Intapp Inc.

02/03/2026 | Press release | Distributed by Public on 02/03/2026 15:23

Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Notes Regarding Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes and other financial information included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the Securities and Exchange Commission (the "SEC") on August 20, 2025. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, particularly in the section titled "Cautionary Note regarding Forward-Looking Statements" and 'Risk Factors." Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless otherwise noted, any reference to a year preceded by the word "fiscal" refers to the fiscal year ended June 30 of that year.
Overview
We are a leading global provider of AI-powered solutions for the world's premier accounting, consulting, investment banking, legal, private capital and real assets firms. Our vertical software as a service ("SaaS") solutions help professionals apply their collective expertise to make smarter decisions, manage risk, increase competitive advantage and drive new growth. Using the power of Applied AI, our purpose-built vertical SaaS solutions help firms accelerate the flow of information, activate expertise, empower teams, strengthen client relationships, reduce risk, and adapt more quickly in a highly complex ecosystem. The world's top firms - across accounting, consulting, investment banking, legal, private capital, and real assets - trust Intapp's industry-specific platform and solutions to modernize and drive new growth.
Highlights for the three months ended December 31, 2025
During the three months ended December 31, 2025, we generated total revenues of $140.2 million with a gross margin of 75%. Our operating cash flow was $22.9 million and we repurchased approximately 2.3 million of our common stock for $100.0 million. Total cash and cash equivalents as of December 31, 2025 were $191.2 million. Our remaining performance obligations, which represent all future revenue under contract yet to be recognized, were $777.1 million as of December 31, 2025.
How We Generate Revenue
We generate revenues primarily from software subscriptions, typically with one-year or multi-year contract terms. We sell our software through a direct sales model, which targets clients based on end market, geography, firm size, and business need. We recognize revenues from SaaS and support revenue ratably over the contract term. We recognize license revenues related to subscription fees upfront and license revenues related to support ratably over the term of the support contract. We generally price our subscriptions based on the number of users adopting our solution and the modules deployed.
We expect the vast majority of our new ARR (as defined below) growth in the future to be from the sale of SaaS subscriptions.
We generate service revenues primarily from professional services. Our clients utilize these services to configure and implement one or more modules of the Intapp Intelligent Cloud, integrate those modules with the existing platform and with other core systems in their IT environment, upgrade their existing deployment, and provide training for their employees. Other professional services include strategic consulting and advisory work, which are generally provided on a standalone basis.
Key Factors Affecting Our Performance
Market Adoption of our Cloud Platform.Our future growth depends on our ability to win new accounting, consulting, investment banking, legal, private capital and real assets clients and expand within our existing client base, primarily through the continued acceptance of our cloud business. Our cloud business has historically grown faster than our overall business and represents an increasing proportion of our annual recurring revenues. We must demonstrate to new and existing clients the benefits of selecting our cloud platform, and support those deployments once live with reliable and secure service. From a sales perspective, our ability to add new clients and expand within existing accounts depends upon a number of factors, including the quality and effectiveness of our sales personnel and marketing efforts, and our ability to convince key decision makers within accounting, consulting, investment banking, legal, private capital and real assets firms to embrace the Intapp Intelligent Cloud over point solutions, internally developed solutions, and horizontal solutions. If our clients do not continue to see the ability of our platform to generate return on investment relative to other software alternatives, net revenue retention could suffer and our operating results may be adversely affected.
Continued Investment in Innovation and Growth.We have made substantial investments in research and development and sales and marketing to achieve a leadership position in our market and grow our revenues and client base. We intend to continue to invest in research and development to build new capabilities and maintain the core technology underpinning our differentiated platform. In addition, we expect to invest in sales and marketing to broaden our reach with new clients in the U.S. and abroad and deepen our penetration with existing clients. With our revenue growth objectives, we expect to continue to make such investments for the foreseeable future. We intend to continue to gradually increase our general and administrative spending to support our growing operational needs.
