Good morning, everybody. Tim Horan, the Cloud and Communications Analyst here at Oppenheimer. My pleasure to be hosting most of the senior management team of AvePoint. We're going to just have a fireside chat and no presentation. If anyone has any questions, feel free to ask them on the webcast Q&A section there. I do have that open. Thanks, guys, for coming. Maybe TJ, can you just give a thorough quick overview of AvePoint, the solutions you sell, and key use cases you address for your customers, please? Yeah, great to be here. Thank you for having us, Tim. AvePoint is a global leader in data management and data governance software. We offer a cloud-based platform to customers across from large enterprise to small businesses and also truly horizontal, cover all industries. Even though our starting point was the regulated industry, federal government, and financial services, we help organizations control and secure their information through their digital systems, such as Microsoft 365, basically Office Cloud, Google Workspace, Salesforce, and others. We started off as an enterprise content management in that space and working on information lifecycle management. We grew and expanded alongside Microsoft, which offers a variety of digital workloads. Today, we offer end-to-end data management capabilities that help organizations to prepare, secure, and optimize data for use. The solutions we sell are a SaaS offering we call the Confidence Platform, where the major areas of coverage are resiliency, which is data backup, ransomware detection, recovery, data archiving. A second area is control. That's data governance, lifecycle management, access control, critically important in AI deployment scenarios. Lastly, modernization, which is data analytics and data migration, which effectively is data movement. Enterprises will always have data move between systems, between clouds, between applications. These are all aspects that are critical to enterprise data security and to ensure successful AI deployments, as we all know that good data leads to good AI. Very helpful. Thank you. You reported results last week. Can you and Jim recap the key takeaways from the quarter for investors? Yeah, I'll go first, and then Jim can talk about the specific numbers. Q2 was a very strong quarter in a number of ways. It's actually our 10th consecutive outperformance quarter. AI is starting to roll out more widely. This applies to all customers across our regions, verticals, and different sizing segments. We efficiently deliver the solution that organizations need to thrive in the AI era. We help them curate and secure data. We actually called out a number of very large industry examples of how enterprises deploy AI and, prior to that, deploy our governance and management solution in order to ensure that the AI they deploy is of good quality and also has the right access. Governance and security of data estate is now central to the enterprise strategy. We also crossed the $100 million revenue mark on a quarterly basis. It's a powerful validation of our innovation and strategy. There is a lot to be excited about in the Q2 results. Maybe just to add on to what TJ just covered and put some numbers to it. Obviously, as he mentioned, strong top-line performance, that $100 million of revenue was 31% year-over-year growth, 27% ARR growth. We've had a mantra of profitable growth. Obviously, our operating margins, again, continue to do that. This quarter, we had operating profitability and improvement of 720 basis points. When we think about Rule of 40, we're actually now, for the trailing 12 months, at a Rule of 44. Really strong performance across the board there. Some of the other key metrics we look at are retention metrics, where we saw a record NRR at 112% and our GRR at 89%. Really strong performance there. When we look at our ARR, if you've heard us talk in the past, you know we have this really good diversification in terms of our ARR, everything from our geographic approach in terms of really performing well in both North America, EMEA, and APAC. We participate in all three segments, from enterprise, mid-market, and SMB. We had strong performance in our ARR across all of those segments as well. A really strong quarter. I think the numbers bear that out. We're really pleased to be able to raise our full-year guidance for all three of our key metrics. Jim, the dollar-based net retention, it's pretty impressive, 112%. It's been improving every quarter. Can you give maybe just a little bit more color? What's driving that? Is it lower churn, higher ARPU? Yeah, I mean, great question. I think it's yes and yes in terms of what we've seen over the past several years is this steady improvement. It does start with GRR, as you mentioned. Improvements in GRR obviously translate to improvements in NRR. It starts there. We've seen a couple percentage point improvement over the past couple of years in our GRR. That's helpful. On top of that, we've really made a commitment and investments in our CS team. It's both from a people point of view, but