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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒

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

 

For the quarterly period ended September 30, 2024

or

 

☐

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

 

For the transition period from __________ to ___________.

 

Commission file number: 001-39048

 

AvePoint, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

83-4461709

(State or other jurisdiction of incorporation or organization)

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

 

525 Washington Blvd, Suite 1400

Jersey City, NJ 07310

(Address of principal executive offices) (Zip Code)

 

(804) 314-5903

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report).

 

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

 

Title of each class

 

Trading symbol

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

AVPT

 

The Nasdaq Global Select Market

Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share

 

AVPTW

 

The Nasdaq Global Select Market

 

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

 

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

 

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

 

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐Smaller reporting company ☐
 Emerging growth company ☐

 

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

 

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

 

As of November 6, 2024 there were 187,511,301 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

 

 
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FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “Quarterly Report”) of AvePoint, Inc. (hereinafter referred to as the “Company,” “AvePoint,” “we," “us” and “our”) includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements, as well as descriptions of the risks and uncertainties that could cause actual results and events to differ materially, may appear throughout this Quarterly Report, including in the following sections: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Quarterly Report), “Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Quarterly Report), and “Risk Factors” (Part II, Item 1A of this Quarterly Report). These risks and uncertainties also include, but are not limited to, those described from time to time in the Company’s reports filed with the Securities and Exchange Commission (“SEC”).

 

These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events, or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, sales, earnings, and statements expressing general views about future operating results — are forward-looking statements. These forward-looking statements are, by their nature, subject to significant risks and uncertainties, and are based on the beliefs of, as well as assumptions made by and information currently available to, our management. Our management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Readers should evaluate all forward-looking statements made in the context of these risks and uncertainties. The important factors referenced above may not contain all of the factors that are important to investors.

 

In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications.

 

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PART I

Item 1

 

PART I. FINANCIAL INFORMATION.

 

Item 1. Financial Statements.

 

 

Index to Financial Statements (Unaudited)

  

Page
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023   5
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 2023   6
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023   7
Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023   8
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023   10
Notes to Condensed Consolidated Financial Statements   11

 

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AvePoint, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except par value)

(Unaudited)

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 

Assets

        

Current assets:

        

Cash and cash equivalents

 $249,803  $223,162 

Short-term investments

  173   3,721 

Accounts receivable, net

  79,986   85,877 

Prepaid expenses and other current assets

  11,083   12,824 

Total current assets

  341,045   325,584 

Property and equipment, net

  5,248   5,118 

Goodwill

  19,003   19,156 

Intangible assets, net

  9,709   10,546 

Operating lease right-of-use assets

  14,259   13,908 

Deferred contract costs

  55,371   54,675 

Other assets

  18,320   13,595 

Total assets

 $462,955  $442,582 

Liabilities, mezzanine equity, and stockholders’ equity

        

Current liabilities:

        

Accounts payable

 $3,898  $1,384 

Accrued expenses and other current liabilities

  57,459   53,766 

Current portion of deferred revenue

  133,338   121,515 

Total current liabilities

  194,695   176,665 

Long-term operating lease liabilities

  8,986   9,383 

Long-term portion of deferred revenue

  8,929   7,741 

Earn-out shares liabilities

  29,941   18,346 

Other liabilities

  4,683   5,603 

Total liabilities

  247,234   217,738 

Commitments and contingencies (Note 9)

          

Mezzanine equity

        

Redeemable noncontrolling interest

  —   6,038 

Total mezzanine equity

  —   6,038 

Stockholders’ equity

        

Common stock, $0.0001 par value; 1,000,000 shares authorized, 187,431 and 184,652 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

  19   18 

Additional paid-in capital

  693,819   667,881 

Accumulated other comprehensive income

  4,431   3,196 

Accumulated deficit

  (484,451)  (460,496)

Noncontrolling interest

  1,903   8,207 

Total stockholders’ equity

  215,721   218,806 

Total liabilities, mezzanine equity, and stockholders’ equity

 $462,955  $442,582 

 

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Revenue:

                                

SaaS

   $ 60,866     $ 41,910     $ 165,820     $ 115,701  

Term license and support

     14,140       16,293       35,128       40,474  

Services

     10,810       11,194       31,808       31,007  

Maintenance

     2,988       3,363       8,543       10,019  

Total revenue

     88,804       72,760       241,299       197,201  

Cost of revenue:

                                

SaaS

     10,624       9,561       30,139       26,586  

Term license and support

     373       484       1,202       1,441  

Services

     10,057       9,922       28,777       29,231  

Maintenance

     167       189       487       584  

Total cost of revenue

     21,221       20,156       60,605       57,842  

Gross profit

     67,583       52,604       180,694       139,359  

Operating expenses:

                                

Sales and marketing

     30,050       28,436       90,459       82,978  

General and administrative

     17,043       15,838       52,095       45,679  

Research and development

     12,838       8,643       35,827       26,931  

Total operating expenses

     59,931       52,917       178,381       155,588  

Income (loss) from operations

     7,652       (313 )     2,313       (16,229 )

Other expense, net

     (4,541 )     (1,076 )     (8,107 )     (1,576 )

Income (loss) before income taxes

     3,111       (1,389 )     (5,794 )     (17,805 )

Income tax expense

     183       2,841       6,170       8,132  

Net income (loss)

   $ 2,928     $ (4,230 )   $ (11,964 )   $ (25,937 )

Net income (loss) attributable to noncontrolling interest

     308       (18 )     (59 )     57  

Net income (loss) available to common shareholders

   $ 2,620     $ (4,212 )   $ (11,905 )   $ (25,994 )

Net income (loss) per share:

                                

Basic

   $ 0.01     $ (0.02 )   $ (0.07 )   $ (0.14 )

Diluted

   $ 0.01     $ (0.02 )   $ (0.07 )   $ (0.14 )

Weighted average shares outstanding:

                                

Basic

     183,946       181,769       182,753       182,630  

Diluted

     203,859       181,769       182,753       182,630  

 

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net income (loss)

   $ 2,928     $ (4,230 )   $ (11,964 )   $ (25,937 )

Other comprehensive income (loss) net of taxes

                                

Unrealized gain (loss) on available-for-sale securities

     3       —       (138 )     —  

Foreign currency translation adjustments

     1,794       56       1,395       228  

Total other comprehensive income

     1,797       56       1,257       228  

Total comprehensive income (loss)

   $ 4,725     $ (4,174 )   $ (10,707 )   $ (25,709 )

Comprehensive income (loss) attributable to noncontrolling interest

     406       (18 )     (35 )     (16 )

Total comprehensive income (loss) available to common shareholders

   $ 4,319     $ (4,156 )   $ (10,672 )   $ (25,693 )

 

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

   

Three Months Ended September 30, 2024

  
                                   

Accumulated

                  
                   

Additional

            

Other

            

Total

  
   

Common Stock

    

Paid-In

    

Accumulated

    

Comprehensive

    

Noncontrolling

    

Stockholders’

  
   

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Interest

    

Equity

  

Balance, June 30, 2024

     186,657,306     $ 19     $ 688,487     $ (485,327 )   $ 2,732     $ 1,497     $ 207,408  

Proceeds from exercise of options

     117,457       —       279       —       —       —       279  

Common stock issued upon vesting of restricted stock units

     874,326       —       —       —       —       —       —  

Stock-based compensation expense

     —       —       9,811       —       —       —       9,811  

Reclassification of earn-out RSUs to earn-out shares

     —       —       (120 )     —       —       —       (120 )

Purchase of public warrants

     —       —       (3,828 )     —       —       —       (3,828 )

Repurchase and retirement of common stock

     (218,546 )     —       (810 )     (1,744 )     —       —       (2,554 )

Comprehensive income:

                                                        

Net income

     —       —       —       2,620       —       308       2,928  

Unrealized gain on available-for-sale securities

     —       —       —       —       3       —       3  

Foreign currency translation adjustments

     —       —       —       —       1,696       98       1,794  

Balance, September 30, 2024

     187,430,543     $ 19     $ 693,819     $ (484,451 )   $ 4,431     $ 1,903     $ 215,721  

 

  

Three Months Ended September 30, 2023

 
  

Redeemable

  

Total

                  

Accumulated

     
  

noncontrolling

  

mezzanine

          

Additional

      

Other

  

Total

 
  

interest

  

equity

  

Common Stock

  

Paid-In

  

Accumulated

  

Comprehensive

  

Stockholders’

 
  

Amount

  

Amount

  

Shares

  

Amount

  

Capital

  

Deficit

  

Income

  

Equity

 

Balance, June 30, 2023

 $14,009  $14,009   185,723,183  $19  $659,604  $(450,750) $2,251  $211,124 

Proceeds from exercise of options

  —   —   288,180   —   625   —   —   625 

Common stock issued upon vesting of restricted stock units

  —   —   631,866   —   —   —   —   — 

Stock-based compensation expense

  —   —   —   —   9,285   —   —   9,285 

Reclassification of earn-out RSUs to earn-out shares

  —   —   —   —   (127)  —   —   (127)

Repurchase and retirement of common stock

  —   —   (2,647,605)  (1)  (9,495)  (7,144)  —   (16,640)

Comprehensive income (loss):

                                

Net loss

  —   —   —   —   —   (4,230)  —   (4,230)

Net loss attributable to and accretion of redeemable noncontrolling interest

  (18)  (18)  —   —   —   18   —   18 

Foreign currency translation adjustments

  —   —   —   —   —   —   56   56 

Balance, September 30, 2023

 $13,991  $13,991   183,995,624  $18  $659,892  $(462,106) $2,307  $200,111 

 

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

   

Nine Months Ended September 30, 2024

  
   

Redeemable

    

Total

                                    

Accumulated

                  
   

noncontrolling

    

mezzanine

                    

Additional

            

Other

            

Total

  
   

interest

    

equity

    

Common Stock

    

Paid-In

    

Accumulated

    

Comprehensive

    

Noncontrolling

    

Stockholders’

  
   

Amount

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Interest

    

Equity

  

Balance, December 31, 2023

   $ 6,038     $ 6,038       184,652,402     $ 18     $ 667,881     $ (460,496 )   $ 3,196     $ 8,207     $ 218,806  

Proceeds from exercise of options

     —       —       1,502,820       —       3,613       —       —       —       3,613  

Common stock issued upon vesting of restricted stock units

     —       —       3,905,299       1       (1 )     —       —       —       —  

Stock-based compensation expense

     —       —       —       —       29,807       —       —       —       29,807  

Accretion of redeemable noncontrolling interest

     (99 )     (99 )     —       —       —       99       —       —       99  

Redemption of noncontrolling interest

     (5,926 )     (5,926 )     —       —       6,379       —       2       (6,381 )     —  

Reclassification of earn-out RSUs to earn-out shares

     —       —       —       —       (378 )     —       —       —       (378 )

Purchase of public warrants

     —       —       —       —       (3,828 )     —       —       —       (3,828 )

Repurchase and retirement of common stock

     —       —       (2,629,978 )     —       (9,654 )     (12,050 )     —       —       (21,704 )

Comprehensive (loss) income:

                                                                        

Net (loss) income

     (5 )     (5 )     —       —       —       (12,004 )     —       45       (11,959 )

Unrealized loss on available-for-sale securities

     —       —       —       —       —       —       (138 )     —       (138 )

Foreign currency translation adjustments

     (8 )     (8 )     —       —       —       —       1,371       32       1,403  

Balance, September 30, 2024

   $ —     $ —       187,430,543     $ 19     $ 693,819     $ (484,451 )   $ 4,431     $ 1,903     $ 215,721  

 

 

   

Nine Months Ended September 30, 2023

  
   

Redeemable

    

Total

                                                    

Accumulated

          
   

noncontrolling

    

mezzanine

                    

Additional

                            

Other

    

Total

  
   

interest

    

equity

    

Common Stock

    

Paid-In

    

Treasury Stock

    

Accumulated

    

Comprehensive

    

Stockholders’

  
   

Amount

    

Amount

    

Shares

    

Amount

    

Capital

    

Shares

    

Amount

    

Deficit

    

Income

    

Equity

  

Balance, December 31, 2022

   $ 14,007     $ 14,007       185,277,588     $ 19     $ 665,715       4,189,750     $ (21,666 )   $ (416,927 )   $ 2,006     $ 229,147  

Proceeds from exercise of options

     —       —       2,063,783       —       3,865       —       —       —       —       3,865  

Common stock issued upon vesting of restricted stock units

     —       —       2,637,904       —       —       —       —       —       —       —  

Stock-based compensation expense

     —       —       —       —       26,975       —       —       —       —       26,975  

Reclassification of earn-out RSUs to earn-out shares

     —       —       —       —       (439 )     —       —       —       —       (439 )

Repurchase and retirement of common stock

     —       —       (5,983,651 )     (1 )     (36,224 )     (4,189,750 )     21,666       (19,185 )     —       (33,744 )

Comprehensive income (loss):

                                                                                

Net loss

     —       —       —       —       —       —       —       (25,937 )     —       (25,937 )

Net income attributable to and accretion of redeemable noncontrolling interest

     57       57       —       —       —       —       —       (57 )     —       (57 )

Foreign currency translation adjustments

     (73 )     (73 )     —       —       —       —       —       —       301       301  

Balance, September 30, 2023

   $ 13,991     $ 13,991       183,995,624     $ 18     $ 659,892       —     $ —     $ (462,106 )   $ 2,307     $ 200,111  

 

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

   

Nine Months Ended

  
   

September 30,

  
   

2024

    

2023

  

Operating activities

                

Net loss

   $ (11,964 )   $ (25,937 )

Adjustments to reconcile net loss to net cash provided by operating activities:

                

Depreciation and amortization

     4,020       3,439  

Operating lease right-of-use assets expense

     4,975       5,294  

Foreign currency remeasurement loss

     1,212       763  

Stock-based compensation

     29,807       26,975  

Deferred income taxes

     (235 )     (240 )

Other

     (4 )     725  

Change in value of earn-out and warrant liabilities

     11,717       6,921  

Changes in operating assets and liabilities:

                

Accounts receivable

     6,873       (4,633 )

Prepaid expenses and other current assets

     1,767       1,663  

Deferred contract costs and other assets

     (3,280 )     (5,637 )

Accounts payable, accrued expenses, operating lease liabilities and other liabilities

     (598 )     (5,331 )

Deferred revenue

     11,844       9,282  

Net cash provided by operating activities

     56,134       13,284  

Investing activities

                

Maturities of investments

     5,361       1,292  

Purchases of investments

     (1,850 )     (2,050 )

Capitalization of internal-use software

     (947 )     (988 )

Purchase of property and equipment

     (2,303 )     (1,478 )

Issuance of notes receivables

     (1,500 )     (1,000 )

Other investing activities

     (130 )     —  

Net cash used in investing activities

     (1,369 )     (4,224 )

Financing activities

                

Repurchase of common stock

     (21,704 )     (33,644 )

Proceeds from stock option exercises

     3,613       3,865  

Redemption of redeemable noncontrolling interest

     (6,130 )     —  

Purchase of public warrants

     (3,991 )     —  

Repayments of finance leases

     (6 )     (30 )

Net cash used in financing activities

     (28,218 )     (29,809 )

Effect of exchange rates on cash

     94       (653 )

Net increase (decrease) in cash and cash equivalents

     26,641       (21,402 )

Cash and cash equivalents at beginning of period

     223,162       227,188  

Cash and cash equivalents at end of period

   $ 249,803     $ 205,786  

Supplemental disclosures of cash flow information

                

Income taxes paid

   $ 5,552     $ 5,794  

 

See accompanying notes.

 

  

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

1. Nature of Business and Organization

 

AvePoint, Inc. (collectively with its subsidiaries, hereinafter referred to as “AvePoint,” the “Company,” “we,” “us,” or “our”) was incorporated as a New Jersey corporation on July 24, 2001 and redomiciled as a Delaware corporation in 2006.

 

AvePoint provides a cloud-native software platform that organizations rely on to optimize operations, manage critical data and secure the digital workplace. As companies around the world embrace the new normal of hybrid work, they must build and deliver a new, seamless workplace experience for knowledge workers, centered around an extensive portfolio of SaaS solutions and productivity applications aimed at improving collaboration across the organization.

 

Our principal corporate headquarters are located in Jersey City, New Jersey, with our principal operating headquarters in Richmond, Virginia and additional offices in North America, Europe, Asia, Australia and the Middle East.
 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company and entities consolidated under the variable interest and voting models. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted.

 

In the opinion of management, these financial statements contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Interim results are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2024.

 

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our most recent Annual Report on Form 10-K for the year ended  December 31, 2023, which was filed with the SEC on February 29, 2024 (“Annual Report”).

 

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Annual Report. There have been no significant changes to these policies during the nine months ended September 30, 2024.

 

Comparative Data

 

Certain amounts from prior periods have been reclassed to conform to the current period presentation, including:

 

 •The reclassification of changes in earn-out and warrant liabilities to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.
 •The reclassification of interest income, net to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.

 
11
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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported and the amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for the determination of standalone selling price for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.

 

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other expense, net in the Company’s condensed consolidated statements of income.

 

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers its investments with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2024 and December 31, 2023, the Company’s cash balances at these entities were $11.7 million and $13.1 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

 

12
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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2024 or  December 31, 2023.

 

Deferred Contract Costs

 

We defer sales commissions that are considered to be incremental and recoverable costs of obtaining or renewing SaaS, term license and support, services, and maintenance contracts. Changes in the anticipated period of asset benefit or the average renewal term are recognized on a prospective basis upon occurrence. 

 

Amortization of deferred contract costs of $5.6 million and $15.7 million for the three and nine months ended September 30, 2024, and $4.6 million and $13.1 million for the three and nine months ended  September 30, 2023, is included as a component of sales and marketing expenses in our condensed consolidated statements of income. Deferred contract costs recognized as a contract asset in the condensed consolidated balance sheets were $55.4 million and $54.7 million as of  September 30, 2024 and December 31, 2023, respectively.

 

Revenue Recognition

 

The Company derives revenue from four primary sources: SaaS, term license and support, services, and maintenance. Services include installation services, training and other consulting services.

 

Term license revenue recognized at a point in time was $9.9 million and $22.1 million for the three and nine months ended September 30, 2024, and $11.1 million and $24.9 million for the three and nine months ended  September 30, 2023.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for credit losses. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for credit losses as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2024 and December 31, 2023, the allowance for credit losses was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2024 and December 31, 2023 was $142.3 million and $129.3 million, respectively. Revenue recognized that was included in the deferred revenue balance as of December 31, 2023, was $103.1 million for the nine months ended September 30, 2024.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The opening and closing balances of the Company’s accounts receivable, net, deferred revenue and deferred contract costs are as follows:

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2023

 $94,067  $129,256  $54,675 

Balance, September 30, 2024

  91,033   142,267   55,371 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2024 and the year ended December 31, 2023 outside of its sales activities.

 

As of September 30, 2024, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $363.7 million, of which $310.4 million is related to SaaS and term license and support revenue. We expect to recognize approximately 61% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 

Stock-Based Compensation

 

Stock-based compensation represents the cost related to stock-based awards granted to employees. To date, we have issued both stock options and restricted stock units. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award and recognizes the cost ratably over the requisite service period, net of actual forfeitures in the period.

 

We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes model requires highly subjective assumptions in order to derive the inputs necessary to calculate the fair value of stock options. To estimate the expected term of stock options, the Company considers contractual terms of the options, including the vesting and expiration periods, as well as historical option exercise data and current market conditions to determine an estimated expected term. The Company’s historical experience is too limited to be able to reasonably estimate an expected term. Expected volatility is based on the historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected term.

 

Recent Accounting Pronouncements not yet effective

 

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendment in this ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after  December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-07 will have on our consolidated financial statements and related disclosures. 

 

In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures (Topic 740)” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The amendment in this ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements and related disclosures. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

3. Goodwill

 

The changes in the carrying amounts of goodwill were as follows:

 

  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2023

 $19,156 

Effect of foreign currency translation

  (153)

Balance as of September 30, 2024

 $19,003 

 
 

4. Intangible assets, net

 

Intangible assets consist of acquired intangible assets and self-developed software.

