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What changed in Intapp, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Intapp, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+353 added−324 removedSource: 10-K (2023-09-07) vs 10-K (2022-09-09)

Top changes in Intapp, Inc.'s 2023 10-K

353 paragraphs added · 324 removed · 243 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

62 edited+14 added−9 removed49 unchanged
Biggest changeExamples include: • Automatically analyzing all past engagements by shared characteristics, to derive data-validated intelligence that can be used to improve pricing strategies and optimize staffing levels. • Enhancing conflicts review on matters with large number of parties, for example, bankruptcies or restructuring, to accelerate conflicts clearance and help firms open matters faster with fewer errors. • Capturing billable activities to find missing time and automatically fill out timesheets to reduce revenue leakage, minimize write-offs, and accelerate cash and collections. 3 Table of Contents Industry-specific data architecture Our platform includes several key data management capabilities that help firms more effectively capture and leverage their critical data using a system of record that reflects the unique operating model of professional and financial services.
Biggest changeIndustry-specific data architecture Our platform includes several key data management capabilities that help firms more effectively capture and leverage their critical data using a system of record that reflects the unique operating model of professional and financial services. These capabilities include: • A specialized industry graph data model.
Intapp Integration Service is a core capability of our platform that provides cloud-native and easy-to-use, enterprise class integration to connect applications and data without requiring any code. The solution helps firms overcome data silos and easily move information between systems, including within our platform.
Intapp Integration Service is a core capability of our platform that provides cloud-native, easy-to-use, enterprise-class integration to connect applications and data — without requiring any code. The solution helps firms overcome data silos and easily move information between systems, including within our platform.
Our land-and-expand model generates multi-year growth within our client base, with client lifetimes often spanning more than a decade. Clients typically adopt our modular solution to address a specific use case, and then expand their use by adopting more modules, adding more users, and deploying to other parts of their organization over time. • Grow our client base .
Our land-and-expand model generates multi-year growth within our client base, with client lifetimes often spanning more than a decade. Clients typically adopt our modular solution to address a specific use case, then expand their use by adopting more modules, adding more users, and deploying to other parts of their organization over time. • Grow our client base .
Further, certain of our competitors may challenge our intellectual property, may develop additional competing or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time than we could. Our solutions may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors.
Further, certain of our competitors may challenge our intellectual property, may develop additional competing or superior technologies and processes, and compete more aggressively and sustain that competition over a longer period of time than we could. Our solutions may be rendered obsolete or uneconomical by technological advances, or by entirely different approaches developed by one or more of our competitors.
We also rely upon trademarks to build and maintain the integrity of our brand and, in part, upon trade secrets, know-how and continuing technological innovation, and licensing arrangements, to develop and maintain our competitive position.
We also rely upon trademarks to build and maintain the integrity of our brand and, in part, upon trade secrets, know-how, continuing technological innovation, and licensing arrangements, to develop and maintain our competitive position.
Our solutions help clients increase efficiency and profitability by streamlining and automating the many functions required to originate deals and deliver work. Using Intapp’s workflow, analytics, and AI capabilities, firms can connect and operationalize their formerly disjointed engagement and deal lifecycle, eliminating manual processes, reducing duplicative data entry, and scaling to support growing businesses with less overhead.
Our solutions help clients increase efficiency and profitability by streamlining and automating the many functions required to originate deals and deliver work. Using our workflow, analytics, and AI capabilities, firms can connect and operationalize their formerly disjointed engagement and deal lifecycle — eliminating manual processes, reducing duplicative data entry, and scaling to support growing businesses with less overhead.
By leveraging Intapp’s open (REST) APIs, client IT departments, other software providers, firm consultants, and partners in Intapp’s ecosystem, can extend the benefits of Intapp’s platform to a broader range of business applications. Low-code configurability and personalized UX Our configurable UX capabilities allow technical and non-technical users to rapidly tailor our applications to meet their specific needs.
By leveraging Intapp’s open (REST) APIs, client IT departments, other software providers, firm consultants, and partners in Intapp’s ecosystem can extend the benefits of Intapp’s platform to a broader range of business applications. Low-code configurability and personalized UX Our configurable UX capabilities allow both technical and non-technical users to rapidly tailor our applications to meet their specific needs.
We have invested, and continue to invest, human and technology resources into our GDPR compliance efforts and our data privacy compliance efforts generally. Seasonality We generally experience seasonality in billings with our clients, and we typically record a higher percentage of billings in our fourth quarter than in the other quarters.
We have invested, and continue to invest, human and technology resources into our GDPR and CPRA compliance efforts and our data privacy compliance efforts generally. Seasonality We generally experience seasonality in billings with our clients, and we typically record a higher percentage of billings in our fourth quarter than in the other quarters.
Adverse determinations in litigation could subject us to significant liabilities to third parties, require us to seek licenses from third parties or could prevent us from selling or using the solution accused of infringement, any of which could severely harm our business.
Additionally, adverse determinations in litigation could subject us to significant liabilities to third parties, require us to seek licenses from third parties, or prevent us from selling or using the solution accused of infringement — any of which could severely harm our business.
Historically, firms in the professional and financial services industry have either relied on internally built technology solutions and legacy on-premises software or attempted to use horizontal software providers for their industry-specific technology needs.
Historically, firms in the professional and financial services industry have either relied on internally built technology solutions and legacy on-premises software, or they have attempted to use horizontal software providers for their industry-specific technology needs.
See “Risk Factors –Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations.” and “–Failure to protect our intellectual property could substantially harm our business and results of operations.” for additional information.
See “Risk Factors – Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations” and “– Failure to protect our intellectual property could substantially harm our business and results of operations” for additional information.
Our solutions provide firms with a single source of truth and 360 degrees views of key clients, related investments, potential new clients and investments, and prospective deals, giving partners, professionals, and dealmakers a competitive advantage in the market. • Operate more efficiently and profitably.
Our solutions provide firms with a single source of truth and 360-degree views of key clients, related investments, potential new clients and investments, and prospective deals — giving partners, professionals, and dealmakers a competitive advantage in the market. • Operate more efficiently and profitably.
Key features include: Modern, cloud-based architecture Intapp’s modern cloud-based architecture is purpose-built to meet the specialized needs of the industry. Key capabilities of our cloud architecture include: • Multi-tenant architecture. Our multi-tenant architecture enables scalability, elasticity, high availability, and security, and provides operational cost efficiencies.
Modern, cloud-based architecture Our modern cloud-based architecture is purpose-built to meet the specialized needs of the industry. Key capabilities of our cloud architecture include: • Multi-tenant architecture. Our multi-tenant architecture enables scalability, elasticity, high availability, and security, and provides operational cost efficiencies.
These capabilities enable our clients to make meaningful changes to their user experience, processes, or business rules with drag-and-drop configuration features and functionality without having to perform custom coding. The flexibility of this framework enables firms to maximize their agility, easily adapting the software to match the frequent changes in their business.
These capabilities enable our clients to make meaningful changes to their user experience, processes, and business rules with drag-and-drop configuration features and functionality — without having to perform custom coding. The flexibility of this framework enables firms to maximize their agility and easily adapt the software to match the frequent changes in their business.
We empower the world’s premier private capital, investment banking, legal, accounting, and consulting firms with the technology they need to meet rapidly changing client, investor, and regulatory requirements, deliver timely insights to the right professionals, and operate more competitively. Our Intapp Platform is purpose-built to modernize these firms.
We empower the world’s premier private capital, investment banking, legal, accounting, and consulting firms with the technology they need to operate more competitively, deliver timely insights to their professionals, and meet rapidly changing client, investor, and regulatory requirements. The Intapp platform is purpose-built to modernize these firms.
We protect our proprietary rights through a variety of methods, including confidentiality and assignment agreements with suppliers, employees, consultants, and others who may have access to our proprietary information. Regulations We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business.
We protect our proprietary rights through a variety of methods, including confidentiality and assignment agreements with suppliers, employees, consultants, and others who may have access to our proprietary information. 8 Table of Contents Regulations We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business.
Using Intapp, risk and compliance teams can work seamlessly together with front office professionals, all within the Intapp Platform, to quickly assess new business opportunities, clear and manage conflicts and independence issues, easily establish ethical walls, prepare for regulatory or client audits, and dynamically respond to rapidly changing regulatory landscapes and the firm’s overall risk posture. 4 Table of Contents • Leverage collective knowledge for competitive advantage.
Using Intapp, risk and compliance teams can work seamlessly together with front-office professionals, all within the Intapp platform, to quickly assess new business opportunities, clear and manage conflicts and independence issues, easily establish ethical walls, prepare for regulatory or client audits, and dynamically respond to rapidly changing regulatory landscapes and the firm’s overall risk posture. • Leverage collective knowledge for competitive advantage.
This focus includes critical processes such as investor relations, business development, conflicts clearance and business acceptance, engagement planning and resourcing, and billing and collections. Our cloud-based delivery model also reduces firms’ operating costs by eliminating their need to own, upgrade, and support the solutions or associated hardware infrastructure. • Manage risk and compliance more effectively.
This focus includes critical processes such as investor relations, business development, conflicts clearance and business acceptance, engagement planning and resourcing, and billing and collections. Our cloud-based delivery model also reduces firms’ operating costs by eliminating their need to own, upgrade, and support the solutions or associated hardware infrastructure. 4 Table of Contents • Manage risk and compliance more effectively.
We believe that this unique opportunity will allow us to continue to attract top talent for our product development and sales efforts. As of June 30, 2022, we had 946 full-time employees. Our employees are primarily located in the United States, the United Kingdom, Europe, Australia and Singapore.
We believe that this unique opportunity will allow us to continue to attract top talent for our product development and sales efforts. As of June 30, 2023, we had 1,150 full-time employees. Our employees are primarily located in the United States, the United Kingdom, Europe, Australia, and Singapore.
The solution manages firms’ client relationships, prospective clients and investments, current engagements and deal processes, and operations and compliance activities, allowing investors and advisors to react faster, make better decisions, and execute the best deals. For investment banks and advisory firms, this helps enhance their coverage models, achieve greater win rates, and drive higher success fees.
The solution manages firms’ client relationships, prospective clients and investments, current engagements and deal processes, and operations and compliance activities — allowing investors and advisors to react faster, make better decisions, and execute the best deals. At investment banks and advisory firms, DealCloud helps partners and professionals enhance their coverage models, achieve greater win rates, and drive higher success fees.
Item 1. Business. Overview Intapp is a leading provider of industry-specific, cloud-based software solutions for the global professional and financial services industry.
Item 1. B usiness. Overview Intapp is a leading provider of industry-specific, cloud-based software solutions for the global professional and financial services industry.
In response to the strict security requirements of professional and financial services firms, Intapp’s SaaS solutions provide tenants with enterprise-grade security, data protection, and control. In Intapp’s SaaS solutions, strict identity and access controls are employed and data is encrypted in transit and at rest.
In response to the strict security requirements of professional and financial services firms, Intapp’s software-as-a-service (“SaaS”) solutions provide tenants with enterprise-grade security, data protection, and control. In Intapp’s SaaS solutions, strict identity and access controls are employed and data is encrypted in transit and at rest.
We believe we are now in the early stages of a strong adoption cycle of cloud-based solutions by professional and financial services firms, driven in part by the needs of the next generation of professionals for purpose-built technology and software solutions. • Expand within our existing client base. We have a deep, longstanding, and trust-based relationship with our clients.
We believe we are a leader in the adoption cycle of cloud-based solutions by professional and financial services firms, driven in part by the needs of the next generation of professionals for purpose-built technology and software solutions. • Expand within our existing client base. We have deep, longstanding, and trust-based relationships with our clients.
Our solutions provide a competitive advantage to firms by helping leverage their immense, but often under-utilized, collective knowledge.
Our solutions provide a competitive advantage to firms by helping leverage their immense, but often underutilized, collective knowledge.
Collectively, more than 2,100 clients, including 96 of the Am Law 100 law firms, 7 of the top 8 accounting firms, and over 1,250 private capital and investment banking firms rely on Intapp solutions to help activate their collective knowledge, navigate complex relationships, and drive growth. No single client represented more than 10% of total revenues in fiscal year 2022.
Collectively, more than 2,300 clients, including 96 of the Am Law 100 law firms, 13 of the top 20 accounting firms, and over 1,500 private capital and investment banking firms rely on Intapp solutions to help activate their collective knowledge, navigate complex relationships, and drive growth. No single client represented more than 10% of total revenues in fiscal year 2023.
We also provide solutions that extend the value of our platform with Third Party Data that Intapp is licensed to resell from a broad number of providers. 2 Table of Contents Our T echnology P latform Our solutions are built on a single cloud platform, taking advantage of capabilities tailor-made for the unique requirements of the industries we serve.
We also provide solutions that extend the value of our platform with third-party data that we are licensed to resell from a broad number of providers. Technology Platform Our solutions are built on a single cloud platform, taking advantage of capabilities tailor-made for the unique requirements of the industries we serve.
The industry is competitive and uniquely structured around highly experienced partners and professionals who leverage knowledge, intellectual capital, and relationships to succeed, as opposed to providing physical goods. Firms must manage an intricate web of complex, non-linear relationships spread across various functions, processes, and personnel while also navigating an ever-changing regulatory environment.
The industry is competitive, and uniquely structured around highly experienced partners and professionals who leverage knowledge, intellectual capital, and relationships to succeed — differing greatly from companies that sell goods and products. Firms must manage an intricate web of complex, non-linear relationships spread across various functions, processes, and personnel, while also navigating an ever-changing market and regulatory environment.
On July 2, 2021, we completed the initial public offering of our common stock (the “IPO”) and our common stock now trades on the Nasdaq Global Select Market under the symbol “INTA.” Our principal executive offices are located at 3101 Park Boulevard, Palo Alto, CA 94306, and our telephone number is (650) 852-0400. Our website address is www.intapp.com .
Our common stock trades on the Nasdaq Global Select Market under the symbol “INTA.” Our principal executive offices are located at 3101 Park Boulevard, Palo Alto, CA 94306, and our telephone number is (650) 852-0400. Our website address is www.intapp.com .
Our clients leverage Intapp’s solutions to increase their revenues and investment returns by improving their origination and business development effectiveness, optimizing market coverage, and helping nurture key relationships to ensure time is spent with the right people and that those relationships convert into business.
Our clients leverage our solutions to increase their revenues and investment returns by improving their origination and business development effectiveness, optimizing market coverage, and helping nurture key relationships by ensuring outreach to the right people at the right time to convert those relationships into business.
These capabilities include: • Specialized industry graph data model. Our specialized industry data model is purpose-built to capture the complex relationships as well as the specialized knowledge and experience unique to professional and financial services. The platform creates many-to-many data linkages that connect professionals with prospective clients, investors and target portfolio companies and assets.
Our specialized industry data model is purpose-built to capture the complex relationships, and the specialized knowledge and experience, that are unique to professional and financial services. The platform creates “many-to-many” data linkages that connect professionals with prospective clients, investors, and target portfolio companies and assets.
Our solutions leverage these linkages to provide personalized analysis and insights for each professional that reflects his or her unique area of specialty, including client industry, asset class, investment strategy, geography, transaction type, and others. • Low-code integration platform .
Our solutions leverage these linkages to provide personalized analysis and insights for each professional that reflect their unique area of specialty, such as client industry, asset class, investment strategy, geography, or transaction type. • A low-code integration platform .
Together with these partners, we generate increased value for our clients and broaden our reach. Partners range from specialized implementation or data partners up through some of the largest technology players in the world, like Microsoft and KPMG.
Together with these partners, we generate increased value for our clients and broaden our reach. Partners include specialized implementation and data partners as well as some of the largest technology players in the world, including Microsoft and KPMG.
We will continue to broaden our global footprint and intend to establish a presence in additional international markets. • Selectively pursue strategic transactions. We have acquired and successfully integrated several complementary businesses that allowed us to enhance our platform, add new technology capabilities, and address new client segments.
We will continue to broaden our global footprint and intend to establish a presence in additional international markets. • Selectively pursue strategic transactions. We have successfully completed 9 acquisitions over the past 10 years that have allowed us to enhance our platform, add new technology capabilities, and address new client segments.
We believe that the principal competitive factors in our industry include the following: • Deep domain experience and a long-term, trusted relationship; • Product innovation, quality, functionality and design; • Solutions that are purpose built for this industry; • Platform solutions that are complete end-to-end solutions across the relationship lifecycle; • Solutions that enable connectedness of key data and processes through the use of AI; • A track record of, delivering value consistently over time; • A strong commitment to security and privacy; and • Brand reputation and name recognition in the industry.
We believe that the principal competitive factors in our industry include the following: • Deep domain experience and a long-term, trusted relationship; • Product innovation, quality, functionality, and design; • Solutions that are purpose-built for this industry; • Platform solutions that are complete, end-to-end solutions across the relationship lifecycle; • Solutions that enable connectedness of key data and processes through the use of AI; • A track record of delivering value consistently over time; • A strong commitment to security and privacy; and • Brand reputation and name recognition in the industry. 7 Table of Contents Some of our competitors and potential competitors are large and have greater brand name recognition, longer operating histories, larger marketing budgets, established marketing relationships, access to larger client bases, and significantly greater resources for the development of their offerings.