maybe even more importantly, from a technology point of view. That's really helped us ensure that our customers are fully enabled with our technology early on and that they're seeing full value from the solutions they've purchased. Tim, what you normally see when people are getting full value out of what they've already purchased, they're much more receptive to consider purchasing additional solutions. That's what we're seeing actually reflected in the 112%. For us, the way we license our technology, most of that NRR improvement is coming from what we would refer to as cross-sells, where they're consuming more and more of the platform, not actually buying more seats of the same product that they've purchased, but actually buying additional products within our unified platform. That's been a really positive driver for the overall performance. Great. I want to kind of get back to that. Maybe one of the key questions we're just getting out there is what's going on with macro. Are we slowing down? Are tariffs having an impact? I know there was a little bit of uncertainty you mentioned last week from the public sector. We obviously hear that from quite a few other companies. Just any color on macro on the public sector, are there any other nuances in the current guidance that we should be aware of? I'll talk about the business side, and then Jim can talk about some of the accounting side details. We're really not seeing any meaningful change in customer behaviors. We continue to see high demand after we experienced continued strong growth across all the major geos of North America, EMEA, APAC, as well as enterprise, mid-market, SMB segment. Really pleased to see strength across the board. All the regions have delivered 20%+ growth. Also, all the verticals we operate in continue to be high growth. Even the public sector in the U.S. public sector specifically is still double-digit growth. Enterprise today is 53% of our ARR. That's 5,000 and above seat counts Jim talked about. Control is our fastest growing suite for now of nearly four quarters. Maybe just add a couple more points to what TJ just covered. First, we're really pleased to be actually raising our guidance for the three key metrics that we look at. Those for us are ARR, revenue, and operating income. We raised after 2Q's performance, we've raised all three of those metrics. We feel good about that. By the way, that raise is in addition to the beat that we actually delivered in Q2. Strong performance in Q1, Q2, and on top of those beats, we're actually raising for the full year. We feel really good about that. Teams are excited to deliver not only in Q3, but for the full year. That's really a reflection of the momentum that TJ alluded to that we're seeing in the business and the demand for our solutions. That's been really good. When you speak specifically about Q3, I think it's important to keep in mind that for us, Q3 is obviously the federal government's year-end. For our public sector, right from the beginning of the year, we were commenting and talking about that we definitely appreciated the fact that there was going to be uncertainty in this sector for this year. If you remember back to when we issued guidance for Q1 and really the full year, it was late February. There were already talks of tariffs. There were already talks of DOGE taking a very significant role in looking at the federal government spending. We built that into our guidance really for the full year right from day one. I don't know that all companies did that, but we did. We had kind of built in the expectations that we would expect our public sector to grow probably less than the rest of North America. Just as a data point there, we saw North America growth at 25% in Q2, and our public sector practice was less than that 25%. Still double-digit growth, but less than what we saw in North America, which was right in line with what our expectations were. That's continued now with our expectations for Q3 and the rest of the year. No change from where we started the year, just a reaffirmation that that uncertainty remains and continues. I'm glad that we built it in in the beginning of the year. Maybe just one other data point for Q3. In our guidance, we guided to about a 19% year-over-year growth in revenue in Q3. Really strong growth, but less than what we just delivered in Q2. The reason for that is partly, one, for what I just talked about in terms of public sector and particularly the federal space. Two is the mix of our revenue types. TJ alluded to this in terms of our SaaS revenue. It's our fastest growing segment. We also have another revenue line item called term license revenue. Both are subscription. Both are recurring. Both are generally annual contracts. The accounting treatment for those two line items is different. If we close a deal and it's term license, there's a chunk of revenue recognized upfront, and then the rest is recognized ratably over the course of the year. With SaaS, as you guys know, everything is recognized just ratably across the year. This year, we're