AVPT 10-K & 10-Q changes, risk factors and insider trading

The significant majority of our customers choose to integrate their products and services with, or as an enhancement of, third-party solutionssolutions, suchand as infrastructure, platforms or applications, in particular from Microsoft. Thethe functionality and popularity of our products and services depend largely on our ability to integrate our platform with third-party solutions,solutions. in particular Microsoft’s Azure, SharePoint, and Office 365. We are dependent on technology partner solutions for several major categoriesMany of our offerings,products includingwork datainteractively management,with migration,partner governance,solutions, protectionand, and backup. Asas a result, our customers’customers' satisfaction with our products areis, highlyto dependentsome extent, contingent on their perception of, and satisfaction with, our third-party providers and their respective offerings. We will continue to depend on various third-party relationships to sustain and grow our business. Third-party providers may change the features of their solutions, alter their governing terms, or end the solutions’ availability altogether. They may restrict our ability to add, customize or integrate systems, functionality and customer experiences.solutions. Any such changes could limit or terminate our ability to use these third-party solutions and provide our customers with the full range of our products and services.services, Ourand our business wouldcould be negatively impacted if we fail to retain these relationships for any reason, including due to third parties’ failure to support or secure their technology or integrations; errors, bugs, or defects in their technology; or changes in our products and services.relationships. Any such failure, as well as a prolonged disruption, a cybersecurity event or any other negative event affecting our third-party providers and leading to customer dissatisfaction, could harm our relationship with our customers, our reputation and brand, our revenue, our business, and our results of operations.

We currently serve the majority of our SaaS offerings from third-party data center hosting facilities in different geographical locations that are operated by Microsoft. Our products and services, in particular SaaS offerings, are deployed to multiple data centers within these geographies, with additional geographies available for disaster recovery. Our operations depend,depend in part,part on ourthese third-party providers’cloud providers to maintain the availability, security, and physical protection of thesetheir facilities and underlying networks from natural disasters, power or telecommunications failures, criminal acts, orcyber similarincidents, and other disruptive events. If any third-party facility’sfacility's arrangement is terminated, or our service lapses, we could experience interruptions in our platform,platform latency, as well as delays and additional expenses in arranging new facilities and services.

A significant portion of our operating costs are from our third-party data hosting and transmission services. If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation or otherwise, we may not be able to increase the fees for our products and services to cover the changes.cost increases. As a result, our operating results may be significantly worse than forecasted. Our failure to achieve or maintain sufficient and performant data transmission capacity could significantly reduce demand for our products and services.

Our operations may, in some cases, involve the storage, transmissiontransmission, and other processing of customer data or information. Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based platform providers of services are expected to continue to be targeted. Threats include traditional computer “hackers,” malicious code (such as viruses and worms), phishing attacks, employee theft or misuse and denial-of-service attacks. Sophisticated nation-states and nation-state supported actors now engage in such attacks, including advanced persistent threat intrusions. The growth in state sponsored cyber activity showcases the increasing sophistication of cyber threats and could dramatically expand the global threat landscape. While no single company can thwart a nation state attack, we work to implement and continuously improve security-aware software development, operational management, and threat-mitigation practices that are essential to the strong protection of services and data. AvePoint has experience spanning multiple decades of building enterprise software and running online services around the world. We implement a robust defense-in-depth security strategy based on the principle of “assume breach.” We work to continuously strengthen threat detection, response, and defense, conduct continuous security monitoring, and practice security incident response to validate and improve the security of our software and services. Rigorous third-party audits verify that we adhere to strict security controls such as the ones contained in the ISO/IEC 27001 standard mandate. We are audited once a year for ISO/IEC 27001, 27017 and 27701 compliance by a third-party accredited certification body, which provides independent validation that security controls are in place and operating effectively.

We have security measures in place designed to protect us and our customers’ confidential and sensitive information and prevent data loss, but such measures cannot provide absolute security and may not be effective to prevent a security breach, including as a result of employee error, theft, misuse or malfeasance, third-party actions, unintentional events or deliberate attacks by cyber criminals, any of which may result in someone obtaining unauthorized access to our customers’ data, our data, our intellectual property and/or other confidential or sensitive business information. Importantly, the scope of our internal information controls and security measures is limited to the scope of our information security management system (“ ISMS”). All of the legal entities (and each of their respective employees) within our global corporate structure are contractually bound to the ISMS, but failure by any of our subsidiaries or affiliates (or employees thereof) to abide by the terms and conditions imposed by our ISMS could result in increased vulnerabilities, decreased integrity of our assets, and ultimately, liability, loss of business, and loss of customer confidence.