Our sales team is supported by technical sales professionals and subject-matter experts who facilitate the sales process through developing and presenting demonstrations of our solutions after assessing requirements, addressing security and technical questions, and matching client needs with the appropriate solutions.
All sales personnel focus on attracting new clients as well as expanding usage within our existing client base. Our sales team is supported by technical sales professionals and subject-matter experts who facilitate the sales process through developing and presenting demonstrations of our solutions after assessing requirements, addressing security and technical questions, and matching client needs with the appropriate solutions.
Corporate Information We were formed as a Delaware corporation on November 27, 2012 as LegalApp Holdings, Inc. and we changed our name to Intapp, Inc. in February 2021.
Corporate Information We were formed as a Delaware corporation on November 27, 2012 as LegalApp Holdings, Inc. and we changed our name to Intapp, Inc. in February 2021. We completed the initial public offering of our common stock (the “IPO”) on July 2, 2021.
Prior to Russia’s invasion of Ukraine in February 2022, a majority of our research and development had been conducted through our facilities based in Ukraine and our contractors’ facilities located in Belarus, Ukraine, and Russia.
We also utilize a substantial number of independent contractors and consultants working in research and development throughout the world. Prior to Russia’s invasion of Ukraine in February 2022, a majority of our research and development had been conducted through our facilities based in Ukraine and our contractors’ facilities located in Belarus, Ukraine, and Russia.
Beginning in March 2022, in response to Russia’s invasion of Ukraine, we have transitioned and relocated all of our development and services functions previously located in Russia and Belarus to facilities and resources outside of the conflict zone in the European Union, U.K. and Americas. 6 Table of Contents Our E mployees and H uman C apital We have built our culture around the success of our clients, our partners, our employees, and our investors.
Beginning in March 2022, in response to Russia’s invasion of Ukraine, we have transitioned and relocated all of our development and services functions previously located in Russia and Belarus to facilities and resources in the European Union, U.K., and Americas, outside of the conflict zone.
Additionally, California approved the California Privacy Rights Act (“CPRA”), which goes into effect on January 1, 2023, and changes privacy rights under the CCPA, including with respect to business-to-business transactions. Non-compliance with these laws could result in penalties 8 Table of Contents or significant legal liability.
Additionally, California approved the California Privacy Rights Act (“CPRA”), which became effective on January 1, 2023 and under which enforcement has been delayed until March 29, 2024, and changes privacy rights under the CCPA, including with respect to business-to-business transactions. Non-compliance with these laws could result in penalties or significant legal liability.
We focus our efforts on enhancing our existing solutions and developing new solutions for our clients. Our research and development teams are primarily located in Palo Alto, California, Charlotte, North Carolina, Jersey City, New Jersey, Manchester, England and Belfast, Northern Ireland. We also utilize a substantial number of independent contractors and consultants working in research and development throughout the world.
Our research and development team is responsible for the design, architecture, testing, and quality of our solutions. We focus our efforts on enhancing our existing solutions and developing new solutions for our clients. Our research and development teams are primarily located in Palo Alto, California; Charlotte, North Carolina; Jersey City, New Jersey; Manchester, England; and Belfast, Northern Ireland.
Applied artificial intelligence Industry-specific AI is embedded throughout our platform and solutions to help professional and financial services firms use their vast amounts of data to optimize critical processes and make better, faster decisions. The applications of AI span a wide range across firm operations, from strategy and business development through to risk and compliance and work execution.
Applied AI — our artificial intelligence strategy Industry-specific AI is embedded throughout our platform and solutions to help professional and financial services firms use their vast amounts of data to optimize critical processes and make better, faster decisions.
Our Clients Intapp is a leading provider of industry-specific, cloud-based software solutions for the global professional and financial services industry. We serve the world’s premier private capital, investment banking, legal, accounting, and consulting firms.
We will continue to evaluate acquisition opportunities that will help us extend our market leadership and client reach. 5 Table of Contents Our Clients Intapp is a leading provider of industry-specific, cloud-based software solutions for the global professional and financial services industry. We serve the world’s premier private capital, investment banking, legal, accounting, and consulting firms.
We anticipate that we will continue to develop partnerships with a select number of third parties to help grow our business and deliver our solutions. In those markets where we have established such partnerships, we consider these important to our and our clients’ success.
We anticipate that we will continue to develop partnerships with a select number of third parties to help grow our business and deliver our solutions.
As of June 3 0 , 202 2 , we had over 2 , 10 0 clients. Our business has historically grown through a combination of expanding within our existing client base—including additional users and capabilities—and selling to new clients.
We sell our software on a subscription basis through a direct enterprise sales model. As of June 30, 2023, we had over 2,300 clients. Our business has historically grown through a combination of expanding within our existing client base — including additional users and capabilities — and selling to new clients.
Our Products and Platform Our Intapp Platform is purpose-built to modernize these firms. The platform facilitates greater team collaboration, digitizes complex workflows to optimize deal and engagement execution, and leverages proprietary AI to help nurture relationships and originate new business.
With our scalable, modular cloud-based platform, we believe we are well positioned to continue our growth. 1 Table of Contents Our Products and Platform The Intapp platform is purpose-built to modernize these firms. The platform facilitates greater team collaboration, digitizes complex workflows to optimize deal and engagement execution, and leverages applied AI to help nurture relationships and originate new business.
The professional and financial services industry is one of the largest sectors in the global economy. Firms in this industry operate in a highly connected ecosystem, providing valuable expertise, insight, and advice to a broad range of companies across multiple transactions and engagements.
Firms in this industry operate in a highly connected ecosystem, providing valuable expertise, insight, and advice to a broad range of companies and institutions across varied transactions and engagements.
For example, we acquired DealCloud in 2018 to better target private capital and investment banking clients with cloud-based deal management, pipeline management and CRM functionalities. We will continue to evaluate acquisition opportunities that will help us extend our market leadership and client reach.
For example, we acquired DealCloud in 2018 to better target private capital and investment banking clients with cloud-based deal management, pipeline management, and CRM functionalities.
See the section titled “Risk Factors—Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations” for additional information. 7 Table of Contents Intellectual P roperty We rely on a combination of patent, copyright, trademark and trade secret laws, and confidentiality and invention assignment agreements to protect our intellectual property rights.
See the section titled “Risk Factors—Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations” for additional information.
Our Growth Strategies The key components of our growth strategy are: • Capitalize on a generational shift to the cloud. Mission-critical applications are increasingly being delivered more reliably, securely and cost-effectively via the cloud, which can more readily enable real-time collaboration and provide access to valuable data from anywhere, anytime, on any device.
Mission-critical applications are increasingly being delivered more reliably, securely, and cost-effectively via the cloud, which can more readily enable real-time collaboration and provide access to valuable data from anywhere, anytime, on any device. As more professionals embrace cloud technologies, they will continue to drive the accelerated adoption of additional cloud capabilities across their firms.
Sales and Marketing We currently focus on marketing and selling our solutions to professional and financial services firms in North America, Europe, the Middle East, and Asia Pacific.
Our Functions Sales and Marketing We currently focus on marketing and selling our solutions to professional and financial services firms in North America, Europe, the Middle East, and Asia Pacific. We seek to drive market demand by developing and delivering specific, market-focused solutions to professional and financial service firms. We primarily generate sales through a direct enterprise sales model.
Our patents cover various aspects of the Intapp Platform. The term of individual patents depends on the legal term for patents in the countries in which they are granted. There is no active patent litigation involving any of our patents and we have not received any notices claiming that our activities infringe a third-party’s patent.
There is no active patent litigation involving any of our patents, and we have not received any notices claiming that our activities infringe a third-party’s patent.
For investors, this helps increase origination volume, support investment selection, and drive greater returns. OnePlace is our solution to manage all aspects of a professional services firm’s client and engagement lifecycle. The solution improves client strategy and targeting, business development and origination, and work delivery, increasing financial performance and regulatory compliance.
For investors, it helps increase origination volume, support investment selection, and drive greater returns. At professional services firms, DealCloud improves client strategy and targeting, business development and origination, and work delivery, increasing financial performance and regulatory compliance. The flexibility of DealCloud allows it to meet many needs including as a CRM, deal management, experience management and relationship intelligence solution.
Our deep understanding of the professional and financial services industry has enabled us to develop a suite of solutions on the Intapp Platform tailored to address these challenges faced by firms. We have two brands with which we go to market: DealCloud is our deal and relationship management solution for financial services firms.
Our deep understanding of the professional and financial services industry has enabled us to develop a suite of solutions on the Intapp platform tailored to address these firms’ specific business challenges.
The platform facilitates greater team collaboration, digitizes complex workflows to optimize deal and engagement execution, and leverages proprietary AI to help nurture relationships and originate new business. By better connecting their most important assets—people, processes, and data—our platform helps firms increase client fees and investment returns, operate more efficiently, and better manage risk and compliance.
By better connecting their most important assets — people, processes, and data — our platform helps firms increase client fees and investment returns, operate more efficiently, and better manage risk and compliance.
By better connecting their most important assets—people, processes, and data—our platform helps firms increase client fees and investment returns, operate more efficiently, and better manage risk and compliance. Our deep understanding of the professional and financial services industry has enabled us to develop a suite of solutions on the Intapp Platform tailored to address these challenges faced by firms.
By better connecting their most important assets — people, processes, and data — our platform helps firms increase client fees and investment returns, operate more efficiently, and better manage risk and compliance. The professional and financial services industry, largely comprised of elite, partner-led firms, is one of the biggest sectors of the global economy.
We have carefully recruited, selected, and developed employees who are highly focused on delivering success for our clients in the professional and financial services industry. This strategy is a crucial element of our hiring and evaluation processes throughout all departments. We believe this approach produces high levels of both client success and employee engagement.
This strategy is a crucial element of our hiring and evaluation processes throughout all departments. We believe this approach produces high levels of both client success and employee engagement. We believe we provide employees with a unique opportunity to develop and sell world-class solutions within a specific industry.
We offer a full range of licensable solutions through these brands including: - CRM, deal management, experience management and relationship intelligence solutions that help firms manage all aspects of their client relationships. - Risk and compliance management solutions to help firms thoroughly evaluate new business, onboard clients quickly, and monitor relationships for risk throughout their business lifecycle. - Operational and financial management solutions, including time management and billing that provide AI-enabled software to drive efficiency and profitability. - Collaboration solutions that provide intelligent client-centric collaboration, seamless content governance, and innovative client experiences leveraging Microsoft 365, Teams and SharePoint. - Integration solutions that connect all firm data into a single platform, tailored to the needs of professional and financial services firms.
These solutions include time management and billing software, such as our recently acquired Billstream product, which helps accelerate billing, improve realization, and improve the experience for the firm’s clients. • Collaboration solutions that provide intelligent client-centric collaboration, seamless content governance, and innovative client experiences leveraging Microsoft 365, Teams, and SharePoint. • Integration solutions that connect all firm data into a single platform, tailored to the needs of professional and financial services firms.
Professionals make better decisions faster by leveraging more institutional knowledge from across the firm. We believe our solutions provide us with a competitive advantage, driven by our deep domain expertise gained over 20 years of serving professional and financial services firms.
We believe our industry cloud strategy and solutions provide us with a competitive advantage, driven by our deep domain expertise gained over 20 years of serving professional and financial services firms. We have cultivated difficult-to-replicate, privileged access to these firms resulting in a deep understanding of how they work and what they need.
Research and Development Our ability to compete depends in large part on our continuous commitment to research and development and our ability to rapidly introduce new technologies, features, and functionality. Our research and development team is responsible for the design, architecture, testing, and quality of our solutions.
In those markets where we have established such partnerships, we consider these important to our and our clients’ success. 6 Table of Contents Research and Development Our ability to compete depends in large part on our continuous commitment to research and development and our ability to rapidly introduce new technologies, features, and functionality.
We have had success in driving c lient s to further adoption, and currently have 41 clients with contracts greater than $1 million of annual recurring revenue s (“ ARR ”) . With our scalable, modular cloud-based platform, we believe we are well positioned to continue our growth.
We have had success in driving clients to further adoption, and currently have 53 clients, up from 41 clients at the end of fiscal year 2022, representing a 29% increase, with contracts greater than $1 million of annual recurring revenues (“ARR”).
We have cultivated difficult-to-replicate, privileged access to these firms to develop thorough expertise in how they work and what they need. Clients value our scalable platform’s differentiated domain expertise, purpose-built capabilities, comprehensive end-to-end offering, data-driven AI insights, and industry brand.
Clients value our scalable platform’s differentiated domain expertise, purpose-built capabilities, comprehensive end-to-end offering, data-driven AI insights, and industry brand. We are trusted by many of the world’s elite firms, including 96 of the Am Law 100 law firms, 13 of the top 20 accounting firms, and over 1,500 private capital and investment banking firms.
We offer these solutions through an integrated platform that features three key categories of capabilities: a low code, tailored and configurable user experience (UX) based on industry-specific templates, modern AI and intelligence applied to high-value domain-specific use cases, and a specialized data architecture based on an industry graph data model that accurately reflects the unique firm operating model.
Our full range of solutions are delivered through an integrated cloud platform underpinned by key technology capabilities: • A modern, cloud-based architecture purpose-built to meet industry needs; • A low-code, tailored, configurable user experience (“UX”), based on industry-specific templates that meet users’ specific needs; 2 Table of Contents • An applied AI strategy that combines modern AI with our market expertise to help professional and financial services firms optimize the use of their vast amounts of data; and • A specialized data architecture based on an industry graph data model that is purpose-built to capture professional and financial services firms’ unique operating model — supporting the complex integrations needed to deliver data where and when it is needed.
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The solution manages firms’ market relationships, prospective clients and investments, current engagements and deal processes, and operations and compliance activities, allowing investors and advisors to react faster, make better decisions, and execute the best deals. For investment banks and advisory firms, this helps enhance their coverage models, achieve greater win rates, and drive higher success fees.
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The platform facilitates better team collaboration, digitizes complex workflows to optimize deal and engagement execution, and leverages applied AI to help nurture relationships and originate new business. The Intapp platform allows firms to manage their unique risk and compliance challenges, such as conflicts and independence, ethical walls, and employee compliance.
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Our client base represents many of the world’s premier professional and financial services firms, including 96 of the Am Law 100 law firms, 7 of the Top 8 accounting firms, and over 1,250 private capital and investment banking firms. 1 Table of Contents We sell our software on a subscription basis through a direct enterprise sales model.
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Our industry cloud strategy leverages deep understanding of the professional and financial services industry to deliver products on the Intapp platform that are tailored to address these firms’ specific business challenges. We combine our purpose-built technology with what we believe are best practices developed over more than 20 years and through thousands of successful deployments.
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We have two brands with which we go to market: • DealCloud is our deal and relationship management solution for financial services firms and deal professionals.
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This includes our robust set of applied AI capabilities that help clients solve unique challenges, allowing them to grow faster and run smarter. We have curated a robust, industry-specific partner ecosystem that allows our clients to generate added value from the adoption of our platform. All of these elements work together in our comprehensive industry cloud strategy.
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For investors, this helps increase origination volume, support investment selection, and drive greater returns. • OnePlace is our solution to manage all aspects of a professional services firm’s client and engagement lifecycle. The solution improves client strategy and targeting, business development and origination, and work delivery, increasing financial performance and regulatory compliance.
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Our solutions serve firms’ need for strong operational controls and compliance, and are complemented by solutions that support the work of the partners and professionals that grow the firms’ fees and revenues: • A deal and relationship management solution, DealCloud, that serves partners and professionals in all of our markets.
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Professionals make better decisions faster by leveraging more institutional knowledge from across the firm, ultimately delivering greater value for their clients.
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DealCloud helps firms manage all aspects of their client relationships. • Risk and compliance management solutions that help firms thoroughly evaluate new business, onboard clients quickly, and monitor relationships for risk throughout their business lifecycle, while staying compliant with both regulatory and client obligations around independence and ethics. These solutions include our recent acquisition of Paragon Data Labs, Inc.
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As more professionals embrace cloud technologies, they drive the accelerated adoption of additional cloud capabilities across their firms.
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(“Paragon”), which complements our solution that protects firms, and delivers our Employee Compliance solution to help firms ensure personal independence for their professionals and manage and track material non-public information (“MNPI”), trading restrictions, and other business conflicts of interest. • Operational and financial management solutions that provide AI-enabled software to drive efficiency and profitability.
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We seek to drive market demand by developing and delivering specific, market-focused solutions to professional and financial service firms. 5 Table of Contents We primarily generate sales through a direct enterprise sales model. All sales personnel focus on attracting new clients as well as expanding usage within our existing client base.
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Our AI team has been delivering capabilities into our solutions for over 10 years, leveraging AI technology from automation to machine learning (“ML”) to deep learning to generative AI. The functions span a wide range across firm operations, including strategy, business development, risk and compliance, and work execution.
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We believe we provide employees a unique opportunity to develop and sell world-class solutions within a specific industry.
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Examples include: • Enhanced conflicts review on matters with large number of parties — such as bankruptcies and restructuring — to accelerate conflicts clearance and help firms open matters faster with fewer errors. 3 Table of Contents • Billable activity capture to find missing time and automatically fill out timesheets to reduce revenue leakage, minimize write-offs, and accelerate cash and collections. • Analysis of firms’ collected relationships to identify the strongest approach to winning new business and retaining important clients. • Self-maintaining contacts in firm systems to keep contact records up to date — without requiring manual data entry.