expecting that our term license revenue, as a component of total revenue, will be a little less than 10%. Last year in Q3, it was over 16% of total revenue. You can see that product mix shift is also going to have an impact on our revenue growth this year. To just boil that down into some numbers, if we had the same revenue composition in Q3 this year that we did last year, that revenue growth would be about 4% or 5% percentage points higher. Short term, there's going to be that impact on growth in Q3. Long term, this is where we want to be. We want to continue to deliver more and more of our SaaS solution to our customers. Ultimately, it makes it easier for me in terms of the predictability and the forecastability of what we're going to deliver when we have more and more of the SaaS. We take out the lumpiness of the term license revenue. Again, really pleased to be raising our guidance for Q3 and really for the full year. Where do you think term kind of levels out as a percentage of revenue longer term? Yeah, it's a great question. It's been declining for really this past year, past two years. We do see the momentum in the business. Really, our customers obviously engage more and more with our SaaS solutions. We expect that to continue to kind of decline. We're not forcing it. The key here, Tim, is that our customers, we want to meet them where they are. If they're still in hybrid environments, some stuff on-prem, some stuff in the cloud, we want to be able to service them and make sure that we're protecting their data and giving them the solutions they need. When they're 100% in the cloud, then that's fine too. We're happy to meet their needs there as well. This isn't a situation where we're incenting them to change their behavior. We want to support them as they continue in this cloud journey that they're on. I mean, looking from the outside, it seems like you should be a huge winner from AI, generative AI. What do you think AI means for the company and maybe just for the software industry in general? Yeah, that's a great question, Tim. We believe we're exceptionally well positioned given the enterprise need to curate and secure data, which is prerequisite to all AI strategies. Because our platform understands the environment we operate in, we can leverage AI to derive proactive remediation for data security concerns and risks. This really puts us at the center of AI initiatives. We have given a great example of a number of large organizations around the world, different industries, different sectors leveraging our solution as they prepare to roll out Microsoft Copilot, for example. Specifically now, this year is the year of agents. AI agents will enhance efficiency and responsiveness. The focus shifts beyond automation towards more of an automating governance itself. Without a robust governance framework in place, even the most sophisticated agents can introduce new risks. We're now shipping in the product a measure of that risk. We monitor the interactions and identity in which the agents function and alert where the risks are seen. Said it differently, misalignment between agent behavior and risk priorities is actually detected by our system and corrected in real time. Ultimately, we think AI agents will change software, not kill software. Tim, you know there are infinite amounts of new software solutions to be developed. With AI acceleration, we think software-based solutions can be reimagined and be far more accessibly delivered, leading to truly software eating the world. It's true that software vendors will need to reimagine how their products can be more intuitive and apply controls to the anticipated risks. Those are the things that we really focus on. This is why, to us, this is not a disruption, but a massive opportunity. Great. I know historically you've been very tied to the whole Microsoft ecosystem. What is the opportunity now within Microsoft for you to grow your business? I guess the same thing outside of Microsoft. Will outside of Microsoft increase as a percentage of revenue over time? That's a great question and also a common question that customers and investors ask us about. First, we want to emphasize that our relationship with Microsoft is a competitive strength. We are one of the largest ecosystem players in the Microsoft Cloud ecosystem. We do not consider that as a vulnerability given how large and successful Microsoft is when it comes to enterprise collaboration and productivity software. There's been a mutually beneficial relationship that we have been doing this for well over two decades. Even still, customers today are multi-cloud by definition from a business resiliency perspective. It is important to have the diversification and cater to their needs. We want to enlarge our footprint. Again, it goes along that NRR expansion conversation to help them organize holistically, curate holistically their data across multiple clouds. Specifically, when it comes to Google, Salesforce, to remind our investors on this call, we have already been supporting backup service and