AvePoint at Wells Fargo Summit: Strategic Expansion and AI Integration

On Tuesday, 18 November 2025, AvePoint (NASDAQ:AVPT) took center stage at Wells Fargo's 9th Annual TMT Summit. The company's leadership highlighted strategic advancements, including a shift towards AI-driven data management and expansion into multi-cloud environments. While AvePoint showcased a robust growth trajectory, uncertainties in the federal sector posed challenges. The company's diversified model was emphasized as a key strength in navigating market dynamics.

Key Takeaways

• AvePoint is transitioning from infrastructure management to cloud-based data protection with a focus on AI-driven solutions.
• The launch of AgentPulse marks a significant step in AI data management, providing comprehensive agent monitoring.
• Federal sector uncertainties have impacted growth, but AvePoint remains resilient due to a diversified business model.
• The company is targeting $1 billion in ARR by 2029, with a current growth rate of 26%.
• Expansion into SMBs and multi-cloud environments is a major focus, leveraging partnerships with MSPs.

Financial Results

• AvePoint reported a 26% growth in Q3, aligning with its status as a Rule of 40 company with an 18-19% operating margin.
• North America saw a 21% growth year-over-year, despite challenges in the federal sector.
• The company reiterated its long-term target of achieving a 27% operating margin.

Operational Updates

• AvePoint emphasized its balanced business model, which spans various geographies and customer segments, mitigating risks.
• The expansion into multi-cloud environments includes platforms like Google Workspace, Salesforce, and Monday.com.
• The Elements edition of the Confidence Platform is enabling MSPs to create recurring revenue streams.

Future Outlook

• AvePoint aims to reach $1 billion in ARR by 2029, driven by growth across different segments and geographies.
• The company is expanding its footprint in the APAC region, with significant growth in Japan, Australia, South Korea, and Singapore.
• The launch of AgentPulse at Microsoft Ignite highlights AvePoint's commitment to AI integration and data management.

Q&A Highlights

• CFO Jim Caci addressed federal sector challenges, noting that no single customer accounts for more than 2% of ARR.
• Mario Carvajal, Chief Strategy and Chief Marketing Officer, emphasized the importance of AI guardrails and agent monitoring.
• AvePoint's strategic focus includes organic growth, tuck-in acquisitions, and leveraging a massive total addressable market (TAM).

In conclusion, AvePoint's participation at the Wells Fargo Summit underscored its strategic initiatives in AI and cloud expansion. For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Wells Fargo's 9th Annual TMT Summit:

Richard Bowen, Wells Fargo software team, Wells Fargo: All right. I think we can get started here.

Yeah.

I'm Richard Bowen on the Wells Fargo software team. I'm delighted to be joined by Jim Caci, the CFO of AvePoint, and Mario Carvajal, the Chief Strategy and Chief Marketing Officer. Thank you guys for joining. I think a good place to start, just to level set the conversation, is, you know, tell me a little bit about the AvePoint story. You know, you guys have come a long way since the early days, but we'd love to just kinda take us through some of that evolution of the company.

Jim Caci, CFO, AvePoint: Yeah, sure. I'll start. Richard, thank you for having us, and thanks for sitting in. Yeah, we started building our business at a time where infrastructure management was really important for organizations, the ability to recover when distributed apps would crash or not work. We concentrated mostly on the data set. We thought about how, what's the best way to recover data for continuity of information. We focused on recovery time objectives, and that, you know, started helping us really develop a platform strategy from the start. You fast forward, you know, that storyline at a time where organizations started moving to cloud infrastructure, and we decided to take our data protection story to the cloud. This was around 2008.

We then, successfully built a cloud infrastructure, platform that would allow us to help organizations, really think about the challenges in managing data holistically. From the start, we concentrated mostly on regulated industries. We were very fortunate that, we had the opportunity to work with some of the most sophisticated organizations and also public sector agencies. What this gave us was, you know, the ability to really focus on how do you properly, control and govern data through its entire lifecycle. Today, we ship a pretty comprehensive platform that not only, supports organizations across different cloud service providers, but also different data repositories. Our application today is not only helping you, employ data protection, but do it in a modern way.