We have a track record of successfully identifying, acquiring and integrating complementary businesses within the accounting, consulting, investment banking, legal, private capital and real assets industries. To complement our organic investment in innovation and accelerate our growth, we will continue to evaluate acquisition opportunities that help us extend our platform, broaden and deepen our market leadership, and add new clients.
Key Business Metrics
We review a number of operating and financial metrics, including the following key metrics to help us evaluate our business, measure our performance and the effectiveness of our sales and marketing efforts, identify trends affecting our business, formulate business plans and budgets and make strategic decisions.
Annual Recurring Revenues ("ARR")
ARR represents the annualized recurring value of all active SaaS and on-premise license contracts at the end of a reporting period. Contracts with a term other than one year are annualized by taking the committed contract value for the current period divided by number of days in that period then multiplying by 365. As a metric, ARR mitigates fluctuations in revenue recognition due to certain factors, including contract term and the sales mix of SaaS contracts and licenses. ARR does not have any standardized meaning and may not be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenues and deferred revenues and is not intended to be combined with or to replace either of those elements of our financial statements. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our clients.
ARR was $535.0 million and $437.1 million as of December 31, 2025 and 2024, respectively, an increase of 22%.
Cloud ARR
Cloud ARR is the portion of our ARR which represents the annualized recurring value of our active SaaS contracts. We believe Cloud ARR provides important information about our ability to sell new SaaS subscriptions to existing clients and to acquire new SaaS clients.
Cloud ARR was $433.6 million and $331.1 million as of December 31, 2025 and 2024, respectively, an increase of 31%, and represented 81% and 76% of ARR as of December 31, 2025 and 2024, respectively.
Cloud Net Revenue Retention ("NRR")
Cloud NRR is the portion of our NRR which represents the net revenue retention of our SaaS contracts. We calculate Cloud NRR by starting with the Cloud ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period Cloud ARR. We then calculate the Cloud ARR from these same clients as of the current fiscal period, or current period Cloud ARR. We then divide the current period Cloud ARR by the prior period Cloud ARR to calculate the Cloud NRR.
This metric accounts for changes in our cloud recurring revenue base from cross-sell (additional solution capabilities sold), upsell (additional seats sold), cloud migrations, price changes, and client attrition (including contraction of solution capabilities, contraction of seats and client churn). Our trailing twelve months Cloud NRR as of December 31, 2025 and 2024 was 124% and 119%, respectively.
Number of Clients
We believe our ability to increase the number of clients on our platform is a key indicator of the growth of our business and our future business opportunities. We define a client at the end of any reporting period as an entity with at least one active subscription as of the measurement date. As of December 31, 2025, we had over 2,750 clients. No single client represented more than 10% of total revenues for either of the three and six months ended December 31, 2025 and 2024.
Our client base includes some of the largest and most reputable accounting, consulting, investment banking, legal, private capital and real assets firms globally. These clients have the financial and operating resources needed to purchase, deploy, and successfully use the full capabilities of our software platform, and as such, we believe the number of our clients with contracts greater than $100,000 of ARR is an important metric for highlighting our progress on the path to full adoption of our platform by our accounting, consulting, investment banking, legal, private capital and real assets clients. As of December 31, 2025 and 2024, we had 834 and 728 clients, respectively, with contracts greater than $100,000 of ARR.
With our scalable, modular cloud-based platform, we believe we are well positioned to continue our growth. Our most significant opportunity lies with the largest firms, where we see substantial expansion potential as firms continue to consolidate. We pursue growth in the number of clients, but our biggest drivers are the assets under management and revenue growth of our clients as well as growth in the total number of professionals they employ.
Components of Our Results of Operations
Revenues
We generate revenues from the sale of our SaaS solutions and premium support services related to SaaS, and subscriptions to our term software applications and support services related to licenses. We generate professional services revenues primarily by delivering professional services for the configuration, implementation and upgrade of our solutions.
