All right. All right, let's get started. Good to see everyone. Thank you for joining us. I'm Melissa Knox. I run the global software investment banking business here at Morgan Stanley. I am excited to be here with John Hall and Dave Morton, CEO and CFO of Intapp. Intapp, vertical software company focused on selling to banks, financial institutions, consultants, law firms, vertical software company, specialized workflows, highly proprietary data, AI platform, really big customers, and a really amazing story. We want to spend this time talking about the company, talking about the defensibility that they've built into the platform and the offensive strategy that you have for really capturing these workflows, this market, with an AI-first solution. All right?
We're coming off of a really exciting investor day last week in New York, where you came up with some new product announcements around the Intapp Celeste platform. Wanna talk about that. Wanna talk about the target that we put out there for $1 billion in revenue by FY 2029, accelerating growth, accelerating margin, and a lot of new metrics around the cloud business. We'll hit on all of that. First, John, why don't you just hit on, what are the products that Intapp provides today? Talk about what we're doing around winning new business, managing risk, and improving profitability. Let's start with winning new business.
Thank you for having us. The target that we sell to is a large, underserved, highly regulated industry, the large professional and financial services firms. As you mentioned, the law firms, accounting firms, consulting firms, the private capital investors, the real estate, real assets investors, and the advisors, like the investment banks. Historically, these firms have built their own software. You look back many years, and this was the investment thesis for the business. We were a bootstrap business. We never raised money all the way to IPO. Our observation was they've been building their own software, and the thesis was, why are lawyers, bless them, building their own software?
It was an observation that as good as all the horizontal systems of that era were, they clearly were not meeting the unique operating requirements and regulatory requirements of these firms. We built the business over many years, and the four founders are still with the business today. It's a founder-led company that has survived and thrived through multiple generations of technology. In fact, we have benefited from every transition, from on-prem to the cloud, the introduction of mobile, and now with AI. We've grown the business through good and bad times economically, the 2008 recession, the COVID recession, what happened in 2023 with interest rates. The company has grown right through it because these firms have been so behind technologically, and their needs are so specialized.
That was sort of the foundation of the business, and we built out a special set of business applications for these firms that was designed in collaboration with the CIOs of these firms. When we entered the market, they had been building all of their own, and we said, "Can we build that for you?" It's as simple as that. Firms had a real incentive. Even though we charged a premium, we cost a lot more than what they were doing internally to buy from a third party and to buy an enterprise-scaled system. They were interested in working with a supplier who could build up an enterprise class view of what all the firms were doing. As everybody knows that's worked in these markets, these firms really do follow each other.
They want to do what everybody else is doing. As we built up more and more of the compliance capabilities, more of the enterprise-grade features, we established a business-of-the-firm set of systems and workflows and data that really was second to none and was unique in the marketplace. We've established ourselves now. We have 2,750 firms that work with us, the very large firms in this $4 trillion industry. We've been doing well. This last quarter, we grew our cloud business 31%. This is a real growth situation because we're replacing this set of business applications. I think one of the things that people might not get is that a lot of the excitement around AI recently has been around thinking about these LLMs and what they do with the work product.
T he documents that the lawyers, for example, are working on or the models that the professionals in some of the financial services-oriented firms are working with. They're excellent at that, no question. That's a completely different category from the business management set of applications that these firms run, which is where, really where we have. You know, the practices in the law firm, the service lines in the accounting firm, the deal teams in the private capital firms, they have had tools for many generations of technology helping them. We were always the business system that integrated with each of those.
The firms that we sell to at the top of the market, the enterprise classrooms, are actually portfolio businesses that have many strategies and many service lines and many practices, and many of those will have their own unique applications underneath them . There's also really exciting AI opportunities across each of those practices and strategies. Our position in the market has never been down at that practitioner level. It's been at the senior leadership of the firm, the strategy setting, the go-to-market of the firm. Where do they wanna raise money if they're a private equity investor or a real assets investor? What are their relationships like with their LPs if they're more of an advisory business? What clients are they pursuing? What industries and sectors? How do they bring that in?