What we often focus on is implementing the right guardrails in place to help you understand if sensitive data is being overshared, or if you have data sets that are redundant, obsolete, how do you ensure you remove risk from the organization. Believe it or not, there are many organizations that are challenged by this. The complexity of the digital workplace environment has, you know, had exponential growth after the pandemic, where many organizations are using, you know, different cloud service providers as well as SaaS applications. You mix that in with legacy systems, and you have a pretty challenging task in front of you. We do that.

Of course, you know, in the last, I would say 28, 36 months, all of this was amplified by the ability for organizations to consider what is AI and how do we implement AI effectively. Yeah, I think our story and foundation and understanding data, data repositories, data structures, our ability to focus primarily on unstructured data, which is the kind of data that we generate every day, whether it's through videos or chats or transcriptions or emails or chat, and interactions we have with our supply chain partners, our customers, that data, believe it or not, represents about 90% of what enterprises are generating every day. When you're in a position where you can offer them an end-to-end data management story in an effective way, then I think you're very meaningful to organizations.

That's one of the reasons why, you know, we've been very fortunate to have had the performance track record we've had.

Richard Bowen, Wells Fargo software team, Wells Fargo: Awesome. That's a great overview. If we think about, you know, the AI story, right, this morning you guys launched AgentPulse Command Center. Can you tell us a little bit about that and just kinda how it fits into the broader AI vision with AvePoint?

Jim Caci, CFO, AvePoint: Yeah. Thank you for mentioning that. We are excited. Microsoft Ignite, which is Microsoft's big conference, is taking place now in San Francisco. This morning we put out our announcement of launching AgentPulse. It was really in response to a lot of demand we've had from enterprise organizations across regulated industries that have said to us over the last year and a half, we're ready to turn on whether it's a generative AI commercial off-the-shelf product or build our own agents. We're concerned about oversharing data, the identity these agents are gonna operate under, and the ability, quite frankly, to roll back in case there are, you know, inadvertent actions taken by the agents. On one side of the equation, you have the ability to automate and really have agents do a lot of the processing of information.

On the other side, the concern is, you know, what if an agent goes rogue and how do you actually protect the organization? AgentPulse is a product designed to first monitor agents that are either built on Microsoft stack or, you know, Google stack or any other, you know, platform control plane that's being built by the hyperscalers. Our intention is to be multi-cloud. The product allows you to do a quick analysis and tell you within the organization how many agents you've deployed, what they're actually doing, what identity they're using, and more specifically, what kind of data transfer is occurring across the agents. This command center is meant to give you full control and visibility, and it helps you immediately start to remediate when issues are starting to, you know, come up.

We have, you know, the ability to also interoperate with Microsoft's 365 agent, which they also announced this morning, and Gemini Enterprise is coming next. The goal there is that those platforms will be the control plane. What we will offer, AgentPulse, is, again, properly named the command center for you to take action, for you to actually know how to remediate. This is really important to regulators, security officers, folks that need to audit the environment. We are excited about it. It is something that we started working, as soon as ChatGPT launched in 2022. We knew that we wanted to be one of the first, yeah, in market to introduce the guardrails for agents. We began last year doing some stuff around Power Platform, which is Microsoft's power, low-code platform, where they started shipping Copilot Studio.

That gave us the confidence that we were, you know, able to really ship a more robust capability. That's the result of, yeah, the work we've done with AgentPulse.

Richard Bowen, Wells Fargo software team, Wells Fargo: That's great. I think, like, another recent theme that's come up, you know, especially on the most recent earnings call is federal. Jim, you kinda talked a little bit about how the intent around maintaining the ARR guide was to kinda create some flexibility around what could happen in the federal space. We had the shutdown, and now it seems like, you know, things are opening back up on the federal side. I guess just any context for kinda what you saw on the federal side and now that the shutdown is opening back up, like, how should we think about that?

Jim Caci, CFO, AvePoint: Yeah. Yeah. Thanks for bringing it up. Yeah. We spent some time on the earnings call talking about it, but, you know, right from the beginning of the year, we thought about the uncertainties that we really saw with the public sector in general and more specifically federal. That really came from not only the activities of Doge that I think got the headlines in terms of what was actually happening and maybe agencies that were specifically targeted for, you know, activities that were gonna go in and carpet bomb the agency and then kinda rebuild it, but also just the uncertainty that that created amongst other agencies that were not even targeted. There were a bunch of resignations. There were people that were fired in other agencies. Just lots of turnover. That turnover, for us, just creates a bunch of uncertainty.

