10-Q 1 inta-20221231.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40550

 

Intapp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

46-1467620

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

3101 Park Blvd

Palo Alto, California

94306

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 852-0400

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

INTA

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of January 31, 2023, the registrant had 63,751,804 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets as of December 31, 2022 and June 30, 2022

1

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2022 and 2021

2

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended December 31, 2022 and 2021

3

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended December 31, 2022 and 2021

4

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2022 and 2021

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

36

 

PART II.

 

OTHER INFORMATION

37

Item 1.

Legal Proceedings

37

Item 1A.

Risk Factors

37

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

Item 3.

Defaults Upon Senior Securities

38

Item 4.

Mine Safety Disclosures

38

Item 5.

Other Information

38

Item 6.

Exhibits

39

 

Signatures

40

 

 

 

 


Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and the information incorporated herein by reference, particularly in the sections captioned “Risk Factors” under Part II, Item 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part I, Item 2, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements about:

 

 

our ability to continue our growth at or near historical rates;

 

 

our future financial performance and ability to be profitable;

 

 

the effect of global events, such as outbreaks, epidemics, or pandemics involving public health, including the COVID-19 pandemic, and Russia’s invasion of Ukraine, on the U.S. and global economies, our business, our employees, results of operations, financial condition, demand for our products, sales and implementation cycles, and the health of our clients’ and partners’ businesses;

 

 

our ability to prevent and respond to data breaches, unauthorized access to client data or other disruptions of our solutions;

 

 

our ability to effectively manage U.S. and global market and economic conditions, including inflationary pressures and economic and market downturns, particularly adverse to our targeted industries;

 

 

the length and variability of our sales cycle;

 

 

our ability to attract and retain customers;

 

 

our ability to attract and retain talent;

 

 

our ability to compete in highly competitive markets;

 

 

our ability to manage additional complexity, burdens, and volatility in connection with our international sales and operations;

 

 

our ability to incur indebtedness in the future and the effect of conditions in credit markets;

 

 

the sufficiency of our cash and cash equivalents to meet our liquidity needs; and

 

 

our ability to maintain, protect, and enhance our intellectual property rights.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

i


Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

INTAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

 

 

 

December 31, 2022

 

 

June 30, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

51,563

 

 

$

50,783

 

Restricted cash

 

 

1,007

 

 

 

3,528

 

Accounts receivable, net of allowance for doubtful accounts of $1,404 and $918 as of December 31, 2022 and June 30, 2022, respectively

 

 

68,193

 

 

 

66,947

 

Unbilled receivables, net

 

 

9,153

 

 

 

6,763

 

Other receivables, net

 

 

935

 

 

 

3,199

 

Prepaid expenses

 

 

7,489

 

 

 

5,984

 

Deferred commissions, current

 

 

10,897

 

 

 

10,187

 

Total current assets

 

 

149,237

 

 

 

147,391

 

Property and equipment, net

 

 

14,834

 

 

 

12,283

 

Operating lease right-of-use assets

 

 

16,890

 

 

 

 

Goodwill

 

 

269,865

 

 

 

269,103

 

Intangible assets, net

 

 

42,843

 

 

 

48,430

 

Deferred commissions, noncurrent

 

 

15,601

 

 

 

14,755

 

Other assets

 

 

1,853

 

 

 

2,451

 

Total assets

 

$

511,123

 

 

$

494,413

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

6,090

 

 

$

4,220

 

Accrued compensation

 

 

31,342

 

 

 

40,004

 

Accrued expenses

 

 

7,915

 

 

 

8,774

 

Deferred revenue, net

 

 

162,953

 

 

 

142,768

 

Other current liabilities

 

 

26,712

 

 

 

27,753

 

Total current liabilities

 

 

235,012

 

 

 

223,519

 

Deferred tax liabilities

 

 

1,795

 

 

 

2,099

 

Deferred revenue, noncurrent

 

 

1,300

 

 

 

2,712

 

Operating lease liabilities, noncurrent

 

 

16,567

 

 

 

 

Other liabilities

 

 

3,593

 

 

 

10,201

 

Total liabilities

 

 

258,267

 

 

 

238,531

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value per share, 50,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock, $0.001 par value per share, 700,000 shares authorized; 63,651 and 62,739 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively

 

 

64

 

 

 

63

 

Additional paid-in capital

 

 

680,035

 

 

 

643,227

 

Accumulated other comprehensive loss

 

 

(1,699

)

 

 

(1,672

)

Accumulated deficit

 

 

(425,544

)

 

 

(385,736

)

Total stockholders’ equity

 

 

252,856

 

 

 

255,882

 

Total liabilities and stockholders’ equity

 

$

511,123

 

 

$

494,413

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

1


Table of Contents

INTAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended December 31,

 

 

Six Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

SaaS and support

 

$

61,605

 

 

$

46,970

 

 

$

118,418

 

 

$

90,459

 

Subscription license

 

 

10,979

 

 

 

9,323

 

 

 

23,227

 

 

 

19,907

 

Total recurring revenues

 

 

72,584

 

 

 

56,293

 

 

 

141,645

 

 

 

110,366

 

Professional services

 

 

12,108

 

 

 

8,404

 

 

 

22,585

 

 

 

16,521

 

Total revenues

 

 

84,692

 

 

 

64,697

 

 

 

164,230

 

 

 

126,887

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

SaaS and support

 

 

12,456

 

 

 

12,175

 

 

 

24,854

 

 

 

23,517

 

Total cost of recurring revenues

 

 

12,456

 

 

 

12,175

 

 

 

24,854

 

 

 

23,517

 

Professional services

 

 

14,329

 

 

 

11,378

 

 

 

27,265

 

 

 

22,412

 

Total cost of revenues

 

 