 

A summary of the balances of the Company’s intangible assets as of  September 30, 2024 and  December 31, 2023 is presented below:

 

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
  September 30, 2024  December 31, 2023 
  

(in thousands)

 

Technology and software

 $8,962  $(3,091) $5,871  $7,976  $(1,758) $6,218 

Customer related assets

  4,601   (980)  3,621   4,546   (640)  3,906 

Content

  869   (652)  217   843   (421)  422 

Total

 $14,432  $(4,723) $9,709  $13,365  $(2,819) $10,546 

 

Amortization expense for intangible assets was $0.7 million and $1.9 million for the three and nine months ended September 30, 2024, and $0.6 million and $1.6 million for the three and nine months ended  September 30, 2023, respectively.

 

As of September 30, 2024, estimated future amortization expense for intangible assets, net is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $654 

2025

  2,300 

2026

  1,801 

2027

  1,405 

2028

  1,013 

Thereafter

  2,536 

Total intangible assets subject to amortization

 $9,709 

 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

5. Accounts Receivable, Net

 

Accounts receivable, net, consists of the following components:

 

   

September 30,

    

December 31,

  
   

2024

    

2023

  
   

(in thousands)

  

Trade receivables

   $ 57,434     $ 60,508  

Current unbilled receivables

     23,470       26,295  

Allowance for credit losses

     (918 )     (926 )
    $ 79,986     $ 85,877  

 
 

6. Line of Credit

 

The Company maintains a loan and security agreement (the “Loan Agreement”) with HSBC Bank USA, National Association, (“HSBC”) as lender, for a revolving line of credit of up to $30.0 million, with an accordion feature that provides up to $20.0 million of additional borrowing capacity the Company may draw upon at its request. The line bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee at a rate equal to 0.5%. The line will mature on November 3, 2026. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. The Company pledged, assigned and granted HSBC a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the Loan Agreement obligations. As of September 30, 2024, the Company is compliant with all covenants under the line and had no borrowings outstanding under the line of credit.

 
 

7. Income Taxes

 

The Company had an effective tax rate of 5.9% and (106.5)% for the three and nine months ended September 30, 2024, respectively, and (204.5)% and (45.7)% for the three and nine months ended  September 30, 2023, respectively.

 

The change in effective tax rates for the three-month period ended September 30, 2024 as compared to the three-month period ended  September 30, 2023 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

 

The change in effective tax rates for the nine-month period ended September 30, 2024 as compared to the nine-month period ended  September 30, 2023 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

 

The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis and will adjust such amounts in light of changing facts and circumstances. In making such an assessment, management would consider all available supporting data, including the level of historical taxable income, future reversals of existing temporary differences, tax planning strategies, and projected future taxable income.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

8. Leases

 

The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through 2030. We determine if an arrangement is a lease at inception.

 

The components of the Company’s operating lease expenses are reflected in the condensed consolidated statements of income as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Lease liability cost

 $1,853  $1,798  $5,353  $5,294 

Short-term lease expenses (1)

  345   138   891   592 

Variable lease cost not included in the lease liability (2)

  163   119   478   365 

Total lease cost

 $2,361  $2,055  $6,722  $6,251 

(1) Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.

 

(2) Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.

 

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We elected to combine fixed payments for non-lease components, for all classes of underlying assets, with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities.

 

During the nine months ended September 30, 2024 and 2023, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $5.2 million and $3.7 million, respectively.

 

Other information related to operating leases is as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,828  $1,659  $5,576  $5,324 

 

As of September 30, 2024, our operating leases had a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 5.4%.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 
As of December 31, 2023, our operating leases had a weighted average remaining lease term of 3.8 years and a weighted average discount rate of 5.6%.
 
The maturity schedule of the operating lease liabilities as of September 30, 2024 is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $1,642 

2025

  6,123 

2026

  3,472 

2027

  2,274 

2028

  1,395 

Thereafter

  1,427 

Total future lease payments

 $16,333 

Less: Present value adjustment

  (1,471)

Present value of future lease payments (1)

 $14,862 

 

(1) Includes the current portion of operating lease liabilities of $5.9 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.

 

As of September 30, 2024, letters of credit have been issued in the amount of $0.8 million as security for operating leases. The letters of credit are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 
 
 

9. Commitments and Contingencies

 

Legal Proceedings

 

In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of September 30, 2024, the Company was not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

 

Indemnification

 

The Company has entered into indemnification agreements with its executive officers and directors. These agreements, among other things, require AvePoint to indemnify its directors and executive officers to the fullest extent permitted by Delaware law, specifically the Delaware General Corporation Law (as the same exists or may hereafter be amended) for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.

 

As part of the business combination with Apex Technology Acquisition Corporation, Inc. (“Apex”), we assumed certain indemnification obligations for Apex Technology Sponsor LLC and Jeff Epstein, Brad Koenig, David Chao, Peter Bell, Donna Wells, and Alex Vieux (the “Indemnitees” or “Defendants”). On February 2, 2024, Drulias and Farzad (as purported Apex stockholders, the “Plaintiffs”) filed a class action complaint against the Indemnities in Delaware Court of Chancery, captioned Dean William Drulias, et.al. v. Apex Technology Sponsor LLC, et.al., C.A. No. 2024-0094-LWW. Plaintiffs asserted breach of fiduciary duty and unjust enrichment claims against the Defendants. The complaint alleged that Defendants made false and misleading disclosures in the June 2, 2021 proxy statement of Apex impacting its stockholders’ vote to approve a merger between Apex and us and also affecting stockholders’ redemption rights prior to the merger. Plaintiffs sought unspecified damages, rescission or rescissory damages, and disgorgement of unjust enrichment. We were not a named defendant in the complaint but had indemnification obligations to the Defendants under indemnification agreements executed during the merger. Also, in accordance with the business combination agreement, the Defendants obtained insurance policies to cover post-closing liability, with Apex securing a policy with a limit of $10 million and the sponsors obtaining a policy with a $3 million limit. The parties participated in a mediation in October and agreed to settlement terms. Pursuant to a signed letter of intent and a forthcoming settlement agreement, releasing us and the Defendants and settling the class action, we will contribute $1.4 million toward the full settlement amount of $14.4 million. The remaining $13 million will be paid pursuant to the two aforementioned insurance policies covering the Defendants and sponsor. As of September 30, 2024, an estimated accrual of $1.4 million was included in the accrued expenses and other current liabilities within the condensed consolidated balance sheets.

 

Guarantees

 

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements for the completion of service projects, the completion of which are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets. As of September 30, 2024, letters of credit have been issued in the amount of $3.7 million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

10. Earn-Out and Warrant Liabilities

 

Company Earn-Out

 

Certain holders of common stock and certain holders of options shall be issued additional shares of AvePoint’s common stock, as follows:

 

  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $12.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share;
  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $15.00 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share;
  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $17.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share.

 

The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of restricted stock units of the Company for a number of shares of AvePoint’s common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “Company Earn-Out RSUs”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718, Compensation-Stock Compensation (“ASC 718”). Refer to “Note 13 — Stock-Based Compensation” for more information regarding the Company Earn-Out RSUs.

 

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ (as defined below) contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on July 1, 2021 was determined to be $29.6 million. The fair value was remeasured as of September 30, 2024 and December 31, 2023, and was determined to be $29.9 million and $18.3 million, respectively, and included in the earn-out shares’ liabilities in the condensed consolidated balance sheets. As a result, $4.2 million and $11.2 million increases in liability were recognized during the three and nine months ended September 30, 2024, and $2.8 million and $6.8 million increases in liability were recognized during the three and nine months ended  September 30, 2023, and included as other expense, net in the condensed consolidated statements of income. No Company Earn-Out Shares have been issued as of September 30, 2024. We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:

 

   

September 30,

   December 31,  
    2024   2023  

Term (in years)

     3.75   4.5  

Volatility

     50.0

%

 55.0 %

 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

Private Warrants to Acquire Common Stock

 

On July 1, 2021, the Company granted 405,000 private placement warrants with a 5-year term and an exercise price of $11.50 per share. Management has determined that the private placement warrants are to be classified as liabilities to be marked to market at each reporting period.

 

The private placement warrants are non-transferable and any transfer to an unrelated party would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $1.4 million. The fair value was remeasured as of September 30, 2024 and December 31, 2023, and was determined to be $0.9 million and $0.5 million, respectively, and included in the other non-current liabilities in the condensed consolidated balance sheets. As a result, $0.3 million and $0.5 million of losses were recognized during the three and nine months ended September 30, 2024, and $0.1 million and $0.2 million were recognized during the three and nine months ended  September 30, 2023, and included as other expense, net in the condensed consolidated statements of income.

 

As of September 30, 2024, 328,750 private placement warrants remained outstanding.
 

11. Mezzanine Equity and Stockholders’ Equity

 

The Company has one class of capital stock: common stock. The following summarizes the terms of the Company’s capital stock.

 

Common Stock

 

Pursuant to the Company’s restated Articles of Incorporation, the Company was authorized to issue up to 1,000,000,000 shares of common stock at $0.0001 par value. There were 187,430,543 and 184,652,402 shares issued and outstanding as of  September 30, 2024 and December 31, 2023, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception.

 

Share Repurchase Program

 

On March 17, 2022, the Company announced that its Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to $150 million of common stock via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period of three years from the date of authorization and may be suspended or discontinued at any time. The Company is not obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During the nine months ended September 30, 2024, the Company repurchased and retired 2,629,978 shares at an average price of $8.25 per share. The shares were returned to the status of authorized but unissued shares. As a result, common stock amount, additional paid-in capital, and accumulated deficit in the condensed consolidated balance sheet during the nine months ended September 30, 2024, were reduced by $0.0 million, $9.7 million, and $12.1 million, respectively. During the nine months ended  September 30, 2023, the Company repurchased and retired 5,983,651 shares at an average price of $5.62.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Sponsor Earn-Out Shares

 

On July 1, 2021, the Company modified the terms of 2,916,700 shares of common stock (“Sponsor Earn-Out Shares”) then held by Apex Technology Acquisition Corporation’s sponsor, such that such shares will be subject to the following vesting provisions:

 

 •

100% of the Sponsor Earn-Out Shares shall vest and be released if at any time through July 1, 2028, AvePoint’s stock price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and

 •

100% of the remaining Sponsor Earn-Out Shares that have not previously vested shall vest and be released if at any time through July 1, 2028, the Company consummates a subsequent transaction.

 

The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of  September 30, 2024.

 

Public Warrants to Acquire Common Stock

 

On July 1, 2021, the Company issued 17,500,000 public warrants with an exercise price of $11.50. Each warrant entitles the registered holder to purchase one share of AvePoint’s common stock and the warrants are exercisable from the date of issuance through July 1, 2026.

 

On August 27, 2024, the Company announced the commencement of an offer to purchase all of its outstanding public warrants at a price of $2.50 per warrant in cash, with an expiration date of  September 26, 2024 (the “Offer”). On September 26, 2024, the Company announced that 1,596,314 warrants had been validly tendered and purchased, representing approximately 9.1% of the outstanding warrants, for a total amount of $4.0 million. As of  September 30, 2024, 15,979,936 warrants remained outstanding.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Redeemable Noncontrolling Interest

 

During the nine months ended September 30, 2024, the redeemable noncontrolling interest shareholders of MaivenPoint Pte. Ltd. (“MaivenPoint”), a consolidated subsidiary of the Company, submitted notices of exercise of their put option to cause MaivenPoint to repurchase their shares at a price of $6.1 million. As a result of the exercise, AvePoint’s ownership in MaivenPoint became 76.1%, with the remaining ownership interest held by an unaffiliated investor. Due to the ownership percentage change, the Company adjusted the carrying amount of the noncontrolling interest by multiplying the adjusted net assets of MaivenPoint by the unaffiliated investor’s new ownership percentage, resulting in a reduction to noncontrolling interest and increase in additional-paid-in capital of $6.4 million, respectively, within the condensed consolidated balance sheets.

 

There are no put options held by MaivenPoint’s remaining noncontrolling interest shareholders, and therefore, there is no longer any redeemable noncontrolling interest in MaivenPoint as of September 30, 2024.
 

12. Growth Equity Fund

 

On February 28, 2024, the Company and Lumens Capital Partners Ltd. (“LCP”) established A3V JV Co. (the “Venture”), with each owning an equal share of the Venture. In addition, the Company entered into a separate agreement with LCP to form A3 Ventures Fund 1, L.P. (the “Fund”). The Fund is a Cayman Islands-exempted limited partnership, aimed at investing in companies in the growth equity phase and mature cashflow generating businesses with strong growth potential. The Fund looks to invest in companies situated in enterprise software markets aligning with the professional expertise and geographical presence of both the Company and LCP.

 

The Venture wholly owns A3V GP Co., which serves as the general partner of the Fund. As a limited partner, the Company committed to contribute $50.0 million to the Fund, to be called as needed, for portfolio investments, fees, and expenses of the Fund. The Company also participates in Fund establishment costs and an annual management fee equal to 2.0% of the total commitment. Any future repayment obligations will be triggered upon the receipt by LCP of profit allocations related to the Fund.

 

As of September 30, 2024, no portion of the Company’s $50.0 million commitment has been called or was callable, and the operations of the Fund and the Venture have not materially impacted the Company’s financial position, financial performance, or cash flows.

 

As of September 30, 2024, $1.9 million of management fee and establishment costs were included in accrued expenses and other liabilities in the condensed consolidated balance sheets. During the three and nine months ended September 30, 2024, $0.6 million and $1.9 million, respectively, of management fee and establishment costs were included in general and administrative in the condensed consolidated statements of income.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

13. Stock-Based Compensation

 

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”). As of September 30, 2024, 27,210,325 shares remained for future issuance under the 2021 Plan. To date, the Company has issued only stock options and restricted stock units to employees, directors and consultants.

 

For the three months ended September 30, 2024 and 2023, total stock-based compensation expense was $9.8 million and $9.3 million, respectively. For the nine months ended September 30, 2024 and 2023, total stock-based compensation expense was $29.8 million and $27.0 million, respectively.

 

Stock Options

 

The compensation costs for stock option awards are accounted for in accordance with ASC 718. Stock options vest over a four-year service period and expire on the tenth anniversary of the date of award. 

 

On March 5, 2024, the Company granted 469,920 options under the 2021 Plan. The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

  March 5, 
  2024 
Expected life (in years)  6.1 
Expected volatility  55.9%
Risk-free rate  4.1%
Dividend yield  — 

 

To estimate the expected life of stock options, the Company considered the vesting term, contractual expiration period, and market conditions. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Based on these inputs, the grant-date fair value was determined to be $2.0 million.

 

As of September 30, 2024, there was $8.4 million in unrecognized compensation costs related to all unvested options.

 

As of  September 30, 2024, the Company had 25,195,045 options outstanding and 22,646,655 options exercisable with intrinsic values of $188.6 million and $177.8 million, respectively. During the nine months ended September 30, 2024, 1,502,820 options were exercised, with a total intrinsic value of $9.5 million.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

Restricted Stock Units

 

Under the terms of the 2021 Plan, we have issued restricted stock unit awards with a continuous employment condition only (“Time-Based RSUs”), and restricted stock unit awards with a continuous employment condition that are also contingent on the Company meeting certain performance goals (“PSUs”, and together “RSUs”). Both types of RSU awards vest over a four-year period from the grant date.

 

3,727,387 Time-Based RSUs and 502,676 PSUs were granted under the 2021 Plan during the nine months ended September 30, 2024, with a weighted-average grant date fair-value of $7.52 per award. The compensation costs for RSUs are accounted for in accordance with ASC 718.  RSUs are measured at the fair market value of the underlying stock at the grant date. RSUs that vested during the nine months ended  September 30, 2024 had an aggregate fair value at vesting of $35.5 million. As of September 30, 2024, there was $60.0 million in unrecognized compensation costs specific to the unvested RSUs, to be recognized over a weighted-average period of 2.5 years. As of  September 30, 2024, the Company had 10,031,797 unvested Time-Based RSUs and 502,676 unvested PSUs with a weighted-average grant date fair-value of $6.29 per award.

 

Company Earn-Out RSUs

 

The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC 718. In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on July 1, 2021, was determined to be $2.5 million. The stock options underlying the Earn-Out RSUs vest over a four-year period and expire on the tenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs are not met by July 1, 2028, the holders of the underlying stock options will not receive the Earn-Out RSUs. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

14. Financial Instruments

 

Fair value is defined by ASC 820, Fair Value Measurement (“ASC 820”) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

 

 

•

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

 

•

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

 

•

Level 3 — Unobservable inputs for the asset or liability.

   

  

September 30, 2024

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit

 $—  $1,565  $—  $1,565 

Money market funds

  —   4,211   —   4,211 

U.S. treasury bills

  —   179,051   —   179,051 

Short term investments:

                

Certificates of deposit

  —   171   —   171 

Other assets:

                

Certificates of deposit

  —   38   —   38 

Notes receivables (1)

  —   —   3,692   3,692 

Total

 $—  $185,036  $3,692  $188,728 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $29,941  $29,941 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   871   —   871 

Total

 $—  $871  $29,941  $30,812 

 

  

December 31, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (3)

 $—  $1,533  $—  $1,533 

Money market funds

  —   4,423   —   4,423 

U.S. treasury bills

  —   171,841   —   171,841 

Short term investments:

                

Certificates of deposit (3)

  —   3,721   —   3,721 

Other assets:

                

Notes receivables (1)

  —   —   1,840   1,840 

Total

 $—  $181,518  $1,840  $183,358 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $18,346  $18,346 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   533   —   533 

Total

 $—  $533  $18,346  $18,879 

 

(1) During 2023, the Company extended a credit facility to LCP with a total commitment of up to $5.0 million and maturities of greater than twelve months (the “LCP Notes Receivable”). Refer to “Note 12 — Growth Equity Fund” for further details. The LCP Notes Receivable bear interest at an annual rate equal to 8%.  As of September 30, 2024 and December 31, 2023, the LCP Notes Receivable in the amounts of $3.5 million and $1.8 million, respectively, were included in other assets within the condensed consolidated balance sheets. Fair values are based on discounted future cash flows using current interest rates offered for similar notes to third parties with similar credit ratings for the same remaining maturities.

(2) Refer to “Note 10 — Earn-Out and Warrant Liabilities” for further details.

(3) The majority of certificates of deposit are foreign deposits.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The following tables summarize the Company’s available-for-sale securities measured at fair value as of September 30, 2024 and December 31, 2023.

 

  

September 30, 2024

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized losses

 

U.S. treasury bills

 $179,089  $179,051  $(38)

Total

 $179,089  $179,051  $(38)

 

  

December 31, 2023

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized gains

 

U.S. treasury bills

 $171,815  $171,841  $26 

Total

 $171,815  $171,841  $26 

 

The contractual maturity of the available-for-sale securities held as of September 30, 2024 and December 31, 2023 was within one year.

 

The following table presents the reconciliation in Level 3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis.

 

  Nine Months Ended September 30, 
  

2024

 
  

(in thousands)

 

Opening balance

 $18,346 

Total gains or losses from the period

    

Included in other expense, net

  11,217 

Reclass from Earnout-RSU

  378 

Closing balance

 $29,941 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

15. Segment Information

 

The Company operates in one segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation or profitability by product or geography.

 

Revenue by geography is based upon the billing address of the customer. All transfers between geographic regions have been eliminated from consolidated revenue. The following table sets forth revenue by geographic area:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

North America

 $37,648  $31,751  $99,240  $84,484 

EMEA

  26,298   21,739   72,193   60,800 

APAC

  24,858   19,270   69,866   51,917 

Total revenue

 $88,804  $72,760  $241,299  $197,201 

 

The following table sets forth revenue generated by countries which represent more than 10% of total consolidated revenue:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

United States

 $37,518  $31,115  $98,744  $82,151 

Singapore

  10,700   8,639   31,409   22,256 

Germany

  11,568   9,212   30,856   25,993 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

16. Other expense, net

 

Other expense, net is disaggregated as follows:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands)

  

Change in value of earn-out and warrant liabilities

   $ (4,537 )   $ (2,785 )   $ (11,717 )   $ (6,921 )

Interest income, net

     45       232       116       843  

Profits on securities (1)

     2,383       2,177       7,136       5,772  

Foreign currency exchange gain (loss), net

     237       (692 )     (975 )     (1,322 )

Other, net

     (2,669 )     (8 )     (2,667 )     52  

Other expense, net

   $ (4,541 )   $ (1,076 )   $ (8,107 )   $ (1,576 )

 

(1) Profits on securities consist of interest income from amortization of the discount arising at acquisition of U.S. treasury bills.
 

