agents for deal development, professional compliance and revenue management, all grounded in Intapp data and systems all running on Celeste. These innovations expand our addressable market meaningfully.

As AI automates knowledge work inside firms, Intapp can move beyond competing for software budgets and capture a larger share of overall personnel budgets, pricing for the value that expert agents create and for the volume of activity flowing through the platform, matters opened, deals managed, engagements resourced, compliance actions approved.

Celeste enables consumption-based pricing alongside our existing enterprise and seat models, giving us more ways to grow with our clients as adoption deepens. We are entering the agent market from a position of significant structural advantage. With thousands of firms already running on Intapp, we manage their end-to-end business workflows, their most critical data and their professional compliance programs.

Now with a trusted professionally compliant agentic platform, no competitor can match that position. We grow as the firms do, and there is no one better positioned to lead this next chapter. At Amplify, 3 of the most consequential companies in AI spoke publicly about why they're building with Intapp. Our strategic alliance with Microsoft continues to deepen.

On stage, Microsoft was direct about what enterprise AI actually requires for professional firms. AI is becoming part of the enterprise backbone. In order to make this really work at the enterprise level, especially for sensitive firms, we really need to think about walls to make sure that the data only shows up for the right people at the right time.

Winston Weinberg, CEO of Harvey, discussed their collaboration with Intapp as a way to help clients succeed. "Intapp has been working on this for so long, and you have built such an incredible structure and trust with all the clients, making sure that we can integrate with all of your systems and making it the best for the end user." Elanor Dorfman, Head of Industries at Anthropic, articulated why our 2 platforms are built to work together, "we're very ecosystem-driven. We build primitives that we then work with our partners like Intapp to deliver, so customers experience customized value inside of these products." This is exactly the way we want to deliver AI into regulated enterprise environments. This is what it looks like when the market validates your position. And the signals we're seeing from clients and prospects back that up.

Let me share a few highlights. Amplify grew over 40% more client attendees than last year with an 80% increase in digital impressions and more than 110% increase in client and partner engagement across social and digital channels. The appetite for Celeste is clear. Celeste content is generating 3x the average engagement across our channels, and the Celeste overview is averaging over 9 minutes per individual visit, the highest in our portfolio.

Our April webinar series featuring Celeste, one for each industry vertical, set company records for both registrants and attendees. And sales development meetings in April exceeded monthly goals by over 65%, a new high watermark. That momentum runs alongside a business that continues to execute and now with Celeste.

Q3 growth came from all 3 of our core motions: new clients, expansion within existing accounts and cloud migrations, while we continue building traction across newer verticals, products and geographies. In our legal vertical, we saw a continuing trend of firms seeking to modernize and expand their technology while continuing to require the trust and professional compliance expertise we provide. We mentioned last quarter that Ropes & Gray, an Am Law 100 firm, chose our compliance solutions to modernize intake and conflicts.

This quarter, they decided to add to those solutions, choosing DealCloud to help accelerate their business development activity and Celeste to drive their agentic agenda. PLT, a current client utilizing conflicts, chose to further modernize their solutions and migrate to the cloud with Intapp Time. They also purchased Intapp Terms with Assist and Walls as they work to simplify their tech stack via a single provider. Kobre & Kim chose Intapp Time to increase overall efficiency and provide enhanced features to improve compliance. And an Am Law 100 firm chose Intapp Time for its trusted AI capabilities after a well-funded AI start-up competitor fell short of what their firm actually required.

This is a pattern in the market. In the accounting industry, technology purchases continue to be driven by both the need for AI capabilities and the continuing competition resulting from PE investments and mergers. Among the firms that turned to Intapp for AI-driven modernization this quarter, Mauldin & Jenkins, an Accounting Today Top 100 firm needed a central place to track, monitor and review engagements. They chose Intapp Employee Compliance to deliver reliable confirmation with regulatory requirements. U.K.-based Summer Group looked to Intapp to solve inefficiencies from multiple systems brought together from acquisitions.

Using Intapp Collaboration, they will be able to streamline operations and improve collaboration across the firm. The European offices of 2 major accounting firms chose Intapp as well. One purchased Intapp Collaboration to increase internal productivity and satisfaction. The other purchased both Intapp Collaboration and Walls to ensure greater control over data with geographic sensitivities.

In our financial services verticals, firms continue to choose our purpose-built solutions for their industry specificity. A global private investment firm replaced a competing platform with Intapp DealCloud, choosing industry depth over a generic solution in order to drive adoption and value firm-wide. We also added new clients in real assets.

A leading residential builder chose Intapp Properties to consolidate their workflows into one centralized repository. And Essential Properties, an internally managed REIT chose Intapp Properties to meet their growing demand for modern technology solutions. Q3 was a strong quarter, and it came at a defining moment. We launched Celeste in limited availability. Our clients are engaged and the early signals are strong.

Our ecosystem is aligned, and our core business continues to execute across new logos, expansions and migrations. What comes next is what we've been building toward. Professional firms are transforming. The firm AI market is growing. And as Celeste moves toward broader availability, no one is better positioned to lead it than Intapp. To our clients, partners, investors, Board and the global Intapp team, thank you. This is the result of your trust and dedication. David, over to you.

Thank you, John, and thanks to everyone for joining us today. I'd also like to acknowledge those who participated in our Investor Day in February, both virtually and in person. Alongside our annual Amplify event, it marked an important step forward in articulating Intapp's firm AI strategy.

We highlighted 3 key areas: the introduction of Celeste, our agentic AI platform, purpose-built for professional firms and the incremental TAM it unlocks, the strength of our enterprise go-to-market motion and our framework and line of sight to $1 billion in total ARR.

We remain confident in that trajectory, underpinned by our differentiated position, serving highly regulated professionals with professional trust, compliance native, workflow critical industry-specific AI solutions.

Turning to the quarter. We delivered strong fiscal third quarter results, reflecting continued momentum in our cloud business and growing market adoption of our AI offerings. Alongside strong quarterly performance across our growth, compliance and profitability offerings, our Celeste AI offering is now translating into meaningful contribution.

Just a few months removed from our Celeste product announcement, over 15% of net new bookings in the quarter was driven by our Celeste AI solutions, including early monetization from firm AI pilots. We're seeing strong enterprise adoption across land, expand and vertical motions, reinforcing AI as a durable driver of cloud growth.

Following our Amplify event, we also saw a meaningful uptick in demand generation, not just for Celeste, but across our broader product suite, driven by increased customer engagement with our AI capabilities. Cloud ARR grew 31% year-over-year to $459.3 million, supported by expansion within our $100,000-plus ARR client base and 123% cloud net revenue retention rate.

We continue to operate the business with discipline. Gross and operating margins expanded year-over-year. Q3 marked a record free cash flow quarter, and we continued executing on our share repurchase program. Together, these results reflect our focus on driving operating leverage while investing for long-term growth. Our SaaS revenue was $107.9 million, up 27% year-over-year and now represents nearly 3/4 of total revenue, driven by both new client wins and expansion within the installed base.

License revenue was $24.8 million, down 22% year-over-year, consistent with expectations as clients prepare for migration to the cloud. Professional services revenue totaled $13.4 million, up 7% year-over-year, supported by increased partner-led implementations. Total revenue was $146 million, up 13% year-over-year.

Following the completion of our initial repurchase program, our Board authorized an additional $200 million in January. During Q3, we repurchased $100 million or approximately 3.9 million shares, bringing fiscal year-to-date repurchases to over 7 million shares. This reflects both our confidence in the long-term value of the business and our continued focus on managing dilution.

Our partner ecosystem is becoming an increasingly important growth lever. Our co-sell motion with Microsoft continued to gain traction in Q3 with strong alignment and expanding Azure marketplace participation and MACC utilization, driving improved deal velocity, larger transaction sizes and reduced execution risk in the enterprise engagements.

At the same time, our broader partner network is scaling alongside our AI road map. As highlighted at Amplify, we are building a targeted ecosystem around Celeste to expand both capability and reach. Non-GAAP gross margin was 78.8%, up from 77.9% a year ago, driven by cloud mix and efficiency gains.

Non-GAAP operating expenses were $89.3 million compared to $80.3 million in the prior year period, reflecting continued investment in go-to-market capacity, pipeline generation and scaled client and partner events, including Amplify. Our non-GAAP operating income was $25.7 million, up from $20.3 million last year, and non-GAAP diluted EPS was $0.29. Free cash flow was $63.4 million, a record quarter, and we ended Q3 with $146.8 million in cash and cash equivalents.

Some of our key metrics include cloud ARR grew 31% year-over-year to $459.3 million and total ARR increased 23%. Remaining performance obligations were $791.4 million, up 27% year-over-year, providing strong forward visibility.

Clients generating at least $100,000 in ARR reached 858, representing more than 100 net adds year-over-year. We exited the quarter with over 1,375 clients at the $50,000-plus ARR. This cohort represents approximately 95% of total ARR and will be a go-forward quarterly disclosure.

Turning to our guidance. For the fourth quarter of fiscal 2026, we expect SaaS revenue to be between $113.1 million and $114.1 million, total revenue between $149.1 million and $150.1 million, non-GAAP operating income between $28.4 million and $29.4 million and non-GAAP EPS between $0.36 and $0.38 based on approximately 79 million diluted shares.

For the full fiscal year, we expect SaaS revenue between $421 million and $422 million, total revenue between $574.3 million and $575.3 million, non-GAAP operating income between $102.7 million and $103.7 million, non-GAAP EPS between $1.22 and $1.24 based on approximately 82 million diluted shares.

Thank you. And I'll now turn the call back to the operator.

[Operator Instructions] Your first question comes from the line of Kevin McVeigh with UBS.

Congratulations on the continued execution. I wonder if you could give us just any initial feedback on Celeste and whether or not that's what's driving some of the uptick in the average client size because clearly, you're seeing pretty good momentum there and just maybe help dimensionalize that a little bit.

Thanks, Kevin. The feedback on Celeste has been tremendous. We had a very exciting set of programs at Amplify, where people got to see it for the first time. We released it in limited availability. So we've been managing the number of clients that we're engaging with.

But the list of people who have looked at it, had us come and talk to them about what it can do is off the charts. So we're very excited about how well it's been received. And what's been really interesting to hear back from the prospects is they've really struggled with some of the first-generation tools in exactly the areas that we designed Celeste to address.

So MCP is an important technology architecture for this generation, but it is revealing and creating a lot of new repositories of business information that are essentially ungoverned by the firm's professional compliance requirements.

And what we've done with the Celeste architecture is exactly what addresses this core point. So there's a lot of excitement about the opportunity, and we've been working with several of the limited availability clients on some really exciting solutions already. And we were able to share with you all that Ropes & Gray bought the product in the quarter, and we have a group that is in the pipeline to do more.

I think there's a really exciting opportunity for us to enter into this Agentic space here. Obviously, we announced the product 2/3, 2/3 of the way through Q3. So it was a small part of the time that we had in market in the quarter.

That's helpful. Really helpful, John. And just a follow-up there. As the clients have started to season some of the LLMs, have they shifted preference in terms of any specific LLMs or they kind of stayed the course?

Well, that's also interesting. We're seeing a wide range across the market. There are people who had committed to OpenAI and ChatGPT early. We're seeing folks who have adopted Claude and like the Anthropic models.

We're seeing a big footprint for Microsoft Copilot because this is such a Microsoft-oriented market and the overall relationship they have with Microsoft and the ability of Copilot to work with that whole environment is important to them.

So it's a very interesting mix, we're even seeing some clients asking us about some of the other systems like xAI and Google. So I think that there is a rich competition going for those models out there. Celeste is importantly designed with a lot of feedback from our clients to be model agnostic.

So we will allow clients to use whichever of the model fits best for their firm or even for each solution because some people prefer certain models for certain solution areas versus others, and they want to have a mix inside their firm. And we provide the professional compliance capability and the Agentic orchestration for all of those across multiple solution types and multiple models at the same time. So people really like that design.

Your next question comes from the line of Alexei Gogolev of JPMorgan.

This is Bella Camaj on for Alexei. So starting with the adjusted EBIT guidance, it looks like the full year guidance raise was smaller in magnitude than the 3Q beat. Is that mainly just a product of expense timing with 3Q spend being pushed into 4Q? Or are you planning to step up investment next quarter into Celeste or other initiatives?

Thank you for the question. Yes, if you step back over 2 years ago, when we started framing the conversation in and around the leverage that we'll be driving towards the 300 to 500 basis points.

Clearly, the first year, we drove over 600 basis points this past year, the implied guide will land you around the 300 basis points while letting us continue to invest ratably across our go-to-market efforts with everything that we've announced in the last Amplify event.;

We're getting really good traction as well as in our product rate of pace of innovation has been nothing but spectacular. And so when you think about not having 100% leverage per se of all your incremental revenue, that's kind of how we've been scaling the company appropriately.

Also, you get into a little bit timing. And what I mean by that is in Q2, you provide an annual guide that's across $4 million versus now we're very centered in, of course, the last quarter of the fiscal year, that guide midpoint is across only $1 million. So that's -- you get into a little bit of rounding there, too. Obviously, we're going to continue to drive our top line growth and continue to scale appropriately the company as we've guided both in our long-term and near-term targets.

Got it. That's helpful. And just a follow-up question. Looking at the impressive cloud NRR performance, could you quantify the mix between the drivers there, such as seat adds, module attach or AI-related expansion? And how should we think about NRR normalizing over the next few quarters?

Yes. We gave some windows of near-term success of kind of what's added to that, both with our -- with some incremental disclosures at Investor Day. And I would say those trends continue, both through our cross-sell and up-sell matter.

Our NRR of the 123% -- 124% cadence that we've been operating at has some durability. And we're continuing to see the cohort that we're selling to this enterprise motion, which also ties into the $50,000-plus ARR cohort adds that we saw over this past quarter. So all in all, the team executed really strong, and they're driving both the actions, both on incremental up-sell as well as cross-sell across the board.

Our next question comes from the line of Terry Tillman with Truist Securities.

This is Luke [indiscernible] for Terry. So I know you mentioned the revenue monetization for Celeste will come. But what are some key milestones and KPIs in terms of integrating Celeste are you looking for in the coming quarters and years?

Thanks for the question. We have a strong road map for the rollout of Celeste through this limited availability period and into general availability. There's a whole series of engagements with our clients that we're doing across our target markets. In addition to Celeste as a stand-alone platform, you can buy each of our products now with Celeste integrated into it.

So DealCloud with Celeste, Compliance with Celeste, et cetera. There's a set of solutions that clients have already asked us to help them build out with agents, which gives us access to a whole new value proposition and TAM inside the firms. In addition to the traditional opportunity to sell our software into the IT budget, the firms are creating a second budget for AI solutions specifically, which we're now able to sell into.

And we're looking increasingly at the conversations with firms about their personnel budget because part of the promise of the agentic strategy is, can you offset some of your hiring in the future with agents rather than additional headcount as your firm continues to scale. So if you look across our solution areas, we're bringing agents into each of them and the key milestones will be the extension of our products into Agentic workflows in each of those key areas.

And the value for that is enormous. So we've had some very positive experiences with a lot of the engagements that we've had since limited availability launch. And you'll see more news from us as we grow and roll out more of the Agentic solutions inside each of the areas that we serve.

Awesome. And then I was hoping for a follow-up going into the compliance officer hiring that you mentioned within your client base. And if you could just double tap into that and potentially share any use cases from there.

Yes. The compliance officer, they go by several titles, but that role is an increasingly sought-after role across the firms in our market because of their unique professional compliance obligations. And Intapp has always had a very strong business being the system that enables the firms to run strong professional compliance programs, avoiding conflicts of interest, meeting their duties of loyalty, meeting their duties of independence, managing material nonpublic information across deals and across clients and across investors in a way that the firms really trust us to have the deep understanding of what this existential risk is to their firm.

And the compliance officers that are being hired are increasingly getting involved in the AI strategy of these firms because there's such a risk as AI rolls out of these firms of creating ungoverned repositories of new information. So many of these systems encourage the users to drag documents and information into them so they can do really exciting analysis.

But what's happening is larger and larger pools of ungoverned information are being formed inside these firms as they try these first-generation AI tools. And they've been in the market long enough now that the compliance officers, the risk officers and the AI leaders are getting together and saying, we need to start looking at how to manage the information governance risk, the professional compliance risk that goes along with all these tools.

And so the experience that they've had these first couple of years has really set them up well to meet us when we come to talk to them about the Celeste design and they appreciate what we've built in from the ground up in this AI native Agentic platform that is designed to help manage and govern the AI from the Intapp systems, but also from the other AI systems that they're adopting.

And we're the trusted provider in this category. And there really isn't a great counterpart in the competitive arena where we face a lot of competition. So I think this is an area where we have a lot of ability to affect the risk profile of these firms in a way the compliance officers are going to be delighted with and which they need to do. So we're excited about this. And the growth in that role is something that we're really targeting in our go-to-market.

Your next question comes from the line of Parker Lane with Stifel.

John, as you look at the different use cases and workflows for Celeste, be it compliance or intake or business origination, are there any particular areas that clients are looking to tackle first here with the launch of Celeste and the initial bookings momentum? Is that relatively representative of the existing apps that people have or anything that has hit the ground running that you'd call out?

Yes. Thanks, Parker. We have focused initially on the areas that the firms are already working with us. Obviously, that's going to be the fastest go-to-market for a general purpose compliant Agentic platform is to work with them in the areas that we can demonstrate value very quickly and then grow from there.

So the first areas would be intake, business acceptance, all the compliance issues that are associated with how firms onboard new clients, key to their growth, business origination, sourcing and origination and all the work that firms do sourcing fundraising or sourcing opportunities to deploy funds.

It's also in the lateral area. So a lot of the firms grow by hiring lateral partners and bringing books of business or bringing particular areas of expertise with them. This is a very complex maneuver, but is central to a big part of the market's growth strategy.

There's also the private equity trend coming into accounting and consulting, the area of helping firms with mergers and getting through the compliance issues of bringing these larger and larger accounting firms together.

And then in the time area, we have incredible opportunity to deploy agents in the whole realm of business utilization, how are firms using the resources they have, how are they starting to use AI in place of people and how are they going to capture that and the activity as a way to figure out what their pricing and profitability management needs to be.

So all the business of the firm areas that Intapp has built such a strong position are perfect for us rolling out Celeste, and it's complementary to a lot of the areas in the practices where the firms have deployed other tools, but they really haven't had a great solution for the business side.

And it's half to 2/3 of the population of the firm spends most of their time on these things. So it's a huge area for us, and we're very excited about how that's rolling out.

That's great feedback. And Dave, I think you mentioned that 50% of net new bookings are from Celeste. I'd love to hear how the initial conversations have gone around the monetization of that and the business model there. Obviously, you haven't priced on seats fully in the past, but this is even a different business model altogether. So can you just give us some initial impressions of how those conversations have gone?

Yes. I'll add some and then invite John to as well. And just -- so we're clear, it was 15, 15% of the approximately 15%. I thought you might have said 50%, but everything rose last quarter. So it was really successful.

No, it's been after Amplify, just the demand and outreach directly from our key clients as well as net new. And so it's been kind of pulling everything through not only within just those specific SKUs or that platform, but along a lot of our other products that we offer as well because they would like that whole suite.

And so it's been more of a portfolio conversation. And they'll continue to engage with us as we look forward to future deployments, but everything we've seen thus far has been very, very positive. John, I don't know if you wanted to add any other notes on some of those as well.

No, I gave a few stats in the prepared remarks about the engagement that we have across the client base. It's incredible the volume that we're dealing where the people who are interested in getting engaged with.

I think it really is speaking to one of the limitations of the general horizontal models that people have been trying to work with, and they really appreciate the architecture and the compliance design that we're bringing in. I also am super excited because we were only in the market for 4, 5 weeks of the quarter there at the end, and these are generally enterprise engagements.

So people need a little time to go through, work with the product and come to conclusion they want to come on board and for us to get to this progress in just 4 or 5 weeks, I'm thrilled. And moreover, the pipeline going forward is very strong.

So I think we're really tapping into an area here. It's still early, obviously, but I think we're really tapping into an area of need. Firms are trying to figure out how to get the best value and leverage out of this AI strategy, but they need to do it in an industry aware, compliance-aware way. And I think the opportunity here is huge.

Your next question comes from the line of Steven Enders with Citi.

This is [indiscernible] for Steven Enders. I think my first question is, you mentioned winning over very well-funded generic LLMs. So as your customers become more cognizant of token costs, how does this benefit or impact Intapp and Celeste adoption?

Thanks for the question. I think your question is about how do firms react as they start to look at their scaling token costs. Yes. So I think one of the things to realize is that firms have been experimenting in a lot of different ways with these tools.

And one of the things that they've discovered is that generic MCP creates a lot of traffic because they have to try things over and over or the system, the agent, the pool has to try things over and over to try to find the right answer, and it takes a few iterations or several iterations each time.

One of the design principles in Celeste with our semantic layer, our context engine is to really understand the deterministic information inside the firm that so many of these solutions on the enterprise side and on the firm side are designed to go get and serve up as part of a general business workflow in many of these different functions inside the firm.

And so what they're discovering is the Celeste architecture is actually much better at getting truer facts, more reliable facts out of the business systems as part of the workflows in a more effective and efficient way than a lot of the things that they were trying to develop or put together in a DIY model.

And this is one of the deeper arguments for why I think there's a huge opportunity for these vertical companies with deep expertise to build solutions for this LLM and agentic generation in a way that really understands how the correct architecture should be put together and particularly for highly regulated industries like this one, it's not just a token cost issue, although that is certainly something that they need to manage.

It's an information risk issue, which has serious implications for the firm's reputation and standing and compliance generally with their clients and with their regulators and with the courts. So I think there's a real argument here for a vertical-specific program and architecture like Celeste. I think it plays to our favor.

Perfect. That's very helpful. And my next question is just trying to understand the contribution of AI to net new. So you said Celeste is at about 15% of new ARR. And if I'm not wrong, I think Assist last quarter was about 10% of net new. So is the math right that at this point, AI contributes to about over 25%? Or how to think about the overall contribution from AI?

So growing...

Yes, go ahead, Dave.

No, go ahead, John. Sorry.

It's growing rapidly. We did incorporate the Assist technology into a new generation when we released Celeste. So this quarter, you had a period when we were selling Assist because we had not announced Celeste yet. And then in the last month of the quarter, we were selling and marketing and delivering Celeste, but only in limited availability. So what you're seeing is an evolution of the mix there.

Your next question comes from the line of Alex Sklar with Raymond James.

This is Johnathan McCary on for Alex. I'll start with John. You alluded to winning against a well-funded start-up in a bid for time. So I'm actually just curious on the back of that. How often are you seeing those sorts of competitors in bake-offs and in which areas of the platform is that most common? And then how important are the partnerships with the likes of Anthropic and Microsoft when you're going into a competitive conversation like that with the prospect?

Yes. Thank you for the question. So in several areas, there have been venture-backed companies that have started in spaces that we've had a long history in. We've actually been very excited about the fact that we have such a rich enterprise position with strong data and strong compliance and strong trust in these firms that we're able to offer a very compelling case for why we have an enterprise-class system versus something that some of the smaller companies have put together.

There's no question that competition has grown over the years inside the space. But one of the things I'm very impressed by what the team has done is that we've actually seen firms who have tried some of these newer tools for a little while and then turn them off and come back. So a lot of the opportunity here, I think, is to build on the enterprise-grade capabilities that we have developed over so many years and bring the Celeste technology in to meet the clients' needs.

I think the partnerships certainly with Anthropic more recently, but in this area, Microsoft has a huge influence. And so our ability to build on the Microsoft relationship overall, I think, really helps us, particularly with the enterprise class firms for whom this is a core business function where they want to trust a scaled vendor. And we have to keep up with the competition in certain areas, but we also have set the pace in many areas of the product that is keeping everybody else on their toes, too.

So it's a vibrant market, but I'm very impressed with how well the team has developed our offering here. And I gave a lot of examples in the script about our time win specifically on this point so that you all have some insight into how that's actually going out there.

Yes, very helpful. And then I'll pivot the one for Dave. So we heard about this at the Analyst Day a bit, but on the increased focus on the 2,800 named accounts. I'm curious what you think is left to do there from a hiring perspective? And then now in the AI world with Celeste out there in the market, what go-to-market adjustments do you think are needed now to kind of succeed and enable those clients, the largest accounts with your AI offering?

Yes. No, good question. We're going to continue to drive scale and efficiency with our sales and marketing motion, specifically on densifying those key enterprise accounts. We still have a lot to go, but we like the progress we've done thus far, and we're already busy at work thinking about FY '27 and what that portends and the massive amount of opportunities in front of us that we're really excited about. So more to come on that, but we like how everything is being set up thus far.

Your next question comes from the line of Saket Kalia with Barclays.

John, maybe for you, I just want to zoom out. There's a lot of great product stuff that I want to dig into. But maybe just at the highest level, I know that you spend a lot of time with customers. What do you hear from them around their hiring plans going forward? And because we've got such a diverse business, maybe you can just compare and contrast how those are different, if at all, between sort of professional services and financial services.

Yes. Thank you, Saket. We've been on quite a tour here leading up to Amplify with our advisory board and then after Amplify, I've met a lot of the firms along with many of the executives on the team who have been out with the team. It is a really interesting conversation because I ask this too.

And almost everyone has said, yes, there's an opportunity for AI to bring efficiency into our business. We're not really looking at profound staffing changes for this next 12 months. Maybe the summer classes will be a little more controlled, but we don't feel like we're ready to say that all the work is something going to be done with AI. That being said, what they are saying and I think this is a very interesting positioning is rather than reduce the size of the team, they're looking to deploy more AI and more agents so that they can continue to scale their businesses, all of whom are growing and grow with the economy or faster without hiring as many people going forward, which is a much more culturally sensitive way of building these partnership firms and scaling them.

And so that's been our messaging with Celeste is to help firms scale from here, and it's very positively received. Now there are pockets where people are saying, "Oh, these are areas inside the firm that we think are a place where we can reduce expenses and automate the activity." And where that's the case, we're able to build an ROI case for agents that can be very compelling. But I think the firms are selective about where in the firm they're proposing to do that.

I think your question about professional services versus financial services, I think the firms that are still partnerships are a little more sensitive in this regard. I think the firms that have converted to corporations years ago or more recently who are looking to drive particularly this PE-backed investment drive efficiency for the bottom line, are saying there's a little bit more opportunity to deploy AI and agents to transform parts of the business.

One of the things I'm really excited about is in these expert-driven businesses where so much of their value is the people who really represent the firm and have the knowledge for execution. It's in the business services areas that support all those folks that I think will be the first areas where they make transformative moves with staffing. And we are uniquely positioned on the business services side to help the firm deploy agents. And this is exactly what Celeste is for and what it's designed to do. So I think the area where they're going to go first is exactly the area where we're set up to serve them.

Got it. Got it. That makes a ton of sense and very helpful. Dave, maybe for you, just on the back of that, it's great to hear about the early success with Celeste and limited availability. So I realize this is an unfair question because the sample size is still small. But I'm curious how you think about the uplift that you can get from existing customer as they sort of add Celeste on, if that makes sense.

It does. A good question. We're just really scratching the surface here. And one of the thesis is that it unlocks a whole new SAM and TAM that we rolled out at Investor Day.

As you recall, our TAM that we're servicing is $20 billion of the core IT SAM that we offer, but then there's the whole $30 billion of non-IT spend, which is really the workforce that we think that we can tap into. And so when you look at our performance with just a couple of weeks out, yes, I just -- I think there's a large appetite there and just seeing the pull-through and the demand and the pipe gen thus far has been really, really encouraging.

And so we look forward to continue to provide updates on this trajectory. But I do think we're continuing to participate across different vectors, which then also get us into platform, consumption, seat and so on and so on, along with our traditional enterprise motions that we've been doing. So anyway, more to come on that, Saket, but it's a fair question.

There are no further questions for the question-and-answer session. I'd now like to turn the call back over to John Hall for final comments.

Okay. Thanks, everyone. We appreciate your attention and questions. We have a great Q3 behind us, and we're excited about our continued momentum to finish out fiscal '26. Thanks again for your time today, and we look forward to talking to you again next quarter.

Thank you. And with that, we conclude our program for today. We thank you for participating, and you may now disconnect.

All right. Let's get started. Good to see everyone. Thank you for joining us. I'm Melissa Knox. I run the global software investment banking business here at Morgan Stanley, and I am excited to be here with John Hall and David Morton, CEO and CFO of Intapp.

Intapp, vertical software company focused on selling to banks, financial institutions, consultants, law firms, vertical software company, specialized workflows highly proprietary data, AI platform, really big customers and a really amazing story. So we want to spend this time talking about the company, talking about the defensibility that they've built into the platform and the offensive strategy that you have for really capturing these workflows, this market with an AI-first solution, all right?

So we're coming off of a really exciting Investor Day last week in New York where you came up with some new product announcements around the Celeste platform. I want to talk about that. I want to talk about the target that we put out there for $1 billion in revenue by FY '29. Accelerating growth, accelerating margin and a lot of new metrics around the cloud business. We'll hit on all of that.

But first, John, why don't you just hit on what are the products that Intapp provides today? So talk about what we're doing around winning new business, managing risk and improving profitability? Let's start with winning new business.

Okay. Thank you for having us. The target that we sell to is a large, underserved, highly regulated industry, the large professional and financial services firms. So as you mentioned, the law firms, accounting firms, consulting firms, the private capital investors, the real estate, real assets investors and the advisers like the investment banks. Historically, these firms have built their own software. You look back many years, and this was the investment thesis for the business, we were a bootstrap business. We never raised money all the way to IPO and our observation was they've been building our own software. And the thesis was why are lawyers [ less them ] building their own software. And it was an observation that as good as all the horizontal systems of that era were, they clearly were not meeting the unique operating requirements and regulatory requirements of these firms.

And so we built the business over many years, and the 4 founders are still with the business today. It's a founder-led company that has survived and thrived through multiple generations of technology. In fact, we have benefited from every transition from on-prem to the cloud, the introduction of mobile and now with AI. We've grown the business through good and bad times economically, the 2008 recession, the COVID recession, what happened in 2023 with interest rates, the company has grown right through it because these firms have been so behind technologically, and their needs are so specialized. So that was sort of the foundation of the business, and we built out a special set of business applications for these firms that was designed in collaboration with the CIOs of these firms.

So when you entered the market, they had been building all of their own, and we said, can we build that for you? It's as simple as that. And firms had a real incentive, even though we charged a premium, we cost a lot more than their focus, than -- what they were doing internally to buy from a third-party and to buy an enterprise-scale system. They were interested in working with a supplier who could build up an enterprise-class view of what all the firms were doing because as everybody knows, it's worked in these markets, these firms really do follow each other. They want to do what everybody else is doing. And as we built up more and more of the compliance capabilities, more of the enterprise-grade features, we established a business of the firm set of systems and workflows and data that really was second to none and was unique in the marketplace. And we've established ourselves now. We have 2,750 firms that work with us, the very large firms in this $4 trillion industry. And we've been doing well. This last quarter, we grew our cloud business 31%. So this is a real growth situation because we're replacing this set of business applications.

I think 1 of the things that people might not get is that a lot of the excitement around AI recently has been around thinking about these LLMs and what they do with the work product, the documents that the lawyers, for example, are working on are the models that the professionals in some of the financial services oriented firms are working with, and they're excellent at that, no question. That's a completely different category from the business management set of applications that these firms run, which is really where we have. The practices in the law firm, the service lines, the accounting firm, the deal teams in the private capital firms, they have had tools for many generations of technology helping them, and we were always the business system that integrated with each of those. And the firms that we sell to at the top of the market, the enterprise classrooms are actually portfolio businesses that have many strategies and many service lines and many practices and many of those will have their own unique applications underneath them.

There's also really exciting AI opportunities across each of those practices and strategies but our position in the market has never been down at that practitioner level. It's been at the senior leadership of the firm, the strategy setting, the go-to-market of the firm, which -- where do they want to raise money if they're a private equity investor or a real assets investor, what are their relationships like with their LPs, if they're more of an advisory business? What clients are they pursuing? What industries and sectors? How do they bring that in? And then what are all the complexities of the unique professional compliance requirements of that industry. There is a universe of compliance rules that are specific to this industry.

So the conflicts avoidance for the lawyers, the independence rules for the accountants, the MMPI and market abuse directive requirements for the banks and the private capital investors, these sets of compliance issues are existential for these firms and their information governance as systems become more and more important to the large-scale businesses for managing their information, you have to design for professional compliance responsibilities from the ground up. And 1 of the things that we did and we discovered was 1 of the core reasons that these firms had been forced to build their own software is the horizontal systems never really internalize the deep professional compliance obligations that these firms built.

So over our bootstrap years, we developed an expertise in this area that is second to none. And as the AI opportunity has come along, we have this incredible moment now to bring agents and agentic AI to this business side of the firm with professional compliance understanding built directly in. And it's completely differentiated from the traditional horizontal systems, even the horizontal AI systems. And so we're in a unique position to be 1 of these SaaS generation companies. We actually -- SaaS is a more recent thing for us. We've evolved through multiple generations of technology because of our focus on these unique issues in this firm. So we don't think about ourselves as tied to any particular technology generation, we've always talked about ourselves as a vertical company with expertise first building out this business set of systems and evolving through multiple technology generations to be the people who apply each generation of technology but in an industry aware way and in a compliant way. And so that's our strategy. That's a lot. We can talk some more about it.

