AvePoint Q2 Earnings Call Highlights

AvePoint (NASDAQ:AVPT) reported second-quarter 2026 revenue and annual recurring revenue growth that exceeded its guidance, as the company highlighted rising demand for governance, security and recovery tools tied to enterprise adoption of artificial intelligence.

Total revenue rose 22% year over year to $124.5 million, above the high end of the company’s outlook. On a constant-currency basis, revenue grew 21%. SaaS revenue increased 27% to $98.5 million and accounted for 79% of Total revenue.

Chief Financial Officer Jim Caci said total annual recurring revenue, or ARR, reached $465.1 million at the end of the quarter, up 27% year over year, or 24% adjusted for foreign exchange. Net new ARR was a record $29.9 million, representing 35% year-over-year growth. All three regions surpassed $100 million in ARR after the company’s APAC business reached that threshold during the quarter.

AI Governance Drives Product Focus

Chief Executive Officer Tianyi Jiang said customers are increasingly confronting what he described as AI-agent sprawl, as autonomous agents are deployed across Microsoft 365, Google Workspace, Salesforce, Copilot Studio and custom environments.

Jiang said AvePoint’s research of 750 global IT leaders found that 88% of respondents reported at least one security incident tied to AI agents during the prior year. Nearly 20% of organizations did not know whether employees were using unsanctioned tools to build AI agents, according to the company’s survey.

“Trust will become the essential unifying layer for AI,” Jiang said, positioning AvePoint’s Confidence Platform as a governance and control layer for enterprise AI deployments.

The company’s AgentPulse product became generally available during the first quarter as part of the Control suite’s bundled offerings, and AvePoint introduced a standalone version in July. AgentPulse is designed to provide visibility into AI agents, including their ownership, permissions, data access, usage and costs, while allowing organizations to enforce governance policies and retire unused agents.

During the question-and-answer session, Jiang said the number of Control packages sold roughly doubled in the second quarter from the first quarter. He added that deals involving AgentPulse had an average dollar value two to three times larger than other deals. AvePoint said its average AgentPulse customer is managing more than 5,000 AI agents, with that figure doubling every three months.

Caci said AgentPulse has so far generated pipeline and bookings momentum, but the product remains early in its rollout and had limited effect on second-quarter retention metrics. The company maintained its long-term target of reaching 115% net revenue retention.

Customer, Channel and Retention Metrics

AvePoint ended the quarter with 911 customers generating more than $100,000 in ARR, an increase of 26% from a year earlier. Caci said growth in the company’s customer cohorts above $250,000, $500,000 and $1 million in ARR was at least 30%.

The company cited several customer wins and expansions involving AI governance, data protection and records management. A large U.S. retailer selected AgentPulse through the Control Plus bundle to inventory and govern more than 10,000 agents after opening AI agent development to 36,000 employees, according to Jiang. The expansion moved that customer into AvePoint’s $1 million ARR cohort.

AvePoint also said a U.S. dental insurance provider selected AgentPulse and transitioned from à la carte licensing to the Control Plus bundle. Separately, a financial-services company in Canada used AvePoint in a proof of concept after its new chief information security officer paused a planned Copilot deployment because of concerns about sensitive information.

Channel sales continued to play a larger role in the business. At the end of the second quarter, 59% of total ARR came through the channel, up from 56% a year earlier, while two-thirds of incremental ARR during the quarter came through channel partners. Jiang said the company’s managed service provider business remains one of its fastest-growing areas.

Foreign-exchange-adjusted gross retention was 89% and net retention was 110%, both unchanged from the first quarter. Caci noted that the company’s migration products created a two-point headwind to gross retention because of their naturally lower retention rates.

Profitability, Cash Flow and Repurchases

Second-quarter gross profit totaled $91.7 million, producing a gross margin of 73.7%, compared with 74.8% in the prior-year period. The decline reflected lower services margins, while software gross margin was 83%, in line with the prior quarter and prior year, Caci said.

Non-GAAP operating income was $20.3 million, or a 16.3% operating margin, exceeding the high end of guidance. GAAP operating margin was 8.2%, expanding nearly 130 basis points year over year. The company said stock-based compensation declined to 8% of revenue from 11% a year ago.

For the first six months of 2026, operating cash flow was $40.2 million and free cash flow was $37.7 million, compared with $20.8 million and $18.3 million, respectively, in the same period last year. Trailing-12-month free cash flow exceeded $100 million, representing a 22% margin.

AvePoint spent approximately $50 million during the second quarter to repurchase 4.9 million shares. Including purchases made after quarter-end, the company had spent $121.5 million on buybacks in 2026 and had about $108.6 million remaining under its authorization.

Outlook Raised for ARR

The company raised its full-year ARR outlook to a range of $522.1 million to $528.1 million, representing 26% growth at the midpoint. The guidance includes a $1 million increase from the prior outlook, offset by a $2 million foreign-exchange headwind.

For the third quarter, AvePoint forecast revenue of $128.2 million to $130.2 million, representing 18% growth at the midpoint, and non-GAAP operating income of $21 million to $22 million.

For the full year, the company expects revenue of $508.5 million to $512.5 million, or 22% growth at the midpoint, and non-GAAP operating income of $86.4 million to $88.4 million. Caci said the company is increasing second-half investments in technology, sales capacity, partner enablement and brand awareness, with the expected benefits intended primarily to support longer-term growth and operational efficiency.

About AvePoint (NASDAQ:AVPT)

AvePoint, Inc (NASDAQ:AVPT) is a leading software provider specializing in data management, governance, and compliance solutions for Microsoft 365 and related cloud platforms. Founded in 2001 and headquartered in Jersey City, New Jersey, the company offers a comprehensive suite of cloud-based and on-premises tools designed to help organizations migrate, manage, and protect their collaboration data. AvePoint's flagship Cloud Platform delivers backup, governance, reporting, and migration services for SharePoint, Teams, Exchange, OneDrive, and Salesforce environments.

With a customer base spanning thousands of organizations across more than 100 countries, AvePoint serves enterprises, government agencies, and educational institutions seeking to ensure data security, regulatory compliance, and operational resilience.

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