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Some of our competitors and potential competitors are large and have greater brand name recognition, longer operating histories, larger marketing budgets and established marketing relationships, access to larger client bases and significantly greater resources for the development of their offerings.
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Growth Strategies The key components of our growth strategy are: • Capitalize on the generational change in work driven by AI.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, if we are unable to successfully grow our SaaS solutions business or navigate our growth strategy, our results of operations could be harmed. • If we are unable to develop, introduce and market new and enhanced versions of our solutions, we may be put at a competitive disadvantage and our operating results could be adversely affected. • If the market for SaaS solutions for professional and financial services develops slower than we expect or declines, it could have a material adverse effect on our business, financial condition and results of operations. • Our estimates of certain operational metrics are subject to inherent challenges in measurement. • If we are unable to develop or sell our solutions into new markets or to further penetrate existing markets, our revenues will not grow as expected and our operating results could be adversely affected. • We compete in highly competitive markets, and if we do not compete effectively, our business, results of operations, and financial condition could be negatively impacted and cause our market share to decline. • We may continue to expand through acquisitions or partnerships with other companies, which may divert our management’s attention and result in unexpected operating and technology integration difficulties, increased costs, and dilution to our stockholders. • If we fail to effectively manage our growth, our business and results of operations could be harmed. 10 Table of Contents • Our solutions address functions within the heavily regulated professional and financial services industry, and our clients’ failure to comply with applicable laws and regulations could subject us to litigation. • Our solutions or pricing models may not accurately reflect the optimal pricing necessary to attract new clients and retain existing clients as the market matures. • We have in the past, and may in the future, incur indebtedness that could adversely affect our financial flexibility and expose us to risks that could materially adversely affect our liquidity and financial condition. • Failure of any of our established solutions to satisfy client demands or to maintain market acceptance would harm our business, results of operations, financial condition, and growth prospects. • Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations. • Failure to protect our intellectual property could substantially harm our business and results of operations. • If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. • Our international sales and operations subject us to additional risks that can adversely affect our business, results of operations and financial condition. • Failure to comply with the GDPR or other data privacy regimes could subject us to liability, fines and reputational harm. • If the ownership of our common stock continues to be highly concentrated, it may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest. • The market price and trading volume of our common stock has been and may continue to be volatile, which could result in rapid and substantial losses for our stockholders. • The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets. • Outbreaks, epidemics, or pandemics involving public health, including COVID-19 outbreaks, could harm our business, results of operations, and financial condition.
Biggest changeIn addition, if we are unable to successfully grow our SaaS solutions business or navigate our growth strategy, our results of operations could be harmed. • If we are unable to develop, introduce and market new and enhanced versions of our solutions, we may be put at a competitive disadvantage and our operating results could be adversely affected. • We are expanding our AI offerings to incorporate recent innovations in AI and these initiatives may not be successful, which may adversely affect our business, results of operations and financial condition, and may also result in reputational harm and liability. • If the market for SaaS solutions for professional and financial services develops slower than we expect or declines, it could have a material adverse effect on our business, financial condition and results of operations. • Our estimates of certain operational metrics are subject to inherent challenges in measurement. • If we are unable to develop or sell our solutions into new markets or to further penetrate existing markets, our revenues will not grow as expected and our operating results could be adversely affected. • We compete in highly competitive markets, and if we do not compete effectively, our business, results of operations, and financial condition could be negatively impacted and cause our market share to decline. 10 Table of Contents • We may continue to expand through acquisitions or partnerships with other companies, which may divert our management’s attention and result in unexpected operating and technology integration difficulties, increased costs, and dilution to our stockholders. • If we fail to effectively manage our growth, our business and results of operations could be harmed. • Our solutions address functions within the heavily regulated professional and financial services industry, and our clients’ failure to comply with applicable laws and regulations could subject us to litigation. • Our solutions or pricing models may not accurately reflect the optimal pricing necessary to attract new clients and retain existing clients as the market matures. • We have in the past, and may in the future, incur indebtedness that could adversely affect our financial flexibility and expose us to risks that could materially adversely affect our liquidity and financial condition. • Failure of any of our established solutions to satisfy client demands or to maintain market acceptance would harm our business, results of operations, financial condition, and growth prospects. • Assertions against us, by third parties alleging infringement or other violation of their intellectual property rights, could result in significant costs and substantially harm our business and results of operations. • Failure to protect our intellectual property could substantially harm our business and results of operations. • If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. • Our international sales and operations subject us to additional risks that can adversely affect our business, results of operations and financial condition. • Failure to comply with the GDPR or other data privacy regimes could subject us to liability, fines and reputational harm. • If the ownership of our common stock continues to be highly concentrated, it may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest. • The market price and trading volume of our common stock has been and may continue to be volatile, which could result in rapid and substantial losses for our stockholders. • The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets. • Adverse developments affecting the financial services industry could have an adverse impact on our business operations, financial condition, and results of operations. • Outbreaks, epidemics, or pandemics involving public health could harm our business, results of operations, and financial condition. 11 Table of Contents Risks Related to Our Business and Industry Our rapid growth makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to grow at or near historical rates.
If we accumulate additional funds through debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities. We cannot assure you that additional financing will be available on terms favorable to us, or at all.
Additionally, if we accumulate additional funds through debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities. We cannot assure you that additional financing will be available on terms favorable to us, or at all.
Our current international operations and our plans to expand our international operations subject us to a variety of risks, including: • increased management, travel, infrastructure, and legal compliance costs associated with having multiple international operations; • unique terms and conditions in contract negotiations desired by clients in foreign countries; • longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable; • the need to localize our solutions and store data locally for international clients; • lack of familiarity with and unexpected changes in foreign regulatory requirements; • increased exposure to fluctuations in currency exchange rates; • levels of inflation in international economies; 25 Table of Contents • the burdens and costs of complying with a wide variety of foreign laws and legal standards, including the General Data Protection Regulation in the European Union; • compliance with the U.S.
Our current international operations and our plans to expand our international operations subject us to a variety of risks, including: • increased management, travel, infrastructure, and legal compliance costs associated with having multiple international operations; • unique terms and conditions in contract negotiations desired by clients in foreign countries; • longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable; • the need to localize our solutions and store data locally for international clients; • lack of familiarity with and unexpected changes in foreign regulatory requirements; • increased exposure to fluctuations in currency exchange rates; • levels of inflation in international economies; 26 Table of Contents • the burdens and costs of complying with a wide variety of foreign laws and legal standards, including the General Data Protection Regulation in the European Union; • compliance with the U.S.
Infringement assertions from third parties may involve patent holding companies or other patent owners who have no relevant product revenues, and therefore our own issued and pending patents may provide little or no deterrence to these patent owners in bringing intellectual property rights claims against us. 22 Table of Contents If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims.
Infringement assertions from third parties may involve patent holding companies or other patent owners who have no relevant product revenues, and therefore our own issued and pending patents may provide little or no deterrence to these patent owners in bringing intellectual property rights claims against us. 23 Table of Contents If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims.
European Union clients may require that our employees who are providing services to them be based in the European Union due to data transfer restrictions, which could increase our costs in providing such services. 27 Table of Contents In addition, the CCPA which went into effect on January 1, 2020 , imposes requirements relating to how companies may collect, use and process personal information relating to California residents.
European Union clients may require that our employees who are providing services to them be based in the European Union due to data transfer restrictions, which could increase our costs in providing such services. 28 Table of Contents In addition, the CCPA which went into effect on January 1, 2020, imposes requirements relating to how companies may collect, use and process personal information relating to California residents.
Breach of warranty or damage liability, or injunctive relief resulting from such claims, could harm our results of operations and financial condition. 21 Table of Contents In addition, as we further expand our solutions, our implementation services and support organization will face new challenges, including hiring, training and integrating a large number of new implementation services personnel with experience in delivering high-quality support for our solutions.
Breach of warranty or damage liability, or injunctive relief resulting from such claims, could harm our results of operations and financial condition. 22 Table of Contents In addition, as we further expand our solutions, our implementation services and support organization will face new challenges, including hiring, training and integrating a large number of new implementation services personnel with experience in delivering high-quality support for our solutions.
Facebook and Maximillian Schrems (“Schrems II”), changes to how data transfers to and from the European Union are regulated could impact how we provide services to our clients in the European Union.
Facebook and Maximillian Schrems (“Schrems II”), further changes to how data transfers to and from the European Union are regulated could impact how we provide services to our clients in the European Union.
Although we believe we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in the tax laws or challenges from tax authorities under existing tax laws could adversely affect our business, financial condition, and results of operations. 36 Table of Contents If securities or industry analysts do not publish research or reports about our business or publish negative reports, our stock price could decline.
Although we believe we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in the tax laws or challenges from tax authorities under existing tax laws could adversely affect our business, financial condition, and results of operations. 38 Table of Contents If securities or industry analysts do not publish research or reports about our business or publish negative reports, our stock price could decline.
If we are unable to attract, integrate and retain qualified personnel, or if there are delays in hiring required personnel, including delays due to geopolitical instability or outbreaks, epidemics, or pandemics involving public health , including COVID-19 , or adjustments to U.S. immigration policy related to skilled foreign workers, our business, results of operations, and financial condition may be materially adversely affected.
If we are unable to attract, integrate and retain qualified personnel, or if there are delays in hiring required personnel, including delays due to geopolitical instability or outbreaks, epidemics, or pandemics involving public health or adjustments to U.S. immigration policy related to skilled foreign workers, our business, results of operations, and financial condition may be materially adversely affected.
Moreover, in addition to our failure to realize the anticipated benefits of any acquisition, including our revenues or return on investment assumptions, we may be exposed to unknown liabilities or impairment charges as a result of acquisitions we do complete. 18 Table of Contents If we fail to effectively manage our growth, our business and results of operations could be harmed.
Moreover, in addition to our failure to realize the anticipated benefits of any acquisition, including our revenues or return on investment assumptions, we may be exposed to unknown liabilities or impairment charges as a result of acquisitions we do complete. 19 Table of Contents If we fail to effectively manage our growth, our business and results of operations could be harmed.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. 24 Table of Contents Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. 25 Table of Contents Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
In the future, we may be required to reduce our prices or develop new pricing models, which could adversely affect our revenues, gross margin, profitability, financial position, and cash flow. 19 Table of Contents We have in the past, and may in the future, incur indebtedness that could adversely affect our financial flexibility and expose us to risks that could materially adversely affect our liquidity and financial condition .
In the future, we may be required to reduce our prices or develop new pricing models, which could adversely affect our revenues, gross margin, profitability, financial position, and cash flow. 20 Table of Contents We have in the past, and may in the future, incur indebtedness that could adversely affect our financial flexibility and expose us to risks that could materially adversely affect our liquidity and financial condition.
Moreover, policing our intellectual property rights is difficult, costly and may not always be effective. 23 Table of Contents From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity.
Moreover, policing our intellectual property rights is difficult, costly and may not always be effective. 24 Table of Contents From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity.
Some of the factors that have or could in the future negatively affect our share price or result in fluctuations in the price or trading volume of our common stock, many of which are beyond our control, include: • variations in our quarterly or annual operating results; • our ability to attract new clients in both domestic and international markets, and our ability expand the solutions provided to existing clients; • the timing of our clients’ buying decisions and reductions in our clients’ budgets for IT purchases and delays in their purchasing cycles, particularly in light of recent adverse global economic conditions; • changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts; • the contents of published research reports about us or our industry or the failure of securities analysts to cover our common stock; • additions to, or departures of, key management personnel and our ability to attract, train, integrate and retain highly skilled employees; • any increased indebtedness we may incur in the future; • announcements and public filings by us or others and developments affecting us; • actions by institutional stockholders; • litigation and governmental investigations; • operating and stock performance of other companies that investors deem comparable to us (and changes in their market valuations) and overall performance of the equity markets; • speculation or reports by the press or investment community with respect to us or our industry in general; • increases in market interest rates, including due to impacts from inflation, that may lead purchasers of our shares to demand a higher yield; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; • announcements or actions taken by Anderson or Great Hill as our principal stockholders; • sales of substantial amounts of our common stock by Anderson, Great Hill or other significant stockholders or our insiders, or the expectation that such sales might occur; • volatility, inflation, or economic downturns in the markets in which we, our clients and our partners are located caused by outbreaks, epidemics, or pandemics involving public health, including COVID-19 outbreaks, and related policies and restrictions undertaken to contain the spread of such pandemics or potential pandemics; • geopolitical tensions or conflicts in locations in which we, our clients and our partners are located, including Russian military action against Ukraine and any further escalation of such conflict; • general volatility in the prices of stock traded on the Nasdaq Global Select Market and other equity markets; and • general market, political and economic conditions, including inflation, in the professional and financial services industry in particular, including any such conditions and local conditions in the markets in which any of our clients are located. 32 Table of Contents The stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies.
Some of the factors that have or could in the future negatively affect our share price or result in fluctuations in the price or trading volume of our common stock, many of which are beyond our control, include: • variations in our quarterly or annual operating results; • our ability to attract new clients in both domestic and international markets, and our ability expand the solutions provided to existing clients; • the timing of our clients’ buying decisions and reductions in our clients’ budgets for IT purchases and delays in their purchasing cycles, particularly in light of recent adverse global economic conditions; • changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts; • the contents of published research reports about us or our industry or the failure of securities analysts to cover our common stock; • additions to, or departures of, key management personnel and our ability to attract, train, integrate and retain highly skilled employees; • any increased indebtedness we may incur in the future; • announcements and public filings by us or others and developments affecting us; • actions by institutional stockholders; • litigation and governmental investigations; 33 Table of Contents • operating and stock performance of other companies that investors deem comparable to us (and changes in their market valuations) and overall performance of the equity markets; • speculation or reports by the press or investment community with respect to us or our industry in general; • increases in market interest rates, including due to impacts from inflation, that may lead purchasers of our shares to demand a higher yield; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; • announcements or actions taken by Anderson or Great Hill as our principal stockholders; • sales of substantial amounts of our common stock by Anderson, Great Hill or other significant stockholders or our insiders, or the expectation that such sales might occur; • volatility, inflation, or economic downturns in the markets in which we, our clients and our partners are located caused by outbreaks, epidemics, or pandemics involving public health and related policies and restrictions undertaken to contain the spread of such pandemics or potential pandemics; • geopolitical tensions or conflicts in locations in which we, our clients and our partners are located, including Russian military action against Ukraine and any further escalation of such conflict; • general volatility in the prices of stock traded on the Nasdaq Global Select Market and other equity markets; and • general market, political and economic conditions, including inflation, rising interest rates and disruptions in the professional and financial services industry, including any such conditions and local conditions in the markets in which any of our clients are located.
Any of the foregoing could adversely affect our business, financial condition, or results of operations. 20 Table of Contents Failure of any of our established solutions to satisfy client demands or to maintain market acceptance would harm our business, results of operations, financial condition, and growth prospects. We derive our revenues and cash flows from our established solutions.
Any of the foregoing could adversely affect our business, financial condition, or results of operations. 21 Table of Contents Failure of any of our established solutions to satisfy client demands or to maintain market acceptance would harm our business, results of operations, financial condition, and growth prospects. We derive our revenues and cash flows from our established solutions.
All of our revenues are generated by sales to clients in our targeted verticals, and factors, including the downturn in U.S. and global markets and economic conditions, that adversely affect the applicable industry could also adversely affect us. Currently, all of our sales are to clients in the professional and financial services industry.
All of our revenues are generated by sales to clients in our targeted verticals, and factors, including the downturn in U.S. and global markets and economic conditions, that adversely affect the applicable industry could also adversely affect our business. Currently, all of our sales are to clients in the professional and financial services industry.
In addition, the failure to increase, or the loss of, market share, would harm our business, results of operations, financial condition, and/or future prospects. 17 Table of Contents We may continue to expand through acquisitions or partnerships with other companies, which may divert our management’s attention and result in unexpected operating and technology integration difficulties, increased costs, and dilution to our stockholders.
In addition, the failure to increase, or the loss of, market share, would harm our business, results of operations, financial condition, and/or future prospects. We may continue to expand through acquisitions or partnerships with other companies, which may divert our management’s attention and result in unexpected operating and technology integration difficulties, increased costs, and dilution to our stockholders.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
Our disclosure controls and other procedures are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
Our amended and restated certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for resolving any complaint 34 Table of Contents asserting a cause of action arising under the Securities Act.
Our amended and restated certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Risk Factors Summary Below is a summary of material factors that make an investment in our common stock speculative or risky: • Our rapid growth makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to grow at or near historical rates. • We have a history of losses and may not achieve or maintain profitability in the future. • All of our revenues are generated by sales to clients in our targeted verticals, and factors, including the downturn in U.S. and global markets and economic conditions, that adversely affect the applicable industry could also adversely affect us. • Russian military action against Ukraine and subsequent sanctions against Russia and Belarus has resulted in disruptions to some of our research and development resources, which could lead to interruptions in our development efforts or hamper our ability to maintain our solutions. • If our solutions or third-party cloud providers experience data security breaches and there is unauthorized access to our clients’ data, we may lose current or future clients, our reputation and business may be harmed, and we may be subject to a risk of loss or liability. • Our business depends on clients renewing and expanding their subscriptions for our solutions.
