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Date

Feb. 26, 2026, at 4:30 p.m. ET

Call Participants

  • Chief Executive Officer — Tianyi Jiang
  • Chief Financial Officer — James Caci
  • Vice President, Investor Relations — James Arestia

Takeaways

  • Total revenue -- $114.7 million, up 29% year over year, with constant currency growth of 25% and above the high end of guidance.
  • Fiscal Q4 SaaS revenue -- $88.9 million, a 37% year-over-year increase and representing 78% of total fiscal Q4 revenues; SaaS revenue grew 33% year over year on a constant currency basis.
  • Fiscal Q4 services revenue -- $14.6 million, 13% of revenue and a 20% year-over-year increase.
  • Term license & support revenue -- Grew 7% year over year and composed 9% of fiscal Q4 revenues, compared to 11% in the prior year.
  • Fiscal Q4 revenue by geography -- North America grew 25% (SaaS +34%), EMEA grew 39% (SaaS +44%), and APAC grew 23% (SaaS +32%, services +25%) year over year.
  • Fiscal Q4 total ARR -- $416.8 million, up 27%, or 26% when adjusting for FX.
  • Net new ARR -- $26.8 million in fiscal Q4, up 48% year over year, surpassing the prior quarter's record.
  • Enterprise customer growth -- 820 customers with ARR above $100,000 (up 24%), 298 with more than $250,000, 100+ above $500,000, and 31 above $1 million in ARR.
  • Gross margin -- 74.2% in fiscal Q4, compared to 75.5% a year ago; decline attributed to a higher mix of lower-margin services revenue.
  • Fiscal Q4 non-GAAP operating income -- $22.9 million with a 20% margin, a year-over-year expansion exceeding 370 basis points.
  • Fiscal Q4 GAAP operating margin -- Double-digit for the year, at 7.9%, as commitment to Rule of 40 achieved with Rule of 46 in 2025.
  • Fiscal Q4 gross retention rate (GRR) and net retention rate (NRR) -- 88% GRR (90% excluding migration-related headwinds), 110% NRR; NRR at 111% on a reported basis.
  • Fiscal Q4 sales & marketing efficiency -- Fiscal Q4 expense ratio was 31%, and 32% for the year, with a long-term target of 30%.
  • Cash position -- $481 million in cash, cash equivalents, and short-term investments at year-end.
  • Fiscal year 2025 revenue -- $419.5 million, a 27% increase (constant currency +25%), with SaaS revenue of $319.2 million, up 38%.
  • Fiscal year non-GAAP operating income -- $79.2 million, an 18.9% margin, up from 14.4% last year.
  • Share buybacks -- 3.4 million shares repurchased in 2025 for ~$50 million, with an additional 2.8 million shares repurchased year-to-date in 2026 for $33.5 million.
  • Free cash flow -- $81.6 million for 2025, a 19% margin; impacted by ~$7 million in one-time tax payments and timing of public sector receivables.
  • Remaining performance obligation -- $508.1 million at year-end, up 36%.
  • 2026 ARR guidance -- $525.1 million-$531.1 million, 27% growth at midpoint (26% FX-adjusted); revenue guidance of $509.4 million-$517.4 million, 22% growth at midpoint.
  • 2026 non-GAAP operating income guidance -- $92.6 million-$96.6 million.
  • Stock-based compensation -- Declined to below 10% of revenue in 2025, with further decreases expected in 2026.
  • Platform adoption -- AgentPulse command center and agentic AI governance features announced, enabling operational oversight and security posture corrections.
  • Pricing and model evolution -- Move towards hybrid licensing (seat-based and consumption/data volume), aligning with customer and hyperscaler trends.
  • Channel contribution -- 57% of ARR through the channel, up from 55% last year.
  • Rule of 40 -- Achieved Rule of 46 in 2025, compared to 38 in 2024 and 31 in 2023.

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Risks

  • Caci explained, "While we believe this positions us to potentially cater to additional use cases outside of migration for these customers, this dynamic could put modest pressure on GRR in 2026."
  • The higher mix of migration projects, with typically lower renewal rates than day-two solutions, contributed two points of headwind to gross retention rate in fiscal Q4.
  • Caci cited weaker growth in federal civilian public sector business relative to North America overall, though he characterized state, local, and Department of Defense segments as strong.

Summary

AvePoint (AVPT 0.33%) delivered accelerating revenue and ARR growth, with SaaS revenue outpacing company-wide expansion, and fiscal Q4 performance exceeding guidance high end. Management emphasized record growth across enterprise customer cohorts, with 87% recurring revenue and increased channel contribution. The company highlighted expanded adoption of its Confidence Platform, including new AgentPulse AI oversight tools and a shift toward hybrid, consumption-aligned pricing models. Significant share buybacks, increased remaining performance obligations, and high cash reserves highlighted capital discipline and forward visibility.

  • Caci said, "Q1 is generally a step down, and it is usually our lowest quarter in terms of ARR, sequentially from Q4," clarifying seasonality in ARR pacing.
  • Jiang noted that enterprises require trusted data layers before deploying AI at scale and highlighted Copilot adoption lag due to data readiness and change management constraints.
  • Hybrid pricing is gaining traction, as Jiang explained that "From a software perspective, from a licensing perspective, it looks like a virtual employee. So you have agents that have an email account, that have a CRM login, that also have access to cloud storage access and accounts. So from that perspective, there is also that seat count conversation. But overall, we are very much focused on working with customers regardless of the structure to ensure that they are able to maximize their investment to drive customer value. So, so far, we have not seen overall seat count reduction in a major way because there is a combination of consumption and also this virtual AI licensing—agent licensing. So we will continue to evaluate and look at work to be done, not just the people doing it. So this is where the IaaS and PaaS expansion, with that consumption meaning, will be a bigger piece of our business going forward."
  • Public sector federal civilian demand lagged, but state/local and Department of Defense verticals remain robust for growth initiatives, according to Caci.
  • Jiang stated, "we have not seen overall seat count reduction in a major way because there is a combination of consumption and also this virtual AI licensing — agent licensing."
  • The company is investing in 2026 primarily through marketing and technology productivity initiatives, expecting margin expansion to resume after this investment period.