But that was a big part of our announcements last week was our entry into the agentic opportunity for this business of the firm tier with all of the professional compliance requirements that need to go into the correct design for an agentic approach here.

So super specialized -- these workflows, I work at 1 of these firms. Our system is $30 million that we've invested into this homegrown system that's broken. It's cobbled together -- sorry, if there's anybody from Morgan Stanley IT here, cobbled together, we manage our pipeline basically in Excel and Spreadsheets and this old system. And it is very differentiated. We have over 800 -- just within software, we have over 800 clients that we cover. We're at different phases in our go-to-market with each of them. This is episodic. It's very different than something that Salesforce or somebody can just come in and do. Super specialized workflows. You talked about compliance which the consequence of not getting it right, SEC investigations, fraud, not something that somebody can just vibe code a solution to.

So first, hit on the specific workflow. So what are you doing in DealCloud? What are you doing in compliance? Let's hit the business logic and workflows, and then talk about the data that you have. Like what are the -- what's the specialized proprietary data that you have that enables you to go build the agents?

So if you scale up these firms to many thousand people with tens or hundreds of thousands of clients, they could be providing investment banking services, financial advisory services. They could be providing accounting services or assured services. They could be providing legal services. So each of those industries has their own language, and we need to speak the correct terminology. But if you scale up as an operating model, they all follow a pretty similar structure. And our system is the mission-critical backbone for the business flow of those firms at scale.

So at the front end, we're looking at the firm's strategy. What kind of industries or clients is it trying to chase with what practice areas or product lines or service lines. In the case of private capital real assets, it's what LPs are you chasing and what funds are you raising for what purpose. So it's that front end of the process. And in this set of professional industries, it's an extremely relationship-oriented pursuit on the 1 hand, but it's a networked relationship. It's who knows whom across your entire platform that can help you get in and make the first introduction.

But then you are not selling widgets, you're not selling off of a price book with fixed price products with a gross margin associated with them, you are pitching your expertise, your reputation, your history of deals and knowledge, you're pitching your people and their expertise. You're trying to assemble the right team. It's completely different from the way the traditional "CRM" is designed to sell products off a price list with a SKU. There are no SKUs.

You are inventing each and every pitch bespoke as you go to market, particularly at the higher end firms where you have very high margin, high price point value-based pricing. So the whole approach to the company is at the front end who knows whom and who knows what and how do you match that up against the opportunity and use all the technology that you can to bring your whole platform together to win. And then you have an unbelievably preposterous thing that you have to do, which is you're not allowed to take every deal that you can go win. You have to run it and vet it against everything you've done in the past and all your promises and commitments either to the regulators or to your professional ethics groups, if it's a case of something like the ABA or the AICPA or the SRA in the U.K. And you have to identify, is this going to create a conflict problem? Is it going to create independence problem. Is this going to change our relationship with any of our existing clients. Sometimes, you have to go back and negotiate with an existing client, a change in your relationship with them in order to get you to say, yes, to a client that you want to bring on. It's insane what you have to go through in this market just to win a deal. Yes, it's insane.

So the complexity of business acceptance and these extraordinarily high priced engagements is off the charts. And to your point, if you make the call, the pressure is to say, yes, your capitalist, you're trying to win business. So the firms are desperately trying to figure out within the rules. And with all the promises and all the individually negotiated client agreements are individually negotiated LP side letters or individually negotiated engagement letters that form the basis of your business. How can you say yes. And firms go through extraordinary creative thinking to come up with all the things they can promise to their existing clients and to the regulators and to their new clients to say yes. And our system is the system that documents all of that creativity and all the rules that you are developing and negotiating to say yes. Because once you say yes, you are now on the hook your firm's reputation, your practitioners, personal reputation, your client obligations.

And if you screw it up, you may have, to your point, about practice claims in the future, you may have SEC investigations. You may have your licenses reviewed for things, not to mention, the fee discouragement and the penalties that come the insurance premiums that come forward. And ultimately, the thing -- interesting that the firms are most worried about is the reputation. If these things get screwed up in the way that you've made promises to clients and you end up on the front page of the Wall Street Journal, that affects your whole franchise value in the future.

So this professional compliance thing and everything that you decide at business acceptance is no small joke. And our system is the same that firms use in this mission-critical workflow to determine all that to set up the rules and then to govern the entire firm's activities after business acceptance to make sure that all the promises you made in 18 ways to 18 different constituents, you make sure you live up to even as long-running deals run and people move in and out of deal teams and information that is generated needs to be segregated and maintained under that set of responsibilities across all of your systems. It's extraordinary what you have to put in place. And we've just built the business over many years with the depth of command over this set of issues that nobody ever has other than the firms internally. It's a unique position.

So we have the proprietary data for each firm. We have every engagement letter client agreement outside counsel guideline. We have every implication of that for information governance, how your teams set up, how are people resourced on the project, as people move in and out, how do you make those decisions, if someone moves from here to there and they have to cross an ethical boundary or an ethical wall, what implications does that have? What negotiations as things move to go back to the clients and renegotiate? All of that kind of complexity, which exists for no other industry. And for no other industry does it have the consequence that it has here is our system. So it is the core of the firm's business independent of the individual document manipulation that is happening at the practitioner level. It's at the firm level. So that's what we do. It starts out at business development. Moves through business acceptance, all the compliance and then the governance of the engagement, including staffing, information governance, and then we even do time management for all. For the parts of our market that manage the time of people. And sometimes they build for that or sometimes they look for the economics of that. And that time that people spend influences their expertise and their exposure information. So it wraps all the way back into resourcing at the beginning and the kinds of compliance issues that you have when you're trying to choose who's going to be on the engagement. It also wraps back into the knowledge that people have to have. So we're just -- we're at the heartbeat of the way that these firms run regardless of the technology generation, we are the heartbeat.

And if that heartbeat is not enough, the complexity, the specialization, the criticality of what you do, now we do this with an AI-first approach.

So the AI thing is so interesting because firms are so excited to bring on AI and they should be. It's [ Buck Rogers ]. But it is ravenous for information. The whole principle as you throw everything in there, and have it give you awesome answers, which it does, except most of the first-generation systems that are coming out with AI depend on the individual who's using it to know what they're allowed to commingle in their database in the AI system. And this is creating leakage problems.

So these folks who have really jumped in fast and are adopting it are coming to us saying we desperately need to move to the second generation of these AI tools because they must be governed, the risk that we are taking is off the charts. We want the productivity but we have to have professional compliance with this generation of systems. And you all are the folks who have that command. So can we work with you and help create governed AI as a general capability across our firm. So we get the benefits of it, but with all the governance that you've always provided for all of our previous systems, and that's a big part of our strategy.

So you've announced the Celeste AI platform. And Celeste will basically be the agentic AI-first workflows for all of these products, business lines that you have, integrates with your existing applications and will operate as its own platform. So just talk about how you can incorporate this into existing workflows today and that the opportunity that this -- first, what it does. 2, it's amazing. We've used SIMs and due diligence and put together the first generation of LBO model, I mean, within agentic, all compliance-first approach. So talk about how it integrates with existing workflows and the opportunity for this as your platform.

So we're -- we could not be more excited. This is the biggest product launch that the company has done in its history. Celeste has been 2 years in the making. It is from the ground up true AI native agentic platform. It's built with all the modern tools that you would have expected to start up to be using to build the next-generation AI product. We announced it just this past week at our event in New York and the way it was developed is in the way that our company has consistently developed the market-leading products in each of these categories, which is in direct collaboration with our client advisory boards.

So in that same tradition that built the whole company where we looked at what they were building internally, and we built the industry-specific technology we have built Celeste as the true firm AI. The AI system that is designed for this business model, these firms with professional compliance built in, it's an agentic platform. So we have the opportunity with Celeste to go into that whole backbone that I just described from upfront business development and pursuing investors and clients through the compliance workflow and then the governance of all the activities of each of the deals and projects and engagements and we can apply Celeste as an agentic system to automate that entire system with agents that are themselves professionally compliant.

So it's an enormous opportunity because we have such an incredible footprint with the core systems, and we've now brought to market with Celeste the agentic system that will protects your professional compliance obligations as you identify all those things. And we're going to leverage our existing workflows, all the proprietary data, the installed base Celeste works with, as you were mentioning, DealCloud, our intake system, our conflict system, our terms of business system, our wall system, our time system. So everything firms have that is running their backbone today can now deploy Celeste agents to automate that entire process and take a lot of the manual burden off, do some growth cost avoidance on the people side, which is where there's so much economic opportunity, we could not be more excited about this launch. So we launched in New York here this past week, and I'm headed to London after this event, we're going to do our London launch on Wednesday.

So we've heard a lot about -- we've had Harvey here this morning. We've got Anthropic here, tomorrow talking about what they're doing. And we think the application layer has the most to gain from AI applications are the channel into the enterprise. It's the use case for all the AI that's coming up, and you're integrated with these systems. You're partnered with Harvey, you're partnered with Anthropic, you're partnered with Microsoft. To talk about how that's benefiting the business, maybe Harvey, then Anthropic, then Microsoft.

Yes. So we're very excited about these relationships. I think it helps the client community and the investor community position these AI players a little bit more clearly. The Harvey class of technology is tremendous. There is an enormous opportunity for what they are doing. And they're really taking advantage of the LLM technology itself and how fast that is with natural language, which was always a barrier in legal, in particular, but in many of these markets for this unstructured style of information, how do you in a modern way of flight compute and speak English to these things and get them to help you with your English output. So a huge space for them. It is very much for the practitioners, right? It's for the individual in this case, the lawyers who are manipulating documents and trying to work from precedent and coming up with the best possible cases.

The opportunity for us is to bring the whole business management layer to all the places where those folks work and to sit next to. So in legal, we talk about the distinction between the practice of law, which is where systems like Harvey sit and the business of law, which is where systems like Intapp sit. And that same distinction can be applied to the other industries that we're talking about, where you have the practitioners who are using their tools and then you have the business backbone that's running the firm. And there's a huge AI opportunity in each of those areas, and it is complementary.

So I think this is a little bit 1 more level of sophistication for dissecting the industry structure and what the opportunity structure is for AI that really helps people clarify things. In the case of Harvey, we could not be more excited because we had the CEO of Harvey, Winston, was on stage with us. We read his event on Monday in London last week, and then he came to New York and was on stage with me at our client event. But we've agreed that the opportunity is for Intapp Celeste to help provide governed AI for all the Harvey experiences so that it's not left to the burden of the individual practitioner to decide what goes in and out of their systems, but rather the system will be governed safely within all the rules that the firm has to run. And that should really help them expand into more parts of the market. It helps us because we can go all the places where Harvey is with a professional compliance capability that is needed is in demand from the compliance officers of the firm.

With Anthropic, we did an announcement on Tuesday of last week. We had Eleanor Dorfman, who's the Head of Industries from Anthropic, on our stage with our launch. They're 1 of our launch partners. We were announcing that Intapp Celeste, our agentic platform was able to be used with the Anthropics engine. Celeste is model-agnostic. So you, as a firm can choose whether you like the OpenAI system or you like a copilot or you like Claude or 1 of the other systems. So that was an important design requirement from our clients that they'd be able to do that. But we were very excited to be able to launch with Anthropic because it's got such great technology and capabilities. One of the things that she said on stage was at their size, they're going to be looking to work with firms that have deep industry context and industry compliance.

And there's a recording of this from our event that people can listen to, but it was really important for people to hear that. We also have published in the Anthropic directory for MCP as Intapp Celeste MCP connector. So if firms are working with any of these systems, you'll be able to talk to Celeste to get information about the firm's information. But the core principle is everything that's coming from Celeste maintains its governed status. So you're not going to be able to get information leaked outside of where it should go if you're coming through the Celeste gateway. So this is an important design principle in that.

With Microsoft, we've had a long-standing partnership with Microsoft. We announced this several years ago. We've had the Head of Microsoft CoPilot on stage with us. 2 years ago when we launched our generative offer, which was called Intapp Assist, which has now rolled into the Celeste platform, many, many of the firms in our marketplace are very heavily invested with Microsoft. They have a huge position which you would expect with Word and PowerPoint and Excel, all the types of things that the analysts and the associates work in.

Our team's investment with them, our whole collaboration system, which helps govern Microsoft Teams and SharePoint and also provides walls for copilot and walls for AI to the whole Microsoft system. So a big relationship there. We also have a commercial relationship with Microsoft, where all of our technologies are available on the Azure marketplace. The Microsoft salespeople receive quota relief for selling our products. So we've got a go-to-market relationship in our partnership with them as well. And it's been a huge help. Dave can talk about a little bit more of our growth path here, but a lot of our business now, particularly at the high end of the market, is co-selling with Microsoft under their Azure agreements, which has a huge footprint in the marketplace. So we're going to have more partners. We have 145 partners today in our ecosystem. These were 3 big ones that we emphasized and 3 that we wanted to emphasize because of the AI generation position that they have and people see the relationship that Celeste and Intapp have with those folks.

All right. Let's talk about how you get to $1 billion by FY '29. We've planted the seeds here. This is how -- all right, Dave. So over $500 million in ARR, over 25% subscription revenue growth, profitable, 17%, 18% operating margin, and we're accelerating revenue -- GAAP revenue growth. So what are the growth levers? Let's start there. What are the growth levers from getting to here to $1 billion?

Yes. We're really excited coming off a week of just profound announcements. And so if you think about when we did our inaugural Investor Day 2 years ago, it was more about continued cloud transformation, continued performance within just a straight set of series, nothing on this type of scale in the marketplace. And so when we look at our client attestation, we've made the move more to densify around enterprise. We've seen larger lands, 50% up since IPO, larger expands, which last quarter was record cloud NRR at 124%. And so we believe we're on the right pace of performance here. And so coming off a record quarter, having these types of announcements gave us confidence in updating our longer-term targets.

So talk about the expand. Should we be concerned around a seat-based model. What's the business model? Talk about seats versus platform versus consumption.

Seats has a place for us. We do enjoy the seat-based pricing. With that said, we have a lot of other models that we do sensibly. We get into more enterprise banding of those type of clients. And when you think about firm-wide value, whether if you're offering a time or compliance solution, it's just not 1 seat per se. It's the whole company or a client. Seats today is less than 50% of our ARR. So clearly, we want to land with seats in some of these places and they continue to expand and get them mature enough to a whole enterprise narrative.

As John had articulated on Celeste, we will have some data platform fees as well as consumption that the rate of pace will evolve with how complex or just simple queries, and so we're set up to perform that as well.

And then maybe just to elaborate on the expansion motion. So when you expand and especially when things move to the cloud, there's rapid expansion. So what is the expansion motion once you're in?

Yes. Good point. So another key tailwind that we have is we still have about $100 million still on-prem. Even though 94%, 95% of our clients have at least 1 module in the cloud. So now it's just about time and scheduling. And so once we're able to successfully move them from on-prem to the cloud, we're seeing about a 20% to 30% uptake just on that. And so all these AI features that we've been excited talking about, you need to be cloud native, nothing on-prem, which is a further accelerant that we view getting to the $1 billion.

So can you grow and get more profitable? And what are the levers on the profitability side?

Yes. So for us, we still have productivity measures with our sales and marketing. We're still 2 years into our whole enterprise narrative of where we do have named accounts. We're still densifying in and around that, but we are getting greater and greater returns. And we've seen in the last 3 to 4 quarters as proof points of that with the top line or a cloud ARR accelerant. So success there, more to come. We have invested heavily in our partner ecosystem. We're seeing a lot of co-sell motion bringing us along in those partnerships, which we appreciate, and we'll still continue to get productivity measures there. And then productivity, obviously, within G&A, we drink our own champagne with our own AI tools. So we're getting a lot of success there, and we'll continue to optimize where it seems fit on those narratives.

Any questions from the audience? All right, John. So we've just laid out a story, super defensible, company over $0.5 billion in ARR with accelerating growth and profitable. What do you think the market has wrong about the story? Why is the baby getting thrown out with the bathwater here and kind of give your last pitch here to investors on the opportunity for Intapp because they're getting it wrong, right? They're getting it wrong.

Yes. I mean we've been in business through many cycles, and we've seen the markets move up and down. We've got a long-term view as founders to serve a completely overlooked but large and lucrative end market with each generation of new technology, I think this AI opportunity is by far the biggest opportunity in front of the company that we've ever had. And the agentic investment with Celeste and the professional compliance capabilities that we've built into it are an illustration of the company's expertise. So much of the company's expertise comes from this unique combination of Silicon Valley engineers. There's a whole group that came from some of the best companies you can imagine technologically.

With the other half of the company are lawyers, bankers, private capital, compliance professionals. I mean the folks in the company are actually the people who have had the jobs on the other side. This is a very rarified space to really understand how these firms operate at some of the largest institutions in the world. And the opportunity to apply AI to pull together the firm's institutionalized knowledge and deploy it to grow as these firms themselves, the industries that we sell to are consolidating and growing. We've got a tailwind from a consolidation standpoint. We've got the AI opportunity in front of us, and we've got an unmatched distribution channel, existing relationships with 2,750 clients today and growing. We have the workflows. We have the proprietary data. We have the professional compliance mode. It's an incredible position for the company.

And if you look at the list of things we say, well, which of the SaaS companies have the right recipe to go succeed and really make, hay, with this AI transition, this is wonderful. And then the greatest thing about them is for better or worse, their premium payers. These firms want to buy the premium product. We move them off of a low-cost model where they built internally. So this whole DIY freak out about building on tools, I just don't think that fits with the economics of how they make choices. They want to go with the compliance solution that everybody is using, that's from a trusted vendor, that's enterprise class that they can get support from the professional indemnity insurers that if you buy this one, you're safe because everybody has bought it. And that's the position that we're in. So we're going to capitalize on this moment and that's what the Celeste opportunity was all about. And people are welcome to watch the recording from last week, but it was just off the charts.

Really impressive execution. Thank you. Now it's the time for Intapp. Thank you.

Thank you, guys.

Okay. Good morning, everyone. Welcome to Intapp's Investor Day 2026. I'm David Trone, Head of Investor Relations at Intapp. And I'd like to say on my behalf and the leadership team, we really appreciate you to hear our story for those of you on the webcast and certainly for everyone here, who braved the difficult conditions to get here in person. I'm going to give a quick overview with the lineup and then go through some legal disclosures, and we'll get started.

Our first speaker will be John Hall, our Chairman and CEO. He'll be followed by Thad Jampol, a Co-Founder and our Chief Product Officer. Next will be Ben Harrison, President of Industries and Founder DealCloud, which as most of you know, we acquired in 2018. Don Coleman, also a Co-Founder, Chief Operating Officer, and we'll finish up with David Morton, our Chief Financial Officer. We'd like you to please hold questions to the end when we will hold a Q&A session up until our -- we endeavor to have a board stop at 2:00 p.m., given the other activities today, including our notable annual client event, Amplify.

So now I'm going to give a legal disclosure, we'll get started. During the course of this meeting, we may make forward-looking statements regarding trends, strategies and the anticipated performance of our business, including long-term targets. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents, that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law. Further on today's call, we will discuss certain non-GAAP metrics, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating profit, non-GAAP operating margin, free cash flow and free cash flow margin. Reconciliation of GAAP to these non-GAAP measures can be found in today's presentation materials, which will be available on our website.

And with that, I'll turn it over to John.

Thank you all for joining us. Intapp helps the leading capital markets, legal and advisory firms grow, manage risk and run profitably. We're coming off a quarter of record results with strong growth, strong retention and a blue-chip roster of global clients. But these are unusual times. AI is disrupting the software industry and the markets that we serve.

Within the software industry, AI coding tools have reduced the time to build software. People are moving from clicking through software to working with agents to do the job for them. seat-based pricing, a foundation of SaaS companies for 20 years is under pressure. Software companies need to rethink their offerings and business models around agents. Not every company will make this shift. And it's not just the software industry. AI can now research draft contracts and build financial models. Will that reduce demand for the professional services firms that we serve and the size of our market. So investors are asking, is Intapp, one of the companies that will successfully make this shift. How is a genic AI going to impact our business? I'd like to begin by answering these questions clearly. Intapp is positioned to win in the agentic AI cycle. Here's why. First, our markets are expanding. Demand for the elite professional firms we serve is growing and we're confident this trend will continue. These top of the industry firms provide essential core functions to capitalism.

As the economy grows, companies will continue to need outside counsel for high-stakes litigation, bankers for acquisitions and auditors for assurance. Companies will continue to hire high reputation outside advisers for their transactions because they need the expert advice. But in addition, they need an accepted third-party who can be held accountable for their advice and role in these transactions. That deep point has nothing to do with technology. The fundamental economic reasons that these high-end firms are in business are not going away. In fact, demand grows as the economy grows, but these firms must transform. These firms absolutely do knowledge work, and this industry has a tremendous opportunity to leverage all the new AI technologies to become much more efficient, capable and competitive as firms. Most of them already see that potential, and they are looking for AI solutions that help them capture that opportunity.

At the same time, having experimented with so many of these first-generation tools, the firms are increasingly aware of and acknowledging that the solutions that they need have a unique business and industry compliance requirement for AI that the horizontal players don't meet. Later in this presentation, we'll walk you through these in detail. Our news today is that we are launching Celeste, our agentic AI platform built for professional firms. Our road map to this launch has been 2 years in the making. Celeste is a true AI native platform built from the ground up. Celeste provides expert agents into our business workflows that drive firm growth, returns and profitability. How firms originate new business manage deals and assets, run business intake and compliance and manage revenue. This is the biggest launch in our company's history. Thad Jampol is going to give you a special preview in this presentation.

Celeste is a stand-alone platform, but it also enhances other AI tools such as copilot, Claude and Harvey. It provides the expert agents, firm-specific context and professional compliance protections that those platforms need to actually work in a professional firm. Our launch partners for Celeste are Microsoft, anthropic and Harvey. You will have seen our release on Monday with Harvey and yesterday with Anthropic. And today, you will see all 3 of these partners on stage with us at Amplify. To position our portfolio for the next wave of a genetic demand, we are rearchitecting all our core business applications to run as expert agents powered by Celeste. At Amplify, we will show examples of expert agents for deal development, professional compliance and revenue management. all powered by data and Intapp systems and running on Celeste. Thad Jampol will also walk through these points in more detail for you later in this presentation. These innovations reinforce the strategic and AI value of our existing portfolio and expand our TAM with new agentic use cases.

As AI automates the work in a professional firm, we can move beyond software budgets and capture a larger share of their overall personnel budget. With Celeste, we're going to talk in an entirely different way about our market opportunity. We are actively entering the agent market, and it is a different TAM and size. In the way that we are rolling this out, the growth from Celeste and agents will be accretive to the growth of the core business. Don Coleman and Dave Morton will walk through these points in more detail. And with Celeste, we now have the ability to apply consumption-based pricing. People are concerned about seats. Now we absolutely use seats to land and expand inside accounts and humans still work in these firms despite rumors to the contrary, but it can be a very effective technique for account entry. Our model, though, is to land and expand that way and then convert these to enterprise agreements. A little later, Don Coleman will talk about this with you. But Celeste puts us in a position to charge for the value created by expert agents in place of human labor and to charge for the business activity, all that demand that the firms need to execute flowing through the Intapp platform. Matters opened deals managed, engagements resourced and compliant actions approved.

As firms do more with Celeste, we grow with them. With 2,750 firms already on Intapp, we have major distribution and technical advantages as we bring these agentic innovations to market. We already run our firm's end-to-end business workflows. We organize their most critical data, and we help manage their professional compliance programs. There is no one better positioned. This is a summary of our strategy and why we're confident we'll win. We're going to go through all of this in more detail now, beginning with our market and why it requires vertical solutions, okay? As a reminder, we serve a large market. Professional and financial services firms as an industry represent roughly $4 trillion in annual revenue. including law firms, private capital firms, investment banks, accounting consulting and real assets. Within this market, we focus on the largest firms and 2 forces are reshaping the way these firms drive technology investment.

The first that we've been talking about is AI. Every firm has an imperative to transform how they operate with AI. Initially, the focus was on productivity and cost. Increasingly, we see the focus broadening to include AI-driven growth. The second is consolidation. Capital and market share are concentrating at the top. The largest law firms have roughly doubled in size since we've been working with them through organic growth, mergers and international expansion. The 10 largest PE firms now capture 45% of all capital raised. And private equity has entered the accounting vertical, driving over 400 M&A transactions in the past 3 years. Ben Harrison will walk through these market trends in more detail.

As the largest firms get bigger, more complex and more global, they need technology and AI to achieve economies of scale to manage risk across jurisdictions and to drive continued growth. Our keynote speaker this afternoon at Amplify will be Jim Pico, CEO of Grant Thornton Advisors, our client, who will address these trends. And as I shared at the last Investor Day, firms in our market have special needs for technology. This derives from the fact that they are structurally different. Unlike the typical corporate model, the firms we serve are led and primarily resourced by a broad group of highly experienced partners and partner track developing professionals. In this very unusual structure, partners act as cross-functional business owners, each responsible for a wide range of business management and professional activities in their areas of the firm's investing strategy or service line. This is not a traditional company.

On top of this, the firm's work is project-based. They assemble teams to complete engagements, a deal, a legal matter, a consulting project and then they reassemble those teams in new configurations for the next project. And these firms don't sell products in the traditional sense. They win new business based on their knowledge, experience and relationships. In large firms, like the ones that we serve, partners and professionals are working across dozens of practice areas, investment strategies and disciplines. Over time, their collective expertise, client relationships, build and compound. This institutional knowledge is the firm's moat. But it's always been hard for the firm to capture and share this expertise. Much of this lives in people's heads. A partner in London may not know that a colleague in Dubai just worked on a similar deal last month. When a partner leaves, that knowledge walks out the door. And as firms grow through M&A, lateral hiring, international expansion this problem gets harder, not easier.

One of the biggest opportunities for AI is to help these firms at the firm level to capture and institutionalize their firm's knowledge connected across the organization and put it to work. Finally, think about the nature of AI today. When every one of these firms has access to the same horizontal AI models, which traded on the same corpus of public information. firms need to differentiate themselves even more by putting their own proprietary knowledge to work. The firms that win will be those that capture their firm's knowledge, use it to power AI models and workflows and deploy their knowledge at scale.

Okay. But horizontal AI has a problem. Our target industry is highly regulated in a unique way. It carries a unique class of compliance requirements. We refer to these as professional compliance. These firms have professional and regulatory obligations unlike any other industry. They must actively avoid conflicts of interest protect material nonpublic information, maintain independence and honor duties of loyalty and confidentiality that are both statutory and ethical. The requirements are strict, and highly specific to each industry. Adherence to these requirements is existential for these firms. Their clients and investors depend on them to get judgment calls right every day across every engagement and trust them with their most sensitive information to make those judgment calls.

The firm is not only self-interested, they have made promises to their investors and their clients about how they will govern their activities and their knowledge and information that they must live up to. A compliance failure at a major law firm isn't a software bug. It's a malpractice claim, a confidentiality breach of MNPI at a large multi-strategy firm operating in all the public and private markets isn't an inconvenience, it's an SEC investigation. One mistake and the reputation these firms spent decades building is at risk. This is also why generic AI is hard to deploy in these firms. They cannot feed client data into systems that don't respect ethical walls, confidentiality obligations or regulatory requirements. Compliance concerns are the #1 blocker to AI adoption at these firms. And horizontal AI providers are not built with this specialized market in mind. This leads directly to our agentic AI strategy.

Before I go into it, I'd like to address a simple point that I think people are confused about. The next-generation software development methodology and new tools, including Cursor, OpenAI Codex, Quadcode, GitHub CoPilot and a growing number of open source options are available for everyone to use, including us. And that's what we've been doing. I think we have tremendous advantages versus a startup in knowing exactly how to put these tools to use to build solutions that solve our customers' problems. We have unmatched expertise in understanding how these firms actually operate, and we already run giant portions of the firm today. Who better to use these tools to build a genetic generation solutions than us. And that's exactly what we've been doing in this strategy.

All right. You have seen our AI journey taking shape. When we launched Intapp Assist 24 months ago, we brought generative AI into our core products, DealCloud, our compliance suite and time. Assist helps users effortlessly enter data summarize information and work more efficiently within the workflows they already use. We're seeing steady adoption and assist capabilities are driving upsells across our portfolio and improving both user experience and decision quality. We have also learned some lessons from Assist about the opportunities in driving individual productivity versus powering workflows at the firm level. Assist will continue, but it was just the beginning. Today, we are announcing Celeste. Our agentic AI platform purpose built for firm AI. Celeste is a true AI native platform that we are launching today. We have incorporated years of learning into every aspect of Celeste's design.

Celeste is not another productivity tool. It's AI that sits at the heart of the firm's organization, orchestrating and automating the core workflows that define a firm's success with expert agents. Celeste is a stand-alone product. that also complements our existing applications, DealCloud, our compliance suite and time. Celeste provides full governance over the agents that it powers and Celeste MCP is the gateway to the firm's governed information. Thad Jampol will walk through Celeste and these differentiators for you. And as Celeste is an all-new product, we built it in-house with a fully AI native code base. It is model-agnostic. Celeste is not tied to any single AI model. We select the best model for each task and give clients a choice of providers.

As the models improve, Celeste gets better automatically without rearchitecting. Being modeled agnostic was a major design requirement coming from our clients. We also designed it around a new user experience paradigm. Agents replace traditional workflows. Instead of navigating through screens and clicking through menus, users work alongside expert agents that understand their firm's processes. The expertise is in the agent, not the UI. And this less team is shipping on a start-up cadence, leveraging all the fast-moving AI coding tools. We're learning quickly from our clients and the product is getting better every day.

Okay. To the agentic opportunity. Most AI attention in professional firms has focused on junior knowledge work, research, drafting financial modeling. Tools for this are making real progress. But the partners who lead these firms spend their time very differently. PE partners focus on fundraising LP relations and deal pursuits. Law firm partners spend at least 1/3 of their time on business development and the senior rainmakers much more. The senior professionals who drive firm economics are focused on relationships and origination, not document production. Surrounding them are business services teams that keep the firm running, marketing, business development. practice management, conflicts, compliance, finance, talent, IT. These teams are growing in importance as firms scale, yet their workflows and interactions with the partners remain largely manual.

The AI that partners and their teams need to run the firm looks nothing like a drafting copilot. It looks like expert intelligence that helps them identify which relationships to pursue, understand the firm's full history with a prospect, clear new business faster and spot where a practice is leaking value. This work drives firm growth, returns and profitability, and it is largely unaddressed. Firm leaders need AI that works for them, not just their junior staff. And firm leaders are very interested in the opportunity that expert agents have to help with the growth returns and profitability of the firm itself.

Let me drill into a simple illustration. You can take just one of the medium-sized business services departments, for example, the conflicts function. These functions expense budget grow extensively as the firm grows because the conflicts environment becomes much more complex. Firm leaders that we work with have estimated that 40% to 60% of the department labor cost could be automated with AI. This kind of ROI is a different scale than traditional software. The opportunity for Intapp to deploy expert agents in the workflows we already control represents a huge change to our value proposition and value case. Obviously, this class of return is what makes Celeste such an incredible update to our value case. Don Coleman will talk more about this later. If we take this and scale it up to our SAM.

First, we have more than enough headroom in our traditional IT SAM to grow our company to $1 billion and beyond. As you have seen in our consistent results, we have been doing that. Now with our agentic strategy, we are going to focus initially on making a smooth introduction of expert agents directly into those same business workflows that we already control with our software. Very conservatively, focusing only on bringing our expert agents into the same workflows that we already manage. We are today immediately naming an additional $30 billion agentic opportunity with Celeste. We are just launching Celeste Now, so this is upside to our plan as we expand our expert agent uses over time. Entering the agentic market this way is a milestone in our company's history.

Now to tell you more about this exciting strategy, please let me introduce our Chief Product Officer and Co-Founder, Thad Jampol. Thank you.

Thank you, John. All right. I'm going to pick up on a few of those themes and the strategy and what we're doing with Celeste, where we're going with our product strategy. So up until now, in our markets, a lot of AI and a lot of the AI adoption has been focused on this generative era, question-answering type of AI. But that is going to change. Firms are going to be moving from working with stand-alone models into agentic systems of work, and we think this is transformational for the operations and the competitiveness of the firms in which we serve. And here's why. If you think about the prior generations of workflow technologies, so business process management, BPM robotic process automation, RPA, some of the power automated integration class. They were powerful, but they were insufficient for the high complexity, high judgment workflows and business activities that are core to our markets and our firms. Think about sourcing and underwriting the best deals, collaborating across a global network to better serve your key clients assessing a multiparty cross-border conflict. You could not automate those at scale. That ceiling is now gone.

Agents can reason they could adapt and they could execute end to end. We think that is going to have a very huge impact. But as John mentioned, our markets have very unique and heightened requirements, existential requirements that don't exist in other industries, MPI, ethical walls, independent market abuse regulations, your entire institutional history that none of those exist in any generic AI or generic agents. And that's the problem that we are solving with Celeste. As John said, this is absolutely the biggest thing that we've ever done. This is a stand-alone true AI native AI generation platform. This is what gives us the technology to harness agents. This is what is going to give us the ability to be able to deploy hundreds of agents across firm's business operations and to be able to capitalize on this incredible opportunity and to be able to fully execute on these workflows and business processes which we are already playing a role in.