Risk Factors Summary Below is a summary of material factors that make an investment in our common stock speculative or risky: • Our rapid growth makes it difficult to evaluate our future prospects and may increase the risk that we will not continue to grow at or near historical rates. • We have a history of losses and may not achieve or maintain profitability in the future. • All of our revenues are generated by sales to clients in our targeted verticals, and factors, including the downturn in U.S. and global markets and economic conditions, that adversely affect the applicable industry could also adversely affect our business. • Russian military action against Ukraine and subsequent sanctions against Russia and Belarus has resulted in disruptions to some of our research and development resources, which could lead to interruptions in our development efforts or hamper our ability to maintain our solutions. • If our solutions or third-party cloud providers or sub-processors experience data security breaches and there is loss, theft, misuse, unauthorized disclosure or unauthorized access to our clients’ data, we may lose current or future clients, our reputation and business may be harmed, and we may be subject to governmental inquiries or investigations and a risk of loss or liability. • Our business depends on clients renewing and expanding their subscriptions for our solutions.
Any of these events could seriously harm our business, results of operations, and financial condition. 29 Table of Contents Some of our services and technologies may use “open source” software, which may restrict how we use or distribute our services or require that we release the source code of certain solutions subject to those licenses.
Any of these events could seriously harm our business, results of operations, and financial condition. Some of our services and technologies may use “open source” software, which may restrict how we use or distribute our services or require that we release the source code of certain solutions subject to those licenses.
Our future success depends upon our ability to continue to attract, train, integrate and retain highly skilled employees, particularly those on our management team, including John Hall, our Chief Executive Officer and Stephen Robertson, our Chief Financial Officer, whose services are essential to the execution of our corporate strategy and ensuring the continued operations and integrity of financial reporting within our company.
Our future success depends upon our ability to continue to attract, train, integrate and retain highly skilled employees, particularly those on our management team, including John Hall, our Chief Executive Officer and David Morton, our Chief Financial Officer, whose services are essential to the execution of our corporate strategy and ensuring the continued operations and integrity of financial reporting within our company.
Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their stockholdings in us. The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets.
Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their stockholdings in us. 34 Table of Contents The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets.
Item 1A. Risk Factors. Our business, operations and financial results are subject to various risks and uncertainties, including those described below, that could materially adversely affect our business, results of operations, financial condition, and the trading price of our common stock.
Item 1A. Ris k Factors. Our business, operations and financial results are subject to various risks and uncertainties, including those described below, that could materially adversely affect our business, results of operations, financial condition, and the trading price of our common stock.
In fiscal year 2021, we acquired Repstor, a cloud software company that engages in the creation of Microsoft 365-based enterprise content management and team collaboration tools for the professional services industry. In fiscal year 2022, we acquired the Billstream business from Billstream LLC, which is a legal billing automation solution.
For example, in fiscal year 2021, we acquired Repstor, Limited (“Repstor”), a cloud software company that engages in the creation of Microsoft 365-based enterprise content management and team collaboration tools for the professional services industry. In fiscal year 2022, we acquired the Billstream business from Billstream LLC (“Billstream”), which is a legal billing automation solution.
Disruptions in communications with these resources could also lead to periods of unavailability of our SaaS solutions, which could require the Company to provide credits or refunds to clients or lead to client cancellations. 26 Table of Contents Additionally, we engage through third parties a significant number of independent contractors in our research and development efforts.
Disruptions in communications with these resources could also lead to periods of unavailability of our SaaS solutions, which could require us to provide credits or refunds to clients or lead to client cancellations. 27 Table of Contents Additionally, we engage through third parties a significant number of independent contractors in our research and development efforts.
Some of the Company’s development resources are subject to additional risks inherent in foreign operations, which could lead to interruptions in the Company’s development efforts or hamper the Company’s ability to maintain its solutions.
Some of our development resources are subject to additional risks inherent in foreign operations, which could lead to interruptions in our development efforts or hamper our ability to maintain its solutions.
We have experienced, and may continue to experience, rapid growth, which has placed, and may continue to place, significant demands on our management and our operational and financial resources. We operate globally, sell our services to more than 2,100 clients in more than 40 countries, and have employees and contractors in the United States, Europe and Asia Pacific.
We have experienced, and may continue to experience, rapid growth, which has placed, and may continue to place, significant demands on our management and our operational and financial resources. We operate globally, sell our services to more than 2,300 clients in more than 40 countries, and have employees and contractors in the Americas, Europe and Asia Pacific.
We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. Item 1B. Unresolved Staff Comments. None
We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. 39 Table of Contents Item 1B.
See “Risk Factors—General Risk Factors — Outbreaks, epidemics, or pandemics involving public health, including COVID-19 outbreaks, could harm our business, results of operations, and financial condition.” Our growth strategy is focused on continuing to develop our SaaS solutions, which may increase our costs.
See “Risk Factors—General Risk Factors — Outbreaks, epidemics, or pandemics involving public health could harm our business, results of operations, and financial condition.” 15 Table of Contents Our growth strategy is focused on continuing to develop our SaaS solutions, which may increase our costs.
We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations. Our international sales are generally denominated in foreign currencies, and these revenues could be materially affected by currency fluctuations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Our international sales are generally denominated in foreign currencies, and these revenues could be materially affected by currency fluctuations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
We may be impacted by changes in law as a result of future review or invalidation of, or changes to, transfer mechanisms by European courts or regulators. In the aftermath of the decision in Data Protection Commissioner v.
We may be impacted by changes in law as a result of future review or invalidation of, or changes to, transfer mechanisms by European courts or regulators, including changes to the EU-US Data Privacy Framework. In the aftermath of the decision in Data Protection Commissioner v.
Our ability to expand geographically depends, in large part, on our ability to attract, retain and integrate managers to lead the local business 28 Table of Contents and employees with the appropriate skills.
Our ability to expand geographically depends, in large part, on our ability to attract, retain and integrate managers to lead the local business and employees with the appropriate skills.
Our solutions involve the storage and transmission of data, in some cases to third-party cloud providers, which may include personal data, and security breaches, including at third-party cloud providers, could result in the loss of this information, which in turn could result in litigation, breach of contract claims, indemnity obligations, reputational damage and other liability for our company.
Our solutions involve the storage and transmission of data, in some cases to third-party cloud providers, which may include personal data, and security breaches, including at third-party cloud providers, could result in the loss, theft, misuse, unauthorized disclosure of and unauthorized access to this information, which in turn could result in governmental inquiries or investigations, litigation, breach of contract claims, indemnity obligations, reputational damage and other liability for our company.
In future periods, our revenues could grow more slowly than in recent periods or decline for a number of reasons, including any reduction in demand for our Intapp Platform, increase in competition, limited ability to, or our decision not to, increase pricing, or our failure to capitalize on growth opportunities.
In future periods, our revenues could grow more slowly than in recent periods or decline for a number of reasons, including any reduction in demand for our Intapp platform, increase in competition, limited ability to, or our decision not to, increase pricing, or our failure to capitalize on growth opportunities or if any of the other risks described herein were to materialize.
Bribery Act and other anti-corruption regulations, particularly in emerging market countries; • compliance by international staff with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • import and export license requirements, tariffs, trade agreements, taxes, and other trade barriers; • increased financial accounting and reporting burdens and complexities; • weaker protection of intellectual property rights in some countries; • multiple and possibly overlapping tax regimes; • the application of the respective local laws and regulations to our business in each of the jurisdictions in which we operate and associated legal expenses; • impacts of or uncertainties regarding the United Kingdom’s exit from the EU on regulations, currencies, taxes and operations, including possible disruptions to the sale of our services or the movement of our people between the United Kingdom, EU and other locations; • government sanctions that may interfere with our ability to sell into particular countries; • disruption to our operations caused by epidemics, pandemics or outbreaks, such as COVID-19; and • political, social, and economic instability abroad, including Russia’s invasion of Ukraine, terrorist attacks, and security concerns in general.
Bribery Act and other anti-corruption regulations, particularly in emerging market countries; • compliance by international staff with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • import and export license requirements, tariffs, trade agreements, taxes, and other trade barriers; • increased financial accounting and reporting burdens and complexities; • weaker protection of intellectual property rights in some countries; • multiple and possibly overlapping tax regimes; • the application of the respective local laws and regulations to our business in each of the jurisdictions in which we operate and associated legal expenses; • government sanctions that may interfere with our ability to sell into particular countries; • disruption to our operations caused by epidemics, pandemics or outbreaks; and • political, social, and economic instability abroad, including Russia’s invasion of Ukraine, terrorist attacks, and security concerns in general.
In the event that portions of our proprietary technology are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies, each of which could reduce or eliminate the value of our services and technologies and materially and adversely affect our business, results of operations and prospects.
In the event that portions of our proprietary technology are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies, each of which could reduce or eliminate the value of our services and technologies and materially and adversely affect our business, results of operations and prospects. 31 Table of Contents We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations.
Further, any inability to adequately address privacy concerns in connection with our solutions, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, and adversely affect our ability to offer our solutions.
Such changes could hamper our ability to use data to train our artificial intelligence algorithms. Further, any inability to adequately address privacy concerns in connection with our solutions, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, and adversely affect our ability to offer our solutions.
Also, the effects of climate change may disrupt our clients’ businesses, by, among other things, increasing their costs and credit risk from their customers.
The effects of climate change may further disrupt our clients’ businesses, by, among other things, increasing their costs and credit risk from their customers. Additionally, our market verticals are also interdependent.
As of August 26, 2022, we had an aggregate of 611,711,268 shares of common stock authorized but unissued and not reserved for issuance under our incentive plans. We may issue all of these shares of common stock without any action or approval by our stockholders, subject to certain exceptions.
As of August 25, 2023, we had an aggregate of 604,612,135 shares of common stock authorized but unissued and not reserved for issuance under our incentive plans. We may issue all of these shares of common stock without any action or approval by our stockholders, subject to certain exceptions.
These expenditures may not result in additional revenues or growth of our business. Accordingly, we may not be able to generate sufficient revenues to offset our expected cost increases and achieve and sustain profitability. If we fail to achieve and sustain profitability, the market price of our common stock could decline.
Accordingly, we may not be able to generate sufficient revenues to offset our expected cost increases and achieve and sustain profitability. If we fail to achieve and sustain profitability, the market price of our common stock could decline.
As of August 26, 2022, Anderson Investments Pte Ltd. and its affiliates (collectively, “Anderson”) beneficially own approximately 35% of our common stock and Great Hill Equity Partners IV, L.P. and its affiliates (collectively, “Great Hill”) beneficially own approximately 29% of our common stock.
As of August 25, 2023, Anderson Investments Pte Ltd. and its affiliates (collectively, “Anderson”) beneficially own approximately 28% of our common stock and Great Hill Equity Partners IV, L.P. and its affiliates (collectively, “Great Hill”) beneficially own approximately 23% of our common stock.
Any new markets in which we attempt to sell our solutions, including new countries or regions, may not be receptive or sales cycles may be delayed due to outbreaks, epidemics, or pandemics involving public health , including COVID-19.
Any new markets in which we attempt to sell our solutions, including new countries or regions, may not be receptive or sales cycles may be delayed due to outbreaks, epidemics, or pandemics involving public health, political instabilities and the global economic downturn.
As of September 9, 2022, we had no outstanding loan balance under this facility.
As of September 7, 2023, we had no outstanding loan balance under this facility.
Geopolitical tensions or conflicts, such as Russia’s invasion of Ukraine, may create a heightened risk of cyberattacks. 13 Table of Contents We rely on third-party technology and systems for a variety of services, including, without limitation, third-party cloud providers to host our websites and web-based services, encryption and authentication technology, employee email, content delivery to clients, back-office support and other functions, and the ability to prevent breaches of any of these systems may be beyond our control.
We rely on third-party technology and systems for a variety of services, including, without limitation, third-party cloud providers or sub-processors to host our websites and web-based services, encryption and authentication technology, employee email, content delivery to clients, back-office support and other functions, and the ability to prevent breaches of any of these systems may be beyond our control.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our growth rates may slow and our business would suffer. 11 Table of Contents We have a history of losses and may not achieve or maintain profitability in the future.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our growth rates may slow and our business would suffer.
In addition, other industry-specific factors, such as industry consolidation or the introduction of competing technology, could lead to a significant reduction in the number of clients that use our solutions within a particular vertical or the services demanded by these clients.
In addition, other industry-specific factors, such as industry consolidation or the introduction of competing technology, could lead to a significant reduction in the number of clients that use our solutions within a particular vertical or the services demanded by these clients. Inflation has risen significantly worldwide, and the United States has recently experienced historically high levels of inflation.
Security breaches that result in access to confidential information could damage our reputation and subject us to a risk of loss or liability. We may be required to make significant expenditures to protect against or remediate security breaches. Additionally, if we are unable to adequately address our clients’ concerns about security, we may have difficulty selling our solutions.
Security breaches that result in access to confidential information could damage our reputation and subject us to a risk of loss or liability. We may be required to make significant expenditures to remediate security breaches or significant additional expenditures to protect against security breaches.
As of August 26, 2022, there were 62,963,488 shares of common stock outstanding. Approximately 35% of our outstanding common stock is held by Anderson and approximately 29% of our outstanding common stock is held by Great Hill and can be resold into the public markets in the future in accordance with the requirements of Rule 144.
As of August 25, 2023, there were 69,240,659 shares of common stock outstanding. Approximately 28% of our outstanding common stock is held by Anderson and approximately 23% of our outstanding common stock is held by Great Hill and can be resold into the public markets in the future in accordance with the requirements of Rule 144.
We are an “emerging growth company,” as defined in the JOBS Act and may remain an emerging growth company for up to five years following our IPO.
We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the JOBS Act and may remain an emerging growth company for up to five years following our IPO.
Adverse changes in domestic and global economic and political conditions, including those associated with the withdrawal of the United Kingdom from the European Union (“Brexit”), COVID-19 outbreaks, Russian military action against Ukraine, inflation and the adverse economic downturn, and impacts from climate change, could result in significant decreases in demand for our solutions, including the delay or cancellation of current or anticipated projects, and reduction in IT spending by our clients and potential clients, or could present difficulties in collecting accounts receivables from our clients due to their deteriorating financial condition.
Adverse changes in domestic and global economic and political conditions, including those associated with outbreaks, epidemics, or pandemics involving public health Russian military action against Ukraine, inflation and the adverse economic downturn, stress and volatility in the financial services industry and impacts from climate change, could result in significant decreases in demand or lengthened sales cycles for our solutions, including the delay or cancellation of current or anticipated projects, and reduction in IT spending by our clients and potential clients, or could present difficulties in collecting accounts receivables from our clients if their financial condition deteriorates.
This private right of action may increase the likelihood of, and risks associated with, data breach litigation. In addition, in November 2020, California voters adopted the California Privacy Rights Act (“CPRA”), which goes into effect January 1, 2023, and enhances and strengthens regulatory requirements and individual protections that currently exist under the CCPA.
This private right of action may increase the likelihood of, and risks associated with, data breach litigation. In addition, in November 2020, California voters adopted the CPRA, which became effective January 1, 2023 and under which enforcement has been delayed until March 29, 2024, and enhances and strengthens regulatory requirements and individual protections that currently exist under the CCPA.
These factors may cause significant fluctuations in our results of operations and cash flows, may make it challenging for an investor to predict our performance and may prevent us from meeting or exceeding the expectations of research analysts or investors, which in turn may cause our stock price to decline. 14 Table of Contents Our sales cycles are lengthy and variable, depend upon factors outside our control, and could cause us to expend significant time and resources prior to generating revenues.
These factors may cause significant fluctuations in our results of operations and cash flows, may make it challenging for an investor to predict our performance and may prevent us from meeting or exceeding the expectations of research analysts or investors, which in turn may cause our stock price to decline.
The Company has not been governed by Section 203 of the Delaware General Corporation Law, as amended (the “DGCL”), and we will only become subject to Section 203 of the DGCL, immediately following the time at which both of the following conditions exist: (i) Section 203 of the DGCL by its terms would, but for the provisions of our amended and restated certificate of incorporation, apply to the Company; and (ii) neither Great Hill nor Anderson owns (as defined in Section 203 of the DGCL) shares of capital stock of the Company representing at least fifteen percent (15%) of the voting power of all the then outstanding shares of capital stock of the Company.
Certain provisions of Delaware law, that certain stockholders’ agreement, dated July 2, 2021, by and between us, Anderson and Great Hill (the “Stockholders’ Agreement”), our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could make it more difficult for a third-party to acquire us without the consent of our board of directors or certain existing stockholders. 32 Table of Contents The Company has not been governed by Section 203 of the Delaware General Corporation Law, as amended (the “DGCL”), and we will only become subject to Section 203 of the DGCL, immediately following the time at which both of the following conditions exist: (i) Section 203 of the DGCL by its terms would, but for the provisions of our amended and restated certificate of incorporation, apply to the Company; and (ii) neither Great Hill nor Anderson owns (as defined in Section 203 of the DGCL) shares of capital stock of the Company representing at least fifteen percent (15%) of the voting power of all the then outstanding shares of capital stock of the Company.