SaaS
SaaS revenues include subscription fees from clients accessing our SaaS solutions, premium support services related to SaaS, and updates, if any, to the subscribed service during the subscription term. We recognize SaaS revenues ratably over the contract term beginning on the commencement date of each contract, which is the date when the service is provisioned and made available to our clients. The initial term of our SaaS contracts is generally one to three years in duration.
License
License revenues include subscription fees from providing clients with the right to functional intellectual property where clients can benefit from the subscription licenses on their own and support services related to the licenses, which entitles clients to receive technical support and software updates, on a when and if available basis. We recognize license revenues related to subscription fees at a point in time when control of our term software application is transferred to the client, which generally occurs at the time of delivery or upon commencement of the renewal term. License fees are generally payable in advance on an annual basis over the term of the license arrangement, which is typically non-cancelable. We recognize license revenues related to support ratably over the term of the support contract which corresponds to the underlying license agreement. We expect to continue to generate a relatively consistent stream of license revenues from our existing license clients. From time to time, there may be cumulative catch ups in revenue as a result of compliance uplift contracts. However, over time as we focus on new sales of our SaaS solutions and encourage existing license clients to migrate to SaaS solutions, we expect revenues from license to decrease as a percentage of total revenues.
Professional Services
Our professional services primarily consist of implementation, configuration and upgrade services provided to clients and others. These engagements are billed to clients either on a time and materials or milestone basis; revenues are recognized as invoiced or in proportion to the work performed, respectively. We expect the demand for our professional services to remain relatively flat, with modest increases due to client growth and the need for implementation, upgrade, and migration services for new and existing clients. This demand will be affected by the mix of professional services that are provided by us versus provided by our third-party implementation partners, reflecting our strategy to de-emphasize professional services revenue. This shift will enhance partner involvement, support co-selling efforts, and drive partner-led deal origination.
Cost of Revenues
Our cost of revenues consists primarily of expenses related to providing SaaS solutions, premium support services related to SaaS, support services related to license and professional services to our clients, including personnel costs (salaries, bonuses, benefits and stock-based compensation) and related expenses for client support and services personnel, as well as cloud infrastructure costs, third-party expenses, depreciation of fixed assets, amortization of capitalized internal-use software costs and acquired intangible assets, and allocated overhead costs. We expect our cost of revenues to increase in absolute dollars as we expand our SaaS client base over time as this will result in increased cloud infrastructure costs and increased costs for additional personnel to provide technical support services to our growing client base.
Cost of SaaS
Our cost of SaaS revenues comprises the direct costs to deliver and support our SaaS solutions and premium support services related to SaaS, including personnel costs, allocated overhead costs, third-party hosting fees related to cloud infrastructure, amortization of capitalized internal-use software costs, amortization of acquired intangible assets, and depreciation of fixed assets.
Cost of License
Our cost of license revenues comprises the direct costs to support our license, including personnel costs, and allocated overhead costs.
Cost of Professional Services
Our cost of professional services revenues comprises the personnel-related costs for our professional services employees and contractors responsible for delivering implementation, upgrade and migration services to our clients. This includes personnel costs and allocated overhead costs. We expect the cost of professional services revenues to increase in absolute dollars as we continue to hire personnel and engage contractors to provide implementation, upgrade and migration services to our growing client base.
Operating Expenses
Research and Development
Our research and development expenses consist primarily of personnel costs for engineering and product development employees, costs of third-party services, cloud infrastructure costs and allocated overhead costs. We expect our research and development expenses to continue to increase in absolute dollars for the foreseeable future as we continue to dedicate substantial internal resources to develop, improve and expand the functionality of our solutions.
Sales and Marketing
Our sales and marketing expenses consist primarily of costs incurred for personnel costs for our sales and marketing employees as well as sales commissions and benefits, costs of marketing events and online advertising, allocated overhead costs, and travel and entertainment expenses. We capitalize client acquisition costs (principally commissions paid to sales personnel) and subsequently amortize these costs over the expected period of benefits. In the medium term, we expect to see an increase in sales and marketing expenses as we continue to expand our direct sales force to take advantage of opportunities for growth and increase in in-person meetings, conferences, and attendance at trade shows.
