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.

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.

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…

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…

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.

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?

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.

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?

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.

Awesome. Nice job, guys. Thank you.

Thanks, Joe.

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

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?

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.

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?

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.

Perfect. Thanks so much.

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

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?

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.

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.

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.

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.

Great. Thank you, guys.

Thanks, Rudy.

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

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.

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.

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?

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.

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?

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.

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.

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.

Thanks, guys. Good luck.

Thank you.

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

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?

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.

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?

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.

Very good. Thank you.

Thanks, Erik.

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

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?

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.

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?

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.

Thank you.

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

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?

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.

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.

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.

Alright. Thank you.

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

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.

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