Intapp's SaaS Momentum Masks Persistent GAAP Struggles as Shares Retreat

Intapp, Inc. (INTA) delivered a robust fiscal third quarter performance, with non-GAAP earnings and SaaS revenue surging against year-ago figures. Yet shares dipped in after-hours trading, reflecting lingering investor skepticism about the company’s path to GAAP profitability and sector-wide challenges in professional services. Despite strong cloud adoption metrics and strategic moves like its TermSheet acquisition, the stock’s post-earnings retreat underscores a broader market demand for sustainable profit growth.

Earnings Highlights: SaaS Strength, GAAP Gaps

Intapp reported $129.1 million in total revenue, up 17% year-over-year, driven by a 28% jump in SaaS revenue to $84.9 million. Cloud annual recurring revenue (ARR) rose 28% to $351.8 million, accounting for 77% of total ARR of $454.7 million. The company’s trailing twelve-month cloud net revenue retention rate of 119% signaled solid client retention and upselling success.

Non-GAAP metrics shone: operating income jumped to $20.3 million (up from $11.2 million), while non-GAAP net income rose to $21.7 million, yielding a diluted EPS of $0.26—18% above estimates. However, GAAP net loss widened to $3.0 million, or $0.04 per share, due to stock-based compensation and amortization. This contrast between non-GAAP optimism and GAAP struggles has long plagued Intapp’s valuation, leaving investors divided on its path to comprehensive profitability.

Stock Retreat: Mixed Signals in a Sector Turn

Despite beating revenue and EPS expectations, Intapp’s shares fell 2.1% after hours, erasing earlier intraday gains. The reaction likely stemmed from several factors:
- Professional Services Decline: Revenue in this segment dropped 6.2% YoY to $12.5 million, contrasting with the SaaS boom. This suggests potential execution challenges in non-cloud offerings.
- Zacks Hold Rating: Analysts assigned a #3 (Hold) rating, citing mixed earnings estimate revisions and a 10% year-to-date stock decline versus the S&P 500’s -3.9%.
- Sector Competition: Peers like UiPath (PATH) face downward earnings revisions, highlighting broader concerns about SaaS growth sustainability.

Market Context: SaaS Momentum, Real Assets Opportunities

The SaaS sector is undergoing a renaissance, with 2025 global revenue projected to hit $300 billion, fueled by 19.4% annual growth (Gartner). Strategic M&A activity is surging, with 44% of deals in late 2024 led by public buyers—a trend Intapp might leverage. Its acquisition of TermSheet to bolster real assets software capabilities aligns with rising demand for AI-driven tools in sectors like private equity and infrastructure.

However, Intapp’s challenges are not unique. The SaaS sector faces $21 million in annual wasted SaaS license costs due to underutilization, a problem Intapp’s cloud platforms could address. Yet its GAAP losses and uneven segment performance remind investors that growth alone isn’t enough; profitability must follow.

Conclusion: A Cloudy Crystal Ball

Intapp’s Q3 results highlight a company capitalizing on SaaS trends—its Cloud ARR and retention metrics are undeniably strong. Yet the stock’s retreat underscores unresolved concerns: GAAP losses persist, professional services are lagging, and the broader SaaS market faces valuation skepticism.

With $323 million in cash and a $0.85–$0.90 FY2025 non-GAAP EPS guidance, Intapp has runway to convert momentum into GAAP earnings. If it can stabilize non-SaaS segments and demonstrate broader operational efficiency, shares could rebound. However, until GAAP profitability materializes, the stock will remain a speculative bet on SaaS’s future rather than a proven growth story.

Investors should monitor Q4 2025 results, particularly professional services recovery and GAAP net loss contraction. Until then, Intapp’s narrative remains split between cloud optimism and profit pragmatism.