Industry glossary

  • Agentic AI: Autonomous software agents that act on enterprise data, requiring governance and security oversight.
  • ARR (Annual Recurring Revenue): The value of the recurring components of subscription revenue, annualized from the current period.
  • Rule of 40: A SaaS metric defined as the sum of year-over-year ARR growth and non-GAAP operating margin, used to benchmark efficient growth.
  • GRR (Gross Retention Rate): A metric showing the percentage of recurring revenue retained from existing customers, excluding expansion.
  • NRR (Net Retention Rate): A metric reflecting retained recurring revenue, including upsells and cross-sells, from the prior period's customer base.
  • AgentPulse: AvePoint's command center for overseeing, governing, and remediating agentic AI operations across digital environments.
  • ROT data: Data that is redundant, obsolete, or trivial; often targeted for cleanup in modernization and governance projects.

Full Conference Call Transcript

Operator: Good day, and welcome to the AvePoint, Inc. Fourth Quarter and Full Year 2025 Earnings Call. All participants will be in listen-only mode. To ask a question, please press star then 0 on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to James Arestia, Vice President, Investor Relations. Please go ahead.

James Arestia: Thank you, operator. Good afternoon, and welcome to AvePoint, Inc.'s fourth quarter and full year 2025 earnings call. With me on the call this afternoon are Tianyi Jiang, Chief Executive Officer, and James Caci, Chief Financial Officer. After preliminary remarks, we will open the call for a question-and-answer session. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in our press release for a more complete description. All material in the webcast is the sole property and copyright of AvePoint, Inc., with all rights reserved.

Please note this presentation describes certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, and non-GAAP operating margin, which are not measures prepared in accordance with U.S. GAAP. The non-GAAP measures are presented in this presentation, as we believe they provide investors with a means of understanding how management evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to, financial measures prepared in accordance with U.S. GAAP.

A reconciliation of these measures to the most directly comparable GAAP financial measures is available in our fourth quarter and full year 2025 earnings press release as well as our updated investor presentation and financial tables, all of which are available on our Investor Relations website. With that, let me turn the call over to Tianyi.

Tianyi Jiang: Thank you, James. And thank you to everyone joining us on the call today. Our fourth quarter results are a strong conclusion to an outstanding year. Our leading position in mission-critical data management, coupled with market demand for data protection in the AI era, enabled us to accelerate revenue growth, deliver our eleventh straight quarter of double-digit growth in net new ARR, and achieve double-digit GAAP operating margins. Very few software companies can point to comparable levels of organic growth, GAAP profitability, and strong cash flow generation. And even fewer sit at a critical intersection of data protection and security.

And, importantly, we see healthy demand from companies spanning every size, vertical, and region of the world, validating our conviction in a large and growing market for secure, automated, and AI-ready data governance and resilience solutions.

This broad-based customer demand is not surprising, as it is clear that AI has transformed the speed, scale, and stakes of data security and governance for companies everywhere. Organizations no longer view data governance as simple back-office hygiene; it has become the prerequisite for AI and agentic AI adoption. And our customers and partners continue to tell us the same thing: before they can deploy AI at scale, they need one company that can secure, govern, and operationalize their data with confidence. In fact, I just met with one of our financial services customers who in Q4 replaced patchwork tools and a vendor they had for over 20 years with AvePoint, Inc. Our platform now secures, governs, and guarantees data recovery for nearly 100,000 employees who drive $25,000,000,000 in annual revenue. That is not a workflow that gets agented away. It is the trust layer that makes enterprise AI possible in the first place.

With stories like these, I will focus today on the durability of our value, and share why, despite speculation about the future of enterprise software in the context of agentic AI, AvePoint, Inc. will capitalize on the AI data protection opportunity in 2026 and the years ahead.

But first, I want to remind you of three long-standing trends that you have heard us discuss for years: the relentless growth of data, the complexity of systems, and the severe consequences of poor data management. These challenges existed long before AI, but have only accelerated in recent years as data now spans cloud platforms, on-premise systems, third-party tools, and AI-driven workflows. AvePoint, Inc. brings order to this chaos. We ensure that data is reliable, governed, and secure, and we have done this for more than two decades for thousands of customers. While AI is a powerful tool, enterprise-grade software remains essential for managing complex environments and ensuring regulatory compliance. And if your AI relies on inconsistent or poorly governed data, it becomes a liability rather than an asset.

The AvePoint, Inc. Confidence Platform is the solution to this challenge. Specifically, it is our platform architecture, which determines how effectively organizations can discover, govern, protect, and recover data across distributed multi-cloud environments. That not only makes us unique today, but provides a durable competitive moat. To start, our platform serves as a foundational layer within any data protection framework, acting as the control plane for policy management and real-time remediation, and the connectivity tissue for enterprise security operations. By maintaining a robust API framework and interoperability across hybrid cloud environments, we enforce strict identity verification and least-privileged access at the data layer, and immediately remediate any potential breach or policy violation.

This approach was crucial for one of our largest consumer packaged goods customers, who faced significant challenges around ransomware threats, intellectual property protection, and data access compliance before launching Copilot. Using our platform as the core of their data protection strategy, we cleaned up their ROT data, deployed data resiliency across their 13,000 global employees, and implemented granular access controls. By starting at the data layer and utilizing our policy management and real-time remediation capabilities, they now have safe, secure, and compliant data they can trust to power their business. Our solutions also ensured that proper, provable access controls are in place for Copilot and other agents.

We can solve challenges like this for thousands of companies because of our platform's ability to define all of their unstructured data and then visualize how its attributes, including sensitivity, intent, and lineage, evolve in real time. This contextual data, which is housed with us and which you heard Anthropic discuss on Tuesday as a critical input to their goal of transforming knowledge work, provides AvePoint, Inc. an enormous competitive advantage because our customers rely on us to govern the data in real time. Customers today know that proper data governance requires more than logs or snapshots; it requires a live context that our platform provides, that AI cannot deliver on its own, and that traditional static databases miss.