And here's why nobody else can do this. Most of the firms right now are directly interacting with the models themselves. Sometimes they are working with suppliers, the pejorative word wrapper sometimes is used around that, but very lightweight generative era question answering. We bring the expert agents. The industry crafted, industry-specific agents. We are adding new ones every week. We are going to have agents for every single function capability and business activity within the business operation and the firms in which we serve. And because we are already in there, we already know how they work. We are able to codify those best practices into what we call playbooks. And I'll explain those later, but it runs the same way every time and we will be building out-of-the-box libraries that we can do a lot of really exciting things, and I have a special point on that later.

As you all know, LLMs and AI without context are kind of not that useful. Certainly for this industry. We know these firms. We bring that industry context. We can bring the firm context, your deals, your matters, engagements, your institutional history, the decisions that you've made, everything. And I'm going to talk about that as well. And lastly, and perhaps most importantly, everything that Celeste does adheres to the heightened compliance and confidentiality requirements, those existential requirements that are central to this organization. And lastly, and this is a big theme that we have for our show later today, we work better together with the models. They're bringing incredible general intelligence in the frontier models and together with our expert agents with our industry context with being able to embed in the workflows that the professionals use every day and with the professional compliance, it's an incredible combination. This is why we're excited. This is why Anthropic is excited. This is why Microsoft is excited, and I expect that the remainder of the major model companies will be partners at some point.

All right. So this is Celeste and I'll just give you sort of a quick 2 or 3 here. I won't go too deep into it, but I want to make a few points. One is you'll notice 2 things if you look closely, One is, it looks like a modern kind of AI era user interface, and that's by design. It looks a little bit like Claude, looks a little bit by chatGPT. This is signifying our clients that this truly is a new stand-alone AI generation offering. But what is very different is this is not generic. You don't need to work with it a month to train it. It knows who you are from the first time that you log in, especially if you use an intact product. We have that decade, those years of transactional information. We know every deal that you have done. We know every matter that you've been on. We know every engagement that you have pitched. And that is manifested here right from the beginning. And so the expert agents will bring insights into these tiles, one of them is about your professional network.

Celeste knows the intermediaries. It knows the bankers that bring me the best deals and it says, hey, these 6 are the best, 2 of them, you probably should reach out to a little bit more. That relationship is degrading. It knows your pipeline. You should pay attention to this deal because it is very similar to one of your best deals with the best returns. It has compliance information portfolio information. This is expert agents in action. And the little Blue Shield, it's kind of small up there. That says Intapp govern that means everything that goes through Celeste is benefiting from that professional compliance, that harness, that safety. This is responsible, trusted AI that these firms require. And then we're going to show a super cool use case. I think everyone here will certainly understand this one. This is a team of analysts at a large private equity fund, and they are drowning from the inbound deal flow from the teasers and the SIMs that are hitting their relatively small team. And what we're showing is how Celeste deploys an agent alongside those analysts to help them process those sims and teasers. And so instead of waking up and having this gigantic to-do list, these analysts wake up and every single SIM and tether has been opened, it has been processed. The comps have been validated. The metrics validated, the firm's preferred comps have been brought in.

The institutional history, every historical investment, the ones that have been passed the ones that the firm has done deals, the way that they have underwrote that, the way they have structured their IC metals. All of that is incorporated into the point view that is waiting for that analyst at 7:30 a.m. And they can look at it, they could evaluate it. And in fact, it will even generate a preliminary LBO and valuation assessment. They can go over it before they submit it to their partner. But this, again, I think you see this is transformative from just a little utility. This is transformative from a pain with a blinking cursor that says type something in there. This is an agent. And then we're going to show to my point on how we work complementary with the general models. We are going to show how this can be surfaced within CoPilot.

Okay. So this is the architecture. One of the -- I'll talk about this for a moment. The point here though Celeste is this stand-alone AI native product, it is also a platform and it is how we are going to rearchitect our applications, what you see along the growth compliance, profitability row, how we will rearchitect for the agentic era. And I'll talk a little bit about that. Let me dig into Celeste first. Okay. So I made a little bit of point earlier that we know the workloads and the business processes that drive these firms. This is what we live and breathe. The value chains that drive the financial performance that drive the competitiveness that the managing partners and chair people think about every day. And this is just a small list. We have an enormous one here. We play roles today. This is where we're going to start deploying agents. And then I talked about playbooks. This is super cool.

So as we begin to deploy these, we understand not just what they are, but how they should be run. We have relationships with malpractice insurers, with the regulators, with the thousands of customers that we have with the industry luminaries and we are able to channel all of those best practices into a playbook library that is included with Celeste that every customer can benefit from. And this list is constantly evolving and improving and changing, and this is something that no customer doing do-it-yourself is going to be able to reproduce and firms love this. They get incredible value from it. There's 2 points here. I'd love for you to take away. So skills, these are the building blocks within playbooks. These are the part that actually does work. And one of the important things about skills is that it can be run deterministically, which is pretty critical for this industry. You think about dealing with financials and currency and billion transactions and bet the company litigation. You don't want the hallucinations. You don't want the probabilistic LLM giving you a different answer back every time. Sometimes that's okay. If you're doing a first draft of a pleading, fine. Generating at the play, okay. But not when you're doing heavy lifting in these big transactions and that's what the skills allow you do. So it's a really cool architecture that benefits from the probabilistic general intelligence of the LLMs, but gives you the assurance of certainty in the moments where you need in your most critical parts of your process. And then the connectors are the means by which we access all of the data, the tools, all of your systems of record, your applications, your third-party data feeds and we have a whole set of those connectors that come out of the box.

Okay. So I mentioned this earlier, but an LLM without context, especially for this industry is not super useful. And the way that we solve this is through what we call Celeste context engine. So it's looking across all of your data. We have all the business logic, how the firm thinks about its different, and we have ontologies. And all that means is we're able to look at the different business models across each of those applications, and we'll be able to tell you what an account is or what a deal is or what an opportunity is or what a client is. And then this is how we are able to assess that a qualified opportunity at this firm means something different than a qualified opportunity at that firm. So it really is how you pull all of this together to create the language that the agents can understand and act on. So we like to say we know your firm to our clients. And so we know their firm through that context engine. There's another really important way that we know their firm and that is through the applications that they use every day from Intapp. There are years, if not decades, of transactional information, configured workflows, approvals, permissions, compliance, that is impossible to reproduce, it would take years.

And if you really want an agent to go execute these value chains that I walk through, you're going to need the data and the capabilities that live within these applications. And that's what Celeste orchestrates across. So we really think we're bringing the best of all worlds to these clients. They don't have to rip out their core. They get the benefit of the systems of record all of their applications, what they're comfortable using and now they get the agentic innovation and the automation on top of that from a company that they trust, and they have worked with for a long time. And you could see examples of the data, and this is just a small set of just the incredible wealth, and it's not just any data. These are the primitives, these are the objects. This is the foundation of how they do their deals, how they run their matters, how they run their engagements, how they compete, how they drive revenue, profit and returns. Here you see an example of Celeste embedded within DealCloud and conflicts. So I think I mentioned this earlier, but Celeste, not only is that stand-alone application, but it is embedded in every one of those applications, and that does 2 big things. One is this is part of our agentic refactoring or rearchitecture.

And over time, Celeste will take on more and more part of the operation and the maintenance of these applications, relieving a lot of the humans that have to do that today, helping them. It also means we're not asking users to jump into Celeste stand-alone application on day 1. This is probably how they will experience Celeste initially within the applications that they're already using every day. And as they want more power, this is a bread crumb to lead them to the full richer experience. This is an example of Celeste working through Claude. So I show an example a copilot earlier. We really are agnostic. We're agnostic with the models we use, and we're agnostic with the actual model UI. And so here is using our time and prebilling and financial data that lives within our systems, and we're able to generate these really cool react charts through a cloud that show realization within a firm, how they're going to get paid. And then the impact in productivity that these AI tools are having with the organization, which is one of the big questions that firm leadership has. So this gives a really cool way to address somebody that is very front of mind for leadership.

And then lastly, the walls for AI point. This is something that Celeste is built on top of -- again, I talked about a core design pillar. There's another point that I want to make here. Not only does this secure and govern Celeste, but this is what underpins every AI product that firms are putting into their organizations. This is why Harvey wants to partner with us. This is why Anthropic wants to partner with us. And CIOs love it because now they can bring in additional tools for all the different use cases, and there is one governance and professional compliance layer underneath everything that allows them to deploy this in a responsible trust way. As John said, there's nothing that stops an AI deployment in its tracks more than a compliance issue in the GC throwing up the red flag. It is absolutely a no-go and it is the biggest encumbrance of firms successfully deploying AI in these regulated industries. And we're really, really excited to have [indiscernible] AI underneath that. So those are the points on Celeste.

We talked about the expert agents across all of those different business activities and value chains, being able to codify best practices and playbooks to be have an ever-growing library of these, being able to activate our extensive partner network to build on top of it, be able to continue working with our thousands of customers to be able to engage the community of luminaries, regulators, malpractice insurers, knowing your firm to bring the context to the LLM and doing that through the context engine as well as benefiting from the very deep, extensive deployment of our applications, and then to have professional compliance underpinning and embedded in everything that we do. Thank you.

All right. Good afternoon. You heard from John a little bit about how different the businesses are that we serve from the traditional corporation. And from that, about how much we actually know about what these firms do to run. I'm going to talk to you a little bit today about the markets that we serve, the dynamics that underlie those markets and how we transform that into our go market strategy. So if you take a look at the 6 core industries that we work in, very complex, very hard to understand. We spent 25 years studying this market. We started out in the early days, actually working inside of these firms and building the products with them. After that, as we scaled up and have more resource. We've hired a tremendous number of people from this market. Yes, Manolis & Associates, but the core hiring, we brought in MDs, People have done the fundraising and led the deal process. We bring C-suite executives from these professional services firms that have sat in that office and actually run those businesses. We brought in the heads of compliance in the control function that work inside of these businesses.

So we brought this knowledge in-house, and we are experts in this market. It's very hard to understand. We feel like it's a moat. We don't think anybody else is studying these markets the way that we are and translating that into a go-to-market strategy. Today, we talked a lot about our enterprise focus. We've been reporting on it each quarter. One of the biggest drivers of our knowledge and our intimacy in these markets are the Tier 1 and the global enterprise clients that we've already landed in. They've opened their doors to us, and they are teaching us about the dynamics that are driving their firms forward. So we're excited about this space that we picked. And while it's complex and hard to understand, we actually think we picked very good markets to work in. These are high-growth markets. They are durable, secular bull market trends in each one of them. They go through cycles and there are moments of course. But we want to talk to you about the relative growth rates in each market because we think it's better than the general economy. We think it brings tailwinds for Intapp.

And in addition to that, we want to talk about the underlying fundamentals that are driving those growth rates and that's what I really want to focus on here because it's those fundamentals that are driving the innovation procedure in these firms that are driving the digital transformation initiatives of the firms. We learn those, we understand those, and that's what we translate for our go-to-market field so that they can go and approach the management teams, the Boards, the directors, and the heads of each of the functions inside of these industries. So bear with me. We're going to go through each of them real quick.

All right. In the legal market, this business on average, if you look at the AMLO 100 grows about 7% to 8% a year. If you look at the top firms in this market, some of our biggest clients, they grow at 15% to 20%. There are a number of things that are driving this. A couple of core items are higher billable rates, and realized improvements. They're also doing practice area optimization and industry mix. They like litigation, they like M&A, they like private equity work. This is the high-value things with greater margins. In addition to that, they're looking to grow and cross-sell the clients, and they're doing global expansion. Their businesses are getting very big. There's more and more regulation and around each of those markets, and they're getting harder to run. Each of these things are perfect dynamics for our platform. We're going to talk about how we position it around that.

In the accounting market, we have a really once in a generation thing happening right now. The private equity firms realized how consistent and recurring the assurance, tax and advisory revenue was inside of these firms, and they started investing in this market. What started as small partnerships with very conservative IT spends and very small balances on the balance sheet. These businesses are now backed by private equity. They are consolidated and they are rolling up. So we're extremely excited about that. We were already in this market. But as this dynamic has played out, the demand for our products is growing substantially right now. So inside of the accounting firms, there's a couple of core things also happening, the tech adoption and the digital transformation trends of all of their clients out in the world here is driving the need for that service. They're shifting their mix more towards advisory services, and they're also building practices focused on regulatory and complexity. So we're watching all of that. The consulting business is very similar.

If you look at the entirety of this market, it grows about the rate of the general economy, 3% to 6%. If you get out of the big 4 and you get out of the top 3 strategy consulting firms because confident on these big revenue numbers. Number 7 through 100 in the consulting market tends to grow a lot faster at the 10% to 15% rate. Private equity is rolling these businesses up as well. They are also focused on the high-value practices, digital transformation, tech transformation, strategic advisory and M&A. We're focused on building the private equity practice and also the work in organizational changes that's undergoing with this shift to AI. So we like these markets and the roll-up dynamic is really a once-in-a-lifetime thing that we're excited about. In the investment banking market, this is forecast to grow somewhere between 7% and 11% over the next decade. There's been a huge resurgence in M&A over the past year. The total value got to about $4.5 trillion. And as that grew and rose, that's a historic number, largest of all time. There was about a 9% rise in investment banking fees in the same period. The capital markets are open.

There's a bunch of big tech IPOs expected. In addition to that, there's a lot of follow-ons and debt issuance going on. This is expected to continue with these big tech companies and the strategic corporate funding needs that you've seen announced from a lot of the big tech companies that are spending on this. In addition to the expansion of private equity, private credit, and the alternative capital models is a secular lift for investment banking that provides more deal flow. It provides bespoke financing and repeated mandates because they have that 5- to 10-year halt, right? And they've got to get in and out of the assets. So we like the dynamics in this market as well. In private equity, I think we've all read the stats and heard this, but they've experienced 2 decades of secular bull market trends, double-digit growth, 15% to 20%.

AUM $13 million to $14 trillion today, that's expected to grow at a 12% CAGR for the next 5 years, up $17 trillion to $18 trillion. So that's a good growth rate. But even within the private capital markets, there are some submarkets, secondaries, the continuation vehicle market, some of these complex alternative vehicle strategies as well that are growing even faster than that. Secondaries market is a little opaque, but some of the stats are showing that it was about a $50 billion market in 2024. And in 2025, they're saying it could be as big as $100 billion market. So we really like some of these trends that we're orienting our business around those.

In the real assets market, you guys saw we did the term sheet acquisition. We had a position in this market. We acquired a company last year. We think the growth rate is, give or take, 7% to 8% over the next decade. There's a structural shift and capital investment into some of these new real estate assets. Of course, the data centers, which we've all read about, the industrial and tech powered sectors. There's still some good urbanization and demographic trends for your core residential and commercial, real estate investment growth. And there was a dip in COVID on the commercial side, but if you actually look at the capital deployment into real estate and real assets. It's supported by increased institutional allocation right now. And there are some growing structures like these private REITs that are getting popular. There's also a tremendous amount of cross-border cattle flow into the real asset sector. So this isn't meant to be a dissertation or an economic presentation on the growth of our markets. What we're trying to show you here is that we understand the underlying points in each of the markets that are causing them to grow and that are causing the management teams who run businesses in these markets to think about how they're going to run their firms.

So what we just shared with you actually forms the tip of the spear for our business. This is where our marketing team and our product marketing team takes that information, we're distilling that down into our go-to-market strategy. right? We're not talking just about revenue acceleration cost reductions. We're actually talking about the core things in these markets we're appealing to the management teams. We're appealing to the Boards of Directors. We are doing a value-oriented approach to our platform in and around the dynamics of each of those markets. They are hard to understand. We do not think any horizontal player is approaching them in the same way that we are approaching them. So we call these sales place. And of course, every technology company has sales place in terms of how they push and position their products. But what we think is interesting here is actually what's inside of our sales plan. That's what's different. So we have a lot of them that we run, and they change some years, this is the core growth driver in the market. Other years, we update them every year, right? It's about finding the greatest spot to get the throughput for our products and where we can get the best yields. But I'm going to share with you a couple of them that we've been running over the past 18 to 24 months and then let's look at some client outcomes. This is how we do it. This is how sausage is made. This is how we are equipping the field team that Don is going to tell you about to talk smartly on a consistent and repeatable basis.

All right. Let's pick one from the private capital market sector. We're going to start with secondaries. This super hot, very fast growth. The investment banking desks that are servicing this part of the market are some of the fastest-growing desk on the street and obviously, the fundraising efforts in and among the GPs themselves have been massive in terms of creating some liquidity in this market. This is a publicly traded boutique investment bank, very large, a couple of thousand people. They were on a horizontal solution for a decade. We had been in there working and working. They were unhappy, but it was functioning. We show up with a sales play focused on the private capital advisory team that's doing the secondaries transaction. This is the land for our company in that small to bar on the left-hand side of the screen, small desk, a couple of hundred people very hard to understand what they're doing, GD-led transactions, LP-led transactions, the fundraising. We go in there and we nail it. When we started, this had $40 million in revenue. Today, 2 years later, it's almost $110 million in revenue, and this year, it's expected to go to $200 million. It was that outcome with the client of the land that want us the right to work with the entirety of the whole business. We landed with that desk. Product glows global to the whole firm. You can see the 6x growth after the initial land. This is what we're talking about. This is the level of fluency and intimacy that we have with the customer inside their business that are leading to the client outcomes, not to mention that the product can do it, too.

All right. Let's pick another one. We talked about this influx of private equity dollars into the accounting market. These firms are getting big and they are getting big fast. They are doing acquisitions rapidly and they are getting harder and harder to run. This is a top 10 accounting firm. We landed here a while ago. Prior to the last Investor Day that you saw, we had DealCloud in a for their corporate finance and M&A team. It's actually a small group at the time. They take this PE investment, right, a great leader. And we start selling the employee compliance and [indiscernible] capabilities because they're transitioning the firm from that old partnership to a new corporate model, right, as I got acquired by this private equity firm. They go on an absolute acquisition tear, and they have to run the global independence process across tons of member firms that they've acquired. It was the experience with their first 2 products with us that won us the mandate to run the global independence process across the entire international business. tremendous growth here. We're very excited about this. We think we are the enabler to allow them to do that acquisition pace. We talked about the accounting market growth rates. This firm is growing at a 16% CAGR year-over-year for the last 3 years, we think underpinned by our software.

Let's pick another one. This is another top 20 accounting firm. They were an existing conflicts and intake client and risk client of ours. They took PE investment is 2024. In 2025, they merged with a firm of equal size. You can see the cross-sell in the first bar, the conflicts and intake upsell. Two firms come together, the acquirer where we have intake conflict in that product goes across the entirety of the whole firm. The firm that was acquired has our employee compliance solution. They take that employee compliance solution backwards to the acquirer. That's the second upsell here that you see. So firms getting big, doing mergers, going global, you see the impact here.

I want to talk just for a second about the ROI that the client achieved with our products because I think this is pretty incredible. So prior to putting our new business intake, clearance system in independent system in, they were doing their conflicts checks and their independent checks manually. They were doing 20 of them a year. They were doing them in a spreadsheet, and they were only doing them on the big clients where they thought they might have an issue. Today, at the run rate that our system is running on a monthly basis, John talked about how the firm gets bigger and the independents becomes a growing a growing problem. Today, they are doing run rates about 30,000 conflict checks a year from 200 manually, to using an AI-oriented system to do it globally across every single client, every single engagement and transaction that they're working on. It's not manual. That's AI-enabled. We have a very -- it's not -- I don't have a slide on it. We have a very similar firm that we do this with that already had the system in that was doing it globally. We put our AI system in and did the same thing. We got a 30% uplift in terms of efficiency and speed with that product as it went from the existing system add in and as we replace that existing system. So you can see we're getting the breadth and the scale, but we're also getting the speed and the efficiency.

Okay. Many of you have seen quarter-to-quarter as we talk about moving some of those legacy on-prem clients from the early days in the legal industry to the cloud, we report this every quarter as while we're making great progress here. But why do that, right? So the sales play here and the reason that we are working with these law firms to do this is to get them to the cloud so that they can take advantage of all the AI and our products. Don't use the on-prem things because they're not as good. Cloud-based version with AI in our products. So this is one of the big sales plays that we do. This is one of the ways that we're driving that remaining on-premise revenue to the cloud. And of course, with the agentic release today, that proposition is even more compelling than it's been just with our first versions of Assist, some of the early machine learning AI.

So let's look at a couple of examples here. This is large AmLaw 100 firm, New York-based. They were an early time client of ours on-premise. We got the upsell and the profitability capability that we call bill stream. So they're doing time and billing inside of their firm. They choose to make an upgrade to the time cloud module. This is AI time capture better experience, cloud-based experience, so you can see we're walking it up. We're making slow progress at this firm. As soon as you get to the cloud, as soon as you get to the AI experience, they want our cloud-based product. So it's not just about bringing the firm to the cloud. It's about once you get there and you're getting that AI-oriented experience. It's so much better than it was previously that we think it's accelerating to complete the suite of the rest of our software platform. So you can see huge growth here as we went from just being a time client to running the entire risk system globally. We are now a DealCloud process here and early conversations about agentic AI capabilities across the full cloud suite.

All right. One more. So this is another long term. It's a great long-term client of ours. They started early with our entire risk suite. It was on-prem, very happy, excellent client. We've got the cross-sell of DealCloud, and collaboration. And then as they got the experience with those 2 products in the cloud, they looked at us and they said, we want to take all of our on-premise stuff here. But the reason for bringing their on-premise stuff to the cloud was so that they can deploy AI across the entirety of the connected data. So you can see the value proposition here. This is another one very similar. So long-term law firm client on the cloud with the compliance suite, we do terms and time in the cloud, we get the DealCloud cross-sell. They did a huge acquisition, merged 2 big firms. And reason for that -- for the DealCloud win was so that they could have true client intelligence across those 2 firms that they combined and get the cross-sell in those large clients. And they are in the middle of taking all of those early products that were on-premise to the cloud as well, so that they can send the agent to I through all of it.

All right. Last one. John talked about the success we've had with Assist. The CRM paradigm of DealCloud, the original put my data in, update a Roladex, have my analyst key information in on the pipeline, that's really gone in the thing of the past. We have auto data ingestion. We have AI all over the UI-UX, and now we're going to deploy agents through that software to automate most of that procedure. So a huge sales play that we have is taking the thousands of clients that we have on that original uses paradigm and getting them into AI uses paradigm. It's much better and much easier.

Let's talk about one exciting one here. So this is real estate private equity firm. They started on DealCloud with us. deal management, some of the portfolio management data in there as well. It was a system of record for every transaction that they were doing. We did do ingestion to automate the way that they were bringing in CIMs and teasers deal data, you can see a little bit of lift here. And they have been an early development partner with us on Celeste. So you can see we nearly 2x the relationship just in the early agentic AI days. The thing I really want to point out to you here is the difference in the bars between the deal cloud days in today, the agentic AI piece. This is 2 agents. It's a development partner in 2 agents. They are running hundreds of processes for their firm in their DealCloud instance, and we just deployed 2 agents right there to get that lift. So we think there's tremendous more room to run in these accounts. And when you see that TAM expansion from John, we think we have already a lot of early indications about how we can get there.

All right. Don?

Ben shared the ways that we win, the sales place, how we go to market in the field. I want to offer a little bit about some of the transition that our go-to-market team has experienced over the gets different heritage, where we've either started at the top or the bottom, and we simply split that to the middle market versus the enterprise. You will have heard from Dave over the last several years, our rotation and focus to enterprise. We call this a go-to-market transformation. We've been embarked on this for the last 2 years. Overwhelmingly, the logos that are shared, that Ben talked about, those are the leading brands across this industry. Those are the top names. Those collectively fit within our enterprise motion. And so as we have done this, as we've done this rotation in some of these categories from what might be an SMB to the enterprise, there's been a tremendous learning. And also, we've earned that right has been shared rights to serve that enterprise piece. 3/4 of the SAM, this is the existing SAM and the traditional IT space lives within the enterprise. That's the $15 billion number. And collectively, that represents 2,800 accounts. When the executives in this team, I think on our team, I think we were thinking principally about those 2,800 accounts. That is because so much of the consolidation, so much of the market forces that are driving so much of the technology spend exists at the top portion of that. We will get in larger, we sell for more, and we have tremendous runway to sell from there.

I want to share with you a little bit just how that feels across cohorts of clients. In every single case, there has been a dramatic inflection of what we're able to land with, what we're able to win with and how that accelerates. You can see here the impact of Intapp Assist at the very top. When you aggregate those individual stories that Ben shared, you can start to see how over the last 2 years that introduction and that inflection has lifted what we have been doing at the top layers of our client accounts as we are a more strategic partner as we have earned the right to sell into us, we have mastered those industries, and we're able to speak very deeply to those sub processes that Thad spoke about and their specific contours and workflows. This is new for us to share. But within those 200 accounts, today, our client logos are split roughly 2/3, 1/3 between professional and financial services. Of that client logo space, we have approximately 1/3 today as clients.

When we talk about the path to $1 billion, it's a very simple story. We move that bar to the right, right? There's a tremendous amount of market headway. We are the trusted brand. We're having very successful sales pursuits having earned that enterprise right across these landing those new logos is a very simple path to do it. Additionally, Ben shared with you the experience we're having at just about every one of these enterprise clients, which is they grow with us. We find additional use cases we expand. We've earned the right to get in and to serve and then from there, you expand. So this very simple view, I think, is a very core piece of how we view our traditional revenue opportunity across these firms. We've been focused this year on increasing the overall density, particularly in enterprise that has just been a recurring theme that you've heard in our calls. We've found great success with it. I think we're just going to keep going more. We're going to continue to increase the density of coverage across the accounts landing those firms that we don't have and growing across more. We also have some additional and significant geographic expansion. As you serve in that enterprise you're expected to cover our client firms and the major capital centers where they operate.

A big part of the company's success is not just the knowledge of their firm so that we can speak intelligently in the sales process. But ultimately, it's delivering an outcome that impacts their business in some way. We have invested in our capabilities locally, but I think one of the most important parts of Intapp strategy has been to cultivate the ecosystem that services these firms already. So we see ourselves as central or clients see ourselves as central to the ecosystems in which they operate. This is a simple view that shows the majority of the technology partner of the universe of partners in the various firms. It's split 3 ways. At the top are the data partners. These are the people with proprietary content who are infusing that content for professionals to make their business decisions, whether it is conflicts to make sure you're not dealing with a person on a list that shouldn't be, et cetera, whether it's investment advice from any of the PitchBook or Preqin or others, much of these data is consumed directly within the Intapp system.

Secondarily, the technology partners to work in this. These are complex enterprise ecosystems. And we have spent years building glue connections and integrations across all so that our products work with all of those. And finally, the services provider. So many of these firms have existing relationships with folks who they know and trust, and those people have large and established now in Intapp practices. You will hear, if you stay for the afternoon session, all of these people and as well tomorrow at our partner forum, talk about how they are going to join with us in working on this agent transformation. So not only are these people in our today ecosystem, but these are allies that we are enlisting in the transformation that John listed in the beginning. I'd like to give you a couple of examples. We do this obviously because we win at a much higher rate in our deal sizes are bigger. I'd like to share with you 3 specific examples that I think tell the story. So while we're in this room in the room adjacent are 20 CIOs of the leading professional services firms in the world. These are the biggest of the big, and they are with us jointly in a preshow to amplify with an Executive Vice President at Microsoft talking about industry strategy and exactly the concepts that Thad and John laid out.

We are charting that course together and Intapp strategy to co-sell, co-market codevelop with Microsoft is absolutely directly on display. You can kind of buy and see it as you go through. But the relationship there is tremendous. 50% of our largest transactions year-to-date, more than 50% of our largest transactions year-to-date have been jointly with Microsoft. We are at 1 of the 4 largest accounting -- 1 of the big 4 accounting firms on a process to prepare that firm's content for the agentic world for the AI world in a Microsoft SharePoint, Intapp collaboration project that's beginning right now. That is the type of co-development effort that we're exploring and rolling across the market with them. We talked about Harvey. It's the opposite end of the spectrum. So great big 50-year-old Microsoft, I think these guys are a few year old. But Harvey's AI era start-up has got tremendous progress in the market. There's a lot of news, a lot of excitement. Intapp is in the business of law to the extent in the legal market. We work on the operational side in the categories that John listed. This is someone who works on the practice of law so practicing law. This solution cannot be deployed at scale in our firms without the confidentiality management in ethical controls, governed AI that John and Thad spoke about.

When you saw that secured by Intapp, governed by Intapp on the right-hand side, that's exactly the challenge that exists here. You will hear the CEO of Harvey on stage this afternoon with John, explaining this value proposition and explaining directly how this governed nature of AI is necessary for the successful deployment of these technologies. It will be just Harvey. This is something that anyone that seeks to have an all-knowing brain applied to the firm content and information must be able to adopt what are the rules? What do you get to know? What do you get to know? And how can I validate when someone comes and asks that we've never crossed those walls? So it's a very marquee announcement we're excited to make this week. And on the -- on another end of the spectrum, Anthrapic. You will hear this afternoon, Eleanor Dorfman, who is the Head of Industries for Anthropic about their strategies with Intapp to bring Claude and some of those products to market together. We're very excited about this, and it's just part of that model agnostic strategy that we've got, where our customers are, we will meet them, and we'll bring these capabilities to their market.

Okay. We -- one of the big questions that exist generally about the SaaS world is what's going to happen with the seats. Well, how is that going to unfold? And I'd like to share with you, Intapp, of course, sell seats. And much of Ben's story was the seat-based story. We came in, we had a small desk, a small win. We had some success, and we expanded that. As that goes, oftentimes, we convert our firms to some type of enterprise license. And there's lots of definitions for what that can be. That could be assets under management. It could be a function of the number of professionals total in the firm. It could be something tied to their revenue, but we count something other than seats. One of the important things to appreciate about the company is that today, less than 50% of our ARR is seat-based. So less than 50% of the ARR comes from a mechanism that is seat-based. We're very happy with the seats. It's a great way to get in, right? But we're also very excited about the fact that we can grow and expand and really have an enterprise-level partnership with these firms.

Celeste does adds another arrow to the quiver. It's not yet in our model, but we will release this in a conventional AI basis, which will have a platform fee and then a consumption model. What this means is we'll be able to get paid for the security each time we element security or as conflict checks are run or as any of those agents run their factories and provide. So that's an additional piece, and I'm excited that we've got multiple different ways to monetize the relationships we've got.

Okay. Thanks. Dave?

Thank you all for joining us today. A good predictor of future performance is also acknowledging some of the past. And just as I stood before you, approximately 2 years ago, we've done some quite remarkable things. And when you think about just whole model evolution of where we broke out SaaS, that's upwards of 70% of our total revenues now. We deemphasized services. We've been trying to move more and more from on-prem to license. And so we've done a very good job on that. Cloud ARR, as you all know, with our quarterly earnings, the trailing 12 months, at $100 million. That's up from approximately $65 million trailing 12 months when I stood before you 2 years ago. And so we've made meaningful progress at scale, specifically with our cloud deployments.

When you think about enterprise, enterprise motion altogether, we'll show some episodic new disclosures here. But I'm happy to report that our greater than $1 million cohorts have actually doubled in size. We're talking 3 digits now. And they're very, very meaningful, and we'll get into that cohort here in a little bit. Migrations were up about 5% folks that have a lease or our clients have at least one module in the cloud. And with the Celeste announcement, we only see that accelerating. And then obviously, we've done a great job with M&A, pulling in some of the term sheet assets, and we have other within a long-term pipeline as well. And then when you think about profitability and what we've done there, we're up 10 percentage points. So we've worked a lot of effort, not only on OpEx, but our free cash flow margins as well. And we'll talk about what the future state holds.

So some of this presentation is we're down a line in sand. This is a line in the sand rule of 40 when you look at our true growth matters, i.e., SaaS and where our non-GAAP operating performance has been. And we'll talk about GAAP as well. So power the platform. The reason I bring this up is that did a very good job walking us all through the different asymptotes and what his team has been very, very busy developing. And I look at this as so many opportunities to monetize. When you think about not only the new consumption models that Don has been articulating, the new development of some of the key technologies that will be bringing forward and just get really excited about what that portends going into the future. Furthermore, when we step back and say, okay, when I stood in front of you approximately 2 years ago, how has our SAM TAM evolved? And we're now articulating this as a true IT SAM TAM.

So when you think about where we were, Investor Day, it was approximately $15 billion. And through our pricing, packaging, couple of our acquisitions, we believe we're closer to $20 billion today of IT SAM TAM. That's just pure go forward as we know it today. That doesn't include some of that agentic opportunity that we've been articulating earlier. And then more so within that $15 billion to $20 billion breakout, nominal amounts on pricing packaging product expansion and then we've been taking opportunity really with our real assets with the term sheet acquisition. And then getting into the total $20 billion IT SAM TAM plus the agentic opportunity, we believe we have line of sight to $30 billion -- or excuse me, $50 billion go forward, just at this rate of pace today. And so it's a little nomenclature there, but we're still holding on to that IT SAM TAM, but then you're also getting into this agentic AI opportunity, which John walked us through with the back office and how much is there to monetize.