migration service for Google and Salesforce for some time. Specifically for Google, we announced some new relationships where this year we rolled out new solutions around risk, intel, governance, all specific things that the Google ecosystem critically needs and is in shortage of. That actually allows us to really elevate our enterprise posture within the Google ecosystem. Also, very importantly, it allows us to be much more of a platform provider that can help our customers at the end of the day reconcile the differences of their data estate across multiple clouds. That also includes hybrid data estate setup as well. I'm assuming your business outside of Microsoft is growing faster than within Microsoft. Is that a fair statement? Business outside of Microsoft is less than 10% revenue today. It is growing pretty fast. We think that our recent investor day in March has the potential to become 30% of our revenue split by 2029. Having said that, the Microsoft ecosystem is very large and very robust, high growth for us. Even if we just focus on the Microsoft ecosystem, we will be able to hit our $1 billion ARR target as well. Plenty of room for growth. Is there any channel conflict with Microsoft? Do you compete with them much? I guess the same for your other customers. I guess related to that, who do you kind of view as your primary competitors? Yeah, that's a great question. We actually, our software sits on top of the Microsoft Cloud and helps customers, one, secure and govern their data, but ultimately maximize their return on investment on Microsoft Cloud and others. We also even do baseline management, configuration management, and even license management to actually save customer cloud storage costs, as well as over-licensing, oversharing type of scenarios. Our go-to-market, we actually have a channel. Microsoft also is a channel-driven organization. We leverage the big distributors around the world, whether it's Ingram, Tech Data, SoftwareOne, and now combined with Crayons, Pax8, Insight in America, Software House International, all these big distributors. Within those distributors, we have resellers as well as managed service providers that are actually specific managed service providers using our software to help them take care of their customers in the small to medium-sized segment. This is how we actually take our traditionally very enterprise and regulated industry-focused solutions and be able to unlock the SMB market segment. That's very, very exciting for us. SMB today, it's less than 19% of our recurring. A few years ago, it was practically zero. We think actually in three to four years, it could be 40% of our business. That's another fast-growing segment because we realize just because you're a small business doesn't mean you don't care about data, especially when it comes to deploying AI. We do see fast growth outside of the Microsoft ecosystem, as well as our really strong ecosystem leading position within the Microsoft Cloud ecosystem. When you go to bake-offs, who are you primarily kind of competing with to win a customer? Yeah, we have different competitors in different solution areas and different segments. That's what makes it actually quite interesting. As you know, our C onfidence Platform, I mentioned the resilience side, which is backup, ransomware detection, recovery, archiving. In the enterprise segment, we run into folks like Veritas, which I think is now part of Cohesity, and then Commvault, and sometimes Rubrik. In the SMB segment, we run into folks like Veeam and some others. Now, on the control side, which is governance, access control, remediation, we actually run into some in the enterprise segment, folks like Varonis. In the SMB segment, small startups. In the modernization, data analytics, migration as a service, we will run into some folks like Informatica in the enterprise segment, and even a legacy player like Quest Software. In the SMB segment, a bunch of startups. We don't have a singular holistic competitor. We win based on our platform play. Also, based on even in-class, we actually win bake-offs against some of the aforementioned competitors. It is a very interesting dynamic. That has been the case, actually, in technology anyway. It's no different today. You don't really consider yourself competing with Microsoft too much. It's an overlay add-on product that brings a lot of benefit to Microsoft and their customers. Microsoft actually loves us because we actually light up workloads for them. They used to have this IP co-sell metric where they measure partners where we're ISV partner in their lingo, independent software vendor. Not only do we consume a ton of Azure, we have a nine-digit contract with Microsoft when it comes to cloud consumption. We also influence Azure consumption for their customers. We will light up workloads like Purview, for example, right? Classification, tagging, so we can govern that. We will light up now Copilot. We are a very important part of their ecosystem to land workloads, to expand use cases. We don't compete against Microsoft. We