What we saw in general across the board in really all of our federal sector was just a lot of delays in terms of just getting things through the system, as you would expect. We heard this from some of our peers as well. We did have some impact directly from Doge, but then there was just more impact really from the uncertainty. Definitely our federal business from a growth rate was much lower in 2025 than it was in 2024. That was then reflected in our North America growth, year over year of about 21%, which was still very good, but was definitely negatively impacted by the federal space. That definitely had a negative drag in Q3.

Now, the good thing for us is that despite that, we actually had a very good quarter in terms of 26% overall growth. That was healthy. Now with the, you know, government, you know, being open, that is a good thing. It was interesting. I was just having a conversation with somebody a couple minutes ago. It is interesting that the government, though, is not a speedboat, right? Even though the government is quote unquote open, it is not as if, oh, that means everything that was in backlog or everything that may have been paused is now immediately put through the system. It is a process and an engine that needs to go through.

We're sitting here in the middle of November, and, you know, I think we were pretty, you know, thoughtful of what we thought the outcomes could be in Q4 for the government shutdown. We didn't expect that it would last the whole quarter. Even with it opening up, there's still a process to actually happen. Deals that we are hopeful are gonna get through, there's still no certainty because you have to get through not only the approval process, but then it has to get through procurement and actually has to get closed prior to the end of the year. There's lots of deals that are in that stage. We're hopeful, but obviously, I think it's still gonna be, you're gonna see a lot of people talking about federal in Q4 as well just because of that kind of backlog.

Again, we felt like right from the beginning of the year, we factored in a lot of this. We feel good about the guidance we provided, you know, for the year. We feel we're gonna end the year strong. That sets us up nicely for next year, which again, we're optimistic that, you know, we'll have a good start in 2026 to our target of really four years out getting to a billion dollars of ARR. We feel like, you know, we're four years away. When we first made that commitment, we were five years. Now we got a year in the books at roughly 26% growth. We feel good about now continuing that trek to a billion dollars.

Richard Bowen, Wells Fargo software team, Wells Fargo: That's great. It's a great pivot point. I wanna ask you about next year's guidance. If we think about that 1 billion target.

Jim Caci, CFO, AvePoint: Yeah.

Richard Bowen, Wells Fargo software team, Wells Fargo: You know, kinda implies sustaining that mid-20s growth rate through.

Jim Caci, CFO, AvePoint: Yeah.

Richard Bowen, Wells Fargo software team, Wells Fargo: Through 2029. How do we think about, like, all the growth levers you have to pull there? Is there a way to kinda distill or break it up into chunks?

Jim Caci, CFO, AvePoint: You know, there is. And I am glad you brought that up because somebody asked me this question. We made the commitment back in March of 2025 where we said we are gonna get to a billion. I remember a couple of our analysts, one from Citi, one from Goldman, were essentially saying, like, why would you make a commitment going out, you know, at that point, five years? Like, you are crazy. One of the things we said back then is it is interesting. Our business is, you know, broken up into many different pieces. We were just talking about public sector, right? That is a component of our business. There is North America, which is a component of our business. Today represents about 45% of our total business. There is our AMEA business, which represents about 30-35% of the business. And then there is APAC.

We have these, like, diversity and what we refer to as balance across our business, whether it's geography, whether it's customer base from enterprise, mid-market to SMB, whether it's industries. We don't really have any concentration in any one industry that, you know, we get necessarily overly hurt by. Like, if we were 90% federal business, right, we would have been really hurt this past quarter. We don't have that kind of concentration. We have no one customer who represents more than 2% of our total ARR. We have this great balance and diversity. I do think that's one of the strengths of AvePoint over the past 20 years. I think it'll be a strength for sure over the next four years. When you think about what are the drivers, I don't think it's any one driver. I think it's many drivers.

If I look at our, if you look at our customer segments, what's our fastest growing segment? It's the SMB, which only is at 19% of our business today. But we think that's the fastest growing today, driven really by the MSP community, which you guys know, those managed service providers. That segment of the industry has really exploded. A lot of PE money being poured into that. A lot of growth in that area. They're using our technology to really grow. So that's been a real catalyst. We would expect that to be an accelerant going forward. When we look at geographies, you know, our APAC is our fastest growing region, yet it's our smallest in terms of current capacity. Japan is accelerating. Very hard for American companies to penetrate Japan. We've been there now for over 10 years.