What are all the complexities of the unique professional compliance requirements of that industry. There is a universe of compliance rules that are specific to this industry. The conflicts avoidance for the lawyers, the independence rules for the accountants, the MNPI and Market Abuse Regulation requirements for the banks and the private capital investors, these sets of compliance issues are existential for these firms and their information governance. As systems become more and more important to the large-scale businesses for managing their information, you have to design for professional compliance responsibilities from the ground up. One of the things that we did and we discovered was one of the core reasons that these firms had been forced to build their own software is the horizontal systems never really internalized the deep professional compliance obligations that these firms built.
Over our bootstrap years, we developed an expertise in this area that is second to none. As the AI opportunity has come along, we have this incredible moment now to bring agents and agentic AI to this business side of the firm with professional compliance understanding built directly in. It's completely differentiated from the traditional horizontal systems, even the horizontal AI systems. We're in a unique position to be one of these SaaS generation companies. SaaS is a more recent thing for us. We've evolved through multiple generations of technology because of our focus on these unique issues in this firm. We don't think about ourselves as tied to any particular technology generation.
We've always talked about ourselves as a vertical company with expertise first, building out this business set of systems and evolving through multiple technology generations to be the people who apply each generation of technology, but in an industry-aware way and in a compliant way. That's our strategy. That's a lot. We can talk some more about it, but that was a big part of our announcements last week was our entry into the agentic opportunity for this business of the firm tier with all of the professional compliance requirements that need to go into the correct design for an agentic approach here.
To super specialize these workflows, you know, I work at one of these firms. Our system is $30 million that we've invested into this homegrown system that's broken. It's cobbled together. Sorry if there's anybody from Morgan Stanley IT here. Cobbled together. We manage our pipeline basically in Excel, spreadsheets and this old system. It is very differentiated. We have over 800 clients that we cover. We're at different phases in our, you know, in our go-to-market with each of them. This is episodic. It's very different than something that Salesforce or somebody can just come in and do. Super specialized workflows. You talked about compliance, which the consequence of not getting it right, SEC investigations, fraud, not something that somebody can just vibe code a solution to.
First, hit on the specific workflows. What are you doing in DealCloud? What are you doing in compliance? Let's hit the business logic and workflows, and then talk about the data that you have. Like, what's the specialized proprietary data that you have that enables you to go build the agents?
If you scale up these firms to many thousand people with tens or hundreds of thousands of clients, they could be providing investment banking services, financial advisory services. They could be providing accounting services or assurance services. They could be providing legal services. Each of those industries has their own language, and we need to speak the correct terminology. If you scale it up as an operating model, they all follow a pretty similar structure. Our system is the mission-critical backbone for the business flow of those firms at scale. At the front end, we're looking at the firm's strategy. What kind of industries or clients is it trying to chase with what practice areas or product lines or service lines?
In the case of private capital real assets, it's what LPs are you chasing and what funds are you raising, you know, for what purpose? It's that front end of the process. In this set of professional industries, it's an extremely relationship-oriented pursuit on the one hand, but it's a networked relationship. It's who knows whom across your entire platform that can help you get in and make the first introduction. You are not selling widgets. You're not selling off of a price book with fixed price products with a gross margin associated with them. You are pitching your expertise, your reputation, your history of deals and knowledge. You're pitching your people and their expertise. You're trying to assemble the right team.
It's completely different from the way that traditional, quote-unquote, "CRM" is designed to sell products off a price list with a SKU. There are no SKUs. You are inventing each and every pitch bespoke as you go to market, particularly at the higher-end firms where you have very high margin, high price point value-based pricing. The whole approach to the company is at the front end, who knows whom and who knows what, and how do you match that up against the opportunity and use all the technology that you can to bring your whole platform together to win? Then you have an unbelievably preposterous thing that you have to do, which is you're not allowed to take every deal that you can go win.
