UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered |
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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.
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).
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 |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
Table of Contents
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PART I. |
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Item 1. |
1 |
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Condensed Consolidated Balance Sheets as of December 31, 2022 and June 30, 2022 |
1 |
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2 |
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3 |
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4 |
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2022 and 2021 |
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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. |
35 |
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Item 4. |
36 |
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PART II. |
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37 |
Item 1. |
37 |
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Item 1A. |
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Item 2. |
38 |
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Item 3. |
38 |
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Item 4. |
38 |
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Item 5. |
38 |
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Item 6. |
39 |
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40 |
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:
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our ability to continue our growth at or near historical rates; |
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our future financial performance and ability to be profitable; |
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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; |
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our ability to prevent and respond to data breaches, unauthorized access to client data or other disruptions of our solutions; |
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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; |
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the length and variability of our sales cycle; |
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our ability to attract and retain customers; |
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our ability to attract and retain talent; |
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our ability to compete in highly competitive markets; |
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our ability to manage additional complexity, burdens, and volatility in connection with our international sales and operations; |
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our ability to incur indebtedness in the future and the effect of conditions in credit markets; |
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the sufficiency of our cash and cash equivalents to meet our liquidity needs; and |
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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
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
INTAPP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
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December 31, 2022 |
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June 30, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Unbilled receivables, net |
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Other receivables, net |
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Prepaid expenses |
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Deferred commissions, current |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Deferred commissions, noncurrent |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued compensation |
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Accrued expenses |
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Deferred revenue, net |
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Other current liabilities |
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Total current liabilities |
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Deferred tax liabilities |
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Deferred revenue, noncurrent |
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Operating lease liabilities, noncurrent |
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Other liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
1
INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
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Three Months Ended December 31, |
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Six Months Ended December 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenues |
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SaaS and support |
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$ |
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$ |
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$ |
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$ |
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Subscription license |
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Total recurring revenues |
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Professional services |
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Total revenues |
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Cost of revenues |
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SaaS and support |
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Total cost of recurring revenues |
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Professional services |
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Total cost of revenues |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Lease modification and impairment |
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Total operating expenses |
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Operating loss |
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Loss on debt extinguishment |
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Interest expense |
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( |
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( |
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( |
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Other income (expense), net |
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( |
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Net loss before income taxes |
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( |
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Income tax benefit (expense) |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Net loss per share, basic and diluted |
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$ |
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$ |
( |
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$ |
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$ |
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Weighted-average shares used to compute net loss per share, basic and diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
2
INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
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Three Months Ended December 31, |
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Six Months Ended December 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation adjustments |
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Other comprehensive income (loss) |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
3
INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
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Three Months Ended December 31, 2022 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Balance as of September 30, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Vesting of performance stock units and restricted stock units, net of shares withheld for taxes |
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— |
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— |
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Issuance of common stock under employee stock purchase plan |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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Balance as of December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Three Months Ended December 31, 2021 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Balance as of September 30, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance as of December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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4
INTAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
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Six Months Ended December 31, 2022 |
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Common stock |
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Additional |
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Accumulated |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Balance as of June 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Vesting of performance stock units and restricted stock units, net of shares withheld for taxes |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock under employee stock purchase plan |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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( |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance as of December 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
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$ |
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Six Months Ended December 31, 2021 |
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