We're now a local, which is a different status. Our growth rate there is well above our overall company growth rate. We expect that to continue. And then places like Australia and South Korea and even Singapore, we've had significant growth in those areas as well. You know, when we look at those kind of as we slice the business into these different components, each of them have opportunities for growth, and we're seeing acceleration. That kind of gives us the confidence and was really the catalyst for us talking back in March about, hey, we feel good about getting to this billion because when you look at all the different pieces, we see growth in those areas that we can accelerate and expand. Again, that gave us the confidence.

Richard Bowen, Wells Fargo software team, Wells Fargo: That's great. And so I wanna touch on, I guess, the SMB component, but it's part of a broader conversation. Mario, I think earlier you touched on how, you know, you started off in highly regulated industries with large enterprises. And so now you have SMB, 19% of the business, right? So it's expanded. And as we think about that kind of, I guess, initial foundation, right, within, you know, largely Microsoft environments at that time. And so when we think about the Microsoft opportunity, where are we? Like, what inning are we in in terms of penetrating that Microsoft opportunity and kinda what's unlocked some of the broadening beyond kind of the highly regulated industries?

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: There are several things at play here. One is in the Microsoft ecosystem, you have all these partners that for many years were doing great with license, resell, et cetera. You know, there's a shift in that entire ecosystem moving to understand that managing IT is where the margin expansion is. We've seen a number of partners just transition and say, we need to build a MSP practice in our business. We need to take over IT operations. We need to think about how do we create a service on a monthly recurrent basis that offers the end customer, you know, a full confidence that we can take over IT. As that shift occurred, it just so happened that we've been always working with partners.

We saw an opportunity to take our platform and create basically a version of the platform for the managed service provider that would be, you know, taking over the IT operations. We did this in a number of ways. We have the architecture that allows you to partition the different tenants and gives you all the role-based access controls. The Elements edition of the Confidence Platform is that very product that gives an MSP the operational counsel to then say, I'm gonna manage your entire, you know, applications from M365 to managing recoverability of your data to your end users to your devices. Little by little, that product line for us has given us the opportunity to differentiate in that segment.

As Jim mentioned, the reason that's growing really nicely for us is because a lot of these partners say to us, wait a second, I could now sign up to get access to AvePoint's Elements, which is the edition of the platform for MSPs. For every dollar I'm spending, I could make up to five-six dollars, you know, margin expansion. That's great. It gives the MSP the opportunity to now start creating a services recurring revenue stream for them. That's working quite well for us. You know, we believe that even technologies like AgentPulse, which will also be shipped in the Elements edition version, are also gonna be critical for these organizations. The other thing that we saw in this space was a consolidation of IT spend around personnel.

A lot of mid-size organizations realize I'd rather outsource my IT services than start to hire, you know, our own sort of staff. That I think also plays very nicely into this trend. If you look at reports that are being published by Canalys, which is like your equivalent of a Gartner for a channel, their projection for the MSP sort of TAM is pretty incredible. We feel really good about that. We also know that the ability to automate, and further extend that reach through this type of platform will give us an opportunity to play more strategically with the larger MSPs. We also see a lot of LSPs, right, licensed resellers that realize, wait, we also need to build, you know, a strong managed service practice.

I think that's why we holistically look at it as a lever for growth. And also, it's a more cost-effective way for us to go to market.

Richard Bowen, Wells Fargo software team, Wells Fargo: That's great. That's great. Another, I guess, element of the expansion of the platform, you guys talked a lot about multi-cloud, right?

Jim Caci, CFO, AvePoint: Yeah.

Richard Bowen, Wells Fargo software team, Wells Fargo: Started in the Microsoft environment, have now moved to Google, Salesforce, I think Monday.com. There are a couple others in there.

Jim Caci, CFO, AvePoint: Yeah.

Richard Bowen, Wells Fargo software team, Wells Fargo: You know, what I guess, how has that conversation evolved with customers? Like, you know, when you go into accounts now and you're saying, hey, we can actually do that in a lot more places now, how has that kind of evolved for you? And what stage are we at in terms of penetrating kind of the current installed base with that?