The ISMS applies to the use of information, network resources, and electronic and computing devices to conduct business or interact with internal networks and business systems, whether owned or leased by us, our employees, or a third party. All employees, contractors, consultants, as well as our affiliates and subsidiaries are responsible for exercising good judgment regarding appropriate use of information, electronic devices, and network resources in accordance with the ISMS, as well as local laws and regulation. While we have policies and procedures to address global compliance with the ISMS, our employees and agents could violate these policies and applicable law, for which we may be ultimately held responsible. We are taking further steps to assess globally managed departmental systems to ensure ISMS standards are maintained. Based on the results of that analysis, if, as, and when necessary, we will subsequently implement a remediation plan that will include tools, training, and education to ensure (A) repeatable procedures are being implemented that protect the confidentiality, availability, and integrity of assets from threats and vulnerabilities in accordance with the ISMAISMS standards and protocols, and (B) that vulnerability testing is being performed, measured, and documented across our global operations landscape.

Outside of the ISMS and the internal security measures and data protections we have developed (and continue to improve), third parties may attempt to fraudulently induce employees, contractors or users to disclose information, including user names and passwords, to gain access to our customers’ data, our data or other confidential or sensitive information, and we may be the target of email scams that attempt to acquire personal information or our assets. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until successfully launched against a target, we may be unable to anticipate these techniques, react in a timely manner or implement adequate preventative measures. We devote significant financial and personnel resources to implement and maintain security measures; however, such resources may not be sufficient, and as cyber-securitycybersecurity threats develop, evolve and grow more complex over time, it may be necessary to make significant further investments to protect our data and infrastructure. If our security measures are compromised as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials, or otherwise, our reputation and business could be damaged and we could incur significant liability. As we rely on third-party and public-cloud infrastructure, it depends in part on third-party security measures to protect against unauthorized access, cyberattacks, and the mishandling of customer data. A cybersecurity event could have significant costs, including regulatory enforcement actions, litigation, litigation indemnity obligations, remediation costs, network downtime, increases in insurance premiums, and reputational damage. These risks, as well as the number and frequency of cybersecurity events globally, may also be heightened during times of geopolitical tension or instability between countries.

A significant portion of our products will incorporate open source software, and we expect to incorporate open sourceopen-source software into other offerings or products in the future. Such open source software is generally licensed by its authors or other third parties under open sourceopen-source licenses. Little legal precedent governs the interpretation of these licenses; therefore, the potential impact of these terms on our business is unknown and may result in unanticipated obligations regarding our technologies. If a distributor of open source software were to allege that we had not complied with our license, we could be required to incur significant legal expenses. In addition, if the license terms for the open source code change we may be forced to re-engineer our software or incur additional costs. If we combine our proprietary software with open source software or utilizes open sourceopen-source software in a certain manner, under some open source licenses, we could be in breach of the license if we did not release the source code of our proprietary software. Releasing the source code could substantially help competitors develop products that are similar to or better than ours and could help malevolent actors detect security weaknesses to develop and deploy attacks, including malware, against our products and systems.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We aim to comply with and perform the evaluations needed to comply with Section 404 of the Sarbanes-Oxley Act (“SOX”). We may need to undertake various additional costly and time-consuming actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff, which may adversely affect our business, financial conditioncondition, and results of operations. We may not be able to complete our evaluation, testing and any required remediation in a timely manner. If we are unable to assert that our internal control over financial reporting is effective and our independent registered public accounting firm is unable to attest to management’s assessment of the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.

We are required, pursuant to Section 404 of SOX, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of December 31, 2024.2025. This assessment willis needrequired to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, including theany existing material weakness, if not remediated. We are also required to disclose changes made in our internal control and procedures on a quarterly basis. In addition, our independent auditor is required to attest to management’s assessment of the effectiveness of our internal control over financial reporting.

Additionally, the existence of any material weakness, or any significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause shareholdersstockholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and stock price.

We believe ARR further enables measurement of our business performance, is an important metric for financial forecasting, and better enables us to make strategic business decisions. We calculate ARR as the annualized sum of contractually obligated Annual Contract Value (“ACV”) from SaaS, term license and support, and maintenance revenue sources from all active customers at the end of a reporting period.