General and Administrative
Our general and administrative expenses consist primarily of personnel costs as well as professional services and facilities costs related to our executive, finance, human resources, information technology and legal functions. As a public company, we expect to continue to incur significant accounting and legal costs related to compliance with rules and regulations enacted by the SEC, including the costs of maintaining compliance with the Sarbanes-Oxley Act, as well as insurance, investor relations and other costs associated with being a public company.
Interest and Other Income (Expense), Net
Our interest and other income (expense), net consists primarily of interest income from our cash and cash equivalents, gains and losses from foreign currency transactions, remeasurement, a foreign currency impact from dissolution of subsidiary and non-cash interest expense related to the amortization of deferred financing costs.
Income Tax (Expense) Benefit
Our income tax (expense) benefit consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Results of Operations
The following tables set forth our results of operations for the periods presented, expressed in total U.S. dollar terms and as a percentage of our total revenues (percentages may not add up due to rounding):
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
(in thousands, except for percentages)
Revenues:
SaaS $ 102,458 73 % $ 79,976 66 % $ 199,982 72 % $ 156,852 65 %
License 25,449 18 28,017 23 54,636 19 56,509 24
Professional services 12,301 9 13,216 11 24,617 9 26,653 11
Total revenues 140,208 100 121,209 100 279,235 100 240,014 100
Cost of revenues (1):
SaaS 18,242 13 16,292 14 36,102 13 31,610 14
License 1,348 1 1,630 1 2,916 1 3,382 1
Professional services 15,480 11 14,549 12 31,248 11 29,413 12
Total cost of revenues 35,070 25 32,471 27 70,266 25 64,405 27
Gross profit 105,138 75 88,738 73 208,969 75 175,609 73
Operating expenses (1):
Research and development 39,283 28 33,325 27 80,217 29 65,752 27
Sales and marketing 46,691 33 40,791 34 95,477 34 78,551 33
General and administrative 26,341 19 24,808 20 54,907 20 48,746 20
Total operating expenses 112,315 80 98,924 81 230,601 83 193,049 80
Operating loss (7,177) (5) (10,186) (8) (21,632) (8) (17,440) (7)
Interest and other income (expense), net 1,915 1 (202) (1) 2,974 1 3,220 1
Net loss before income taxes (5,262) (4) (10,388) (9) (18,658) (7) (14,220) (6)
Income tax (expense) benefit (672) - 171 1 (1,629) - (517) -
Net loss $ (5,934) (4) % $ (10,217) (8) % $ (20,287) (7) % $ (14,737) (6) %
(1)Amounts include stock-based compensation expense as follows:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Cost of SaaS $ 907 1 % $ 851 1 % $ 1,693 1 % $ 1,515 1 %
Cost of license 158 - 199 - 335 - 388 -
Cost of professional services 1,582 1 1,652 1 3,007 1 3,031 1
Research and development 8,634 6 6,800 6 16,621 6 11,424 5
Sales and marketing 9,284 7 7,232 6 17,177 6 12,970 5
General and administrative 10,132 7 8,677 7 19,151 7 16,072 7
Total stock-based compensation $ 30,697 22 % $ 25,411 21 % $ 57,984 21 % $ 45,400 19 %
Comparison of the Three and Six Months Ended December 31, 2025 and 2024
Revenues
Three Months Ended December 31, Change Six Months Ended December 31, Change
2025 2024 Amount % 2025 2024 Amount %
(in thousands, except for percentages)
Revenues:
SaaS $ 102,458 $ 79,976 $ 22,482 28 % $ 199,982 $ 156,852 $ 43,130 27 %
License 25,449 28,017 (2,568) (9 %) 54,636 56,509 (1,873) (3 %)
Professional services 12,301 13,216 (915) (7 %) 24,617 26,653 (2,036) (8 %)
Total revenues $ 140,208 $ 121,209 $ 18,999 16 % $ 279,235 $ 240,014 $ 39,221 16 %
SaaS
SaaS revenues increased by $22.5 million, or 28%, and $43.1 million, or 27%, respectively, in the three and six months ended December 31, 2025 compared to the same periods in the prior year, due to sales to new clients and expansion of existing clients from both cross-selling and upselling sales motions. The continuation of clients migrating from using our on-premise license solutions to our cloud solutions also contributed to the growth.