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: Yeah, it's a great question. The logic here is that when you work with an organization and they say to you, I have a number of service providers that I use for my application stack, maybe I'm using Monday.com, maybe I use DocuSign, I use M365, for example, their challenge will be if I don't have one central mechanism to apply a policy to how my data should be, you know, monitored and used, then it's a friction point for us. We decided that we have the platform capability to build this sort of connectivity to different APIs. You know, years ago, we started with Salesforce. We brought to market a capability prior to Salesforce having the ability to recover data. Many customers were saying, well, can you guys do that also for Google Drive, right?

A lot of organizations, even if they were using Microsoft services, would still store data on Google Drive. We moved into the Google space. We saw a bigger opportunity with Workspace. We realized that a lot of what we do for M365, we could just carry it over. It's the same recipe. We launched that product line. We also realized that it's not just those hyperscaler systems. It's also organizations that have been very successful, like Monday.com, for example. The work for us is to go into an organization and say, use our system as a central pane of glass, single pane of glass that allows you to apply one guardrail for how data is gonna be, you know, shared. We can also help you identify where data could be redundant, obsolete. We can help you curate.

We can help you kind of apply that new data management playbook, at scale. Because we also can monitor for any kind of anomalies on data or corruption or ransomware attacks, we could also, you know, offer cybersecurity professionals the opportunity to remediate right from the platform. We are gonna continue to connect to different, third-party providers. You know, that puts us in a place where we could also, you know, help organizations that are thinking more holistic about companies that they acquire or different areas of the business that may be using different applications be all part of one single strategy.

Richard Bowen, Wells Fargo software team, Wells Fargo: That's great. I guess the other side of the cross-sell coin is, expanding kind of how many products they take from you guys. You guys have kind of, I think it's like three core suites. When we think about the attach rates of those three core suites on your customers, are there certain ones that are earlier stages? Like, walk us through kinda as the platform has built out more capabilities around data, just kinda how you're solving more problems for customers and how that journey goes.

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: Yeah. I'll start and Jim could add. The suites is a, think of it, it's a packaging strategy that really is thematic. It's helping organizations realize if I need to think about continuity of information, the resilience of my data set, what are the controls I need to have. That's the Resilience Suite. On the control side, we're implementing all of the capabilities to cover from policy activation to remediation of entitlements, and so on. Those two are meant to work side by side. They're really helping organizations that realize, well, I don't need to use four vendors. I could just, you know, vendor consolidation with AvePoint. For our sales teams, they give you a nice pathway to, you know, cross-sell and upsell.

I think what we'll see over time is as we keep introducing more capabilities, these themes may expand. For us, you know, the transition to create a, you know, unified experience in the platform also is part of that strategy to keep cross-selling and expanding our current footprint. For new organizations, it gives you an opportunity to start in any one place with us and over time, you know, build and add more capabilities. We also have the modernization, which is the third area, which has been about, you know, first, you know, anything that you wanna do to move data inside the platform. There's a 30-plus connector framework that's in that section of the platform. This allows me to move data in and out. It also allows organizations that oftentimes wanna kill a subscription here and move data to the other side.

We have also introduced a concept of delegated administration, which is really a shared accountability model that says business users can also be empowered with tools so they know when they're sharing information, who they're sharing without having to contact central IT. That is the idea of modernizing the experience. We'll probably also introduce more capability there. There could be an uptick in the modernization category for us. In general, I think the idea for us is to keep it simple, help organizations realize that they can achieve great value within any one of the suites, but also cross-pollinate from different suites.

Richard Bowen, Wells Fargo software team, Wells Fargo: Yeah.

Jim Caci, CFO, AvePoint: Yeah. I mean, the only thing I would have just re-emphasized, and Mario touched on it, is, you know, the beauty of the platform is there's really not just one tip of spear in terms of how we penetrate a customer. It might be depending on their needs and where they are. We have really products within each of those suites that could be the first product that a customer consumes. And then they may then need other products. It is actually demonstrated, and we see it every quarter where, you know, it's across the board, people, you know, enter our kind of ecosystem or our sphere from various different points. That's been a real, I think, a strength in terms of it's not just one path to entry.

Richard Bowen, Wells Fargo software team, Wells Fargo: You don't have a favorite child.

Jim Caci, CFO, AvePoint: Exactly. No, no favorite children.

Richard Bowen, Wells Fargo software team, Wells Fargo: I guess when we think about the context of all these different paths to cross-sell into, I'm curious, you mentioned the modernization. What you said there was interesting is that maybe you could see uptake there. I think right now everyone's trying to get their data estates in order. It's a whole, you know, topic of conversation right now. Is that something that you're seeing? Are more people coming to the platform through that lane than maybe historically? Or just tell me what's going on in that modernization piece.

