Business 2 min read By Bethany Hadley
Intapp accelerates cloud growth but misses first-quarter revenue forecast
Intapp's cloud business grew faster in the first quarter, although total revenue fell short of expectations, according to the company's investor slides.
Intapp, the software provider serving professional services firms, reported accelerating growth in its cloud business in the first quarter, even as total revenue came in below expectations. The company's investor presentation for the period points to a split picture: demand for its subscription products strengthened, while other parts of the top line did not keep pace.
The cloud segment is the focus of the results. Growth in cloud revenue picked up compared with the preceding period, which the company presents as evidence that its shift towards recurring subscription income is gaining momentum. For a business that sells software to law firms, accounting practices and consultancies, the transition to cloud-based contracts is central to how investors judge its long-term prospects.
The shortfall in overall revenue, however, is what will draw attention from the market. Missing revenue expectations in a quarter where a core segment is speeding up raises questions about the timing of contract conversions and the pace at which older licence revenue is declining. The slides indicate that the headline figure was weaker than analysts had anticipated, even though the cloud line improved.
Intapp's results are a reminder that in software, the rate of growth in recurring revenue is often weighed more heavily than a single quarter's total. The company will need to show that the cloud acceleration can offset the drag from other lines if it is to restore confidence in its near-term revenue trajectory.
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