Furthermore, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.
We may in the future, identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.
General Risk Factors Outbreaks, epidemics, or pandemics involving public health, including COVID-19 outbreaks, could harm our business, results of operations, and financial condition. Outbreaks, epidemics or pandemics involving public health, could materially and adversely impact our business.
Outbreaks, epidemics, or pandemics involving public health could harm our business, results of operations, and financial condition. Outbreaks, epidemics or pandemics involving public health, including COVID-19, could materially and adversely impact our operations and the markets and industries in which we, our partners and customers operate.
If the third-party cloud providers that host any of our websites or web-based services were to experience a system failure, the performance of our websites and web-based services, including our SaaS solutions, would be harmed and our ability to deliver our solutions to our clients could be impaired, resulting in client dissatisfaction, damage to our reputation, loss of clients, and harm to our operations and our business.
If these outages, delays or service disruptions frequently occur in the future, usage of our web-based services could grow more slowly than anticipated or decline and we may lose revenues and clients. 30 Table of Contents If the third-party cloud providers or sub-processors that host any of our websites or web-based services were to experience a system failure, the performance of our websites and web-based services, including our SaaS solutions, would be harmed and our ability to deliver our solutions to our clients could be impaired, resulting in client dissatisfaction, damage to our reputation, loss of clients, and harm to our operations and our business.
Our voluntary participation in agreements with states, countries, or other jurisdictions, or successful assertions by states, countries, or other jurisdictions that we should have been or should be collecting additional sales, use, or other taxes on our solutions could, among other things, result in substantial tax liabilities for past sales, create significant administrative burdens for us, discourage clients from purchasing our solutions, or otherwise harm our business, results of operations, and financial condition. 30 Table of Contents Risks R elated to O ur O rganizational S tructure If the ownership of our common stock continues to be highly concentrated, it may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest.
Our voluntary participation in agreements with states, countries, or other jurisdictions, or successful assertions by states, countries, or other jurisdictions that we should have been or should be collecting additional sales, use, or other taxes on our solutions could, among other things, result in substantial tax liabilities for past sales, create significant administrative burdens for us, discourage clients from purchasing our solutions, or otherwise harm our business, results of operations, and financial condition.
We have incurred net losses of $99.7 million and $46.8 million in fiscal years 2022 and 2021, respectively. We must generate and sustain higher revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our profitability.
We must generate and sustain higher revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our profitability.
Our risks are likely to increase as we continue to expand our platform, grow our client base, and process, store, and transmit increasingly large amounts of proprietary and sensitive data. Our business depends on clients renewing and expanding their subscriptions for our solutions. A decline in our client renewals and expansions could harm our future results of operations.
Our risks are likely to increase as we continue to expand our platform, grow our client base, and process, store, and transmit increasingly large amounts of confidential and sensitive data, and as cyber security threats continue to grow increasingly sophisticated and complex. 14 Table of Contents Our business depends on clients renewing and expanding their subscriptions for our solutions.
We compete with a number of software and other technology companies to attract and retain software developers with specialized experience in designing, developing, and managing our solutions, including our cloud-based software, as well as for skilled developers, engineers and information technology and operations professionals who can successfully implement and deliver our solutions.
The loss of any member of our senior management team could significantly delay or prevent us from achieving our business and/or development objectives, and could materially harm our business. 29 Table of Contents We compete with a number of software and other technology companies to attract and retain software developers with specialized experience in designing, developing, and managing our solutions, including our cloud-based software, as well as for skilled developers, engineers and information technology and operations professionals who can successfully implement and deliver our solutions.
If our security measures are breached or unauthorized access to client data is otherwise obtained, our solutions may be perceived as not being secure; clients, especially those in the professional and financial services industry, may reduce the use of or stop using our solutions, and we may incur significant liabilities.
While we have developed and implemented measures designed to protect client information and prevent security breaches and our cloud services comply with numerous internationally recognized standards, such as ISO 27001, ISO 27017, ISO 27108, SOC 2 and CSA STAR, if our security measures are breached or unauthorized access to client data is otherwise obtained, our solutions may be perceived as not being secure; clients, especially those in the professional and financial services industry, may reduce the use of or stop using our solutions, and we may incur significant liabilities.
We cannot provide any assurance that the conflict will not spill into neighboring countries where some of our resources have relocated and affect our development and services functions. Any such disruptions may also magnify the impact of other risks described in our Annual Report on Form 10-K.
We cannot provide any assurance that the conflict will not spill into neighboring countries where some of our resources have relocated and affect our development and services functions.
Our industry is evolving rapidly and we anticipate the market for solutions will become increasingly competitive as our current and potential clients move a greater proportion of their data and computational needs to the cloud or to future generation technologies.
If we are unable to compete effectively with these evolving competitors for market share, our business, results of operations, and financial condition would be materially and adversely affected. 18 Table of Contents Our industry is evolving rapidly and we anticipate the market for solutions will become increasingly competitive as our current and potential clients move a greater proportion of their data and computational needs to the cloud or to future generation technologies.
We may also deem it advisable in the near-term or later to downsize certain of our offices in order to reduce costs, which may cause us to incur related charges. If we do not achieve the benefits anticipated from these investments, or if the achievement of these benefits is delayed, our results of operations may be adversely affected.
We may also deem it advisable in the near-term or later to downsize certain of our offices in order to reduce costs, which may cause us to incur related charges.
These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. 31 Table of Contents Risks R elated to O wnership of O ur C ommon S tock The market price and trading volume of our common stock has been and may continue to be volatile, which could result in rapid and substantial losses for our stockholders.
These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.
Any new solutions we develop or acquire may not be introduced 16 Table of Contents in a timely or cost-effective manner and may not achieve the market acceptance necessary to generate significant revenues.
Any new solutions we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve the market acceptance necessary to generate significant revenues. Any new industry standards or practices that emerge, or any introduction by competitors of new solutions embodying new services or technologies, may cause our solutions to become obsolete.
Our executive officers and other key employees are generally employed on an at-will basis, which means that these personnel could terminate their relationship with us at any time. The loss of any member of our senior management team could significantly delay or prevent us from achieving our business and/or development objectives, and could materially harm our business.
Our executive officers and other key employees are generally employed on an at-will basis, which means that these personnel could terminate their relationship with us at any time.
Historical data with respect to rates of client renewals, upgrades and expansions of our solutions, may not accurately predict future trends in client renewals, upgrades and expansions of our solutions.
The loss of business from clients, including from cancellations, could seriously harm our business, results of operations and financial condition. Historical data with respect to rates of client renewals, upgrades and expansions of our solutions, may not accurately predict future trends in client renewals, upgrades and expansions of our solutions.
The conditions caused by the pandemic have adversely affected our business in the past, and the pandemic or other outbreaks, epidemics, or pandemics involving public health, may in the future adversely affect, among other things, demand, spending by new clients, renewal and retention rates of existing clients, the length of our sales cycles, the value and duration of subscriptions, collections of accounts receivable, our IT and other expenses, our ability to recruit, and the ability of our employees to travel, all of which could adversely affect our business, results of operations and financial condition.
The pandemic has and other outbreaks, epidemics, or pandemics involving public health may in the future adversely affect, among other things, demand, spending by new clients, renewal and retention rates of existing clients, the length of our sales cycles, the value and duration of subscriptions, collections of accounts receivable, our IT and other expenses, our ability to recruit, and the ability of our employees to travel, all of which could adversely affect our business, results of operations and financial condition. 37 Table of Contents Because we recognize revenues over the term of the agreements for our SaaS solutions, any downturn in our business resulting from the such outbreaks, epidemics, or pandemics involving public health, including COVID-19 outbreaks, may not be reflected immediately in our operating results, which increases the difficulty of evaluating our future financial performance.
While the metrics presented in this Annual Report on Form 10-K are based on what we believe to be reasonable assumptions and estimates, our internal systems have a number of limitations, and our methodologies for tracking these metrics may change over time.
While the metrics presented in this Annual Report on Form 10-K are based on what we believe to be reasonable assumptions and estimates, our internal systems have a number of limitations, and our methodologies for tracking these metrics may change over time. 17 Table of Contents If investors do not perceive our estimates of our operational metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our results of operations and financial condition could be adversely affected.
The market price of our common stock has been and may continue to be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur.
Risks Related to Ownership of Our Common Stock The market price and trading volume of our common stock has been and may continue to be volatile, which could result in rapid and substantial losses for our stockholders. The market price of our common stock has been and may continue to be highly volatile and could be subject to wide fluctuations.
If we incur significant expenses developing solutions that are not competitive in technology and price or that fail to meet client demands, our market share will decline and our business and results of operations would be harmed.
If we incur significant expenses developing solutions that are not competitive in technology and price or that fail to meet client demands, our market share will decline and our business and results of operations would be harmed. 16 Table of Contents We are expanding our AI offerings to incorporate recent innovations in AI and these initiatives may not be successful, which may adversely affect our business, results of operations and financial condition, and may also result in reputational harm and liability.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits.
This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions. 36 Table of Contents These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits.
Acquisitions and alliances may result in unforeseen operating difficulties and expenditures and may not result in the benefits anticipated by such corporate activity.
In fiscal year 2023, we acquired Paragon, a cloud-based employee compliance software solution provider. Acquisitions and alliances may result in unforeseen operating difficulties and expenditures and may not result in the benefits anticipated by such corporate activity.
If our solutions or third-party cloud providers experience data security breaches, and there is unauthorized access to our clients’ data, we may lose current or future clients, our reputation and business may be harmed, and we may be subject to a risk of loss or liability.
Any such disruptions may also magnify the impact of other risks described in our Annual Report this Form 10-K. 13 Table of Contents If our solutions or third-party cloud providers or sub-processors experience data security breaches, and there is loss, theft, misuse, unauthorized disclosure or unauthorized access to our clients’ data, we may lose current or future clients, our reputation and business may be harmed, and we may be subject to governmental inquiries or investigations and a risk of loss or liability.
As a result, our ability to generate revenues from our clients could be adversely affected by specific factors that affect the professional and financial services industry. 12 Table of Contents Russian military action against Ukraine and subsequent sanctions against Russia and Belarus has resulted in disruptions to some of our research and development resources, which could lead to interruptions in our development efforts or hamper our abilit y to maintain our solutions.
Russian military action against Ukraine and subsequent sanctions against Russia and Belarus has resulted in disruptions to some of our research and development resources, which could lead to interruptions in our development efforts or hamper our ability to maintain our solutions.
Prior to the escalation, a majority of our research and development had been conducted through our facilities based in Ukraine and our contractors’ facilities located in Belarus, Ukraine, and Russia. In addition to product development, our resources in the region also played a role in providing implementation services as well as support services for our solutions.
In addition to product development, our resources in the region also played a role in providing implementation services as well as support services for our solutions.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Future offerings of debt or equity securities by us may materially adversely affect the market price of our common stock.
Future offerings of debt or equity securities by us may materially adversely affect the market price of our common stock.
Upon the effectiveness of such a registration statement, all shares covered by the registration statement will be freely transferable. The market price of our common stock may decline significantly if our existing stockholders were to sell substantial amounts of our common stock.
Such sales of shares into the market could adversely affect the market price of shares of our common stock. The market price of our common stock may decline significantly if our existing stockholders were to sell substantial amounts of our common stock.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition to our head office, we also maintain eight offices in multiple locations in the United States and internationally in the United Kingdom, Singapore and Ukraine. Our lease renewal dates range from 2022 to 2030. We are evaluating our real estate strategy as it relates to the impact of the COVID-19 pandemic and changing needs of a hybrid workforce.
Biggest changeIn addition to our head office, we also maintain eight offices in multiple locations in the United States and internationally in the United Kingdom, Singapore and Ukraine. We are evaluating our real estate strategy as it relates to the impact of post-pandemic and changing needs of a hybrid workforce.
Item 2. Properties. We have nine offices globally, all in leased or managed premises. Our corporate headquarters is located in Palo Alto, California, and consists of approximately 26,000 square feet of space pursuant to an agreement that expires in August 2023.
Item 2. Pro perties. We have nine offices globally, all in leased or managed premises. Our corporate headquarters is located in Palo Alto, California, and consists of approximately 13,000 square feet of space pursuant to an agreement that expires in August 2024.
We believe that suitable additional or alternative space will be available as needed to accommodate any such changes. 37 Table of Contents
We believe that suitable additional or alternative space will be available as needed to accommodate any such changes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The information contained in Note 8. “Commitments and Contingencies—Litigation” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings. The information contained in Note 9. “Commitments and Contingencies—Litigation” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K is incorporated herein by reference.
Removed
On February 11, 2021, Navatar Group, Inc. commenced an action in the United States District Court for the Southern District of New York captioned Navatar Group, Inc. v. DealCloud, Inc., 1:21-cv-01255.
Removed
In its complaint, Navatar asserts false advertising and related claims, alleging that DealCloud, Inc., a subsidiary of the Company, has disseminated false and/or misleading statements about Navatar’s financial condition, current sales and sales staff levels. Navatar claims that it has lost customers and prospective customers to DealCloud as a result of the allegedly false statements.
Removed
The Company believes that the allegations are without merit and is vigorously defending the claim. Item 4. Mine Safety Disclosures. Not applicable. 38 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 38 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. [Reserved] 40 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 61 Item 8.
Added
Item 4. Mine Saf ety Disclosures. Not applicable. 40 Table of Contents PART II Item 5 . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “INTA” and began trading on June 30, 2021.
Added
Prior to that date, there was no public trading market for our common stock. Holders of Common Stock As of August 25, 2023, there were 30 holders of record of our common stock.
Added
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy We have never declared or paid any cash dividends on our capital stock.
Added
We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
Added
Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.
Added
Our ability to pay cash dividends on our capital stock is limited by our Credit Agreement. Recent Sales of Unregistered Securities All unregistered sales of equity securities during the period covered by this Annual Report were previously disclosed on prior Quarterly Reports on Form 10-Q that we filed with the SEC. Issuer Purchases of Equity Securities None.
Added
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K. 41 Table of Contents Performance Graph The following graph shows a comparison of the cumulative total return for our common stock to the Nasdaq Composite - Total Return Index and S&P Software & Services Select Industry Index for the fiscal year ended June 30, 2023, assuming an initial investment of $100.
Added
Such comparisons are based on historical results and are not intended to suggest future performance. Data for the Nasdaq Composite Total Return Index and S&P Software & Services Select Industry Index assume reinvestment of dividends.
Added
Comparison of Cumulative Total Return The performance graph above shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Exchange Act or the Securities Act.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “INTA” and began trading on June 30, 2021. Prior to that date, there was no public trading market for our common stock.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. [Reserved] 42 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 64 Item 8. Financial Statements and Supplementary Data 65
Removed
Holders of Common Stock As of August 26, 2022, there were 18 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Removed
Dividend Policy We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
Removed
Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.
Removed
Our ability to pay cash dividends on our capital stock is limited by our Credit Agreement. Recent Sales of Unregistered Securities None Use of Proceeds from our IPO On July 2, 2021, we completed our initial public offering, in which we sold 10,500,000 shares of our common stock to the public at a price of $26.00 per share.
Removed
Additionally, on July 8, 2021, we sold an additional 1,575,000 shares of our common stock, pursuant to the underwriters’ exercise in full of the over-allotment option that was granted to the underwriters in connection with our initial public offering, for an aggregate of 12,075,000 shares of our common stock sold in our initial public offering.
Removed
The offer and sale of the shares of our common stock in our initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-256812) which was declared effective by the SEC on June 29, 2021. The aggregate offering price for the shares sold in the offering was $314.0 million.
Removed
We received net proceeds of $283.0 million after deducting underwriters’ discounts and commissions and offering expenses of $31.0 million. We used $278.0 million of the net proceeds from the offering to fully repay outstanding borrowings under a term loan and an associated revolving credit facility (together, the “Prior Credit Facility”).
Removed
As of June 30, 2022, we have used all of the net proceeds from the IPO for the purposes described in the prospectus relating to our initial public offering. Issuer Purchases of Equity Securities None.
Removed
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K. 39 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Exchange Act or the Securities Act.
Removed
The following graph shows a comparison of the cumulative total return for our common stock to the Nasdaq Composite - Total Return Index and S&P Software & Services Select Industry Index for the fiscal year ended June 30, 2022, assuming an initial investment of $100.