compete within this multi-trillion-dollar ecosystem. Got it. What percentage of your revenues come from channel partners versus direct sales? Today, in aggregate, I think it's 60% directly sourced from channel. We do have variabilities, right? While we're experiencing 20% growth across major geos, that's North America, EMEA, APAC, and major customer segment, that's enterprise, mid-market, SMB, our major regions do have differences in their strength of go-to-market direct versus channel. I'll just go through that real quick. North America, we started there earliest. We started in Somerset, New Jersey Public Library, just coding, very scrappy, bootstrapped the whole operations. We focus on large regulated industry players like government and banks because that's the type of customer we know. Today, our largest recurring deals tend to happen first in the North America enterprise segment. While SMB in North America is now fully 100% channel and is our fastest growing segment globally, our mid-market segment is still just half channel and half direct in North America. Still a work in progress to be converting to be 100% channel. In comparison, EMEA, so Western Europe and the Middle East, specifically UAE, Saudi, Qatar, and then ANZ, we're already well over 80%, close to 90% channel sourced. There, the mid-market and SMB channel flywheel is in full swing. We're acquiring new logos at a high velocity and with shortened deal cycles. On the other side of it, the average deal sizes are smaller. We can do more to enlarge our capabilities in the enterprise and public sector segments in those geos. In Japan, we're still primarily an enterprise segment-focused business. That has very much to do with historically Microsoft Japan is very successful in enterprise, whereas their SMB strategy has always been OEM bundling with laptops. Now, thanks to the success of AI, finally, mid-market SMB customers are moving to cloud in droves. This created a net new mid-market SMB business for us in Japan. In Japan, we're already 100% channel, whether it's enterprise, mid-market, or SMB. Lastly, but not least, Singapore is our service-focused business. That's about 10% of our total revenue. Much of its services is in IP generation. That's in the public sector. That's in higher ed. In the recent two years, we also started to really grow that mid-market SMB through channel opportunity. We have now reached the hockey stick velocity with ASEAN country territories like India, Philippines, Indonesia, Malaysia, all via channel. A very different mix of types of velocity in different regions. If we're firing in all cylinders across enterprise, mid-market, SMB, channel, we will grow even faster. That's something that we're working on to continue that focus on profitable growth and get to our big target of $1 billion ARR. Great. Maybe just switching to Jim, you have a lot of cash on the balance sheet, over $400 million. You seem to be producing a lot of free cash flow. Is there some thought maybe you should be investing more aggressively to grow a little bit faster or making more acquisitions? How do you think about balancing profitability with growth? Yeah, I think there's a couple of questions within that one question, Tim, in terms of we definitely have a very active M&A pipeline. Mario is very instrumental in that. We spend a lot of time looking at opportunities. To date, we've made six acquisitions since going public. All have been relatively small tuck-in technology acquisitions. We are looking at larger opportunities that would not only provide technology, but potentially provide some enhancement to our ARR as well. We're constantly looking at the right opportunities there. You're right. We do have the capital to expand our opportunities and look at things. We're definitely doing that, and we're spending a lot of time focused there. That's a really good potential use of cash in the future. The second component of what you're saying, really kind of comparing, should we be doubling down, investing more for growth, maybe sacrificing a little profitability? It's a question we spend a lot of time evaluating and addressing because you're right. The markets can be fickle in terms of the expectations. As a business, we have to think much longer term and not be responsive. We've seen over the years where growth was highly rewarded. Then we saw times where profitability was also or became the king, and growth was less rewarded. It will fluctuate from time to time. I think our focus is really on this profitable growth, which is trying to balance both, which is looking to grow responsibly. We think we're doing that at high 20% growth in the 27%, 28% range. We think that's really good growth. We're going to be above. We're guiding to being above Rule of 40 this year. We think that metric is key for us in terms of trying to keep that balance. We are exploring opportunities to continue to invest, reinvest, and look at spending more money, particularly as we think about investing in not only the technology, but resources and planning to deliver not just