17. Net Income (Loss) Per Share

 

Basic net income (loss) per share is computed by dividing total net income (loss) by the weighted average common shares outstanding for the period. In computing diluted net income (loss) per share, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share-based payment awards, warrants and Company Earn-Outs. The Company’s Sponsor Earn-Out Shares described in “Note 11 — Mezzanine Equity and Stockholders’ Equity” are considered participating securities and have no contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below. 

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands, except per share amounts)

 

Net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net income (loss)

 $2,928  $(4,230) $(11,964) $(25,937)

Net income attributable to Sponsor Earn-out Shares

  (41)  —   —   — 

Net (income) loss attributable to noncontrolling interest

  (308)  18   59   (57)

Total net income (loss) available to common shareholders

 $2,579  $(4,212) $(11,905) $(25,994)

Denominator:

                

Weighted average common shares outstanding

  183,946   181,769   182,753   182,630 

Effect of dilutive securities

                

Stock options

  14,533   —   —   — 

RSUs

  5,380   —   —   — 

Weighted average diluted shares

  203,859   181,769   182,753   182,630 
                 

Basic net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

Diluted net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

 

To arrive at net income (loss) available to common stockholders, the Company deducted net income attributable to Sponsor Earn-out Shares and net (income) loss attributable to noncontrolling interest.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The below table includes the total potentially dilutive securities for the three and nine months ending September 30, 2024 and the three and nine months ending September 30, 2023 which have been excluded from the computation of diluted net income (loss) per share as their effect is anti-dilutive:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  (in thousands) 

Stock options

  12   27,982   25,195   27,982 

RSUs

  1   11,533   10,534   11,533 

Warrants

  16,308   17,905   16,308   17,905 

Company Earn-Outs

  3,000   3,000   3,000   3,000 

Total potentially dilutive securities

  19,321   60,420   55,037   60,420 

 
 

18. Subsequent Events

 

No material subsequent events occurred since the date of the most recent balance sheet period reported.

 

 
 
 

 

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Part I
Item 2

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Quarterly Report) (“MD&A”) summarizes (and is intended to help the reader understand) the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”) and our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report. 

 

Third Quarter 2024 Business Highlights

 

 

▪

Total annual recurring revenue (“ARR”) increased 23% year-over-year to $308.9 million as of September 30, 2024;
 

▪

Total revenue increased 22% year-over-year to $88.8 million for the three months ended September 30, 2024;
  ▪ SaaS revenue increased 45% year-over-year to $60.9 million for the three months ended September 30, 2024; and
  ▪ Announced the general availability of AvePoint Cloud Backup Express, designed to use Microsoft 365 Backup Storage for rapid and more efficient data protection.

 

Overview

 

AvePoint provides a cloud-native data management software platform that organizations rely on to manage and protect critical data, optimize IT operations, achieve meaningful cost savings, and efficiently secure the digital workplace. Companies around the world have adopted a hybrid work model, and they are now tasked with delivering a seamless and secure workplace experience for knowledge workers, centered around an extensive portfolio of Software-as-a-Service (“SaaS”) solutions and productivity applications.

 

The adoption of a portfolio of solutions is a substantial and ongoing challenge for most organizations, which for decades had used only a small number of multi-purpose on-premises applications to drive business outcomes. However, to deliver an efficient digital workplace today, companies must manage this range of applications – and the associated explosive growth and sprawl of critical data – with a platform offering that is well governed, fit for purpose, easy to use and built on automation.

 

In addition, many organizations are beginning to realize the potential of generative artificial intelligence (“AI”) to drive competitive advantage and value creation, including (1) extracting greater value from complex datasets, (2) making more informed business decisions, (3) reducing employee workloads, and (4) improving the overall customer experience. While these data-driven improvements are expected to lead to stronger revenue growth and operational efficiency, successfully leveraging this new technology is in turn dependent on first addressing data management challenges that all organizations face. Specifically, for AI-driven projects to succeed, companies must apply robust strategies across the data estate to manage the information lifecycle, properly govern and secure their data, and ensure its compliance. These are the core business problems that AvePoint has been solving for more than two decades, and why we believe AvePoint is well positioned to be a key enabler of generative AI adoption within enterprises in the coming years.

 

AvePoint’s Confidence Platform empowers organizations – of all sizes, in all regions, and across all industries – to optimize and secure the solutions that most commonly establish and underpin the digital workplace. As our customers seek to rapidly reduce costs, improve productivity and make more informed business decisions, they depend on our platform for data-driven insights, critical business intelligence and ongoing operational value through automation.

 

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Part I
Item 2

 

Key Business Metric

 

   

September 30,

  
   

2024

    

2023

  

Total ARR ($ in mil)

   $ 308.9     $ 250.6  

 

Annual Recurring Revenue

  

We believe ARR further enables measurement of our business performance, is an important metric for financial forecasting and better enables us to make strategic decisions on the business. We calculate ARR as the annualized sum of contractually obligated Annual Contract Value (“ACV”) from SaaS, term license and support, and maintenance revenue sources from all active customers at the end of a reporting period.

 

As of September 30, 2024 and September 30, 2023, total ARR was $308.9 million and $250.6 million, respectively, representing growth of 23%. 

 

Growth in ARR is driven by both new business and the expansion of existing business. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, and the active contracts used in calculating ARR may or may not be extended or renewed by our customers.

 

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Part I
Item 2

 

Components of Results of Operations

 

Revenue

  

We generate revenue from four primary sources: SaaS, term license and support, services, and maintenance.

 

SaaS revenues are generated from our cloud-based solutions. Term license and support revenues are generated from the sales of on-premise or hybrid licenses, which include a distinct support component. Both SaaS and term license and support revenues are primarily billed annually. SaaS and term license and support are generally sold per user license or based upon the amount of data protected. SaaS revenue is recognized ratably over the term of the contract. For term license and support revenues, the license component is generally recognized upfront at the point in time when the software is made available to the customer to download and use, and the support component is recognized ratably over the term of the contract.

 

Services revenue includes revenue generated from implementation, training, consulting, license customization and managed services. These revenues are recognized by applying a measure of progress, such as labor hours, to determine the percentage of completion of each contract. These offerings are not inherently recurring in nature and as such are subject to more period-to-period volatility than other elements of our business. Services revenue from managed services are recognized ratably or on a straight-line basis over the contract term.

 

Maintenance revenue is a result of selling on-going support for legacy perpetual licenses. It also includes recurring professional services such as technical account management. Maintenance revenue is recognized ratably over the term of the maintenance agreement, which is typically one year.
     

Cost of Revenue

  

Cost of SaaS and cost of term license and support consists of all direct costs to deliver and support our SaaS and term license and support products, including salaries, benefits, stock-based compensation and related expenses, overhead, third-party hosting fees related to our cloud services, depreciation and amortization. We recognize these expenses as they are incurred. We expect that these costs will increase in absolute dollars but may fluctuate as a percentage of SaaS and term license and support revenue from period to period.

 

Cost of maintenance consists of all direct costs to support our legacy perpetual license products, including salaries, benefits, stock-based compensation and related expenses, overhead, depreciation and amortization. We recognize these expenses as they are incurred. We expect that cost of maintenance revenue will decrease in absolute dollars as maintenance revenue declines but may fluctuate as a percentage of maintenance revenue.

 

Cost of services consists of salaries, benefits, stock-based compensation and related expenses for our services organization, overhead, IT necessary to provide services for our customers, depreciation and amortization. We recognize these expenses as they are incurred.
     

Gross Profit and Gross Margin

  

Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue.

 

Gross profit has been and will continue to be affected by various factors, including the mix of our revenue, the costs associated with third-party cloud-based hosting services for our cloud-based subscriptions, and the extent to which we expand our customer support and services organizations. We expect that our gross margin will fluctuate from period to period depending on the interplay of these various factors but should increase in the long term as SaaS revenue continues to increase as a percentage of total revenue.
     

Sales and Marketing

  

Sales and marketing expenses consist primarily of personnel-related expenses for sales, marketing and customer success personnel, stock-based compensation expense, sales commissions, marketing programs, travel-related expenses, overhead costs, depreciation and amortization. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. We plan to continue our investment in sales and marketing by hiring additional sales and marketing personnel, executing our go-to-market strategy globally, and building our brand awareness.

 

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Item 2

 

General and Administrative

  

General and administrative expenses consist primarily of personnel-related expenses for finance, legal and compliance, human resources, and IT personnel, as well as stock-based compensation expense, external professional services, overhead costs, other administrative functions, depreciation and amortization. Our general and administrative expenses have increased as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations, and professional services.
     

Research and Development

  

Research and development expenses consist primarily of personnel-related expenses incurred for our engineering and product and design teams, as well as stock-based compensation expense, overhead costs, depreciation and amortization. We have a geographically dispersed research and development presence in the United States, China, Singapore and Vietnam. We believe this provides a strategic advantage, allowing us to invest efficiently in both new product development and increasing our existing product capabilities. We believe delivering expanding product functionality is critical to enhancing the success of existing customers while new product development further reinforces our breadth of software solutions.
     

Other Expense, net

  

Other Expense, net consists primarily of fair value adjustments on earn-out and warrant liabilities, realized gain/loss for securities, and of foreign currency remeasurement gains/losses.
     

Income Taxes

  

We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Tax laws, regulations, administrative practices, principles, and interpretations in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions. The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Accordingly, our effective tax rate could be affected by the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate.

 

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Part I
Item 2

 

Results of Operations

 

The below period-to-period comparisons of operating results are not necessarily indicative of results for future periods.

 

  

Comparison of Three Months Ended September 30, 2024 and September 30, 2023

 

Revenue

 

The components of AvePoint’s revenue during the three months ended September 30, 2024 and 2023 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Revenue:

                                

SaaS

   $ 60,866     $ 41,910     $ 18,956       45.2 %

Term license and support

     14,140       16,293       (2,153 )     (13.2 )%

Services

     10,810       11,194       (384 )     (3.4 )%

Maintenance

     2,988       3,363       (375 )     (11.2 )%

Total revenue

   $ 88,804     $ 72,760     $ 16,044       22.1 %

 

Total revenue increased 22.1% to $88.8 million for the three months ended September 30, 2024, due to an increase in SaaS revenue, which increased 45.2% to $60.9 million, and represented 69% of total revenue, up from 58% of total revenue in the prior year. The increase in SaaS revenue, which was driven by strong customer demand for our SaaS solutions, was partially offset by an expected decrease in both term license and support and maintenance revenue. 

 

Services revenue is expected to fluctuate as the services generally are not recurring in nature. Additionally, maintenance revenue is expected to continue declining as we have shifted away from the sale of perpetual licenses and towards SaaS and term licenses. Without perpetual license sales, there will be limited opportunities to sell maintenance contracts to new customers. Existing customers have and will continue to transition to SaaS and term licenses, which will continue the decline in maintenance revenue. 

 

Revenue by geographic region for the three months ended September 30, 2024 and 2023 was as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

North America

   $ 37,648     $ 31,751     $ 5,897       18.6 %

EMEA

     26,298       21,739       4,559       21.0 %

APAC

     24,858       19,270       5,588       29.0 %

Total

   $ 88,804     $ 72,760     $ 16,044       22.1 %

 

For the three months ended September 30, 2024, North America revenue increased 18.6% to $37.6 million, driven by a 46.2%, or $8.3 million, increase in SaaS revenue, partially offset by a combined $2.4 million decrease in term license and support, services, and maintenance revenues. EMEA revenues increased 21.0% to $26.3 million, driven by a 41.5%, or $6.5 million, increase in SaaS revenue, partially offset by a combined $1.9 million decrease in term license and support, services and maintenance revenues. APAC revenues increased 29.0% to $24.9 million, driven by a 50.4%, or $4.1 million, increase in SaaS revenue, a 10.3%, or $0.8 million, increase in services revenue, a 22.7%, or $0.4 million, increase in term license and support revenue, and a 16.0%, or $0.2 million, increase in maintenance revenue.

 

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Part I
Item 2

 

Cost of Revenue, Gross Profit, and Gross Margin

 

Cost of revenue, gross profit, and gross margin during the three months ended September 30, 2024 and 2023 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Cost of revenue:

                                

SaaS

   $ 10,624     $ 9,561     $ 1,063       11.1 %

Term license and support

     373       484       (111 )     (22.9 )%

Services

     10,057       9,922       135       1.4 %

Maintenance

     167       189       (22 )     (11.6 )%

Total cost of revenue

   $ 21,221     $ 20,156     $ 1,065       5.3 %

Gross profit

     67,583       52,604       14,979       28.5 %

Gross margin

     76.1 %     72.3 %     —       —  
                                 

GAAP cost of revenue

   $ 21,221     $ 20,156     $ 1,065       5.3 %

Stock-based compensation expense

     (530 )     (806 )     276       (34.2 )%

Amortization of acquired intangible assets

     (242 )     (241 )     (1 )     0.4 %

Non-GAAP cost of revenue

   $ 20,449     $ 19,109     $ 1,340       7.0 %

Non-GAAP gross profit

     68,355       53,651       14,704       27.4 %

Non-GAAP gross margin

     77.0 %     73.7 %     —       —  

 

Cost of revenue increased 5.3% to $21.2 million for the three months ended September 30, 2024, primarily driven by a $0.6 million increase in personnel costs and a $0.4 million increase from higher aggregate hosting costs resulting from increased SaaS revenue. 

 

36
Table of Contents
Part I
Item 2

 

Operating Expenses

 

Sales and Marketing

 

Sales and marketing expenses during the three months ended September 30, 2024 and 2023 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Sales and marketing

   $ 30,050     $ 28,436     $ 1,614       5.7 %

Percentage of revenue

     33.8 %     39.1 %     —       —  
                                 

GAAP sales and marketing

   $ 30,050     $ 28,436     $ 1,614       5.7 %

Stock-based compensation expense

     (2,186 )     (2,358 )     172       (7.3 )%

Amortization of acquired intangible assets

     (120 )     (112 )     (8 )     7.1 %

Non-GAAP sales and marketing

   $ 27,744     $ 25,966     $ 1,778       6.8 %

Non-GAAP percentage of revenue

     31.2 %     35.7 %     —       —  

 

Sales and marketing expenses increased 5.7% to $30.1 million for the three months ended September 30, 2024, primarily driven by a $1.2 million increase in personnel costs, which included additional headcount and other investments in the business to respond to strong customer demand for our solutions and provide support for future growth.

 

General and Administrative

 

General and administrative expenses during the three months ended September 30, 2024 and 2023 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

General and administrative

   $ 17,043     $ 15,838     $ 1,205       7.6 %

Percentage of revenue

     19.2 %     21.8 %     —       —  
                                 

GAAP general and administrative

   $ 17,043     $ 15,838     $ 1,205       7.6 %

Stock-based compensation expense

     (4,925 )     (5,264 )     339       (6.4 )%

Non-GAAP general and administrative

   $ 12,118     $ 10,574     $ 1,544       14.6 %

Non-GAAP percentage of revenue

     13.6 %     14.5 %     —       —  

 

General and administrative expenses increased 7.6% to $17.0 million for the three months ended September 30, 2024. The increase was primarily driven by $0.5 million in new fees related to the Company’s investment in a growth equity fund, a $0.5 million increase in salary and benefits, and a $0.2 million increase in software license expense due to increased headcount, partially offset by a $0.3 million decrease in stock-based compensation.

 

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Part I
Item 2

 

Research and Development

 

Research and development expenses during the three months ended September 30, 2024 and 2023 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Research and development

   $ 12,838     $ 8,643     $ 4,195       48.5 %

Percentage of revenue

     14.5 %     11.9 %     —       —  
                                 

GAAP research and development

   $ 12,838     $ 8,643     $ 4,195       48.5 %

Stock-based compensation expense

     (2,170 )     (857 )     (1,313 )     153.2 %

Non-GAAP research and development

   $ 10,668     $ 7,786     $ 2,882       37.0 %

Non-GAAP percentage of revenue

     12.0 %     10.7 %     —       —  

 

Research and development expenses  increased   48.5%  to $12.8  million for the three months ended September 30, 2024 , primarily driven by a $3.6 million increase in personnel costs associated with the expansion of our workforce.

 

Income Tax Provision

 

Income tax expense during the three months ended September 30, 2024 and 2023 was as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Income tax expense

   $ 183     $ 2,841     $ (2,658 )     (93.6 )%

 

AvePoint’s income tax expense for the three months ended September 30, 2024 was $0.2 million, as compared to a tax expense of $2.8 million for the three months ended September 30, 2023. The effective tax rate was 5.9% for the three months ended September 30, 2024, compared to (204.5)% for the three months ended September 30, 2023. The change in effective tax rates was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, certain jurisdictions with separate tax expense calculated, impact of foreign inclusions, stock-based compensation, and changes in valuation allowance.

 

In assessing the need for a valuation allowance, the Company has considered all available positive and negative evidence including its historical levels of income, expectations of future taxable income, future reversals of existing taxable temporary differences and ongoing tax planning strategies. If in the future, the Company determines it is more likely than not that deferred tax assets will not be realized, the Company may set up a valuation allowance, which may result in income tax expense in the Company’s condensed consolidated statements of income and condensed consolidated statements of comprehensive income (loss).

 

38
 
Part I
Item 2

 

Comparison of Nine Months Ended September 30, 2024 and September 30, 2023

 

Revenue

 

The components of AvePoint’s revenue during the nine months ended September 30, 2024 and 2023 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Revenue:

                                

SaaS

   $ 165,820     $ 115,701     $ 50,119       43.3 %

Term license and support

     35,128       40,474       (5,346 )     (13.2 )%

Services

     31,808       31,007       801       2.6 %

Maintenance

     8,543       10,019       (1,476 )     (14.7 )%

Total revenue

   $ 241,299     $ 197,201     $ 44,098       22.4 %

 

Total revenue increased 22.4% to $241.3 million for the nine months ended September 30, 2024, primarily as a result of an increase in SaaS revenue, which increased 43.3% to $165.8 million, and represented 69% of total revenue, up from 59% of total revenue in the prior year. The increase in revenue, which was driven by strong customer demand for our SaaS products, was partially offset by an expected decrease in both term license and support and maintenance revenue.

 

Services revenue is expected to fluctuate as the services generally are not recurring in nature. Additionally, maintenance revenue is expected to continue declining as we have shifted away from the sale of perpetual licenses and towards SaaS and term licenses. Without perpetual license sales, there will be limited opportunities to sell maintenance contracts to new customers. Existing customers have and will continue to transition to SaaS and term licenses, which will continue the decline in maintenance revenue.

 

Revenue by geographic region for the nine months ended September 30, 2024 and 2023 was as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

North America

   $ 99,240     $ 84,484     $ 14,756       17.5 %

EMEA

     72,193       60,800       11,393       18.7 %

APAC

     69,866       51,917       17,949       34.6 %

Total

   $ 241,299     $ 197,201     $ 44,098       22.4 %

 

For the nine months ended September 30, 2024, North America revenue increased 17.5% to $99.2 million, driven by a 42.7%, or $21.8 million, increase in SaaS revenue, partially offset by a combined $7.1 million decrease in term license and support, services, and maintenance revenues. EMEA revenues increased 18.7% to $72.2 million, driven by a 41.0%, or $17.5 million, increase in SaaS revenue, partially offset by a combined $6.1 million decrease in term license and support, services and maintenance revenues. APAC revenues increased 34.6% to $69.9 million, primarily driven by a 49.1%, or $10.9 million, increase in SaaS revenue, a 25.7%, or $5.2 million, increase in services revenue, and a 34.6%, or $1.8 million, increase in term license and support revenue.