Removed
Such comparisons are based on historical results and are not intended to suggest fu ture performance. Data for the Nasdaq Composite Total Return Index and S&P Software & Services Select Industry Index assume reinvestment of dividends. Comparison of Cumulative Total Return

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized. 45 Table of Contents Results of Operations The following tables set forth our results of operations for the periods presented, expressed in total dollar terms and as a percentage of total revenues (percentages may not add up due to rounding): Year Ended June 30, 2022 2021 2020 (in thousands, except for percentages) Revenues: SaaS and support $ 192,980 71 % $ 144,075 67 % $ 114,125 61 % Subscription license 44,202 16 45,963 21 48,427 26 Total recurring revenues 237,182 87 190,038 89 162,552 87 Professional services 34,889 13 24,595 11 24,300 13 Total revenues 272,071 100 214,633 100 186,852 100 Cost of revenues (1) : SaaS and support 51,177 19 40,644 19 37,677 20 Total cost of recurring revenues 51,177 19 40,644 19 37,677 20 Professional services 47,906 18 33,730 16 32,847 18 Restructuring — — — — 765 — Total cost of revenues 99,083 36 74,374 35 71,289 38 Gross profit 172,988 64 140,259 65 115,563 62 Operating expenses (1) : Research and development 74,412 27 50,853 24 42,090 23 Sales and marketing 111,905 41 69,948 33 58,898 32 General and administrative (2) 86,127 32 42,418 20 28,491 15 Restructuring — — — — 2,894 2 Total operating expenses 272,444 100 163,219 76 132,373 71 Operating loss (99,456 ) (37 ) (22,960 ) (11 ) (16,810 ) (9 ) Loss on debt extinguishment (2,407 ) (1 ) — — — — Interest expense (274 ) — (24,608 ) (11 ) (27,856 ) (15 ) Other income (expense), net (976 ) — 1,276 1 (896 ) — Net loss before income taxes (103,113 ) (38 ) (46,292 ) (22 ) (45,562 ) (24 ) Income tax benefit (expense) 3,435 1 (472 ) — (353 ) — Net loss $ (99,678 ) (37 ) % $ (46,764 ) (22 ) % $ (45,915 ) (25 ) % ___________________ (1) Amounts include stock-based compensation expense as follows: Year Ended June 30, 2022 2021 2020 Cost of SaaS and support $ 1,258 1 % $ 250 — % $ 203 — % Cost of professional services 3,029 1 878 1 439 — Research and development 17,166 6 4,054 2 1,145 1 Sales and marketing 25,428 9 6,791 3 1,037 — General and administrative 30,633 11 6,593 3 1,315 1 Total stock-based compensation expense $ 77,514 28 % $ 18,566 9 % $ 4,139 2 % ( 2 ) Includes acquisition-related transaction costs of $1.9 million and $1.6 million for fiscal years 2022 and 2021, respectively. 46 Table of Contents Comparison of the Fiscal Y ears E nded June 30, 20 2 2 and 202 1 Revenues Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Revenues: SaaS and support $ 192,980 $ 144,075 $ 48,905 34 % Subscription license 44,202 45,963 (1,761 ) (4 )% Total recurring revenues 237,182 190,038 47,144 25 % Professional services 34,889 24,595 10,294 42 % Total revenues $ 272,071 $ 214,633 $ 57,438 27 % Recurring Revenues Recurring revenues from the sale of our SaaS solutions, from subscriptions to our term software solutions, and from providing support for these solutions increased by $47.1 million, or 25%, compared to the prior year.
Biggest changeWe maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized. 47 Table of Contents Results of Operations The following tables set forth our results of operations for the periods presented, expressed in total dollar terms and as a percentage of total revenues (percentages may not add up due to rounding): Year Ended June 30, 2023 2022 2021 (in thousands, except for percentages) Revenues: SaaS and support $ 252,310 72 % $ 192,980 71 % $ 144,075 67 % Subscription license 48,970 14 44,202 16 45,963 21 Total recurring revenues 301,280 86 237,182 87 190,038 89 Professional services 49,593 14 34,889 13 24,595 11 Total revenues 350,873 100 272,071 100 214,633 100 Cost of revenues (1) : SaaS and support 53,022 15 51,177 19 40,644 19 Total cost of recurring revenues 53,022 15 51,177 19 40,644 19 Professional services 58,440 17 47,906 18 33,730 16 Total cost of revenues 111,462 32 99,083 36 74,374 35 Gross profit 239,411 68 172,988 64 140,259 65 Operating expenses (1) : Research and development 93,851 27 74,412 27 50,853 24 Sales and marketing 132,189 38 111,905 41 69,948 33 General and administrative (2) 81,031 23 86,127 32 42,418 20 Lease modification and impairment 1,601 — — — — — Total operating expenses 308,672 88 272,444 100 163,219 76 Operating loss (69,261 ) (20 ) (99,456 ) (37 ) (22,960 ) (11 ) Loss on debt extinguishment — — (2,407 ) (1 ) — — Interest expense (156 ) — (274 ) — (24,608 ) (11 ) Other income (expense), net (503 ) — (976 ) — 1,276 1 Net loss before income taxes (69,920 ) (20 ) (103,113 ) (38 ) (46,292 ) (22 ) Income tax benefit (expense) 495 — 3,435 1 (472 ) — Net loss $ (69,425 ) (20 ) % $ (99,678 ) (37 ) % $ (46,764 ) (22 ) % ___________________ (1) Amounts include stock-based compensation expense as follows: Year Ended June 30, 2023 2022 2021 Cost of SaaS and support $ 1,705 — % $ 1,258 1 % $ 250 — % Cost of professional services 3,916 1 3,029 1 878 1 Research and development 15,186 4 17,166 6 4,054 2 Sales and marketing 20,426 6 25,428 9 6,791 3 General and administrative 26,536 8 30,633 11 6,593 3 Total stock-based compensation expense $ 67,769 19 % $ 77,514 28 % $ 18,566 9 % (2) Includes acquisition-related transaction costs of $1.4 million, $1.9 million and $1.6 million for fiscal years 2023, 2022 and 2021, respectively. 48 Table of Contents Comparison of the Fiscal Years Ended June 30, 2023 and 2022 Revenues Year Ended June 30, Change 2023 2022 Amount % (in thousands, except for percentages) Revenues: SaaS and support $ 252,310 $ 192,980 $ 59,330 31 % Subscription license 48,970 44,202 4,768 11 % Total recurring revenues 301,280 237,182 64,098 27 % Professional services 49,593 34,889 14,704 42 % Total revenues $ 350,873 $ 272,071 $ 78,802 29 % Recurring Revenues Recurring revenues from the sale of our SaaS solutions, from subscriptions to our term software solutions, and from providing support for these solutions increased by $64.1 million, or 27%, compared to the prior year.
We measure our ability to grow and retain ARR from existing clients using a metric we refer to as net revenue retention. We calculate this by starting with the ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period ARR.
Net Revenue Retention. We measure our ability to grow and retain ARR from existing clients using a metric we refer to as net revenue retention. We calculate this by starting with the ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period ARR.
Financing Activities During fiscal year 2022, net cash provided by financing activities was $6.6 million, primarily comprised of $292.8 million in net proceeds from our IPO completed in July 2021, $10.2 million of proceeds from stock option exercises and $1.2 million of proceeds from employee stock purchase plan, partially offset by $278.0 million used for the repayment of borrowings, $10.4 million of payment for contingent consideration related to the acquisition of Repstor, $4.4 million of payments related to deferred offering costs in connection with our IPO, $3.9 million of payments related to tax withholding for vested equity awards and $0.8 million of payments related to deferred financing costs in connection with our JPMorgan Credit Facility.
During fiscal year 2022, net cash provided by financing activities was $6.6 million, primarily comprised of $292.8 million in net proceeds from our IPO completed in July 2021, $10.2 million of proceeds from stock option exercises and $1.2 million of proceeds from employee stock purchase plan, partially offset by $278.0 million used for the repayment of borrowings, $10.4 million of payment for contingent consideration related to the acquisition of Repstor, $4.4 million of payments related to deferred offering costs in connection with our IPO, $3.9 million of payments related to tax withholding for vested equity awards and $0.8 million of payments related to deferred financing costs in connection with our JPMorgan Credit Facility.
Other Income (Expense), Net Other income (expense), net consists primarily of realized and unrealized foreign exchange gains and losses resulting from fluctuations in foreign currency exchange rates on monetary assets and liabilities denominated in currencies other than the U.S. dollar.
Other Income (Expense), Net Other income (expense), net consists primarily of realized and unrealized foreign exchange gains and losses resulting from fluctuations in foreign currency exchange rates on monetary assets and liabilities denominated in currencies other than the U.S. dollar and interest income.
See Note 8 to our consolidated financial statements for additional information. Purchase obligations primarily consist of non-cancelable obligations under third-party cloud hosting and support service agreements and software subscriptions. See Note 8 to our consolidated financial statements for additional information.
See Note 8 to our consolidated financial statements for additional information. Purchase obligations primarily consist of non-cancelable obligations under third-party cloud hosting and support service agreements and software subscriptions. See Note 9 to our consolidated financial statements for additional information.
We will remain an emerging growth company until the earlier of (1) the last day of fiscal year in which we have more than $1.07 billion in annual revenues; (2) the date we qualify as a “large accelerated filer,” which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter, and we have been required to file annual, quarterly and current reports under the Exchange Act for at least twelve months, and we have filed at least one annual report pursuant to the Exchange Act; (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (4) the last day of fiscal year ending after the fifth anniversary of our initial public offering. 60 Table of Contents
We will remain an emerging growth company until the earlier of (1) the last day of fiscal year in which we have more than $1.235 billion in annual revenues; (2) the date we qualify as a “large accelerated filer,” which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter, and we have been required to file annual, quarterly and current reports under the Exchange Act for at least twelve months, and we have filed at least one annual report pursuant to the Exchange Act; (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (4) the last day of fiscal year ending after the fifth anniversary of our initial public offering. 63 Table of Contents
Operating Expenses Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Operating expenses: Research and development $ 74,412 $ 50,853 $ 23,559 46 % Sales and marketing 111,905 69,948 41,957 60 % General and administrative 86,127 42,418 43,709 103 % Total operating expenses $ 272,444 $ 163,219 $ 109,225 67 % Research and Development Research and development expenses increased by $23.6 million, or 46%, for fiscal year 2022 compared to fiscal year 2021.
Operating Expenses Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Operating expenses: Research and development $ 74,412 $ 50,853 $ 23,559 46 % Sales and marketing 111,905 69,948 41,957 60 % General and administrative 86,127 42,418 43,709 103 % Total operating expenses $ 272,444 $ 163,219 $ 109,225 67 % 53 Table of Contents Research and Development Research and development expenses increased by $23.6 million, or 46%, for fiscal year 2022 compared to fiscal year 2021.
This demand will be affected by the mix of professional services that are provided by us versus provided by our third-party implementation partners. Our professional services are currently loss making (after allocated overhead costs for facilities and IT) and accounted for 13%, 11% and 13% of our total revenues during fiscal years 2022, 2021 and 2020, respectively.
This demand will be affected by the mix of professional services that are provided by us versus provided by our third-party implementation partners. Our professional services are currently loss making (after allocated overhead costs for facilities and IT) and accounted for 14%, 13% and 11% of our total revenues during fiscal years 2023, 2022 and 2021, respectively.
The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million. As of June 30, 2022, no amounts have been borrowed under the JPMorgan Credit Facility. See Note 9 to our consolidated financial statements for additional information.
The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million. As of June 30, 2023, no amounts have been borrowed under the JPMorgan Credit Facility. See Note 10 to our consolidated financial statements for additional information.
We expect the cost of professional services revenues to increase in absolute dollars as we continue to hire personnel to provide implementation, upgrade and migration services to our growing client base.
We expect the cost of professional services revenues to increase in absolute dollars as we continue to hire personnel and engage contractors to provide implementation, upgrade and migration services to our growing client base.
Our recurring revenues accounted for 87%, 89% and 87% of our total revenues during fiscal years 2022, 2021 and 2020, respectively. SaaS and Support We recognize revenues from our SaaS solutions ratably over the term of the contract beginning once the SaaS environment is provisioned and made available to clients.
Our recurring revenues accounted for 86%, 87% and 89% of our total revenues during fiscal years 2023, 2022 and 2021, respectively. SaaS and Support We recognize revenues from our SaaS solutions ratably over the term of the contract beginning once the SaaS environment is provisioned and made available to clients.
However, over time as we focus on new sales of our SaaS solutions and encourage existing subscription license clients to migrate to SaaS solutions, we expect revenues from support to decrease as a percentage of total revenues. 43 Table of Contents Subscription L icense Our subscription licenses provide the client with the right to functional intellectual property and are distinct performance obligations as the client can benefit from the subscription licenses on their own.
However, over time as we focus on new sales of our SaaS solutions and encourage existing subscription license clients to migrate to SaaS solutions, we expect revenues from support to decrease as a percentage of total revenues. 45 Table of Contents Subscription License Our subscription licenses provide the client with the right to functional intellectual property and are distinct performance obligations as the client can benefit from the subscription licenses on their own.
These changes were partially offset by an increase in accounts receivable of $18.2 million due to growth in our revenues and the timing of 53 Table of Contents collections from our clients , an increase in deferred commissions of $ 8.0 million consistent with our revenue growth and a de crease in other liabilities of $ 3. 1 million , primarily due to a decrease in our accrued interest as our debt under the Prior Credit Facility was repaid in full in July 2021 .
These changes were partially offset by an increase in accounts receivable of $18.2 million due to growth in our revenues and the timing of collections from our clients, an increase in deferred commissions of $8.0 million consistent with our revenue growth and a decrease in other liabilities of $3.1 million, primarily due to a decrease in our accrued interest as our debt under the Prior Credit Facility was repaid in full in July 2021.
As a result, we expect a minor increase in research and development expenses due to increased labor rates pertaining to contract resources and relocation costs in connection with such resources, from Ukraine, Russia, and Belarus, to other jurisdictions and backfilling positions in other jurisdictions for those not willing or able to relocate.
As a result, we have incurred and expect to continue to incur a minor increase in research and development expenses due to increased labor rates pertaining to contract resources and relocation costs in connection with such resources, from Ukraine, Russia, and Belarus, to other jurisdictions and backfilling positions in other jurisdictions for those not willing or able to relocate.
We also intend to rely on certain other exemptions and reduced reporting requirements under the JOBS Act, including: not having to (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act or (2) comply with any requirement that may be adopted by Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.
We also intend to rely on certain other exemptions and reduced reporting requirements under the JOBS Act, including: not having to (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act or (2) comply with any requirement that may be adopted by PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.
We invested in developing a multi-tenant cloud version of our platform and launched our initial software-as-a-service (“SaaS”) solutions in 2017. We recognize revenues from SaaS subscriptions ratably over the term of the contract, while we recognize revenues from the license component of on-premise subscriptions upfront and the support component of such subscriptions ratably over the support term.
We invested in developing a multi-tenant cloud version of our platform and launched our initial SaaS solutions in 2017. We recognize revenues from SaaS subscriptions ratably over the term of the contract, while we recognize revenues from the license component of on-premise subscriptions upfront and the support component of such subscriptions ratably over the support term.
Being a new public company, we expect to incur significant additional accounting and legal costs related to compliance with rules and regulations enacted by the SEC, including the additional costs of achieving and maintaining compliance with the Sarbanes-Oxley Act, as well as additional insurance, investor relations and other costs associated with being a public company.
As a public company, we expect to continue to incur significant accounting and legal costs related to compliance with rules and regulations enacted by the SEC, including the costs of maintaining compliance with the Sarbanes-Oxley Act, as well as insurance, investor relations and other costs associated with being a public company.
From a sales perspective, our ability to add new clients and expand within existing accounts depends upon a number of factors, including the quality and effectiveness of our sales personnel and marketing efforts, and our ability to convince key decision makers within professional and financial services firms to embrace the Intapp Platform over point solutions, internally developed solutions, and horizontal solutions. 41 Table of Contents Net Revenue Retention .
From a sales perspective, our ability to add new clients and expand within existing accounts depends upon a number of factors, including the quality and effectiveness of our sales personnel and marketing efforts, and our ability to convince key decision makers within professional and financial services firms to embrace the Intapp platform over point solutions, internally developed solutions, and horizontal solutions.
We were in compliance with all of the covenants as of June 30, 2022. As of June 30, 2022, no amounts have been borrowed under the JPMorgan Credit Facility. Critical Accounting Policies and Estimates The process of preparing our consolidated financial statements in conformity with U.S.
We were in compliance with all of the covenants as of June 30, 2023. As of June 30, 2023, no amounts have been borrowed under the JPMorgan Credit Facility. 60 Table of Contents Critical Accounting Policies and Estimates The process of preparing our consolidated financial statements in conformity with U.S.
Future borrowings under the JPMorgan Credit Facility will bear interest, at our election, at an annual rate of either (a) LIBOR plus a percentage spread (ranging from 1.75% to 2.50%) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75% to 1.50%), in each case based on our total net leverage ratio.
Future borrowings under the JPMorgan Credit Facility will bear interest, at our election, at an annual rate based on either (a) an adjusted secured overnight financing rate (SOFR, as described in the Credit Agreement) plus a percentage spread (ranging from 1.75% to 2.50%) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75% to 1.50%), in each case based on our total net leverage ratio.
As of June 30, 2022, we had over 2,100 clients. Our client base includes some of the largest and most reputable professional and financial services firms globally.
As of June 30, 2023, we had over 2,300 clients. Our client base includes some of the largest and most reputable professional and financial services firms globally.
In the medium-term, we expect to see an increase in sales and marketing expense as we continue to expand our direct sales force to take advantage of opportunities for growth and resume in-person meetings, conferences, and attendance at trade shows as the COVID-19 pandemic wanes.
In the medium-term, we expect to see an increase in sales and marketing expense as we continue to expand our direct sales force to take advantage of opportunities for growth and resume more normal post-COVID-19 levels of in-person meetings, conferences, and attendance at trade shows.