So stepping back, this is our core revenue stream. We're going to start broadening our definitions on a prospective basis come FY '27 because we do have a lot of new models in flight. But just for common definition subscription here is known as SaaS. But we're much broader than that. As you heard Don say less than 50% of our ARR is actually seat-based. We're also entering the form of value as well as consumption. And so for us, the nomenclature going forward is going to be true subscription. And then on top, you can kind of see the movement that we've been deemphasizing, both from a license and professional services. And so all things being considered, yes, we've had a 20% CAGR. Great. If you just pull that thread on just pure subscription, it's closer to 32%. And we've had 2 to 3 good quarters here where you've seen some slight acceleration because of our performance. Also talking about just our total ARR. And when you look at where we've gone from both on-prem and cloud, now you're seeing the complete mix of where -- when I was on [indiscernible] Intapp Investor Day, the inaugural one, we've increased well over 10 points on this as well. And so that will continue with that forward-looking trend. And again, 32% CAGR over the time, which is very, very health and strength in these markets.

When you look at just us continuing to grow total net new year-over-year, this continues to increase at scale as well. And so up 1.5x, both from Investor Day to today on a trailing 12 months, which is very, very healthy. And now you're seeing the densification strategy in and around our enterprise where both our lands and expands are getting there, and I'll get into that in a minute. Key growth drivers. So we've talked about your nominal ones. We have a lot more new logos to go get. We believe we can get to $1 billion of ARR there. Clearly, with expands, we think we can get to well beyond $1 billion of ARR just on that motion. Don teased a little bit about some new geographies where we're throwing some investments, opportunities there. We're talking about new solutions, new subsets. Obviously, we've been monetizing those. And then later this afternoon, over to the right, you'll hear about our full platform at Celeste, which should be incremental to our $1 billion aspirations. This is just to provide kind of a reorientation of where we're at on total ARR of PS versus FS. I know in the previous, we narrated around 1/3 versus 2/3. It's almost 50-50. We've seen strong growth across both through our provisioning of not only on compliance and intakes but also time as well as DealCloud across both sets of clients that fit within these end verticals.

And our revenue mix continues to be strong, both U.S. versus non. And that will continue to grow accordingly as we continue to densify and call upon those key enterprise accounts. So we've talked in the past qualitatively about, okay, where do you get a lot of your net new ACV or net new ARR Yes, we have a very strong land motion, but we've been doing a lot of expand. And you kind of see it in the numbers as well with the NRR. But this just gives you a context of how once we land, we're very, very sticky and those enterprise accounts can be very, very large, and we consume a lot of that white space. In fact, when we land, our lands are almost 50% greater than where we were at the time of IPO. We've also heard a narrative on timing, duration in and around some of those lands and what clients are truly setting up for. And if you think about it, these enterprise clients, on average, our top 10 ARR or 3 years. And if you look at the performance of our RPO since growth, long-term RPO, it's up 10 points. And our average contract duration of IPO versus today is up 20%. And so all of those just lead to you that we are the truly entrusted platform for the clients that we serve. And they're very excited about today's announcements as well. This, we know we've provided a logo count to total logos, and our universe of acquisition, net new logo with more than 2,750 this past quarter, which is a great success. With that said, not every net new logo is created equal. Some could be mid-market, the ones we're -- and we'll continue to service those and facilitate that acquisition. But the ones we're really targeting are the enterprise level. And so these are the logos 500 and above, we'll report as a cohort go forward.

And so you can see the strength of kind of this cohort. It's over 95% of the total ARR. And by the way, it's up 50% of the total year-over-year on clients. And when you think about it on a trend basis, it is growing extensively, up 10% year-over-year, with quarter-to-date or year-to-date over 100 adds, net new adds. So it's very, very healthy of those accounts that we're adding. So strong growth in our large clients. Again, the $100,000 number isn't anything new, but this $1 million cohort is net new disclosure for you all, 120%, up 38% year-over-year, which is why sizable, not only because of our net new -- or net lands are getting bigger, but even our expands. And it's that consumption of white space. of cross-sell and upsell activity. So when you think about just that denomination of that cohort, we have over 10 clients, a 3 million plus ARR. So in 2 or 3 years from now, hopefully, I'm talking over $5 million, $10 million and continue to consume. But our white space is large, and we've been very entrusted by our clients. Progress in our $1 million ARR client base. If you think about it, at the time of IPO, our total ARR, only 25% was part of that $1 million cohort. Today, it's about 40%. 5 of our 6 verticals, we have somebody over $1 million, and it represents over $225 million of ARR today, it's up 4x since IPO. There's no reason that this number should de-sell at all.

And just continuing on, taking the flip side of that, the white space that we have on our $50,000 cohort is approximately 10%. And so we have a lot of white space with those accounts. This is actually my favorite slide out of the mall because it doesn't speak necessarily to one cohort versus another. Each year has been very, very steadfast and growing accordingly. And it just shows that, hey, our gross revenue retention is strong. Our churn is very minimal, and it's all been a bent about to expand, up 20% growth in FY '25 which you've all seen the 124% of NRR, which translates into that. And just pulling the thread on that 124%, it really does come from the land and expand motion. Specifically, cross-sell. And we've started narrating a little bit more about that. What does that mean? Well, that means we landed originally with DealCloud over in financial services. We're doing really well with our compliance motion cross-selling or vis-a-vis, if we're landing a compliance with over in the other areas, we're doing very well with the cross-sell into deal cloud. And so we've seen a lot, a lot of strength there. And that is a new motion for us over this past 18 months.

Pricing has been nominal. Yes, we'll take it, but it's not the end all, in cloud migrations, there's still a lot more to come there. And so that's been about 1 point or 2. And so as we continue to move through that cycle, we'll see even more tailwinds. Introduced this kind of analysis on the cohort 2 years ago. It showed about how much white space we have just on our top 200 clients. And there's still a lot to go. And again, this is the IT SAM. And so when we start talking about the agentic SAM of the $30 billion, these numbers would become even larger. Could articulate even our strongest clients we have a lot more to sell. And that's what gets me really exciting, and I know it does for Don and Ben as well.

And so firm AI, just as a sub note, that's what we're pulling in Celeste and the collaboration previously BU that we're narrating around. But this alone is just another $2.5 billion opportunity. And so when we talk about getting to that $1 billion of ARR, it's line of sight. And we'll talk about what that line of sight line in the sand means but it's coming a lot sooner. And then this is an articulation that we have been successful even with deal cloud into legal. It's approximately 10% of our total deal Cloud ARR. And so we've made meaningfully inroads on that adoption of that cross-sell motion. So it's been a very successful playbook. I think Ben actually showed an example of that. And so we're very very thoughtful about how we can continue to expand that as well. You've all seen this many times in and around kind of where we're at on our cloud migration. We do have even more opportunities that folks want to aggressively move faster and faster into this agentic era because you need to be in the cloud. You need to be cloud native. And so none of that has changed. I'm excited to speak to the partners tomorrow. I know they're excited about what we've released and what that means for the whole ecosystem and how we serve them successfully.

To that point, this is kind of the progress we've made, where we're at. This is illustrative of how much more to go of what their picture is of that 100 million on-prem. So we're furthest along on time, conflicts, we're right behind and walls. So all of these are well underway, and we'll start finally seeing those conversions take place, which then will add further to that cloud ARR and even that NRR number that I just showed you previously. And then here, on a go-forward basis, we will have clean KPIs of our Celeste agentic vectors. This past quarter, approximately 10% of our net new client spend was from Assist. Quite healthy because that was just version 1.0, 2.0 and hasn't included anything of what you'll see this afternoon. So we're quite excited about what that portends on that growth as in total.

So M&A, we've had a great track record. We've seen it been highly successful with the capital that we have deployed since IPO, the SAM and TAM that it has offered and the combination that has delivered, both from either a technology tuck-in or top line revenue growth or a subset into a specific vertical, where we didn't necessarily have the expertise at that time. We don't see that slowing down anytime. And then as far as our operating leverage, this is something that we've been working very hard on as a management team. And again, gross margin improvement since where I've stood before you, back at our inaugural Investor Day, up 6 points, one, subscription revenue mix to economies of scale. We still have some more opportunities there. And then obviously, our services margin mix. And then on our operating margin, up 12 points. Again, we've seen the subscription mix of revenue, sales and marketing productivity and then G&A, economies of scale. Our success in the past definitely enables us to think about how we do things in the future and it doesn't give us any lack of confidence of what we're able to achieve.

And then obviously, what that yielded from our free cash flow. Again, gross margin leverage, working capital management and operational efficiency, which if you think about it, generated over $200 million versus when I stood before you, it was only $60 million, which then begs the question, the capital allocation framework, which we technically haven't had a formal conversation on. So yes, we have done some Board-authorized share buybacks. But just to set the stage, first and foremost, we're going to continue to invest in the team. We have a wonderful set of releases set out today, which is of no consequence. It will be our largest one today or to date. So we're going to continue to do that. Two, we're going to be deliberate and disciplined M&A. We believe we have been able to achieve that thus far. And then three, dilution management. which you've seen us exercise the $150 million that the Board authorized for 3 quarters ago, and then we just have another share authorization for $200 million, which obviously has brought us to approximately 0% dilution for this year, and we'll continue to work on that. So what all that means, headlines to our top line $1 billion growth and kind of where we see that trajectory.

Cloud growth, we're going to continue to have that as our primary revenue driver. We've got strong NRR. We've got a path just on net new logos, and we have a path just on net expand. Our $50,000 plus ARR clients. We've shown success factors there. We're going to continue to grow that trajectory, that logo trajectory. Subscription mix progression on-prem to cloud. Hopefully, we get past 80% here soon. AI ecosystem. We're going to continue to participate in that, but we're going to participate in it in different ways, as Don had narrated on, consumption, platform fees, data on and on and on. So we're very, very excited about that.

Client satisfaction. Don touched on that a little bit earlier. Obviously, we want to keep churn to a minimum, sustain leverage commitment. I think we've had a good track record, and we're going to continue doing that. And then capital allocation discipline which stood before you in 2024, so it's kind of the articulation of where we're at then, only $365 million of ARR. Today, over $500 million. And our target where we're putting a line in the sand is to have $1 billion of ARR by FY '29, which is approximately a 20% CAGR. And it also takes off those revenue mix equation off the table between services and licenses. It's ARR, and this is [indiscernible]. Non-GAAP gross margin, 80%. Non-GAAP operating margins tightened at 28% to 30% and our free cash flow margins of $25 million. That's FY '29, right around the corner, line of sight.

And last but not least, GAAP operating income profit FY '28. We acknowledge our stock-based comp has gone up past 2 quarters. We've hired some excellent talent, stage appropriate people, executives, AI, genic technologists, and we are leading the way. And unfortunately, we have a near-term bubble within that. With that said, we are committing to positive gap operating profit in FY '28. It will be managed as with everything else.

And with that, I'll turn it back over to John Hall.

Thank you, Dave. Okay. Very solid foundation, consistent execution. You all saw what we said in '24, you see what we've delivered here. On top of this baseline solid performance as a company to this unique market I want to summarize some of the unique advantages we have for this eugenic opportunity that's in front of us today. First, we're not starting from scratch. We have an extensive client base who already trust us to manage their most critical workflows, including, for example, 96% of the Am Law 100, hundreds of the world's leading private capital firms. I can go on. Many of these clients have been asking us to build this very product for them in our advisory boards over the past 2 years. Our distribution channel is tailor-made for the Celeste opportunity. And we have, as you saw, scaled enterprise go-to-market today that is already embedded in these firms and working with them every day on their key business process opportunities, we have a decade-long head start in establishing our position in this marketplace.

Second, we already manage the critical data and the workflows for these firms today. We manage their systems of record for fundraising and fund deployment for client engagement and deals for conflicts and compliance for time and billing. We power dozens, sometimes hundreds of different workflows for these firms, which they have carefully designed with us. So we aren't asking firms to adopt a new platform or migrate their data. We're adding expert agents to help operate the systems they already use. If you go to Amplify, you will see this in motion. And they're working with people on this that they already trust and workflows that they already depend on. This is a platform and technical advantage that is unmatched in our industry. Third, we are unique in our professional compliance position in the market. We are recognized as the industry leader, firm general counsels and risk and compliance officers ask for Intapp by name.

When we had the joint announcement with Harvey at their event in London on Monday, Ben Harrison was there representing us and talking to the CEO, and this went up, there was a pause from the audience. We have long-standing connections to the professional indemnity insurers. And the ecosystem of AI players looks to us to help manage professional compliance requirements in their own deployments, there is an example. Fourth, that ecosystem is not limited to those few companies that we're talking about. We have cultivated one of the largest ecosystems in this market serving these firms. We have a wide range of partners today who can amplify our value proposition and reach and help us bring this generation of agentic AI solutions to every client in our market. And they're motivated to do so because they want to get to the genetic AI game too. Fifth, we have a very successful track record of M&A. And we can continue to use this to fill out our platform as the market continues to evolve. Our most recent acquisition of term sheet was a fantastic move to bring some excellent AI technology and teams and talent to augment our offering. You will see some of the speakers there at Amplify today. And finally, I would just like to point out the uniqueness of our team. This isn't a business that you can just build overnight. We've spent 25 years earning the trust of these firms. And our team is a major reason why. Our people come from the industries that we serve.

In addition to the Silicon Valley Group, we have former bankers, lawyers, compliance professionals. Our team works with clients on all of the advisory boards that set our road map and our ambassador programs. Those relationships have always directly shaped our road map and what we build and buy. We don't guess what these firms need. They tell us, this is also a founder-led business. From the beginning, we've combined the Silicon Valley technology expertise with deep industry knowledge in New York and London. And that combination of engineering excellence and industry fluency is rare and very hard to replicate. And as you know, from our bootstrapped history, our focus on client success runs deep. Our 124% cloud net revenue retention rate. It's just an example, but I think it really captures the value clients see in our platform and our ability to expand these long-term relationships over time because they trust us.

The agentic AI opportunity is something we could not be more excited about as a team to bring to this market successfully. To sum up, firms are expanding, but they need that is compliant and built for how they work. Celeste is our AI native genic platform, purpose built for professional firms. We partner with Microsoft, Anthropic and Harvey, Celeste makes their tools better, and we're rearchitecting our applications as expert agents running on Celeste, these innovations reinforce the value of our portfolio, expand our TAM and enable us to apply consumption-based pricing. We have the distribution, the data, the workflows, the compliance, the ecosystem and the team to win. Intapp is positioned to win the agentic AI cycle in this highly regulated. Thank you.

We're happy to take some questions.

So we will do about 15, 20 minutes of questions, but -- and we've all seen this. This is being webcast. So please wait for the mic to get to you, okay? But the people on the webcast don't hear your question. Agnes and Dylan will be bringing the mics around for everyone who needs it. Again, please hold your question until you get the mic. Kevin McVay over here. Dylan?

Dave, do you want to join me?

Kevin, if you want to hold off until our execs get up here, that would be great.

Folks want to come up. Okay. At your service. .

It's Kevin McVay from UBS. Really, really terrific presentation. John, I guess one thing to start with what's the funding source for the increased budget from the clients? Is it coming from internal efficiencies that AI is generating? And then you put tune with Harveys and Anthropics. Are you bundling that together just as kind of the industry continues to evolve, what's the source of the funding? And then ultimately, how are you -- is that part of the the consumption? Or how does that manifest itself in the model?

So there are 3 sources, I would say. There is absolutely a pre-existing traditional IT budget. And the CIOs have become very AI oriented. It's hard to talk to them without talking about AI anymore, as you would expect. And there's a fair bit in the AI budgets that we traditionally have called on and can still win, and we are winning. There's a new set of budgets, which are AI-specific. So a lot of the firms have created -- they might call it an AI budget, they might call it an innovation budget. Sometimes it's under the CIO. Sometimes they have a new leader, like a head of innovation, who is responsible for evaluating that or a Head of AI that's responsible for evaluating that. So we can pursue that category of spending as well. And firms definitely have increased created a budget for that above the traditional IT budget. So you're seeing already an increase in percentage of revenue going to AI plus IT.

But I think with this agentic opportunity, there is a totally different source of funding, which is you look at the planned head count increases for these various functions and look at how much they were planning to spend on roles X, Y and Z. And you can make a business case to say, we will help you avoid certain types of hiring and replace that with an agent spend. And so you saw that example where some of the firms that we worked with have helped us estimate this. And they're saying 40% to 60% in that example, that particular process is labor spend that they think they can avoid with appropriately deployed compliant agents. And so I think that is actually a very big opportunity because suddenly, you're outside of a percentage of revenue AR IT spend into what is your business expense planning for the firm, your cost structure for the firm across all of the different practice areas, service lines, investing teams and all the different business services. Very grateful.

We did not have Dustin Sedgwick, our new CMO, who joined us recently, but Dustin is in the room, and his team has done incredible work putting together a very appropriate next-generation brand experience that really feels like AI native messaging and storytelling next to the incredible work that the product team has done really bring out the benefits of it. You're going to see a lot of the outcome here. But Dustin anybody wants to talk to us. We're very appreciative of the work that he and his team have done.

All right. Alex?

Alex Sklar with Raymond James. First one, I don't know John or Thad who wants to take this, but with Celeste, can you just talk a little bit more about the Intapp moat, specifically around the data that's underlying those playbooks and you talked about coming preconfigured on a persona basis? Do you already have that underlying context data is that something clients still need to opt into? And then I've got a quick follow-up.

Sure. It comes out of the box with the connectors and will be automatically configured as part of the deployment to any Intapp application that they have. They have the option to extend that to other systems. We have a connector for Snowflake. We have connectors for some of the partners and so that would just be optionality as part of the deployment. The context layer does come with that. That is also a small configuration to make sure that we're using the right terminology that, that firm uses the right semantic understanding and some of the ontological mapping, just sort of the data mappings underneath the hood. So it comes with templates out of the box, but there is a lightweight deployment process associated with it.

Got it. And then just a quick follow-up. So you've had Intapp Assist kind of launched a couple of years ago, walls for AI as well. When you look at the kind of adoption curve over the last 2 years, how does that kind of inform your thought process on what the adoption curve of Celeste would look like?

I think one of the things that we observed with the assist capability, was, on the one hand, there were firms, as we were talking about earlier, who are looking for AI specifically, but a lot of the end users experienced assist as a much easier way to interact with the various products, for example, DealCloud. So there's a lot of end-user enthusiasm for this. I think the opportunity going forward with Celeste is talking about expert agents at the firm level for the processes as a whole, which might interact with many different people along the path. So there's a lot of benefit to the individual user because Celeste will be available as you saw, to the individual users. But there's also a really interesting story to move up to the more senior business owners of the overall processes for the firm and be able to make a business case around enterprise agents and also make an operational case, how will your firm's performance evolve as you bring this out, and Ben you were sharing some examples of what people are seeing with some of that.

So we want to claim too much, but I'm actually very optimistic about what the uptake should be because the value case is so significant to these firms. And the interest level in enterprise agents purpose built for the market seems very strong from all the feedback that we've gotten.

Bala Kamajan on behalf of Alexei at JPMorgan. So you've highlighted a significant $50 billion-plus agentic AI opportunity. Could you break down a bit more by the subverticals that you serve or where would you foresee the greatest adoption given any trends you've noticed with past product rollouts and AI adoption?

Sure. So one of the things we wanted to emphasize with this agentic SAM, that we're sharing with you all is we wanted to be relatively conservative with it is the first time that we're naming this additional SAM. So we're focused on the business processes that we already own and operate. So the business acceptance workflow, the sourcing and origination workflows in deal Cloud in the financial services markets and private capital markets, the conflicts, clearance independence governance. So that is a sum of agents we think we can immediately deploy in just the systems that we already have so that we can go directly into the same buyers with a genetic story now. There actually is significant opportunity above this that we haven't declared there, where we can -- as we develop these playbooks and bring up more and more agents, we can propose to bring value across a much wider rate of the firm's activities. So that's how we put it together.

When you talk about rearchitecting the products to make them more AI native, what does that mean for the scaffolding of the existing applications? Do you need to change the guts of the way those apps work to make them work better with Celeste over time? Do your customers have to feel that at some point?

So the very explicit design principle is no, to not rip it out to not inflict that burden. And I think that's a huge advantage that we have with the scaffolding they have, the application, the select pain embeds in there, and it gives you all the benefits that Assist provides in addition to the ability to now execute agents. And as those agents develop, they will start to help users and administrators be able to take on more and more of sort of the repetitive activity, so they could spend more time doing the judgment and sort of the higher value work there. So we really are trying to bring the best of all worlds, new agentic era, AI, stand-alone, but being able to embed it directly within the applications that they use every day and not have them go through the disruption of having to go rip and replace it.

I would also add, I really like this strategy for a trust reason. This design, when you see the product the users and the firm leadership can see what it's doing in application environments and workflows that they are familiar with and they trust. And I think this is a big issue in people flipping from the traditional paradigm to this text-based paradigm is you're not quite sure what these systems are doing. And I think this is a beautiful transition experience that we have the opportunity to bring out where people know their systems, they know their workflows. They worked hard on laying all that out. They know exactly what the ins and outs are and then they deploy Celeste agents and they can see this less agent taking over and doing work that a person used to do. And I mean, eventually, they won't need the UI at some point. But in this transition period, I think this is a huge step. It's just a really savvy design strategy that will help people start to deploy agents that they trust because they can see how it works inside the environment. So I just love the transition part of this approach.

Matthew Kikkert with Stifel. Thanks for hosting us all today. Where do you see NRR maybe trending from current levels going forward? And how much might AI monetization play into that going from now to -- through those '29 targets?

So a couple of things. Our NRR is already extremely healthy, given visibility on just kind of our new logo land and then the expand opportunity we have. Suffice it to say, I do believe it will stay within those realms of the 120%. Is there a thesis that it could go north of that? Absolutely. That isn't something that we're specifically guiding to other than we believe we'll get to the $1 billion of ARR by '29, which doesn't include the full accelerant of the Celeste platform. That's incremental. .

Okay. And then secondly, is there a metric that you're tracking or that we should be tracking to judge the success of the AI [indiscernible]?

We'll be transparent on the Celeste uptake, recognizing it's very limited today. There's some pilots going on. They've had a couple of key success stories, but it's GA is right around corner.

Ryan [indiscernible] at Barclays. Just a question around the on-premise customer base, the $100 million or so of ARR. I think we've talked about like a 20% or so uplift on conversion when you go from on-premise to the cloud. Just curious, what could Celeste potentially to that as more of those customers are converting? And then how does that sort of factor into the $1 billion by 2029 -- or fiscal '29 ARR target?

So again, Celeste is that full platform is outside of the line of ARR, right? And so when you think about the on-prem going to cloud conversion, those are still on track. We're still seeing that 20% to 30% uptake. I believe the pressure for that adoption will just accelerate. So we've always talked about, hey, where is the carat in the stick, right? The carat is, hey, please move the stick being EOL. I think this is yet another carat that's going to help facilitate that transition, especially walls as a key one. And so we've already bifurcated clearly with our new time product, Walls is another one intake, and you'll hear more later. So it should only accelerate that plan. The new capabilities announced all wire cloud solutions, and there are going to be a lot of salivating clients when they see what is available if you make that transition.

[indiscernible] jumping back in here. Dave, maybe just elaborating a little bit more about what's underpinning the 20% growth outlook. You're at 22% ARR growth today. So staying at kind of 20% for the next 3 years is pretty impressive. What does that embed from kind of a go-to-market productivity standpoint? Is it a lot of it just incremental hiring? Or is there anything built in, in terms of productivity gains? And then is that an entirely organic outlook? Or does it include any potential tuck-in type M&A?

No, that's primarily organic, just like as we've talked in the past. For sure. We have opportunity on our productivity as we continue to densify some of those enterprise accounts that I've explained or articulated at least earlier today, the lands keep getting bigger, the expands keep getting bigger. The rate of pace of our product innovation has been nothing less than phenomenal even outside of just the Celeste announcement today. And so even in your prior release, I don't know how many additional attributes it had within DealCloud, but it's been quite expansive. And so and again, that's coming off of the past 2 to 3 quarters of strong success that we've been able to kind of articulate where this is moving.

One more? No? Okay. Thanks, everyone. Really appreciate it. We'll be around in the room if you have any further questions for the next few minutes. And then [email protected], e-mail me anytime if you have any needs until a quiet period we hit on March 15. Thanks again for coming. Thanks for braving the elements for you guys here in the room, and thanks to everyone on the webcast for listening.

Thank you all.

Thank you.

Hello, everyone, and welcome to the Intapp Second Quarter Fiscal 2026 Earnings Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

Now it is my pleasure to turn the call over to Senior Vice President of Investor Relations, David Trone. The floor is yours.

Thank you. Welcome to Intapp's Fiscal Second Quarter Financial Results. On the call with me today are John Hall, Chairman and CEO of Intapp; and David Morton, Chief Financial Officer.

During the course of this conference call, we may make forward-looking statements regarding trends, strategies and the anticipated performance of our business, including guidance provided for our fiscal third quarter and full year 2026. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law.

Further on today's call, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income per share and free cash flow. Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures can be found in today's earnings release and its supplemental financial tables, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call or a supplemental financial presentation, which is available on our website.

With that, I'll hand the conversation over to John.

Thank you, David. Good afternoon, everyone. Thank you for joining us today as we share the results of our fiscal second quarter. I'm happy to share that once again, we've achieved strong quarterly results, supported by the addition of new clients and the expansion of client accounts around the world.

Our results also reflect our ability to serve enterprise clients, a growing partner ecosystem and demand for our AI capabilities in the highly regulated industries we serve. I'll share details on these select growth drivers on this call.

In Q2, our Cloud ARR grew to $434 million, up 31% year-over-year. Cloud now represents 81% of our total ARR of $535 million. In the quarter, we earned SaaS revenue of $102 million, up 28% year-over-year and total revenue of $140 million, up 16% year-over-year.

Now I'd like to share some highlights from our fiscal second quarter. We continue to execute our vertical AI road map, which is designed to increase adoption of AI in the highly regulated industries we serve. As a reminder, our industry-specific AI solutions automate road tasks, but more importantly, they deliver actionable insights that are drawn from a firm's proprietary information and are enriched with our industry graph data model and trusted third-party sources. These advanced tailored compliance capabilities are what set Intapp apart and why firms continue to invest in our technology.

This leads me to my first example. You may recall that last quarter, we announced a significant new release of Intapp Time, which delivers faster, easier and more accurate timekeeping powered by major new AI features. It's proven to be a catalyst for cloud migrations with large firms like Buchanan Ingersoll & Rooney and multiple Am Law 100 clients moving their time instances to the cloud.

The new Time release is also drawing large firms to buy the solution for the first time, sometimes in addition to their other Intapp solutions. Examples include CyparkShaw and Brown-Forman. Additionally, we added more than 70 new AI capabilities and enhancements to our DealCloud platform. Among their many benefits, these new advancements save users time, surface personalized actionable data insights and support InfoSec by monitoring data access in real time. They come together in DealCloud to boost productivity, support regulatory compliance, unlock firm intelligence and create a competitive edge.

Now let's turn to our partner network. We continue to grow our expansive partner ecosystem anchored by Microsoft and a strategic set of more than 145 curated data technology and services partners. This powerful network continues to drive growth for us and greatly influence many of our recent logo wins.

In Q2, partners were directly involved in 7 of our 10 largest deals, reflecting how deeply embedded our partners are in our go-to-market motions. Microsoft, in particular, continues to be a major growth driver. More than half of our largest wins this quarter were jointly executed with Microsoft. And in several Microsoft even contributed Azure investment dollars to help us accelerate the deals.

Our growth was also powered by adding new clients, expanding within existing clients and migrating clients to the cloud. And we continue to gain traction in newer markets across our verticals, products and global locations.

In our legal vertical, we once again saw some distinct trends across our wins. First, we had some of the largest law firms in the U.S. turn to Intapp for AI-powered enterprise-grade compliance solutions. These clients include several Am Law 100 firms. For example, Ropes & Gray chose our compliance solutions to modernize their intake and conflict check-in processes in the cloud. This transaction was completed on the Azure marketplace with Microsoft providing investment dollars to accelerate the deal.

An Am Law 30 firm added our compliance solutions and chose to migrate time to the cloud after attending an event and seeing them in action. And an Am Law 75 firm chose our compliance products to automate managing access to sensitive matters across applications.

Second, law firms continue to choose DealCloud to strengthen their business development operations and innovate with AI. This quarter, Ford and Harrison and an Am Law 100 firm, among others, moved off their legacy horizontal or bespoke systems to support more strategic new business acquisition with DealCloud.

And third, evolving anti-money laundering and know-your-client regulations are fueling the modernization of intake and conflicts processes globally. A few examples of firms who have chosen our AML solutions in response this quarter include an Netherlands-based firm Holding Redlich in Australia and U.S.-based Reed Smith.

In the accounting industry, the influx of PE investments and mergers has continued to create disruption and increased competition across the industry. In response, firms, no matter their investment status, are modernizing their compliance practices and extending that modernization to collaboration and business development as well.

Among the firms that turned to Intapp for AI-driven modernization this quarter, one of the largest public accounting firms in the U.S., deepened its investment in Intapp employee compliance to modernize personal independence processes across its global employee base.

BKL and Graviton, both replaced their legacy systems with Intapp collaboration. They needed a scalable cloud-based solution that integrates seamlessly with their Microsoft tools, streamlines collaboration and sets them up for growth.

And a top U.K. accounting firm chose DealCloud to establish a scalable foundation for relationship management and business development as it undergoes rapid growth through M&A.

In the financial services vertical, firms are continuing to replace their legacy horizontal CRMs with DealCloud for AI-powered relationship and business intelligence, especially enterprise and mid-market investment banks. For example, one of the most prestigious boutique investment banks in the world chose DealCloud for its banker advisory business after a successful pilot with its private capital advisory team. The firm sees DealCloud as a way to help modernize its business with purpose-built AI, allowing them to unlock key deal and relationship insights more easily.

Meridian Capital chose DealCloud to improve visibility and management of deal origination, active mandates, buyer outreach and business development and forecasting.

Finally, our investments in real assets, including the April 2025 acquisition of term sheet, continue to attract new clients who are coming to Intapp for AI-driven solutions. I'll share a few examples.

Neuberger Berman moved off its legacy horizontal CRM and on to DealCloud to improve reporting, streamline workflows, reduce key person risk and eliminate duplicative and inaccurate data. A leading mixed-use and multifamily housing developer replaced its existing system with DealCloud to improve data quality, user experience, analytics, reporting and optimization.

And Smith Douglas replaced multiple legacy systems with DealCloud, which spans all their divisions and will help them improve workflows and operations so they can deliver homes faster.

In conclusion, we're proud of our strong second quarter performance, and we continue to be optimistic about our growth opportunities. As our Q2 performance has shown, we are growing by adding new capabilities and increasing our global enterprise go-to-market reach. We see continued opportunity both to add new clients across a broad TAM and to deliver greater value by expanding our existing client base.

We're serving a durable end market with our subscription revenue model, industry-specific cloud platform and applied AI and compliance capabilities. We have a great growth opportunity to drive AI, cloud adoption and modernization across all the industries we serve.

As always, I'd like to thank our clients, our partners, our investors, our Board and our global Intapp team for their teamwork and dedication. Thank you all very much. Okay, David, over to you.

Thank you, John, and thanks to everyone for joining us today. I'm pleased to share our fiscal second quarter results, which reflect continued strength in our cloud business and disciplined execution across the organization. Demand for our SaaS solutions remain strong, particularly among existing clients, driving solid growth and a higher mix of recurring revenue as we progress through our cloud transition.

Our enterprise-focused go-to-market motion is working as intended. We're seeing strength both in net new logo acquisition and expansion within our installed base. As a vertical SaaS company, we have deep domain expertise and a clear understanding of the highly regulated markets we serve. Clients in these markets continue to value the application-specific capabilities we provide from compliance workflows to applied AI, which reinforces the durability of our ARR growth. This is evident in the continued expansion of our $100,000-plus ARR client base and our 124% cloud net revenue retention rate.

At the same time, we continue to operate the business with a focus on margin expansion, cash generation and capital discipline. Gross margins improved year-over-year, operating income increased meaningfully and free cash flow remained strong. Combined with our share repurchase activity during the quarter, these results reflect our confidence in the long-term opportunity while maintaining a strong balance sheet.

Before we get to the income statement, Cloud ARR hit $433.6 million this quarter, up 31% year-over-year, driven by enterprise clients deepening their relationship with Intapp stronger co-sell activity and growing adoption of our applied AI offerings.

Turning to our fiscal second quarter results. SaaS revenue came in at $102.5 million, up 28% year-over-year, now representing 73% of total revenue, reflecting strong demand and a continued shift to our cloud offerings.

License revenue was $25.4 million, down 9% year-over-year, consistent with our stated strategy and ongoing cloud migration efforts.

Professional services revenue totaled $12.3 million, down 7% year-over-year. Our partner ecosystem continues to support cloud growth through co-sell execution, client satisfaction and efficient implementations.

