Executive Summary / Key Takeaways

• AvePoint (NASDAQ:AVPT) is demonstrating robust financial and operational performance, driven by its cloud-native data management platform and a strategic focus on AI governance and security, particularly within the Microsoft (MSFT) ecosystem and expanding into multi-cloud environments.
• The company achieved record-breaking results in Q3 2025, with total revenue increasing 24% year-over-year to $109.7 million and SaaS revenue growing 38% to $84 million, representing 77% of total revenue. Non-GAAP operating income reached a company-high of $24.1 million, translating to a 22% operating margin.
• Annual Recurring Revenue (ARR) grew 26% year-over-year to $390 million as of September 30, 2025, with net new ARR of $22.4 million, reflecting strong customer acquisition and expansion.
• AvePoint's technological differentiation lies in its unified platform approach to data security, governance, and business continuity, offering specialized solutions for agentic AI governance, multi-SaaS data protection, and operational efficiency through its Command Centers.
• Despite macroeconomic uncertainties and public sector softness, AvePoint maintains a positive full-year 2025 outlook, projecting total revenues of $414.8 million to $416.8 million and non-GAAP operating income of $77.3 million to $78.3 million, with a Rule of 40 of 46 at the midpoint.

The Imperative of Data Confidence in an AI-Driven World

AvePoint, Inc. (NASDAQ:AVPT), established in 2001, has built its foundation on a strategic philosophy of "doing the hard things first." This approach has seen the company prioritize serving large corporations in highly regulated industries and expanding into challenging global markets. This historical journey has culminated in AvePoint's current position as a critical provider of cloud-native data management software, enabling organizations to prepare, secure, and optimize their vital data. The company's overarching strategy centers on its "Beyond Secure" philosophy, integrating data security, governance, and business continuity into a seamless, resilient experience. This platform-first approach is increasingly relevant in a digital landscape grappling with explosive data growth, sophisticated cyber threats, complex regulatory demands, and the transformative, yet risky, emergence of artificial intelligence (AI).

The global AI governance market, valued at approximately $309.01 million in 2025, is projected to grow at a robust compound annual growth rate (CAGR) of 35.74% from 2025 to 2034, reaching an estimated $4.83 billion by 2034. This significant growth is driven by the rising adoption of AI across industries and the urgent need for transparent, accountable decision-making frameworks. Organizations are actively seeking sophisticated systems that act as single control points for business processes, integrating policy formulation, execution, supervision, and control into a unified AI governance framework. AvePoint's research indicates that 86% of organizations have delayed AI rollouts by up to 12 months due to security and governance concerns, underscoring the critical demand for its solutions.

Technological Edge: Unifying Data Security, Governance, and AI Readiness

At the core of AvePoint's strategic advantage is the AvePoint Confidence Platform, a cloud-native data management software designed to unify data security, governance, and business continuity. This platform is not merely a collection of tools; it is an integrated framework that addresses the complexities of data sprawl in hybrid work environments and the emerging challenges of generative AI. The platform's capabilities are organized into three core pillars: Resilience, Control, and Modernization.

The Control Suite is AvePoint's fastest-growing offering, focusing on cloud unstructured data governance. It provides essential capabilities for data access controls, policy enforcement, managing oversharing of sensitive data, and reducing data sprawl. Crucially, it prepares customers for an AI readiness posture by including features like prompt tracking, access controls, and policy enforcement for AI-generated content. This suite directly addresses the urgency of AI readiness, ensuring data accuracy and risk control for AI deployments.

The Resilience Suite offers comprehensive data protection, backup and recovery, ransomware attack detection and recovery, security assessments, and automated recovery testing. It includes Opus, an information lifecycle management solution that classifies data, improves data quality, and automates archiving and deletion of redundant content. This suite is growing north of 20% and is vital for organizations to protect against and recover from increasingly frequent and severe ransomware attacks.

AvePoint's innovation extends to Agentic AI governance, a critical differentiator as AI systems evolve to automatically execute workflows and make decisions. The Confidence Platform provides deeper visibility into agentic AI, monitoring agent origin, data access, permissions, and evolution within environments like Copilot Studio. This eliminates "shadow agents" and ensures auditability and transparency. The company has also launched an Operational Efficiency Command Center to track policy violations, agent remediation speed, and workspace status, elevating governance to a board-level discipline. Furthermore, AvePoint offers unified protection across multi-SaaS and multi-cloud environments, extending data backup and protection to applications like monday.com (MNDY), Docusign (DOCU), Smartsheet (SMAR), Okta (OKTA), Confluence, and Google (GOOGL) GCP Virtual Machines. This multi-cloud expansion, which currently represents less than 10% of revenue, is targeted to reach up to 30% of total ARR by 2029, with significant growth opportunities in the Google and Salesforce (CRM) ecosystems.

