AvePoint Eyes $1B ARR as AI Governance Pipeline Surges

Key Points

• AI governance is becoming a major growth driver: Control-related products now represent 40% of AvePoint’s pipeline, up from 26% of recurring revenue, while AgentPulse deals are typically two to three times larger than standard control deals.
• AvePoint reported its 13th consecutive quarter of double-digit net new ARR growth, with particularly strong expansion among customers generating at least $250,000 in ARR and across international regions.
• The company is targeting $1 billion in ARR by 2029 while remaining profitable, supported by $100 million in trailing-12-month free cash flow, mid-80% software gross margins and increased investment in go-to-market initiatives.

AvePoint NASDAQ: AVPT executives said the company’s second-quarter performance reflected continued growth in annual recurring revenue, expanded enterprise customer cohorts and rising demand for products aimed at governing artificial intelligence deployments.

Speaking at KeyBanc’s conference in Park City, CEO TJ Jiang said AvePoint recorded its 13th consecutive quarter of double-digit net new ARR growth and its 14th consecutive quarterly outperformance. He said the company was particularly encouraged by net new logo acquisitions and growth among larger customer cohorts.

“The $250,000-and-above cohorts are 30%-plus increase,” Jiang said, referring to ARR customer segments. He added that AvePoint saw growth above 20% across North America, Europe, the Middle East and Africa, and Asia-Pacific. EMEA posted the highest growth, which he attributed to the company’s nearly fully channel-based model in the region.

AI Governance Becomes Larger Part of Pipeline

Jiang said AI governance has become an increasingly important driver of demand. AvePoint’s software platform is organized around modernization, resiliency and control, with the control category encompassing lifecycle management, identity management, access controls and records management.

He said the company views data curation and governance as foundational requirements for enterprise AI projects. Historically, control represented 26% of AvePoint’s total recurring revenue, but control now accounts for 40% of its pipeline following the introduction of AI-focused offerings such as AgentPulse.

AgentPulse, which became generally available in the first quarter, is designed to help organizations manage AI agents. Jiang said AvePoint released a standalone “lite” version of the product in July because customer deal sizes and the number of agents being managed were increasing. Customers using the product manage an average of 5,000 agents, he said, and the number of agents is doubling every three months.

According to Jiang, deals that include AgentPulse are typically two to three times larger than standard control deals. AvePoint is offering the product on a seat-based subscription model, which he said can provide customers with more predictable costs than consumption-based AI pricing.

Growth Strategy Extends Across Segments and Clouds

AvePoint’s small- and medium-sized business business now represents 20% of recurring revenue and is its fastest-growing segment, Jiang said. The company is using managed service providers as an intermediary in that market.

The company still generates about 90% of its business within the Microsoft ecosystem, but Jiang said AvePoint is expanding its presence across other cloud platforms as customers adopt multi-cloud strategies. The company supports Google Workspace for resiliency and control functions, while also providing resiliency products for Salesforce and other platforms including Atlassian.

“Our strategy for multi-cloud is really just to follow our customers,” Jiang said. He added that AvePoint is increasing its Google go-to-market investment as it sees an opportunity to target that ecosystem more directly.

Jiang also pointed to security and data-security-posture management as areas of opportunity. AvePoint currently performs cloud-based shadow AI discovery and is working toward device-level visibility, which Jiang said is relevant as open-source AI models can be run on local hardware. He said the company is developing first-party capabilities while also evaluating potential third-party opportunities through its M&A efforts.

Data Layer Is Central to AI Trust Approach

Jiang described AvePoint’s role as an “AI trust layer” positioned between enterprise data and AI models. The company’s approach begins with data classification, integration, migration, backup, recovery and access control before extending governance practices to AI agents.

He said organizations need to establish accountability for the data and permissions connected to AI agents, particularly as agents can make changes at machine speed. AvePoint recently released Kinetic Classification, which Jiang said can adjust classifications, tagging and access controls as policies and employee roles change.

AvePoint’s services business accounts for 12% of revenue and is increasingly focused on what Jiang called AI-foundry work. He said services engagements can generate intellectual property that feeds back into the company’s software offerings.

Jiang said companies remain anxious about AI-related security risks and the costs of operating advanced models. Rather than viewing customer demand primarily as a budget issue, he characterized it as a pressing need to address AI risk, access control and data security.

Investment Plans and Profitability

Jiang said AvePoint is targeting $1 billion in ARR by 2029, a goal that implies at least 25% annualized top-line growth based on his comments. He said the company is accelerating while remaining profitable, noting that it generated $100 million in free cash flow over the last 12 months and is GAAP profitable.

The company is making an incremental midyear investment equal to about 1% of its budget to pursue market opportunities, Jiang said. More than half of that spending will go toward go-to-market initiatives, including partner-development hiring and brand marketing campaigns. Less than half will be allocated to technology upgrades and related costs.

Jiang said AvePoint expects to maintain its medium- and long-term operating-margin guidance and cited software gross margins in the mid-80% range. He also said the company could repurchase nearly $180 million in shares this year at its current pace.

CFO Jamie Arestia said AvePoint’s second-quarter beat flowed through to its ARR and revenue outlook, although foreign-exchange headwinds offset some of those increases because of the company’s international exposure. Jiang said AvePoint expects to make additional product announcements through the rest of the year as it expands its AI trust-layer strategy.

About AvePoint (NASDAQ:AVPT)

AvePoint, Inc NASDAQ: AVPT is a leading software provider specializing in data management, governance, and compliance solutions for Microsoft 365 and related cloud platforms. Founded in 2001 and headquartered in Jersey City, New Jersey, the company offers a comprehensive suite of cloud-based and on-premises tools designed to help organizations migrate, manage, and protect their collaboration data. AvePoint's flagship Cloud Platform delivers backup, governance, reporting, and migration services for SharePoint, Teams, Exchange, OneDrive, and Salesforce environments.

With a customer base spanning thousands of organizations across more than 100 countries, AvePoint serves enterprises, government agencies, and educational institutions seeking to ensure data security, regulatory compliance, and operational resilience.

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