And it was this technological differentiation that led a large construction company to become a new AvePoint, Inc. customer in Q4. They were recovering from a major cyber incident and preparing for broader AI adoption, but their core issue was not simply storage or cleanup; it was a lack of real-time context into how sensitive data was evolving and being accessed across their environment. By deploying our unified platform, with live visibility and control across unstructured data, they were able to reduce access sprawl and saved up to $1,300,000, improve data quality, and, most importantly, govern risk as they emerged.

With AvePoint, Inc. as their strategic partner and restored confidence in their data foundation, they are now positioned to safely expand protection across their cloud and Azure workloads.

Our platform is the result of decades of innovation and refinement, and today features a layered, interoperable architecture built for scale. It also functions as a governance and control layer for agentic AI, providing the trusted data foundation that agents need to act safely and effectively in the AI era. This includes a business logic layer, which defines the security and operational rules required by the customer; an elastic, scaling data abstraction layer, which allows the platform to meet massive data surges without performance degradation; and AI-specific remediation, which leverages proprietary algorithms to identify threats designed to bypass AI guardrails. We have always aimed for our innovation to keep up with the larger technological changes taking place.

Today, as agents proliferate, the missing layer is not more AI. It is governance and operational oversight for AI.

That is exactly why we built our sixth command center, AgentPulse, which provides unified visibility, governance, and operational oversight for agentic AI. AvePoint, Inc. customers can now inventory agents across their digital estate, surface usage, risk, and cost signals, monitor performance drift, and ultimately take action when needed. As companies scale their agentic AI deployments, AgentPulse becomes the operational cockpit that ensures safety, compliance, and measurable value. And lastly, building on AgentPulse, our new agentic AI governance and data protection features that we announced earlier this month provide customers with better insights about agent security posture and the ability to correct security problems directly in the Confidence Platform, helping them use agentic AI tools safely and efficiently.

In short, no other platform combines modularity with tailored functionality to manage critical data in real time across cloud vendors. This was also validated by Gartner, which referenced AvePoint, Inc. in their latest research on how to build a strategy for M365 Copilot and agentic AI in 2026. And as we continue to introduce extensions to existing cloud services and to new applications, the Confidence Platform will further consolidate point solutions to drive a faster ROI, which in turn only deepens our competitive advantage. Our conviction in our platform differentiation is not to suggest that every enterprise software company is immune to disruption from AI. In fact, it is quite the opposite. We believe every company, regardless of industry, will be impacted by AI. But those that use AI to drive innovation as their core competency will be successful in delivering durable growth in the years ahead. And, specific to software, we believe the winners will offer the market two things: a true platform offering that provides pricing flexibility and ultimately leans on consumption-based and cost-saving-focused licenses, and end-to-end vertical organic integration ranging from development to go-to-market to best-in-class cloud ops and security to continuous enhancements and improvements.

We are mindful of this with every strategic decision we make, and we will further differentiate ourselves by leveraging our domain expertise, our extensive partnerships, and our global scale and distribution to solidify our leadership position in the responsible and effective deployment of AI across all enterprises. As technology evolves, we are enhancing our go-to-market strategy to prioritize bundle offerings, building on last year's successful launch of our Control and Resilience packages. These bundles deliver comprehensive, outcome-based solutions addressing data cleanup, lifecycle management, governance, storage optimization, and protection, which customers and partners prefer over fragmented tools.

And while we have historically licensed by seat count, we anticipate moving towards a hybrid model that incorporates capacity-based and data volume pricing, especially as AI enhances productivity but retains user-driven workflows.

In Q4 and throughout 2025, we proved that AvePoint, Inc. is built for this moment, and our belief in the long-term market opportunity has only strengthened. As organizations modernize their processes and workflows, the need for a secure, governed, and resilient data foundation that transforms enterprise data into a secure, high-quality signal for AI only becomes structurally more important. That is what our platform delivers, making us the trusted long-term partner for our customers. We have said before that our ambition is big, reaching $1,000,000,000 ARR by 2029. But it is grounded in operational discipline, durable market demand, and a platform strategy that is only becoming more relevant as AI adoption grows.

And while questions about market cycles or technological disruption will come and go, our conviction in the durability of the market opportunity and our ability to capture it has never been stronger. I want to thank the entire AvePoint, Inc. team for their tireless efforts in making 2025 an exceptional year of execution and continued growth. And we are excited for an even stronger 2026. Thank you again for joining us today. I will now turn it over to James.

James Caci: Thanks, Tianyi, and good afternoon, everyone. Thanks for joining us today. Coming into 2025, our outlook reflected two central themes: first, the growing customer demand to prepare, secure, and optimize their critical data, and second, the ongoing improvement in our ability to efficiently deliver on that demand. These themes gave us the confidence to continue investing in support of our strategic priorities and our 2029 goal of $1,000,000,000 in ARR while remaining committed to delivering ongoing top-line growth and margin expansion. As we recap our fourth quarter and full-year results today, we are proud that they validate and demonstrate our ability to execute on our commitments to shareholders.

Q4 had a number of highlights, including acceleration of our revenue growth, our eleventh straight quarter of double-digit growth in net new ARR, substantial expansion of both GAAP and non-GAAP operating margins, and our continued success selling the AvePoint, Inc. Confidence Platform to large enterprises, reflected in the record number of $100,000 and $250,000 ARR customers added. We are particularly proud of these accomplishments in light of the two goals we set at our first Investor Day three years ago. Namely, that by 2025, we would deliver GAAP operating profitability, and we would be a Rule of 40 company.

And while we delivered GAAP profitability in 2024, a year ahead of schedule, we delivered on both of these commitments in 2025, with a Rule of 46 and a GAAP operating margin of 7.9% for the year. These accomplishments have only strengthened our conviction in the market opportunity and our ability to execute, and we have even better visibility into the growth vectors that will propel us toward our $1,000,000,000 ARR target for 2029.

