AvePoint Q3 ARR Rises 27% as Operating Margin Narrows

AvePoint Inc. reported continued subscription growth in the third quarter of 2026, with annual recurring revenue rising 27% year over year to $495.1 million and quarterly revenue increasing 19% to $131.1 million. The expansion came alongside lower non-GAAP operating profit and margin, while the data-management software provider modestly increased the midpoints of its full-year revenue, ARR and non-GAAP operating-income forecasts.

Revenue for the quarter rose from $109.7 million a year earlier and increased 20% on a constant-currency basis. ARR growth was 25% after adjusting for foreign exchange.

Non-GAAP operating income declined to $22.0 million from $24.1 million, while the corresponding margin narrowed to 16.8% from 22.0%. AvePoint said quarterly revenue was $1.9 million above the midpoint of its guidance, including a $0.8 million currency benefit and $1.1 million attributed to third-quarter performance. Non-GAAP operating income exceeded the guidance midpoint by $0.5 million, reflecting currency effects.

On a trailing-12-month basis, total revenue reached $487.5 million, including $425.9 million of recurring revenue. GAAP operating income was $48.9 million, equivalent to a 10% margin, while non-GAAP operating income totaled $85.6 million, or an 18% margin. Free cash flow was $96.6 million, representing a 20% margin, and operating cash flow margin was 21%. AvePoint’s Rule of 40 measure—the sum of revenue growth and free cash flow margin—was 44%.

Large-customer growth supports ARR expansion

The number of customers generating more than $100,000 in ARR increased 28% year over year to 976 as of Sept. 30. AvePoint added 65 such customers during the quarter, its highest quarterly increase to date.

Foreign-exchange-adjusted gross retention improved to 90% from 88% a year earlier, reaching the company’s target level of at least 90%. Adjusted net retention was 111%, compared with 110% in the prior-year period and below AvePoint’s 115% target.

AvePoint’s platform addresses data resilience, governance and modernization across cloud environments. The company is also extending its offering to AI agents, models and tools through the AvePoint Trust Platform. The product is in private preview, with general availability expected in the first quarter of 2027. Planned capabilities include inventories of AI assets, sensitive-data exposure detection, lifecycle governance and monitoring of token consumption and costs. AvePoint cautioned that features and integrations remain subject to change.

Full-year outlook moves modestly higher

AvePoint now expects 2026 ARR of $524.8 million to $528.8 million, representing reported growth of 25.9% to 26.9% and foreign-exchange-adjusted growth of 25.4% to 26.4%. The updated midpoint of $526.8 million compares with the prior midpoint of $525.1 million; the presentation attributed $1.0 million of the change to revised guidance and the remainder to currency effects.

Full-year revenue is projected at $511.3 million to $513.3 million, up 21.9% to 22.4% as reported and 20.9% to 21.4% in constant currency. The $512.3 million midpoint is above the previous $510.5 million midpoint, reflecting third-quarter performance and currency movements.

The company forecasts full-year non-GAAP operating income of $87.5 million to $88.5 million, implying a margin of 17.1% to 17.2%. The new $88.0 million midpoint compares with $87.4 million previously, with the change attributed to currency effects.

For the fourth quarter, AvePoint expects revenue of $138.4 million to $140.4 million, representing reported growth of 20.7% to 22.4%. Non-GAAP operating income is expected to range from $24.7 million to $25.7 million, for a margin of 17.9% to 18.3%.

Longer term, AvePoint is targeting $1 billion of ARR by 2029, along with an 80% gross margin and a 27.5% non-GAAP operating margin. Its strategic priorities include expanding platform adoption, scaling its channel ecosystem, broadening its geographic presence, and pursuing complementary investments and acquisitions.

AvePoint ended the quarter with $410.7 million of cash and cash equivalents. It spent $141.3 million on share repurchases during the first nine months of 2026, reducing shares outstanding by 5.0 million to 210.0 million. The company also expanded its revolving credit facility commitment to $100 million from $30 million.

The outlook remains subject to competitive and regulatory changes, technology-sector and market downturns, foreign-exchange movements, and AvePoint’s ability to execute its business plans and identify additional opportunities. The company also noted that forward-looking non-GAAP guidance cannot be reconciled to GAAP measures without unreasonable effort because of uncertainty surrounding stock-based compensation, acquisition-related intangible amortization, interest rates and currency rates.