You have to run it and vet it against everything you've done in the past and all your promises and commitments, either to the regulators or to your professional ethics groups, if it's a case of something like the ABA or the AICPA or the SRA in the U.K. You have to identify, is this going to create a conflict problem? Is this going to create an independence problem? Is this going to change our relationship with any of our existing clients? Sometimes you have to go back and negotiate with an existing client a change in your relationship with them in order to get you to say yes to a client that you want to bring on. It's insane what you have to go through in this market just to win a deal. Yeah, it's insane.
The complexity of business acceptance in these extraordinarily high-priced engagements is off the charts. To your point, if you make the call, the pressure is to say yes. You are capitalists, you're trying to win business. The firms are desperately trying to figure out within the rules and within all the promises and all the individually negotiated client agreements or individually negotiated LP side letters or individually negotiated engagement letters that form the basis of your business, how can you say yes? Firms go through extraordinary creative thinking to come up with all the things they can promise to their existing clients and to the regulators and to their new clients to say yes. Our system is the system that documents all of that creativity and all the rules that you are developing and negotiating to say yes.
Once you say yes, you are now on the hook. Your firm's reputation, your practitioner's personal reputation, your client obligations, and if you screw it up, you may have, to your point, malpractice claims in the future. You may have SEC investigations. You may have your licenses reviewed for things. Not to mention the fee disgorgement and the penalties that come, the insurance premiums that come forward. Ultimately, the thing interesting that the firms are most worried about is their reputation. If these things get screwed up in the way that you've made promises to clients, and you end up on the front page of The Wall Street Journal, that affects your whole franchise value and the future. This professional compliance thing and everything that you decide at business acceptance is no small joke.
Our system is the thing that firms use in this mission-critical workflow to determine all that, to set up the rules, and then to govern the entire firm's activities after business acceptance to make sure that all the promises you made in 18 ways to 18 different constituents, you make sure you live up to, even as long-running deals run and people move in and out of deal teams and information that is generated needs to be segregated and maintained under that set of responsibilities across all of your systems. It's extraordinary what you have to put in place. We've just built the business over many years with a depth of command over this set of issues that nobody ever has other than the firms internally. It's a unique position. We have the proprietary data for each firm.
We have every engagement letter, client agreement, Outside Counsel Guidelines. You know, we have every implication of that for information governance, how your team's set up, how are people resourced on the project as people move in and out. How do you make those decisions? If someone moves from here to there and they have to cross an ethical boundary or an ethical wall, what implications does that have? What negotiations as things move to go back to the clients and renegotiate? All of that kind of complexity, which exists for no other industry and for no other industry does it have the consequence that it has here, is our system. It is the core of the firm's business, independent of the individual document manipulation that is happening at the practitioner level. It's at the firm level.
That's what we do. It starts out at business development, moves through business acceptance, all the compliance, and then the governance of the engagement, including staffing, information governance, and then we even do time management for all, for the parts of our market that manage the time of people. Sometimes they build for that, or sometimes they look for the economics of that. That time that people spend influences their expertise and their exposure to information. It wraps all the way back into resourcing at the beginning and the kinds of compliance issues that you have when you're trying to choose who's going to be on the engagement. It also wraps back into the knowledge that people have to have. We're, we're just, we're the heartbeat of the way that these firms run.
Regardless of the technology generation, we're the heartbeat.
If that heartbeat is not enough, the complexity, the specialization, the criticality of what you do, now we do this with an AI-first approach.
The AI thing is so interesting because firms are so excited to bring on AI, and they should be. It's Buck Rogers. It is ravenous for information. The whole principle is you throw everything in there and have it give you awesome answers, which it does, except most of the first-generation systems that are coming out with AI depend on the individual who's using it to know what they're allowed to commingle in their database, in the AI system. This is creating leakage problems. These folks who have really jumped in fast and are adopting it are coming to us saying, "We desperately need to move to the second generation of these AI tools because they must be governed. The risk that we are taking is off the charts.