See Note 6 to our consolidated financial statements for additional information. 55 Table of Contents Non-GAAP F inancial M easures We report our financial results in accordance with GAAP, however, management believes evaluating our ongoing operating results may be enhanced if investors have additional non-GAAP financial measures.
See Note 6 to our consolidated financial statements for additional information. 58 Table of Contents Non-GAAP Financial Measures We report our financial results in accordance with GAAP, however, management believes evaluating our ongoing operating results may be enhanced if investors have additional non-GAAP financial measures.
As noted above, we also expect a minor increase in research and development expenses in connection with the relocation of contract resources primarily from Russia and Belarus to other geographic locations and transitioning work previously performed by such teams to other teams outside of the conflict zone in the European Union, U.K. and Americas. 44 Table of Contents Sales and M arketing Our sales and marketing expenses consist primarily of costs incurred for personnel-related costs for our sales and marketing employees as well as commission payments to our sales employees, costs of marketing events and online advertising, allocations of various overhead and facilities costs and travel and entertainment expenses.
We experienced a minor year-over-year increase in research and development expenses in connection with the relocation of contract resources primarily from Russia and Belarus to other geographic locations and transitioning work previously performed by such teams to other teams outside of the conflict zone in the European Union, U.K. and Americas. 46 Table of Contents Sales and Marketing Our sales and marketing expenses consist primarily of costs incurred for personnel-related costs for our sales and marketing employees as well as commission payments to our sales employees, costs of marketing events and online advertising, allocations of various overhead and facilities costs and travel and entertainment expenses.
Cost of Revenues and Gross Profit Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Cost of revenues: SaaS and support $ 51,177 $ 40,644 $ 10,533 26 % Total cost of recurring revenues 51,177 40,644 10,533 26 % Professional services 47,906 33,730 14,176 42 % Total cost of revenues 99,083 74,374 24,709 33 % Gross profit: SaaS and support 141,803 103,431 38,372 37 % Subscription license 44,202 45,963 (1,761 ) (4 )% Total gross profit - recurring revenues 186,005 149,394 36,611 25 % Professional services (13,017 ) (9,135 ) (3,882 ) 42 % Gross profit $ 172,988 $ 140,259 $ 32,729 23 % 47 Table of Contents Cost of SaaS and Support Cost of SaaS and support revenues increased by $10.5 million, or 26%, for fiscal year 2022 compared to fiscal year 2021.
This reflects a continuation in demand for implementation, upgrade and migration services, which were adversely impacted by COVID-19 during fiscal year 2021. 52 Table of Contents Cost of Revenues and Gross Profit Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Cost of revenues: SaaS and support $ 51,177 $ 40,644 $ 10,533 26 % Total cost of recurring revenues 51,177 40,644 10,533 26 % Professional services 47,906 33,730 14,176 42 % Total cost of revenues 99,083 74,374 24,709 33 % Gross profit: SaaS and support 141,803 103,431 38,372 37 % Subscription license 44,202 45,963 (1,761 ) (4 )% Total gross profit - recurring revenues 186,005 149,394 36,611 25 % Professional services (13,017 ) (9,135 ) (3,882 ) 42 % Gross profit $ 172,988 $ 140,259 $ 32,729 23 % Cost of SaaS and Support Cost of SaaS and support revenues increased by $10.5 million, or 26%, for fiscal year 2022 compared to fiscal year 2021.
Allocated overhead costs increased by $1.3 million due to increased headcount and overall costs to support the growth in our business. Amortization expense relating to intangible assets increased by $1.1 million. 48 Table of Contents General and A dministrative General and administrative expense increased by $43.7 million, or 103%, for fiscal year 2022 compared to fiscal year 2021.
Allocated overhead costs increased by $1.3 million due to increased headcount and overall costs to support the growth in our business. Amortization expense relating to intangible assets increased by $1.1 million. General and Administrative General and administrative expenses increased by $43.7 million, or 103%, for fiscal year 2022 compared to fiscal year 2021.
Key Business Metrics We review a number of operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. 42 Table of Contents Annual R ecurring R evenues ( “ A RR ” ) ARR represents the annualized recurring value of all active SaaS and on-premise subscription contracts at the end of a reporting period.
Key Business Metrics We review a number of operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. 44 Table of Contents Annual Recurring Revenues (“ARR”) ARR represents the annualized recurring value of all active SaaS and on-premise subscription contracts at the end of a reporting period.
In addition to the obligations described above, in connection with the acquisition of Billstream, we are also obligated to pay contingent consideration up to a maximum of $5.0 million in the second quarter of fiscal year 2024, if certain performance measures are achieved.
In addition to the obligations described above, in connection with the acquisition of Billstream, we are also obligated to pay contingent consideration in the second quarter of fiscal year 2024 up to a maximum of $5.0 million and by the third quarter of fiscal 2025, a maximum of $6.4 million in connection with the acquisition of Paragon, if certain performance measures are achieved.
Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Emerging Growth Company Status In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our clients. ARR was $270.5 million and $212.3 million as of June 30, 2022 and 2021, respectively, an increase of 27%.
ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our clients. ARR was $330.2 million and $270.5 million as of June 30, 2023 and 2022, respectively, an increase of 22%.
The estimates and assumptions requiring significant judgment under our revenue recognition policy in accordance with ASC 606 are as follows: Determination of the transaction price We determine the transaction price based on the consideration to which we expect to be entitled in exchange for transferring our services and products to the client.
The estimates and assumptions requiring significant judgment under our revenue recognition policy in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), are as follows: Determination of the transaction price We determine the transaction price based on the consideration to which we expect to be entitled in exchange for transferring our services and products to the client.
Any such increase is expected to be offset in part by cost reductions in future discretionary spending.
Any such increase has been and is expected to continue to be offset in part by cost reductions in future discretionary spending.
As of June 30, 2022 and 2021, we had 506 and 420 clients, respectively, with contracts greater than $100,000 of ARR, of which 41 and 31 clients, respectively, had contracts greater than $1.0 million of ARR.
As of June 30, 2023 and 2022, we had 603 and 506 clients, respectively, with contracts greater than $100,000 of ARR, of which 53 and 41 clients, respectively, had contracts greater than $1.0 million of ARR.
Other Income (Expense), Net Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Other income (expense), net $ (976 ) $ 1,276 $ (2,252 ) (176 )% The change in other income (expense), net, was primarily due to the impact of fluctuations in foreign currency rates on our monetary asset and liability balances denominated in currencies other than the U.S.
The decrease was mainly due to the full repayment of our debt under the Prior Credit Facility in July 2021. 54 Table of Contents Other Income (Expense), Net Year ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Other income (expense), net $ (976 ) $ 1,276 $ (2,252 ) (176 )% The change in other income (expense), net, was primarily due to the impact of fluctuations in foreign currency rates on our monetary asset and liability balances denominated in currencies other than the U.S.
Our total revenues for fiscal years 2022, 2021 and 2020 were $272.1 million, $214.6 million and $186.9 million, respectively. Net losses attributable to us for fiscal years 2022, 2021 and 2020 were $99.7 million, $46.8 million and $45.9 million, respectively. Key Factors Affecting Our Performance Market Adoption of our Cloud Platform.
Our total revenues for fiscal years 2023, 2022 and 2021 were $350.9 million, $272.1 million and $214.6 million, respectively. Net losses attributable to us for fiscal years 2023, 2022 and 2021 were $69.4 million, $99.7 million and $46.8 million, respectively. 43 Table of Contents Key Factors Affecting Our Performance Market Adoption of our Cloud Platform.
The following table provides a reconciliation of gross profit to non-GAAP gross profit (in thousands): Year Ended June 30, 2022 2021 2020 Gross profit $ 172,988 $ 140,259 $ 115,563 Adjusted to exclude the following (as related to cost of revenues): Stock-based compensation 4,287 1,128 642 Amortization of intangible assets 7,877 6,783 7,371 Restructuring costs — — 765 Non-GAAP gross profit $ 185,152 $ 148,170 $ 124,341 Non-GAAP Recurring Gross Profit We define non-GAAP recurring gross profit as GAAP total recurring revenues less GAAP total cost of recurring revenues adjusted for the portion of cost related to stock-based compensation expense and amortization of intangible assets.
The following table provides a reconciliation of gross profit to non-GAAP gross profit (in thousands): Year Ended June 30, 2023 2022 2021 GAAP gross profit $ 239,411 $ 172,988 $ 140,259 Adjusted to exclude the following: Stock-based compensation 5,621 4,287 1,128 Amortization of intangible assets 4,340 7,877 6,783 Non-GAAP gross profit $ 249,372 $ 185,152 $ 148,170 Non-GAAP Recurring Gross Profit We define non-GAAP recurring gross profit as GAAP total recurring revenues less GAAP total cost of recurring revenues adjusted for the portion of cost related to stock-based compensation expense and amortization of intangible assets.
To complement our organic investment in innovation and accelerate our growth, we will continue to evaluate acquisition opportunities that help us extend our platform, broaden and deepen our market leadership, and add new clients. COVID-19 Expenses.
To complement our organic investment in innovation and accelerate our growth, we will continue to evaluate acquisition opportunities that help us extend our platform, broaden and deepen our market leadership, and add new clients. Business Impact of Russia’s Invasion of Ukraine.
We finance our liquidity needs primarily through collections from clients and the issuance of equity securities. We generally bill and collect from our clients annually in advance. Our billings are subject to seasonality with billings in the fourth quarter higher than the other quarters. In July 2021, we received net proceeds of $283.0 million upon the completion of our IPO.
We finance our liquidity needs primarily through collections from clients and the issuance of equity securities. We generally bill and collect from our clients annually in advance. Our billings are subject to seasonality with billings in the fourth quarter higher than the other quarters.
How We Generate Revenue We generate revenues primarily from software subscriptions, typically with one-year or multi-year contract terms. We sell our software through a direct enterprise sales model, which targets clients based on end market, geography, firm size, and business need.
We intend to use the net proceeds from the offering for working capital and general corporate purposes. How We Generate Revenue We generate revenues primarily from software subscriptions, typically with one-year or multi-year contract terms. We sell our software through a direct enterprise sales model, which targets clients based on end market, geography, firm size, and business need.
These adjustments consisted of $17.8 million of non-cash charges (principally comprising depreciation and amortization and stock-based compensation expense), and net cash inflow of $26.7 million from net changes in operating assets and liabilities.
These adjustments consisted of $87.7 million of non-cash charges (principally comprising stock-based compensation expense, depreciation and amortization and amortization of operating lease right-of-use assets) and net cash inflow of $9.2 million from net changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the periods indicated (in thousands): Year Ended June 30, 2022 2021 2020 Net cash provided by (used in) operating activities (1) $ 14,236 $ (9,749 ) $ (1,410 ) Net cash used in investing activities (7,287 ) (25,604 ) (5,134 ) Net cash provided by financing activities 6,647 32,404 27,246 Effect of foreign currency exchange rate changes on cash and cash equivalents (748 ) 1,253 (161 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 12,848 $ (1,696 ) $ 20,541 (1) Includes debt-related cash interest payments of $6.0 million, $24.1 million and $22.1 million during fiscal years 2022, 2021 and 2020, respectively.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the periods indicated (in thousands): Year Ended June 30, 2023 2022 2021 Net cash provided by (used in) operating activities (1) $ 27,487 $ 14,236 $ (9,749 ) Net cash used in investing activities (14,340 ) (7,287 ) (25,604 ) Net cash provided by financing activities 64,100 6,647 32,404 Effect of foreign currency exchange rate changes on cash and cash equivalents (373 ) (748 ) 1,253 Net increase (decrease) in cash, cash equivalents and restricted cash $ 76,874 $ 12,848 $ (1,696 ) (1) Includes debt-related cash interest payments of $6.0 million and $24.1 million during fiscal years 2022 and 2021, respectively. 56 Table of Contents Operating Activities During fiscal year 2023, net cash provided by operating activities was $27.5 million, as our operating loss of $69.4 million was reduced by $96.9 million of adjustments.
The following table provides a reconciliation of recurring gross profit to non-GAAP recurring gross profit (in thousands): Year Ended June 30, 2022 2021 2020 Total recurring revenues $ 237,182 $ 190,038 $ 162,552 Total cost of recurring revenues 51,177 40,644 37,677 Recurring gross profit 186,005 149,394 124,875 Adjusted to exclude the following (as related to cost of recurring revenues) Stock-based compensation 1,258 250 203 Amortization of intangible assets 7,877 6,783 7,371 Non-GAAP recurring gross profit $ 195,140 $ 156,427 $ 132,449 56 Table of Contents Non-GAAP Operating Profit (Loss) We define non-GAAP operating profit (loss) as GAAP operating loss excluding stock-based compensation expense, amortization of intangible assets, change in fair value of contingent consideration, acquisition-related transaction costs and restructuring costs.
The following table provides a reconciliation of recurring gross profit to non-GAAP recurring gross profit (in thousands): Year Ended June 30, 2023 2022 2021 Total recurring revenues $ 301,280 $ 237,182 $ 190,038 Total cost of recurring revenues 53,022 51,177 40,644 Recurring gross profit 248,258 186,005 149,394 Adjusted to exclude the following: Stock-based compensation 1,705 1,258 250 Amortization of intangible assets 4,340 7,877 6,783 Non-GAAP recurring gross profit $ 254,303 $ 195,140 $ 156,427 59 Table of Contents Non-GAAP Operating Profit (Loss) We define non-GAAP operating profit (loss) as GAAP operating loss excluding stock-based compensation expense, amortization of intangible assets, lease modification and impairment, change in fair value of contingent consideration and acquisition-related transaction costs.
We believe our existing cash, cash equivalents and restricted cash as of June 30, 2022, along with our JPMorgan Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. On October 5, 2021, we entered into a Credit Agreement with a group of lenders led by JPMorgan.
We believe our existing cash, cash equivalents and restricted cash as of June 30, 2023, along with our JPMorgan Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months.
During fiscal year 2021, net cash provided by financing activities was $32.4 million, primarily comprised of $29.0 million from the issuance of common stock and $15.7 million proceeds from option exercises, partially offset by $5.4 million of payments related to offering costs in connection with our IPO, $5.0 million for the repayment of borrowings on our revolving line of credit and $1.9 million of payments for the repurchase of common stock. 54 Table of Contents During fiscal year 2020, net cash provided by financing activities was $27.2 million, primarily resulting from $16.5 million net proceeds for the issuance of convertible preferred stock, $3.6 million proceeds from option exercises and shareholder contribution and $10.0 million of net proceeds from borrowings on our revolving line of credit , offset by payments of $2.8 million to repurchase shares and options in the tender offer in October 2019.
During fiscal year 2021, net cash provided by financing activities was $32.4 million, primarily comprised of $29.0 million from the issuance of common stock and $15.7 million proceeds from option exercises, partially offset by $5.4 million of payments related to offering costs in connection with our IPO, $5.0 million for the repayment of borrowings on our revolving line of credit and $1.9 million of payments for the repurchase of common stock.
Cloud ARR was $162.9 million and $109.7 million as of June 30, 2022 and 2021, an increase of 48%, and represented 60% and 52% of ARR for fiscal years 2022 and 2021, respectively.
Cloud ARR was $222.3 million and $162.9 million as of June 30, 2023 and 2022, respectively, an increase of 36%, and represented 67% and 60% of ARR for fiscal years 2023 and 2022, respectively.
During fiscal year 2021, net cash used in investing activities was $25.6 million, consisting of $20.6 million of cash consideration (net of cash acquired) paid for our acquisition of Repstor, Limited (“Repstor”), capitalized internal-use software costs of $2.5 million and capital expenditures of $2.5 million on property and equipment consisting largely of leasehold improvements to our facilities in Charlotte, North Carolina.
During fiscal year 2023, net cash used in investing activities was $14.3 million, consisting of $6.6 million cash consideration paid for the acquisition of Paragon, capitalized internal-use software costs of $5.5 million and capital expenditures of $2.2 million on property and equipment largely of computer equipment and leasehold improvements to our facilities in London, United Kingdom.
We measure stock-based compensation expense for performance-based stock options based on the estimated grant date fair value determined using the Black-Scholes valuation model, and we recognize compensation expense for such awards in the period in which it becomes probable that the performance target will be achieved. 59 Table of Contents Goodwill Goodwill represents the excess purchase price over fair value of net tangible and identifiable intangible assets acquired in our business combinations.
We measure stock-based compensation expense for performance-based stock options based on the estimated grant date fair value determined using the Black-Scholes valuation model, and we recognize compensation expense for such awards in the period in which it becomes probable that the performance target will be achieved.
The income tax expense for fiscal years 2021 and 2020 are primarily attributable to taxes in foreign jurisdictions. 52 Table of Contents Liquidity and C apital R esources Sources of Liquidity As of June 30, 2022, we had cash, cash equivalents, and restricted cash of $54.3 million.
The income tax benefit (expense) for fiscal years 2022 and 2021 are primarily attributable to taxes in a number of foreign jurisdictions. 55 Table of Contents Liquidity and Capital Resources Sources of Liquidity As of June 30, 2023, we had cash, cash equivalents, and restricted cash of $131.2 million.
Loss on Debt Extinguishment Loss on debt extinguishment consists of the write-off of unamortized deferred financing costs upon the repayment of our debt obligations. Interest Expense Interest expense consists primarily of the interest on our debt, which was repaid in full in July 2021, and the amortization of deferred financing costs.