 

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Table of Contents
Part I
Item 2

 

Cost of Revenue, Gross Profit, and Gross Margin

 

Cost of revenue, gross profit, and gross margin during the nine months ended September 30, 2024 and 2023 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Cost of revenue:

                                

SaaS

   $ 30,139     $ 26,586     $ 3,553       13.4 %

Term license and support

     1,202       1,441       (239 )     (16.6 )%

Services

     28,777       29,231       (454 )     (1.6 )%

Maintenance

     487       584       (97 )     (16.6 )%

Total cost of revenue

   $ 60,605     $ 57,842     $ 2,763       4.8 %

Gross profit

     180,694       139,359       41,335       29.7 %

Gross margin

     74.9 %     70.7 %     —       —  
                                 

GAAP cost of revenue

   $ 60,605     $ 57,842     $ 2,763       4.8 %

Stock-based compensation expense

     (1,516 )     (2,292 )     776       (33.9 )%

Amortization of acquired intangible assets

     (722 )     (725 )     3       (0.4 )%

Non-GAAP cost of revenue

   $ 58,367     $ 54,825     $ 3,542       6.5 %

Non-GAAP gross profit

     182,932       142,376       40,556       28.5 %

Non-GAAP gross margin

     75.8 %     72.2 %     —       —  

 

Cost of revenue increased 4.8% to $60.6 million for the nine months ended September 30, 2024, primarily driven by a $1.7 million increase in personnel costs and a $1.4 million increase from higher aggregate hosting costs resulting from increased SaaS revenue.

 

40
Table of Contents
Part I
Item 2

 

Operating Expenses

 

Sales and Marketing

 

Sales and marketing expenses during the nine months ended September 30, 2024 and 2023 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Sales and marketing

   $ 90,459     $ 82,978     $ 7,481       9.0 %

Percentage of revenue

     37.5 %     42.1 %     —       —  
                                 

GAAP sales and marketing

   $ 90,459     $ 82,978     $ 7,481       9.0 %

Stock-based compensation expense

     (6,684 )     (7,267 )     583       (8.0 )%

Amortization of acquired intangible assets

     (342 )     (381 )     39       (10.2 )%

Non-GAAP sales and marketing

   $ 83,433     $ 75,330     $ 8,103       10.8 %

Non-GAAP percentage of revenue

     34.6 %     38.2 %     —       —  

 

Sales and marketing expenses increased 9.0% to $90.5 million for the nine months ended September 30, 2024, primarily driven by a $6.6 million increase in personnel costs, which included additional headcount and other investments in the business to respond to strong customer demand for our solutions and provide support for future growth.

 

General and Administrative

 

General and administrative expenses during the nine months ended September 30, 2024 and 2023 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

General and administrative

   $ 52,095     $ 45,679     $ 6,416       14.0 %

Percentage of revenue

     21.6 %     23.2 %     —       —  
                                 

GAAP general and administrative

   $ 52,095     $ 45,679     $ 6,416       14.0 %

Stock-based compensation expense

     (15,451 )     (14,551 )     (900 )     6.2 %

Non-GAAP general and administrative

   $ 36,644     $ 31,128     $ 5,516       17.7 %

Non-GAAP percentage of revenue

     15.2 %     15.8 %     —       —  

 

General and administrative expenses increased 14.0% to $52.1 million for the nine months ended September 30, 2024. The increase was primarily driven by a $2.9 million increase in personnel costs, $1.9 million in new fees related to the Company’s investment in a growth equity fund, a $0.8 million increase in software license expense due to increased headcount, and a $0.6 million increase in professional services expense.

 

41
Table of Contents
Part I
Item 2

 

Research and Development

 

Research and development expenses during the nine months ended September 30, 2024 and 2023 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Research and development

   $ 35,827     $ 26,931     $ 8,896       33.0 %

Percentage of revenue

     14.8 %     13.7 %     —       —  
                                 

GAAP research and development

   $ 35,827     $ 26,931     $ 8,896       33.0 %

Stock-based compensation expense

     (6,156 )     (2,865 )     (3,291 )     114.9 %

Non-GAAP research and development

   $ 29,671     $ 24,066     $ 5,605       23.3 %

Non-GAAP percentage of revenue

     12.3 %     12.2 %     —       —  

 

Research and development expenses increased 33.0%   to $35.8  million for the nine months ended September 30, 2024 , primarily driven by a $7.9 million increase in personnel costs.

 

Income Tax Provision

 

Income tax expense during the nine months ended September 30, 2024 and 2023 was as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2024

    

2023

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Income tax expense

   $ 6,170     $ 8,132     $ (1,962 )     (24.1 )%

 

AvePoint’s income tax expense for the nine months ended September 30, 2024 was $6.2 million, as compared to a tax expense of $8.1 million for the nine months ended September 30, 2023. The effective tax rate was (106.5)% for the nine months ended September 30, 2024, compared to (45.7)% for the nine months ended September 30, 2023. The change in effective tax rates was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, certain jurisdictions with separate tax expense calculated, impact of foreign inclusions, stock-based compensation, and changes in valuation allowance.

 

In assessing the need for a valuation allowance, the Company has considered all available positive and negative evidence including its historical levels of income, expectations of future taxable income, future reversals of existing taxable temporary differences and ongoing tax planning strategies. If in the future, the Company determines it is more likely than not that deferred tax assets will not be realized, the Company may set up a valuation allowance, which may result in income tax expense in the Company’s condensed consolidated statements of income and condensed consolidated statements of comprehensive income (loss).

 

Certain Non-GAAP Financial Measures

 

We believe that, in addition to our financial results determined in accordance with GAAP, non-GAAP operating income (loss) and non-GAAP operating margin are useful in evaluating our business, results of operations, and financial condition.

 

42
Table of Contents
Part I
Item 2

 

Non-GAAP Operating Income and Non-GAAP Operating Margin

 

Non-GAAP operating income and non-GAAP operating margin are non-GAAP financial measures that our management uses to assess our overall performance. We define non-GAAP operating income as GAAP operating income (loss) plus stock-based compensation and the amortization of acquired intangible assets. We define non-GAAP operating margin as non-GAAP operating income divided by revenue. We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation which has had historical volatility from period to period due to marked-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results. We believe the elimination of the effect of variability caused by stock-based compensation expense and the amortization of acquired assets, both of which are non-cash expenses, provides a better representation as to the overall operating performance of the Company. We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to our peers, (b) to set and approve spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, and (e) to assess financial discipline over operational expenditures.

 

Non-GAAP operating income and non-GAAP operating margin should not be considered as an alternative to operating income, operating margin or any other performance measures derived in accordance with GAAP as measures of performance. Non-GAAP operating income and non-GAAP operating margin should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

 

The following table presents a reconciliation of (i) non-GAAP operating income from the most comparable GAAP measure, operating income, and (ii) non-GAAP operating margin from the most comparable GAAP measure, operating margin, for the periods presented:

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands, except percentages)

  

GAAP operating income (loss)

   $ 7,652     $ (313 )   $ 2,313     $ (16,229 )

GAAP operating margin

     8.6 %     (0.4 )%     1.0 %     (8.2 )%

Add:

                                

Stock-based compensation

     9,811       9,285       29,807       26,975  

Amortization of acquired intangible assets

     362       353       1,064       1,106  

Non-GAAP operating income

   $ 17,825     $ 9,325     $ 33,184     $ 11,852  

Non-GAAP operating margin

     20.1 %     12.8 %     13.8 %     6.0 %

 

Liquidity and Capital Resources

 

As of September 30, 2024, we had $249.8 million in cash and cash equivalents and $0.2 million in short-term investments.

 

Our short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. In addition, we extended a credit facility with a remaining commitment of $2.5 million, and committed $50.0 million to a growth equity fund. We also have letters of credit issued in the amount of $0.8 million as security for operating leases, and $3.7 million as security for customer contingency agreements. Our long-term capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, and the timing of new product introductions.

 

43
Table of Contents
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Item 2

 

We currently maintain a loan and security agreement (the “Loan Agreement”), dated as of November 3, 2023, with HSBC Bank USA, National Association, (“HSBC”) as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may to draw upon at our request. The line currently bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee at a rate equal to 0.5%. The line will mature on November 3, 2026. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. We pledged, assigned, and granted HSBC a security interest in all shares of our subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as a security for the performance of the loan and security agreement obligations.

 

We believe that our existing cash, cash equivalents and short-term investments, our cash flows from operating activities, and our borrowing capacity under our credit facility with HSBC are sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. In the future, we may attempt to raise additional capital through the sale of additional equity or debt financing. The sale of additional equity would be dilutive to our stockholders. Additional debt financing could result in increased debt service obligations and more restrictive financial and operational covenants.

 

Cash Flows

 

The following table sets forth a summary of AvePoint’s cash flows for the periods indicated.

 

   

Nine Months Ended

  
   

September 30,

  
   

2024

    

2023

  
    (in thousands)  

Net cash provided by operating activities

   $ 56,134     $ 13,284  

Net cash used in investing activities

     (1,369 )     (4,224 )

Net cash used in financing activities

     (28,218 )     (29,809 )

 

Operating Activities

 

Net cash provided by operating activities for the nine months ended September 30, 2024 was $56.1 million, reflecting AvePoint’s net loss of $12.0 million, adjusted for non-cash items of $51.5 million and net cash inflows of $16.6 million from changes in its operating assets and liabilities. The primary drivers of non-cash items were stock-based compensation which reflects ongoing compensation and an increase in the mark to market value of earn-out and warranty liabilities. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to the timing of customer invoices and an increase in prepaid expenses and other current assets primarily related to prepaid software maintenance and subscription, an increase in deferred revenue and an increase in accrued expenses primarily due to income tax payable.

 

Net cash provided by operating activities for the nine months ended September 30, 2023 was $13.3 million, reflecting AvePoint’s net loss of $25.9 million, adjusted for non-cash items of $43.9 million and net cash outflows of $4.7 million from changes in its operating assets and liabilities. The primary drivers of non-cash items were stock-based compensation which reflects ongoing compensation and an increase in the mark to market value of earn-out and warranty liabilities. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to timing of customer invoices and decrease in prepaid expenses and other current assets primarily related to prepaid insurance, an increase in deferred revenue and a decrease in accrued expenses primarily due to accrued bonuses, commissions and VAT/sales tax payable.

 

Investing Activities

 

Net cash used in investing activities for the nine months ended September 30, 2024 was $1.4 million. It primarily consisted of $2.3 million of purchases of property and equipment, $1.9 million of purchases of short-term investments, $1.5 million investment in notes, and $0.9 million from the capitalization of internal use software, offset by $5.4 million from the maturity of short-term investments.

 

Net cash used in investing activities for the nine months ended September 30, 2023 was $4.2 million. It primarily consisted of $2.1 million of purchases of short-term investments, $1.5 million of purchases of property and equipment, and $1.0 million from the capitalization of internal use software, partially offset by $1.3 million from the maturity of short-term investments.

 

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Table of Contents
Part I
Item 2

 

Financing Activities

 

Net cash used in financing activities for the nine months ended September 30, 2024 was $28.2 million, primarily consisting of $21.7 million in repurchases of common stock under the previously announced Share Repurchase Program that authorizes us to repurchase up to $150 million of our common shares (the “Share Repurchase Program”), $6.1 million in the redemption of the redeemable noncontrolling interest of MaivenPoint, and $4.0 million in the purchase of our public warrants, partially offset by $3.6 million of proceeds from the exercise of stock options.

 

Net cash used in financing activities for the nine months ended September 30, 2023 was $29.8 million, primarily consisting of $33.6 million in repurchases of common stock under the Share Repurchase Program, partially offset by $3.9 million of proceeds from the exercise of stock options.

 

Indebtedness

 

Credit Facility

 

We maintain a line of credit under Loan Agreement with HSBC, as the lender. See “Note 6 - Line of Credit” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q.

 

The Loan Agreement provides for a revolving line of credit of up to $30.0 million and an additional $20.0 million accordion feature for additional capital we may draw upon at our request. Borrowings under the line currently bear interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee at a rate equal to 0.5%. Any proceeds of borrowings under the Loan Agreement will be used for general corporate purposes.

 

On a consolidated basis with our subsidiaries, we are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. Pursuant to the Loan Agreement, we pledged, assigned, and granted HSBC a security interest in all shares of our subsidiaries, future proceeds, and certain assets as security for our obligations under the Loan Agreement. Our line of credit under the Loan Agreement will mature on November 3, 2026.

 

To date, we are in compliance with all covenants under the Loan Agreement. We have not at any time borrowed under the Loan Agreement. The description of the Loan Agreement is qualified in its entirety by the full text of the form of such agreement, a copy of which is referenced as an exhibit to our Annual Report.

 

Leasing Activities

 

We are obligated under various non-cancelable operating leases for office space. The initial terms of the leases expire on various dates through 2030. As of September 30, 2024, the commitments related to these operating leases is $16.3 million, of which $6.3 million is due in the next twelve months.

 

Operating Segment Information

 

We operate in one segment. Our products and services are sold throughout the world, through direct and indirect sales channels. Our chief operating decision maker (the “CODM”) is our Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation or profitability by product or geography. See the section titled “Notes to Condensed Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report) under the sub-heading “Note 15 – Segment Information” for more information.

 

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Table of Contents
Part I
Item 2

 

Critical Accounting Policies and Estimates

 

Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on the reported revenue generated and reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that our management believes are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

While our significant accounting policies are described in more detail in the section titled “Notes to Condensed Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report), we believe the following critical accounting policies and estimates are most important to understanding and evaluating our reported financial results.

 

Revenue Recognition

 

We derive revenue from four primary sources: SaaS, term license and support, services, and maintenance. Many of our contracts with customers include multiple performance obligations. Judgement is required in determining whether each performance obligation is distinct. Our products and services generally do not require a significant amount of integration or interdependency; therefore, our products and services are generally not combined. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (“SSP”) for each performance obligation within each contract.

 

We use judgment in determining the SSP for products and services. For substantially all performance obligations except term licenses, we are able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Term licenses are sold only as a bundled arrangement that includes the rights to a term license and support. In determining the SSP of license and support in a term license arrangement, we utilize observable inputs and consider the value relationship between support and term license when compared to the value relationship between support and perpetual licenses, the average economic life of our products, and software renewals rates. Using a combination of the relative fair value method, or the residual value method the SSP of the performance obligations in an arrangement is allocated to each performance obligation within a sales arrangement.

 

Company Earn-Out Shares

 

In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718. Refer to “Note 13 — Stock-Based Compensation” for more information regarding the Company Earn-Out RSUs.

 

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares.

 

46
Table of Contents
Part I
Item 2

 

Economic Conditions, Challenges, and Risks

 

The markets for software and cloud-based services are dynamic and highly competitive. Our competitors are developing new software while also deploying competing cloud-based services for consumers and businesses. Customer preferences evolve rapidly, and choices in hardware, products, and devices can and do influence how users access services in the cloud, and in some cases, the user’s choice of which suite of cloud-based services to use. We must continue to evolve and adapt to keep pace with this changing environment. The investments we are making in infrastructure, research and development, marketing, and geographic expansion will continue to increase our operating costs and may decrease our operating margins.

 

Our success is highly dependent on our ability to attract and retain qualified employees. We hire a mix of university and industry talent worldwide. We compete for talented individuals globally by offering an exceptional working environment, broad customer reach, scale in resources, the ability to grow one’s career across many different products and businesses, and competitive compensation and benefits.

 

Additionally, demand for our software and service is correlated to global macroeconomic and geopolitical factors, which remain dynamic and currently include multiple ongoing conflicts where the outcomes and consequences are not possible to predict, but could include regional instability and geopolitical shifts, and could materially adversely affect global trade, currency exchange rates, regional economies and the global economy. These in turn could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

 

Our international operations provide a significant portion of our total revenues and expenses. Many of these revenues and expenses are denominated in currencies other than the U.S. dollar. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. Refer to the section titled “Risk Factors” (Part I, Item 1A of our Annual Report) for a discussion of these factors and other risks.

 

Seasonality

 

Our quarterly revenue fluctuates and does not necessarily grow sequentially when measuring any one fiscal quarter’s revenue with another (e.g. comparing the fourth fiscal quarter of fiscal year 2023 with the first fiscal quarter of fiscal year 2024). Historically, our third and fourth quarters have been our highest revenue quarters, however those results are not necessarily indicative of future quarterly revenue or full year results. Higher third and fourth quarter revenue is driven primarily by increased sales resulting from our customers’ fiscal year ends. Additionally, new product and service introductions (including the timing of those introductions) can significantly impact revenue. Revenue can also be affected when customers anticipate a product introduction. Our operating expenses have generally increased sequentially due to increases in personnel in connection with the expansion of our business.

 

Recently Issued and Adopted Accounting Pronouncements

 

For information about recent accounting pronouncements, see “Note 2 - Summary of Significant Accounting Policies” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q.

 

47
Table of Contents

Part I

Item 3

 

Item 3. Quantitative and Qualitative Disclosures About Market Risks

 

We are exposed to potential economic risk from interest rates, foreign exchange rates, and our concentration of credit. We continued to evaluate our exposure to market risks during the nine months ended September 30, 2024, and have determined that there have been no material changes to our exposure to market risks from those described in our Annual Report. However, we have provided the following information to supplement or update our disclosures in our Annual Report.

 

Interest Rate Risk

 

As of September 30, 2024, we had cash and cash equivalents, marketable securities, and short-term deposits of $250.0 million, which we hold for working capital purposes. Our cash and cash equivalents are held in cash deposits and money market funds. Due to the short-term nature of these instruments, we believe that it does not have any material exposure to changes in the fair value of our investment portfolio due to changes in interest rates. Declines in interest rates, however, would reduce our future interest income. The effect of a hypothetical 10% change in interest rates would not have a material negative impact on our condensed consolidated financial statements. To the extent we enter into other long-term debt arrangements in the future, we would be subject to fluctuations in interest rates which could have a material impact on our future financial condition and results of operation.

 

Foreign Currency Exchange Risk

 

Fluctuations in foreign currencies impact the amount of total assets and liabilities that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars. In particular, the amount of cash, cash equivalents and marketable securities that we report in U.S. Dollars for a significant portion of the cash held by these subsidiaries is subject to translation variance caused by changes in foreign currency exchange rates as of the end of each respective reporting period, the offset to which is substantially recorded to accumulated other comprehensive income on our condensed consolidated balance sheets and is also presented as a line item in its condensed consolidated statements of comprehensive income (loss). We believe we are in large part naturally hedged against foreign currency exchange risk from our ongoing business operations, as most of our regional revenues are generated in the same currency as that region’s expenses are paid.

 

Concentration of Credit Risk

 

We deposit our cash with financial institutions, and, at times, such balances may exceed federally insured limits.

 

48
Table of Contents

Part I

Item 4

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer (in his capacity as “Principal Executive Officer”) and our Chief Financial Officer (in his capacity as “Principal Financial and Accounting Officer”), we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e)) under the Exchange Act, as of the end of the period covered by this report. Based upon that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024, due to the material weakness described below.

 

Notwithstanding such material weakness in internal control over financial reporting, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that our condensed consolidated financial statements included in this report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”).

 

Previously Disclosed Material Weakness

 

Our management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. As reported in our Annual Report, we did not maintain effective internal control as of December 31, 2023, as a result of a material weakness in our internal control over financial reporting for accuracy and completeness of information used. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Refer to our Annual Report for a description of our material weakness.

 

2024 Remediation Plan

 

Our material weakness was not remediated as of September 30, 2024. Our management has been and continues to be committed to remediating this material weakness and has identified and implemented several steps to enhance our internal controls over financial reporting. We have implemented a remediation plan (the “2024 Remediation Plan”), which includes actions not limited to:

 

 

■

enhance the design of controls that address the accuracy and completeness of reports being utilized in the execution of internal controls; and
 

■

establishing additional training to address the accuracy and completeness of data used controls and the level of documentation required to evidence control activities.

 

We have implemented documented policies and procedures for, and are in the process of testing the implementation and operating effectiveness of, the newly designed controls. The material weakness in our internal control over financial reporting will not be considered remediated until the newly designed controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are designed and operating effectively. In addition, we may discover additional material weaknesses that require additional time and resources to remediate, and we may decide to take additional measures to address the material weaknesses or modify the remediation steps described above.

