Good day, ladies and gentlemen. Thank you for standing by and welcome to Intapp's Second Quarter Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. To ask a question during the session you will need to press the star then the One key on your [Indiscernible] If you require operator assistance, please press star then zero. [Operator instructions]. I would now like to hand the conference over to your speaker host. David Trone, Senior Vice President of Investor Relations.

Thank you. Welcome to Intapp's Second Quarter Fiscal Year 2022 Earnings Conference Call. On the call with me today are John Hall, Chairman and CEO of Intapp, and Steve Robertson, Chief Financial Officer. During the course of this conference call we may make forward-looking statements regarding trends, strategies, and the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations until certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings and other publicly available documents. Intapp disclaims any obligation to update or revise any forward-looking statements further on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call. With that, I'll hand the conversation over to John.

Thank you. And welcome to the team, David. Good afternoon, everyone. Thank you for joining us. We ended our fiscal second quarter and calendar year 2021 with continued dedication to our corporate mission. To enable professional and financial services firms to better connect their people, processes, and data through our AI-powered software solutions. As a reminder for those of you who may be new to our story, our team has focused on this sector for more than 20 years. Our clients are the professionals who work in the large professional and financial services firms that were traditionally organized as partnerships. This is a large global industry that brings in $3 trillion in fees every year. But it has been underserved and overlooked by the technology industry because its firms are organized differently than the traditional corporations that make up the rest of the technology market. Traditional corporate employees tend to be organized into functional departments like sales, or finance, or IT. Their workflows and data needs are specialized to those functions. In contrast, the professional clients whom we serve grow their careers by developing and leveraging individually specialized knowledge and expertise about their chosen domain. Our professionals drive their career success and their firm's success by leveraging that expertise to develop and build key investor and client relationships, to grow and retain business with those clients, and ultimately to deliver great results and returns for their clients on a wide range of projects. Unique working model that these professionals execute every day is different from the traditional sales or operations department workflows that traditional CRM and ERP systems were designed for. We've built our Cloud based on 20 years of working directly with these firms. Intapp’s purpose-built industry Cloud understands these professionals focus to build and develop their own area…

Thanks John and thanks everyone for joining us today. Before I go through the numbers, I'd like to quickly review a few fundamentals of our financial model. As John discussed, the professional and financial firms that we serve are rapidly adopting purpose-built cloud solutions. Today, nearly all of our new customer wins are for cloud solutions, and recurring revenue makes up approximately 85% to 90% of our total revenue. We believe Cloud ARR and total ARR metrics are good indicators of the consistent growth of our annual recurring software business. For the second quarter of Fiscal 2022, our cloud ARR grew 52% year-over-year, and our total ARR grew 27% year-over-year. In terms of revenue recognition, Cloud ARR is recognized as SaaS revenue rateably following a new sale or renewal. On-premises ARR is recognized in two parts, 50% as subscription license revenue, recognized upfront at the time of the sale or renewal, and 50% as support revenue, recognized rateably and included in our SaaS and support revenue line. Because it is recognized greatly, SaaS and support revenue will generally be more predictable quarter to quarter. In contrast, subscription license revenue can vary quarter-to-quarter because it is recognized as revenue episodically, when the subscription licenses are initially delivered or renewed. Okay. Moving to our numbers. Q2 was another strong quarter for Intapp as follows. Total revenue was $64.7 million, up 30% year-over-year, driven primarily by continued strong sales of our Cloud solutions, as well as by solid growth in professional services revenue. SaaS and support revenue was $47 million up 36% year-over-year, reflecting both new sales to new clients and upsales and cross-sales to existing clients of Intapp purpose-built cloud solutions. Subscription license revenue was $9.3 million compared to $9.8 million in the prior year period, primarily reflecting renewals of on-premises subscription…

Ladies and gentlemen [Operator Instructions] Now our first question coming from the line of Jackson Ader. Your line is open

Great. Thanks for taking our questions, guys. The first one is on the net new logo growth. So if we look at the 50 or so that you added in the quarter, could you maybe give us a sense for what are some of the top end markets that contribute to that 50 new logos?

Well, Jackson, let me take that. Thanks, and good to -- good to hear you today. Most of our new logos generally in a quarter are driven in the financial services business where we have both private capital markets and investment banking and other financial clients. There are numerous of them and we have some real momentum there. And we tend to have fewer new logos in our professional services segments where we've been in business longer, and where much of our sales opportunity tends to be more of an up-sell or cross-sell nature than new logos per se.

Okay. Perfect. And that actually leads into the second question, which was about the net revenue retention of being above that -- the 108 to 112 range. What really is driving this, is this existing law firms or existing professional services that might be adding other lines of business or geographies, are they adding new products at a faster rate than you had previously expected? What's really driving the upside to the 112?