Interest Expense Interest expense consists primarily of the interest on our debt, which was repaid in full in July 2021, and the non-cash interest expense related to the amortization of deferred financing costs.
These adjustments consisted of $90.1 million of non-cash charges (principally comprising stock-based compensation expense and depreciation and amortization) and net cash inflow of $23.8 million from net changes in operating assets and liabilities.
During fiscal year 2022, net cash provided by operating activities was $14.2 million, as our operating loss of $99.7 million was reduced by $113.9 million of adjustments. These adjustments consisted of $90.1 million of non-cash charges (principally comprising stock-based compensation expense and depreciation and amortization) and net cash inflow of $23.8 million from net changes in operating assets and liabilities.
We believe non-GAAP gross profit provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of gross profit.
Non-GAAP Gross Profit We define non-GAAP gross profit as GAAP gross profit before the portion related to cost of revenues of stock-based compensation expense and amortization of intangible assets. We believe non-GAAP gross profit provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of gross profit.
The primary purpose of our invoicing terms is to provide clients with simplified and predictable ways of purchasing our products and services, not to receive financing from clients or to provide clients with financing. 58 Table of Contents Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, we allocate the entire transaction price to the single performance obligation.
The primary purpose of our invoicing terms is to provide clients with simplified and predictable ways of purchasing our products and services, not to receive financing from clients or to provide clients with financing.
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on its relative standalone selling price (“SSP”). The determination of SSP involves judgment and is generally based on the contractually stated, observable prices of the promised goods and services charged when sold separately to client.
The determination of SSP involves judgment and is generally based on the contractually stated, observable prices of the promised goods and services charged when sold separately to client.
Some of our performance obligations have observable inputs that are used to determine the SSP of those distinct performance obligations. Where SSP is not directly observable, we determine the SSP using information that may include market conditions and other observable inputs.
Some of our performance obligations have observable inputs that are used to determine the SSP of those distinct performance obligations.
These changes were partially offset by an increase in unbilled revenues of $3.8 million and deferred commissions of $3.4 million consistent with our revenue growth and a decrease in accounts payable and accrued liabilities of $1.3 million due to timing of payments.
These changes were partially offset by an increase in accounts receivable of $26.4 million due to growth in our revenues and the timing of billing and collections on our outstanding receivables, a decrease of $5.9 million in operating lease liabilities due to lease payments, an increase of $3.9 million in unbilled receivables due to the timing of invoicing to our clients, an increase in deferred commissions of $3.4 million due to increased sales and a decrease in other liabilities of $1.3 million due to timing of payments.
We test goodwill for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. We have determined that we have one reporting unit for purposes of our annual impairment evaluation.
Goodwill Goodwill represents the excess purchase price over fair value of net tangible and identifiable intangible assets acquired in our business combinations. We test goodwill for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount may not be recoverable.
Stock-Based Compensation We calculate compensation expense related to stock option awards made to employees, consultants and directors based on the fair value of stock-based awards on the date of grant.
Where SSP is not directly observable, we determine the SSP using information that may include market conditions and other observable inputs. 61 Table of Contents Stock-Based Compensation We calculate compensation expense related to stock option awards made to employees, consultants and directors based on the fair value of stock-based awards on the date of grant.
The following table provides a reconciliation of GAAP operating loss to non-GAAP operating profit (loss) (in thousands): Year Ended June 30, 2022 2021 2020 Operating loss $ (99,456 ) $ (22,960 ) $ (16,810 ) Adjusted to exclude the following (including the portion related to total cost of revenues): Stock-based compensation 77,514 18,566 4,139 Amortization of intangible assets 13,519 10,870 11,339 Change in fair value of contingent consideration (639 ) — — Acquisition-related transaction costs 1,939 1,557 — Restructuring costs — — 3,659 Non-GAAP operating profit (loss) $ (7,123 ) $ 8,033 $ 2,327 57 Table of Contents Indebtedness As of June 30, 2021, we had an outstanding balance under our Prior Credit Facility of $273.0 million under a term loan and $5.0 million under the associated revolving credit facility.
The following table provides a reconciliation of GAAP operating loss to non-GAAP operating profit (loss) (in thousands): Year Ended June 30, 2023 2022 2021 GAAP operating loss $ (69,261 ) $ (99,456 ) $ (22,960 ) Adjusted to exclude the following: Stock-based compensation 67,769 77,514 18,566 Amortization of intangible assets 10,773 13,519 10,870 Lease modification and impairment 1,601 — — Change in fair value of contingent consideration (1,762 ) (639 ) — Acquisition-related transaction costs 1,366 1,939 1,557 Non-GAAP operating profit (loss) $ 10,486 $ (7,123 ) $ 8,033 Indebtedness On October 5, 2021, we entered into a Credit Agreement, as amended on June 6, 2022 and further amended on November 17, 2022, with a group of lenders led by JPMorgan.
The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts and other receivable of $7.7 million as we increased collections on our outstanding receivables, an increase in deferred revenues of $18.0 million consistent with our revenue growth and an increase in other liabilities of $9.0 million which primarily related to accrued interest on our debt and deferred rent.
The net cash inflow from changes in operating assets and liabilities was primarily driven by an increase in deferred revenues of $46.6 million due to our revenue growth, an increase in accounts payable and accrued liabilities of $2.3 million due to an increase in accrued bonuses and timing of payments, and a decrease of $1.3 million in prepaid expenses and other assets.
Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information regarding recent accounting pronouncements and our assessment of their impact. Emerging Growth Company Status In April 2012, the JOBS Act was enacted.
If, as a result of its qualitative assessment, the carrying amount of the reporting unit is more than its fair value, an impairment charge in the amount of such excess is recorded to goodwill. 62 Table of Contents Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information regarding recent accounting pronouncements and our assessment of their impact.
The income tax benefit (expense) for fiscal years 2022 and 2021 are primarily attributable to taxes in a number of foreign jurisdictions. 49 Table of Contents Comparison of the Fiscal Y ears E nded June 30, 20 21 and 2020 Revenues Year Ended June 30, Change 2021 2020 Amount % (in thousands, except for percentages) Revenues: SaaS and support $ 144,075 $ 114,125 $ 29,950 26 % Subscription license 45,963 48,427 (2,464 ) (5 )% Total recurring revenues 190,038 162,552 27,486 17 % Professional services 24,595 24,300 295 1 % Total revenues $ 214,633 $ 186,852 $ 27,781 15 % Recurring Revenues Recurring revenues from the sale of our SaaS solutions, from subscriptions to our term software solutions, and from providing support for these solutions increased by $27.5 million, or 17%, compared to the prior year.
Comparison of the Fiscal Years Ended June 30, 2022 and 2021 Revenues Year Ended June 30, Change 2022 2021 Amount % (in thousands, except for percentages) Revenues: SaaS and support $ 192,980 $ 144,075 $ 48,905 34 % Subscription license 44,202 45,963 (1,761 ) (4 )% Total recurring revenues 237,182 190,038 47,144 25 % Professional services 34,889 24,595 10,294 42 % Total revenues $ 272,071 $ 214,633 $ 57,438 27 % Recurring Revenues Recurring revenues from the sale of our SaaS solutions, from subscriptions to our term software solutions, and from providing support for these solutions increased by $47.1 million, or 25%, compared to the prior year.
Income Tax Expense Year ended June 30, Change 2021 2020 Amount % (in thousands, except for percentages) Income tax expense $ (472 ) $ (353 ) $ (119 ) 34 % Income tax expense was $0.5 million for fiscal year 2021 compared to an income tax expense of $0.4 million recorded during fiscal year 2020.
Interest income increased due to increases in the interest rate and cash balances during fiscal year 2023 compared to fiscal year 2022. 51 Table of Contents Income Tax Benefit Year Ended June 30, Change 2023 2022 Amount % (in thousands, except for percentages) Income tax benefit $ 495 $ 3,435 $ (2,940 ) (86 )% Income tax benefit was $0.5 million for fiscal year 2023 compared to an income tax benefit of $3.4 million recorded during fiscal year 2022.
The balance was fully repaid in July 2021 using proceeds from the IPO. On October 5, 2021, we entered into a Credit Agreement with a group of lenders led by JPMorgan.
On October 5, 2021, we entered into a Credit Agreement, as amended on June 6, 2022 and further amended on November 17, 2022, with a group of lenders led by JPMorgan.
Material Cash Requirements Our material cash commitments as of June 30, 2022 were as follows: Total Short-Term Long-Term (in thousands) Operating lease obligations $ 30,277 $ 7,882 $ 22,395 Purchase obligations 132,716 7,688 125,028 Acquisition-related obligations: Deferred purchase consideration 10,390 10,390 — Acquisition holdbacks 3,320 2,320 1,000 Contingent consideration - earned 9,709 9,709 — Total cash requirements $ 186,412 $ 37,989 $ 148,423 Operating lease obligations consist of obligations under non-cancelable operating leases for office space with expiration through June 2030.
Material Cash Requirements Our material cash commitments as of June 30, 2023 were as follows (in thousands): Total Short-Term Long-Term Operating lease obligations $ 25,721 $ 5,998 $ 19,723 Purchase obligations 123,517 10,003 113,514 Acquisition holdbacks 3,124 1,065 2,059 Total cash requirements $ 152,362 $ 17,066 $ 135,296 Operating lease obligations consist of obligations under non-cancelable operating leases for office space with expiration through June 2030.
As part of the annual goodwill impairment test, we perform a quantitative assessment to determine whether a goodwill impairment shall be recognized. If, as a result of this quantitative assessment, the carrying amount of our reporting unit is more than its fair value, an impairment charge in the amount of such excess is recorded to goodwill.
We have determined that we have one reporting unit for purposes of our annual impairment evaluation. As part of the annual goodwill impairment test, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
The decrease was mainly due to the full repayment of our debt under the Prior Credit Facility in July 2021.
The decrease was mainly due to the full repayment of our debt under the Prior Credit Facility in July 2021. The change in other expense, net, was primarily due to the impact of fluctuations in foreign currency rates on our monetary asset and liability balances denominated in currencies other than the U.S. Dollar, primarily British Pounds.
Personnel costs increased by $9.4 million due to an increase in headcount, the impact of annual pay raises and higher commission expense due to new sales growth.
Personnel-related costs increased by $19.8 million due to annual salary increase and increased headcount ($8.4 million of which was due to the operational and organizational realignment of part of the client success team to sales and marketing), and higher sales commissions driven by increased sales.
Cost of Professional Services Cost of professional services revenues increased by $0.9 million, or 3%, for fiscal year 2021 compared to fiscal year 2020, primarily due to an increase in headcount-related costs due to new hires and an increase in the annual bonus, partially offset by a decrease in travel related costs due to the impact of COVID-19.
Cost of Professional Services Cost of professional services revenues increased by $10.5 million, or 22%, for fiscal year 2023 compared to fiscal year 2022, primarily due to an increase in personnel-related costs of $6.5 million due to salary raises and increased headcount, sub-contractor costs of $3.3 million, and other allocated overhead costs of $0.5 million as we expanded our teams to provide implementation and migration services to our growing client base.
This reflects a continuation in demand for implementation, upgrade and migration services, which were adversely impacted by COVID-19 during fiscal year 2021.
Professional Services Professional services revenues increased by $14.7 million, or 42%, for fiscal year 2023 compared to fiscal year 2022. This reflects a continuation in demand for implementation, upgrade and migration services consistent with our revenue growth.
Stock-based compensation expense increased by $2.9 million due to an increase in option grants made in fiscal year 2021 combined with an increase in the fair value of the common stock underlying such grants. These increases were partially offset by a decrease in travel related costs of $0.9 million due to COVID-19 related restrictions.
These increases were partially offset by a decrease of $5.0 million in stock-based compensation expense due to the reversal of stock-based compensation expense on forfeitures of unvested performance stock awards and achievement of performance milestones on previously granted awards in fiscal year 2022.
We expect that operating losses could continue in the future as we continue to invest in the growth of our business.
In May 2023, we received net proceeds of $68.5 million upon the completion of our follow-on offering. We intend to use the net proceeds from the offering for working capital and general corporate purposes. Operating losses could continue in the future as we continue to invest in the growth of our business.
These increases were partially offset by a decrease of $4.8 million in travel related costs and marketing expenses resulting from the curtailment of business travel and in-person corporate marketing events caused by COVID-19. 51 Table of Contents General and A dministrative General and administrative expenses increased by $13.9 million, or 49%, for fiscal year 2021 compared to fiscal year 2020.
These increases were partially offset by a decrease of $2.0 million in stock-based compensation expense arising primarily from the reversal of stock-based compensation expense on forfeitures of unvested performance stock awards. 50 Table of Contents Sales and Marketing Sales and marketing expenses increased by $20.3 million, or 18%, for fiscal year 2023 compared to fiscal year 2022.
These increases were partially offset by a $1.4 million decrease in travel and entertainment and company event related expenses resulting from the suspension of business travel and in-person company events due to COVID-19. Restructuring Restructuring expense decreased by $2.9 million in fiscal year 2021 compared to fiscal year 2020.
These decreases were partially offset by an increase of $5.2 million in personnel-related costs primarily due to annual salary increases and increased headcount and an increase of $1.6 million in travel and company event related expenses.
Removed
We have averaged a net revenue retention rate of more than 114% and 110% in fiscal years 2022 and 2021, respectively, due to a steady increase in ARR from upsell and cross-sell motions.
Added
Public Offering On May 22, 2023, we completed a registered public offering of 7,187,500 shares of our common stock at a price of $36.50 per share less underwriting discounts and commissions. We sold 2,000,000 of such shares and existing stockholders sold 5,187,500 of such shares.
Removed
In March 2020, in response to the COVID-19 pandemic to ensure the safety of our employees, we implemented a global work from home policy and suspended international and domestic travel. We began easing these restrictions as we entered fiscal year 2022, including by re-opening offices and resuming some essential business travel and in-person marketing events.
Added
We did not receive any proceeds from the sales by the selling stockholders in this public offering. The aggregate gross proceeds for the shares sold in the offering by us were $73.0 million. We received net proceeds of $68.5 million after deducting underwriters’ discounts and commissions and estimated offering expenses of $4.5 million.
Removed
As a result, we have seen an increase in travel-related and marketing expenses. In March 2022, we announced a broad return to office on a voluntary basis and in the long term, we expect to adopt a hybrid work model to allow flexibility for our employees.
Added
We upsold additional seats and cross-sold new solutions to our existing clients such that our trailing twelve months’ net revenue retention rate as of June 30, 2023 was within our expected range of 113% to 117%.
Removed
We continue to closely monitor the status of COVID-19 cases in the community to ensure the health and safety of our employees and clients and may reinstate travel and meeting restrictions from time to time in response to future COVID surges. Business Impact of Russia’s Invasion of Ukraine.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf a hypothetical 10% change in the relative value of U.S. dollar to British Pound were to occur in the future, the resulting gain or loss would be immaterial on our operating results. Credit Risk We routinely assess the creditworthiness of our clients.
Biggest changeIf a hypothetical 10% change in foreign currency exchange rates were to occur in the future, the resulting gain or loss would be immaterial on our operating results over the next twelve months. Credit Risk We routinely assess the creditworthiness of our clients.
We have not experienced any material losses related to non-payment of receivables from individual or groups of clients due to loss of creditworthiness during fiscal years 2022, 2021 and 2020. We had one client that represented in excess of 10% of our accounts receivable balance at each of June 30, 2022 and 2021.
We have not experienced any material losses related to non-payment of receivables from individual or groups of clients due to loss of creditworthiness during fiscal years 2023, 2022 and 2021. We had one client that represented in excess of 10% of our accounts receivable balance at each of June 30, 2023 and 2022.
These matters could harm our business, results of operations, or financial condition. Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to our senior secured revolving credit facility of up to $100.0 million. As of September 9, 2022, we had no outstanding loan balance under this facility.
These matters could harm our business, results of operations, or financial condition. Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to our senior secured revolving credit facility of up to $100.0 million. As of September 7, 2023, we had no outstanding loan balance under this facility.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business, including foreign currency exchange, credit, inflation, and interest rate risks.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business, including foreign currency exchange, credit, inflation, and interest rate risks.
Future borrowings under this facility will accrue interest at a variable rate based on, at our election, either (a) LIBOR plus a percentage spread (ranging from 1.75% to 2.50%) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75% to 1.50%), in each case based on the Company’s total net leverage ratio.
Future borrowings under this facility will accrue interest at a variable rate based on, at our election, either (a) an adjusted secured overnight financing rate (SOFR, as described in the Credit Agreement) plus a percentage spread (ranging from 1.75% to 2.50%) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75% to 1.50%), in each case based on the Company’s total net leverage ratio.
As a result, we will be exposed to increased interest rate risk if we draw down on the facility. 61
As a result, we will be exposed to increased interest rate risk if we draw down on the facility. 64 Table of Contents
Our exposure to foreign currency exchange risk relates primarily to our contingent consideration liability, accounts receivable, cash balances and other employee compensation related obligations denominated in British Pounds.
Our exposure to foreign currency exchange risk relates primarily to our accounts receivable, cash balances, other employee compensation related obligations and lease liabilities denominated in currencies other than the U.S. dollar.

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