Total revenue increased 21.6%26.9% to $330.5$419.5 million for the year ended December 31, 20242025 , primarily due to an increase in SaaS revenue, which increased 43.3%38.4% to $230.7$319.2 million, and represented 70%76% of total revenue, up from 59%70% of total revenue in the prior year. TheTotal revenue growth was also due to an increase in SaaSServices revenue, which wasgrew driven22.3% byto strong$53.8 customermillion. demandThe forincreases ourin SaaS solutions,and wasServices revenue were, partially offset by an expected decrease in both term license and support and maintenance revenue.

While SaaS revenue growth was again driven by consistently strong customer demand for our SaaS solutions, Services revenue is expected to fluctuate as the services generally are not recurring in nature. Additionally, maintenance revenuerevenue, which is tied to the sale of perpetual licenses, is expected to continue decliningdeclining, as we haveno shiftedlonger awayoffer fromthese the sale of perpetual licenses and towards SaaS and term licenses. Without perpetual license sales, there will be limited opportunities to sell maintenance contractsproducts to new customers. ExistingAdditionally, existing maintenance customers have and will continue to transition to SaaS and term licenses, which will further support the continued decline in maintenance revenue.

For the year ended December 31, 2024,2025, North America revenues increased 14.7%21.3% to $135.9$164.8 million, driven by a 43.6%,34.7%, or $30.7$35.1 million, increase in SaaS revenue, partially offset by a $13.3$6.2 million combined net decrease in term license and support, services and maintenance revenue. EMEA revenues increased by 21.4%35.3% to $99.3$134.3 million, driven by a 39.8%,43.1%, or $23.8$36.0 million, increase in SaaS revenue, partially offset by a $6.3$0.9 million combined net decrease in term license and support, services and maintenance revenue. APAC revenues increased 33.2%26.2% to $95.4$120.4 million, primarily driven by a 49.2%,37.7%, or $15.2$17.4 million, increase in SaaS revenue, a 24.1%,26.3%, or $6.9$9.3 million, increase in services revenue, and a $1.7$2.5 million combined increase in term license and support andrevenue, partially offset by a $4.2 million decrease in maintenance revenue.

Cost of revenue increased 6.5%31.8% to $82.5$108.8 million for the year ended December 31, 2024,2025, driven primarily by a $3.0$12.2 million increase in aggregated hosting costs resulting from increased SaaS revenue and a $2.3$11.0 million increase in personnel costs resulting from increased SaaS revenue.costs.

Sales and marketing expenses increased 9.6%17.2% to $122.9$144.0 million for the year ended December 31, 2024,2025, primarily driven by a $8.5$17.5 million increase in personnel costs, which included additional headcount and other investments in the business to respond to strong customer demand for our solutions and provide support for future growth. The continued decline in sales and marketing expenses as a percentage of revenue reflects the continuedongoing scaling of the company’s focus onCompany’s channel partnerships and strategiesstrategy as well as ongoingconsistent improvements in overall sales efficiency.

General and administrative expenses increased 13.0%17.1% to $69.2$81.1 million for the year ended December 31, 2024.2025. The increase was primarily driven by a $3.9$7.2 million increase in personnel costscosts, anda $2.4$2.9 million inof new feescosts related to the Company’s investmentsecondary listing on the SGX-ST, and $1.9 million of net costs related to the discontinuation of the Company’s participation in aA3 growthVentures equityFund fund.1, L.P. (the "Fund").

Research and development expenses increased 34.0%8.0% to $48.7$52.6 million for the year ended December 31, 2024,2025, primarily driven by a $10.7$2.2 million increase in personnel costs, which included additional headcount and ongoing investment in the development of new offerings and enhancements to existing offerings.offerings, and a $0.7 million increase in training and development costs.

Income tax expense for the year ended December 31, 20242025 was $4.7$5.4 million as compared to $2.9$4.7 million for the year ended December 31, 2023.2024. The effective tax rate, which equals the income tax provision divided by pretax income (loss) from continuing operations, was 13.3% for the year ended December 31, 2025, compared to (19.4)% for the year ended December 31, 2024, compared to (15.5)% for the year ended December 31, 2023.2024. The change in effective tax rates for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates than 21%, a permanent item recorded for stock-based compensation, GILTI, fair value of earnout liabilityGILTI and changes in the valuation allowance in the U.S. and certain foreign jurisdictions. The amount of the valuation allowance, however, could be reduced in the near term. The exact timing will be based on the level of profitability that we are able to achieve and our visibility into future results. Such a release would increase our effective tax rate in subsequent periods but would not affect cash paid for income taxes.