As Tianyi mentioned, there are very few software companies that have our organic growth profile, scaling operating margins and GAAP profitability, material cash flow generation, and healthy SaaS KPIs. And this exceptional financial position, coupled with the competitive differentiation that Tianyi discussed, are why we will continue to balance strategic growth investments in our go-to-market capacity and innovation pipeline with a continued commitment to driving operating leverage across the business.

So, let us turn to our results. Total revenues for the fourth quarter were $114,700,000, up 29% year over year and comfortably above the high end of our guidance. On a constant currency basis, total revenues grew 25% year over year, a meaningful acceleration from Q3. SaaS continues to drive our business, with Q4 revenue of $88,900,000 growing 37% year over year. The strong customer demand for SaaS is also reflected in our revenue mix, as it represents 78% of total Q4 revenues, surpassing last quarter's record, and on a constant currency basis, Q4 SaaS revenues grew 33% year over year.

Services revenue of $14,600,000 represented 13% of total revenues and grew 20% year over year, while term license and support revenues grew 7% year over year and represented 9% of Q4 revenues compared to 11% a year ago. And lastly, maintenance revenue of approximately $981,000 represented 1% of total revenues and continued its expected decline. As a result, 87% of our Q4 revenues were recurring.

Looking at our geographical performance, we were pleased that each region delivered a strong close to the year. In North America, total revenue growth accelerated to 25% year over year, driven by SaaS revenue growth of 34%. In EMEA, total revenue growth accelerated to 39% year over year, driven by SaaS revenue growth of 44%, and in APAC, total revenues grew 23% year over year, driven by SaaS revenue growth of 32% and service revenue growth of 25%. On a constant currency basis, EMEA SaaS revenues increased 33% while total revenues increased 28%, and for APAC, SaaS revenues increased 31% on a constant currency basis while total revenues increased 22%.

We were pleased to see the same strength and balance when looking at ARR. In Q4, North America ARR grew 20%, EMEA ARR grew 32%, and APAC ARR grew 34%. Taken together, we ended the year with total ARR of $416,800,000, representing year-over-year growth of 27%, or 26% after adjusting for FX. As a result, net new ARR in Q4 was $26,800,000, once again surpassing last quarter's record and representing growth of 48% year over year. Lastly, as of the end of Q4, 57% of our total ARR came through the channel, compared to 55% a year ago.

Our success at the enterprise level has been consistent for many years, but it was especially notable across our large customer cohorts in Q4. We ended the year with 820 customers with ARR of over $100,000, a year-over-year increase of 24%. This record growth also represented the addition of 64 such customers in Q4, easily surpassing last quarter's record of 41. In addition, we ended the quarter with 298 customers with ARR of over $250,000. As we added 28 such customers in Q4 and 73 for the year, both of which were records. Lastly, we now have more than 100 customers with ARR of over $500,000, as well as 31 customers with ARR of more than $1,000,000.

Taken together, these results demonstrate that we are meeting the demands of organizations looking for single-platform vendors that can address multiple strategic use cases.

Turning now to our customer retention rates. Adjusted for the impact of FX, our Q4 gross retention rate was 88% and our Q4 net retention rate was 110%, both of which were in line with Q3. I want to remind you that GRR factors in account-level churn, customer downsell, and our migration products, which have naturally lower renewal rates. This quarter, migration served as a two-point headwind to GRR. So, excluding it, GRR would have been 90%. I also want to point out that in Q3 and Q4, we did see a higher migration contribution than in prior years due to increased customer modernization efforts around AI deployment.

While we believe this positions us to potentially cater to additional use cases outside of migration for these customers, this dynamic could put modest pressure on GRR in 2026. On a reported basis, Q4 GRR was 88% and Q4 NRR was 111%, with GRR in line with the prior year and NRR representing a one-point improvement.

Turning back to the income statement, gross profit for Q4 was $85,100,000, representing a gross margin of 74.2% compared to 75.5% a year ago. The year-over-year gross margin decline is primarily the result of a higher mix of services revenue this year and the lower relative gross margins on those revenues. Moving down the income statement, Q4 operating expenses totaled $62,200,000, or 54% of revenues, compared to $52,800,000, or 59% of revenues, a year ago. As a result, Q4 non-GAAP operating income was $22,900,000, with our 20% operating margin, representing year-over-year expansion of more than 370 basis points.

Sales productivity was a key driver of the increase, as this metric improved every quarter over the course of 2025 and was our highest ever in Q4. These improvements, along with our growing channel contribution, continue to drive down our sales and marketing expense as a percentage of revenues, which was 31% for Q4 and 32% for the year. To remind you, our long-term target for this is 30%.

Turning to the balance sheet and cash flow statement, we ended the year with $481,000,000 in cash, cash equivalents, and short-term investments. And for the year, cash generated from operations was $85,300,000, or a 20% margin, while free cash flow was $81,600,000, or a 19% margin. I also want to call out our remaining performance obligation growing 36% year over year, which crossed the half-billion-dollar mark in Q4, to $508,100,000. The ongoing strength of this metric reflects the longer-term commitments that customers are making, and they are investing in our platform as a foundational layer for governing, protecting, and operationalizing data as they scale AI across the business. Lastly, we repurchased 1,700,000 shares in the fourth quarter for approximately $22,400,000.

Before I turn to our guidance, I will briefly recap our full year 2025 results. Total revenues of $419,500,000 represented 27% reported growth and 25% constant currency growth, both of which were an acceleration from 2024. SaaS revenues grew 38% year over year to $319,200,000 and represented 76% of total revenues, compared to 70% in 2024 and 59% in 2023. As mentioned, total ARR as of December 31 was $416,800,000, representing growth of 27% or 26% when adjusted for FX. As a result, net new ARR for the full year was a record $89,800,000, representing record growth of 44%. This compares to net new ARR in 2024 of $62,500,000, which grew 25% over 2023.

Full-year non-GAAP operating income was $79,200,000, or an operating margin of 18.9%, compared to $47,600,000 in 2024, or a margin of 14.4%. GAAP operating income for the year was $33,000,000, with GAAP operating margins expanding 570 basis points year over year to 7.9%. This expansion was driven by the improvements I discussed earlier, as well as our management of stock-based compensation expense, which is now less than 10% of our revenues, and which we expect will further decrease as a percentage of revenue in 2026. During 2025, we repurchased 3,400,000 shares for approximately $50,000,000, and through the close of trading last week, we have repurchased another 2,800,000 shares year to date, for another $33,500,000.

