Good day, and welcome to the AvePoint Tianyi Jiang Q3 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. To withdraw your question, please press star and then two. Please note, this event is being recorded. Now, I'd like to turn the conference over to Jamie Arestia, Investor Relations. Please go ahead.
Thank you, Operator. Good afternoon, and welcome to AvePoint's third quarter 2024 earnings call. With me on the call this afternoon is Dr. TJ Jiang, Chief Executive Officer, and Jim Caci, Chief Financial Officer. After preliminary remarks, we will open the call for a question-and-answer session.
Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in our press release for a more complete description.
All material in the webcast is the sole property and copyright of AvePoint, with all rights reserved. Please note this presentation describes certain non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, and non-GAAP operating margin, which are not measures prepared in accordance with U.S. GAAP.
The non-GAAP measures are presented in this presentation as we believe they provide investors with a means of understanding how management evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to, financial measures prepared in accordance with U.S. GAAP.
A reconciliation of these measures to the most directly comparable GAAP financial measures is available in our third quarter 2024 earnings press release, as well as our updated investor presentation and financial tables, all of which are available on our Investor Relations website. With that, let me turn the call over to TJ.
Thank you, Jamie, and thank you to everyone joining us on the call today. The third quarter was an exceptional one for AvePoint as we built on the momentum and strength of the first half of the year, outperforming our expectations for the seventh consecutive quarter. We also demonstrated meaningful improvement on a number of key financial and operational metrics, which Jim will discuss in more detail.
Our results again reflect our steady focus on profitable growth and the ongoing demand for the AvePoint Confidence Platform, which is designed to enhance data security, governance, and resilience. While these customer needs are not new, they have never been as high-profile or as widespread as they are today. Companies worldwide increasingly are turning to AvePoint as they recognize the importance of high-quality data and the criticality of a robust data management strategy.
AvePoint's unmatched ability to establish these strategies for customers for more than 20 years makes us a perfect fit for this moment, where companies are rethinking data security in the age of generative AI and prioritizing platform solutions that deliver automated value across their multi-cloud environments. These dynamics position AvePoint exceptionally well to capitalize on the tremendous market opportunity ahead of us and provide us the confidence to again raise our expectations for the year.
Today, I'll talk about what we are seeing in the market and some key customer wins in the quarter. I'll then turn it over to Jim to cover our financial performance and updated financial guidance. I recently attended the Microsoft SMC APAC Conference, which brings together the top Microsoft partners in the region. A key topic was maximizing the value of Microsoft 365 Copilot.
In every conversation, whether with members of Microsoft's executive team or other top partners, it was clear that data security and data quality are key to delivering the potential that GenAI solutions like Copilot offers. At the same time, the concept of data security is rapidly evolving in the age of AI. It goes beyond traditional security measures, extending to comprehensive data protection, quality data management, robust data governance, and, of course, data security.
Traditional data security has focused on protecting the perimeter, but that approach, while still important, is ultimately insufficient today. With the rise of GenAI, businesses must shift to data-centric security, which focuses on protecting the data itself wherever it resides. What do we mean by this?
Today, companies require a centralized data security posture, a uniform approach to data governance, automated business processes, proactive and agile risk response, and the ability to do all these things at scale. Essential to this approach is the integration of strong data governance and data protection practices. Effective governance ensures that data is properly managed, accessible, and compliant with regulations, while data protection measures like encryption and access controls secure sensitive information.
Without these practices, the true value of generative AI simply cannot be realized. Gartner found that at least 30% of generative AI projects will be abandoned after proof of concepts by the end of 2025 due to poor data quality and inadequate risk controls. And by 2027, 60% of organizations will fail to realize the anticipated value of their AI use cases due to incohesive data governance frameworks.
Seamlessly addressing these widespread problems is precisely what the AvePoint Confidence Platform solves. We enable security, business, and IT leaders to automate data governance for unstructured data, including the right security controls, business process automation, monitoring, and analytics to simplify data security and successfully implement generative AI.
Our platform approach, which offers a one-stop solution to the most universal data management challenges, continues to resonate with customers and prospects and led to strong new local acquisitions and significant customer expansions in the third quarter. I want to highlight a few of these wins, which encapsulate organizations of all sizes and verticals from all around the world.
Financial institutions deal with vast amounts of sensitive unstructured data, and the integration of AI capabilities for fraud detection, customer service automation, and risk assessments inherently introduces risks like data privacy breaches, unauthorized access, and bias in AI algorithms.