Non-GAAP operating income and non-GAAP operating margin are non-GAAP financial measures that our management uses to assess our overall performance. We define non-GAAP operating income as GAAP operating income plus the following items: stock-based compensation andcompensation, the amortization of acquired intangible assets.assets, the costs associated with our secondary listing on the SGX-ST, and the costs associated with the discontinuation of our participation in the Fund. We define non-GAAP operating margin as non-GAAP operating income divided by revenue. We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation, which has had historical volatility from period to period due to mark-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results. While the amortization expense of acquired intangible assets is excluded from certain non-GAAP measures, the revenue related to acquired intangible assets is reflected in such measures as those assets contribute to revenue generation. The elimination of the effect of variability caused by stock-based compensation expense and the amortization of acquired intangible assets, both of which are non-cash expenses, and the one-time nature of the costs associated with our secondary listing on the SGX-ST and the net costs associated with the discontinuation of our participation in the Fund, provides a better representation as to the overall operating performance of the company.Company. We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to our peers, (b) to set and approve spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, and (e) to assess financial discipline over operational expenditures.

GAAP operating margin for the years ended December 31, 20242025 and 20232024 was 2.2%7.9% and (5.6)%,2.2%, respectively. Non-GAAP operating margin for the years ended December 31, 20242025 and 20232024 was 14.4%18.9% and 8.1%,14.4%, respectively. The increase in both GAAP and non-GAAP operating marginmargins was primarily attributable to the Company’s enhancedrevenue focusgrowth on(in expensepart managementbenefitting andfrom the continued scaling of the Company’s channel partner strategy.strategy) as well as to the Company’s continued focus on expense management, while GAAP operating margins also improved due to the Company’s ongoing management of stock-based compensation expense, which represented less than 10% of total revenue in the year ended December 31, 2025.

As of December 31, 2024,2025, we had $290.7$481.1 million in cash and cash equivalents, $0.2 million in short-term investmentsequivalents and no outstanding debt.

Our short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. In addition, we extended a credit facility with a remaining commitment of $1.5 million, and committed $50.0 million to a growth equity fund. We also have letters of credit issued in the amount of $1.0 million as security for operating leases, and $4.4$5.4 million as security for customer contingency agreements. In addition, we extended a credit facility with a remaining commitment of $1.5 million, and a committed $50.0 million to the Fund. Our long-term capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, and the timing of new product introductions. Refer to “Note 12 - Commitments and Contingencies” for more information regarding the purchase commitments.

Net cash provided by operating activities for the year ended December 31, 2024,2025, was $88.9$85.3 million, reflecting our net lossincome of $29.1$35.1 million, adjusted for non-cash items of $89.3$60.5 million and net cash inflowsoutflows of $28.8$10.4 million from changes in our operating assets and liabilities. The main considerations for non-cash items were stock-based compensation, which reflects ongoing compensation charges for the entity’s equity- and pre-merger liability-classified awards, operating lease right-of-use asset expense and mark to market adjustments on earnoutdepreciation and warrant liabilities.amortization. The main considerations of changes in operating assets and liabilities that resulted in cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth. This was partially offset by cash outflows related to an increase in deferred contract costs and operating lease liabilities.

Net cash provided by operating activities for the year ended December 31, 2023,2024, was $34.7$88.9 million, reflecting our net loss of $21.5$29.1 million, adjusted for non-cash items of $58.6$89.3 million and net cash outflowsinflows of $2.4$28.8 million from changes in our operating assets and liabilities. The main considerations for non-cash items were stock-based compensation, which reflects ongoing compensation charges for the entity’s equity- and pre-merger liability-classified awards, operating lease right-of-use asset expense and mark to market adjustments on earnout and warrant liabilities. The main considerations of changes in operating assets and liabilities that resulted in cash outflows related to an increase in deferred contract costs and operating lease liabilities. This was partially offset by cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth. This was partially offset by cash outflows related to an increase in deferred contract costs and operating lease liabilities.

Net cash used in investing activities for the year ended December 31, 2023,2025, was $5.6$20.2 mill ion,million, primarily consisting of $3.5$14.9 million paid in thea purchasebusiness of investments, $2.1acquisition, $3.7 million of purchases of property and equipment, $1.4and $1.6 million in software development, and $1.3 million investment in notes, partially offset by $2.6 million in maturities of short-term investments.development.