Total revenue was $140.2 million, up 16% year-over-year, driven by strong growth in our cloud solutions.

Turning to our capital allocation. As announced in August 2025, our Board authorized $150 million share repurchase program. During the second quarter, we repurchased $100 million or approximately 2.3 million shares. Combined with our first quarter activity, this authorization was fully utilized, resulting in approximately 3.4 million shares repurchased.

In January 2026, our Board authorized an additional $200 million share repurchase program, further reflecting our confidence in the long-term value of the business. Our partner ecosystem remains a key driver of long-term cloud growth.

In Q2, we co-sold with partners on many new logo wins and participation in the Microsoft Azure marketplace increased meaningfully year-over-year. We see this as a durable, repeatable motion, especially for supporting larger enterprise deployments.

Service partner certifications rose 35% year-over-year, reinforcing Intapp's position as a growth engine within the ecosystem.

Turning to margins and profitability. Q2 non-GAAP gross margin was 78.1%, up from 76.7% a year ago, driven by favorable mix and cloud efficiency gains. Non-GAAP operating expenses were $81.8 million compared to $74.1 million in the prior year period, largely reflecting ongoing investments in our product-led growth organization and go-to-market spend.

Non-GAAP operating income was $27.7 million, up from $18.9 million last year, and non-GAAP diluted EPS was $0.33. Free cash flow was $22.2 million for the quarter, and we ended Q2 with $191.2 million in cash and cash equivalents, reflecting $100 million share repurchase.

Turning to our key metrics. Cloud ARR increased 31% year-over-year while total ARR grew 22%. Remaining performance obligations were $777.1 million, up 26% year-over-year, providing strong revenue visibility.

Our enterprise-focused motion continued to show progress with 834 clients now generating at least $100,000 in ARR, up from 728 a year ago, representing 30% of our total client base.

Now turning to our outlook. For the third quarter of fiscal 2026, we expect SaaS revenue between $105 million and $106 million, total revenue between $143.8 million and $144.8 million, non-GAAP operating income between $23.1 million and $24.1 million. This Q3 outlook includes incremental spend for targeted marketing campaigns associated with our upcoming product showcase at Intapp Amplify as well as targeted investments to increase the rate and pace of delivery on our AI suite of offerings.

Non-GAAP EPS between $0.27 and $0.29 based on approximately 83 million diluted shares.

For the full fiscal year, we expect SaaS revenue between $415 million and $419 million, total revenue between $570.3 million and $574.3 million, non-GAAP operating income between $99.9 million and $103.9 million, non-GAAP EPS between $1.20 and $1.24 based on approximately 83 million diluted shares.

And finally, I'd like to remind everyone of our upcoming Investor Day in New York City, followed by our annual Intapp Amplify event, where we'll share our latest AI-powered innovations. You can find details on our Investor Relations website.

Thank you. And I'll now turn the call back to the operator.

[Operator Instructions] Our first question comes from the line of Kevin McVeigh from UBS.

In terms of how you're positioning Intapp for just the kind of news flow out of Anthropic today?

Kevin, it's John. I think I just caught the tail end of that. Your voice was -- but I think you were asking about the Anthropic news today.

Yes, that's it. I apologize if I'm breaking up on you.

Sure. No, that's a great question. So they've released some open source plug-ins for the corporate legal department. And it's a good segment of legal opportunity. They are doing things like contract review and NDA Triage, you can look up the plug-ins.

Just to be clear, we have never been in the category of contract review. Our strategy has been differentiated over the long development of technology in these industries because we focus on the firms in professional and financial services. Sometimes you hear people distinguish between the practice of law and the business of law, but it applies across all the types of firms that we're selling to.

So we focus on the senior leadership of the firm, how to help them grow their business, how to help their people pursue fundraising for new funds or new clients or new engagements. the compliance of how the firms do business and operate internally with all of the sophisticated information governance around managing nonpublic information, better trading information or other information that needs to be kept confidential in a variety of ways in these complex institutions, profitability, how the firms actually execute that successfully or drive returns, talent management. So the business of these firms has been our emphasis.

And there's huge opportunity for AI in all the contract review type things, the LLMs are great at it. We're using a lot of it, too. But I think from the value proposition of the company standpoint, we're chasing a giant underserved category that we spent a long time working with the firms to grow. And we've had some great response to our offerings here, and we've really been paying attention to how the firms have the best opportunity to deploy AI.

So we're not really in this space, although it is very complementary to what we do. And the firms actually have come to us and said, can you help us with the whole compliance infrastructure for the agents and everything to help them succeed as they deploy these different use cases to the individual users of the firm. So I actually think our history and our relationship with these firms gives us a tremendous position to be a big influence over how the firms deploy AI in our own products and how they deploy AI generally.

Your next question comes from the line of Alexei Gogolev from JPMorgan.

This is Bella on for Alexei. Just one question from us. So you announced a partnership with Decimal Point Analytics last month. And in light of that, I wanted to ask, how do you balance utilizing third-party partnerships to advance your data strategy while also safeguarding the proprietary data that gives you a competitive advantage in this ecosystem?

Yes. Thanks, Bella. We have a very significant investment in an ecosystem strategy that we talk about each quarter because we're bringing a whole product to each of the firms in each of the industries. And part of that is all the professionals have a very rich set of market information or present information that they're looking to bring into their environment to make better decisions about the clients or the deals that they take on and how they execute that work. So we have a strong program.

You mentioned one of our important partners, but we absolutely have a program of managing data for the firms, each of whom views their experience and their expertise in the particular area as their intellectual property that helps them compete. And this is actually one of the areas of information governance that we are first in the world in is to help the firms manage and safeguard their proprietary information so that they can reuse it to win new deals competitively, serve those clients successfully. And we have a wide range of data partners that we work with to enable the firms to do that. But we're also focused on helping the firms themselves protect their data.

We have some proprietary data that we enable them to use as well. But our fundamental goal is helping each firm differentiate itself using their own expertise, that's how the industry works, and we're sort of at the center of that. And I think it's one of the reasons why our compliance program has been so successful in making its way through the market.

And the same is true in the AI era, by the way. The firms are going to use their proprietary knowledge and expertise and experience to differentiate themselves in how they go and win new business.

Your next question comes from the line of Parker Lane from Stifel.

John, for the customers that have been receptive to your early AI offerings here from Intapp, particularly Intapp Assist, what has been the primary hook or motivation point that you've seen from them to get them across the goal line and using this? Is it a desire to do more with less? Is it just drive efficiencies in their business? What are the implications for headcount amongst the customers that are using this as well?

Thanks, Parker. Yes, the Intapp Assist take-up has been strong. We've been excited to see how many users at many levels of the firm are interacting with Assist in our AI offerings.

Part of the book is absolutely efficiency. The firms don't want to add tons and tons of headcount if they can get some help from the AI. But a lot of it, too, and I think people may miss this, is that with the right AI and agentic setup, you can bring a universe of information to each person, whether they're an early career business development person or a practitioner in the middle of their career or a later-stage partner, you can bring a universe of information to them that would have been cost prohibitive to try to assemble with a human universe of researchers for them.

So really, the firms that are deploying Assist most successfully are getting much richer, better, clearer answers in a compliant way more comprehensively to all of their people, and they're using that for competitive advantage. So there is absolutely an efficiency angle to that. But part of it is a capability that's difficult to imagine doing in a totally human-powered world. And I think this is a huge focus of the firms because they're all focused on the fact that they don't do it, someone else will. And they need to have this capability to compete as the world becomes more competitive with AI powering everybody.

Got it. And I appreciate the answer earlier on Anthropic, being focused on the practice of law versus the business of law. Clearly, a lot of anxiety around not what that looks like today, but the future state of these models and where they can go over the long run. Are you starting to see instances of your customers or potential prospects testing these tools themselves, trying to develop things on their own with any level of success? Or are they primarily going to some of the incumbent vendors like yourself to figure out how to fully make this pivot to an AI-first world?

Well, when we first started building the company in the market, it was a self-built technology universe. All the firms could not get technology that met the unique needs, including compliance of the industry. And so they were investing in big IT departments to develop everything themselves. The whole history of the company has been working to provide them with a commercial enterprise-grade secure now AI-enabled set of capabilities to replace all those. And we've built a business doing that. It's been very successful.

I think as these AI tools come out, they're absolutely encouraging people to try, and the forward-looking IT departments absolutely are experimenting with them. One of the things that we've been studying over the past 2 years is what are the reactions of the firms to this? Are they going to change their posture from what they've developed over the past few years, which is to work with specialist providers who really understand the issues and can provide a supported environment or are they going to go back to building it on their own?

I think they're going to experiment, but I don't think that, that's economically the right answer. I think the right answer is to have somebody who can really provide this to them and support this with them, bringing together the best practices that are being developed around the market, which is the whole point of the company.

And we've got a lot of clients who are saying to us, "Oh, that's what you're doing. Thank God, I don't have to do it myself." And so I think that kind of response, you're going to see more and more. So we actually encourage the experimentation because it gives people more of a feel for what it's going to take to really get the valuable solutions out of this. And then we come in and say, "here's what we can do for you, and it turns into a continuing growth partnership."

Your next question comes from the line of Koji Ikeda from Bank of America.

It's George McGreehan on for Koji. I wanted to ask one as it relates to CRPO, and when you kind of look at that metric on a 2-year stack, that metric actually accelerated, and that's kind of in line with the sequential step-up in NRR that we're seeing. So I wanted to ask over the last few months, how have customer conversations sounded? And is there any change in tone and maybe particularly as it relates to adopting AI products generally versus a few months ago?

Yes. Thanks, George. The conversations have continue to accelerate. We announced the first versions of this generation of AI just 22 months ago and then a second version in February of last year. We have our new event coming up here in about 3 weeks.

But people have moved from curiosity to experimentation. And now there are a few places where we're really seeing people able to articulate here is the business value that I can achieve by deploying Assist and AI technologies in these areas, in these parts of my business process. Here's the efficiency I'm getting in people. Here's the increased visibility that those people are having in their decision-making and here's how that's flowing through to create a better experience for the senior folks who are working with clients or working with investors. And so I think you are seeing really positive reactions. Now you're also seeing continued experimentation all over the place. So I think in the big picture, it is still relatively early.

But what we're excited about are these use cases that are coming out that are really starting to pull forward some of our sales and some monetization opportunities that we were very focused on from the very beginning. I mean we've long felt that the way you bring a next generation of -- true next generation of technology out is you have to get to those early filler apps that really make a difference that people can point to and say, of all the infinite imaginings that we could do, that's the thing that I can put money behind and buy it and bring it in. And that's what we've been focused on doing. When we talk about applied AI, that's really the emphasis of that strategy.

Your next question comes from the line of Terry Tillman from Truist Securities.

Connor Passarella on for Terry. Just wanted to touch on Microsoft first off here. So you just -- you've highlighted them as a major go-to-market partner over the past several years, Azure marketplace execution and joint wins continuing in this quarter. Just kind of curious in more of a risk-off type environment like today, does that partnership help to, I guess, derisk the deal cycles or shorten time to close? Or is that more of an impact to more visible in terms of expansion and upsell once customers are live on the platform?

Yes. Thanks, Connor. No, we're very appreciative of the ongoing strategic partnership with Microsoft. We have talked about some of the ways that we're working with them. Their sales team is aligned with ours on the firms in our target market. They actually get quota relief when we sell. So there's a lot of alignment in the field. But more recently, we've been doing more of these Azure marketplace agreements. I mentioned a few of them on the call. And interestingly, they tend more towards the enterprise firms. So it's very consistent with our enterprise strategy.

We're doing larger deals. They are shortening the sales cycle when the folks already have a Microsoft minimum Azure spend commitment in place. And we've actually won some very large business that we talked about on the call today from some firms that are brand new to us that came to us through an introduction or a relationship with Microsoft and others that are our long-time partners who want to grow their relationship. So it's working in both growth dimensions for us.

We've had folks who had those agreements with Microsoft and it helped us move them to the cloud. So a lot of the key parts of our overall growth strategy have worked really well with that program. And as we've learned about it and the sales team has done more of it and the clients have gotten used to it and are talking to each other, it's actually growing as part of our overall go-to-market. So it's really helped us a lot.

That's helpful. And just as a follow-up, looking at the macro environment, just particularly around the backdrop in financial services with the potential for M&A activity to pick up, is there typically a tailwind associated with the growing deal pipeline as firms maybe look to check the box on tech enablement prior to an elevated period?

Yes, I think so. The banks have been doing good business with us. We emphasized quite a bit of that on the call today, some particularly large ones, in fact. We also have a lot of compliance support for firms that want to increase their volume. There's this interesting trend happening in the accounting industry itself where private equity is coming in and changing the form of the business from partnerships to corporations and putting capital to work, and those firms are then going on an M&A program themselves. And all of those things are driving demand for upgrading and modernizing the technology infrastructure. So there's a lot of larger macro style trends or industry trends that we think we're really playing into with the strategy here. And as people do this, they want to have an AI-forward approach to do all that. So I think we've got a great position to benefit from those trends.

Your next question comes from the line of Steve Enders from Citi.

I guess maybe just to start, I do want to ask a little bit about the guidance for the full year and some of the change there. I think particularly looking at the revenue side, it looks like the full beat wasn't really rolled through. And so just want to get a little bit of clarity on maybe if there was some revenue that kind of shifted around or if it's a reflection of customers converting more to the SaaS solution faster than expected. Yes, just getting any kind of clarity around some of those dynamics would be helpful to start.

Yes. Thanks for the question, Steve. We continue to operate on our strategy that we articulated over 2 years ago at our Investor Day. That being we are cloud first. And so clearly, that's what drives a lot of our key activity.

With respect to everything else flowing through, obviously, we'll have puts and takes, both with services as well as license. That being said, we continue to be successful and continue to orient more and more migrations. And so we'll talk more about how that is not only being modeled, but our success vectors coming up here at Investor Day.

And then even within our own services, clearly, we've discussed just broader on the whole partner ecosystem, and it's always going to be a delicate balance there as we continue to make investments as well as that opportunity and more prone to items in and around our customer set and items that will clearly drive our cloud offerings even more so. So I don't view it as evergreen change to kind of the mix of revenue. We've always been cloud first and the orientation of that, of which I do believe the full guide was passed through and then so.

Okay. Got you. That's helpful there. And then maybe shifting gears just in terms of the buyback program. I guess good to see that re-upped here. Just how are you kind of viewing kind of the forward cadence for those plans and putting that into place? And then I guess, anything to read into, I guess, broader capital allocation and kind of the ramifications of investing in the business and other areas versus utilizing the buyback?

Yes. We've never had a formal articulation of our capital allocation strategy. That will come forward more in earnest again at Investor Day. But just for the near term, we have been putting capital to work. We've been focused more so on antidilution measures and offsetting that. I think we've done a good job at that. And so clearly, we've got a lot of confidence not only in our ability, but in the strength of our balance sheet that the Board authorized an additional $200 million, and we'll put that to work to offset forward dilution as well.

Your next question comes from the line of Alex Sklar from Raymond James.

John, I want to start -- follow up on your answer to George's question earlier, just in terms of what you're seeing on broader IT budgets and AI budgets, maybe within your named accounts going to 2026. Any sense if these accounts are dedicating distinct spend to AI this year just as you're bringing more solutions to market? And then Dave called out doing more in terms of increasing spend around delivering AI offerings. Can you just talk about how that fits into your strategy there?

Yes. Thanks, Alex. It varies across firms. A lot of firms do absolutely have specific AI budgets or innovation budgets that they're looking to make sure that their firms figure out how to take advantage of the change here. That's benefiting us. We've had several deals that are being funded out of AI budgets. There's also -- there are also firms that are looking at their IT budgets generally and saying, how do they bring AI in to more traditional ways of budgeting and procuring and it becomes part of the procurement process. So we've won things in that category as well.

internally, this is a huge focus for us, and it has been for several years. We've tried to be both responsible and forward leaning in investing in R&D for this generation of technology. We've brought the company through and benefited from each of the previous technology generations from on-prem to cloud to mobile and now AI.

Coming up here at our event in February with Investor Day and our marketing event is called Intapp Amplify. This is the single largest release that we've ever done. This is the most consequential release that the company is setting up to bring to everybody, and it's been in the works for 2 years since this whole AI generation started to break. And we spent a lot of time working directly with our clients and all the folks who helped us build the company across the marketplace to really appreciate what is it that the potential of AI can do to drive success for these firms financially and in their business in compliance area with all the professionals, how do they become much more capable of using AI, applying it in the most successful possible way to compete.

And I think there's really interesting learnings from this first couple of years of experimentation, and we've integrated that all into our strategy here. And so I'm really could not be more excited about the February event because the early responses that we're getting from the folks on our ambassador program and our Advisory Board program could not be more positive about where we're headed here because I think these firms do have a disproportionate opportunity in how they can benefit from AI deployments.

I also think for the enterprise class firms, it's doubly complex because they have such significant work that they do for all of the world's capital markets transactions, M&A, litigations. I mean these are serious projects that these firms execute. And we've grown up working with them and increasingly are the folks that they're turning to for AI. So I'm really excited about what's coming here. And I think the R&D investment has been fantastic and something that we're really excited to keep doing.

All right. Great. Yes, the product velocity has definitely picked up. So look forward to more there. Dave, just maybe a quick follow-up for you. Can you just expand on some of the drivers? NRR stepped up pretty notably this quarter? What were kind of the big 1, 2, 3 things behind that?

Yes, for sure. First and foremost, our enterprise motion is working. Secondarily, we also oriented around some successful talk tracks about our partner ecosystem. And so if you think about how not only our lands are getting bigger, but also our expands because of those 2 motions. And so in theory, it was both upsell and cross-sell that we're seeing good uptake, but we still have a lot more room to go.

Your next question comes from the line of Brian Schwartz from Oppenheimer.

John, I wanted to ask you a question about different pricing models. Clearly, the forecasts are out there that we expected slow labor growth here on the heels of AI through the second half of the decade. I think you talked about in your comments how you're working with your customers and experimenting on different types of AI use cases and solutions. What about internally at Intapp in terms of the pricing model? Are you experimenting at all in introducing a more consumption or value-based pricing model? Just wondering if there's any testing of that going on and that potentially could be a new growth vector for the business in the future.

Yes. Thanks very much, Brian. We do have today multiple pricing models in the business, just for clarity. We do have part of the business and some of the relationships, a historical per user model. It has worked very well. And we are not fully penetrated in almost any of our firms. We have a lot of growth that we achieve each quarter in that NRR number from getting more people onto the platform using the technology, including the AI capabilities of the platform. So that's absolutely a continued growth driver for us.

But we also have today and for a long time, a firm-based pricing model for enterprise agreements that originally started in our compliance business, but we offer it in other areas and have relationships in many other areas where the firm pays based on its size or other metrics that are not per user. So we just wanted to folks understand that. And then from there -- so I think we've got a good relationship with firms where the contracts allow us to price to value. And historically, we've been able to do that.

From there, we are very interested in what the opportunity is for consumption-based or other metric-based pricing that aligns well with the way that the clients are thinking about the value they're receiving. I think fundamentally, the software companies have always been able to price value.

The mechanisms have changed over the years. But if you can get yourself in a position that they really see what it is that you're doing for them and they benefit and they want to grow from that, they're happy to pay for it. And we benefited bootstrapping our company in this particular end market because these firms in comparison to many industries, they're very financially well off. and that's really helped us. They always pay their bills. They're very honorable folks, which I appreciate. And if we can come up with a value agreement that they're happy with, they're happy to pay it. And so we've grown the company for many years working with them. And I'm very interested in this question that you're raising because I think there is an interesting angle as we grow and take more of the AI services into our own product. How do we monetize that and manage the financials and the economics of that. So we're very open to that, and we're experimenting a little bit.

Yes, I agree. That was really helpful. One follow-up for David. Just thinking about kind of tracking the progress of the AI SKUs. In relation to the AR growth, how do you think about the monetization of AI? How that will play out for Intapp in the second half of the fiscal year? Is there anything that investors that we should look to be able to better gauge how the AI product SKUs are doing for the business?

Yes, for sure. These are things that we've been working through, obviously, not only at our annual updates, both from direct ARR or attach rates and something that we'll have meaningful updates on coming forward in our upcoming Investor Day. So I don't want to steal all of our thunder with that. But obviously, the success has been far and wide for us. I'm very pleased with both the application from our go-to-market teams as well as our own internal development and the uptake. And so more to come on that.

Sounds good. I think we'll find out pretty soon at your investor meeting this month.

Your final question comes from the line of Kevin McVeigh from UBS.

Mine's already been answered.

There are no further questions for the question-and-answer session. I'd now like to turn the call back over to John Hall for final comments.

Okay. Well, we appreciate everybody's time today and the questions. We are very excited to have you all at our Investor Day event in a few weeks in February in New York City. There's a lot of opportunities to share all the things that we've been working on. And then later that day is our Intapp Amplify program where we're going to be making some pretty important announcements. So we're excited to have you, and we look forward to chatting with you there. And then we'll talk to you again next quarter. So thanks, everyone. We appreciate it.

Thank you. And with that, we conclude our program for today. We thank you for participating, and you may now disconnect.

Great. Thank you all in attendance here and for everyone on the webcast. This is truly one of my most favorite firesides because I think John and his team, Thad, have done a terrific job and were very fortunate to take Intapp public back in '21 and they've just done a really, really terrific job.

I just need to read one disclaimer, just from a regulatory perspective, and then we'll open it up to Q&A. [Operator Instructions] But part of the goal here is to keep this as iterative possible, so I just want to run through this just one disclosure real quick, and then we'll be on our way.

So as a research analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view at this meeting today, obviously, Intapp. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out to me, and I can provide them to you after this meeting.

So that out of the way, I think this is -- as I prepared for this, John, this is I think our fourth one. You folks went public in '21. And one of the things we always try to do is look back at kind of where you began and kind of where we are. And with the time, I think you folks were discounting about $200 million of revenue in '22; here you are at $600 million today, right? So you've done a terrific job.

And as we're going through the process, I remember part of the transition you did from on-prem into the cloud. But maybe take us through that journey over the last 3, 4 years because it's been one that's been built on execution and really the calvary of product, but maybe talk to some of the milestones along the way.

I wanted to start there because I think it just really helps level set what you folks have done and just really the caliber of what you do each and every day. And actually, we have Thad Jampol as well, who's Chief Product Officer, who -- a lot of this will be related to AI as well. So we're thrilled to have Thad as well because he's got a unique perspective on it, but maybe we start there, John.

Okay. Thanks. And thanks for having us, Kevin. We really appreciate it. The last few years have been a great story for the company. As we came public in '21, we had less than half of our clients on the cloud. We had a great opportunity in front of us to serve this underserved vertical industry, a professional and financial services firms, so the private equity community, the investment banks, the law firms, the accounting firms, the consulting firms.

These folks that were set up as traditional partnerships were fantastic businesses with an incredible 100-year position in capitalism and in the economy. They are incredibly affluent firms and success stories, but they really operate completely differently from a traditional corporation. And that was really the foundation for the company's story. We observed that they were building a lot of their own software because they were so different.

And our strategy was very simple. We were a bootstrapped company. Thad and I were there at the very beginning. There are a few of the founders who still run the business. And our strategy was to look at all the software that these firms were being forced to build internally and to realize there was an opportunity to build a commercial version of that software.

So the road map for the business was really set from the beginning by the organically evidenced needs of the firms, and we worked with the CIOs of the firms over many years and built an incredible relationship with the CIOs, the COOs and the management teams of these organizations to build up a cloud platform that would serve specifically their market.

And it turns out it's a gigantic industry. It's 3% of the global economy. It's shaped in firms like this, and they've never really had a vertically oriented company. Our original inspiration for that strategy was Veeva, what they did in the pharmaceutical industry, and this end market is actually 3x the size of the pharmaceutical industry, and they didn't have a company that was really focused on them.

As part of that, we also had machine learning generation AI because so much of the opportunity inside these firms information management program was around unstructured information, and they really trade on their knowledge as professionals. And so we did a lot of work with AI in the early years to bring technologies to the market. Ten years ago, we had machine learning-based time recording software that took over the market as the system that suggested back to people, here's what you should probably bill for.

We also had a very strong compliance angle to our business, very analogous to Veeva's, in which these firms are highly regulated, they're regulated differently under different regulations in the pharmaceutical industry. They're under insider trading rules and confidentiality management and all the professional obligations, but we built a very strong component to the platform in the compliance area, and that really set us apart from the traditional horizontals, like Salesforce and that crowd.

And then we did a lot of work from a business development point of view. How do we help the firms leverage their knowledge and expertise to win new business, win new clients, establish long-term relationships where they expand their share of wallet with the clients?

And so that was sort of the core of the business strategy that existed before and after the IPO. But coming out of 2021, we ended up building a whole relationship with Microsoft around this that has really helped us to expand. We brought a huge portion of our business from on-prem to the cloud, to your point, Kevin. So we're now over -- 90% of our clients have something in the cloud from us, over 80% revenue. So a major transformation there. We still have a little bit to go.

But a lot of trends are helping us finish that part of the project off. So COVID really helped us because people suddenly had to work from home and they couldn't get access to all their in-house built on-prem software. So that was a big tailwind for us. And then actually, this AI thing has really shaken the world up in this way, too. Firms know they need to get to the cloud to take advantage of all of this opportunity. So that's really helping us as a tailwind.

We've built a whole ecosystem of partners in addition to Microsoft. KPMG came on as a systems integrator for us. That was our first big 4 class co-deployment partner. And then we built up an ecosystem of 145 partner organizations of varying sizes in technology, in services, in data to help bring a whole product to the marketplace. And then most recently, obviously, we've gotten strong feedback from our clients that they trust our platform and its compliance capabilities, and they want us to work with them in this new generative AI and agentic AI era.

So a lot of the road map that you've seen from us over the past 2 years has been in that direction. Thad can talk more about that, but there are just some major milestones here.

Yes, too. And I want to spend actually the majority of time with you and Thad because a couple of things that stood out to me at the time of IPO and just even you've proven that out, right, is architecting your clients' data and how important that is in terms of their monetization, which, quite frankly, they couldn't do. And I think one of the data points that you've shared consistently, which has been stunning to us, again, off a base of $600 million of revenue today, $200 million at the IPO 4 years ago is $1 billion of revenue amongst your existing clients just if they were to adopt all your modules, right?

And if you think about the power of that from an internal perspective and go-to-market motion, John, maybe talk to that a little bit because I think it -- and remember, they serve markets where you can't be 99.5% right, you've got to be right 100% of the time. So just the criticality of the go-to-market motion because part of what we're seeing emerge is the real winners are going to be the data differentiation, right?

And they're serving very complex, very high cost, high stake industries, legal professional services where there can't be hallucination. So maybe talk to -- and I know we're going to get into the GenAI in a broader theme, but just really, there's just such a critical part to the story that continues to emerge, quite frankly, each and every quarter as you continue to deliver and walk up your NRR and things like that. But I know there's a lot there, but it's just -- it's such an important part to the story.

Absolutely. So from a go-to-market standpoint, one of the interesting things, if you watch these industries, they are less consolidated than Veeva's industry is. There are more firms at more sizes. But the trend over the past 10 years, and it continues every year, is that the industry is actually consolidating.

The biggest law firms are much bigger than they were 10 years ago. The accounting firms is the same thing. The private capital organization is the same thing. So we are benefiting from a drift in the industry overall towards an enterprise structure and an enterprise-grade organization. And more and more, they need an enterprise-class supplier. 70% of our SAM, which is about $15 billion, is in the top 2,000 accounts.

So when we started quite a while ago now, the firms were smaller, we were serving more of a mid-market model, but we had a conscious effort to develop the platform more and more towards an enterprise-grade class of solutions and technology, and today, we're serving some of the largest institutions in the world.

We have bulge bracket banks. We have all 4 of the big 4 that do something with us. We have some of the largest private capital institutions that you can name the biggest management consultancies that you can name. And we've just got a foothold in many of these, but the technology now has proven itself as an enterprise class grade. And the organization, similarly from a go-to-market standpoint, we've shifted our team more and more towards the top 2000 accounts.

So just this past year, we put more of our sales team against the top 2,000 accounts under a named accounts model, and you're seeing our average selling price move up and deal sizes move up as you look at the numbers, and that's conscious. We're moving into the area where that's happening. The consolidation trend is being driven by a couple of forces.

There's a competitive force, which is firms that want global business need to have more footprint, and so there's a natural need to have bigger organizations. But there's also a very interesting trend in parts of the market like accounting where private equity, as an industry, has taken an interest in the professional services industries. There's a very rapid acquisition program going on and rollout program going on inside the accounting firms.

And when the private equity firms put these institutions together, they need a technology platform to help all of those newly acquired people participate in the larger institutions. So that's driving a lot of opportunity for us, and we're actually benefiting from that trend. And then the AI trend, obviously, has caught a lot of attention.

To your point about the market opportunity with the existing base. The SAM is meaningful because most of the market today is still running on in-house built software. And so the greenfield for us to come in and be the major supplier there is significant with the clients that we have and we have 2,750 client firms today, we released that number. It goes up every quarter.

If we just sold what we have to the clients we have in that base, we can get well over $1 billion just through upsell and cross-sell of the existing clients. But in addition, there's opportunity for us to go win a much larger number of firms, which we also do every quarter. So there's a growth opportunity in new client acquisition, land and there's a growth opportunity and expand.

And then we do internal development of features. You see us every February with our announcements of new features that are monetized to go out and then we've had an M&A strategy for certain parts of the platform that has brought new capabilities into the organization. So I think it really is a rich environment for us to grow into. And so we've talked about the fact that our next target is $1 billion, and we'll see what happens after that. But it's a big underserved industry.

A question, and the technology is unique, and you folks have kind of discussed it in terms of thesis and delivered on it. One of the things we've always focused on is your clients are your best ambassadors, right? And if you think about KPMG, having come out of Deloitte myself, right, they're not going to scale up unless there's a massive opportunity because they have so much fixed cost.

So number one, they were able to underwrite your product because of how unique it was, right? And again, you entered that partnership with probably about $300 million of revenue. So maybe talk through that alliance as well as Microsoft because what you've seen each and every year is those partnerships and alliances get tighter and you broaden that out.

And the subtle undercurrent to that, at least for me, is you've got a level of distribution that you just haven't had not only from kind of the go-to-market, but also as they start to market your product and it's a really important part of the story and just really endorses the caliber of your software.

Well, one of the interesting things, we were privately held, we were employee-owned for a long time and we came public. And I think part of coming public created a level of transparency that allowed us to form some of these much larger relationships and capitalize on the footprint we had started with. The KPMG partnership has been a very important one for us. Several of the large consultancies have helped us to get into some of the large institutions.

Many of them have existing relationships with the bulge bracket investment banks, for example. And when we have a chance to work with those, we can work with one of the big SIs and we have kind of a trusted relationship from the beginning. There's a lot of opportunity in other parts of the ecosystem -- partnership ecosystem.

You asked about Microsoft. Our relationship there is, we always were built on a set of technologies that were very Microsoft-friendly because the industry is very Microsoft-oriented that we call on. But after the IPO, when we got to a scale that we could really get some of Microsoft's attention on this market and they saw how we were growing and what we were doing for Azure, we were able to form this relationship with them.

So we have a technology relationship that Thad can talk about. We had the head of Microsoft copilot on stage with us at our event, the client event last year. We have a co-marketing partnership with them, and we have a co-selling partnership with them. So today, if you are a client in one of these industries that we call on and you have a Microsoft Azure spend commitment, you can use that dollar for dollar to buy anything that Intapp makes.

So this has really helped us because it's taken the budget question off the table for many of the firms that we're dealing with because they're already committed to spending the money with Azure somehow. And so our sales team can go and make that case. We talked on the earnings call most recently about a big bulge bracket bank that we won, but there's some examples across each of the industries where we're doing that each quarter.

The Microsoft team also gets quota relief when Intapp sells its products, so their sales team is closely aligned in interest with ours, and we're selling well together. This fiscal year, for the first time, Microsoft set up a professional services dedicated sales force. So in prior years, we were working with a much larger number of Microsoft sellers. But this year, we have a very defined team. And so our salespeople and their salespeople are really getting to know each other and calling on deals and winning deals together.

And then this year as well, they've started to put some Azure credit into the mix when we're doing deals to help us land accounts. So we've actually won quite a few deals with both the Microsoft Azure agreement, quota credit for the sales team and also sort of incentive that they're providing to help us get folks over the line to get on to the Azure platform. And that's their interest really is how do they bring industry-specific technologies and AI into the marketplace with us so they get more Azure and Copilot consumption.

And you're seeing this crystallize in the financials. I mean, you've seen upwards of 121% net revenue redemption, which is just industry best and you've been able to execute and walk that up over the course of time, which has really been important.

Again, we're thrilled to have Thad with us today. We were introduced at their last Investor Day, and I thought Thad did an amazing job, very eloquent in terms of the AI strategy, which you folks have been at for a while. Maybe we'll talk to that a little bit.

And as we think about the opportunity for you folks, it's across your income statement, right? It's not only on the revenue side but also on the expense side. So maybe talk to the go-to-market motion, some of the early successes and how are you seeing that expressed across your cloud base?