 

Changes in Internal Control Over Financial Reporting

 

Other than described above, there have been no changes in our internal control over financial reporting during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

 

49
Table of Contents

Part II

Items 1 and 1A

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

As part of the business combination with Apex Technology Acquisition Corporation, Inc. (“Apex”), we assumed certain indemnification obligations for Apex Technology Sponsor LLC and Jeff Epstein, Brad Koenig, David Chao, Peter Bell, Donna Wells, and Alex Vieux (the “Indemnitees” or “Defendants”). On February 2, 2024, Drulias and Farzad (as purported Apex stockholders, the “Plaintiffs”) filed a class action complaint against the Indemnities in Delaware Court of Chancery, captioned Dean William Drulias, et.al. v. Apex Technology Sponsor LLC, et.al., C.A. No. 2024-0094-LWW. Plaintiffs asserted breach of fiduciary duty and unjust enrichment claims against the Defendants. The complaint alleged that Defendants made false and misleading disclosures in the June 2, 2021 proxy statement of Apex impacting its stockholders’ vote to approve a merger between Apex and us and also affecting stockholders’ redemption rights prior to the merger. Plaintiffs sought unspecified damages, rescission or rescissory damages, and disgorgement of unjust enrichment. We were not a named defendant in the complaint but had indemnification obligations to the Defendants under indemnification agreements executed during the merger. Also, in accordance with the business combination agreement, the Defendants obtained insurance policies to cover post-closing liability, with Apex securing a policy with a limit of $10 million and the sponsors obtaining a policy with a $3 million limit. The parties participated in a mediation in October and agreed to settlement terms. Pursuant to a signed letter of intent and a forthcoming settlement agreement, releasing us and the Defendants and settling the class action, we will contribute $1.4 million toward the full settlement amount of $14.4 million. The remaining $13 million will be paid pursuant to the two aforementioned insurance policies covering the Defendants and sponsor. As of September 30, 2024, an estimated accrual of $1.4 million was included in the accrued expenses and other current liabilities within the condensed consolidated balance sheets.

 

In the normal course of our business, we may be involved in various claims, negotiations, and legal actions. Except for such claims that arise in the normal course of business, as of and for the fiscal quarter ended September 30, 2024, we are not a party to any material asserted, ongoing, threatened, or pending claims, suits, assessments, proceedings, or other litigation for which a material claim is reasonably possible, probable, or estimable.

 

Refer to the information under the section titled “Risk Factors” of our Annual Report (Part I, Item 1A of our Annual Report) for information regarding the potential legal and regulatory risks (including potential legal proceedings and litigation) in which we may become involved.

 

Item 1A. Risk Factors

 

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report, which risks and uncertainties could affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes to the risk factors previously disclosed in our Annual Report. We urge you to read the risk factors in our Annual Report.

 

50
Table of Contents

Part II

Items 2, 3 and 4

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

 

During the quarter ended September 30, 2024, we did not issue any shares of our common stock or any other equity securities without registration under the Securities Act of 1933, as amended.

 

Issuer Purchases of Equity Securities.

 

On March 17, 2022, we announced that our Board of Directors authorized the Share Repurchase Program for us to buy back shares of our common stock. Under the Share Repurchase Program, we have the authority to buy up to $150 million of our common stock shares via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period of three years from the date of authorization. Purchases made pursuant to the Share Repurchase Program may be conducted in compliance with Exchange Act Rule 10b-18 and/or Exchange Act Rule 10b5-1. Purchases made pursuant to the Share Repurchase Program will be conducted in compliance with all applicable legal, regulatory, and internal policy requirements, including our Insider Trading Policy. We are not obligated to make purchases of, nor are we obligated to acquire any particular amount of, our common stock under the Share Repurchase Program. The Share Repurchase Program may be suspended or discontinued at any time.

 

The following table presents information with respect to common stock shares repurchased under the Share Repurchase Program during the three months ended September 30, 2024:

 

Period

Total number of shares purchased(1)

Average price paid per share(2)

Total number of shares purchased as part of the Share Repurchase Program

Approximate dollar value of shares that may yet be purchased under the Share Repurchase Program(3)

July 1, 2024 - July 31, 2024

2,696

$10.2964

2,696

$71,857,416

August 1, 2024 - August 31, 2024

13,064

$10.4160

13,064

$71,721,341

September 1, 2024 - September 30, 2024

202,786

$11.7813

202,786

$69,332,259

 

(1) All shares reported herein were purchased pursuant to the publicly announced Share Repurchase Program.

(2) Average price paid per share includes costs associated with the repurchases and excludes the 1% excise tax on stock repurchases enacted by the Inflation Reduction Act of 2022.

(3) The maximum remaining dollar value of shares that may yet be purchased under the Share Repurchase Program is reduced by the aggregate price paid for share purchases in addition to any fees, commissions, or other costs that may arise as a result of the purchase.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

51
Table of Contents

Part II

Item 5

 

 

ITEM 5. OTHER INFORMATION

 

During the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-k.

 

 

 

52
Table of Contents

Part II

Item 6

 

Item 6. Exhibits

 

The following exhibits are filed as part of, furnished with, or incorporated by reference into, this Quarterly Report on Form 10-Q, in each case as indicated therein.

 

Exhibit Index

 

       

Incorporated by Reference

Exhibit
Number

  

Description

  

Schedule/

Form

  

File No.

  

Exhibit

  

Filing Date

   Filed Herewith

31.1

                     X

31.2

  

Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

                   X

32.1**

  

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                   X

32.2**

  

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                   X

101.INS

  

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

                   X

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document.

                   X

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

                   X

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase Document.

                   X

101.LAB

  

Inline XBRL Taxonomy Extension Labels Linkbase Document.

                   X

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

                   X

104.1

  

Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).

                   X

 

**

Furnished herewith. Any exhibit furnished herewith (including the certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto) are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

 

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Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  AVEPOINT, INC.
   

Date: November 7, 2024

/s/ Tianyi Jiang
 

Name:

Tianyi Jiang
 

Title:

Chief Executive Officer

(Principal Executive Officer)

 

Date: November 7, 2024

/s/ James Caci
 

Name:

James Caci
 

Title:

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

54

Exhibit 31.1

 

CERTIFICATIONS

 

I, Tianyi Jiang, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of AvePoint, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended, ("Exchange Act") Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

             

Date: November 7, 2024

      

By:

  

/s/ Tianyi Jiang
           

Tianyi Jiang

Chief Executive Officer

(Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, James Caci, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of AvePoint, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended, ("Exchange Act") Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

 Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

             

Date: November 7, 2024

      

By:

  

/s/ James Caci
           

James Caci

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

Exhibit 32.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Tianyi Jiang, Chief Executive Officer of AvePoint, Inc. (the “Company”) hereby certifies that, to the best of his knowledge:

 

1.

 The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

 

2.

 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

             

Date: November 7, 2024

      

By:

  

/s/ Tianyi Jiang
           

Tianyi Jiang
           

Chief Executive Officer
           

(Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), James Caci, Chief Financial Officer of AvePoint, Inc. (the “Company”) hereby certifies that, to the best of his knowledge:

 

1.

 The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

             

Date: November 7, 2024

      

By:

  

/s/ James Caci
           

James Caci
           

Chief Financial Officer
           

(Principal Financial and Accounting Officer)

 

 

 
v3.24.3
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2024
Nov. 06, 2024
Document Information [Line Items]    
Entity Central Index Key 0001777921  
Entity Registrant Name AvePoint, Inc.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-39048  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 83-4461709  
Entity Address, Address Line One 525 Washington Blvd, Suite 1400  
Entity Address, City or Town Jersey City  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07310  
City Area Code 804  
Local Phone Number 314-5903  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   187,511,301
Warrant [Member]    
Document Information [Line Items]    
Title of 12(b) Security Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share  
Trading Symbol AVPTW  
Security Exchange Name NASDAQ  
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Trading Symbol AVPT  
Security Exchange Name NASDAQ  
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Assets    
Cash and cash equivalents $ 249,803 $ 223,162
Short-term investments 173 3,721
Accounts receivable, net 79,986 85,877
Prepaid expenses and other current assets 11,083 12,824
Total current assets 341,045 325,584
Property and equipment, net 5,248 5,118
Goodwill 19,003 19,156
Intangible assets, net 9,709 10,546
Operating lease right-of-use assets 14,259 13,908
Deferred contract costs 55,371 54,675
Other assets 18,320 13,595
Total assets 462,955 442,582
Liabilities, mezzanine equity, and stockholders’ equity    
Accounts payable 3,898 1,384
Accrued expenses and other current liabilities 57,459 53,766
Current portion of deferred revenue 133,338 121,515
Total current liabilities 194,695 176,665
Long-term operating lease liabilities 8,986 9,383
Long-term portion of deferred revenue 8,929 7,741
Earn-out shares liabilities 29,941 18,346
Other liabilities 4,683 5,603
Total liabilities 247,234 217,738
Commitments and contingencies (Note 9)
Mezzanine equity    
Redeemable noncontrolling interest 0 6,038
Total mezzanine equity 0 6,038
Common stock, $0.0001 par value; 1,000,000 shares authorized, 187,431 and 184,652 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 19 18
Additional paid-in capital 693,819 667,881
Accumulated other comprehensive income 4,431 3,196
Accumulated deficit (484,451) (460,496)
Noncontrolling interest 1,903 8,207
Total stockholders’ equity 215,721 218,806
Total liabilities, mezzanine equity, and stockholders’ equity $ 462,955 $ 442,582
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, shares issued (in shares) 187,431,000 184,652,000
Common stock, shares outstanding (in shares) 187,431,000 184,652,000
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue:        
Revenue $ 88,804 $ 72,760 $ 241,299 $ 197,201
Cost of revenue:        
Cost of revenue 21,221 20,156 60,605 57,842
Gross profit 67,583 52,604 180,694 139,359
Operating expenses:        
Sales and marketing 30,050 28,436 90,459 82,978
General and administrative 17,043 15,838 52,095 45,679
Research and development 12,838 8,643 35,827 26,931
Total operating expenses 59,931 52,917 178,381 155,588
Income (loss) from operations 7,652 (313) 2,313 (16,229)
Other expense, net (4,541) (1,076) (8,107) (1,576)
Income (loss) before income taxes 3,111 (1,389) (5,794) (17,805)
Income tax expense 183 2,841 6,170 8,132
Net income (loss) 2,928 (4,230) (11,964) (25,937)
Net income (loss) attributable to noncontrolling interest 308 (18) (59) 57
Net income (loss) available to common shareholders $ 2,620 $ (4,212) $ (11,905) $ (25,994)
Net income (loss) per share:        
Basic (in dollars per share) $ 0.01 $ (0.02) $ (0.07) $ (0.14)
Diluted (in dollars per share) $ 0.01 $ (0.02) $ (0.07) $ (0.14)
Weighted average shares outstanding:        
Basic (in shares) 183,946 181,769 182,753 182,630
Diluted (in shares) 203,859 181,769 182,753 182,630
SaaS [Member]        
Revenue:        
Revenue $ 60,866 $ 41,910 $ 165,820 $ 115,701
Cost of revenue:        
Cost of revenue 10,624 9,561 30,139 26,586
Termed License and Support [Member]        
Revenue:        
Revenue 14,140 16,293 35,128 40,474
Cost of revenue:        
Cost of revenue 373 484 1,202 1,441
Service [Member]        
Revenue:        
Revenue 10,810 11,194 31,808 31,007
Cost of revenue:        
Cost of revenue 10,057 9,922 28,777 29,231
Maintenance [Member]        
Revenue:        
Revenue 2,988 3,363 8,543 10,019
Cost of revenue:        
Cost of revenue $ 167 $ 189 $ 487 $ 584
v3.24.3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net loss $ 2,928 $ (4,230) $ (11,964) $ (25,937)
Other comprehensive income (loss) net of taxes        
Unrealized gain (loss) on available-for-sale securities 3 0 (138) 0
Foreign currency translation adjustments 1,794 56 1,395 228
Total other comprehensive income 1,797 56 1,257 228
Total comprehensive income (loss) 4,725 (4,174) (10,707) (25,709)
Comprehensive income (loss) attributable to noncontrolling interest 406 (18) (35) (16)
Total comprehensive income (loss) available to common shareholders $ 4,319 $ (4,156) $ (10,672) $ (25,693)
v3.24.3
Condensed Consolidated Statements of Mezzanine Equity and Stockholders' Equity (Unaudited) - USD ($)
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Noncontrolling Interest [Member]
Temporary Equity, Including Portion Attributable to Noncontrolling Interests [Member]
Common Stock Outstanding [Member]
Treasury Stock, Common [Member]
Balance (in shares) at Dec. 31, 2022               185,277,588 4,189,750
Balance at Dec. 31, 2022 $ 229,147,000 $ 19,000 $ 665,715,000 $ (416,927,000) $ 2,006,000       $ (21,666,000)
Proceeds from exercise of options (in shares)               2,063,783 0
Proceeds from exercise of options 3,865,000 0 3,865,000 0 0       $ 0
Common stock issued upon vesting of restricted stock units (in shares)               2,637,904 0
Common stock issued upon vesting of restricted stock units 0 0 0 0 0       $ 0
Stock-based compensation expense 26,975,000 0 26,975,000 0 0       0
Reclassification of earn-out RSUs to earn-out shares (439,000) 0 (439,000) 0 0       0
Net income (25,937,000) 0 0 (25,937,000) 0        
Unrealized gain (loss) on available-for-sale securities 0                
Foreign currency translation adjustments 301,000 0 0 0 301,000       0
Balance, temporary equity, including noncontrolling interest at Dec. 31, 2022           $ 14,007,000 $ 14,007,000    
Repurchase and retirement of common stock (in shares)               (5,983,651)  
Repurchase and retirement of common stock (33,744,000) (1,000) (36,224,000) (19,185,000) 0        
Net loss attributable to and accretion of redeemable noncontrolling interest           57,000 57,000    
Net loss attributable to and accretion of redeemable noncontrolling interest (57,000) 0 0 (57,000) 0       0
Foreign currency translation adjustments           (73,000) (73,000)    
Foreign currency translation adjustments $ 301,000 0 0 $ 0 301,000       $ 0
Temporary Equity, Foreign Currency Translation Adjustments           (73,000) (73,000)    
Repurchase and retirement of common stock (in shares) (5,983,651)               (4,189,750)
Repurchase and retirement of common stock                 $ 21,666,000
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2023           13,991,000 13,991,000    
Balance (in shares) at Sep. 30, 2023       (462,106)       183,995,624 0
Balance at Sep. 30, 2023 $ 200,111,000 18,000 659,892,000 $ (462,106,000) 2,307,000       $ 0
Balance (in shares) at Jun. 30, 2023       (450,750)       185,723,183  
Balance at Jun. 30, 2023 211,124,000 19,000 659,604,000   2,251,000        
Proceeds from exercise of options (in shares)       0       288,180  
Proceeds from exercise of options 625,000 0 625,000   0        
Common stock issued upon vesting of restricted stock units (in shares)       0       631,866  
Common stock issued upon vesting of restricted stock units 0 0 0   0        
Stock-based compensation expense 9,285,000 0 9,285,000   0        
Reclassification of earn-out RSUs to earn-out shares (127,000) 0 (127,000)   0        
Net income (4,230,000) 0 0            
Unrealized gain (loss) on available-for-sale securities 0                
Foreign currency translation adjustments 56,000 0 0   56,000        
Balance, temporary equity, including noncontrolling interest at Jun. 30, 2023           14,009,000 14,009,000    
Repurchase and retirement of common stock (in shares)               (2,647,605)  
Repurchase and retirement of common stock (16,640,000) (1,000) (9,495,000) $ (7,144) 0        
Net loss attributable to and accretion of redeemable noncontrolling interest           (18,000) (18,000)    
Net loss attributable to and accretion of redeemable noncontrolling interest 18,000 0 0   0        
Foreign currency translation adjustments           0 0    
Foreign currency translation adjustments 56,000 0 0   56,000        
Temporary Equity, Foreign Currency Translation Adjustments           0 0    
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2023           13,991,000 13,991,000    
Balance (in shares) at Sep. 30, 2023       (462,106)       183,995,624 0
Balance at Sep. 30, 2023 200,111,000 18,000 659,892,000 $ (462,106,000) 2,307,000       $ 0
Balance (in shares) at Dec. 31, 2023               184,652,402  
Balance at Dec. 31, 2023 $ 218,806,000 18,000 667,881,000 (460,496,000) 3,196,000 8,207,000      
Proceeds from exercise of options (in shares) 1,502,820             1,502,820  
Proceeds from exercise of options $ 3,613,000 0 3,613,000 0 0 0      
Common stock issued upon vesting of restricted stock units (in shares)               3,905,299  
Common stock issued upon vesting of restricted stock units 0 1,000 (1,000) 0 0 0      
Stock-based compensation expense 29,807,000 0 29,807,000 0 0 0      
Reclassification of earn-out RSUs to earn-out shares (378,000) 0 (378,000)   0 0      
Purchase of public warrants $ (3,828,000) 0 (3,828,000) 0 0 0      
Repurchase and retirement of common stock (in shares) (2,629,978)             (2,629,978)  
Repurchase and retirement of common stock $ (21,704,000) 0 (9,654,000) (12,050,000) 0 0      
Net income (11,959,000) 0 0 (12,004,000) 0 45,000      
Unrealized gain (loss) on available-for-sale securities (138,000) 0 0 0 (138,000) 0      
Foreign currency translation adjustments 1,403,000 0 0   1,371,000 32,000      
Balance, temporary equity, including noncontrolling interest at Dec. 31, 2023 6,038,000         6,038,000 6,038,000    
Foreign currency translation adjustments           (8,000) (8,000)    
Foreign currency translation adjustments 1,403,000 0 0   1,371,000 32,000      
Accretion of redeemable noncontrolling interest 99,000     99,000   (99,000) (99,000)    
Redemption of noncontrolling interest           (5,926,000) (5,926,000)    
Redemption of noncontrolling interest 0 $ 0 6,379,000 0 2,000 (6,381,000)      
Temporary Equity, Foreign Currency Translation Adjustments           (8,000) (8,000)    
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2024 0         0 0    
Balance (in shares) at Sep. 30, 2024   187,430,543           187,430,543  
Balance at Sep. 30, 2024 215,721,000 $ 19,000 693,819,000 (484,451,000) 4,431,000 1,903,000      
Balance (in shares) at Jun. 30, 2024   186,657,306              
Balance at Jun. 30, 2024 207,408,000 $ 19,000 688,487,000 (485,327,000) 2,732,000 1,497,000      
Proceeds from exercise of options (in shares)   117,457              
Proceeds from exercise of options 279,000 $ 0 279,000 0 0 0      
Common stock issued upon vesting of restricted stock units (in shares)   874,326              
Common stock issued upon vesting of restricted stock units 0 $ 0 0 0 0 0      
Stock-based compensation expense 9,811,000 0 9,811,000 0 0 0      
Reclassification of earn-out RSUs to earn-out shares (120,000) 0 (120,000) 0 0 0      
Purchase of public warrants (3,828,000) $ 0 (3,828,000) 0 0 0      
Repurchase and retirement of common stock (in shares)   (218,546)              
Repurchase and retirement of common stock (2,554,000) $ 0 (810,000) (1,744,000) 0 0      
Net income 2,928,000 0 0 2,620,000 0 308,000      
Unrealized gain (loss) on available-for-sale securities 3,000 0 0 0 3,000 0      
Foreign currency translation adjustments 1,794,000 0 0 0 1,696,000 98,000      
Foreign currency translation adjustments 1,794,000 $ 0 0 0 1,696,000 98,000      
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2024 0         0 $ 0    
Balance (in shares) at Sep. 30, 2024   187,430,543           187,430,543  
Balance at Sep. 30, 2024 $ 215,721,000 $ 19,000 $ 693,819,000 $ (484,451,000) $ 4,431,000 $ 1,903,000      
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Operating activities    
Net loss $ (11,964) $ (25,937)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 4,020 3,439
Operating lease right-of-use assets expense 4,975 5,294
Foreign currency remeasurement loss 1,212 763
Stock-based compensation 29,807 26,975
Deferred income taxes (235) (240)
Other (4) 725
Change in value of earn-out and warrant liabilities 11,717 6,921
Changes in operating assets and liabilities:    
Accounts receivable 6,873 (4,633)
Prepaid expenses and other current assets 1,767 1,663
Deferred contract costs and other assets (3,280) (5,637)
Accounts payable, accrued expenses, operating lease liabilities and other liabilities (598) (5,331)
Deferred revenue 11,844 9,282
Net cash provided by operating activities 56,134 13,284
Investing activities    
Maturities of investments 5,361 1,292
Purchases of investments (1,850) (2,050)
Capitalization of internal-use software (947) (988)
Purchase of property and equipment (2,303) (1,478)
Issuance of notes receivables (1,500) (1,000)
Other investing activities (130) 0
Net cash used in investing activities (1,369) (4,224)
Financing activities    
Repurchase of common stock (21,704) (33,644)
Proceeds from stock option exercises 3,613 3,865
Redemption of redeemable noncontrolling interest (6,130) 0
Purchase of public warrants (3,991) 0
Repayments of finance leases (6) (30)
Net cash used in financing activities (28,218) (29,809)
Effect of exchange rates on cash 94 (653)
Net increase (decrease) in cash and cash equivalents 26,641 (21,402)
Cash and cash equivalents at beginning of period 223,162 227,188
Cash and cash equivalents at end of period 249,803 205,786
Supplemental disclosures of cash flow information    
Income taxes paid $ 5,552 $ 5,794
v3.24.3
Note 1 - Nature of Business and Organization
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Nature of Operations [Text Block]

1. Nature of Business and Organization

 

AvePoint, Inc. (collectively with its subsidiaries, hereinafter referred to as “AvePoint,” the “Company,” “we,” “us,” or “our”) was incorporated as a New Jersey corporation on July 24, 2001 and redomiciled as a Delaware corporation in 2006.