Net cash usedprovided inby financing activities for the year ended December 31, 2023,2025, was $33.7 $124.0 million, primarily dueconsisting toof $39.0$168.2 million of proceeds from the exercises of warrants and, $17.7 million of proceeds from the exercises of stock options, partially offset by $49.8 million in purchases of common stock,stock partiallyand offset by $5.6$12.1 million ofto proceeds fromrepurchase the exercisingnoncontrolling ofinterest stockin options.MaivenPoint Pte. Ltd.

The Loan Agreement provides for a revolving line of credit of up to $30.0 million, with an additional $20.0 million accordion feature for additional capital we may draw upon at our request. Borrowings under the line bear interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio. The line carries an unused fee at a rate equal to 0.5%. Any proceeds of borrowings under the Loan Agreement will be used for general corporate purposes.

We are obligated under various non-cancelable operating leases for office space.space and other facilities. The initial terms of the leases expire on various dates through 2030.2032. During the years ended December 31, 20242025 and 2023,2024, total rent expense for facilities amounted to $7.2$9.2 million and $6.8$7.2 million, respectively. As of December 31, 2024,2025, letters of credit have been issued in the amount of $1.0 million as security for operating leases. The letters of credit are secured by certificatesa sublimit of deposit and aour line of credit.credit (refer to “Note 9 - Line of Credit” for further details).

For information about recent accounting pronouncements, see “Note 2 to- theSummary consolidatedof financialSignificant statementsAccounting Policies” in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report.

FirstSecond Quarter 2026 Business Highlights

Comparison of Three Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

The components of AvePoint’s revenue during the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Total revenue increased 26.0%22.0% to $117.2$124.5 million for the three months ended MarchJune 31,30, 2026, primarily due to an increase in SaaS revenue, which increased 35.5%27.4% to $93.4$98.5 million,million and represented 80% of total revenue, up from 74% of total revenue in the prior year. The increase in SaaS revenue, which was driven by strong customer demand for our SaaS solutions,solutions. wasSaaS partiallyrepresented offset79% byof antotal expectedrevenue, decreaseup from 76% of total revenue in termthe licenseprior and support revenues.year. The growth in total revenue was also due to an increase in services revenue, which grew 33.0%8.6% to $14.5$15.7 million. Services revenue is expected to fluctuate as the services generally are not recurring in nature.

Revenue by geographic region for the three months ended MarchJune 31,30, 2026 and 2025 was as follows:

Cost of revenue, gross profit, and gross margin during the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Cost of revenue increased 33.4%26.5% to $31.9$33.5 million for the three months ended MarchJune 31,30, 2026, primarily driven by a $3.8$3.5 million increase from higher aggregate hosting costs resulting from increased SaaS revenue and a $3.4$2.7 million increase in personnel costs.

Sales and marketing expenses during the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Sales and marketing expenses increased 21.7%27.3% to $42.0$45.5 million for the three months ended MarchJune 31,30, 2026, primarily driven by a $6.3$7.0 million increase in personnel costs.costs and a $1.3 million increase in marketing spend.

General and administrative expenses during the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

General and administrative expenses decreased 9.6%5.3% to $16.9$18.7 million for the three months ended MarchJune 31,30, 2026, primarily driven by a $1.7$1.3 million decrease in stock-based compensation expense.

Research and development expenses during the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Research and development expenses increased 8.4% 27.8% to $13.8 $16.6 million for the three months ended March 31,June 2026 ,30, 2026, primarily driven by a $0.3$2.6 million increase in personnel costs and a $0.3$0.5 million increase in softwaretraining maintenanceand expense.professional development.

Income tax (benefit) expense during the three months ended MarchJune 31,30, 2026 and 2025 was as follows:

AvePoint’sOur income tax expensebenefit for the three months ended MarchJune 31,30, 2026 was $1.3$15.6 million, as compared to a tax expense of $1.3$4.0 million for the three months ended MarchJune 31,30, 2025. The effective tax rate was 7.8%(129.5)% for the three months ended MarchJune 31,30, 2026, compared to 26.8%57.8% for the three months ended MarchJune 31,30, 2025. The change in effective tax rates was primarily due to the mix of pre-tax income results by jurisdictions taxed at different rates, certainpartial jurisdictions with separate tax expense calculated, impactrelease of U.S. valuation allowance, foreign inclusions and stock-based compensation.