Internally, AvePoint is leveraging AI to enhance its own productivity, with over half of its developer population using AI-accelerated Integrated Development Environments (IDEs) for code development and automated testing. The company also applies AI in cloud security and CloudOps for automated risk identification and infiltration detection. This internal adoption not only drives efficiency but also informs product development, as AvePoint believes "AI is ultimately the new UI," enabling infinitely customizable services.

Competitive Landscape and Strategic Positioning

AvePoint operates in a dynamic and highly competitive market for software and cloud-based services. Its competitive landscape includes both direct rivals focused on data protection and governance, such as Commvault (NASDAQ:CVLT), Rubrik (NYSE:RBRK), and Veeam, and indirect competitors like built-in features from major cloud providers.

AvePoint's primary competitive advantages stem from its proprietary integration with Microsoft ecosystems and a specialized data governance focus. This deep integration with Microsoft 365, SharePoint, Teams, and OneDrive offers customers superior ease of use and seamless extensions, leading to stronger loyalty and potentially faster deployment. This depth allows AvePoint to offer more tailored compliance tools compared to broader players. For instance, AvePoint was selected over other vendors by a major Japanese telecommunication company due to its ability to address multiple data security risks that other vendors could not. Similarly, an American mortgage company and a staffing agency chose AvePoint over traditional backup vendors who lacked its holistic data resilience and data governance approach.

In comparison to Commvault (NASDAQ:CVLT), which focuses on comprehensive data resilience and hybrid cloud solutions, AvePoint's specialized Microsoft 365 extensions offer a more seamless integration for Microsoft-centric environments. While Commvault boasts a broader product suite and established scale, AvePoint's niche focus can translate to stronger customer loyalty in specific segments. Commvault reported total ARR of $996 million, up 24% year-over-year as of July 31, 2025, with a SaaS net dollar retention rate of 125% as of September 30, 2025. Its non-GAAP operating margin is projected to be approximately 21% for fiscal year 2026.

Against Rubrik (NYSE:RBRK), a specialist in data security with a strong emphasis on ransomware protection and AI-enhanced data recovery, AvePoint's governance-oriented approach for Microsoft 365 provides more straightforward compliance tools. Rubrik's strategy leverages AI for faster threat response and reported subscription ARR of $1.25 billion, up 36% year-over-year as of July 31, 2025, with revenue growing 51% year-over-year to $309.9 million in Q2 fiscal year 2026. Rubrik's GAAP gross margin expanded to 79.5% in Q2 fiscal year 2026. While Rubrik excels in security innovation, AvePoint's user-friendly approach to Microsoft 365 data management may foster better adoption in compliance-heavy industries.

Veeam, another significant competitor, offers robust backup and data management across virtual, physical, and cloud environments. AvePoint's solutions are more governance-centric, potentially offering more intuitive tools for compliance tasks. While Veeam provides broader availability, AvePoint could lead in Microsoft-specific performance and integration.

AvePoint's competitive disadvantages include its niche market dependence, which could limit revenue diversification if Microsoft demand wanes, and a potential lag in advanced AI integration compared to some rivals. However, the company is actively addressing these by expanding its multi-cloud offerings and integrating AI into its platform. Strategic acquisitions, such as Ydentic in January 2025 to enhance its Managed Service Provider (MSP) offerings, further bolster its competitive stance. The MSP segment is AvePoint's fastest-growing vertical, with MSP ARR growing at a 60% CAGR from 2020 to 2024 and representing 14% of total ARR by the end of 2024.

Financial Strength and Growth Trajectory

AvePoint's financial performance in the third quarter of 2025 underscores its commitment to profitable growth and effective execution. Total revenue increased 24% year-over-year to $109.7 million, surpassing the high end of guidance. On a constant currency basis, total revenues grew 21% year-over-year. SaaS revenue continues to be the primary growth engine, surging 38% year-over-year to $84 million and now constituting 77% of total revenue, up from 69% a year ago. This strong SaaS performance was partially offset by an expected 21.2% decline in term license and support revenue and a 72% decline in maintenance revenue, reflecting the company's strategic shift away from perpetual licenses.