We want the productivity, but we have to have professional compliance with this generation of systems. You all are the folks who have that command. Can we work with you and help create governed AI as a general capability across our firm so we get the benefits of it, but with all the governance that you've always provided for all of our previous systems?" That's a big part of our strategy.
You've announced the Intapp Celeste AI platform, and Intapp Celeste will basically be the agentic AI-first workflows for all of these products, business lines that you have, integrates with your existing applications and will operate as its own platform. Just talk about how you can incorporate this into existing workflows today and that the opportunity that this. First, what it does too, it's amazing. Review CIMs and just due diligence and put together the first generation of LBO model, I mean, with an agentic, all compliance-first approach. Talk about how it integrates with existing workflows and the opportunity for this as your platform.
We could not be more excited. This is the biggest product launch that the company has done in its history. Intapp Celeste has been two years in the making. It is a from the ground up true AI native agentic platform. It's built with all the modern tools that you would have expected a startup to be using to build the next generation AI product. We announced it just this past week at our event in New York. The way it was developed is in the way that our company has consistently developed the market-leading products in each of these categories, which is in direct collaboration with our client advisory boards.
In that same tradition that built the whole company, where we looked at what they were building internally and we built the industry specific technology, we have built Celeste as the true firm AI, the AI system that is designed for this business model, these firms with professional compliance built in. It's an agentic platform, so we have the opportunity with Celeste to go into that whole backbone that I just described from upfront business development and pursuing investors and clients through the compliance workflow and then the governance of all the activities of each of the deals and projects and engagements. We can apply Celeste as an agentic system to automate that entire system with agents that are themselves professionally compliant.
It's an enormous opportunity because we have such an incredible footprint with the core systems, and we've now brought to market with Celeste the agentic system that will protect your professional compliance obligations as you agentify all those things. We're gonna leverage our existing workflows, all the proprietary data, the installed base. Celeste works with, as you were mentioning, DealCloud, our intake system, our conflict system, our terms of business system, our wall system, our time system. Everything firms have that is running their backbone today can now deploy Celeste agents to automate that entire process and take a lot of the manual burden off, do some growth cost avoidance on the people side, which is where there's so much economic opportunity. We could not be more excited about this launch.
We launched in New York here, this past week, and I'm headed to London after this event. We're gonna do our London launch on Wednesday.
We've heard a lot about, we, you know, we've had Harvey here this morning. We've got Anthropic here tomorrow talking about what they're doing. You know, we think the application layer has the most to gain from AI. Applications are the channel into the enterprise. It's the use case for all the AI that's coming up. You're integrated with these systems. You're partnered with Harvey, you're partnered with Anthropic, you're partnered with Microsoft. Talk about how that's benefiting the business, maybe Harvey, then Anthropic, then Microsoft.
We're very excited about these relationships. I think it helps the client community and the investor community position these AI players a little bit more clearly. The Harvey class of technologies is tremendous. There is an enormous opportunity for what they are doing, and they're really taking advantage of the LLM technology itself and how facile that is with natural language, which was always a barrier in legal in particular. In many of these markets, for this unstructured style of information, how do you, in a modern way, apply compute and speak English to these things and get them to help you with your English output? Huge space for them. It is very much for the practitioners, right?
It's for the individual, in this case, the lawyers who are manipulating documents and trying to work from precedent and coming up with the best possible cases. The opportunity for us is to bring the whole business management layer to all the places where those folks work and to sit next to. In legal, we talk about the distinction between the practice of law, which is where systems like Harvey sit, and the business of law, which is where systems like Intapp sit. That same distinction can be applied to the other industries that we're talking about, where you have the practitioners who are using their tools, and then you have the business backbone that's running the firm. There's a huge AI opportunity in each of those areas, and it is complementary.