 

AvePoint provides a cloud-native software platform that organizations rely on to optimize operations, manage critical data and secure the digital workplace. As companies around the world embrace the new normal of hybrid work, they must build and deliver a new, seamless workplace experience for knowledge workers, centered around an extensive portfolio of SaaS solutions and productivity applications aimed at improving collaboration across the organization.

 

Our principal corporate headquarters are located in Jersey City, New Jersey, with our principal operating headquarters in Richmond, Virginia and additional offices in North America, Europe, Asia, Australia and the Middle East.
v3.24.3
Note 2 - Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company and entities consolidated under the variable interest and voting models. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted.

 

In the opinion of management, these financial statements contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Interim results are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2024.

 

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our most recent Annual Report on Form 10-K for the year ended  December 31, 2023, which was filed with the SEC on February 29, 2024 (“Annual Report”).

 

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Annual Report. There have been no significant changes to these policies during the nine months ended September 30, 2024.

 

Comparative Data

 

Certain amounts from prior periods have been reclassed to conform to the current period presentation, including:

 

 •The reclassification of changes in earn-out and warrant liabilities to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.
 •The reclassification of interest income, net to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported and the amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for the determination of standalone selling price for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.

 

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other expense, net in the Company’s condensed consolidated statements of income.

 

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers its investments with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2024 and December 31, 2023, the Company’s cash balances at these entities were $11.7 million and $13.1 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

 

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2024 or  December 31, 2023.

 

Deferred Contract Costs

 

We defer sales commissions that are considered to be incremental and recoverable costs of obtaining or renewing SaaS, term license and support, services, and maintenance contracts. Changes in the anticipated period of asset benefit or the average renewal term are recognized on a prospective basis upon occurrence. 

 

Amortization of deferred contract costs of $5.6 million and $15.7 million for the three and nine months ended September 30, 2024, and $4.6 million and $13.1 million for the three and nine months ended  September 30, 2023, is included as a component of sales and marketing expenses in our condensed consolidated statements of income. Deferred contract costs recognized as a contract asset in the condensed consolidated balance sheets were $55.4 million and $54.7 million as of  September 30, 2024 and December 31, 2023, respectively.

 

Revenue Recognition

 

The Company derives revenue from four primary sources: SaaS, term license and support, services, and maintenance. Services include installation services, training and other consulting services.

 

Term license revenue recognized at a point in time was $9.9 million and $22.1 million for the three and nine months ended September 30, 2024, and $11.1 million and $24.9 million for the three and nine months ended  September 30, 2023.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for credit losses. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for credit losses as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2024 and December 31, 2023, the allowance for credit losses was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2024 and December 31, 2023 was $142.3 million and $129.3 million, respectively. Revenue recognized that was included in the deferred revenue balance as of December 31, 2023, was $103.1 million for the nine months ended September 30, 2024.

 

The opening and closing balances of the Company’s accounts receivable, net, deferred revenue and deferred contract costs are as follows:

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2023

 $94,067  $129,256  $54,675 

Balance, September 30, 2024

  91,033   142,267   55,371 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2024 and the year ended December 31, 2023 outside of its sales activities.

 

As of September 30, 2024, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $363.7 million, of which $310.4 million is related to SaaS and term license and support revenue. We expect to recognize approximately 61% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 

Stock-Based Compensation

 

Stock-based compensation represents the cost related to stock-based awards granted to employees. To date, we have issued both stock options and restricted stock units. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award and recognizes the cost ratably over the requisite service period, net of actual forfeitures in the period.

 

We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes model requires highly subjective assumptions in order to derive the inputs necessary to calculate the fair value of stock options. To estimate the expected term of stock options, the Company considers contractual terms of the options, including the vesting and expiration periods, as well as historical option exercise data and current market conditions to determine an estimated expected term. The Company’s historical experience is too limited to be able to reasonably estimate an expected term. Expected volatility is based on the historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected term.

 

Recent Accounting Pronouncements not yet effective

 

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendment in this ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after  December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-07 will have on our consolidated financial statements and related disclosures. 

 

In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures (Topic 740)” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The amendment in this ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements and related disclosures. 

 
v3.24.3
Note 3 - Goodwill
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Goodwill Disclosure [Text Block]

3. Goodwill

 

The changes in the carrying amounts of goodwill were as follows:

 

  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2023

 $19,156 

Effect of foreign currency translation

  (153)

Balance as of September 30, 2024

 $19,003 

 
v3.24.3
Note 4 - Intangible Assets, Net
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

4. Intangible assets, net

 

Intangible assets consist of acquired intangible assets and self-developed software.

 

A summary of the balances of the Company’s intangible assets as of  September 30, 2024 and  December 31, 2023 is presented below:

 

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
  September 30, 2024  December 31, 2023 
  

(in thousands)

 

Technology and software

 $8,962  $(3,091) $5,871  $7,976  $(1,758) $6,218 

Customer related assets

  4,601   (980)  3,621   4,546   (640)  3,906 

Content

  869   (652)  217   843   (421)  422 

Total

 $14,432  $(4,723) $9,709  $13,365  $(2,819) $10,546 

 

Amortization expense for intangible assets was $0.7 million and $1.9 million for the three and nine months ended September 30, 2024, and $0.6 million and $1.6 million for the three and nine months ended  September 30, 2023, respectively.

 

As of September 30, 2024, estimated future amortization expense for intangible assets, net is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $654 

2025

  2,300 

2026

  1,801 

2027

  1,405 

2028

  1,013 

Thereafter

  2,536 

Total intangible assets subject to amortization

 $9,709 

 

 
v3.24.3
Note 5 - Accounts Receivable, Net
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5. Accounts Receivable, Net

 

Accounts receivable, net, consists of the following components:

 

   

September 30,

    

December 31,

  
   

2024

    

2023

  
   

(in thousands)

  

Trade receivables

   $ 57,434     $ 60,508  

Current unbilled receivables

     23,470       26,295  

Allowance for credit losses

     (918 )     (926 )
    $ 79,986     $ 85,877  

 
v3.24.3
Note 6 - Line of Credit
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

6. Line of Credit

 

The Company maintains a loan and security agreement (the “Loan Agreement”) with HSBC Bank USA, National Association, (“HSBC”) as lender, for a revolving line of credit of up to $30.0 million, with an accordion feature that provides up to $20.0 million of additional borrowing capacity the Company may draw upon at its request. The line bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee at a rate equal to 0.5%. The line will mature on November 3, 2026. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. The Company pledged, assigned and granted HSBC a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the Loan Agreement obligations. As of September 30, 2024, the Company is compliant with all covenants under the line and had no borrowings outstanding under the line of credit.

 
v3.24.3
Note 7 - Income Taxes
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

7. Income Taxes

 

The Company had an effective tax rate of 5.9% and (106.5)% for the three and nine months ended September 30, 2024, respectively, and (204.5)% and (45.7)% for the three and nine months ended  September 30, 2023, respectively.

 

The change in effective tax rates for the three-month period ended September 30, 2024 as compared to the three-month period ended  September 30, 2023 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

 

The change in effective tax rates for the nine-month period ended September 30, 2024 as compared to the nine-month period ended  September 30, 2023 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

 

The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis and will adjust such amounts in light of changing facts and circumstances. In making such an assessment, management would consider all available supporting data, including the level of historical taxable income, future reversals of existing temporary differences, tax planning strategies, and projected future taxable income.

 
v3.24.3
Note 8 - Leases
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

8. Leases

 

The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through 2030. We determine if an arrangement is a lease at inception.

 

The components of the Company’s operating lease expenses are reflected in the condensed consolidated statements of income as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Lease liability cost

 $1,853  $1,798  $5,353  $5,294 

Short-term lease expenses (1)

  345   138   891   592 

Variable lease cost not included in the lease liability (2)

  163   119   478   365 

Total lease cost

 $2,361  $2,055  $6,722  $6,251 

(1) Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.

 

(2) Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.

 

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We elected to combine fixed payments for non-lease components, for all classes of underlying assets, with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities.

 

During the nine months ended September 30, 2024 and 2023, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $5.2 million and $3.7 million, respectively.

 

Other information related to operating leases is as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,828  $1,659  $5,576  $5,324 

 

As of September 30, 2024, our operating leases had a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 5.4%.

 

 
As of December 31, 2023, our operating leases had a weighted average remaining lease term of 3.8 years and a weighted average discount rate of 5.6%.
 
The maturity schedule of the operating lease liabilities as of September 30, 2024 is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $1,642 

2025

  6,123 

2026

  3,472 

2027

  2,274 

2028

  1,395 

Thereafter

  1,427 

Total future lease payments

 $16,333 

Less: Present value adjustment

  (1,471)

Present value of future lease payments (1)

 $14,862 

 

(1) Includes the current portion of operating lease liabilities of $5.9 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.

 

As of September 30, 2024, letters of credit have been issued in the amount of $0.8 million as security for operating leases. The letters of credit are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets.

 

 
v3.24.3
Note 9 - Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Commitments Contingencies and Guarantees [Text Block]

9. Commitments and Contingencies

 

Legal Proceedings

 

In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of September 30, 2024, the Company was not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

 

Indemnification

 

The Company has entered into indemnification agreements with its executive officers and directors. These agreements, among other things, require AvePoint to indemnify its directors and executive officers to the fullest extent permitted by Delaware law, specifically the Delaware General Corporation Law (as the same exists or may hereafter be amended) for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.

 

As part of the business combination with Apex Technology Acquisition Corporation, Inc. (“Apex”), we assumed certain indemnification obligations for Apex Technology Sponsor LLC and Jeff Epstein, Brad Koenig, David Chao, Peter Bell, Donna Wells, and Alex Vieux (the “Indemnitees” or “Defendants”). On February 2, 2024, Drulias and Farzad (as purported Apex stockholders, the “Plaintiffs”) filed a class action complaint against the Indemnities in Delaware Court of Chancery, captioned Dean William Drulias, et.al. v. Apex Technology Sponsor LLC, et.al., C.A. No. 2024-0094-LWW. Plaintiffs asserted breach of fiduciary duty and unjust enrichment claims against the Defendants. The complaint alleged that Defendants made false and misleading disclosures in the June 2, 2021 proxy statement of Apex impacting its stockholders’ vote to approve a merger between Apex and us and also affecting stockholders’ redemption rights prior to the merger. Plaintiffs sought unspecified damages, rescission or rescissory damages, and disgorgement of unjust enrichment. We were not a named defendant in the complaint but had indemnification obligations to the Defendants under indemnification agreements executed during the merger. Also, in accordance with the business combination agreement, the Defendants obtained insurance policies to cover post-closing liability, with Apex securing a policy with a limit of $10 million and the sponsors obtaining a policy with a $3 million limit. The parties participated in a mediation in October and agreed to settlement terms. Pursuant to a signed letter of intent and a forthcoming settlement agreement, releasing us and the Defendants and settling the class action, we will contribute $1.4 million toward the full settlement amount of $14.4 million. The remaining $13 million will be paid pursuant to the two aforementioned insurance policies covering the Defendants and sponsor. As of September 30, 2024, an estimated accrual of $1.4 million was included in the accrued expenses and other current liabilities within the condensed consolidated balance sheets.

 

Guarantees

 

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements for the completion of service projects, the completion of which are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets. As of September 30, 2024, letters of credit have been issued in the amount of $3.7 million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.

 
v3.24.3
Note 10 - Earn-Out and Warrant Liabilities
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Earn-Out and Warrant Liabilities [Text Block]

10. Earn-Out and Warrant Liabilities

 

Company Earn-Out

 

Certain holders of common stock and certain holders of options shall be issued additional shares of AvePoint’s common stock, as follows:

 

  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $12.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share;
  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $15.00 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share;
  •

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $17.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share.

 

The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of restricted stock units of the Company for a number of shares of AvePoint’s common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “Company Earn-Out RSUs”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718, Compensation-Stock Compensation (“ASC 718”). Refer to “Note 13 — Stock-Based Compensation” for more information regarding the Company Earn-Out RSUs.

 

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ (as defined below) contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on July 1, 2021 was determined to be $29.6 million. The fair value was remeasured as of September 30, 2024 and December 31, 2023, and was determined to be $29.9 million and $18.3 million, respectively, and included in the earn-out shares’ liabilities in the condensed consolidated balance sheets. As a result, $4.2 million and $11.2 million increases in liability were recognized during the three and nine months ended September 30, 2024, and $2.8 million and $6.8 million increases in liability were recognized during the three and nine months ended  September 30, 2023, and included as other expense, net in the condensed consolidated statements of income. No Company Earn-Out Shares have been issued as of September 30, 2024. We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:

 

   

September 30,

   December 31,  
    2024   2023  

Term (in years)

     3.75   4.5  

Volatility

     50.0

%

 55.0 %

 

 

 

Private Warrants to Acquire Common Stock

 

On July 1, 2021, the Company granted 405,000 private placement warrants with a 5-year term and an exercise price of $11.50 per share. Management has determined that the private placement warrants are to be classified as liabilities to be marked to market at each reporting period.

 

The private placement warrants are non-transferable and any transfer to an unrelated party would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $1.4 million. The fair value was remeasured as of September 30, 2024 and December 31, 2023, and was determined to be $0.9 million and $0.5 million, respectively, and included in the other non-current liabilities in the condensed consolidated balance sheets. As a result, $0.3 million and $0.5 million of losses were recognized during the three and nine months ended September 30, 2024, and $0.1 million and $0.2 million were recognized during the three and nine months ended  September 30, 2023, and included as other expense, net in the condensed consolidated statements of income.

 

As of September 30, 2024, 328,750 private placement warrants remained outstanding.
v3.24.3
Note 11 - Mezzanine Equity and Stockholders' Equity
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

11. Mezzanine Equity and Stockholders’ Equity

 

The Company has one class of capital stock: common stock. The following summarizes the terms of the Company’s capital stock.

 

Common Stock

 

Pursuant to the Company’s restated Articles of Incorporation, the Company was authorized to issue up to 1,000,000,000 shares of common stock at $0.0001 par value. There were 187,430,543 and 184,652,402 shares issued and outstanding as of  September 30, 2024 and December 31, 2023, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception.

 

Share Repurchase Program

 

On March 17, 2022, the Company announced that its Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to $150 million of common stock via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period of three years from the date of authorization and may be suspended or discontinued at any time. The Company is not obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During the nine months ended September 30, 2024, the Company repurchased and retired 2,629,978 shares at an average price of $8.25 per share. The shares were returned to the status of authorized but unissued shares. As a result, common stock amount, additional paid-in capital, and accumulated deficit in the condensed consolidated balance sheet during the nine months ended September 30, 2024, were reduced by $0.0 million, $9.7 million, and $12.1 million, respectively. During the nine months ended  September 30, 2023, the Company repurchased and retired 5,983,651 shares at an average price of $5.62.

 

Sponsor Earn-Out Shares

 

On July 1, 2021, the Company modified the terms of 2,916,700 shares of common stock (“Sponsor Earn-Out Shares”) then held by Apex Technology Acquisition Corporation’s sponsor, such that such shares will be subject to the following vesting provisions:

 

 •

100% of the Sponsor Earn-Out Shares shall vest and be released if at any time through July 1, 2028, AvePoint’s stock price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and

 •

100% of the remaining Sponsor Earn-Out Shares that have not previously vested shall vest and be released if at any time through July 1, 2028, the Company consummates a subsequent transaction.

 

The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of  September 30, 2024.

 

Public Warrants to Acquire Common Stock

 

On July 1, 2021, the Company issued 17,500,000 public warrants with an exercise price of $11.50. Each warrant entitles the registered holder to purchase one share of AvePoint’s common stock and the warrants are exercisable from the date of issuance through July 1, 2026.

 

On August 27, 2024, the Company announced the commencement of an offer to purchase all of its outstanding public warrants at a price of $2.50 per warrant in cash, with an expiration date of  September 26, 2024 (the “Offer”). On September 26, 2024, the Company announced that 1,596,314 warrants had been validly tendered and purchased, representing approximately 9.1% of the outstanding warrants, for a total amount of $4.0 million. As of  September 30, 2024, 15,979,936 warrants remained outstanding.

 

Redeemable Noncontrolling Interest

 

During the nine months ended September 30, 2024, the redeemable noncontrolling interest shareholders of MaivenPoint Pte. Ltd. (“MaivenPoint”), a consolidated subsidiary of the Company, submitted notices of exercise of their put option to cause MaivenPoint to repurchase their shares at a price of $6.1 million. As a result of the exercise, AvePoint’s ownership in MaivenPoint became 76.1%, with the remaining ownership interest held by an unaffiliated investor. Due to the ownership percentage change, the Company adjusted the carrying amount of the noncontrolling interest by multiplying the adjusted net assets of MaivenPoint by the unaffiliated investor’s new ownership percentage, resulting in a reduction to noncontrolling interest and increase in additional-paid-in capital of $6.4 million, respectively, within the condensed consolidated balance sheets.

 

There are no put options held by MaivenPoint’s remaining noncontrolling interest shareholders, and therefore, there is no longer any redeemable noncontrolling interest in MaivenPoint as of September 30, 2024.
v3.24.3
Note 12 - Growth Equity Fund
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Variable Interest Entity Disclosure [Text Block]

12. Growth Equity Fund

 

On February 28, 2024, the Company and Lumens Capital Partners Ltd. (“LCP”) established A3V JV Co. (the “Venture”), with each owning an equal share of the Venture. In addition, the Company entered into a separate agreement with LCP to form A3 Ventures Fund 1, L.P. (the “Fund”). The Fund is a Cayman Islands-exempted limited partnership, aimed at investing in companies in the growth equity phase and mature cashflow generating businesses with strong growth potential. The Fund looks to invest in companies situated in enterprise software markets aligning with the professional expertise and geographical presence of both the Company and LCP.

 

The Venture wholly owns A3V GP Co., which serves as the general partner of the Fund. As a limited partner, the Company committed to contribute $50.0 million to the Fund, to be called as needed, for portfolio investments, fees, and expenses of the Fund. The Company also participates in Fund establishment costs and an annual management fee equal to 2.0% of the total commitment. Any future repayment obligations will be triggered upon the receipt by LCP of profit allocations related to the Fund.

 

As of September 30, 2024, no portion of the Company’s $50.0 million commitment has been called or was callable, and the operations of the Fund and the Venture have not materially impacted the Company’s financial position, financial performance, or cash flows.

 

As of September 30, 2024, $1.9 million of management fee and establishment costs were included in accrued expenses and other liabilities in the condensed consolidated balance sheets. During the three and nine months ended September 30, 2024, $0.6 million and $1.9 million, respectively, of management fee and establishment costs were included in general and administrative in the condensed consolidated statements of income.

 
v3.24.3
Note 13 - Stock-based Compensation
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

13. Stock-Based Compensation

 

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”). As of September 30, 2024, 27,210,325 shares remained for future issuance under the 2021 Plan. To date, the Company has issued only stock options and restricted stock units to employees, directors and consultants.