26,785

 

 

 

23,553

 

 

 

52,119

 

 

 

45,929

 

Gross profit

 

 

57,907

 

 

 

41,144

 

 

 

112,111

 

 

 

80,958

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

23,392

 

 

 

17,386

 

 

 

43,071

 

 

 

34,356

 

Sales and marketing

 

 

33,538

 

 

 

26,840

 

 

 

64,850

 

 

 

52,485

 

General and administrative

 

 

20,753

 

 

 

21,217

 

 

 

41,163

 

 

 

42,047

 

Lease modification and impairment

 

 

(348

)

 

 

 

 

 

1,601

 

 

 

 

Total operating expenses

 

 

77,335

 

 

 

65,443

 

 

 

150,685

 

 

 

128,888

 

Operating loss

 

 

(19,428

)

 

 

(24,299

)

 

 

(38,574

)

 

 

(47,930

)

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

(2,407

)

Interest expense

 

 

(39

)

 

 

(38

)

 

 

(78

)

 

 

(197

)

Other income (expense), net

 

 

179

 

 

 

(419

)

 

 

(505

)

 

 

460

 

Net loss before income taxes

 

 

(19,288

)

 

 

(24,756

)

 

 

(39,157

)

 

 

(50,074

)

Income tax benefit (expense)

 

 

(466

)

 

 

531

 

 

 

(651

)

 

 

719

 

Net loss

 

$

(19,754

)

 

$

(24,225

)

 

$

(39,808

)

 

$

(49,355

)

Net loss per share, basic and diluted

 

$

(0.31

)

 

$

(0.40

)

 

$

(0.63

)

 

$

(0.82

)

Weighted-average shares used to compute net loss per share, basic and diluted

 

 

63,287

 

 

 

60,889

 

 

 

63,076

 

 

 

60,487

 

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

2


Table of Contents

INTAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

 

 

Three Months Ended December 31,

 

 

Six Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(19,754

)

 

$

(24,225

)

 

$

(39,808

)

 

$

(49,355

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

651

 

 

 

43

 

 

 

(27

)

 

 

(237

)

Other comprehensive income (loss)

 

 

651

 

 

 

43

 

 

 

(27

)

 

 

(237

)

Comprehensive loss

 

$

(19,103

)

 

$

(24,182

)

 

$

(39,835

)

 

$

(49,592

)

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

3


Table of Contents

INTAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended December 31, 2022

 

 

 

 

Common Stock

 

Additional
Paid-in

 

Accumulated
Other
Comprehensive

 

Accumulated

 

Total Stockholders'

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Loss

 

Deficit

 

Equity

 

Balance as of September 30, 2022

 

 

62,985

 

$

63

 

$

658,523

 

$

(2,350

)

$

(405,790

)

$

250,446

 

Issuance of common stock upon exercise of stock options

 

 

312

 

 

1

 

 

3,450

 

 

 

 

 

 

3,451

 

Vesting of performance stock units and restricted stock units, net of shares withheld for taxes

 

 

288

 

 

 

 

(3,447

)

 

 

 

 

 

(3,447

)

Issuance of common stock under employee stock purchase plan

 

 

66

 

 

 

 

1,241

 

 

 

 

 

 

1,241

 

Stock-based compensation

 

 

 

 

 

 

20,268

 

 

 

 

 

 

20,268

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

651

 

 

 

 

651

 

Net loss

 

 

 

 

 

 

 

 

 

 

(19,754

)

 

(19,754

)

Balance as of December 31, 2022

 

 

63,651

 

$

64

 

$

680,035

 

$

(1,699

)

$

(425,544

)

$

252,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2021

 

 

 

 

Common Stock

 

Additional
Paid-in

 

Accumulated
Other
Comprehensive

 

Accumulated

 

Total Stockholders'

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Loss

 

Deficit

 

Equity

 

Balance as of September 30, 2021

 

 

60,927

 

$

61

 

$

577,339

 

$

(774

)

$

(311,188

)

$

265,438

 

Issuance of common stock upon exercise of stock options

 

 

222

 

 

 

 

1,622

 

 

 

 

 

 

1,622

 

Stock-based compensation

 

 

 

 

 

 

20,440

 

 

 

 

 

 

20,440

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

43

 

 

 

 

43

 

Net loss

 

 

 

 

 

 

 

 

 

 

(24,225

)

 

(24,225

)

Balance as of December 31, 2021

 

 

61,149

 

$

61

 

$

599,401

 

$

(731

)

$

(335,413

)

$

263,318

 

 

 

4


Table of Contents

INTAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

 

 

 

 

 

 

Six Months Ended December 31, 2022

 

 

 

 

 

Common stock

 

Additional
Paid-in

 

Accumulated
Other
Comprehensive

 

Accumulated

 

Total Stockholders'

 

 

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Loss

 

Deficit

 

Equity

 

Balance as of June 30, 2022

 

 

 

 

 

 

62,739

 

$

63

 

$

643,227

 

$

(1,672

)

$

(385,736

)

$

255,882

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

423

 

 

1

 

 

4,479

 

 

 

 

 

 

4,480

 

Vesting of performance stock units and restricted stock units, net of shares withheld for taxes

 

 

 

 

 

 

423

 

 

 

 

(4,948

)

 

 

 

 

 

(4,948

)

Issuance of common stock under employee stock purchase plan

 

 

 

 

 

 

66

 

 

 

 

1,241

 

 

 

 

 

 

1,241

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

36,036

 

 

 

 

 

 

36,036

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

(27

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39,808

)

 

(39,808

)

Balance as of December 31, 2022

 

 

 

 

 

 

63,651

 

$

64

 

$

680,035

 

$

(1,699

)

$

(425,544

)

$

252,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended December 31, 2021