I think this is a little bit one more level of sophistication for dissecting the industry structure and what the opportunity structure is for AI that really helps people clarify things. In the case of Harvey, we could not be more excited because we had the CEO of Harvey, Winston was on stage with us. We were at his event on Monday in London last week, he came to New York and was on stage with me at our client event. We've agreed that the opportunity is for Intapp Celeste to help provide governed AI for all the Harvey experiences, so that it's not left to the burden of the individual practitioner to decide what goes in and out of their systems, but rather their system will be governed safely within all the rules that the firm has to run.
That should really help them expand into more parts of the market. It helps us because we can go all the places where Harvey is with a professional compliance capability that is needed and is in demand from the compliance officers of the firm. With Anthropic, we did an announcement on Tuesday of last week. We had Eleanor Dorfman, who's the Head of Industries from Anthropic, on our stage with our launch. They're one of our launch partners. We were announcing that Intapp Celeste, our agentic platform, was able to be used with Anthropic's engine. Celeste is model-agnostic, you as a firm can choose whether you like the OpenAI system or you like Copilot or you like Claude or one of the other systems. That was an important design requirement from our clients that they'd be able to do that.
We were very excited to be able to launch with Anthropic because it's got such great t echnology and capabilities. One of the things that she said on stage was, you know, at their size, they're going to be looking to work with firms that have deep industry context and industry compliance. There's a recording of this from our event that people can listen to, but it was really important for people to hear that. We also have published in the Anthropic directory as Intapp Celeste connector for MCP . If firms are working with any of these systems, you'll be able to talk to Celeste to get information about the firm's information. The core principle is everything that's coming from Celeste maintains its governed status.
You're not gonna be able to get information leaked outside of where it should go if you're coming through the Celeste gateway. This is an important design principle in that. With Microsoft, we've had a long-standing partnership with Microsoft. We announced this several years ago. We've had the head of Microsoft Copilot on stage with us two years ago when we launched our generative offer, which was called Intapp Assist, which is now rolled into the Celeste platform. Many of the firms in our marketplace are very heavily invested with Microsoft. They have a huge position, which you would expect with Word and PowerPoint and Excel, all the types of things that the analysts and the associates work in.
Our teams investment with them, our whole collaboration system, which helps govern Microsoft Teams and SharePoint, and also provides walls for Copilot and walls for AI to the whole Microsoft system. A big relationship there. We also have a commercial relationship with Microsoft, where all of our technologies are available on the Azure Marketplace. The Microsoft salespeople receive quota relief for selling our products. We've got a go-to-market relationship in our partnership with them as well, and it's been a huge help. You know, Dave can talk about a little bit more of our growth path here, but a lot of our business now, particularly at the high end of the market, is co-selling with Microsoft under their Azure agreements, which has a huge footprint in the marketplace. We're gonna have more partners.
We have 145 partners today in our ecosystem. These were three big ones that we emphasized and three that we wanted to emphasize because of the AI generation position that they have, and people see, you know, the relationship that Celeste and Intapp have with those folks.
All right, let's talk about how you get to $1 billion by FY 2029. We've planted the seeds here. This is how. All right, Dave. over $500 million in ARR, over 25% subscription revenue growth, profitable 17%-18% operating margin, and we're accelerating revenue, GAAP revenue, growth. What are the growth levers? Let's start there. What are the growth levers from getting to here to $1 billion?
Yeah, we're really excited, coming off a week of just profound announcements. If you think about when we did our inaugural Investor Day two years ago, it was more about continued cloud transformation, continued performance within just the straight set of series, nothing on this type of scale in the marketplace. When we look at our client attestation, we've made the move more to densify around enterprise. We've seen larger lands, 50% up since IPO, larger expands, which, you know, last quarter was record cloud NRR at 124%. We believe we're on the right pace of performance here. Coming off a record quarter, having these types of announcements gave us confidence in updating our longer term targets.
Talk about the expand. Should we be concerned around a seat-based model? What's the business model? Talk about seats versus platform versus consumption.