 

For the three months ended September 30, 2024 and 2023, total stock-based compensation expense was $9.8 million and $9.3 million, respectively. For the nine months ended September 30, 2024 and 2023, total stock-based compensation expense was $29.8 million and $27.0 million, respectively.

 

Stock Options

 

The compensation costs for stock option awards are accounted for in accordance with ASC 718. Stock options vest over a four-year service period and expire on the tenth anniversary of the date of award. 

 

On March 5, 2024, the Company granted 469,920 options under the 2021 Plan. The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

  March 5, 
  2024 
Expected life (in years)  6.1 
Expected volatility  55.9%
Risk-free rate  4.1%
Dividend yield  — 

 

To estimate the expected life of stock options, the Company considered the vesting term, contractual expiration period, and market conditions. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Based on these inputs, the grant-date fair value was determined to be $2.0 million.

 

As of September 30, 2024, there was $8.4 million in unrecognized compensation costs related to all unvested options.

 

As of  September 30, 2024, the Company had 25,195,045 options outstanding and 22,646,655 options exercisable with intrinsic values of $188.6 million and $177.8 million, respectively. During the nine months ended September 30, 2024, 1,502,820 options were exercised, with a total intrinsic value of $9.5 million.

 

 

Restricted Stock Units

 

Under the terms of the 2021 Plan, we have issued restricted stock unit awards with a continuous employment condition only (“Time-Based RSUs”), and restricted stock unit awards with a continuous employment condition that are also contingent on the Company meeting certain performance goals (“PSUs”, and together “RSUs”). Both types of RSU awards vest over a four-year period from the grant date.

 

3,727,387 Time-Based RSUs and 502,676 PSUs were granted under the 2021 Plan during the nine months ended September 30, 2024, with a weighted-average grant date fair-value of $7.52 per award. The compensation costs for RSUs are accounted for in accordance with ASC 718.  RSUs are measured at the fair market value of the underlying stock at the grant date. RSUs that vested during the nine months ended  September 30, 2024 had an aggregate fair value at vesting of $35.5 million. As of September 30, 2024, there was $60.0 million in unrecognized compensation costs specific to the unvested RSUs, to be recognized over a weighted-average period of 2.5 years. As of  September 30, 2024, the Company had 10,031,797 unvested Time-Based RSUs and 502,676 unvested PSUs with a weighted-average grant date fair-value of $6.29 per award.

 

Company Earn-Out RSUs

 

The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC 718. In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on July 1, 2021, was determined to be $2.5 million. The stock options underlying the Earn-Out RSUs vest over a four-year period and expire on the tenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs are not met by July 1, 2028, the holders of the underlying stock options will not receive the Earn-Out RSUs. 

 
v3.24.3
Note 14 - Financial Instruments
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Financial Instruments Disclosure [Text Block]

14. Financial Instruments

 

Fair value is defined by ASC 820, Fair Value Measurement (“ASC 820”) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

 

 

•

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

 

•

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

 

•

Level 3 — Unobservable inputs for the asset or liability.

   

  

September 30, 2024

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit

 $—  $1,565  $—  $1,565 

Money market funds

  —   4,211   —   4,211 

U.S. treasury bills

  —   179,051   —   179,051 

Short term investments:

                

Certificates of deposit

  —   171   —   171 

Other assets:

                

Certificates of deposit

  —   38   —   38 

Notes receivables (1)

  —   —   3,692   3,692 

Total

 $—  $185,036  $3,692  $188,728 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $29,941  $29,941 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   871   —   871 

Total

 $—  $871  $29,941  $30,812 

 

  

December 31, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (3)

 $—  $1,533  $—  $1,533 

Money market funds

  —   4,423   —   4,423 

U.S. treasury bills

  —   171,841   —   171,841 

Short term investments:

                

Certificates of deposit (3)

  —   3,721   —   3,721 

Other assets:

                

Notes receivables (1)

  —   —   1,840   1,840 

Total

 $—  $181,518  $1,840  $183,358 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $18,346  $18,346 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   533   —   533 

Total

 $—  $533  $18,346  $18,879 

 

(1) During 2023, the Company extended a credit facility to LCP with a total commitment of up to $5.0 million and maturities of greater than twelve months (the “LCP Notes Receivable”). Refer to “Note 12 — Growth Equity Fund” for further details. The LCP Notes Receivable bear interest at an annual rate equal to 8%.  As of September 30, 2024 and December 31, 2023, the LCP Notes Receivable in the amounts of $3.5 million and $1.8 million, respectively, were included in other assets within the condensed consolidated balance sheets. Fair values are based on discounted future cash flows using current interest rates offered for similar notes to third parties with similar credit ratings for the same remaining maturities.

(2) Refer to “Note 10 — Earn-Out and Warrant Liabilities” for further details.

(3) The majority of certificates of deposit are foreign deposits.

 

The following tables summarize the Company’s available-for-sale securities measured at fair value as of September 30, 2024 and December 31, 2023.

 

  

September 30, 2024

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized losses

 

U.S. treasury bills

 $179,089  $179,051  $(38)

Total

 $179,089  $179,051  $(38)

 

  

December 31, 2023

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized gains

 

U.S. treasury bills

 $171,815  $171,841  $26 

Total

 $171,815  $171,841  $26 

 

The contractual maturity of the available-for-sale securities held as of September 30, 2024 and December 31, 2023 was within one year.

 

The following table presents the reconciliation in Level 3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis.

 

  Nine Months Ended September 30, 
  

2024

 
  

(in thousands)

 

Opening balance

 $18,346 

Total gains or losses from the period

    

Included in other expense, net

  11,217 

Reclass from Earnout-RSU

  378 

Closing balance

 $29,941 

 
v3.24.3
Note 15 - Segment Information
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

15. Segment Information

 

The Company operates in one segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation or profitability by product or geography.

 

Revenue by geography is based upon the billing address of the customer. All transfers between geographic regions have been eliminated from consolidated revenue. The following table sets forth revenue by geographic area:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

North America

 $37,648  $31,751  $99,240  $84,484 

EMEA

  26,298   21,739   72,193   60,800 

APAC

  24,858   19,270   69,866   51,917 

Total revenue

 $88,804  $72,760  $241,299  $197,201 

 

The following table sets forth revenue generated by countries which represent more than 10% of total consolidated revenue:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

United States

 $37,518  $31,115  $98,744  $82,151 

Singapore

  10,700   8,639   31,409   22,256 

Germany

  11,568   9,212   30,856   25,993 

 
v3.24.3
Note 16 - Other Expense, Net
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Other Nonoperating Income and Expense [Text Block]

16. Other expense, net

 

Other expense, net is disaggregated as follows:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands)

  

Change in value of earn-out and warrant liabilities

   $ (4,537 )   $ (2,785 )   $ (11,717 )   $ (6,921 )

Interest income, net

     45       232       116       843  

Profits on securities (1)

     2,383       2,177       7,136       5,772  

Foreign currency exchange gain (loss), net

     237       (692 )     (975 )     (1,322 )

Other, net

     (2,669 )     (8 )     (2,667 )     52  

Other expense, net

   $ (4,541 )   $ (1,076 )   $ (8,107 )   $ (1,576 )

 

(1) Profits on securities consist of interest income from amortization of the discount arising at acquisition of U.S. treasury bills.
v3.24.3
Note 17 - Income (Loss) Per Share
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

17. Net Income (Loss) Per Share

 

Basic net income (loss) per share is computed by dividing total net income (loss) by the weighted average common shares outstanding for the period. In computing diluted net income (loss) per share, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share-based payment awards, warrants and Company Earn-Outs. The Company’s Sponsor Earn-Out Shares described in “Note 11 — Mezzanine Equity and Stockholders’ Equity” are considered participating securities and have no contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below. 

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands, except per share amounts)

 

Net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net income (loss)

 $2,928  $(4,230) $(11,964) $(25,937)

Net income attributable to Sponsor Earn-out Shares

  (41)  —   —   — 

Net (income) loss attributable to noncontrolling interest

  (308)  18   59   (57)

Total net income (loss) available to common shareholders

 $2,579  $(4,212) $(11,905) $(25,994)

Denominator:

                

Weighted average common shares outstanding

  183,946   181,769   182,753   182,630 

Effect of dilutive securities

                

Stock options

  14,533   —   —   — 

RSUs

  5,380   —   —   — 

Weighted average diluted shares

  203,859   181,769   182,753   182,630 
                 

Basic net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

Diluted net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

 

To arrive at net income (loss) available to common stockholders, the Company deducted net income attributable to Sponsor Earn-out Shares and net (income) loss attributable to noncontrolling interest.

 

The below table includes the total potentially dilutive securities for the three and nine months ending September 30, 2024 and the three and nine months ending September 30, 2023 which have been excluded from the computation of diluted net income (loss) per share as their effect is anti-dilutive:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  (in thousands) 

Stock options

  12   27,982   25,195   27,982 

RSUs

  1   11,533   10,534   11,533 

Warrants

  16,308   17,905   16,308   17,905 

Company Earn-Outs

  3,000   3,000   3,000   3,000 

Total potentially dilutive securities

  19,321   60,420   55,037   60,420 

 
v3.24.3
Note 18 - Subsequent Events
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Subsequent Events [Text Block]

18. Subsequent Events

 

No material subsequent events occurred since the date of the most recent balance sheet period reported.
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Insider Trading Arr Line Items  
Rule 10b5-1 Arrangement Adopted [Flag] false
Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false
v3.24.3
Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The accompanying unaudited condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company and entities consolidated under the variable interest and voting models. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted.

 

In the opinion of management, these financial statements contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Interim results are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2024.

 

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our most recent Annual Report on Form 10-K for the year ended  December 31, 2023, which was filed with the SEC on February 29, 2024 (“Annual Report”).

 

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Annual Report. There have been no significant changes to these policies during the nine months ended September 30, 2024.

 
Reclassification, Comparability Adjustment [Policy Text Block]

Comparative Data

 

Certain amounts from prior periods have been reclassed to conform to the current period presentation, including:

 

 •The reclassification of changes in earn-out and warrant liabilities to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.
 •The reclassification of interest income, net to be included in other expense, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2023.

 
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported and the amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for the determination of standalone selling price for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.
Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other expense, net in the Company’s condensed consolidated statements of income.

 
Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers its investments with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2024 and December 31, 2023, the Company’s cash balances at these entities were $11.7 million and $13.1 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

 
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2024 or  December 31, 2023.

 
Deferred Charges, Policy [Policy Text Block]

Deferred Contract Costs

 

We defer sales commissions that are considered to be incremental and recoverable costs of obtaining or renewing SaaS, term license and support, services, and maintenance contracts. Changes in the anticipated period of asset benefit or the average renewal term are recognized on a prospective basis upon occurrence. 

 

Amortization of deferred contract costs of $5.6 million and $15.7 million for the three and nine months ended September 30, 2024, and $4.6 million and $13.1 million for the three and nine months ended  September 30, 2023, is included as a component of sales and marketing expenses in our condensed consolidated statements of income. Deferred contract costs recognized as a contract asset in the condensed consolidated balance sheets were $55.4 million and $54.7 million as of  September 30, 2024 and December 31, 2023, respectively.

 
Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

 

The Company derives revenue from four primary sources: SaaS, term license and support, services, and maintenance. Services include installation services, training and other consulting services.

 

Term license revenue recognized at a point in time was $9.9 million and $22.1 million for the three and nine months ended September 30, 2024, and $11.1 million and $24.9 million for the three and nine months ended  September 30, 2023.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for credit losses. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for credit losses as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2024 and December 31, 2023, the allowance for credit losses was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2024 and December 31, 2023 was $142.3 million and $129.3 million, respectively. Revenue recognized that was included in the deferred revenue balance as of December 31, 2023, was $103.1 million for the nine months ended September 30, 2024.

 

The opening and closing balances of the Company’s accounts receivable, net, deferred revenue and deferred contract costs are as follows:

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2023

 $94,067  $129,256  $54,675 

Balance, September 30, 2024

  91,033   142,267   55,371 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2024 and the year ended December 31, 2023 outside of its sales activities.

 

As of September 30, 2024, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $363.7 million, of which $310.4 million is related to SaaS and term license and support revenue. We expect to recognize approximately 61% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 
Share-Based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

 

Stock-based compensation represents the cost related to stock-based awards granted to employees. To date, we have issued both stock options and restricted stock units. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award and recognizes the cost ratably over the requisite service period, net of actual forfeitures in the period.

 

We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes model requires highly subjective assumptions in order to derive the inputs necessary to calculate the fair value of stock options. To estimate the expected term of stock options, the Company considers contractual terms of the options, including the vesting and expiration periods, as well as historical option exercise data and current market conditions to determine an estimated expected term. The Company’s historical experience is too limited to be able to reasonably estimate an expected term. Expected volatility is based on the historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected term.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements not yet effective

 

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendment in this ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after  December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-07 will have on our consolidated financial statements and related disclosures. 

 

In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures (Topic 740)” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The amendment in this ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted. We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements and related disclosures. 

 
v3.24.3
Note 2 - Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Accounts Receivable, Net, Deferred Revenue and Deferred Sales Commissions [Table Text Block]
  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2023

 $94,067  $129,256  $54,675 

Balance, September 30, 2024

  91,033   142,267   55,371 
v3.24.3
Note 3 - Goodwill (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Goodwill [Table Text Block]
  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2023

 $19,156 

Effect of foreign currency translation

  (153)

Balance as of September 30, 2024

 $19,003 
v3.24.3
Note 4 - Intangible Assets, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
  September 30, 2024  December 31, 2023 
  

(in thousands)

 

Technology and software

 $8,962  $(3,091) $5,871  $7,976  $(1,758) $6,218 

Customer related assets

  4,601   (980)  3,621   4,546   (640)  3,906 

Content

  869   (652)  217   843   (421)  422 

Total

 $14,432  $(4,723) $9,709  $13,365  $(2,819) $10,546 
Finite-Lived Intangible Assets Amortization Expense [Table Text Block]

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $654 

2025

  2,300 

2026

  1,801 

2027

  1,405 

2028

  1,013 

Thereafter

  2,536 

Total intangible assets subject to amortization

 $9,709 
v3.24.3
Note 5 - Accounts Receivable, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]
   

September 30,

    

December 31,

  
   

2024

    

2023

  
   

(in thousands)

  

Trade receivables

   $ 57,434     $ 60,508  

Current unbilled receivables

     23,470       26,295  

Allowance for credit losses

     (918 )     (926 )
    $ 79,986     $ 85,877  
v3.24.3
Note 8 - Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Lease liability cost

 $1,853  $1,798  $5,353  $5,294 

Short-term lease expenses (1)

  345   138   891   592 

Variable lease cost not included in the lease liability (2)

  163   119   478   365 

Total lease cost

 $2,361  $2,055  $6,722  $6,251 
Other Information Related to Operating Leases [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,828  $1,659  $5,576  $5,324 
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year Ending December 31:

    
  

(in thousands)

 

2024 (three months)

 $1,642 

2025

  6,123 

2026

  3,472 

2027

  2,274 

2028

  1,395 

Thereafter

  1,427 

Total future lease payments

 $16,333 

Less: Present value adjustment

  (1,471)

Present value of future lease payments (1)

 $14,862 
v3.24.3
Note 10 - Earn-Out and Warrant Liabilities (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
   

September 30,

   December 31,  
    2024   2023  

Term (in years)

     3.75   4.5  

Volatility

     50.0

%

 55.0 %
v3.24.3
Note 13 - Stock-based Compensation (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Share-Based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]
  March 5, 
  2024 
Expected life (in years)  6.1 
Expected volatility  55.9%
Risk-free rate  4.1%
Dividend yield  — 
v3.24.3
Note 14 - Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Fair Value, by Balance Sheet Grouping [Table Text Block]
  

September 30, 2024

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit

 $—  $1,565  $—  $1,565 

Money market funds

  —   4,211   —   4,211 

U.S. treasury bills

  —   179,051   —   179,051 

Short term investments:

                

Certificates of deposit

  —   171   —   171 

Other assets:

                

Certificates of deposit

  —   38   —   38 

Notes receivables (1)

  —   —   3,692   3,692 

Total

 $—  $185,036  $3,692  $188,728 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $29,941  $29,941 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   871   —   871 

Total

 $—  $871  $29,941  $30,812 
  

December 31, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (3)

 $—  $1,533  $—  $1,533 

Money market funds

  —   4,423   —   4,423 

U.S. treasury bills

  —   171,841   —   171,841 

Short term investments:

                

Certificates of deposit (3)

  —   3,721   —   3,721 

Other assets:

                

Notes receivables (1)

  —   —   1,840   1,840 

Total

 $—  $181,518  $1,840  $183,358 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (2)

 $—  $—  $18,346  $18,346 

Other non-current liabilities:

                

Warrant liabilities (2)

  —   533   —   533 

Total

 $—  $533  $18,346  $18,879 
Debt Securities, Available-for-Sale [Table Text Block]
  

September 30, 2024

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized losses

 

U.S. treasury bills

 $179,089  $179,051  $(38)

Total

 $179,089  $179,051  $(38)
  

December 31, 2023

 
  

(in thousands)

 
  

Amortized Cost

  

Fair Value

  

Gross unrealized gains

 

U.S. treasury bills

 $171,815  $171,841  $26 

Total

 $171,815  $171,841  $26 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
  Nine Months Ended September 30, 
  

2024

 
  

(in thousands)

 

Opening balance

 $18,346 

Total gains or losses from the period

    

Included in other expense, net

  11,217 

Reclass from Earnout-RSU

  378 

Closing balance

 $29,941 
v3.24.3
Note 15 - Segment Information (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

North America

 $37,648  $31,751  $99,240  $84,484 

EMEA

  26,298   21,739   72,193   60,800 

APAC

  24,858   19,270   69,866   51,917 

Total revenue

 $88,804  $72,760  $241,299  $197,201 
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

Revenue:

                

United States

 $37,518  $31,115  $98,744  $82,151 

Singapore

  10,700   8,639   31,409   22,256 

Germany

  11,568   9,212   30,856   25,993 
v3.24.3
Note 16 - Other Expense, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Other Nonoperating Income (Expense) [Table Text Block]
   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands)

  

Change in value of earn-out and warrant liabilities

   $ (4,537 )   $ (2,785 )   $ (11,717 )   $ (6,921 )

Interest income, net

     45       232       116       843  

Profits on securities (1)

     2,383       2,177       7,136       5,772  

Foreign currency exchange gain (loss), net

     237       (692 )     (975 )     (1,322 )

Other, net

     (2,669 )     (8 )     (2,667 )     52  

Other expense, net

   $ (4,541 )   $ (1,076 )   $ (8,107 )   $ (1,576 )
v3.24.3
Note 17 - Income (Loss) Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands, except per share amounts)

 

Net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net income (loss)

 $2,928  $(4,230) $(11,964) $(25,937)

Net income attributable to Sponsor Earn-out Shares

  (41)  —   —   — 

Net (income) loss attributable to noncontrolling interest

  (308)  18   59   (57)

Total net income (loss) available to common shareholders

 $2,579  $(4,212) $(11,905) $(25,994)

Denominator:

                

Weighted average common shares outstanding

  183,946   181,769   182,753   182,630 

Effect of dilutive securities

                

Stock options

  14,533   —   —   — 

RSUs

  5,380   —   —   — 

Weighted average diluted shares

  203,859   181,769   182,753   182,630 
                 

Basic net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

Diluted net income (loss) per share available to common shareholders, excluding sponsor earn-out shareholders

 $0.01  $(0.02) $(0.07) $(0.14)

 
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 
  (in thousands) 