License
License revenues decreased by $2.6 million, or 9%, for the three months ended December 31, 2025 compared to the same period in the prior year, due to clients migrating to our SaaS solutions.
License revenues decreased by $1.9 million, or 3%, for the six months ended December 31, 2025 compared to the same period in the prior year, due to clients migrating to our SaaS solutions, partially offset by compliance uplift contracts.
Professional Services
Professional services revenues decreased by $0.9 million, or 7%, and $2.0 million, or 8%, respectively, in the three and six months ended December 31, 2025 compared to the same periods in the prior year, due to changes in mix of resource delivery to our third-party implementation partners.
Cost of Revenues and Gross Profit
Three Months Ended December 31, Change Six Months Ended December 31, Change
2025 2024 Amount % 2025 2024 Amount %
(in thousands, except for percentages)
Cost of revenues:
SaaS $ 18,242 $ 16,292 $ 1,950 12 % $ 36,102 $ 31,610 $ 4,492 14 %
License 1,348 1,630 (282) (17 %) 2,916 3,382 (466) (14 %)
Professional services 15,480 14,549 931 6 % 31,248 29,413 1,835 6 %
Total cost of revenues 35,070 32,471 2,599 8 % 70,266 64,405 5,861 9 %
Gross profit:
SaaS 84,216 63,684 20,532 32 % 163,880 125,242 38,638 31 %
License 24,101 26,387 (2,286) (9 %) 51,720 53,127 (1,407) (3 %)
Professional services (3,179) (1,333) (1,846) (138 %) (6,631) (2,760) (3,871) (140 %)
Gross profit $ 105,138 $ 88,738 $ 16,400 18 % $ 208,969 $ 175,609 $ 33,360 19 %
Cost of SaaS
Cost of SaaS revenues increased by $2.0 million, or 12%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This was driven by increases in cloud hosting costs of $0.6 million, royalty expenses of $0.5 million, amortization of acquired intangible assets costs of $0.5 million and personnel-related costs of $0.2 million primarily due to annual salary increases.
Cost of SaaS revenues increased by $4.5 million, or 14%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. This was driven by increases in cloud hosting costs of $1.3 million, royalty expenses of $0.9 million, amortization of acquired intangible assets costs of $0.8 million, personnel-related costs of $0.7 million primarily due to annual salary increases and contractor costs of $0.4 million.
Cost of License
Cost of license revenues decreased by $0.3 million, or 17%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, primarily due to a decrease in personnel-related costs of $0.2 million.
Cost of license revenues decreased by $0.5 million, or 14%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024, primarily due to decreases in personnel-related costs of $0.3 million.
Cost of Professional Services
Cost of professional services revenues increased by $0.9 million, or 6%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, primarily due to increases in contractor costs of $0.8 million.
Cost of professional services revenues increased by $1.8 million, or 6%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024, primarily due to increases in contractor costs of $1.5 million.
Gross Profit
Gross profit increased by $16.4 million, or 18%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. Of this increase, $20.5 million was attributable to growth in SaaS revenues, partially offset by a $1.8 million decrease related to professional services as costs increased as a percentage of related revenues and a $2.3 million decrease related to license as revenues decreased as clients migrated to SaaS solutions.