You know, seats has a place for us. We do enjoy the seat-based pricing. With that said, we have a lot of other models that we do. Ostensibly, we get into more enterprise banding of those type of clients. When you think about firm-wide value, whether if you're offering it a time or a compliance solution, it's just not one seat per se, it's the whole company or client. Seats today is less than 50% of our ARR. Clearly we wanna land with seats in some of these places, and they continue to expand and get them mature enough to a whole enterprise narrative. As John had articulated on Celeste, you know, we will have some data platform fees as well as consumption that, you know, the rate of pace will evolve with how complex or just simple queries.
We're set up to perform that as well.
Then maybe just elaborate on the expansion motion. When you expand, and especially when things move to the cloud, there's rapid expansion. What is the expansion motion once you're in?
Yeah, good point. Another key tailwind that we have is we still have about $100 million still on-prem, even though 94%, 95% of our clients have at least one module in the cloud. Now it's just about time and scheduling. Once we're able to successfully move them from on-prem to the cloud, we're seeing about a 20%-30% uptake just on that. All these AI features that we've been excited talking about, you need to be cloud native, nothing on-prem, which is a further, you know, accelerant that we view getting to the $1 billion.
Can you grow and get more profitable? What are the levers on the profitability side?
Yeah. For us, we still have productivity measures with our sales and marketing. We're still, you know, two years into our whole enterprise, narrative of where we do have named accounts. We're still densifying in and around that, but we are getting greater and greater returns. We've seen the last, you know, three to four quarters as proof points of that with the top line or cloud ARR accelerant. Success there, more to come. You know, we have invested heavily in our partner ecosystem. We're seeing a lot of co-sell motion bringing us along in those partnerships, which we appreciate, and we'll still continue to get productivity measures there. Then productivity, obviously, within G&A.
You know, we drink our own champagne with our own AI tools, so we're getting a lot of success there, and we'll continue to optimize where it seems fit on those narratives.
Any questions from the audience? All right, John. We've just laid out a story, super defensible, company over half a billion in ARR with accelerating growth and profitable. What do you think the market has wrong about this story? You know, why is the baby getting thrown out with the bath water here? Kinda give your last pitch here to investors on the opportunity for Intapp because they're getting it wrong, right? They're getting it wrong.
I mean, we've been in business through many cycles. We've seen the markets move up and down. We've got a long-term view as founders to serve a completely overlooked but large and lucrative end market with each generation of new technology. I think this AI opportunity is by far the biggest opportunity in front of the company that we've ever had. The agentic investment with Celeste and the professional compliance capabilities that we've built into it are an illustration of the company's expertise. Much of the company's expertise comes from this unique combination of Silicon Valley engineers. There's a whole group that came from some of the best companies you could imagine technologically, with the other half of the company are lawyers, bankers, private capital, compliance professionals.
I mean, the folks in the company are actually the people who have had the jobs on the other side. This is a very rarefied space to really understand how these firms operate at some of the largest institutions in the world. The opportunity to apply AI to pull together the firm's institutionalized knowledge and deploy it to grow as these firms themselves, the industries that we sell to, are consolidating and growing. We've got a tailwind from a consolidation standpoint. We've got the AI opportunity in front of us. We've got an unmatched distribution channel, existing relationships with 2,750 clients today and growing. We have the workflows, we have the proprietary data, we have the professional compliance mode. It's an incredible position for the company.
If you look at the list of things, people say, "Well, which of the SaaS companies have the right recipe to go succeed and really make hay with this AI transition?" This is one of them. The greatest thing about them is, for better or for worse, they're premium payers. These firms want to buy the premium product. We move them off of a low-cost model where they built internally. This whole DIY freak out about building our tools, I just don't think that fits with the economics of how they make choices.
They wanna go with the compliance solution that everybody is using, that's from a trusted vendor, that's enterprise class, that they can get support from the professional indemnity insurers, that if you buy this one, you're safe because everybody's bought it, and that's the position that we're in. We're going to capitalize on this moment, and that's what the Celeste opportunity was all about. People are welcome to watch the recording from last week, but it was just off the charts.
Really impressive execution. Thank you. Now's the time for Intapp. Thank you.
Thank you, guys.