Yes, Happy to. So as John mentioned, we have been in AI very heavily for a long time, starting the ML generation, working through deep learning. And with the emergence of generative AI, we think about it as almost as mini arc of innovation and that mini arc has been heavily focused on natural language, and you're seeing a lot of the initial use cases focus on document review, document analysis, red lining, document generation and sort of that wave, which there are a number of companies focused on that, are really focused on sort of more of the junior professionals in their day-to-day activities.

And we do have generative AI built into our products, which we've launched 2 years ago. But where we are really excited and where we see technology emerging in our industries is in the agentic AI. And we think that is a massive, even bigger opportunity than sort of that initial wave of generative AI because we're getting into automating not just sort of tactical document manipulation, but the automation of the fundamental value chains of these key workflows that drive the competitiveness and ultimately, the financial performance of these firms.

So you think about how do they win and grow clients, how do they cross-sell additional services into their key clients, how are they originating the best deals and leveraging the collective relationships to get first-mover advantage, how are you converting billable time into realized cash and then all the compliance regimes that they have to manage across global multiple jurisdictions.

These are the areas that we think senior leadership and the senior partners are losing sleep over and think about every day. And that's really what our clients are asking us to go build and we are running full speed at that. And so we're really, really excited about where our AI vision goes and AI offerings go.

That's helpful. And maybe talk about the consumption because we were chatting earlier, and I think you're seeing the adoption at much higher levels of the organization, I think, than what you've seen historically. So maybe talk about that a little bit because I think that's important in terms of not only the adoption, but what we've seen so far is -- and one of the questions we've gotten a lot is, okay, does this get competed away?

We haven't gotten a sense to get compete away to redeploying that capital elsewhere, and then driving more, to your point, just deeper into the organization and allowing those folks to do a lot more with just more efficiency. So maybe talk to that a little bit. And again, it's legal professionals are very high complex, very high-risk areas that, quite frankly, you just can't get wrong, right? And it's just -- you help that precision, really.

Yes. So I'll hit the second part and come back to the opening part on the sort of the packaging and the pricing. But we absolutely -- we see the collection of data from the transactional systems, the workflows that have gone into creating and curating that high-quality information, the compliance and governance that comes with that. All of that has been built up over 10 years, and that is fundamental to how you enable high-quality, high-precision AI on top of it.

So it really is almost 2 sides of the same coin, not a totally new separate thing coming in from the side. And one of the, I guess, maybe limitations of SaaS writ large has been adoption has typically trended to the more junior side of organizations. With the emergence of generative AI, it's almost like a new UI/UX paradigm being introduced for more senior audiences where they can get really easy access to highly accurate information if it's stored correctly and if it's structured correctly in a way that they would never have done before.

They would never have gotten their own credentials logged into an application, gone and generate a report and do that. And we have really cool anecdote from the head of Starwood recently that John talked about on the last earnings call. We're walking on to the set of CNBC, was able to open his phone and just get instant access to some really, really important information that came from the Intapp systems, whereas he would never have done that before.

So we look at this as a real augmentative new experience and paradigm on top of SaaS and those systems of record and all that data that you were talking about that is fundamental. So it's 2 sides of the same coin there.

In terms of the packaging and the structure, whether it's enterprise or seat-based or consumption usage based, we have done every one of those over the history of the company. We have -- we were telling the story earlier, one story from our history is we have the market-leading conflicts of interest product. And when we first launched it into the market, large law firms had very, very large conflicts clearance teams typically made up of billable attorneys.

And so there was a high seat count, and we sold conflicts by the seat. As we started penetrating the market, our software helped them meaningfully reduce the size of that team to a very specialized dedicated group of conflicts analysts that were not billable attorneys. And now that, that group was 10% of the size, we were able to change the monetization structure to being an enterprise agreement, and we were able to get higher prices because of that.

So we have experience in reacting to the best approach. We really think about the most important part being are we unlocking trapped value for these organizations and the way that we monetize it might differ. With the recent acquisition of TermSheet and the agentic platform there and the Starwood example, we actually are using a usage-based approach, which we expect to see more of as more agentic offerings will come out in the near future.

That's helpful. This is a very important topic. Open it up to the audience, see if anyone has any questions in the audience around this. We'll keep kind of going into it a little bit deeper.

I'm just curious [indiscernible] I was just curious about this shift [indiscernible] you need fewer junior people at these firms because they can do the work more efficiently, how do you monetize that if you're monetizing on seats now? And where are you in the process of developing that go-to-market scheme and conversation and pricing evolution?

Yes. So the question is, if AI makes the firms more efficient and they find efficiencies in headcount, how does that affect us or any company that's based on a seat-based model?

So one thing to understand about us is we actually have more than one licensing model today. So as Thad described, we've gone through evolution over the history of the business. I think we've benefited from a consistency of serving this special, highly affluent end market -- regulated market over the years, we've actually served it through multiple technology generations.

We're quite different from a traditional horizontal software company that tends to live as long as one of the tech generation lives and then it gets supplanted by the next group. We've gone from an on-premises appliance-based business to a software on-prem business, to mobile technology, to cloud and more recently over the past decade-or-so machine learning-based AI and now generative AI and agentic AI.

So our focus on the end market has allowed us to focus on solutions of applying these technologies. So when you see our language, we talk about applied AI, and that's what we're communicated is the ability to bring with our special expertise the opportunity and the potential of each generation of technology to the market, and they really trust us.

We've built relationships with these folks over the years that they stick with us. We've gone through the evolution from a seat-based model to an enterprise or a firm size-based model. Sometimes that's based on revenue, sometimes that's based on another metric. But in our contracts today, based on our historical experience with these firms, we have the option of pricing and packaging our software in multiple ways.

And we made that transition for some of the reasons that, that explained. We're very interested in this evolution towards a consumption-based opportunity. One of the things we want to be careful about is a pure consumption-based model has pros and cons and you want to have a stable revenue stream. So I think there's an opportunity for us to have more of a consumption-based factor, but also have consistent growth and reliability through ups and downs.

We bootstrapped the business right through the 2008-2009 recession. We grew right through that, which I think is evidence of the resilience and special nature of this end market to allow us to do that. But we had some real benefits from our historical contracts with those clients. Ultimately, I think the clients will go with us as we change the model. When Microsoft came out with Copilot, they made a call to price that by the seat for the first years of the technology, and we wanted to do something that was familiar with AI, so we followed that pattern.

I think what you're seeing now with the TermSheet acquisition and some of the agentic platform, is a little bit of a different pricing model. And I think as long as we stay focused on the value to the firm and they are experiencing the kind of retention numbers, as Kevin mentioned, cloud NRR of 121%, it's very difficult for these firms to take the stuff out. Once they get it in there, they're getting real value from it.

We will evolve the pricing to follow the model. And I think folks are happy to pay it actually if they can get the value for it because the people that we tend to sell to are the senior executive teams who are worried about these revenue and profitability issues that the firm is trying to manage.

And their own businesses can be under pressure, too, because -- and what's been amazing is they've been very consistent in terms of beat and raise, beat and raise, beat and raise and they're not immune from a macro perspective. ECM has been light, M&A has been light, lot of your clients are law firms, and you've been able to power through that and it's just the value I think you bring to bear from an efficiency perspective, but also how critical your product is to the revenue generation as well, right? I mean it's just -- it's a critical part to what they do.

Yes. We've focused in both ways. So part of our ROI story, to give you an example, in the conflicts clearance area, we cut 60% of the cost for clearing new business, but we also cut the time for people to bring on new business from about a month to about a week or sometimes down to 3 days. So when you're stuck in clearance and you can't get the matter open and start billing for it, you can lose the opportunity to a competitor.

So there is a real race in this area. And a lot of our focus has been on that combo. In the Time business, we do a lot around compliant time because there's a strong program from the corporate clients to all these firms that if you don't bill exactly as you agreed in your engagement letter, which by the way, are individually negotiated with every single client, it's a very interesting industry, they will not pay the bill, and you'll get into a dispute around the bill and then you end up writing it off and it's a major source of profit-loss to these firms.

And a lot of our technology is about the hard ROI that comes from avoiding that kind of situation. We have great relationships with the professional indemnity malpractice insurers around our whole compliance issue, which saves them hard money on their insurance agreements.

And then on the revenue side, we're doing a lot about helping the firm capitalize on the intellectual property, intellectual capital that's embedded in the brains of all of these professionals around the world who work in these firms, so they can just unlock that. They probably can win any deal in the world, but the hardest thing they've had is how do they get them all organized?

And so this moment of AI is such a huge opportunity for them, not just on the efficiency side, but on unlocking the trapped potential of the knowledge and expertise by connecting people across the firm with the right expertise to the right opportunities, to the right client engagements, to win the business in the first place or to bring follow-on business for additional practice areas or service lines to the firms later.

It's just -- it's a really exciting opportunity for this AI moment because there's so much you can do inside these firms to take advantage of the potential of this generation. And I think we're just like really well positioned to be the people who apply this technology to help folks succeed.

And I think the key [indiscernible] right, your technology enabled as opposed to displacement because, again, it's such a relationship business, particularly at the senior level and as they embrace it, it helps drive more efficiency in their go-to-market win more business and you become more embedded as opposed to disruption risk. It's actually pretty phenomenal.

Well, and I think the firms take a lot of -- these -- most of these firms, there is still a professional identity that the people who are running the organization have. They really feel it's important to think about the client, to think about the client relationships, to think about the client obligations, to think about their expertise as professionals and a collective group of professionals with that expertise.

How do they capitalize on the intellectual property and knowledge and experience that they've already assembled in their human platform across the world? And this AI moment is such a moment for them to unlock and release that. And so what we're really focused on is being the platform that enables that for the firm as a whole. You can think of it as the firm AI system that helps release the potential of all the expertise across the firm overall. And that really wins. When you talk to the managing partners and the CEOs of these firms, they nod when you talk that way. So it's been a really fun project.

Particularly when you think about their go-to-market relative to -- and again, there's all different types of law, right? But an interpretation at the federal level versus state and local, those judges are at a much different evolution than more a lot of this private practice sits, and they can leverage cases to help drive the outcome for them. And that's just -- there's a lot there.

We're up on time. I mean it's super effective. Anything within that? I mean, again, it's great to have both of you but...

No, we really appreciate everybody's time, and we're happy to talk to folks. Thank you for spending time with us.

Thank you. Yes.

Hello, and welcome, everyone, to the Intapp Fiscal First Quarter 2026 Earnings Webcast. [Operator Instructions] Please be advised that this conference is being recorded.

Now it is my pleasure to turn the call over to the Senior Vice President, Investor Relations, David Trone. The floor is yours.

Thank you. Welcome to Intapp's Fiscal First Quarter Financial Results. On the call with me today are John Hall, Chairman and CEO of Intapp; and David Morton, Chief Financial Officer.

During the course of this conference call, we may make forward-looking statements regarding trends, strategies and the anticipated performance of our business, including guidance provided for our fiscal second quarter and full year 2026. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law.

Further on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income per share and free cash flow. Our GAAP financial results, along with a reconciliation of GAAP to non-GAAP financial measures can be found in today's earnings release and its supplemental financial tables, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call, or a supplemental financial presentation, which is available on our website.

With that, I'll hand the conversation over to John.

Thank you, David. Good afternoon, everyone. Thank you for joining us today as we share the results of our fiscal first quarter.

Now starting our fifth year as a public company, I'm pleased to share that once again, we've achieved strong quarterly results, supported by cloud ARR growth, new products, new partnerships, new logos and expanded client accounts around the world. We added new applied AI capabilities to our platform, furthered our strategic partnership with Microsoft and migrated more clients to the cloud. I'll share details on these and other select growth drivers throughout this call.

In Q1, our cloud ARR grew to $401 million, up 30% year-over-year. Cloud now represents 80% of our total ARR of $504 million. In the quarter, we earned SaaS revenue of $98 million, up 27% year-over-year and total revenue of $139 million, up 17% year-over-year.

Now I'd like to share some highlights from our fiscal first quarter. We continue to execute on our vertical AI roadmap, specifically through applied AI innovation and growing client adoption. For a bit of context, our industry-specific AI solutions do automate rote manual tasks. But more importantly, they deliver actionable insights drawn from a firm's proprietary data, knowledge and relationships, which are unified and enriched with our own industry graph data model and trusted third-party sources.

Critically, our solutions do all this while helping firms maintain compliance with the industry's most complex regulations. These advanced, tailored compliant capabilities are what set Intapp apart and why firm leadership continues to invest in our technology, which brings me to my first example. In Q1, we announced a significant new release of Intapp Time, which delivers faster, easier, more accurate timekeeping powered by major new AI features. Built on our secure cloud foundation, the new Intapp Time offers GenAI capabilities that monitor users' workdays to find and capture billable activities, to validate entries against client guidelines, to suggest corrections when needed, and to answer questions about entries and unreleased time via an AI chat experience.

The response has been very enthusiastic, reflecting that we're tapping into real need with our thoughtfully designed vertical AI. More than 100 clients and prospects attended our introductory webinar, and we booked over 200 meetings in the 6 weeks following its launch. Brian Donato, CIO at Vorys, who participated in our early adopter program said, the Intapp Time release is very intuitive and won't require us to retrain our lawyers. Our users really like the quick add functionality, the ability to use AI to create narratives and the ability to group activities in the activity stream.

Additionally, this quarter, Starwood Capital Group, a leading real estate investment firm with over $120 billion in capital deployed globally and a leader in technology adoption, added Intapp's agentic AI capability to its DealCloud deployment. The agentic capability will give Starwood's investment professionals a 360-degree view of the firm's investments and portfolio, all enabled and orchestrated in a modern AI chat interface.

And third, Alpaca Real Estate is showcasing its use of DealCloud as a differentiator to its clients and prospects. At a recent client retreat, the firm shared how its modern tech stack gives them a competitive advantage among real assets investors and highlighted DealCloud as an integral part of their evolution toward AI, powering their workflows, analytics and data.

Now let's turn to our expansive partner network. We continue to grow our high-impact partner ecosystem, anchored by Microsoft and a strategic set of 145 curated data technology and services partners. It's one of the most powerful vertical ecosystems in our industry. And its real differentiator is how deeply our partners are integrated into our commercial operations. They're strategic amplifiers of our business, enabling us to pursue larger opportunities, execute faster and scale more efficiently without a proportional increase in internal costs.

To name just one example, in Q1, Lexsoft joined our network to help drive growth in our legal vertical in Latin America and other Spanish-speaking markets. And as in previous quarters, Microsoft continues to be a major growth driver for us. Of our 10 largest Q1 wins, more than half were jointly executed with Microsoft. In several of those, Microsoft fronted Azure investment dollars to help accelerate the deals. I'll share more specifics as we turn now our attention to notable wins from the quarter.

Our growth was again powered by adding new clients, expanding within existing clients and migrating clients to the cloud. We also continued to make traction in new markets, spanning across our verticals, products and global locations. This quarter, we saw 3 notable trends driving wins in our legal vertical. First, the largest law firms continue to consolidate. In other words, the big firms keep getting bigger. They're taking a bigger share of the growing legal market, and they're going to continue to need an enterprise-class technology partner that can scale with them.

To cite an example, one of the 95 Am Law 100 firms we count as a client increased their contract for Intapp Conflicts, Intake, Terms, Time, Walls and Collaboration this quarter to accommodate its growing size. Second, our clients are adding additional Intapp solutions, including AI when they migrate to the cloud. For example, another Am Law 100 client started moving its Intake and Conflict solutions to the cloud while also augmenting its portfolio of Intapp solutions by upgrading to the newly released Intapp Time with GenAI on the Azure marketplace.

And an Am Law 200 firm chose to move all of its Intapp solutions to the cloud, starting with Compliance. They purchased Intapp Assist to add GenAI capabilities to its Time, Terms and DealCloud solutions. The firm completed the purchase via the Azure marketplace using their existing MACC agreement. And third, current cloud clients are also growing their Intapp footprint. For example, Bryan Cave Leighton Paisner bought Billstream and added Intapp Assist to its Time contract, expanding their existing product portfolio of Intapp Compliance and Collaboration solutions.

One of our Intapp Time GenAI early adopters also added Intapp Terms with Assist to enable comprehensive compliant time recording. These solutions add to the U.K. law firm's existing portfolio of Intapp Compliance solutions. In our accounting and consulting vertical, we saw continued modernization of compliance and timekeeping practices with many adding new products to their existing Intapp investments.

I'll share a couple of examples. One of the largest providers of tax, accounting and advisory services purchased Intapp Employee Compliance to complement its existing instances of intake and conflicts. And SEA Limited, a leading consulting firm in forensics analysis and investigations, added the new Intapp Time to its portfolio that includes Billstream, Conflicts and Intake.

In our financial services verticals, firms continue to choose our purpose-built solutions for their industry-specific capabilities. Here are some examples. A leading bulge bracket investment bank chose to replace a homegrown system with DealCloud for AI-enabled client coverage and deal execution that are attuned to the complexities of a multinational bank with complex clients. A mid-market PE firm moved from its legacy horizontal CRM to DealCloud with Intapp Assist as part of its AI-first approach to deal origination, deal sourcing and business development.

Compass Capital chose DealCloud for AI-driven marketing, deal origination and relationship management capabilities. The firm is replacing disparate legacy systems with a unified solution designed for PE workflows. And a global investor and manager focused on real assets, selected DealCloud for its ability to improve investment process efficiency and manage complex transactions.

In conclusion, we're proud of our strong performance in our first quarter, and we're optimistic about our continued growth opportunities. As our Q1 performance has shown, we continue to grow by adding new capabilities to our platform and increasing our global and enterprise go-to-market reach. We see continued opportunity both to add new clients across a broad TAM and to deliver greater value by expanding within our existing client base.

We're serving a durable end market with our subscription revenue model, industry-specific cloud platform and applied AI and compliance capabilities. We have a great growth opportunity to drive AI, cloud adoption and modernization across all the industries we serve.

As always, I'd like to thank our clients, our partners, our investors, our Board and our global Intapp team for their teamwork and dedication. Thank you all very much. Okay. David, over to you.

Thank you, John, and thanks to everyone for joining us today. I'm pleased to report a solid start to fiscal 2026 with our first quarter performance. These results underscore the opportunity ahead as we prudently invest and execute against key market tailwinds, digitalization, cloud forward adoption and compliance-driven demand. Our Q1 execution reflects these dynamics and reinforces our confidence in driving sustained profitable growth this fiscal year and beyond.

Cloud annual recurring revenue surpassed $400 million in Q1, a 30% year-over-year increase as we expanded enterprise wallet share across our vertical markets. We excelled on both upsell and cross-sell activity this quarter while continuing to transition client spend to the cloud. We're also seeing strong progress in executing our vertical applied AI strategy with absolute growth in AI SKU ACV dollars and attach rates, while maintaining discipline in our operating model, proving that efficiency and leverage are tenable.

Let's begin with our fiscal Q1 results. SaaS revenue was $97.5 million, up 27% year-over-year, driven by new client acquisitions, contract expansions and ongoing migrations from on-premise products to the cloud. Cloud positive mix progression continued with SaaS now contributing 70% of total revenue, up more than 5 points year-over-year. License revenue totaled $29.2 million, up 2% year-over-year. The on-premise portion of our business continued to migrate toward cloud offerings, while legal client growth remained steady and in line with firm expansion.

Professional services revenue was $12.3 million, down 8% year-over-year. Our partner ecosystem continues to help us prioritize long-term cloud growth by focusing on co-sell execution, client satisfaction and efficient implementation practices. Total revenue was $139 million, up 17% year-over-year, driven primarily by strong demand for our cloud solutions.

Turning to our capital allocation. As announced in August, our Board authorized $150 million share repurchase program. During the first quarter, we repurchased $50 million or approximately 1.1 million shares, reflecting our confidence in long-term value of the business while maintaining a strong balance sheet. Our partner ecosystem continues to deepen its role in the go-to-market execution and client delivery. Partners are facilitating complex deals, opening new geographic opportunities, accelerating value realization and promoting platform adoption and retention.

Our FY '26 sales kickoff included a dedicated in-person partner track for the first time, a reflection of the expanding network opportunity. Year-over-year, co-sell growth in Q1 was strong, and we feel well positioned for even greater partner-driven contribution in FY '26 and beyond. As we continue to focus on margins and operational efficiency, Q1 non-GAAP gross margin was 77.7%, up from 76.3% a year ago, reflecting continued mix shift in cloud efficiency gains.

Non-GAAP operating expenses were $87.1 million compared to $75.6 million in the prior year period, largely reflecting go-to-market spend related to sales kickoff and targeted marketing initiatives as we entered the fiscal year as well as ongoing investments in our product-led growth strategy. Non-GAAP operating income was $20.9 million, up from $15.1 million in Q1 of last year. Non-GAAP diluted EPS was $0.24 compared to $0.21 in the prior year period. Free cash flow was $13.2 million for the quarter, defined as cash flow from operations less capital expenditures. Our cash and cash equivalents balance at the end of the quarter was $273.4 million, reflecting our $50 million share repurchase.

Turning to our key metrics. Cloud ARR increased 30% year-over-year, while total ARR grew 21% over the same period. Total remaining performance obligations, or RPO, was $715.2 million, up 30% year-over-year. Our increasingly enterprise-focused go-to-market motion showed continued progress in Q1, yielding at quarter end, 813 clients with ARR of at least $100,000, up from 707 in the previous year. Our $100,000-plus ARR clients now comprise approximately 30% of our total clients of 2,750. Our cloud net revenue retention rate was 121% in the first quarter, demonstrating continued strong retention and strong upsell and cross-sell expansion among existing cloud clients.

Now turning to our outlook. For the second quarter of fiscal 2026, we expect SaaS revenue of between $100 million and $101 million, total revenue in the range of $137.6 million and $138.6 million. Non-GAAP operating income is expected to be in the range of $21.4 million to $22.4 million and non-GAAP EPS in the range of $0.25 to $0.27 using a diluted share count weighted for the quarter of approximately 84 million common shares outstanding.

For the full year fiscal 2026, we expect SaaS revenue between $412 million and $416 million, total revenue in the range of $569.3 million and $573.3 million, non-GAAP operating income in the range of $97.7 million and $101.7 million and non-GAAP EPS in the range of $1.15 to $1.19 using a diluted share count weighted for the fiscal year 2026 of approximately 85 million common shares outstanding.

Thank you. And I'll now turn the call back to the operator.

[Operator Instructions] And our first question comes from the line of Kevin McVeigh with UBS.

Congratulations really on terrific results. John or Dave, I don't know who this is best for, but the net revenue retention, 121%, just really, really amazing. That was up from last quarter. Can you help us maybe understand what drove that a little bit, and maybe we could start there.

Kevin, it's Dave. Yes, the team has done -- continue to do extremely well. We continue to make continued inroads both not only on the upsell, which is additional seats, but also a true cross-sell motion. And I think going back in time, last year, we introduced our true enterprise model, and we've continued to densify that around a lot of key accounts, and we're continuing to see a lot of success with our cloud offerings with that profile. And so you just continue to see that general nature of how we've been going to market and been articulating and quite frankly, given some really good examples even in today's conversation point.

As well as our churn continues to remain low single-digits. So our product adoption and delivery has been very welcomed by our respective clients, and we'll continue to make progress there.

That's helpful. And then obviously, the results continue to be terrific. There's obviously a lot of debate as to how GenAI could potentially impact your clients. As you've kind of started on the journey, have you seen any changes in behavioral around that where they're consuming maybe more, maybe less or shifts in terms of how you're charging just based on any behavioral changes from your client perspective? I mean the numbers don't suggest that at all. If anything, it seems they get better, but just anything to help us kind of answer that question that we've gotten from our clients.

Thanks, Kevin. This is John. So we're big believers in what this generation of AI is going to bring to this end market. There's an incredible opportunity for these firms who are very knowledge-oriented in the way that they create value, either as investors or as advisors. And so we're putting a huge program behind extending our traditional machine learning generation AI with this GenAI generation technology. And we have a lot of expertise in the business to continue to do that. And you've seen a series of announcements from us over the past 18, 24 months of a sequential expansion of the GenAI generation throughout the platform. And the most recent one we talked about on this call was the time release, which has been very well received.

It's interesting to get the feedback from the clients. A lot of them are trying a lot of the different tools. We had an advisory board with our COOs and one of the leaders told me that she had 9 different AI start-up tools that they were trying. So that's kind of where we are in the adoption cycle. From our perspective, we think there's a tremendous opportunity to leverage the position that we have developed over many years as the scaled compliant systems to bring GenAI into the workflows, we call it vertical AI and really differentiate from a lot of the more general horizontal systems that are being offered out there from some of the larger companies, but also in an integrated workflow that differentiates from some of the smaller companies that are working on more of a point solution approach.

And that's been very positively received from our advisory boards and our early adopters. I gave some examples of how our adoption is working. And this is historically how we have grown the company. We've had many years working with these firms and the advisory board system that helped build the company as a bootstrap business. And we're doing the same thing with this GenAI generation. So it's a very deliberate strategy to look for the key value propositions that will enable us to roll GenAI out and monetize it.

Your question about charging. We have said that we have in our contracts the ability to meter in different ways. We already have revenue that comes both from a per user basis and from a firm size basis. And we are working with some of the early adopters on some other models that we'll hear more about as the fiscal year rolls on. But I think there's a real opportunity to continue to leverage the existing relationships we have. And the firms are pretty excited to pay for it given some of the ROI that we can show. So we're optimistic about how this goes.

Our next question comes from the line of Alexei Gogolev with JPMorgan.

Given the very strong ARR and NRR acceleration, how much of this acceleration is coming from industry-specific changes like the one, John, you mentioned in market consolidation in legal? And how much is coming from macro tailwinds or perhaps that internal enterprise sales build-out and productivity improvement?

Thank you, Alexei. I think it is a combination of several of those trends. So there's definitely a set of trends in each of the industries that is helping us at the enterprise level. As I mentioned, the law firms have a consolidation trend going on. In the accounting industry, there is a trend where the private equity firms are coming in and investing in the midsized accounting firms and basically rolling them up. So they're becoming more enterprise class pretty quickly. And they have a strong technology need and in particular, a strong compliance need because now you have, for the first time, private equity owners of these professional firms and the compliance issues are very meaningful there. So that's helping us.

There are a couple of regulatory things that are happening. I mentioned on an earlier call what's happening in places like Australia with some of the AML regulations. And then the private equity industry is continuing its secular growth. So the firms are getting bigger. They're raising larger funds, and they're taking more share from the public market. So we're very well positioned in several of these macro trends. I think from a technology transformation perspective, we're continuing to follow the digital transformation trend that you all have studied in a lot of the other markets for a long time. It was slower to come to this market. And we're benefiting from the fact that these firms are really committed now to getting to the cloud, particularly after COVID, and you hear us give examples of that accelerating. So we're excited about that for us.

And then finally, this AI conversation that we just talked about is definitely causing people to take a new look at their IT portfolio and how are they going to position themselves to make sure they compete in this era when AI is going to play a meaningful role in the operation of the firms. So there are several overall drivers, I think, that are supporting that NRR and ARR growth.

And Dave, considering the strong dynamic for ARR, do you feel like the guidance that you've given is somewhat conservative? It looks like you've raised full year outlook by less than the Q1 beat. Can you maybe elaborate on that?

Yes. We're always going to show a series of prudence here as we exit not only this year, but then going into next year. So that's one. Two, we're definitely cloud-focused, SaaS-focused. We do have some moving parts going on with both services and with license, but we feel that we provided a very prudent guide that just lets us keep our heads down and execute accordingly. So...

Next question comes from the line of Parker Lane with Stifel.

John, clearly showing a lot of progress here in the percentage of business from cloud from an ARR perspective. For those holdouts that you're seeing today with the amount of innovation you're delivering from an AI perspective, what are the common reasons that people are continuing to stick on-premise? And do you think AI is becoming that tipping point that can perhaps accelerate their decision-making to move to cloud more quickly?

Thanks, Parker. I do think the trend is strong and accelerating because a lot of the traditional impediments that help back this industry have kind of been tackled. There were some regulatory requirements that people needed, but a lot of the capabilities of our partner, Microsoft now to meet the different hosting requirements in each of the jurisdictions have been solved. Lot most of the firms that we serve, certainly the enterprise class firms are operating in more than one regulatory jurisdiction. So that was an important part. I think the Microsoft partnership overall has really helped us in that regard at the larger end of the market.

I think now AI has absolutely captured the attention of the firms, but they really are experimenting in a lot of places and looking for an experienced partner that they can trust. And particularly for this market, where we're focused, the compliance questions about how do they make sure that they respect client confidentiality and the incredible importance to each of them, sometimes from a pure regulatory point of view around how do you manage MNPI inside these large firms and make sure that it doesn't get accidentally shared, over shared inside the firm.

And then how do you make sure that the firm's intellectual property of history of knowledge and experience, which is really what forms the basis of these firms' ability to compete and differentiate themselves. How do you make sure that, that is something that you can manage and use for the firm's proprietary advantage going forward? These are all key issues for these firms as they look at a lot of these solutions. And we've been very focused on continuing our strong position in compliance and information governance and confidentiality as the key partner to enable them to deploy AI in a trusted way to really get the value of it in a way that's consistent with the obligations that they have from regulations, but also from their professional obligations.

And that's playing well. So I think that we have a great opportunity to continue to pull people to the cloud now. The final piece is just the IT budget and prioritization of all the projects that they're doing this year. It's become less and less of an argument against as much as a practical how do we plan for this. And so we're working with each of our clients with our account plans and our teams to make sure that we get in line and make sure we're at the front of the line with the AI story to help them make this move. And you're seeing some examples of that, that we shared with you.

Makes sense, John. And Dave, maybe one for you. As you lean more into partners, you alluded to this more moderated pace of professional services revenue growth. Would you expect that trend to continue here in fiscal '26? And given that, would the somewhat of a pressure that we saw in gross margins professional services also come with that? Or do you expect utilization rates to sort of normalize here?

So on the margin pressure, we expect that to moderate here through the back half of the year. So plenty of planning and activity there. With respect to revenue, we're always playing the trade-offs of building the ecosystem as well as what gets delivered without -- gets delivered internally without losing the aspect of the customer first. And so that's always going to be relatively tricky balance that we're trying to make game-day decisions on and then with respect to the margins that follow. And so I think from a longer-term perspective, you want to model around 10% of revenue to be in our services, but that could deviate a point or 2 here or there as you modulate through the respective quarters.

Next question comes from the line of Koji Ikeda with Bank of America.

Maybe the first one on AI and looking at your 2 target verticals, the financial services and professional services, of the 2, which are more open to adopting AI tools today? And for the other one that maybe is less open, what do you think is the catalyst or trigger within this specific vertical to drive more AI adoption?

Thanks, Koji. The market generally is super excited about the AI opportunity, particularly because so much of what these folks do is in the style of research. And a lot of the first tools that have come out have helped people to look into the outside world and research what's available on the Internet and take a point of view on that. It's very familiar to a lot of the work that a lot of the folks inside these organizations do.

So there's a lot of enthusiasm for what it can do to help them. As they try to bring those experiences and integrate them into the overall management workflows of the firm, they're needing to integrate more and more with the proprietary data of the firm, with the governance practices of the firm, with the financial management, operational management requirements of the firm.

And I think this is what's pulling us in at the top of the leadership group to say, how can we help them orchestrate the role of AI across the various activities that people are trying inside the firm and do so in a compliant way and in a governed way and take advantage of a lot of the firm's proprietary knowledge in our industry graph data model and other sources inside the firm to help them really get the full value for the institution out of this style of adoption.

I think there's different flavors of that in the law firm side, we make this distinction, which is kind of a classic distinction between the practice of law and the business of law. Historically, Intapp has been very much helping the firms as a whole orchestrate their business. And so that's sort of an angle inside that firm. There's an analogous case though, on the financial services side, where firms are really focused on the process of sourcing and origination of business, which is completely analogous to what we're doing in professional services.

So I think rather than contrast the 2, I would say it's more about the vertical AI solutions, the category solutions and how are the firms going to think about AI overall as a program of improving productivity in a compliant way for all of the players inside the organization. That's our focus.

Got it. No, that's super helpful. And a follow-up here for David. I focus a lot -- we focus a lot on ARR and specifically cloud ARR and great to see the acceleration there. But I can't help look at my model and notice billings and just looking at kind of mid-high teens growth in total billings, but also a lot of volatility in that quarterly billings, the calculated billings metrics. Maybe help us understand some of the puts and takes there? And is there the potential for billings to start to smooth out here in the coming quarters?

Good question. So yes, we do see it smoothing out in 6 to 9 months, really getting through things such as services, which has a lot of fixed fee, getting through some of these license, which you get half upfront at times with ASC 606. And so as those things transition, so too will the noise. You also have to -- just with respect to Q1 of '26, if you look at the DRs, right, going from the deferred revenue of almost an all-time high or actually an all-time high in Q4 of '25 coming down to Q1 of '26, $259 million down to $239 million. But then if you look at that year-over-year, the $239 million up over the $205 million, I mean, you are seeing pure growth within that number. And so we think it's on the right trajectory.

Next question comes from the line of Terry Tillman with Truist.