Gross profit increased by $33.4 million, or 19%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. Of this increase, $38.6 million was attributable to growth in SaaS revenues, partially offset by a $3.9 million decrease related to professional services as costs increased as a percentage of related revenues and a $1.4 million decrease related to license as revenues decreased as clients migrated to SaaS solutions.
Operating Expenses
Three Months Ended December 31, Change Six Months Ended December 31, Change
2025 2024 Amount % 2025 2024 Amount %
(in thousands, except for percentages)
Operating expenses:
Research and development $ 39,283 $ 33,325 $ 5,958 18 % $ 80,217 $ 65,752 $ 14,465 22 %
Sales and marketing 46,691 40,791 5,900 14 % 95,477 78,551 16,926 22 %
General and administrative 26,341 24,808 1,533 6 % 54,907 48,746 6,161 13 %
Total operating expenses $ 112,315 $ 98,924 $ 13,391 14 % $ 230,601 $ 193,049 $ 37,552 19 %
Research and Development
Research and development expenses increased by $6.0 million, or 18%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This was driven by increases in personnel-related costs of $2.0 million due to annual salary increases and increased headcount, stock-based compensation expense of $1.8 million primarily due to an increase in stock awards granted, deferred consideration accruals of $1.1 million related to prior acquisitions and contractor costs of $0.4 million.
Research and development expenses increased by $14.5 million, or 22%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. This was driven by increases in stock-based compensation expense of $5.2 million primarily due to an increase in stock awards granted, personnel-related costs of $4.9 million due to annual salary increases and increased headcount, deferred consideration accruals of $2.8 million related to prior acquisitions and allocated overhead costs of $0.9 million as a result of increased headcount.
Sales and Marketing
Sales and marketing expenses increased by $5.9 million, or 14%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This was driven by increases in personnel-related costs of $2.4 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $2.0 million primarily due to an increase in stock awards granted, commissions expense of $1.5 million due to increased sales and a deferred consideration accrual related to a prior acquisition of $0.6 million, partially offset by decreases in sales and marketing events and related travel expenses of $0.9 million.
Sales and marketing expenses increased by $16.9 million, or 22%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. This was driven by increases in personnel-related costs of $6.2 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $4.2 million primarily due to an increase in stock awards granted, commissions expense of $2.6 million due to increased sales, a deferred consideration accrual related to a prior acquisition of $1.7 million and sales and marketing events and related travel expenses of $1.4 million.
General and Administrative
General and administrative expenses increased by $1.5 million, or 6%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This was driven by increases in stock-based compensation expense of $1.4 million primarily due to an increase in stock awards granted and personnel-related costs of $0.6 million primarily due to annual salary increases and increased headcount, partially offset by a decrease of $0.5 million.in acquisition related transaction costs due to costs in the three months ended December 31, 2024 related to a legal settlement incurred in connection with an acquisition.
General and administrative expenses increased by $6.2 million, or 13%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. This was driven by increases in stock-based compensation expense of $3.1 million primarily due to an increase in stock awards granted, personnel-related costs of $2.7 million primarily due to annual salary increases and increased headcount and a change in fair value adjustments of contingent consideration related to a prior acquisition of $1.5 million, partially offset by a decrease of $0.6 million in acquisition related transaction costs due to costs in the six months ended December 31, 2024 related to a legal settlement incurred in connection with an acquisition and travel costs of $0.5 million.
Interest and Other Income (Expense), Net
Three Months Ended December 31, Change Six Months Ended December 31, Change
2025 2024 Amount % 2025 2024 Amount %
(in thousands, except for percentages)
Interest and other income (expense), net $ 1,915 $ (202) $ 2,117 1,048 % $ 2,974 $ 3,220 $ (246) (8 %)
Interest and other income (expense), net, increased by $2.1 million, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This was primarily due to a $2.6 million change from foreign currency transactions and remeasurement, partially offset by a $0.5 million decrease in interest income as a result of reduction in cash held in money market funds.