for the rest of this year, but 2026, 2027. As TJ said, we've committed to get to $1 billion of ARR over the next really four or five years, getting to there by the end of 2029. That's a goal that the company is singularly focused on. It's a nice beacon and a North Star. Everyone is really focused on being singularly focused on that goal in terms of how do we get there and is everything that we're working on in service of hitting that goal. That goes to making the right investments so we can grow responsibly to get to that goal. I think the $1 billion ARR kind of implies close to 25% compound annual growth rate. That's right. I think this next quarter, you're growing roughly 20%. The difference between 20% and 25%, can you accelerate growth through internal investment, or does it kind of require M&A to hit that 25%? Yeah, just for clarity, that $1 billion is our ARR target. When we think about that growth, we're focused on our ARR growth of getting there. Obviously, we just delivered in the high 20s in terms of ARR growth. Our expectation for this year is to be in that 25%+ range, 26%+. We feel good about continuing that trajectory. We do think that there's great demand for what the solutions we're providing. We think there's opportunities for us to continue to enhance that. TJ has talked about this a lot in different venues, and maybe some people have heard this. We have many different vectors that we're looking at both internally in terms of our growth opportunities, looking at M&A opportunities to accelerate that growth, whether it's the multi-cloud, the MSP strategy that we're working on. Obviously, our geographic diversity is allowing us to see growth across the globe, really. All of those factors are really integral to achieving the $1 billion goal. We don't almost need every one of those to hit. There are multiple vectors that are going to help us achieve that. We feel really good that we have a diversified approach to actually get there over the next couple of years. The 25% compounded growth rate, again, I think is fully embraced by the whole organization. Great. Sorry, someone walked in my office. TJ, is there a key message that you'd like to get across to investors or something we haven't really touched on yet? Yeah, thanks, Tim. At AvePoint, we have spent the last two decades plus doing the hard things first. We started in the early 2000s, serving large regulated industry players, including FSIs, financial services, governments. We established a physical presence in 18 countries to offer better direct touch enterprise engagements. We were the first to invest into Microsoft Cloud, did our SaaS business model conversion without borrowing to go through that cash crunch that followed a SaaS conversion. Today, we have invested in global channel, go-to-market to significantly increase our sales and marketing efficiency while achieving high growth rates, providing critical data protection and governance solutions to the Fortune 500s, as well as to the five-person SMB companies. We also have a high development capacity, dev resources, R&D capacity, where over 50% of our employees are developers at 12% of our cost of revenue. Just to ensure that we continue to stay ahead of the tech curve, all the while accelerating, of course, with AI. We're growing our top line double digits while achieving double-digit profitability at the bottom line, as you heard Jim has articulated. With the flywheel of profitable, responsible growth, it's only getting better. As shown with our improved customer retention rates, without sacrificing, at the same time, new logo acquisition rates that we are doing fantastically through our channel strategy here. At the end of the day, this is a massive market opportunity. We're fully committed to hitting our long-term targets with our laid-off financial and profitability metrics at our investor day and our investor deck. It's very hard to do what we have done. You rarely see companies do this type of thing, hitting all these metrics in software space. As the market continues to bear witness to our outperformance, I believe we will finally escape that small-cap tech discount and that bucketing and also this whole recent bearish sentiment and be truly appreciated for the strong global software brand that we have become. Jamie's been keeping me up on the story the last three years, and the stock is up like threefold since. It's done pretty good. Every CEO's job is to tell everyone how cheap their stock is, and you've done a great job. You've executed incredibly well. I remember from first talking to Jamie three years ago, it seemed like the product portfolio has expanded dramatically. The go-to-market has expanded dramatically, and you guys have executed incredibly well. Congratulations. The $1 billion target will get you, I think, firmly into the mid-cap range here in a couple of years. Good luck with that. Thanks a lot for your time, fellas. Appreciate all the effort. Thank you, Tim. Thank you, Tim. Great being with you. Thank you, everyone. Great being with you. Great being with you.