Share buybacks remain a key pillar of our capital allocation philosophy, and we intend to remain active and opportunistic in the open market, reflecting our belief in the underlying strength of our business and commitment to driving shareholder value. And lastly, on a Rule of 40 basis, which for AvePoint, Inc. is the sum of ARR growth and non-GAAP operating margin, as I mentioned earlier, we finished 2025 at a Rule of 46. This compares to a Rule of 38 for 2024 and a Rule of 31 for 2023.

Turning now to our guidance. For the first quarter, we expect total revenues of $115,000,000 to $117,000,000, or growth of 25% at the midpoint. And on a constant currency basis, we expect revenue growth of 20% at the midpoint. We expect non-GAAP operating income of $19,500,000 to $20,500,000. And for the full year, we expect total ARR of $525,100,000 to $531,100,000, or growth of 27% at the midpoint. On an FX-adjusted basis, we expect total ARR growth of 26% at the midpoint. We expect total revenues of $509,400,000 to $517,400,000, or growth of 22% at the midpoint, and on a constant currency basis, we expect revenue growth of 20% at the midpoint.

And lastly, we expect full-year non-GAAP operating income of $92,600,000 to $96,600,000. Finally, on a Rule of 40 basis, the midpoint of our initial full-year guidance is a 45.

Before we open it up for Q&A, I want to provide some additional color into our guidance and how we are thinking about Q1 and the year. First, our guidance philosophy remains unchanged. We want to responsibly set expectations that are consistent with the demand trends we are currently seeing. Second, our FX-adjusted ARR guidance for the year is 26% growth, in line with 2025. I also want to remind you that our 2025 ARR included $2,800,000 in Q1 from our acquisition of Identik. Adjusting for this, our guidance for FX-adjusted ARR growth represents an acceleration over 2025. Third, the delta between our guidance for ARR and revenue growth is driven by two factors: our services business, which is excluded from ARR and which we expect to grow at a slower rate than in 2025, and our term license revenue, where we expect growth to be roughly flat versus 2025 and thus we will realize less upfront revenue in 2026. Lastly, with regard to margins, we expect that 2026 will be an investment year, specifically focused on strengthening our go-to-market strategy through meaningful increases in marketing spend. I want to reiterate that there is no change to our long-term target of 25% to 30% non-GAAP operating margins, while reminding you of our prior commentary that the margin trajectory between now and 2029 will not be perfectly linear.

And, importantly, as I mentioned, we expect that stock-based compensation will further decline as a percentage of revenues in 2026 and thus GAAP operating margins will, in fact, expand this year. In summary, we are proud of our fourth quarter and full year 2025 results, which are a testament to the execution of our teams and the growing demand for our platform offering. As we look ahead, our conviction in the market opportunity and our ability to capitalize on it has only grown, and we are excited for another strong year. Thanks for joining us today. And with that, we would be happy to take your questions. Operator?

Operator: We will now open for questions. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. To assemble our roster, the first question comes from Joseph Gallo with Jefferies. Please go ahead.

Joseph Gallo: Hey, guys. Thanks for the question. James, I want to follow up with something you said at the very end. It was a really, really impressive constant currency ARR guide, and constant currency always makes my head spin a little bit, but I believe it is an acceleration of new constant currency dollar growth versus what you saw this year. So just if you could unpack a little bit more of the visibility, confidence, and any specific product drivers into that guide?

James Caci: Yeah. Thanks, Joe. And you are spot on. I mean, sometimes it does get a little confusing with FX, so definitely appreciate that complexity when we talk about that. But you are right. We are looking at an acceleration in terms of our guidance compared to last year, and so we are excited about that. We are seeing that really across the board. I think one of the things you have probably noticed is that we have this consistent kind of growth across all three regions, and that has been very helpful in terms of really that balance—our approach—whether it is our regions, or even our customer segments and even our verticals.

And so we see that same demand moving forward, we see nice pipeline building across all of those metrics, and so that kind of gives us that confidence to see into the future and look at that ARR guidance and feel good that we are going to be able to deliver on that acceleration.

Joseph Gallo: Awesome. No, that is really clear and helpful. And then maybe, as a follow-up, Tianyi, you spent a lot of time talking about AI on the call, and it has certainly been a buzz for the past few years, but you have not necessarily seen that excitement materialize into revenue for cybersecurity vendors. Are you seeing that now, or is that still more of a longer-term gradual driver?

Tianyi Jiang: Yeah. We are seeing enterprises actually all have AI projects and realizations around efficiency, especially easier workloads like coding, customer support, marketing content generation. On the Microsoft side, a lot of folks are conflating the Copilot adoption as synonymous with AI adoption. That is not the case. We actually see companies deploying AI in various forms, whereas the broader Copilot usage tends to lag behind, even for firms that are fully licensed. We see that this is due to more of the lack of enterprise data readiness, which tends to yield suboptimal experience for rolling out Copilot. And also, this is part of change management.

It is tough for a business user to try several times and have some suboptimal output due to lack of high-quality data and some of the inaccuracies. So this led to some trust issues. But these are the exact kinds of problems we address for our customers and partners. So we do see tremendous demand in that regard.

Joseph Gallo: Awesome. Nice job, guys. Thank you.

James Caci: Thanks, Joe.

Operator: The next question comes from S. Kirk Materne with Evercore ISI. Please go ahead.

Chirag Ved: Hey. This is Chirag on for S. Kirk Materne. Congrats on the quarter, and thanks for taking my question. Tianyi, in your prepared remarks, you touched on developing a hybrid pricing strategy over time that balances seats and usage. Can you speak to where in the platform you might see the opportunity for this over time and any early feedback from partners and customers?