Stock options

  12   27,982   25,195   27,982 

RSUs

  1   11,533   10,534   11,533 

Warrants

  16,308   17,905   16,308   17,905 

Company Earn-Outs

  3,000   3,000   3,000   3,000 

Total potentially dilutive securities

  19,321   60,420   55,037   60,420 
v3.24.3
Note 2 - Summary of Significant Accounting Policies 1 (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Cash $ 11,700   $ 11,700   $ 13,100
Goodwill, Impaired, Accumulated Impairment Loss 0   0   0
Capitalized Contract Cost, Amortization 5,600 $ 4,600 15,700 $ 13,100  
Capitalized Contract Cost, Net 55,371   55,371   54,675
Revenue from Contract with Customer, Excluding Assessed Tax 88,804 72,760 241,299 197,201  
Contract with Customer, Liability 142,267   142,267   $ 129,256
Contract with Customer, Liability, Revenue Recognized     103,100    
Revenue, Remaining Performance Obligation, Amount 363,700   363,700    
Termed License and Support [Member]          
Revenue from Contract with Customer, Excluding Assessed Tax 14,140 16,293 35,128 40,474  
Termed License and Support [Member] | SaaS [Member]          
Revenue, Remaining Performance Obligation, Amount 310,400   310,400    
Transferred at Point in Time [Member] | Termed License and Support [Member]          
Revenue from Contract with Customer, Excluding Assessed Tax $ 9,900 $ 11,100 $ 22,100 $ 24,900  
v3.24.3
Note 2 - Summary of Significant Accounting Policies 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Sep. 30, 2024
Revenue, Remaining Performance Obligation, Percentage 61.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) 12 years
v3.24.3
Note 2 - Summary of Significant Accounting Policies - Accounts Receivable, Net, Deferred Revenue and Deferred Sales Commissions (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Accounts Receivable, after Allowance for Credit Loss [1] $ 91,033 $ 94,067
Deferred Revenue 142,267 129,256
Deferred Contract Costs $ 55,371 $ 54,675
[1] Include long-term unbilled receivables.
v3.24.3
Note 3 - Goodwill - Changes in Carrying Amount of Goodwill (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
USD ($)
Balance $ 19,156
Goodwill, Foreign Currency Translation Gain (Loss) (153)
Balance $ 19,003
v3.24.3
Note 4 - Intangible Assets, Net (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Amortization of Intangible Assets $ 0.7 $ 0.6 $ 1.9 $ 1.6
v3.24.3
Note 4 - Intangible Assets, Net - Summary of Balances of Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets, Gross $ 14,432 $ 13,365
Accumulated Amortization (4,723) (2,819)
Net carrying amount 9,709 10,546
Technology-Based Intangible Assets [Member]    
Finite-Lived Intangible Assets, Gross 8,962 7,976
Accumulated Amortization (3,091) (1,758)
Net carrying amount 5,871 6,218
Customer Relationships [Member]    
Finite-Lived Intangible Assets, Gross 4,601 4,546
Accumulated Amortization (980) (640)
Net carrying amount 3,621 3,906
Media Content [Member]    
Finite-Lived Intangible Assets, Gross 869 843
Accumulated Amortization (652) (421)
Net carrying amount $ 217 $ 422
v3.24.3
Note 4 - Intangible Assets, Net - Estimated Future Amortization Expense for Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
2024 (three months) $ 654  
2025 2,300  
2026 1,801  
2027 1,405  
2028 1,013  
Thereafter 2,536  
Total intangible assets subject to amortization $ 9,709 $ 10,546
v3.24.3
Note 5 - Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Allowance for credit losses $ (918) $ (926)
Accounts Receivable, after Allowance for Credit Loss, Current 79,986 85,877
Trade Accounts Receivable [Member]    
Accounts receivable, gross 57,434 60,508
Unbilled Receivable [Member]    
Accounts receivable, gross $ 23,470 $ 26,295
v3.24.3
Note 6 - Line of Credit (Details Textual) - USD ($)
$ in Thousands
 11 Months Ended
Nov. 03, 2023
Sep. 30, 2024
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] Secured Overnight Financing Rate (SOFR) [Member]  
Revolving Credit Facility [Member] | HSBC Venture Bank USA Inc. [Member]    
Line of Credit Facility, Maximum Borrowing Capacity $ 30,000  
Proceeds from Lines of Credit, Total   $ 0
Line of Credit, Accordion Feature [Member] | HSBC Venture Bank USA Inc. [Member]    
Line of Credit Facility, Maximum Borrowing Capacity $ 20,000  
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage 0.50%  
Line of Credit, Accordion Feature [Member] | HSBC Venture Bank USA Inc. [Member] | Minimum [Member]    
Debt Instrument, Basis Spread on Variable Rate 3.00%  
Line of Credit, Accordion Feature [Member] | HSBC Venture Bank USA Inc. [Member] | Maximum [Member]    
Debt Instrument, Basis Spread on Variable Rate 3.30%  
v3.24.3
Note 7 - Income Taxes (Details Textual)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Effective Income Tax Rate Reconciliation, Percent 5.90% 204.50% 106.50% 45.70%
v3.24.3
Note 8 - Leases (Details Textual) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability $ 5.2 $ 3.7  
Operating Lease, Weighted Average Remaining Lease Term (Year) 3 years 7 months 6 days   3 years 9 months 18 days
Operating Lease, Weighted Average Discount Rate, Percent 5.40%   5.60%
Operating Lease, Liability, Current $ 5.9    
Letters of Credit Outstanding, Amount $ 0.8    
v3.24.3
Note 8 - Leases - Components of Operating Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Lease liability cost $ 1,853 $ 1,798 $ 5,353 $ 5,294
Short-term lease expenses (1) [1] 345 138 891 592
Variable lease cost not included in the lease liability (2) [2] 163 119 478 365
Total lease cost $ 2,361 $ 2,055 $ 6,722 $ 6,251
[1] Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.
[2] Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.
v3.24.3
Note 8 - Leases - Other Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Operating cash flows from operating leases $ 1,828 $ 1,659 $ 5,576 $ 5,324
v3.24.3
Note 8 - Leases - Maturity Schedule of Operating Lease Liabilities (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
2024 (three months) $ 1,642
2025 6,123
2026 3,472
2027 2,274
2028 1,395
Thereafter 1,427
Total future lease payments 16,333
Less: Present value adjustment (1,471)
Present value of future lease payments (1) $ 14,862 [1]
[1] Includes the current portion of operating lease liabilities of $5.9 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.
v3.24.3
Note 9 - Commitments and Contingencies (Details Textual) - USD ($)
$ in Millions
 1 Months Ended 9 Months Ended
Feb. 02, 2024
Oct. 31, 2024
Sep. 30, 2024
Letters of Credit Outstanding, Amount     $ 0.8
Guarantee for Service Agreement [Member]      
Letters of Credit Outstanding, Amount     3.7
Class Action Lawsuit [Member]      
Payments for Legal Settlements     1.4
Class Action Lawsuit [Member] | Accrued Expense and Other Current Liabilities [Member]      
Loss Contingency Accrual     $ 1.4
Class Action Lawsuit [Member] | Subsequent Event [Member]      
Litigation Settlement, Amount Awarded to Other Party   $ 14.4  
Litigation Case, Remaining Amount   $ 13.0  
Defendants [Member] | Class Action Lawsuit [Member]      
Insurance Policy, Post-closing Liability $ 10.0    
Sponsors [Member] | Class Action Lawsuit [Member]      
Insurance Policy, Post-closing Liability $ 3.0    
v3.24.3
Note 10 - Earn-Out and Warrant Liabilities (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Jul. 26, 2021
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Jul. 01, 2021
Number of Shares Exchangeable at $12.50 (in shares) 1,000,000            
Number of Shares Exchangeable at $15.00 (in shares) 1,000,000            
Number of Shares Exchangeable at $17.50 (in shares) 1,000,000            
Business Combination, Contingent Consideration, Liability, Total   $ 29.9   $ 29.9   $ 18.3 $ 29.6
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability   $ 4.2 $ 2.8 $ 11.2 $ 6.8    
Private Placement Warrant [Member]              
Class of Warrant or Right, Outstanding (in shares)   328,750   328,750     405,000
Warrants and Rights Outstanding, Term (Year)             5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)             $ 11.5
Warrants and Rights Outstanding   $ 0.9   $ 0.9   $ 0.5 $ 1.4
Fair Value Adjustment of Warrants   $ 0.3 $ 0.1 $ 0.5 $ 0.2    
v3.24.3
Note 10 - Earn-Out and Warrant Liabilities - Earn-out Shares Fair Value Assumptions (Details)
Sep. 30, 2024
yr
Dec. 31, 2023
yr
Measurement Input, Expected Term [Member]    
Measurement input (Year) 3.75 4.5
Measurement Input, Price Volatility [Member]    
Measurement input (Year) 0.50 0.55
v3.24.3
Note 11 - Mezzanine Equity and Stockholders' Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 26, 2024
Jul. 01, 2021
Sep. 30, 2024
Sep. 30, 2024
Sep. 30, 2023
Aug. 27, 2024
Dec. 31, 2023
Common Stock, Shares Authorized (in shares)     1,000,000,000 1,000,000,000     1,000,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)     $ 0.0001 $ 0.0001     $ 0.0001
Common Stock, Shares, Issued, Including Treasury Shares (in shares)     187,430,543 187,430,543     184,652,402
Common Stock, Shares, Outstanding Including Treasury Shares (in shares)     187,430,543 187,430,543     184,652,402
Stock Repurchase Program, Authorized Amount     $ 150,000 $ 150,000      
Stock Repurchased and Retired During Period, Shares (in shares)       2,629,978      
Shares Acquired, Average Cost Per Share (in dollars per share)       $ 8.25 $ 5.62    
Stock Repurchased and Retired During Period, Value     2,554 $ 21,704      
Treasury Stock, Shares, Acquired (in shares)         5,983,651    
Number of Shares Subject to Vesting Provision (in shares)   2,916,700   0      
Proceeds from Stock Options Exercised       $ 3,613 $ 3,865    
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests       (0)      
Business Acquisition, Conditional Option to Repurchase Shares     0 0      
Redeemable Noncontrolling Interest, Equity, Carrying Amount     $ 0 $ 0     $ 6,038
AvePoint EduTech PTE. LTD. [Member]              
Increase (Decrease), Subsidiary, Ownership Percentage, Parents       76.10%      
EduTech Common Shares [Member] | I-Access Solutions Pte. Ltd. [Member]              
Proceeds from Stock Options Exercised       $ 6,100      
Public Warrant [Member]              
Class of Warrant or Right, Outstanding (in shares)   17,500,000 15,979,936 15,979,936      
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   $ 11.5          
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares)   1          
Class of Warrant or Right, Purchase Price Per Warrant (in dollars per share)           $ 2.5  
Class of Warrant or Right, Number of Warrants Tendered and Repurchased (in shares) 1,596,314            
Class of Warrant or Right, Warrants Repurchased, Percentage of Warrants Outstanding 9.10%            
Class of Warrant or Right, Warrants Repurchased, Value $ 4,000            
Common Stock [Member]              
Stock Repurchased and Retired During Period, Shares (in shares)     218,546        
Stock Repurchased and Retired During Period, Value     $ (0) $ (0)      
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests       (0)      
Additional Paid-in Capital [Member]              
Stock Repurchased and Retired During Period, Value     810 9,654      
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests       (6,379)      
Retained Earnings [Member]              
Stock Repurchased and Retired During Period, Value     $ 1,744 12,050      
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests       $ (0)      
v3.24.3
Note 12 - Growth Equity Fund (Details Textual) - A3 Ventures Fund 1, L.P [Member] - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Feb. 28, 2024
Sep. 30, 2024
Sep. 30, 2024
Variable Interest Entity, Financial or Other Support, Amount $ 50,000   $ 50,000
Management Fee, Percent of Total Commitment 2.00%    
Variable Interest Entity, Financial or Other Support, Amount Called     0
Management Fee Payable   $ 1,900 1,900
Management Fee Expense   $ 600 $ 1,900
v3.24.3
Note 13 - Stock-based Compensation (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 6 Months Ended 9 Months Ended
Mar. 05, 2024
Jul. 01, 2021
Sep. 30, 2024
Sep. 30, 2023
Jun. 30, 2024
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount     $ 8.4     $ 8.4  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares)     25,195,045     25,195,045  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares)     22,646,655     22,646,655  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value     $ 188.6     $ 188.6  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value     $ 177.8     $ 177.8  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)           1,502,820  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value           $ 9.5  
Share-Based Payment Arrangement, Option [Member]              
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)           4 years  
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)           10 years  
Restricted Stock Units (RSUs) [Member]              
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)           3,727,387  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in shares)     10,031,797     10,031,797  
Performance Shares [Member]              
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)           502,676  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in shares)     502,676     502,676  
Time and Performance Based Units [Member]              
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)           $ 7.52  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value           $ 35.5  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value (in dollars per share)           $ 6.29  
Earn-Out RSUs [Member]              
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)   4 years          
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)   10 years          
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Fair Value   $ 2.5          
The 2021 Plan [Member]              
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)     27,210,325     27,210,325  
Share-Based Payment Arrangement, Expense     $ 9.8 $ 9.3   $ 29.8 $ 27.0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) 469,920            
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Fair Value           2.0  
The 2021 Plan [Member] | Restricted Stock Units (RSUs) [Member]              
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)         4 years    
The 2021 Plan [Member] | Time and Performance Based Units [Member]              
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount     $ 60.0     $ 60.0  
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)           2 years 6 months  
v3.24.3
Note 13 - Stock-based Compensation - Stock Option Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option [Member] - The 2021 Plan [Member]
Mar. 05, 2024
Expected life (in years) (Year) 6 years 1 month 6 days
Expected volatility 55.90%
Risk-free rate 4.10%
Dividend yield 0.00%
v3.24.3
Note 14 - Financial Instruments (Details Textual) - Lumens Capital Partners Ltd. (the “LCP”) [Member] - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Notes Receivable, Maximum Commitment   $ 5.0
Notes Receivable, Interest Rate   8.00%
Financing Receivable, after Allowance for Credit Loss $ 3.5 $ 1.8
v3.24.3
Note 14 - Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Total $ 188,728 $ 183,358
Liabilities 30,812 18,879
Warrant Liabilities [Member]    
Liabilities [1] 871 533
Fair Value, Inputs, Level 1 [Member]    
Total 0 0
Liabilities 0 0
Fair Value, Inputs, Level 1 [Member] | Warrant Liabilities [Member]    
Liabilities [1] 0 0
Fair Value, Inputs, Level 2 [Member]    
Total 185,036 181,518
Liabilities 871 533
Fair Value, Inputs, Level 2 [Member] | Warrant Liabilities [Member]    
Liabilities [1] 871 533
Fair Value, Inputs, Level 3 [Member]    
Total 3,692 1,840
Liabilities 29,941 18,346
Fair Value, Inputs, Level 3 [Member] | Warrant Liabilities [Member]    
Liabilities [1] 0 0
Certificates of Deposit [Member]    
Cash Equivalents [2] 1,565 1,533
Cash Equivalents [2] 1,565 1,533
Short term investments [2] 171 3,721
Other assets 38  
Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents [2] 0 0
Cash Equivalents [2] 0 0
Short term investments [2] 0 0
Other assets 0  
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents [2] 1,565 1,533
Cash Equivalents [2] 1,565 1,533
Short term investments [2] 171 3,721
Other assets 38  
Certificates of Deposit [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents [2] 0 0
Cash Equivalents [2] 0 0
Short term investments [2] 0 0
Other assets 0  
Money Market Funds [Member]    
Cash Equivalents 4,211 4,423
Cash Equivalents 4,211 4,423
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents 0 0
Cash Equivalents 0 0
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents 4,211 4,423
Cash Equivalents 4,211 4,423
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents 0 0
Cash Equivalents 0 0
US Treasury Securities [Member]    
Cash Equivalents 179,051 171,841
Cash Equivalents 179,051 171,841
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents 0 0
Cash Equivalents 0 0
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents 179,051 171,841
Cash Equivalents 179,051 171,841
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents 0 0
Cash Equivalents 0 0
Notes Receivable [Member]    
Notes receivables [3] 3,692 1,840
Notes Receivable [Member] | Fair Value, Inputs, Level 1 [Member]    
Notes receivables 0 [3] 0
Notes Receivable [Member] | Fair Value, Inputs, Level 2 [Member]    
Notes receivables 0 [3] 0
Notes Receivable [Member] | Fair Value, Inputs, Level 3 [Member]    
Notes receivables [3] 3,692 1,840
Company Earn-Outs [Member]    
Liabilities [1] 29,941 18,346
Company Earn-Outs [Member] | Fair Value, Inputs, Level 1 [Member]    
Liabilities [1] 0 0
Company Earn-Outs [Member] | Fair Value, Inputs, Level 2 [Member]    
Liabilities [1] 0 0
Company Earn-Outs [Member] | Fair Value, Inputs, Level 3 [Member]    
Liabilities [1] $ 29,941 $ 18,346
[1] Refer to “Note 10 — Earn-Out and Warrant Liabilities” for further details.
[2] The majority of certificates of deposit are foreign deposits.
[3] During 2023, the Company extended a credit facility to LCP with a total commitment of up to $5.0 million and maturities of greater than twelve months (the “LCP Notes Receivable”). Refer to “Note 12 — Growth Equity Fund” for further details. The LCP Notes Receivable bear interest at an annual rate equal to 8%. As of September 30, 2024 and December 31, 2023, the LCP Notes Receivable in the amounts of $3.5 million and $1.8 million, respectively, were included in other assets within the condensed consolidated balance sheets. Fair values are based on discounted future cash flows using current interest rates offered for similar notes to third parties with similar credit ratings for the same remaining maturities.
v3.24.3
Note 14 - Financial Instruments - Schedule of the Fair Value of Available-for-sale Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Available for sale securities, amortized cost $ 179,089 $ 171,815
Available for sale securities, fair value 179,051 171,841
Available for sale securities, gross unrealized gains (losses) (38) 26
US Treasury Securities [Member]    
Available for sale securities, amortized cost 179,089 171,815
Available for sale securities, fair value 179,051 171,841
Available for sale securities, gross unrealized gains (losses) $ (38) $ 26
v3.24.3
Note 14 - Financial Instruments - Reconciliation in Level 3 Instruments Measured on Recurring Basis (Details) - Fair Value, Recurring [Member] - Fair Value, Inputs, Level 3 [Member] - Earn-out Shares Liabilities [Member]
$ in Thousands
 9 Months Ended
Sep. 30, 2024
USD ($)
Opening balance $ 18,346
Included in other expense, net 11,217
Reclass from Earnout-RSU 378
Closing balance $ 29,941
v3.24.3
Note 15 - Segment Information (Details Textual)
 9 Months Ended
Sep. 30, 2024
Number of Operating Segments 1
v3.24.3
Note 15 - Segment Information - Segment Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 88,804 $ 72,760 $ 241,299 $ 197,201
North America [Member]        
Revenue 37,648 31,751 99,240 84,484
UNITED STATES        
Revenue 37,518 31,115 98,744 82,151
EMEA [Member]        
Revenue 26,298 21,739 72,193 60,800
SINGAPORE        
Revenue 10,700 8,639 31,409 22,256
Asia Pacific [Member]        
Revenue 24,858 19,270 69,866 51,917
GERMANY        
Revenue $ 11,568 $ 9,212 $ 30,856 $ 25,993
v3.24.3
Note 16 - Other Expense, Net - Disaggregation of Other Income (Expense), net (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Change in value of earn-out and warrant liabilities $ (4,537) $ (2,785) $ (11,717) $ (6,921)
Interest income, net 45 232 116 843
Profits on securities (1) [1] 2,383 2,177 7,136 5,772
Foreign currency exchange gain (loss), net 237 (692) (975) (1,322)
Other, net (2,669) (8) (2,667) 52
Other expense, net $ (4,541) $ (1,076) $ (8,107) $ (1,576)
[1] Profits on securities consist of interest income from amortization of the discount arising at acquisition of U.S. treasury bills.
v3.24.3
Note 17 - Income (Loss) Per Share - Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net income (loss) $ (2,928) $ 4,230 $ 11,964 $ 25,937
Net income attributable to Sponsor Earn-out Shares (41) 0 0 0
Net (income) loss attributable to noncontrolling interest (308) 18 59 (57)
Total net income (loss) available to common shareholders $ 2,579 $ (4,212) $ (11,905) $ (25,994)
Weighted average common shares outstanding (in shares) 183,946 181,769 182,753 182,630
Weighted average diluted shares (in shares) 203,859 181,769 182,753 182,630
Basic (in dollars per share) $ 0.01 $ (0.02) $ (0.07) $ (0.14)
Diluted (in dollars per share) $ 0.01 $ (0.02) $ (0.07) $ (0.14)
Share-Based Payment Arrangement, Option [Member]        
Stock options (in shares) 14,533 0 0 0
Restricted Stock Units (RSUs) [Member]        
Stock options (in shares) 5,380 0 0 0
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