Well, what we're seeing really is some pretty balanced good sales motions across the board. And in financial services, that typically leans towards upsell of additional users, where people have achieved success in the implementation. And it's working well and more people want to sign up for it. In professional services in legal and elsewhere, it's typically cross-sell of additional product functionality. And there's lots of opportunity there. So it's a fairly balanced contribution from both. And yes, it's been better than our range here, two quarters in row. So we continue to look at that and are pleased with it.

Okay, great. Thanks for taking my question.

Yeah.

Now our next question coming from the line of Koji Ikeda. Your line is open.

Hey, John and Steve. Thanks for taking my questions. Really really great quarter. I wanted to build on that last question from Jackson. Okay. So NRR was above that 108 to 112 range second straight quarter there, so great news. When would you feel comfortable maybe raising that range? And then digging in a little bit more, on this quarter for the NRR, was it higher than last quarter? So any sort of color there would be helpful.

Sure. Well, I think it's fair to say that if we see this kind of sustained success by next quarter, there's a chance we would consider changing this, revising somewhat next quarter, Koji. We were right around where we were last quarter, to be honest. We were -- we were just as good if not slightly better than last quarter. So we're optimistic about that. And we just want to be careful with the trends we see and it works out quarter to quarter, but really good business firing on all cylinders here, right now across the board.

Got it. Thank you. And then on the ARR, specifically on the Cloud side. Thanks for the color there new logos coming from financial services. But from AAR and thinking about this, the 50% plus growth for the second straight quarter. I mean, is that growth coming from -- it sounds like more DealCloud at OnePlace and I guess maybe more financial services versus professional services, or how should we be thinking about where that strength is coming from in the Cloud ARR growth?

Well, now really it is pretty balanced on an absolute dollar basis between the 2, if you will. I think that as we said before, just based on where the 2 parts of the business started and their history and size and so forth, there's a little bit quicker growth in financial services than in professional services on a sort of a percentage growth rate basis. But we're getting pretty good and pretty balanced contribution from both as part of the Cloud growth. As you know, all the new sales are Cloud, they're coming from those 2 twin engines, if you will.

Got it. Got it. Thanks guys. Thanks for taking my questions. Appreciate it.

You bet.

Our next question coming from the line of Kevin McVeigh. Your line is open.

Thanks so much. And let me add my congratulations as well. Just to follow up on the client success, it seems like you're capturing a larger percentage of clients where they are over 100,000, can you help us understand what the average client size is today in terms of employees and how that's been trending over the last couple of quarters?

Well, I'm not sure I have employees and an average size for you in terms of ARR obviously, if you just divide our ARR by the 2,000 plus clients, so you'll see that the average for the business is over $100,000 but there's a spread there. In terms of employee size, I don't want to hazard a number for you. John, you may have some color you would add there.

Well, the range of firms that we sell to today that we count on our client base go from a handful of people at a just started private capital firm, maybe five to 20 people out at the small end. And the largest firms are the global investment or advisory firms, including the Big Four, which could have 180 to 200,000 employees. So the platform does scale. We've built it in a way that supports the largest firms in the world and then we get the Cloud benefit of being able to provide that level of capability and AI power down to the smallest just started firms. So our go-to-market is organized by industry, but also by firm size. And we engage a little bit differently depending on the scale of the firm but overall, we're able to address the big chunk of the professional financial services market globally. So we're excited about the progress that we're making and winning clients of these different sizes because it shows the growth potential of the business into the market.

That's great. That's great. And then it seems like given the acceleration in the revenue, help us maybe dimensionalize it. Not really any kind of COVID related pull-forward, just given the continued acceleration. Is that fair? I mean, from a implementation or just overall client spend perspective.

Well, yeah, there's no pull forward certainly from -- really from the next quarter, if that's what you're asking. And our COVID -- there are some COVID related comparisons. If you go back full-year, quarter-over-quarter that you're looking at here, but we're in a pretty normalized and pretty good business environment right now. That's what we're mostly executing on.

Great. Congrats again.

Thanks.

Our next question coming from the line of Brian Peterson of Raymond James. Your line is open.

Well, thanks, gentlemen. And I'll echo my congrats on the strong results. So first one, John, I'm curious, host the user conference. Anything that you can share in terms of customer conversations or pipeline or any kind of developments from pipeline in terms of how that may play out over the next few years.