Interest and other income (expense), net decreased by $0.2 million, or 8%, for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. This was primarily driven by a $0.8 million loss due to a foreign currency impact from the dissolution of a subsidiary, partially offset by a $0.4 million increase in interest income from our money market funds.
Income Tax (Expense) Benefit
Three Months Ended December 31, Change Six Months Ended December 31, Change
2025 2024 Amount % 2025 2024 Amount %
(in thousands, except for percentages)
Income tax (expense) benefit $ (672) $ 171 $ (843) (493 %) $ (1,629) $ (517) $ (1,112) (215 %)
Our income tax (expense) benefit during the three and six months ended December 31, 2025 and 2024 was primarily attributable to income tax expense in foreign jurisdictions and a number of U.S. state jurisdictions.
Liquidity and Capital Resources
Sources and Uses of Liquidity
As of December 31, 2025, we had cash and cash equivalents of $191.2 million. We finance our liquidity needs primarily through collections from clients, where we generally bill and collect from our clients annually in advance. Our billings are subject to seasonality with billings in the fourth quarter higher than in the other quarters.
Operating losses could continue in the future as we continue to invest in the growth of our business. We believe our existing cash and cash equivalents as of December 31, 2025, along with our JPMorgan Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for the next twelve months and beyond.
On October 5, 2021, we entered into a Credit Agreement, as amended on June 6, 2022 and further amended on November 17, 2022, with a group of lenders led by JPMorgan. The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million. As of December 31, 2025, no amounts have been borrowed under the JPMorgan Credit Facility. See Note 10. "Debt" to our unaudited condensed consolidated financial statements for additional information.
Our primary uses of cash include personnel-related expenses, third-party cloud infrastructure expenses, research and development, sales and marketing expenses, overhead costs and acquisitions or share repurchases we may make from time to time. Our future capital requirements will depend on many factors, including, but not limited to, our ability to grow our revenues and the timing and extent of investment across our organization necessary to support growth in our business. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses or technologies. We may need to seek additional equity or debt financing in order to meet these future capital requirements. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition and results of operations could be adversely affected.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods presented (in thousands):
Six Months Ended December 31,
2025 2024
Net cash provided by operating activities $ 36,676 $ 49,685
Net cash used in investing activities (8,632) (4,762)
Net cash (used in) provided by financing activities (149,575) 32,144
Effect of foreign currency exchange rate changes on cash and cash equivalents (426) 194
Net (decrease) increase in cash, cash equivalents and restricted cash $ (121,957) $ 77,261
Operating Activities
During the six months ended December 31, 2025, net cash provided by operating activities was $36.7 million, as our net loss of $20.3 million was reduced by $57.0 million of adjustments. These adjustments consisted of $73.4 million of non-cash charges (principally comprising of stock-based compensation, depreciation and amortization, amortization of operating lease right-of-use assets and asset impairments) and a net cash outflow of $16.4 million from net changes in operating assets and liabilities. The net cash outflow from changes in operating assets and liabilities was primarily driven by an increase in accounts receivable of $30.2 million due to the growth in our sales and the timing of billing and collections on our outstanding receivables, a $19.3 million decrease in accounts payable and accrued liabilities primarily due to payments made within the period, a $3.1 million decrease in operating lease liabilities due to lease payments, a $2.4 million increase in deferred commissions due to increased sales, offset by an increase in deferred revenue of $28.1 million due to the timing of invoicing our clients, a $4.5 million increase in other liabilities due to timing of payments, a decrease in unbilled receivables of $4.0 million due to the timing of invoicing to our clients, a $1.9 million decrease in prepaid expenses and other assets.