Profitability metrics also demonstrated significant improvement. Non-GAAP operating income reached a record $24.1 million, translating to an impressive 22% operating margin, the highest for the company as a public entity. This compares favorably to 20.1% in the prior year. The improvement in non-GAAP operating margin is attributed to an enhanced focus on expense management and the scaling of its channel partner strategy, with sales and marketing expenses representing 30% of total revenues in Q3 2025, aligning with the company's long-term target. Gross profit for Q3 2025 was $81.6 million, with a gross margin of 74.4%, a slight decrease from 76.1% in Q3 2024, primarily due to a higher mix of lower-margin services revenue.

Annual Recurring Revenue (ARR) as of September 30, 2025, stood at $390 million, representing a 26% year-over-year increase. Net new ARR in Q3 2025 was $22.4 million, a 19% increase year-over-year and a new quarterly record. Customer acquisition remains strong, with 762 customers now contributing over $100,000 in ARR, a 21% increase from the prior year, with 41 new additions in Q3 alone. The company's dollar-based gross retention rate (GRR) was 88%, and the net retention rate (NRR) was 110% in Q3 2025. The sequential step down in GRR was primarily due to expected softness in the public sector, which also impacted NRR due to weaker upsell.

AvePoint maintains a robust liquidity position, with $471.6 million in cash and cash equivalents and no outstanding debt as of September 30, 2025.

Net cash provided by operating activities for the nine months ended September 30, 2025, was $55.6 million. This strong cash position provides ample flexibility for strategic investments, including M&A, and share repurchases, with $123 million remaining in the authorized share repurchase program after $8.4 million in repurchases in Q3 2025.

Outlook and Strategic Imperatives

AvePoint's management has provided an optimistic yet prudent outlook for the remainder of 2025, reflecting continued business momentum while accounting for potential macroeconomic headwinds. For the fourth quarter of 2025, total revenues are projected to be between $110 million and $112 million, representing 23% to 26% year-over-year growth (20% to 23% on a constant currency basis). Non-GAAP operating income is expected to be $21 million to $22 million, with an operating margin of 19.1% to 19.6%.

For the full year 2025, AvePoint expects total revenues of $414.8 million to $416.8 million, indicating a 25.8% growth at the midpoint. Full-year non-GAAP operating income is guided to be $77.3 million to $78.3 million, with an operating margin of 18.7% at the midpoint, representing nearly 430 basis points of year-over-year margin expansion. Total ARR for the full year is maintained at $412.8 million to $418.8 million, reflecting 27% growth at the midpoint (25% on an FX-adjusted basis). The company's Rule of 40 (ARR growth + non-GAAP operating margin) is projected to be 46 at the midpoint of its full-year guidance, a significant improvement from 38 at the beginning of 2025.

Management's guidance prudently factors in potential impacts from the ongoing government shutdown on deal timing, acknowledging that ARR is more susceptible to such delays than revenue. Despite this, the underlying demand environment remains strong, with AI and security continuing as top priorities for B2B software. The company aims to reach $1 billion in ARR by 2029, a goal underpinned by continued investment in sales and marketing and R&D, focusing on long-term growth.

Risks and Considerations

While AvePoint's growth trajectory is compelling, investors should consider several risks. The market for software and cloud-based services is highly competitive, with rapid innovation from rivals. The company's success depends on its ability to continuously evolve its platform and attract and retain talent. Global macroeconomic and geopolitical factors introduce unpredictability, potentially affecting demand, costs, and currency exchange rates. The company's exposure to the U.S. public sector, while relatively small at approximately 2% of total ARR, introduces uncertainty due to potential government shutdowns and spending reductions. Furthermore, the transferability of its common stock between Nasdaq and the SGX-ST could affect liquidity and trading prices.

Conclusion

AvePoint stands at a pivotal juncture, leveraging its deep expertise in data management and a robust, unified platform to capitalize on the burgeoning demand for AI governance and data security. The company's "Beyond Secure" philosophy and platform-first strategy are proving highly effective, as evidenced by record Q3 2025 financial performance, accelerating SaaS growth, and expanding profitability. AvePoint's technological differentiation, particularly in agentic AI governance and multi-cloud protection, positions it as a critical partner for enterprises seeking to responsibly adopt AI and manage complex digital environments.

Despite a competitive landscape and macroeconomic uncertainties, AvePoint's strategic investments in innovation, channel expansion, and M&A, coupled with a strong balance sheet, underscore its commitment to durable, profitable growth. The company's ambitious target of $1 billion in ARR by 2029, supported by a Rule of 40 performance of 46, reflects confidence in its ability to lead in this evolving market. For discerning investors, AvePoint presents a compelling opportunity to participate in the foundational shifts driven by AI and cloud transformation, with a company demonstrating consistent execution and a clear vision for long-term value creation.