Thanks, Brian. The Intapp Connect’21 event was a fantastic event. We had 1,700 folks attend from across all the sub verticals that we call on. 1 of the interesting things that came out of it was how common and shared the challenges were for these firms that have a little bit of a different specialty, each one, but the professionals are grappling with the same issues and the business services teams that support the firms are grappling with the same issues. So there was a lot of enthusiasm across the sub verticals to work together on discussing common opportunities for technology transformation. So that was a big theme that came out of it. There also was a real discussion of the impact of COVID on opening the eyes of these firms to digital transformation, to cloud, to better enabling dispersed or hybrid workforces. And so a lot of the conversations were reinforcing what we've been experiencing, which is these firms through COVID have shifted some of their focuss towards better technology enablement and digital transformation for their people to compete in a changed environment. So there's a lot of discussion about that too. To your question about pipeline, it was a very successful event for us. A lot of new attendees that we had not met before, as well as a lot of our installed base coming and people referring to each other to get into the Intapp community. So we're encouraged by the enthusiasm for what we're doing out there. And I think you're seeing some of it flow through to some of the results.

That's great to hear and maybe a follow-up for Steve. I know you mentioned some of the hiring efforts and we'll see those investments start to kick off in the third quarter here. How do we think about that investment intensity in a go-to-market effort, especially as we're thinking about a couple of years out, should we expect that to continue good going forward, or we should start to see some benefits of those, maybe in coming years? Thanks, guys.

Yes. We are continuing to forward invest when we can in sales and marketing. As we've said last quarter, we've had some success here so far this year and that continues. We are adding to our sales and marketing resources north of 25% annualized growth rate at the moment. And I think that since we see so much opportunity right now, we're going to continue to look to do that. And there's hiring and ramp up time and so on that's part of the mix. So productivity improves after someone starts and it gets better. But we're optimistic and we'll continue to do that going forward as we see this market opportunity in front of us.

Thank you.

Our next question coming from the line of Parker Lane. Your line is open.

Hi guys, this is Matthew Kicker on for Parker. Really impressive numbers, specifically, from quarter ARR keeping that north of 50%. And you gave some great detail as well, breaking down financial services, you're seeing more interest there with professional services and a bit of a mix from Cloud migration net new logos, but I want to get a little bit into maybe the timing of the on-boarding process for each of those segments. From first point-of-contact with the client all the way to when they're being added into the platform, what does that length of time look like? And is it different based on each of those segments that I mentioned?

So thanks, Matthew. The question is, how long does it take us to onboard new clients when we win them?

Yes, exactly and if it's different versus professional services or financial services or cloud migration versus net new logo.

Yeah. So for the smaller firms it's faster, and for the larger firms, it takes longer obviously, because they're more complex environments that we're integrating into. On average, if you look across the whole client base on all scenarios, it's about a six to nine month process, which is weighted towards the larger ones. For the smaller firms that we're getting up and running, we can do it in 30 to 60 days so there's a very rapid experience for the smaller organizations, but on average, you're looking at something like 6 to 9 months across the whole client base.

Okay. And then, that's great info. And then does that affect how you're investing in your sales capacity? And how does the -- you touched a little bit on the go-to-market, but does it differ based on whether it's any of those four segments that were mentioned?

In terms of how we're investing in the go-to-market team?

Yeah.

By segment or firm size?

Yeah, exactly. How does that breakdown affect how you're investing in those different teams?

Yeah, we are growing the teams pretty consistently because we see strong, balanced growth across the different firm sizes and segments. Obviously, as we bring on a lot of new clients that we didn't have before, we're also adding people for support and client success to support the new client relationship. So you'll see a little bit of waiting in investment there to make sure that we are in position not just a win the client, but to take care of them and to grow the accounts from there. So it's pretty balanced with some emphasis where we're winning new clients.

Okay, great. Thank you.

Our next question coming from the line of Terry Tillman. Your line is now open.

Yeah. Thanks and congratulations from me as well. Hi John, Steve, and David. I have two questions. I guess the first question -- and I think I've asked you John a little bit about this in the past. That was interesting with companies to go public, what kind of benefits they see? You all definitely have some footholds within some really large financial services and professional services firms. What I'm curious about is three months further into being a public company, how are you doing on larger transformational deals, like $1 million deal activity with some of these bigger firms? Now that you're public, you've got financials out there, you don't have debt, etc. And then I had a follow-up.

Thanks Terry. We are pleased with the visibility that the IPO has given us. It continues to help us in winning larger clients. We gave a couple of examples of client wins, including some that were quite large this quarter. And I think that the public visibility really helps in that regard. We also are seeing some growth in our existing clients that we had won as a private company before IPO, but we have visibility to higher levels of the organization now. And that's helping us. For the larger transformational type deals we're increasingly working on these cloud transformations for the larger firms. Obviously, it takes them longer to lay out that road map. But we're making pretty consistent progress in bringing our clients to the Cloud for the first time in a bunch of areas, and we're excited about what that means for them and for our future.