Tianyi Jiang: Thank you. Yeah, thank you for that question. So today, we already have capacity-based licensing across products like migration, and also IaaS and PaaS data protection and governance. So we have extended very much into the compute infrastructure, not only just productivity workloads—that is, Office Cloud and Google Workspace—but the compute side, which is Azure, GCP, and AWS. So there, it is actually natural for customers to think about consumption-based licensing, and this is also how hyperscalers think about it as well. It is a blend of seat versus consumption-based. We also see in the age of agentic AI, where there are more sophisticated agents being deployed, these agents are actually fully licensed.

From a software perspective, from a licensing perspective, it looks like a virtual employee. So you have agents that have an email account, that have a CRM login, that also have access to cloud storage access and accounts. So from that perspective, there is also that seat count conversation. But overall, we are very much focused on working with customers regardless of the structure to ensure that they are able to maximize their investment to drive customer value. So, so far, we have not seen overall seat count reduction in a major way because there is a combination of consumption and also this virtual AI licensing—agent licensing.

So we will continue to evaluate and look at work to be done, not just the people doing it. So this is where the IaaS and PaaS expansion, with that consumption meaning, will be a bigger piece of our business going forward.

Chirag Ved: Sounds good. And if I could just squeeze in one more on that line of thought. AI governance clearly remains a strategic focus. So as we look into 2026, how early are we in terms of customers meaningfully monetizing agent governance, and what are some of the leading indicators that you are seeing that signal that AI-driven use cases are becoming a more material ARR driver rather than AI-readiness spending?

Tianyi Jiang: That is a great question. I think the buzzword of the year is AI, agentic, governance. So you have seen—Microsoft released their agent governance capabilities. We actually announced our capabilities at the same time, AgentPulse, which covers multi-cloud, and particularly we are looking at agentic not only governance from a risk exposure perspective, access control, but also the cost. We hear a lot of customers talking about, “Hey, we have got an agent running 24 by 7, and all of a sudden it is racking up, you know, a $100,000 bill.” So that cost thing is real. And we are actively working with our partners and customers to monitor and rein in that agent aspect of it.

So we already see the beginning of revenue generation from that type of need, but that is definitely something that is very much in demand. There is a ton of experimentation with agentic AI, as you would expect. So the risk and control and cost are very much top of mind for our customers.

Chirag Ved: Perfect. Thanks so much.

Operator: The next question comes from Rudy Kessinger with D.A. Davidson. Please go ahead.

Rudy Kessinger: Hey, thanks for taking my questions. Congrats on the quarter and the strong guide here. James, I appreciate the callout of the inorganic contribution to net new ARR in Q1 last year. I guess, are there any further parameters you could give us to help kind of think about the sequential pacing of net new ARR throughout the year and specifically in Q1?

James Caci: Yes. Thanks, Rudy. Good question. So, you know, I would say we are probably going to be fairly consistent with what we said in the past on this topic. As you know, we do not guide today to quarterly ARR. But what we have historically seen is that Q1 is generally a step down, and it is usually our lowest quarter in terms of ARR, sequentially from Q4. And then we would see a pickup in Q2, and then the second half of the year is generally stronger than that first half of the year. And so I think we are going to see that same kind of play out—exactly similar to what we have seen in the past.

So I would not expect any change there. And then you are right that we do have that little bit of callout from last year; we added that $2,800,000 in Q1 last year. So as we think about this year, obviously, we are not going to have that incremental. But, again, we feel really good about where we are going to land for Q1 and really the year, and feel good about that overall guidance.

Rudy Kessinger: Got it. And then I know you called out you saw higher migration contribution in 2025, and we can see the modernization ARR growth really accelerate—it was close to 40% year over year. Your 2026 ARR guide—does that assume that you continue to see growth in that modernization ARR? Does it moderate a bit, or what does it assume? Because that reacceleration growth in that modernization suite is quite the acceleration from the past few years. So I am curious just what your guide assumes on that front.

Tianyi Jiang: Sure. We do see higher demand for migration. So we want to articulate that migration is effectively data movement. Data will never stop moving between different cloud providers, between on-prem legacy to modern workloads in the cloud. You have acquisitions, so that will continue to happen. That is a very important aspect of our tip-of-the-spear approach to engage partners and customers early. And you have seen since we have gone public, we have actually given much of the service revenue opportunities on modernization, data integration, migration to our partners, but that also leaves tremendous value for us to engage our partners and customers to buy our product.

And after that, we have the day-two solutions around governance, around data protection, ransomware detection, and recovery—of course, now with license control, cost control. So we will continue to see this modernization to be a core part of our platform as a way to engage and expand our footprint. It does—James will talk a bit about the GRR headwind. There are two factors. When the migration project is over, what we have in day-two solutions—if the ARR is less than a migration project license piece, it will lead to a perceived GRR decline. And that is the vast majority of the cases.

Very few cases where, after migration projects are over, we do not have a day-two solution running in the customer environment.

James Caci: Yeah. The only thing I would add to that, because I think you did a good job, Tianyi, of summarizing that, would be maybe to come back to your question, Rudy, about our expectations for next year. I think we would expect to see the similar kind of growth next year where, again, we would expect this to be—as Tianyi kind of alluded to—continue to be top of mind for our customers and be part of their strategy. So, again, we would expect this to continue to grow. I think, as a percentage of our overall ARR, it steps up a little bit.

And so we are mindful of that when we think about our GRR, which is why you have probably heard us talking about all the GRR initiatives we have had over the past year or so. And we are continuing to work on those. So we believe that with some of those initiatives, we are naturally seeing some pickup in terms of GRR, which will offset any headwind coming from migration in GRR. We did want to point it out as just to—that is what we are seeing, and, obviously, those are the dynamics.

Rudy Kessinger: Great. Thank you, guys.

James Caci: Thanks, Rudy.

Operator: The next question comes from Jason Ader with William Blair. Please go ahead.

Jason Ader: Yes. Good afternoon, guys. For James, just wanted to talk briefly about free cash flow. Looks like it was down a little bit on a dollars basis this year. I think you had initially expected it to be up a bit. Maybe just talk about what is happening there, and then maybe just give us some guidelines for 2026 on free cash flow.

