Intapp Says Celeste AI Demand Is Running Ahead Of Its Ability To Deploy It
Executives said on the earnings call that Celeste pipeline is up about two and a half times and that 200 enterprise firms are running it.
Intapp, which makes cloud software for accounting, legal, consulting and investment firms, is turning away speed for demand: Chief Financial Officer David Morton said on the company's fiscal first-quarter earnings call on Tuesday that "Demand is running ahead of our ability to engage, run proofs of concept, and deploy" its new Celeste AI product.
Pipeline up, staff short
Morton said qualified Celeste pipeline is up approximately two and a half times from the prior quarter. Chairman and CEO John Hall put the growth at two to three times since Celeste became generally available on July 15.
Asked by a Stifel analyst how long the squeeze would last, Morton said execution is coming online through this quarter and the back half of the year, but "we continue to be constrained." Answering a JPMorgan analyst, he said the company "can't necessarily keep up with demand" and is putting firm deployed engineers on the pilots now underway.
Hall said about 200 enterprise firms are running Celeste today without yet converting to a full subscription, and that enterprise-class firms represent 70% of the company's addressable market. More than 150 clients have already activated DealCloud, the deal-management product, with Celeste.
The quarter behind the AI push
Subscription revenue was $125.5 million, up 29% from a year earlier and faster than the 27% growth of the fourth quarter, Morton said. Total revenue was $161.3 million, up 16%, while license revenue fell 21% to $23 million as on-premise clients shorten contracts ahead of moving to the cloud.
Cloud annual recurring revenue rose 28% to $515.3 million, now 85% of total ARR of $607.1 million. Adjusted operating income was $35.4 million, a 22% margin, and free cash flow of $28.1 million more than doubled. Firm AI products, now built on Celeste, made up more than 40% of net new bookings, up from over 20% the prior quarter.
The company bought back about 600,000 shares for $25 million, leaving $50 million under its authorization.
Guidance and what comes next
For the second quarter, Intapp expects subscription revenue of $129.1 million to $130.1 million and total revenue of $158.8 million to $159.8 million, which is below the first quarter's total. Morton attributed that to the faster shift from on-premise licenses to the cloud. For the full year it expects total revenue of $658.2 million to $662.2 million and adjusted EPS of $1.64 to $1.68.
A Barclays analyst noted net new ARR down about 11% from a year earlier; Morton pointed to the shortening of on-premise durations and said the big renewal season falls in the December quarter.
Hall said the company will talk to investors again in 90 days, when the conversion of those 200 Celeste users will be the number to check.
Sources
- Here's What Key Metrics Tell Us About Intapp (INTA) Q1 Earnings — Yahoo Finance
- Intapp (INTA) Surpasses Q1 Earnings and Revenue Estimates — Yahoo Finance
- Intapp Q1 2027 Earnings Call Transcript — benzinga.com
- Intapp announces first quarter fiscal year 2027 financial results — businesswire.com