Jim Caci, CFO, AvePoint: Yeah, it's a great point. What we have seen last two quarters is, we have seen a pickup in our migration ARR. It's still modernization in general. We see faster growth in terms of the suites themselves in control and resilience. They're growing faster. What we have seen in the past couple quarters is an uptick in what is the growth rate for modernization. Still slower than the other two, but an uptick. That's really driven from the catalyst of what you're talking about. It's not necessarily new customers coming through that door, but even existing customers now re-engaging and using some of our, whether it's migration products, to actually do what you're talking about, that some of that data consolidation. We are seeing more and more of that.

Because it's funny you say that too, because years ago people said, oh, well, once people are in the cloud, there'll be no need to migrate. It's like, well, that's not exactly true. We've seen it now for the past, you know, years that there's always migrations happening, whether it's on-prem to the cloud, cloud to cloud, tenant to tenant, acquisitions. Again, even what we're talking about now, just consolidating. Like, I may have multiple data lakes out there that I'm trying to consolidate to make it much more efficient. I'm gonna need to migrate some of that data from one place to another. We have seen an acceleration there, not dramatic, but uptick of it was almost on the decline, I'd say two years ago. Now it's, quote-unquote, re-accelerating, albeit small, but there is an acceleration there.

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: Yeah. These storylines are really connected. To Jim's point, you might see a company that says, I need to sunset a system and I wanna move the data over. Yeah, that triggers an opportunity for us to help them there. Immediately after, we might be talking to you about how do you maintain resilience on that data set.

Jim Caci, CFO, AvePoint: Yeah.

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: What kind of policies do you want on? Over time, I think the goal for us is to rebalance everything. We want the platform really to be, you know, a place for you to, you know, build out from as a client and also as a partner. Yeah, I guess over time the narratives will shape. The idea is we do not, you know, today you could have organizations, I mean, we have many organizations that'll say, we wanna do a project with you all and we wanna think about what's the best, you know, guardrails to put in place to govern this, you know, agent technology I'm using. You have others that are still moving from a legacy system.

Their concern is, I don't wanna lose any of my metadata value, any historical context on my data to help me carry that over so I can be ready for my next project.

Richard Bowen, Wells Fargo software team, Wells Fargo: Great. Another theme I guess I wanna address is, you know, there's this whole idea of consolidation going on in the market. You know, we've seen a ton of acquisitions in the space. There's Rubrik, Laminar, there's Cohesity and Veritas. Like, I guess where do you guys stand on the idea of consolidation in terms of what's called the data landscape? How can you help investors kinda parse through all these different categories within the data space where you guys sit, where you might see some others?

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: We're looking at it. It's a great question. And there is a convergence occurring. If you, you know, just research the different subcategories that have, you know, been born from either new startups coming in, what you are seeing now is a shift because the cyber threat landscape has increased. Ultimately, whether you're doing identity management or you're thinking about data security posture management, it's really all about a data protection story and narrative. Even Gartner's making some shifts to consolidate those subcategories. I think for investors, they probably will see a number of companies that were categorized in these subcategories either be acquired or, you know, they themselves try to add more capability to cross over into another category. We are watching this space very closely.

As we said all along, we have a sort of a strategy where we think about organically how can we grow, but also inorganically where are the right opportunities for us to put in, you know, tuck-in acquisitions and bolt-on. That is why we study the subcategories very closely. I would say that, you know, players that started perhaps in identity governance or identity management are gonna have to think about what should we do for data sets and maybe we should govern data as well. Those that started in pure cybersecurity, where we're trying to protect the endpoints, how do we start thinking about, you know, the core applications and systems that are being used and how do we support and provide capabilities there?

I think that the acquisition that you said of Laminar by Rubrik is really to think about if we're gonna offer security posture management, we need to think about security. And that security was something that I think that company was starting to do. Yeah, it's a space that's converging. I think that it speaks to one fact for investors, which is that the TAM is quite massive. We also are excited about that. If you follow our story and our lineage, we have the enterprise-grade capabilities. We have that experience curve to also build a scalable, you know, infrastructure, cloud-based infrastructure of apps. We've done so. I think what you also see is a difference that, you know, companies like AvePoint are truly built on modern cloud infrastructure where other companies are just still making that transition to be cloud-native.