This is Dominique Manansala on for Terry. So considering fiscal Q2 and Q4 tend to be the stronger ARR quarters with the client fiscal cycles and the renewal base, as your mix shifts more into enterprise with the new enterprise sales group, do you expect that seasonality to intensify or maybe flatten a bit as your deal sizes grow?

Apologies. I was trying to get my phone off mute. No, we view the same seasonal patterns with both of our -- whether it be mid-market or enterprise. It just lands naturally with our end clients year-end. And so where you see some of the incremental could be budget flush either through the respective calendar year-end and/or through -- halfway through the year when the budgets are allocated. And so that's kind of what we're selling into at more and more of these enterprise accounts.

And so we don't see that deviating. We also don't see it intensifying because we have been part and part selling to a lot of these larger enterprise accounts, but now we're just doing it more formally. And so yes, we'll continue to maintain that asymptote.

Got it. And then just as a follow-up, now that Intapp has surpassed $500 million in revenues entering this next phase of evolution looking towards the $1 billion revenue narrative, what are the 1 or 2 most important execution levers that kind of move the company towards that next major scale milestone? I guess I'm thinking maybe deeper product attach, [ product ] leverage or maybe continued vertical expansion.

Yes. So we have a couple of ways to win here. On one hand, we have enough clients today. We talked about this a little bit at our Investor Day that if we just sold through a percentage of what we have on offer today, we could get the company to $1 billion and much more. And alternatively, it's a large underserved TAM, and we're landing new clients each quarter and each year. And if we just did that with the deal sizes that we're showing, we could get to $1 billion that way. So there's actually a very large opportunity for us. This market is very interesting because it's 3% of the global economy and has traditionally been overlooked by the horizontal players.

So the vertical strategy across the technology generations has been a key angle for us. And a lot of the capabilities that we've developed like the compliance point transcend each of the technology generations. And now we're doing it with vertical AI. So I think there's a great opportunity for us to grow to that number. I think some of the execution levers include the continued success of our clients and the cross-sell and the upsell, continued landing of new clients based on our strong reputation and continued innovation. It's a huge opportunity. It's historically for us been very client-driven. We're a bootstrap company. We have an advisory board systems. People help us understand what it is that if we build for them, they will pay for. And that relationship goes back 15 to 20 years in some firms.

They really do trust us to be the people to bring them to the AI generation. So executing on that, continuing that core capability of innovation directly to this market, I think, will really help us. And then I think just continued talent. As we grow, we've had a great opportunity to bring more and more great talent into the business, people who have seen larger and larger scale, people from the firms themselves who really bring the expertise. It's a unique group that we've assembled that really understands how to bring this next generation of technology to this specialized end market. So those are some of the key points.

Next question comes from the line of Alex Sklar with Raymond James.

John, on the international opportunity and some of the commentary around expanding global reach, you've got the partner in Microsoft globally. What's the opportunity you see internationally broadly versus what's been a string of really strong quarters in the U.S.? And maybe for Dave, how much investment do you think is needed either from a product standpoint or go-to-market side given some of the partners you already have in place for that opportunity?

Thanks, Alex. About 30% to 1/3 of our business has been international historically. That has been a growing footprint around the world. We have a strong business in the U.K., obviously, Australia, New Zealand, where we started, Canada, where we started. But increasingly, good footprint in Continental Europe. The Nordics have done a lot recently. We opened a Singapore office last year. The team there, I just visited them this past quarter, a fantastic group of people that have brought on some incredible clients and a huge opportunity there.

I mentioned in our partner ecosystem, we've added more and more partners that help us reach into parts of the world that we haven't set ourselves up yet. The one we talked about here was a group that's helping us expand into the Spanish-speaking countries. We're excited about that. We have another recent partner that's come on board to help us with the Portuguese-speaking countries. So I think there's a lot of opportunity for us to continue to move in that direction, and it's a huge part of the TAM that we've just begun to kind of enter.

Yes. And then with respect to the incremental investment, Alex, it's been pretty nominal thus far. We don't need to get into things as localization or any arduous local statutories from where a lot of our clients serve. And so it's just a matter of, if anything, just the opportunity cost of us addressing so many respective opportunities within our SAM and TAM. So it's just a matter of pacing and planning.

Okay. Great color. And maybe just following up in terms of direct sales hiring. You talked about some of the partner opportunity, but you talked about putting more wood on the fire this year after some of the structural changes last year. Can you just help frame like the magnitude of hiring plans this year versus maybe what you did last year? Where are those sales resources going? And then any color on kind of timing of the hiring plans this year?

Sure. We are focused on growing the enterprise group that we announced at the beginning of '25, the organization there. That's really showing some traction. I talked about our land of one of the bulge bracket investment banks this quarter, which we were super excited to be able to do as a direct result of that organizational evolution and putting more density of the team against some of these really vast institutions. We are adding some capacity, continuing to do that during fiscal '25, leading -- I'm sorry, during fiscal '26, leading into fiscal '27. So there's still an opportunity for us to continue to grow that footprint. We think that there is a large enterprise class set of firms.

And as I mentioned earlier in the call, they themselves are scaling through M&A or through hiring or in a very leveraged way through growth of revenue or assets under management. And there's a real opportunity for us to be the strategic vertical-specific compliant AI generation technology partner for these growing enterprise class firms. So you're just going to hear more and more about what we're doing in that direction.

Next question comes from the line of Steve Enders with Citi.

Okay. Great. I want to ask on the Microsoft partnership, and I appreciate the call out for the large deal contribution. But I guess with Microsoft, maybe how are the deals that are coming through that partnership? How are they different? Like are they creating or anything newer opportunities that you weren't in before? Are they bigger? Are they coming in faster? Just how do we kind of think about how Microsoft maybe changes some of those dynamics versus maybe what you would have seen historically?

Thanks, Steven. The relationship with Microsoft is an exciting one for us because they've got such an incredible relationship already with these firms in our end market. They have a very strong relationship with IT and a lot of the firms have committed to Azure as, if not the, a core pillar of their cloud strategy. We have a relationship with Microsoft on multiple levels. There's a technology relationship, strong in AI and a lot of the collaboration capabilities that we brought to market over the past couple of years. We have a strong marketing relationship where we work with them and co-present and co-market to all of the clients in the marketplace that really helps us. And then we have a co-selling relationship.

There's a lot of components to that. One of them is that all of our offerings are available on the Azure marketplace. So the firms can buy all of Intapp's platform through the Azure marketplace. That has benefits for them under their Microsoft agreement. If they have a minimum Azure contract spend agreement, they can burn that down by buying Intapp's software through their MACC agreement. That helps us take the budget issue off the table in our sales because they're already committed to spending X amount with the firms every year.

We also are working with Microsoft on many accounts where they will provide Azure credit upfront to incentivize the firms to move. That's really helped us in several situations. And just co-selling with Microsoft has helped us with wins competitively because people feel like we're really tied at the hip in a lot of these key technology areas that the firms need to integrate. And so that's helped us. And then the field, the Microsoft field gets quota relief when Intapp sells its products. So we have a growing person-to-person relationship across the Intapp field and the Microsoft field when calling on these accounts.

To your question, sometimes we are getting leads from those sellers at Microsoft. We're very excited about that. Sometimes we find the opportunity with our direct force, but we can call the Microsoft seller and they will come in and endorse us and co-sell with us. So it works in both directions. But overall, it's become a very collaborative process, and we're very excited about the influence that that's having on the funnel in terms of size and speed and deal size and win rate is great.

Okay. That's great to hear. And maybe to follow up, just in terms of, I guess, margin, I mean, good to see the operating margin beat this quarter, but I guess it doesn't look like it's -- not much is flowing through to the full year guide. Just can you help us think through like factors that are being included in there? Was there some timing dynamics or some things -- some investments may be being pushed out this year?

We're continuing to invest in respectfully, our product innovation and go-to-market. We had a really good strong F Q4. We articulated that we were going to be a little bit front-end loaded with some specific marketing events. We've had great success in this first quarter. And so we're going to continue to invest in our -- in the motions that we've been demonstrating to the investment community.

Next question comes from the line of Saket Kalia with Barclays.

David, maybe for you, great to see the growth in cloud net new ARR. Can you just talk about how much the on-prem conversions are maybe contributing to that? And from the conversions that you have seen, what's the typical uplift that you've been getting on those?

Yes. So we're seeing about a 20% to 30% uplift just through more seats and/or the opportunities to continue to cross-sell. So once we get that moved over and track compliance and all of that other dynamics settle in. And obviously, we're delivering true value for that as well because they are getting inherent different code set that offers a lot more product attributes. So that's one.

On the respectful cloud net ARR from this past quarter, it wasn't that material. I think we're going to start seeing more as we continue on through this year. John talked about our time AI that we've been narrating here for the last 2 quarters. So we'll see a little bit of an acceleration there. It is a heavy -- well, I should say it's a subcomponent of some of our respective sales teams to continue to move in that direction. And so we're really enticing the whole market to move in that direction.

Got it. Actually, that's a great segue into my follow-up for you, John. I mean you're clearly adding more value to your cloud products with new AI capabilities. Intapp Time, of course, was one that we've talked about. What else is on the roadmap? Or what else can you do to help drive that -- sort of that conversion in that on-prem base?

The progress in the time component of our platform has been awesome. There's a lot of enthusiasm. This is one of the areas, as we've mentioned on the previous calls, most of our on-prem business is in legal because that's where the company started, and that's when we were still doing some on-prem offerings for them. So that's really the focus of this migration program and time is a key part of that. So we're really excited to see the progress in time. This year, we've also kicked off a parallel project for all of the compliance capabilities that exist still on-prem in some parts of the legal market.

So we've learned a lot of great stuff about how to get folks there successfully and really what are the AI capabilities that will get them to make the move and what style of ROI and what style of licensing and how do you get the upsell, all those lessons we've kind of developed now and we're bringing that to the compliance group as well. It's an exciting time because there's so much opportunity in AI of various capabilities, generative AI, agentic AI. There's a lot of opportunity to bring real value to some of these core processes in our traditional compliance business, which is really a stronghold of the company and is so in demand for these firms. They need to make sure that the way that they operate stays compliant with the regulatory obligations and their professional obligations and their client obligations. And it's just something we're really well known for. So we've been deliberate about how we sequence this, but that's what's coming next.

And our last question comes from the line of Brian Schwartz with Oppenheimer.

This is Camden Levy sitting in for Brian Schwartz. If you think about the cloud NRR of 121% and the customer expansion motion that you guys are seeing, have you seen the mix shift of the growth algorithm that's coming from product versus seat growth versus pricing change over the last couple of quarters? And from your perspective, in F 1Q, did any 1 or 2 products outperform plan maybe outside of core DealCloud or Intapp Assist that were big drivers of the SaaS beat?

Yes. Just circling back and I think even intimating on the first question we had, if you think about the NRR, probably the biggest change over the last 3 to 4 quarters with our enterprise motion has definitely been the cross-sell motion. We've always been doing very well on the upsell more seats. But clearly, as we continue to densify our enterprise accounts and provide the full breadth of offerings, we've seen a little bit tick up on the cross-sell there. So I would say that's probably one to note on that.

And then maybe just from a product perspective in F 1Q, did anything dramatically outperform plan or were like larger drivers of the software beat?

We've had good uptake across the board. The GenAI features in the cloud have been pulling the platform. And as we brought the capabilities out, obviously, it's been a sequence over time. So we have more out there with DealCloud, which was the first one that we launched, but we are very excited about the uptake around Assist for Terms and this new Intapp Time Horizon release with GenAI. So there's a sequence there. So you can see a pattern that's pretty consistent with that. As we get more people up and the references run, we get more and more folks excited about doing it. And you'll continue to see that roll through the platform as we bring out more capabilities.

That concludes the question-and-answer session. I would like to turn the call back over to John Hall for closing remarks.

Okay. Thank you. Thanks, everyone, for your questions and for the attention. We're excited about how we've done this quarter, and we're really looking forward to continuing this year. There's a lot of good progress happening, as you can see in the results. So we appreciate your time, and we're looking forward to talking to you again next quarter.

Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.

Hello, everyone, and welcome to the Intapp Fourth Quarter Fiscal 2025 Earnings Webcast. [Operator Instructions]. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to the Senior Vice President of Investor Relations, David Trone. The floor is yours.

Thank you. Welcome to Intapp's Fiscal Fourth Quarter and Year-end 2025 financial results. On the call with me today are John Hall, Chairman and CEO of Intapp; and David Morton, Chief Financial Officer.

During the course of this conference call, we may make forward-looking statements regarding trends, strategies and the anticipated performance of our business, including guidance provided for our fiscal first quarter and full year 2026. These forward-looking statements are based on management's current views and expectations entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income per share and free cash flow. As a reminder, all of our financial figures we will discuss today are non-GAAP financial measures or other metrics, except for revenue and revenue growth, cash and cash equivalents and total remaining performance obligations. Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures can be found in today's earnings release and its supplemental financial tables which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call or a supplemental financial presentation, which is available on our website. With that, I'll turn the conversation over to John.

Thank you, David. Good afternoon, everyone. Thank you for joining us today as we share the results of our fiscal fourth quarter and full year fiscal 2025. I'm happy to say that once again, we've achieved strong quarterly results as well as a strong year across the business. In Q4, our Cloud ARR grew 29% year-over-year to $383 million. Cloud now represents 79% of our total ARR of $485 million. In the quarter, we earned SaaS revenue of $90 million, up 27% year-over-year and total revenue of $135 million, up 18% year-over-year. Additionally, we now have 109 clients with ARR of more than $1 million. a year-over-year increase of 49%.

We released additional AI capabilities designed for the specialized needs of our highly regulated target markets, and we're seeing real enthusiasm for these. We expanded our product portfolio and R&D capability through strategic acquisitions. We added notable new logos, consistently grew existing accounts via cross-sell and upsell, expanded our international footprint and migrated more clients to the cloud. We also continue to grow our partner ecosystem with significant wins related to our partnerships, most notably Microsoft. Going into fiscal year 2026, we feel optimism and confidence that our applied AI strategy, vertical SaaS platform, enterprise go-to-market strategy and unique competitive position for these highly regulated firms provides a strong foundation for sustained growth and execution in this large addressable market.

Now I'd like to share some details on our growth drivers from the quarter and the year. We continued progress on our applied AI strategy and road map this year. We launched several new AI solutions and showcased our innovation at our largest client event, Intapp Amplify in February. Our AI strategy reduces cost through automation and helps the professionals to grow revenue by providing back to them unique insights from the firm's proprietary data, relationships and knowledge, all while staying compliant with the industry's complex regulations. Our AI is helping our firms to originate and win more business and to onboard new clients and engagement faster while maintaining the unique compliance obligations that this highly regulated industry requires.

In their increasingly competitive markets, this is what firm leadership is looking to invest in. using AI to arm their professionals with more of their firm's differentiating proprietary knowledge and expertise, which live in Intapp systems. As a quick recap from last quarter, we announced the general availability of Intapp DealCloud activator, a research-backed AI-enabled growth platform that gives professionals the tools, insights and coaching they need to build, scale and apply the most successful business development behaviors. We added new Intapp assist for deal cloud capabilities, including origination, recommendations, smart tagging, prompt studio and AI-powered search. We announced the general availability of Intapp assist for terms, a new Gen AI feature that makes it easier for legal professionals to comply with client terms. We introduced Intapp walls for AI, which offers protection against the over sharing of confidential data by AI tools.

And in Q4, we launched the next generation of Intapp intake, featuring AI-powered persona-driven summaries and Intapp data integration. Our AI-driven wins for this year and the quarter speak to our clients' enthusiasm to name just a few wins here. An international commercial law firm shows Intapp Assist and our compliance solutions to help them comply with new AML regulations in Australia. Eversheds Southern wind and [ Amlo200 ] firm purchased in Intapp Assist to help manage the complexity and volume of outside metal guidelines. And Pantheon Ventures, a global private equity firm replaced its legacy system with DealCloud and Intapp Assist to improve deal flow, capture more opportunities and bring AI into their workflows. You'll hear more about our AI wins throughout my remarks. We're also pleased to have furthered our growth through our expansive partner network and strategic combinations.

I'll speak first about our partnerships. We continue to build our partner strategy around strategic depth as well as breadth. We've curated a high-impact ecosystem, anchored by Microsoft and a focused set of vertical data technology and services partners. This ecosystem consistently helps us scale our largest deals, accelerate time to value and expand platform adoption. Some notable new and expanded partnerships announced this quarter include an expanded partnership with Snowflake, which lets our clients build and apply analytics across firm-wide data in the Snowflake AI Data Cloud and a new partnership with MSCI, which provides access to private capital real asset and deal data within Intapp Cloud.

In Q4, partners were directly involved in 17 of our 20 largest deals. Microsoft, in particular, continues to be a major growth driver. Almost half of our largest Q4 wins were jointly executed with Microsoft. And in several of those, Microsoft even fronted Azure investment dollars to help accelerate the deals. As an example, one of the world's largest multinational investment banks added on Intapp assist after seeing it at Amplify. The firm's deal makers will leverage NHEPS AI to bring a more robust and data-driven approach to their complex network of deal sourcing relationships. Working closely with Microsoft, we were able to close the deal quickly and complete the purchase via the Azure marketplace using their existing MAC agreement.

Next, I'll speak about M&A. To briefly recap from Q3, we acquired term sheet, a software provider for real estate teams. Bringing together DealCloud and term sheet expands our capabilities and our ability to serve new personas within Real Assets. The term sheet team is bringing great energy and insights and we're already winning together with new clients like Kronos Real Estate Group, a real estate investor focused on Spain and Portugal. True homes one of the largest private homebuilders in the U.S. and a private real estate investment firm with a primary focus on hotels and resorts. Speaking of growth, I'll now turn to some notable wins from Q4. Our growth was powered by adding new clients, expanding within existing clients, and migrating clients to the cloud. We also made traction in new markets, spanning across our verticals, products and global locations. Our success this quarter was bolstered by a number of large enterprise deals. As you may recall, in fiscal '24, we successfully piloted our strategic accounts program.

In fiscal '25, we solidified this model by creating an enterprise sales group that focuses on large accounts, which represent 70% of our SAM. We saw tremendous success in this approach with 49% growth in the number of our million dollar accounts year-over-year. I've already mentioned some today, but I'd like to share a few more examples of how our enterprise go-to-market strategy is working here in financial services. The M&A team at a multinational professional services firm chose DealCloud as part of its strategy to improve data management, access and analysis. A leading global alternative investment manager, added additional capacity within DealCloud for new employees coming into the company following an acquisition and a preeminent multi-strategy asset manager chose DealCloud within Intapp assist to replace a well-known legacy horizontal software provider, Intapp Assist was a differentiator that supported the replacement purchase because it enabled the firm's investment professionals to improve their comprehensive coverage of management teams and their pursuit of new investment opportunities.

I'd also like to mention some new deals, reflecting our continued success in investment banking. Capstone Partners added DealCloud within Intapp Assist to support pipeline generation and streamline operations using AI and industry-specific workflows. A large U.S.-based investment bank chose Yield Cloud for its M&A business as a single source of truth for deal data from origination to execution to long-term relationship management. And the specialty investment bank, focusing on M&A and capital advisory services for the middle market chose to replace its legacy horizontal solution with DealCloud and Intapp Assist to facilitate firm growth and ensure a better AI-driven user experience across the firm.

In Q4 also, accounting firms continue to modernize their compliance practices using Intapp solutions to handle the increased complexity created by PE investments and mergers. These included Anderson tax, one of the largest independent tax firms in the world. Baker Tilly, a leading advisory tax and assurance firm, one of the largest accounting and advisory firms in the U.S. and a top 10 global accounting firm. Additionally, Law firms are continuing to replace legacy and horizontal CRM by adding Intapp Deal cloud to their existing Intapp product portfolios. I'll share a few examples from Q4. And a Quebec-based firm chose DealCloud and Intapp and Intapp assist to support business development and relationship management in French.

[indiscernible], chose DealCloud to up-level its business development activities and tracking, especially relationship management. And Marshall Gerste, chose DealCloud as its integrated system to enhance marketing and business development efforts, information sharing and activity tracking. Finally, our legal clients, including Goodwin and step to continue to find value migrating their on-prem impact time to the cloud. Once implemented, they'll have access to all our new AI features and our continuous innovation.

In conclusion, we're proud of our strong fourth quarter and fiscal '25 performance, and we continue to be optimistic about our growth opportunities. As our performance has shown. We're growing by adding new capabilities and increasing our global enterprise go-to-market reach. We see continued opportunity both to add new clients across a broad TAM and to deliver greater value by expanding our existing client base. We're serving a durable end market with our subscription revenue model, industry-specific cloud platform and applied AI and compliance capabilities. We have a great growth opportunity to drive AI and cloud adoption and modernization across the industries we serve. As always, I'd like to thank our clients, our partners, our investors, our board and our global Intapp team. for their hard work and dedication. Thank you all very much. Okay. David, over to you.

Thank you, John, and thanks to everyone for joining us today. I'm pleased to report a strong fourth quarter performance. We concluded fiscal 2025 or several notable achievements that highlight our strong progress, winning in the cloud expanding operational efficiency and deepening our presence with enterprise clients across our vertical end markets. We scaled our $1 million-plus annual recurring revenue or ARR client base into triple digits with both the number of clients and corresponding ARR more than doubling compared to FY '23.

We grew our cloud business through land, expand and migration motions with nearly 80% of total ARR now in the cloud. We surpassed the $0.5 billion mark in annual revenue and we generated well over $100 million of free cash flow. These results underscore the opportunity ahead of us as we continue executing against key market tailwinds, digitalization, low forward adoption and compliance-driven demand. We enter fiscal 2026 with strong traction and a sustained focus on delivering durable, profitable growth. Let's begin with the fiscal Q4 results. SaaS revenue was $90.2 million, up 27% year-over-year, driven by new client acquisitions, contract expansions and the migration of on-premise products to the cloud. We exited Q4 with 93% of our clients having at least one cloud module and over 80% of our clients fully deployed in the cloud. License revenue totaled $31.8 million up 5% year-over-year, primarily driven by on-prem expansions within our compliance solutions. This was partially offset by the continued migration of clients through our cloud-based SaaS offerings. Professional services revenue was $13 million, down 2% year-over-year.

Our evolving partner ecosystem strategy is helping us more efficiently support long-term cloud growth with increased emphasis on co-sell production and elevated client satisfaction. Total revenue was $135 million, up 18% year-over-year, driven primarily by sales of our cloud solutions. Client adoption of Intapp vertical SaaS AI offerings accelerated in Q4, building on momentum from our Amplify product event. Assist for DealCloud now accounts for approximately 35% of new deal cloud wins up from 8% last year. Looking ahead to fiscal 2026 and beyond, we anticipate continued broad-based adoption across all of our AI offerings. Supported by a growing client base, a healthy pipeline and a compelling value proposition. We remain focused on delivering vertical-specific AI solutions that drive sustainable growth for Intapp and long-term value for our clients.

Our partner ecosystem closed FY '25 with 145 active partners playing a critical role in our largest wins, accelerating time to value and driving broader platform adoption. Our co-sell motion continues to deliver solid results with partner-engaged enterprise deals outperforming our win rates over the past 2 years. Q4 highlighted the strength of this collaboration with partner influence bookings growing more than 50% year-over-year. As we continue to focus on margins and operational efficiency, our Q4 non-GAAP gross margin was 78%, and up from 76.1% a year ago, reflecting progress toward breakeven gross margins and professional services and a reduced top line contribution from that business.

Non-GAAP operating expenses were $84 million compared to $73.6 million in the prior year period, reflecting ongoing investments in our product-led growth strategy and go-to-market motion as we enter fiscal 2026. Non-GAAP operating income was $21.3 million, up from $13.5 million in Q4 of last year. Non-GAAP diluted EPS was $0.27 compared to $0.15 in the prior year period. Free cash flow was $37.5 million for the quarter or 28% of total revenue, defined as cash flow from operations less capital expenditures. We ended the quarter with $33.1 million in cash and cash equivalents, reflect our upfront cash payment of $51 million made at the April closing of our term sheet acquisition.

Now turning to our key metrics. Our cloud ARR increased 29% year-over-year, while total ARR grew 20% over the same period. Total remaining performance obligations, RPO, and were $719.7 million, up 27% year-over-year. We ended the fiscal year with over 2,700 total clients. Our go-to-market strategy this year has emphasized landing and expanding within enterprise named accounts. And that focus gained traction as the year progressed. We grew our $1 million-plus ARR client base to 109, up from 73 in the prior year. nearly 50% year-over-year growth. We also expanded our 100,000-plus ARR client base to 795, up from 698 a year ago. Our cloud net revenue retention rate was 120%, exiting FY '25, demonstrating strong retention and steady expansion among existing cloud clients.

Now turning to our full year fiscal 2020 results. SaaS revenue was $331.9 million, up 28% year-over-year, driven by new client acquisitions contract expansions and ongoing cloud migrations. License revenue totaled $120 million, up 2% year-over-year. Growth was driven by on-prem price increases on track expansions and multiyear renewals, partially offset by continued migration of on-prem contracts to the cloud. Professional services revenue was $52.1 million, down 3% year-over-year. As we increasingly rely on our services partners to lead implementation, this aligns with our focus on co-sell execution and improving client satisfaction. Total revenue reached $504.1 million. up 17% year-over-year, primarily driven by growth in our cloud solutions. Non-GAAP gross margin was 77.3% compared to 74.2% in the prior year.

Non-GAAP operating income was $75.6 million, nearly double the prior year's $38.7 million, reflecting revenue growth, improved mix and operating leverage across expense lines. Non-GAAP EPS was $0.94, up from $0.45 in the prior year. Free cash flow was $121.9 million or 24% of total revenue, reflecting meaningful progress on strengthening our operational efficiency. Now turning to our outlook. For the first quarter of fiscal 2026, we expect SaaS revenue of between $95.7 million and $96.7 million. total revenue in the range of $134.8 million and $135.8 million. Non-GAAP operating income is expected to be in the range of $16 million to $17 million. This Q1 outlook includes some front-end spend related to our go-to-market motion, specifically our FY '26 sales kickoff as well as targeted marketing investments as we build on the momentum from a strong Q4.

And non-GAAP EPS in the range of $0.18 to $0.20 using a diluted share count weighted for the quarter of approximately 85 million common shares outstanding. For the full fiscal year of 2026, we expect SaaS revenue of between $4.4 million and $415.4 million, revenue in the range of $566.7 million and $570.7 million. This outlook assumes a professional services revenue mix consistent with fiscal 2025, where it accounted for approximately 10% of total revenue and reflects a more material participation in our cloud migration efforts. Non-GAAP operating income in the range of $96 million and $100 million. and non-GAAP EPS in the range of $1.09 to $1.13 using a diluted share count weighted for the fiscal year of 2026 of approximately 87 million common shares outstanding. Thank you. And I'll now turn the call back to the operator.

[Operator Instructions]. Your first question comes from the line of Kevin McVeigh with UBS.

Great. And what a terrific, terrific result. I wanted to start on just kind of 120% NRR. Maybe help us -- it sounds like it's some retention and steady expansion. But maybe frame that a little bit more? And then what are you assuming in the 2026 guidance?

Kevin, it's Dave. Of course, 120% obviously is continued to be contributed by low churn that we've always commented on. That's one of the beauties of being a very sticky vertical SaaS and now in your end clients. Secondly, as we continue to go further upstream into the enterprise, those expands get even more material both from an upsell as well as a cross-sell. And so we saw some strong execution that you can see in our top line results. And then thirdly, we've taken a very conservative number going into FY '26 as we continue on because we have a large opportunity in front of us, not only with net new logos, but then also with our continued expand motion with our continued product innovation that we've announced over the past couple of years at our key mark events of Intapp Amplify.

Terrific. And then just a quick follow-up because obviously, the incremental margins look really, really strong in '26. How do we think about just with the mix in the enterprise, I would think maybe a little bit lesser margin. Maybe I'm not right on that, but just is it less professional services? Or just what's driving that leverage because it just really, really strong margins as well.

Yes. We've continued to drive efficiency, both in our model and our product offering. And so again, how we've kind of brought items to market have been true value that we've sold into our client base. And so as we've seen that continued leverage across all of those lines, we've continued to yield that both at the top as well as below the line. And so enterprise, mid-market, those items are moderated. And obviously, we're selling the value of that and drop versus just a simple solution set with a simple ASP.

Your next question comes from the line of Koji Ikeda with Bank of America.

I wanted to ask a question on RPO. So when I punching the RPO to the model, it looks like a pretty good growth quarter in the fourth quarter, up 27% year-over-year. But when I look at total contribution for RPO for this year compared to last year, a little bit less this year versus last year. So just trying to understand if there's anything within ARPO we should be thinking about? Or we just kind of pull and teeth here on the numbers comparing fiscal '25 to '24? Thank you.

Yes. I think you might be pulling some teeth as we finally have kind of crossed the chasm, if you will, on more material input from some of these enterprise clients. our total value of duration hasn't really materially changed from last year to this year. Clearly, we'll continue to garner that contract value that will recognize, but there wasn't anything both from a seasonality or a contract duration that changed that?

Got it. That is super helpful. And maybe the follow-up question for you, David. In the prepared remarks, thank you for giving the in the guidance, 10% of revenue coming from professional services for fiscal '26. But when I look at the license line item, is there anything we need to be aware of from a renewal seasonality that could create any sort of quarterly volatility or movement in that license line item specifically for '26?

Yes. We're going to do our best to continue to keep everyone as transparent as possible as we work through -- it's not a matter of if, it's just when we're able to get our clients transitioning more aggressively to the cloud. And so there may be some puts and takes between Q2 and Q3. But clearly, for the year, we have our work kind of identified, but there may be some quarter puts on that. So we'll make sure that we're very transparent as we go through this.

Your next question comes from the line of Alexei Gogolev with JPMorgan.

This is Bella on for Alex. For our first question, can you explain the rationale behind your collaboration with Snowflake. Will customer overlaps did you identify? And how has your lease feedback been?

Sure. Thanks, Bella. We're excited about the growth in the partner ecosystem generally. Obviously, we've talked a lot about the Microsoft relationship. Snowflake was an important partnership for us to strike as we move into the enterprise because they've made such a strong amount of progress there. There's a lot of interest in the key information that we are helping to manage and collect and report on and analyze and then report back to all of the professionals who are working in the firms that stored an Intapp DealCloud in our compliance platform, in our collaboration system.

And the clients really want to make that a central component of their overall business analysis and the integration with Snowflake was a request that we began to receive pretty strongly as we started to win some of these large enterprise accounts, and we were very excited to be able to strike a formal agreement with Snowflake to ensure interoperability. And I think it is one more step for us in helping make sure that the enterprise firms see us increasingly as a key strategic pillar of their overall vertical solution.

That's helpful. And as a follow-up, with the upcoming QC 1000 accounting change, what opportunities do you see arising from this regulatory shift? And how much of that is currently baked into fiscal 2026 guidance?

There's a lot of opportunity for us, I think, in the -- several of the regulatory changes, including C1000, we talked a little bit about the Australia AML change that's happened as an example. And actually, the compliance issues for this market generally have always driven the demand for a vertical-specific solution So the company's strategy throughout the technology generations from the on-prem era to the mobile era to cloud and now AI, a key part of our differentiation versus the traditional horizontal systems is our understanding of the -- not just the workflows, but the compliance requirements of those workflows for these firms. And they really are looking for a strategic technology partner that understands those and can design for those so that they can put the best opportunity forward for their various regulators. And this is just one more change. And as the accounting rules continue to evolve, the regulatory frameworks continue to evolve in each of the jurisdictions that we sell into, we're keeping up with that, and we're making sure that the firms can continue to trust us as the people who can now bring AI in a compliant way to the marketplace. It's a centerpiece of our differentiation and one of the reasons why you're seeing growth like this.

Your next question comes from the line of Parker Lane with Stifel.

John, really nice to see 17 of the 20 largest deals, including a partner. I think you said partner influence bookings up 50% year-over-year. When you take a step back, how would you assess where you're at on the maturity curve of the co-selling relationship with these partners? And do you characterize this as an inflection point that will continue to support this durable growth? Or is there still some enhancements you could do to even drive further performance there?

Well, there's always more to do. We are consciously recruiting partners strategically to help us address different aspects and different segments of the market of the whole solution. That being said, yes, we've been talking with you all for a few years now about our investment in the partner ecosystem. We wanted to consciously give you some statistics on this because this has been one of the questions, how is the partner ecosystem contributing to your growth? And we've really reached a very important stage. We're not just in each of the large deployments, but across the scale of our clients, we have partners working with us. You see it in the relative mix of services revenue in the model, working more and more with the ecosystem, and that's helping us on the sales side, too, because all of those partners who have relationships with their clients are referring us in and have an incentive to sell with us and work on the deployments and taking care of customers after the deployment.

Microsoft, in particular, we wanted to emphasize because such a big contribution to our large deals this time came from the Microsoft relationship that we've been cultivating for many years, and this has been a question out there. So more than half of our clients are working with us and Microsoft together at the large end of the market and just a little under half of the deals this quarter came that way. And we're seeing very strong support from Microsoft because the AI that we're delivering in a compliant way to this regulated market is a great way to pull Microsoft's technology and Azure into the marketplace.