James Caci: Sure. Yeah. I am glad you brought it up, Jason. So, you know, I think maybe two things to call out. One is that in 2025, we did have, at the beginning of the year, some what I would call one-time tax payments that needed to be made, and so that definitely brought down some of the free cash flow that we would have otherwise anticipated. And that was to the tune of about $7,000,000. I think we talked about that in Q1. So that is one factor.

The second factor is we did have a very strong Q4, and we did have a number of opportunities that were actually invoiced in Q4 of this year, and last year they were actually invoiced in Q3 and collected in Q4. And so those opportunities remained outstanding at the end of this year, and a couple of those had to do with our public sector customers. And so we understand the challenges there. So that also had an impact on our free cash flow because in 2024 those would have been collected, and in 2025 they were still receivables at the end of the year. So that had a little bit of a timing issue.

And so, again, I do not think there is a challenge or a problem or a concern. And, again, when we think about 2026, I think our free cash flow is still going to be above what we would consider our non-GAAP operating income. So I think that trend would continue, and we would expect to see that in 2026.

Jason Ader: Okay. But also fair to say that the term biz being a little bit lighter in 2026 in the mix impacts your free cash flow because you do not get the cash upfront—I mean, I am sorry—because you get the cash upfront on the term license, and if that is going to be a little bit smaller in the mix, then that will have a headwind to free cash flow. Correct?

James Caci: Well, let me just dive into that a little bit because it is worthwhile. So when we think about that term license, remember, that is only the revenue recognition. That customer is the same as a SaaS customer where we are billing upfront. So it is the same dynamic. It is the same ARR. It is the same billing structure. It is just the revenue recognition on the term is more upfront as opposed to ratably over the course of the contract. So cash flow is unchanged, but the revenue is different.

And so as we see that our term license becomes less and less a percentage of total, then that does impact the revenue recognized in that year, and it becomes more ratable like SaaS.

Jason Ader: Okay. I guess what I was referring to is if you do a three-year term deal, you do not collect all the cash upfront. You just collect it annually. Is that the right way to think about it?

James Caci: That is the right way to think about it, as our multiyear contracts are still paid annually. And then the revenue would be different, obviously, for SaaS versus term.

Jason Ader: Okay. Helpful. And then one for Tianyi. Tianyi, can you elaborate on the investments you are making in 2026? You talked about it as an investment year, and particularly around your hiring plans. I know there is just a ton of fear out there about jobs and how many jobs are going to be around in five years for knowledge workers and engineers, etc. Maybe just talk to that, in addition to just the specific investments you are making in 2026.

Tianyi Jiang: Thank you, Jason. That is a great question. So we are not slowing down on the tech side. We have seen productivity improvements with, like, other tech companies leveraging AI-driven IDEs to get high productivity improvement. In our case, we use GitHub Copilot. So there, we also continue to invest into tech, but at the same time, you are seeing in James’ prepared remarks we have actually controlled the cost of that very well. So we continue to have the efficiency. So not only do we have tech productivity improvements, but we still monitor the efficiency very carefully because profit growth is the mantra. So on the tech side, we are not slowing down in terms of or reducing headcount.

On the non-tech side, we are very actively looking at productivity—continued productivity improvement—leveraging AI. There are a number of initiatives internally leveraging AI so that we can really continue to accelerate our strong business presence and global go-to-market flywheel that we have going, both for the enterprise segment as well as the channel and partner investment in the mid-market/SMB segment. And, lastly, it is not related to headcount, but from a product perspective, you hear us talk about the scaling of the data fabric layer. So that is something we are super excited about. You will hear more in the coming month.

We actually have close to a zettabyte of unstructured data that we are now surfacing out to our customers to what we call a new data intelligence offering that, combined with AI and UX enhancements, will allow more real-time unstructured data governance intelligence at scale to better service more user personas. So this will massively broaden our data protection and management platform’s consumption base and lead to, we believe, much further stickiness and realization value of our offerings, which is the core of infrastructure—base-level infrastructure—for all AI projects and deployments across companies. So all these things you hear me talking about are really focused on growth. We think the pie is getting bigger.

Jason Ader: Thanks, guys. Good luck.

James Caci: Thank you.

Operator: The next question comes from Erik Suppiger with B. Riley Securities. Please go ahead.

Erik Suppiger: Yes. Thanks for taking the question. First off, on the operating margin guidance, looks like it is going to be relatively flat in fiscal 2026. What will you change as you get past fiscal 2026 so that you can start to expand those margins to get to your target for fiscal 2029? And what gives you confidence that you are not going to have a slowdown in ARR as you invest less?

James Caci: Yeah. Great question, Erik. And so I think one of the things that gives us confidence is our history now over the past three years of this profitable growth strategy and driving significant ARR growth. There are a bunch of sirens outside, so hopefully you guys are not hearing that, but all kinds of police activity outside. So I think that gives us confidence, right? That we have executed now over the past three years on this growth strategy and delivering both profitability and ARR growth.

And what we have decided to do for 2026 is continue to do that, but look at making some outsized investments, particularly, as I called out in the prepared remarks, in marketing in particular, to really take advantage of this dynamic in this environment we are in right now and look to really spend more than we have in the past on marketing and really kind of lean into our go-to-market positioning. So that is different. Some of the investments that Tianyi alluded to, both technically for our development teams but even operationally, we are making investments both in 2025 that just passed but also in 2026.

And those investments will not really pay significant dividends in 2026, but we are talking about operational efficiency from a technology point of view, AI adoption, and those will have benefits going forward. So some of our scalability moving forward should be much more efficient. So that gives me the confidence that 2026, although the operating margins are relatively flat, we will be set up to deliver expanded margins moving forward.

Erik Suppiger: Okay. Very good. And then your growth in your larger customers was very good. Can you comment as to whether or not that is coming more from seat expansion at those customers, or is that layering on new services, or is it the combination of the two?