Richard Bowen, Wells Fargo software team, Wells Fargo: Great. Great. I guess, you know, we talked a little bit earlier about the AI stuff.

Jim Caci, CFO, AvePoint: Yeah.

Richard Bowen, Wells Fargo software team, Wells Fargo: I think when we think about kinda how you mentioned the evolution towards cloud, as we now evolve towards AI, what are some of the things that are different about being able to manage data and secure data in an AI-first world? Like, what are some of the things that you guys have to just think about in terms of the platform? Are there certain things you guys have to change about the platform or how do we think about that whole element of things?

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: I mean, it's a good question. The one thing that changes is there are more low-code and no-code type platforms that really are empowering professionals that may not have development background to be part of the design of a workflow, right? We started realizing, well, we need to offer the capabilities to govern the release cycle of these applications into production environments. That's work that we started doing with Power Platform simply because Power Platform was heavily used. I mean, we have organizations that'll have like 50,000, you know, apps that are in the environment, and they're not going through a traditional software development lifecycle release. That's one side of the equation.

The other side is when you blend that in with the desire to build an agent and the power of what an agent can do is you can wire up an agent and say, you know, talk to this large language model, talk to this private data repository, and then here's a workflow and take some action. If you create that agent, then tracking what the agent is doing over time or when there's issues is gonna be a challenge. The question for us back to what you're asking is, how do we put the right monitoring capability in the hands of the folks that are gonna have to either roll back when an agent goes rogue or, you know, inadvertently makes the wrong change or interacts inappropriately?

What effect can that have on the business or the outcomes of the business? It is changing the way we think about the user experience, the kind of product we build and ship. I think ultimately we're seeing a change in the persona. You don't need to have, you know, system integrators now monitoring your application. We're seeing more and more sort of business analysts that understand the business implications and what they want the system to do. They might not necessarily know all the wirings. What's the right application for me to use that can, you know, guide me through that process?

Richard Bowen, Wells Fargo software team, Wells Fargo: Great. Now, Jim, we've talked about all these growth drivers. How do you kinda think about the balance of growth and profitability and the margin side? I, you know, we've spent a lot of time on the growth piece, but I'm curious just kinda how do you think about balancing those things and, you know, putting money in the right places? I'd love to step through that.

Jim Caci, CFO, AvePoint: Yeah. I mean, that's a it's a great question because, you know, it is, you know, ultimately, you know, the toughest decisions, right? How much are you trying to fuel growth versus profitability? And so we've taken an approach over the past couple years of this profitable growth strategy where, you know, if you look back to when we went public and even back in 2022, we were effectively break-even, growing nicely but break-even. And so we committed that, you know, we wanted to demonstrate a, a pathway to profitability, right, and demonstrate that, hey, you know, we are going to be a profitable company. We're gonna be a Rule of 40 company. And so we are now a Rule of 40 company, growing at that 26%. And this year will be effectively 18-19% operating margin. Really solid performance. But you're right.

The question is, do you continue to generate profitability at those levels and even higher, which our long-term targets are to get to like 27%? How quickly do you do that? Can you pause the profitability to accelerate growth even faster? Like, what investments can you be making? We are constantly balancing those two and trying to achieve kind of a, you know, a balance of we wanna be growing at this 25% compounded growth rate, making sure we're making the investments that we need to for today, tomorrow, and for the longer term, but also balance that with, hey, we have a responsibility to be, we believe, to be profitable and demonstrate that. We constantly are balancing the two as we go through the budgeting cycles.

We've shifted more toward even like a quarterly really cycle of managing these expectations, and analyzing that growth and that constant balance between growth and profitability. We feel good with where we're at in terms of the investments we're making. We believe we're making the commitments both to R&D, making the commitments to sales and marketing to support the organization growing not only for this quarter but really for the longer term, which let's just use 2029 as that target that, you know, will help us achieve those goals. Again, we feel like we're in a good spot where we're balancing both, and making the right investments.

Richard Bowen, Wells Fargo software team, Wells Fargo: Wonderful. I think that's probably a good place to wrap it up. Jim, Mario, thank you for your time today and appreciate it.

Mario Carvajal, Chief Strategy and Chief Marketing Officer, AvePoint: Thank you. Thank you, Richard. Thanks, Joel. Appreciate it. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.