Intapp Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexei Gogolev - JPMorgan Securities LLC - Analyst : Congratulations for great results. John, I was wondering if there has been any change to your guidance philosophy. Do you feel that you now have more visibility and can guide more accurately? Because it seems like in the past, there were more significant beat. And in terms of the demand environment, I seem to recall that on the last earnings call, you suggested that demand is very strong and the pipeline is the strongest you've seen in history. Is that still the case? And if you could provide maybe some more color on top of you what you said during your prepared remarks?

Question: Alexei Gogolev - JPMorgan Securities LLC - Analyst : Thank you, David. And a quick follow-up on your gross margins. It seems like another very strong quarter improving sequentially. It appears that service gross margins were improving as well. I was wondering if you have any midterm trajectory that you can share with us because you now have three quarters sequentially of profitable service gross margins. Where do you see them in the midterm?

Question: Alexei Gogolev - JPMorgan Securities LLC - Analyst : Thank you very much.

Question: J. Parker Lane - Stifel Nicolaus & Co Inc - Analyst : Yeah, guys. Thanks for taking the question. John, you've been working on the enterprise account go-to-market motion over the last couple of years, and that was a big emphasis on the last quarter's call. Just wondering if there's any update on how those additional resources are assisting there and whether or not there's been any incremental hiring or it's mostly been shifting folks around and getting them really centered in on those large deal opportunities.

Question: J. Parker Lane - Stifel Nicolaus & Co Inc - Analyst : Thanks, John. David, I think it was last year at the Analyst Day, you talked about 300 to 500 basis points of margin expansion being the guiding principle here. It looks like you're set to run a little above that even at the midpoint of this guide. Can you just talk about some of the puts and takes there that have you delivering ahead of expectations this year and what we should expect going forward?

Question: J. Parker Lane - Stifel Nicolaus & Co Inc - Analyst : Thanks, David. Appreciate the color.

Question: Natalie Howe - BofA Global Research - Analyst : Hey. This is Natalie Howe on for Koji. Thanks for taking the question. So it's good to hear that there's healthy traction in your partnerships, especially with Microsoft. I wanted to ask how you see those partnerships evolving from here? And how does your AI strategy come into play? I know you mentioned that there were some AI products that are also in the marketplace there. So will it potentially accelerate momentum in that?

Question: Natalie Howe - BofA Global Research - Analyst : Got it. Thank you. Appreciate that.

Question: Terry Tillman - Truist Securities - Analyst : Yeah. Hey, John, Dave, and David. Thanks for taking my questions. First question is just on the strength in the cloud ARR, just extrapolating off of that. Is there probably an expectation that there's going to be some seasonality and some lumpiness and maybe 4Q is the strongest quarter? And related to that first question, is there anything baked in on some of your larger on-prem customers maybe converting by the fourth quarter? And then, I have a follow-up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, INTA.OQ - Q2 2025 Intapp Inc Earnings Call

Question: Terry Tillman - Truist Securities - Analyst : That's great. And then maybe the follow-up question -- thank you for that, Dave. John, you talked about a variety of deal cloud wins in legal and then obviously, some customers moving to cloud. I think you mentioned the time example, and I'm probably short-shifting in terms of all the other stuff you talked about. But what I'm curious about is sometimes in the past, I have investors say, is the legal part of the business, the slower growth more about part of their business, I'm curious if there's an inflection point or an improving growth trend line in the legal side of your business, whether it's because either shift to cloud, AI, DealCloud, et cetera? Just maybe you could share a little bit more on the vitality on growth on the legal side. Thank you.

Question: Terry Tillman - Truist Securities - Analyst : Thank you.

Question: Saket Kalia - Barclays Capital Inc - Analyst : Hey. Great. Hey, guys. Thanks for taking my questions here. John, maybe for you, just maybe hitting on that point around conversions. This was one of the bigger declines that we've seen in on-premise ARR which is great, right, because it sounds like there's healthy conversion activity. There was healthy conversion activity here in Q2. Can you just maybe talk about any changes that Intapp is making to drive that? And how you think about the journey for that on-premise space going forward?

Question: Saket Kalia - Barclays Capital Inc - Analyst : Got it. Got it. That makes sense. Dave, maybe for my follow-up for you on that same topic. Can you just talk a little bit about just the high-level economics of a conversion? I mean, should we think about a conversion being one-for-one from on-premise to SaaS? Or is there additional value that you're able to deliver in those conversions?

Question: Saket Kalia - Barclays Capital Inc - Analyst : Very helpful. Thanks, guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, INTA.OQ - Q2 2025 Intapp Inc Earnings Call

Question: Steven Enders - Citi Investment Research - Analyst : Okay. Great. Thanks for taking the questions here. I guess to start, I want to follow up on some of the prior commentary on the go-to-market changes and the impact that's having I guess, are we at this point like broadly through the changes in the account structure? And I guess, secondarily, is there maybe any flow-through or still like any catch-up spend that could potentially come in here in the next couple of quarters as some of those changes still come into effect?

Question: Steven Enders - Citi Investment Research - Analyst : Okay. Got it. That makes sense --

Question: Steven Enders - Citi Investment Research - Analyst : Okay. Perfect. That's helpful context. And just a quick follow-up, just housekeeping. Any maybe like FX impact or any movements this quarter that may be impacted, either how we should think about the second half outlook or ARR or billings in the quarter?

Question: Steven Enders - Citi Investment Research - Analyst : Okay. Perfect. No, I appreciate the extra context there. So thanks for taking my questions and I'll turn it back in the queue.

Question: Alexander Sklar - Raymond James & Associates Inc - Analyst : Great. Thank you. Dave or John, on the strong cloud NRR expansion this quarter, any change between the buckets of cross-sell, upsell pricing retention in second quarter or year to date? And then, John, specifically on cross-sell, you had that slide at the Investor Day showing how underpenetrated you were on DealCloud and some of those services and legal base really nice quarter this quarter on that. How big of an opportunity

Question: Alexander Sklar - Raymond James & Associates Inc - Analyst : Okay. Great color. And then just a follow-up to Steve's question before, but on the improved bookings exiting December, is the comment you were trying to make that you're seeing productivity back at levels before the changes in place? Or is there still some expectation that you can get productivity even higher from some of the changes around territories and more enterprise reps broadly as we think about third quarter and fourth quarter? Thanks.

Question: Alexander Sklar - Raymond James & Associates Inc - Analyst : Okay. Great. Thank you, both.

Question: Brian Schwartz - Oppenheimer & Co Inc - Analyst : Yeah. Hi. Thanks for taking my question. John, just following up on the last question, are you seeing the linearity revert back to more historical trends here in fiscal 3Q versus what you saw in 2Q from the sales reorganization?

Question: Brian Schwartz - Oppenheimer & Co Inc - Analyst : Good. And then in terms of deal sizes, because it sounds like you're closing a lot of deals out there. Are you seeing average deal sizes increase, too?

Question: Brian Schwartz - Oppenheimer & Co Inc - Analyst : Last question for me. John, maybe just very high level here on just what you're seeing from -- hearing from customers in terms of the macro outlook. Is it your sense that people are more optimistic? And does the macro feel better to you today than it did last time we spoke three months ago? Thanks, again, for taking my questions.

Question: Brian Schwartz - Oppenheimer & Co Inc - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, INTA.OQ - Q2 2025 Intapp Inc Earnings Call