That -- that sounds good. And I guess some follow-up, is this just an education question for me? What kind of correlation do you see when we're looking at financial services or even professional service, maybe on the law firm or the legal side. And who knows how the rest of the year goes, but whether it's capital markets or investment banking fees. If with the volatility that wanes and some of the goodness that has been going on in those industry starts to wane and there's just not as much activity. Does that actually create an opportunity where they're not quite as stretched and slammed with just going out and doing business, need more time to look at software or am I putting words in your mouth, those are wishful thinking? Or do things tend to slow down if the fee start drawing up? And just trying to understand a little bit more about what kind of correlation there might be with your business and just the end market. Thank you.

Yes. Thank you. One of the interesting examples that we can look back to is the 2008 to 2009 recession. And those firms did choose that time to make pretty meaningful investments in their infrastructure. We're benefiting today obviously from strong markets that are going on. But one of the reasons we like this end market is that these firms have multiple strategies and practices that they pursue and they tend to shift their business internally as the business cycle occur. You mentioned law firms, law firms will switch from doing deals and financing to doing litigation and restructuring and that sort of thing. And we found that we grew right through the last recession. So we're not predicting anything on the background economy, but I think we're well-positioned to handle it with this end market as things go maybe better than a lot of other companies that might take a harder hit.

Got it. Thank you.

And our next question coming from the line of Brian Schwartz. Your line is open.

Yeah. Hi Steve and John, thanks for taking my question this afternoon. I have a macro question for John. When you're thinking about all the puts and takes of everything that you've been talking about on the call here this afternoon. If you look out to this year, so 2022, would you say in aggregate that you're expecting the demand environment to be stronger, weaker or the same than what you had in 2021?

Well, compared to calendar 2021, it's definitely a stronger environment. I mean, we're seeing that just in these numbers that we're showing. Our professional services line, most obviously came back from a period when the firms were really paused, not knowing what's going on with COVID. So I think just quantitatively, we're seeing a stronger environment. That being said, we also see the firms have made a pretty significant switch here to investing in technology and going through the Cloud transformation, looking forward, past 2022 and to 2023. Folks are really thinking about this strategically in a way, that people always talked about the importance of technology in these firms, the importance of professionals in accordance to their clients. But I think it's sunk in here. So we're excited about what's happening. The business is really, as Steve said, firing on all four cylinders. But I think looking ahead, there's good demand for us. We're encouraged by what we're seeing.

And then one follow-up I had for Steve. Just wondering if you unpacked a little bit, but can you unpack even further where these growth investments are going to -- it sounds like sales and marketing line. Are they going towards advertising, is it all increasing the capacity? Is it marketing? New markets? Could you provide just a little bit more color on where you are increasing these growth investments. Thanks a lot.

Yes, sure. And I think it is weighted to sales folks and sales capacity and support on the ground, because we're seeing, as John said, pretty good opportunities here and we really want to take advantage of those. We certainly, across the board, are also investing in marketing and related areas. We had -- we had our big conference in the fall. I mean, the Omicron thing took a little bit of steam out of what we might have spent actually. So there's -- that was probably why we weren't spending quite so much in Q2. But we see opportunities across the board there. So it's balanced but I would say it's weighted a bit towards sales capacity and support for sales efforts in the field.

Thank you very much.

And we have a follow up question from Jackson Ader, your line is open.

Great. Thanks. Just a quick follow-up on one of the upsell answers that you gave someone's question earlier. Even within one of these larger investment banks, or private equity funds, does the land sometimes -- how small will the land go? Will it be within, I don't know, just a particular team within equity capital markets and then you can go to debt capital market, there and beyond. Does it go fund by fund sometimes in private equity? Like how small are we talking about potentially within the land of some of these larger customers? Thanks.

Yes. I'll take a shot at that, and maybe John can elaborate. Jackson, I think we can land, as John said, 20 people. And that could be division or a small section of a firm, or it could be a part of one unit there. And then we can expand from there. So it can be relatively, if that's what you consider that relatively small, we can also land quite a bit bigger than that, obviously. And we would like to, generally speaking, but I think we are efficient and effective enough, and we've seen enough success that, that is often a good way for us to go. And our John can elaborate on that.

Yeah, in the bigger institutions, particularly as partnership firms are the ones that have a history as partnerships. There's a lot of independent decision-making, and that actually plays strongly to our advantage. Because we can win footprint in some of these firms and start to show success, improve success with some very influential small groups that can make their own call on what they bring in. So we're pragmatic about that and we're finding that it's very successful, once the rest of the organization starts to see what we're doing and how different it is from the existing environment, we start to grow. And that's a key part of our overall strategy.

Yes. Okay, great. That makes a ton of sense. Thank you.

I am showing no further questions at this time. I would now like to turn the call back over to Mr. Hall for any closing remarks.

Okay. Thank you all for joining us. We appreciate your time, as always. We're excited about the opportunity in front of us and we're looking forward to talking to you again in Q3.

Ladies and gentlemen, that ends our conference for today. Thank you for your participation. You may now disconnect.