They see us as a key partner there. And there are already existing MA agreements with Microsoft at the large firms across the market. So that reduces our time to sale and makes the budget question less of a question because people have already committed to spending X with Microsoft each year, and they can use that now to buy our solutions. So the partnership is really working, and we're very excited about how that's going.

Got it. That's great feedback. And the other thing you called out here was just a lot of AI enhancements across the platform, across the different subverticals and verticals you operate in. If you had to look across the board, is there any one area that stands out above the rest in terms of AI adoption and utilization? Or is this truly broad-based demand you're seeing right now?

Well, it's common experience how strong the AI story is generally in the industry. We're absolutely benefiting from that. I think one of the things that's happening is we're able to come in and show a vertical solution that is built into their workflows and a compliance solution and the relationship with their key technology platforms like Microsoft and Snowflake and some of the other things that we've been talking about. So people see a whole product there. And I think in the application space discussion, this front end of their problem, how can they apply AI to arm their professionals to better compete, pursue growth opportunities, identify, originate new business bring that on board and keep the revenue stream running. This is an angle that is not what you hear from a lot of the AI start-ups. It's something we're in a unique position to deploy AI to solve for, given our history with DealCloud and with our intake and conflict solutions around business acceptance and it's actually the thing that the very most senior people in the firms are trying to figure out how do I use AI to drive growth for my firm. So I think we're well positioned to tap into confluence of top priorities for just AI itself, but AI for growth and compliant AI for growth. That mix is just awesome, and people are really responding well.

Your next question comes from the line of Alex Sklar with Raymond James. Please go ahead.

John, on the fourth quarter bookings improvement, can you just help break down how much of that you saw from any sort of macro improvement productivity just with more time and market with the strategic account team changes you put into place at the start of the year. And Dave, just a quick follow-up for you. Any quantification on what term sheet added to ARR in the quarter?

Thanks, Alex. So there's a healthy demand for our solutions and for AI in the marketplace. Macro-wise, we're seeing positive draw. On the productivity point, I do think that our continued evolution in a very measured and data-driven way towards originally the strategic accounts. pilot in fiscal '24, then the increase to the enterprise go-to-market organization in '25 absolutely contributed to a bunch of these numbers, 70% of our SAM is in the top 2,000 accounts. And so our emphasis of evolving our go-to-market more and more towards the top 2,000 accounts in our enterprise group is a conscious effort. We're investing a little bit more here in Q1 to get that group now off and running with a bigger sales kickoff and armed with more training and support to continue to build on the very strong funnel that we're seeing.

So I think it's both a mix strong demand, clearly, AI is a pull, and they gave some stats about how that's making its way through our pipeline strongly since the two launches that Intapp Amplify last February and this February. And then the enterprise shift as well. So all of those things are adding together. And then I've already mentioned the Microsoft relationship and how that's supporting us in the field.

Your next question comes from the line of Terry Tillman with Truist Securities.

good afternoon, John, Dave and David, congrats on the quarter. I had two questions. The first one actually just kind of building on top of the question and your answer, John, as it relates to front-end loading some investments, sales kickoff, et cetera. you all made good progress with this enterprise sales team build out. Is it more on just marketing kind of branding and just investments in the event? Or are you actually adding more sellers now as you've gotten enough good signals with the enterprise sales motion?

The second part of this first question is these increased investments in the beginning of the year, do you all see potential payoff from those investments maybe later in the year on cloud ARR? And then I had a follow-up.

Thanks, Terry. So from an organizational standpoint, yes, it's bringing the sales team together, but really taking the lessons from the '24 and '25 experience and making sure that all of the team members are armed with the best learnings about how to be successful out there. We've had some really incredible wins here. I want to make sure that everybody has the knowledge and the training to support that. In addition, yes, we are making some increases in that enterprise force. We think there's a real opportunity to continue to grow and scale there.

Yes. The follow-up question is just related to -- I get a lot of questions over time around kind of the longer-standing part of the business and the legal industry, serving law firms. And just knowing the penetration you all had, you did talk about kind of whether you assist the AI product around assist. But just in terms of deal cloud like penetration and attach rate, how is that progressing on the legal side? And just how do you see in terms of the vitality of kind of the law firm legal side of your business?

Yes, this was a core strategy for the DealCloud combination years ago. We did a lot of work. We've talked to you all over the years about blueprints and specific workflow definitions and some terminology change data change and some data integration we needed to do. All of that is paying off. So we've got successful clients rolling out DealCloud as their business development system at small, medium and large law firms we have Intapp assist now as a key value proposition in that story, which is being taken up very positively. I gave some examples.

We also -- as you recall, we did a lot of work on our relationship intelligence system, which is an AI component of the platform that helps the partners in the firm navigate with each other to more client opportunities out in the world in a way that is really enthusiastically being received. So it took us a little while. That's something that we've talked about, but a lot of these results, very positive. So I'm excited about the core concept vertical compliant, growth, AI for these firms in a way that's really built for them. And we are announcing, I'm thrilled replacements consistently now of traditional horizontal CRM systems that were not built for the industry with our vertical-specific AI-powered solution. And I think that, that word of mouth continues to grow. So it's a great growth opportunity for us.

Your next question comes from the line of Steve Enders with Citi.

Okay. I just want to follow up on Alex's earlier question. But I guess what was the term sheet contribution in the quarter to ARR? And I guess, on the backside of that, just as we think about kind of seasonality of ARR, does the shift to the account management structure, does that, I guess, maybe structurally change how we should think about linearity of ARR through the year? Or just kind of what are the factors that we should be taking into account there?

Apologies. And I'm glad you reasked Alex's question. We got cut off there. Regards to term sheet altogether, they're integrating phenomenally, both from a technology as well as hitting the deck running on landing some key new wins that I believe John articulated in his prepared remarks. As far as the overall contribution from your net ARR question, I would say it was relatively immaterial. When you'd say immaterial, it was less than 5%. And so we love what they're doing. We love the end client. We love the market that they're serving. And we really like how that pipe is developing for continued contribution to overall in paper in this fiscal year. So hopefully, that addresses that question.

Yes. Sorry. And just to clarify, when you said it was 5 -- or under 5%, you're talking of the total ARR of the net new ARR in the quarter?

The incremental ARR from the cloud.

Got you.

how -- yes, the delta between Q3 to Q4 is less than 5% of that delta.

Okay. Perfect. That's -- that's helpful context there. And then I guess just on the Microsoft partnership and that relationship, it feels like the commentary this quarter, I think, feels different from I guess, the overall contribution or how it's impacting bookings. I guess, how are you kind of viewing the kind of further contribution for that or kind of the kind of the core groundwork being laid for that to now just kind of be harvest the fruit there? Or is there -- or are there any kind of more hurdles or things that need to be worked through to kind of like fully unlock the Microsoft relationship?

There's always more opportunity with an organization that size, but I think we hit some big milestones here. There were some important deals at the large end of the market that now both the Intapp sellers and the Microsoft sellers saw accomplishment of quota and quota release in that fiscal year. Interestingly, Microsoft fiscal year is the same as ours. So they haven't set to get things done on June 2. We saw some great results from the MAC agreements, which I think we're increasingly able to leverage in our sales motion earlier.

People are getting more used to that and seeing the power that, that can have to smooth making deals happen and take the budget question off the table and how do you navigate that. In these enterprise sales motions. I also think we've got more and more success stories that are traveling among the sales team and among clients by referrals about how to get AI in successfully this way. And I just think that the experience that we have working with their sales force, they made a change in addition to their financial services team, they've put together under one executive of professional services sales organization, which includes legal, accounting, consulting.

So we have an easier way to navigate the Microsoft go-to-market team now, and it's easier to get a line. So a lot of things are aligning on the relationship there that are very excited.

Your next question comes from the line of Saket Kalia with Barclays.

Great. John, maybe for you. I'd love to just double-click on term sheet a little bit. I think the size that we just heard there and correct me here if my math is off, it sounds like it was probably less than $2 million in ARR, right? And I'm assuming that's the total ARR base that contributed in the quarter. And again, correct me if I'm wrong, I think the size of the purchase price there was about $50 million. Maybe there's another $20 million of earn-outs possible. Can you just talk about how you kind of view that revenue opportunity long term with term sheet specifically?

Term sheet is a component of our overall real asset solution strategy, we had already been making progress with DealCloud into certain parts of the real assets universe, specifically the fundraising that all the real assets investors were doing, very strong solution there. The coverage program that they use to look for opportunities in the marketplace, a very strong solution there. as you would expect, a lot of overlap with our existing private equity style, asset managers, the multi-strategy asset managers that had both private equity and real assets investment strategies, and then increasingly, the real assets specialists.

What term sheet brought us was an extension of additional functionality that looks at the deals after the funds are deployed into the deals and helps with asset management over the life of the asset. There's some specific requirements that those firms needed that the term sheet technology really helped us extend. And so actually, together, we have an even better whole product than we had prior to the combination. In addition to that, there was a very strong AI-first team in term sheet that are bringing a lot of horsepower to our growing engineering group that's focused on all the AI solutions we can bring out. And there's a great opportunity for us to leverage both the real asset expertise and even more of the AI expertise that we're bringing into the team.

So it's a great story. And the real assets market and industry, we talked a little bit about at Investor Day last year when we first went into it, this is a very significant space that is totally analogous very closely related through the multi-strategy asset managers that we serve to all the core businesses that we've pursued. And it's similarly underserved. This is a vertical space that has not successfully taken up the horizontal systems for all the same reasons that our private equity and private credit investment banking community has taken. So this just seems like the perfect SAM expansion and step for us for continued growth here. I think it would be a big part of our business over time.

Got it. Got it. That sounds exciting. -- maybe for my follow-up for you. How do you sort of think about the shape of net new ARR next year? Are there any comments you want to make just on overall ARR growth as we sort of think about that versus revenue growth?

From a shaping perspective, I think we started orienting folks around some implied seasonality definitely June and December quarters are going to be a little bit stronger just because of the natural follow-through of where some of our clients year-end reside and a renewal base already being driven naturally in those two. And so Q2 and Q4 are going to be naturally higher. Now, with that said, we're looking at every quarter to be successfully contributing to our growth and our aspirations as we look forward to our $1 billion revenue narrative. It was a very big year for us when you think about just our overall construct, finally breaking through the $500 million finally generating well over $100 million of free cash flow. And so when you put all that into consideration and now you're starting to see some natural seasonality trends that flow this is the next stage and evolution of the company as we exit '25 on to a successful '26.

Your next question comes from the line of Patrick Moley with Piper Sandler.

I was hoping to just get your updated thoughts on capital allocation priorities from here? And then with the share repurchase program announced today, just how you're thinking about the pace and timing of buybacks throughout the rest of this fiscal year?

Patrick, nice to formally meet you. Welcome to the Intapp team account coverage. Yes, thanks for asking on the share authorization. Clearly, we didn't necessarily want to co-mingle our strong results coming off of Q4 and the importance of our 26 guy. But the Board has authorized this $150 million in share repurchases. The way we think about things here is we're going to continue to invest in ourselves. There's a lot to be done within our product road map with AI and the opportunities that we see for our end clients. Secondly, some of the previous questions have evolved around term sheet, a recent acquisition. So we clearly have a profile there of key items that may be sitting within our own I'll call it, persona of an acquisition target in that funneling. And then thirdly, we now have this authorization to take every opportunity to put capital at work when we deem fit. And so it's pretty straightforward as that.

And that concludes our question-and-answer session. And I will turn it back to John Hall for final comments.

Okay. Thank you, everyone. We have a very strong fiscal '25 is behind us, and I am very excited about fiscal '26 and the opportunities in front of us. The team is off and running, and we're very excited to forward to talking to you again in 90 days to talk about Q1. Thanks for your time today.

Thank you. And with that, we conclude our program for today. We thank you for participating, and you may now disconnect.

I'm Koji Ikeda. I'm one of the software analysts here at Bank of America. I am absolutely thrilled to have Intapp here today. We have a special guest, Thad Jampol. You are the Chief Product Officer, and you don't get out on the road all that much, so happy and thrilled to be able to do this with you. We also have Dave Morton, CFO. Thanks for joining us.

Thanks for having us.

Yes, absolutely. And so Intapp, vertical software business for professional services and financial services. I'm a big fan. I think what you guys do out there is great for all the different professional services, financial services organizations out there. But maybe for those in the room that are unfamiliar with Intapp and those on the webcast that are unfamiliar with Webtap (sic) [ Intapp ], maybe from a high level, what is the background of Intapp? You've been there for a long time. Tell us about the kind of the origin story there? And what are you guys doing right now? What is the opportunity that you're addressing?

Absolutely. And no, thank you again for having us. It's great to be here. For those that don't know, as you said, Intapp is a vertical industry cloud company focused on the financial and professional services industries. And we take a lot of inspiration from companies like Veeva, who build industry clouds for very specific, specialized industries. Our end markets are the large partnerships. So it's the large law firms, large accounting firms, large consulting, large investment banks, private capital firms and real asset investors. These are the industries that really drive the world's deals. And it's a surprisingly large industry, about 3% of the global economy, but these are partnerships. And so the business model, the operating requirements and the culture are just extremely distinct from other industries.

And it's one of the reasons that we believe this industry has been underserved and overlooked by Silicon Valley historically. And you think about it, these organizations make deep foundational promises of trust and confidentiality to their clients, they hold a lot of the world's secrets. And so they're regulated in a way that no market is. They don't sell physical products or widgets or SKUs off of a price sheet that they compete based on knowledge, intellectual capital and these long-standing relationships. And structurally, they are mainly made up of professionals organized not by the traditional functional department, but by area of expertise.

And so we look at this and say, look, these are very, very profound differences and these industries, because of that, require hyper-specialized solutions and software, which is where Intapp comes in. And Intapp offers a very broad operating platform purpose-built for this industry. And it's made up of -- I'm the product guy, I talk about the product. So it's really made up of 4 main product lines. We have a solution that helps firms win new business by managing the complex web of deals and relationships and clients, investors and intermediaries.

We have a solution that helps firms execute and deliver on that work collaboratively and efficiently. We have a solution that is a work to cash solution to ensure that these firms get paid for all their work and they could distribute maximum profits back out to the partners every year. And then we have a compliance suite that sits underneath everything to help them navigate this sort of complex set of compliance and regulatory obligations that they have.

Got it. It sounds like you got -- I mean, I know what you got. It sounds like you guys have a front office and back office platform for industries that are data-driven, trust driven, knowledge-driven, which makes it difficult for horizontal vendors to be there not only from a -- well, let me ask you that question. I remember during the IPO period, we talked a lot about Salesforce, right? Salesforce hinted it, they have a horizontal solution that can do it, but maybe it's not the best solution or from a feature standpoint and then maybe from a cost standpoint. And so what are some of those things that the platform can do that makes it better, faster, more cost effective than something like a horizontal platform?

Yes, absolutely. And not coincidentally, you're going to see some dovetailing with the difference between AI from the horizontals versus vertical AI, but the answer is sort of the same. You come back down to starting with the data. And horizontal systems are really built for the manufacturing and retail worlds. They have very linear processes. And you think about just as an example, a typical transaction, there's a buyer, there's a seller, there's an asset or a SKU and there's a bunch of people around that on each side. But in this industry, there's co-investors, there's referring banks, there's lending syndicates, there's diligence teams, there's advising council, there's opposing council. And so all of these different stakeholders are critical to how these firms operate, and you need to be able to capture that so that you can reflect it back.

And so I would put data as a big one. I think a second one is compliance. Again, I was talking about this, compliance is existential to organizations. Everything these professionals do is subject to conflicts or confidentiality or regulatory scrutiny or professional and ethical responsibility rules. It's not a check-the-box thing. It's not an after-the-fact bolt-on. And again, I'm probably jumping the gun here, but this is one of the big obstacles and encumbrances of this first wave of AI because it doesn't really think about the very profound compliance requirements and obligations that the clients step in.

And then thirdly is, we are so intimate with the way that these workflows and processes happened as part of our industry orientation that that's a big one, understanding how are you augmenting and supporting these hyper busy professionals in the way that they work and within the tools that they work. And again, each of those 3, whether it's the data, the compliance obligations or sort of the workflows and processes, we just feel like we have a big advantage being so close to this market.

I know I've probably told John, your CEO, of this before, but I'm still waiting for the equity research CRM tool from you guys. I know that you guys do a lot of investment banking, kind of deal management with the DealCloud but us. When you guys are going to come out with the meter front? Maybe a question for Dave. How do we think about the demand environment, maybe split between broadly professional services and financial services? What does it look like today? How are you thinking about it for the future?

Yes. I mean I think our bigger context and some of the moves we made earlier this year with our go-to-market and looking at where some of the bigger opportunities were coming, before, we kind of weighted everything the same. Whereas what we talked about at our Investor Day, we saw over 70% of our SAM/TAM coming from the top 2,000-plus clients. And so that's where we kind of started over indexing on that go-to-market motion. And as a result, we've continued to see bigger pipe, win rates, a lot of strong deals come through that whole ecosystem, not only for this year, but then looking at this quarter is what we talked about, not only a couple of -- 1.5 months ago on our earnings call.

But then even into FY '26, we are really excited about those opportunities. We'll be excited to talk to you all here at the end of the quarter as well as what that implies specifically for FY '26. So we believe everything that we've done as well as the rate of pace of innovation that in his organization has brought on, we feel that we're positioned really nicely for how this company is continuing to deliver.

Okay. I'm going to start macro and kind of bring it in slowly down to vertical AI, but just starting macro. The demand environment within the categories that you're operating in, professional services, financial services, has been proven to be pretty resilient. Kind of IPO time, through the COVID ups and downs, the recessionary years and even in today, you guys have been pretty darn good. What is it specifically about the professional services and financial services end market that really creates this nice end market?

Right. So I think it's a few things. I think first, we're very fortunate to have an incredibly stable end market. And even in sort of the down markets and as it fluctuates, you're going to pay your lawyers, you're going to pay your tax professionals, you're going to pay your auditors. And when you think about the private capital partners, they're getting paid at 2% out of their management fees, but it's from a fund that has a 5-, 7-, 9-year life span. So it's just -- it's long enough where they can weather whatever ups and downs there are there.

I think secondly, there's just an inherent diversification in our markets. So a lot of these firms are made up of sub businesses of different practices or different service lines or different asset classes and strategies. And so we have seen in the past a shift in go-to-market and investment. So in a down market, you'll see accounting firms maybe move from advisory stronger into the audit side. You'll see firms move from some of the cyclical transaction work into more countercyclical litigation, restructuring bankruptcy work. Even the private equity, private capital firms, they're inherently diversified because they have portfolios of different assets underneath that. So there's diversification.

And then lastly, I'd call out and perhaps counterintuitively, and we've seen this going through the 2008-2009 financial crisis and COVID, that firms when you take the foot off the pedal a little bit in the go, go, go, deal, deal, deal side, they have a moment to go enhance their operation to go make some investments that they've wanted to do for a while, and they'll spend in the areas that they deem strategic even while they're reducing and cutting some of the ancillary areas. And we've been very fortunate to be deemed within those strategic categories. And we've done some of our biggest deals in the depths of financial crisis or COVID.

Let's move to AI. We'll start macro on AI. Tell me a little bit about why vertical AI is maybe differentiated from horizontal broad AI?

Yes. So I touched on some of this earlier, but we talk to our customers a lot, but there's 2 particular moments that I think are really illustrative. So in the beginning of the year, we have a CIO Advisory Board that we host in Redmond together with Microsoft, and we invite a few dozen of the most influential innovative CIOs, and we talk there. And then follow that, we have an event we call the Ambassador Event where we invite some of our biggest power users.

And when we had these sessions last year 2024, there is a lot of optimism on the first wave of this generative AI as we were talking about mostly from the horizontals because they were early out of the gates. They were piloting, they were trialing it. When we got together this year, the tenor was very different, that they felt that while a lot of this technology had cool aspects to it, that had potential, it ultimately didn't deliver the outcomes they were looking for.

And I do think it comes down to those 3 things, at least this is what I'm being told, is that it's not using the firm's data, like these models are so powerful and they're incredibly innovative and we're excited about them but at their core, they're inherently generic. Their raw technology trained from information across the broad Internet and that is part of its power, but the broad Internet doesn't understand the precision of the deals and the transactions and litigations that these professionals work on every day. And so it just -- it didn't use their data.

Secondly, a lot of the General Counsel's office and compliance offices just put the brakes on these when they started panicking about the oversharing risks that these copilots and models might introduce into these firms that have -- they have MNPI, they have PII, they have trade secrets, they have comp information all over the place. And a lot of these first wave of innovations didn't really consider the implications of that.

And then thirdly, and I think this is probably the biggest one, is the professionals never really adopted en masse the tools that came in. And so I think this is because these initial waves of generative AI are there are separate panes of frames that sit on the side of your screen, they're blank with a blinking cursor. We joke that it feels like MS DOS. They just sit there and they ask you to type in something inspirational or something really important and you get natural language back out. But it puts this incredible cognitive burden on these very, very busy professionals, and it's asking them to contact shift away from the other applications and working on the deals and working with their clients and fighting their competitors and developing prospects, to jump over to this other screen that's blank, enter something, get the results, find a way back into your application and your workflow.

So those areas, I think people were very suspect of. They've shifted their focus now much more practically into more vertical AI, to your point, and they're really focusing on grounding the data within the firm's proprietary information, having a compliance confidentiality first offering and ensuring that the AI is manifested directly within the workloads and the processes and the productivity tools that the professionals are using every day.

Is the thought process here within your industries, a blinking cursor ChatGPT screen, how can I help you is not how can I help you because of the cognitive burden that you've been seeing? How do you bridge that, from the offerings that you have or something where I'm afraid to put something in here because I don't know what's going to happen with the sensitive data in compliance and everything? How do you make that easier, more digestible grade?

So I'll answer that in 2 ways, starting with the end of that, which is the -- how do you have confidence, trust, that all this AI is going to be compliant and work with what you're doing. So the first thing to do is to ensure that all of your information is protected. And it sounds fairly straightforward to do but all of these innovations from Microsoft and the productivity tools, which are incredible, all the Teams and the OneDrive and all the M365, they're collaborative. They make it so easy to unintentionally do something that reveals or share sensitive for information, you need to counter to that. And that's an area that Microsoft and Intapp have worked together on. It's in our mutual interest.

And so we have a confidentiality solution that we call Walls for AI. And we launched it on stage last -- or one of our big shows, and we had the Head of Copilot on stage with us. And it really looks at the overall sort of data landscape and identifies where sensitive information is, is it protected, is it not protected, and then the Walls product is a centralized place that can enforce the right confidentiality policies across all the different systems. So that's sort of the first part of your question.

The second part of your question is how do we bridge this gap from the blinking cursor, and this is where it gets really exciting. So if you look across a lot of our applications, I'll pick a few out of the air. You look at time, we have a time product that helps essentially lawyers track their time and ensure that they get the bill out of this. We use AI to capture it. And we could embed right there in the application, we can tell you all the time that you worked. We can tell you what your time sheet is. You can now talk to it. It will build out a narrative. The AI will figure out if that narrative is actually a good narrative. And if it conflicts or violates any commitments you've made to clients, it will tell you, then it will suggest changes to it. It's right there in the application. You don't need to go anywhere else.

In our conflicts of interest products, so a lot of these firms before bringing on a new piece of work, you have to go through a fairly rigorous process to ensure that you're not representing somewhere the opposite side of a deal or a litigation or something like that. And we have AI embedded right there that will say, based upon the way this firm operates and what we've seen from other organizations where risks, "Here are the areas that you might want to double click on and spend some additional time because we think there might be something riskier." Or within DealCloud, within our product that allows you to go win more business we can embed right there capabilities, allowing you to go see all of these exciting opportunities that you might invest in based upon your historical investments. So the list goes on and on. The point to take away here is that it's embedded directly within these applications in context at the moment that you need it.

So it sounds like you guys are doing all the right things with AI. I'm going to put my more balanced head on. And so what's the catalyst for your customers to adopt this stuff? What are they waiting for? Are they still waiting? I mean how do we think about what gets them to start really buying this stuff?

Yes. So surprisingly, or maybe not surprisingly, a lot of people here probably work at a firm within this industry that they -- these industries have been a little slower in the core of digitalization and the digital transformation. And a lot of the trends that we've seen of moving to the cloud and other industries are still happening right now in this market. We're working with a ton of organizations and helping them move their older on-premises, in-house-built tools over to our modern cloud and SaaS solutions, and that is a big demand generator for us.

But then on top of that, what really gets them excited is that, that is an enabler of generative AI because you have to be in the cloud really in order to take advantage of this. And they like we are huge believers and very bullish on the potential transformative opportunities of generative AI in the way you operate and compete. And so we're seeing this opportunity and this demand generation for both the cloud and then the generative AI on top of that. And then compliance, the third one, again, very existential to this industry, and they want to get it right, and they also see the yin and the yang between having the right compliance and confidentiality underpinnings, allowing you to bring in all of this generative AI and be able to take advantage of it in a safe and trusted way.

Throughout your answers, Thad, you mentioned Microsoft, you mentioned Seattle, I know you guys have a big partnership with them. But maybe for those in the audience and those on the webcast that are unfamiliar with your partnership with Microsoft, tell us about it, how deep is it and where is that going in the future?

Sure. Yes. So it's about 3 years in right now. And I would -- there are many pieces to it, but I would call out really 2 big pieces. The one that gets our clients most excited is the co-innovation side of this. And we -- every year that has gone by, we've gotten closer and closer to the engineering teams. We're talking to them regularly. We're co-innovating in a number of areas. I talked about Walls for AI. That's a very important one. We really are looking to make sure that all of our innovations, again, to this blinking cursor point, meet professionals where they are today, and they're not just requiring this big context shift.

One of the places where a lot of professionals are in our industry is in M 365 and the Office suite. So we have a lot of initiatives together with Microsoft to be able to natively plug right into Teams or right into Copilot. So we have a lot of progress there, and we share a lot of it in our big Redmond meeting, and that's really exciting.

We're also really excited about the go-to-market and the co-selling together with that. So Microsoft has these Microsoft Azure Minimum commitment agreement, spend agreements, they're called MAC agreements. And what's really, really great because we are in the top tier of their partnership, is that cost of firms will get dollar-for-dollar credit against their committed Microsoft spend buying Intapp products. And so we actually just had a really, really big account who is kind of on the fence between -- on buying DealCloud, say, "Oh, I could use the MAC spend because your product is in the Azure marketplace, it's essentially free for me if you've got that dangling out there." So in certain situations, it's been a real catalyst and an accelerant of deals. And all of these firms and all of them are industries that we serve are very heavy Microsoft users.

Okay. Okay. Tell me about Amplify, kind of a big event that you guys had, lots of big announcements. I watched it, but I'd love to hear kind of your view and the big announcement within that?

Sure. We're really, really excited by that. So Amplify is the name of our big annual customer event. It's very heavily product-oriented. We share a lot of R&D, a lot of our innovation. We make a number of big product and SKU announcements there. It's held in New York. Last Amplify in 2024, we announced our Intapp Assist brand, which is our generative AI brand, and we launched our Assist for DealCloud SKU. We're really, really excited about the uptake that's had in the market, and then we follow that up with a number of other Assist in our product line SKUs.

This Amplify, which we just had in February, we doubled down on AI. And we made a number of, I think, really, really exciting announcements that went over really, really well with our market. And just to give you a few examples. We announced Assist smart tags. Assist smart tags uses AI to analyze all the conversations and call notes and meeting transcripts that happen throughout the day within these organizations and then to be able to identify the interesting nuggets of intelligence and then bring them to the relevant stakeholders instantly there.

And so this is critical because you think about how many of these conversations happen every day, these are relationship-based businesses. So the number of calls and meetings, I mean, it's hundreds or thousands every day. And then the insights, the competitive intelligence, the opportunities that get buried in this unstructured data, these call notes that just sit in the system and never see the light of day, it's incredible. And so what smart tag is able to do is to go in there and find it and bring it to the right professionals so that they can be smarter in front of their prospects, they could find more opportunities and they could have that extra advantage against their competitors. So that's smart tags.

We announced Assist Prompt Studio. Prompt Studio allows you to get very granular in the configuration of prompts and how generative AI is surfaced within the application. A great example that I just heard is there's a firm, this was a sort of a well-known middle market private equity firm. And they really wanted to focus on the reciprocity of their advisers, meaning they're spending a lot of fees with their advisers, and they want to make sure their advisers are bringing them leads back.

And so they configured the prompt. I just checked it earlier and they're able to say, "Show me right on the advisers page where I load it up in DealCloud. I want to know the total amount of fees that we spent with this adviser. I want to know how many sell-side leads they brought me, I want to know how many of those leads converted opportunities, and I want to know how many of those opportunities we actually worked. And then I want the AI to summarize the health of our relationship with this adviser."

It's a great example of what Prompt Studio can do. We've also seen firms who will want their growth equity partners to really see different information highlighted about companies, so cap tables growth rate CAGR they'll want to see the private credit team, they're going to be more interested in EBITDA and free cash flows and debt service credit ratios those types of things. So that's Prompt Studio.

We announced Assist Origination. This was a big one for us. Assist Origination uses AI to go find and source the best new opportunities for a fund or a firm. And there's $3.7 trillion of dry powder that these firms have to go commit and deploy. And we think the winners are going to be the ones who are most able to go directly source the best new platform acquisition or add-on acquisition faster than their peers. And the magic of this is the data.

And we bring together all of this private company information from across the Internet that we use delphai, a company we acquired a few years ago, to do. We combine that with a lot of thermographic data feeds that firms use through third-party subscriptions. And then firm's proprietary data itself within DealCloud, have I met with this company, have I done workups or models, have I made bids, and it's all surface directly in DealCloud.

So it's just right out of the bat integrated with all your workflows, your pipeline, your Monday morning meetings, your investor committee preparation. So you get this incredible force multiplication effect of coverage, sourcing BD teams of 25, 30 being able to do the work of 40 or 45. And then we had a time for AI, I talked about that. We had walls for AI. I talked about that. It was -- there was just a lot of AI top to bottom. We introduced about a half dozen additional monetized AI SKUs.

Wow. Just listening to that, I would love to have Assist smart tags for equity research. I would do that, I would love that, throw that in there with equity research CRM.

I didn't know this is the pipeline generation event.

That all sounds great. And so how are you guys differentiated or how are you going to keep this differentiated from the competition? Because I think about 2 things. One, clearly, professional services, financial services, good growth. I mean you guys show great growth in your SaaS. SaaS numbers, cloud ARR, I mean, good numbers there. And so I always fear that people will -- the horizontal vendors might recognize this and come after you. And so then it becomes product, right? Product will win. So talk to me a little bit about why your product is differentiated today and how is it going to continue to be differentiated?

Well, it's a great bookend question. I opened with sort of the company, and you had asked about some of the company's beginnings. And when we started the company and we bootstrapped it and we got into law firms very quickly, the law firm that was doing our patent work, looked at our product and said, we should have this, and we hired their CIO as our first seller, and they brought us into a lot of this very insular self-referencing community. And what was so serendipitous for us is that we were middleware at that time, we were integration, and we didn't see just one application area that we really understood the whole application landscape, and we understood more importantly, the data model.

And so that was the formative start of really building what we call the industry graph data model. We think this is one of our big innovations and one of our long-term durable technology moats. And it really reflects the way that these industries and professionals work, and we can capture that information the AI so desperately needs. I use that example of sort of a transaction. That's an example of that. And because of this industry graft data model, you could answer these big strategic questions, which are not new, by the way. They've been out there for a while, but no one's been able to really do this.

It's sort of like what business and what segments have I been most commercially successful so I could do more of that? Or who in my network has more influence or referred work to me so I could spend more time with them? Where are the best deals for my fund? What is the likely native transaction? And what is my best path of introductions by the first-mover advantage or where the best follow-on work or cross-sell opportunities so I can develop my clients? And all of that is based upon having this incredible industry graph data model, which I don't think one of these horizontals can do anytime soon.

Got it. Maybe the last question here, and David, I didn't forget about you.

No worries.

I wanted -- you guys are clearly in an attractive growth category. And so as the CFO, how do you think about balancing growth versus profitability? I mean, you guys showed great margin expansion, but does that continue forever? Are you going to invest more? How do you think about it?

Yes. I mean we've shown really good diligence and judiciousness. I think it goes back to the culture of being bootstrapped. And so this wasn't a company that was born out of endless funding and then all of a sudden had to get profitable here in the 2020s. And so we are very thoughtful and we'll continue to apply economics towards that and his organization to keep that competitive moat out there. We'll continue to drive productivity within our sales and marketing and absolute reductions in G&A. We've done things with our services model. There could be some room to go there.

But all things being considered, yes, we really like of how we framed up on '25. We like our long-term model. We think it's within near reach than not, almost time for another Investor Day, might you say. And so yes, we're just really excited about those opportunities. And when you think about some of the returns that we're getting, both on the AI products we're doing, it's hard to say why we wouldn't continue to invest while also contributing to the bottom line.

Got it. Yes. I like that near comment. And so we'll leave it at that. Thank you guys so much. Fun conversation. Thanks so much for coming.

Thanks for having us, Koji.

Thank you.

Thank you.