James Caci: Yeah. So, historically, if you look at our NRR, it is mostly coming from cross-selling activities of customers consuming additional products more so than seats. Now, the only exception to that is our MSP channel. So, generally, our MSPs—or more successful MSPs—obviously, they are expanding. They are adding seats that they are managing for their customers, and so we see seat expansion there. But, generally, the driver has always been and continues to be adoption of additional components in our platform. And that has been the key driver, and we expect that to continue.

Erik Suppiger: Very good. Thank you.

James Caci: Thanks, Erik.

Operator: The next question comes from Derrick Wood with TD Cowen. Please go ahead.

Derrick Wood: Thank you, guys. Congrats on a strong quarter. First one for Tianyi. Obviously, a lot of concern of software disruption from the LLM vendors as they move up stack and into more of the workflow orchestration layer. Obviously, you do not seem to be seeing it at all, but how do you think about the potential risk of these vendors encroaching on your part of the market? And how should we think about your defensibility in these core areas?

Tianyi Jiang: Yeah. That is a great question. So we always say that we continue to see robust growth. We have multiple vector growth. So we have continued to accelerate our new logo acquisition. There are still tons of greenfield opportunities, both in existing regions and newer ones. Our existing customers—we have a massive upsell opportunity, as clearly demonstrated through the new customer acquisitions and the cohort increase in ARR—and, of course, our channel, focused on MSPs, still our fastest-growing segment unlocking SMB and mid-market. We have not seen slowdown in SMB as some other vendors have seen, and also from a geography perspective.

We attribute this much to our platform expansion, of our enhanced products and our capability around the fundamental underbelly of the data curation, data governance, and the context of data for which AI grounds on. We even called out Anthropic’s identification of that specific critical moat in their Tuesday conversations, and that, we believe, is something that is very, very strong in our perspective as a defensible moat. And, of course, software—we think—is not dead. It is really that there is going to be far more software to be written. The ability to write software and costs have come down and become easier. So there are a lot more niche areas that can now be served by software.

We think there is an infinite amount of software to be written. So AI can definitely lower the barrier to entry. But for critical enterprise-scale data management, you actually need more rigorous approach to this infrastructure for AI, and that is the layer we play in. So we enable high-quality data to give you better AI-driven outcomes. And this is not going to change. So we are seeing tremendous demand and no sign of slowing.

Derrick Wood: Probabilistic technology—probably not that great in enterprise security needs and compliance needs—but good to hear. James, real quick for you. Could you just comment on how the U.S. Fed business performed relative to expectations and what you are seeing in terms of pipeline and demand?

James Caci: Yeah. So, great question. What we saw in Q4 was, I would say, similar to what we had seen in Q3 in that the public sector and particularly Fed space growth rate was lower than North America in general. So that is why, I think I said in the remarks, we are really pleased that North America still grew 20% despite that. Now, having said that, we still are very, very keen on the public sector. It is a big part of our global strategy, still part of our North America strategy. And for us, there are really multiple components within public sector.

We have all been talking about the federal, and that is really the federal civilian piece of the public sector, but there is obviously state and local, and there is also Department of Defense. So those areas of the business—the weakness that we saw this year and kind of anticipated—was in that civilian piece. But the other parts of the business are very strong. Obviously, globally, it is still a very key component to our growth strategy in the future. So we are not backing down on public sector. We know it was a tough year, but we are really proud of the team that, even in this difficult time, executed as well as they did.

James Caci: Thank you.

Operator: And the final question will come from Joe Andre with Scotiabank. Please go ahead.

Joe Andre: Thanks. So I will keep it to one question. So if I look at the breakdown of ARR, it looks like the Control suite came down from 28% of the total last year in Q4 to now 26% of total ARR. So can you talk about why the Control suite net new ARR was maybe a bit weaker than we would have expected, given the AI tailwinds we were expecting to accrue in this segment, and why modernization and Resilience came in a bit stronger?

James Caci: So I can start that one, and Tianyi maybe can jump on. But, yeah, I think it is twofold. Right? First is that Tianyi touched on the improvement in migration and kind of the step up of customers in their journey of trying to take advantage of AI, really making sure that their data is in one place or as few places as possible. And so this idea of migrating your data to be able to accomplish that seems to have resonated, and we saw really a step up of that in Q4 in particular, but really in the second half of the year.

So I think that, in general, had an impact on the overall Control kind of step down as a percentage. But we do not see that as a real long-term challenge. We think that still governance is key, and we would expect to see continued improvement in that area going forward. So, again, we do not look at this as any kind of indication of what the future holds.

Tianyi Jiang: Yeah. From my side, we continue to see very robust demand on the Control side for AI governance. As James mentioned, because there were more data movement—data migration—projects ongoing. And, secondly, the average deal size of a Control license sale is actually lower than the other modules, but it is our highest margin product due to the type of compute and the type of proprietary algorithm that we have to essentially make sure agentic AI data access monitoring is all taken care of on remediation. So, from that perspective, it may look a bit—from quarter to quarter—varied, but overall, it is very much what makes our platform very robust and strong to replace the point solution providers.

It is that combination of data analytics, integration and migration, data resiliency and recoverability, and as well as governance and control. So I would not read too much into the percentages. It is part of our platform. And we also have seen tremendous success in the way we actually start to bundle the platform as a service for our customers and partners.

James Caci: And then the only thing I would add, Joe, is that, overall, year over year, it is still growing at roughly 20%. So we are still very, very proud of that growth rate as well.

Joe Andre: Alright. Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tianyi Jiang, CEO, for any closing remarks.

Tianyi Jiang: Thank you. Thank you for spending time with us today. Our results in 2025 were very, very successful, and we are very proud of our achievement as a team. And, also, you have heard our growth in 2026. Our strong outlook demonstrates our confidence in our ability to continue to deliver profitable growth at even greater scale. As we lean into today’s highly disruptive macro environment and meet the existing and emerging needs of our customers and partners, we see no signs of our momentum slowing down. The value of our platform in enabling AI-driven transformation for companies around the world ensures a durable competitive moat and a vast market opportunity that is ours to capture.

I know I speak for the entire AvePoint, Inc. team when I say how energized I am for 2026 and the many years ahead of us. So, thank you for joining us today, and we look forward to speaking with you more this quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.