Intapp's Q1 2026: Contradictions Emerge in AI Integration, Microsoft Partnership Impact, and Macro Trends

Date of Call: None provided

Financials Results

• Revenue: $139.0M, up 17% YOY (SaaS ~$97.5–98M, up 27% YOY)
• EPS: Non-GAAP diluted EPS $0.24, compared to $0.21 in the prior year
• Gross Margin: Non-GAAP gross margin 77.7%, compared to 76.3% in the prior year
• Operating Margin: Approx. 15.0% (Non-GAAP operating income $20.9M vs $15.1M prior year; prior-year margin ~12.7%)

Guidance:

• Q2 FY26: SaaS revenue $100.0–101.0M; Total revenue $137.6–138.6M; Non-GAAP operating income $21.4–22.4M; Non-GAAP EPS $0.25–0.27 (diluted share count ~84M).
• FY26: SaaS revenue $412–416M; Total revenue $569.3–573.3M; Non-GAAP operating income $97.7–101.7M; Non-GAAP EPS $1.15–1.19 (diluted share count ~85M).

Business Commentary:

• Revenue and Cloud ARR Growth:
• Intapp reported cloud ARR growth to $401 million, up 30% year over year, with cloud now representing 80% of the total ARR of $504 million.

• The growth was driven by new client acquisitions, contract expansions, and ongoing migrations from on-premise products to the cloud.

• Strong Financial Performance:

• SaaS revenue was $98 million, up 27% year over year, and total revenue was $139 million, up 17% year over year.

• Intapp's growth was supported by upsell and cross-sell activities, expanding within existing clients, and migrating clients to the cloud.

• AI Integration and Product Capabilities:

• The company added new applied AI capabilities to its platform, with significant new releases of products like Intapp Time.

• The integration of AI has helped Intapp maintain compliance with complex regulations, enhancing the value proposition for clients.

• Microsoft Partnership and Cloud Migration:

• Microsoft played a notable role in Intapp's growth, with more than half of the top Q1 wins jointly executed.
• Microsoft's support through Azure investment dollars and its strong relationship with clients facilitated the acceleration of cloud deals.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly described the quarter as a "strong start" and "strong quarterly results," highlighted cloud ARR of $401M (up 30% YOY), SaaS revenue up 27% YOY, cloud NRR of 121%, and migration/AI momentum (new GenAI Time release, Microsoft partnership, $50M share repurchase), all indicating confidence and constructive execution.

Q&A:

• Question from Kevin McVeigh (UBS): The net revenue retention of 121% — what drove that, and have you seen behavioral changes from clients around GenAI (consumption/charging)?
  Response: NRR strength is driven primarily by upsell and true cross-sell as the enterprise model densifies accounts; churn remains low single-digit, and GenAI is increasing client interest and is being monetized via existing and experimental pricing models.

• Question from Alexei Gogolev (JPMorgan): How much of the ARR/NRR acceleration is industry consolidation or macro tailwinds versus internal enterprise-sales improvements?
  Response: Acceleration is multi‑factor: vertical consolidation (legal, accounting PE roll-ups), secular private‑equity growth, accelerated cloud adoption post‑COVID, and the enterprise sales motion all combine to drive ARR/NRR gains.

• Question from Alexei Gogolev (JPMorgan): Given the strong quarter, is the guidance conservative?
  Response: Yes — management intentionally provided prudent guidance to remain disciplined despite the quarter's beat.

• Question from Parker Lane (Steve Oh): For remaining on‑prem holdouts, what are the common reasons and can AI accelerate cloud migration?
  Response: Holdouts cite regulatory, governance, and confidentiality/IP concerns; Microsoft hosting solutions plus Intapp's compliance‑focused vertical AI are key accelerants to cloud migration.

• Question from Koji Ikeda (Bank of America): Which verticals are more open to AI today and what catalyzes adoption in the other?
  Response: Both professional and financial services are highly interested; adoption is catalyzed by integrated, compliant vertical AI that leverages proprietary firm data and governance to deliver workflow value.

• Question from Koji Ikeda (Bank of America): Billings have been volatile — will they smooth?
  Response: Yes — management expects billings volatility to smooth over 6–9 months as services/license timing normalizes and deferred revenue stabilizes.

• Question from Dominique Lancell on behalf of Terry Gilman (Truist): As mix shifts to enterprise, will seasonality (Q2/Q4 strength) intensify or flatten?
  Response: Seasonality tied to client fiscal year-ends is expected to persist; shifting to enterprise does not materially change the pattern.

• Question from Dominique Lancell on behalf of Terry Gilman (Truist): What are the top execution levers to reach $1B revenue?
  Response: Primary levers are deeper product attach/cross‑sell within existing clients, landing new clients across a large TAM, continued vertical AI innovation, and scaling talent.

• Question from Alex Clare (Raymond James): What is the international opportunity and incremental investment required?
  Response: International is ~30% of revenue with sizable runway across UK, Australia, Canada, Europe, and Asia; incremental investment has been nominal to date — execution is mainly pacing and local partner expansion.