During the six months ended December 31, 2024, net cash provided by operating activities was $49.7 million, as our net loss of $14.7 million was reduced by $64.4 million of adjustments. These adjustments consisted of $56.6 million of non-cash charges (principally comprising of stock-based compensation, depreciation and amortization and amortization of operating lease right-of-use assets) and net cash inflow of $7.8 million from net changes in operating assets and liabilities. The net cash inflow from changes in operating assets and liabilities was primarily driven by an increase in deferred revenue of $15.5 million due to revenue recognition, a decrease in accounts receivable of $6.5 million due to the timing of billing and collections on our outstanding receivables and a $2.1 million increase in other liabilities due to timing of payments, offset by a $7.9 million decrease in accounts payable and accrued liabilities primarily due to payments made within the period, an increase of $5.0 million in prepaid expenses and other assets primarily due to payments made within the period, a decrease in operating lease liabilities of $2.7 million due to lease payments, an increase in unbilled receivables of $0.5 million due to the timing of invoicing to our clients and an increase in deferred commissions of $0.2 million.
Investing Activities
During the six months ended December 31, 2025, net cash used in investing activities was $8.6 million, due to capitalized internal-use software costs of $4.4 million, a strategic investment purchase of $3.0 million and capital expenditures of $1.2 million on property and equipment largely of computer equipment.
During the six months ended December 31, 2024, net cash used in investing activities was $4.8 million, consisting of capitalized internal-use software costs of $3.5 million, $0.9 million working capital adjustment related to a prior acquisition and capital expenditures of $0.4 million on property and equipment, largely computer equipment.
Financing Activities
During the six months ended December 31, 2025, net cash used in financing activities was $149.6 million, comprised of $150.1 million in payments for the repurchases of common stock, including broker fees, $8.6 million of payments related to employee payroll tax withholding on vested equity awards and $1.2 millionin payments for contingent consideration and holdbacks related to prior acquisitions, partially offset by $8.1 million of proceeds from stock option exercises and $2.2 million of proceeds from the employee stock purchase plan.
During the six months ended December 31, 2024, net cash provided by financing activities was $32.1 million, primarily comprised of $32.6 million of proceeds from stock option exercises and $2.0 million of proceeds from the employee stock purchase plan, offset by $2.4 million in payments for contingent consideration and holdbacks related to a prior acquisition.
Stock Repurchase Programs
On August 7, 2025, our Board of Directors authorized a common stock repurchase program of up to $150.0 million. During the six months ended December 31, 2025, we have repurchased $150.0 million, excluding broker fees, of our common stock and no funds remain available for repurchase under our existing repurchase authorization limit. The repurchased shares of common stock were retired. For further information refer to Note 14. "Stockholders' Equity" to our unaudited condensed consolidated financial statements.
On January 29, 2026, our Board of Directors authorized a new common stock repurchase program of up to $200.0 million. The repurchase program does not obligate us to repurchase any of the common stock or to acquire a specified number of shares and may be modified, suspended or discontinued at any time at our discretion. Repurchases under this program will be funded from our existing cash and cash equivalents or future cash flow. For further information refer to Note 15. "Subsequent Events" in our condensed consolidated financial statements.
Material Cash Commitments
As a result of the restructuring plan initiated in January 2026, we have accelerated payments of approximately $3.0 million related to the acquisition of TDI that will be paid in fiscal year 2026. These payments consist of deferred consideration and cash payments that were subject to certain performance measures and in some cases, certain service conditions.
Except as mentioned above, there have been no significant changes in our material cash requirements from those disclosed in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on August 20, 2025.
Indebtedness
On October 5, 2021, we entered into a Credit Agreement, as amended on June 6, 2022 and further amended on November 17, 2022, with a group of lenders led by JPMorgan. The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million. We were in compliance with all of the covenants as of December 31, 2025.
As of December 31, 2025, there were no outstanding borrowings under the JPMorgan Credit Facility.
Critical Accounting Policies and Estimates
The process of preparing our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions we believe to be reasonable under the circumstances. Significant estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Actual amounts may differ from these estimates and judgments.
There have been no material changes to our critical accounting policies or estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
Recent Accounting Pronouncements
See Note 2. "Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements and our assessment of their impact.
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