InBased assessingon thean needassessment for a valuation allowance, the Company has consideredof all available positive and negative evidenceevidence, including itsour historical levels of income, expectations of future taxable income, future reversals of existing taxable temporary differencesdifferences, and ongoing taxtax-planning planningstrategies, strategies.management Ifconcluded in the future, the Company determinesthat it iswas more likely than not that these deferred tax assets will notwould be realized,realized. During the three months ended June 30, 2026, the Company mayrecorded set up a valuation allowance, which may result inan income tax benefit of $15.6 million, primarily attributable to a $19.9 million release of the valuation allowance on certain deferred tax assets, partially offset by tax expense associated with stock-based compensation activity and other discrete items. The Company continues to maintain valuation allowances against certain deferred tax assets in theU.S. Company’s condensed consolidated statements of incomestate and condensedforeign consolidated statements of comprehensive income.jurisdictions.

Non-GAAP operating income and non-GAAP operating margin are non-GAAP financial measures that our management uses to assess our overall performance. We define non-GAAP operating income as GAAP operating income plus stock-based compensation and the amortization of acquired intangible assets and expenses related to the secondary listing on the SGX-ST and the discontinuation of the Company'sour participation in the Fund. We define non-GAAP operating margin as non-GAAP operating income divided by revenue. We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation, which has had historical volatility from period to period due to mark-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results. The elimination of the effect of variability caused by stock-based compensation expense and the amortization of acquired intangible assets, both of which are non-cash expenses, provides a better representation as to theour overall operating performance of the Company.performance. We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to our peers, (b) to set and approve spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, and (e) to assess financial discipline over operational expenditures.

GAAP operating margin for the three months ended MarchJune 31,30, 2026 and 2025 was 10.9%8.2% and 3.5%,7.0%, respectively. Non-GAAP operating margin for the three months ended MarchJune 31,30, 2026 and 2025 was 17.5%16.3% and 14.4%,18.4%, respectively. The increaseyear-over-year decrease in non-GAAP operating margin was primarily attributable to theour Company’splan enhancedto focusincrease oninvestments expense management and continued scaling ofacross the Company’sbusiness channelin partner strategy.2026.

As of MarchJune 31,30, 2026, we had $444.1$417.3 million in cash and cash equivalents and no outstanding debt.

Our short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. We have letters of credit issued in the amount of $1.0$1.2 million as security for operating leases, and $5.4 million as security for customer contingency agreements. Our long-term capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, and the timing of new product introductions. See “Note 10 – Commitments and Contingencies” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q for more information regarding the purchase commitments.

We also maintain a loan and security agreement (the “Loan Agreement”), dated November 3, 2023, with HSBC Bank USA, National Association, (“HSBC”), as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may draw upon at our request. The line bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee equal to 0.5%. The line will mature on November 3, 2026. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. Pursuant to the Loan Agreement, we pledged, assigned and granted HSBC a security interest in all shares of our subsidiaries, future proceeds, and assets as security for our obligations under the Loan Agreement. As of MarchJune 31,30, 2026, we are compliant with all covenants and had no borrowings outstanding under the Loan Agreement.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $24.3$40.2 million, reflecting AvePoint’s net income of $15.3$42.8 million, adjusted for non-cash items of $9.9$5.3 million and net cash outflows of $0.9$7.9 million from changes in operating assets and liabilities. The primary drivers of non-cash items were stock-based compensation and was partially offset by foreign currency remeasurement losses.gains. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to the timing of customer invoices and aan decreaseincrease in deferred revenue, offset by an increase in prepaid expenses and other current assets primarily related to prepaid rent,software anmaintenance increaseand in deferred revenue, offset bysubscription, a decrease in accrued expenses primarily due to accrued bonuses, commissions and payroll taxes.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025 was $0.5$20.8 million, reflecting AvePoint’s net income of $3.6$6.5 million, adjusted for non-cash items of $14.0$32.8 million and net cash outflows of $17.1$18.5 million from changes in operating assets and liabilities. The primary driver of non-cash items was stock-based compensation which reflects ongoing compensation and wasforeign partiallycurrency offsetremeasurement by a decrease in the mark to market value of warrant liabilities.losses. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to the timing of customer invoices and a decrease in prepaid expenses and other current assets primarily related to prepaid rent, an increase in deferred revenue, offset by a decrease in accrued expenses primarily due to accrued bonuses, commissions and payroll taxes.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $1.6$3.4 million. It primarily consisted of $1.3$2.5 million of purchases of property and equipment, and $0.4$1.0 million from the capitalization of internal use software.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was $16.9$18.2 million. It primarily consisted of $14.9 million cash paid in business acquisitions, $1.5$2.5 million of purchases of property and equipment, and $0.5$0.8 million from the capitalization of internal use software.