• Question from Alex Clare (Raymond James): What are hiring plans for direct sales / enterprise team?
  Response: Management is scaling the enterprise sales organization through FY26 into FY27 to add capacity for large institutional accounts.

• Question from Steve Anders (Citi): How does the Microsoft partnership change deal dynamics?
  Response: Microsoft adds technology, co‑marketing, Azure Marketplace buying/credit mechanics and co‑selling that accelerate deal speed, size, and win rates by leveraging Azure commitments and field collaboration.

• Question from Steve Anders (Citi): Q1 operating margin beat — why isn't more flowing to the full‑year guide?
  Response: Strong Q1 results are being partially reinvested into product and go‑to‑market initiatives (marketing events, product investments), so the company is balancing margin gains with continued strategic investments.

• Question from Saket Kalia (Barclays): How much uplift do on‑prem to cloud conversions generate and how much did conversions contribute to cloud net new ARR?
  Response: On‑prem conversions typically deliver ~20–30% uplift via additional seats and cross‑sell; conversions were a modest part of this quarter but are expected to meaningfully accelerate cloud net new ARR during the year.

• Question from Camden Levy on behalf of Brian Schwartz (Oppenheimer): Within NRR and expansions, is growth coming more from product, seats, or pricing; any standout product performance in F1Q?
  Response: The biggest shift has been stronger cross‑sell as enterprise accounts densify; product momentum is broad with notable uptake in DealCloud, Intapp Assist, and the new Intapp Time GenAI release driving SaaS beats.

Contradiction Point 1

AI Integration and Product Adoption

It involves the company's stance on AI integration and product adoption, which is crucial for strategic growth and market positioning.

What were the drivers behind the 121% net revenue retention rate and have clients' behaviors changed due to GenAI? - Kevin McVeigh(UBS)

2026Q1: Regarding GenAI, Intapp is optimistic about its potential, integrating vertical AI capabilities that are positively received by clients. The company is exploring various monetization models and expects a positive impact from AI. - John Hall(CEO)

What area of AI adoption and utilization is most notable across verticals? - Parker Lane(Stifel)

2025Q4: We are seeing great client engagement with AI solutions that we have developed and added to our suite of products. These solutions are being integrated into workflows, enhancing growth and compliance. - John Hall(CEO)

Contradiction Point 2

Microsoft Partnership Impact on Deals

It involves the company's reporting of the impact of the Microsoft partnership on deal dynamics, which could influence investor perceptions of strategic partnerships.

How does the Microsoft partnership impact deal dynamics and margin expectations? - Steve Anders(Citi)

2026Q1: The Microsoft partnership enhances deal size and speed through Azure Marketplace access and co-selling incentives. It also supports Microsoft's IT strategy and client relationship. Co-selling efforts have improved win rates and funnel dynamics. - John Hall(CEO)

How is the Microsoft partnership affecting bookings, and what is its future potential? - Steve Lester Enders(Citi)

2025Q4: Microsoft's relationship is strong, with increased success in MACC agreements smoothing budget questions. Both Intapp and Microsoft sellers benefit from joint sales, with more success stories driving referrals. - David Morton(CFO)

Contradiction Point 3

AI Integration and Impact

It involves the company's strategy and expectations regarding AI integration and its impact on client operations, which are critical for understanding the company's growth trajectory in the AI space.

What drove the 121% net revenue retention rate and have there been behavioral changes due to GenAI’s impact on clients? - Kevin McVeigh(UBS)

2026Q1: The strong net revenue retention rate is driven by continued inroads in upsell and cross-sell, especially with the enterprise model. Churn remains low single-digit, and product adoption is well-received. Regarding GenAI, Intapp is optimistic about its potential, integrating vertical AI capabilities that are positively received by clients. - John Hall(CEO)

How will incremental AI-related spending impact your margin expansion targets over the next 2-3 years? - Matthew Kikkert(Stifel)

2025Q3: We are focused on applied AI, not building data centers or running large models. AI is applied to specific applications based on our industry expertise. The AI technologies we use enhance firm capabilities without significantly increasing expenses. - John Hall(CEO)

Contradiction Point 4

Macro Economy and Industry Trends

It involves the company's perspective on macroeconomic factors and industry trends, which are crucial for understanding the company's outlook and strategic positioning.

What factors are driving the ARR and NRR acceleration: industry-specific changes, macro tailwinds, or internal sales build-out? - Alexei Gogolev(JPMorgan)

2026Q1: Both ARR and NRR growth are attributed to industry trends like market consolidation and digital transformation. The legal sector sees firm consolidation, and the accounting industry faces private equity investments. Regulatory changes and private equity growth also play a role. - John Hall(CEO)

Can you discuss the acyclical nature indicators in recent client discussions and how much deal activity contributes to growth? - Alexei Gogolev(JPMorgan)

2025Q3: Our business is driven by the need for traditional sectors to move to the cloud. We've seen consistent demand through economic cycles. Indicators like pipeline and sales cycles remain stable. The digitalization of these sectors is unaffected by macroeconomic discussions on tariffs. - John Hall(CEO)