AvePoint (AVPT) risk factors, FY2025 10-K

Other

1. 014. Data loss and interruption, which threaten business continuity and organizational resilience
2. 02Item 7 Key Business Metric
3. 03As of December 31, 2025 and 2024, total ARR was $416.8 million and $327.0 million, respectively, representing growth of 27%. Adjusted for FX, total ARR increased 26% year-over-year
4. 04We generate revenue from four primary sources: SaaS, term license and support, services, and maintenance. We consider SaaS, term license and support, and maintenance revenues to be recurring
5. 05Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue
6. 06General and Administrative
7. 07Other Income (Expense), net
8. 08(in thousands, except percentages)
9. 09$ 419,497 $ 330,482 $ 89,015 26.9 %
10. 10Item 7 Non-GAAP Financial Measures
11. 11Cost of Revenue, Gross Profit, and Gross Margin
12. 12Item 7 Research and Development
13. 13$ 5,381 $ 4,743 $ 638 13.5 %
14. 14Item 7 Non-GAAP Operating Income and Non-GAAP Operating Margin
15. 15As of December 31, 2025, we had $481.1 million in cash and cash equivalents and no outstanding debt
16. 16Item 7 Operating Activities
17. 17Net cash used in investing activities for the year ended December 31, 2025, was $20.2 million, primarily consisting of $14.9 million paid in a business acquisition, $3.7 million of purchases of property and equipment, and $1.6 million in software development
18. 18We maintain a line of credit under the Loan Agreement with HSBC, as lender. See “Note 9 – Line of Credit” in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report
19. 19Operating Segment Information
20. 20Critical Accounting Estimates
21. 21Item 7 Revenue Recognition
22. 22Economic Conditions, Challenges, and Risks
23. 23Recently Issued and Adopted Accounting Pronouncements
24. 24Foreign Currency Exchange Risk
25. 25Opinion on the Financial Statements
26. 26Critical Audit Matter Description
27. 27How the Critical Audit Matter Was Addressed in the Audit
28. 28We evaluated the appropriateness of the Company’s methodology to determine SSP in accordance with ASC 606, Revenue from Contracts with Customers
29. 29Liabilities and stockholders’ equity
30. 30$ 0.15 $ (0.16 ) $ (0.12 )
31. 31Reclassification of warrant liabilities
32. 32Foreign currency translation adjustments
33. 33Common stock issued upon vesting of restricted stock units
34. 34Repurchase and retirement of common stock
35. 35Unrealized loss on available-for-sale securities
36. 36Retirement of common stock
37. 37$ 35,120 $ (29,142 ) $ (21,501 )
38. 38Other investing activities
39. 39Company earn-out shares settled in cash
40. 401. Nature of Business and Organization
41. 41Recently Adopted Accounting Guidance
42. 42Cash and Cash Equivalents
43. 43Property and equipment are stated at cost and depreciated on a straight-line basis over the shorter of their estimated useful lives or related contract terms beginning in the year the asset was placed into service
44. 44Normal repair and maintenance costs are expensed as incurred. We write off depreciated assets that are no longer in service
45. 45Goodwill represents the excess of the fair value of consideration transferred over the fair value of net identifiable assets acquired
46. 46Software Development Costs
47. 47We derive revenue from four primary sources: SaaS, term license and support, services, and maintenance
48. 48Term license revenue recognized at point in time was $26.5 million, $27.3 million and $31.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The remaining revenue amount is recognized over time
49. 49recognition of revenue when, or as, the contractual performance obligations are satisfied
50. 50Notes to Consolidated Financial Statements (continued)
51. 51Channel Partner as Customer
52. 52Total deferred revenue as of December 31, 2024 was $153.3 million, of which $144.7 million was recognized as revenues for the year ended December 31, 2025
53. 53No customer accounted for more than 10% of revenue for the years ended December 31, 2025, 2024 and 2023, and no customer accounted for more than 10% of accounts receivable as of December 31, 2025 and 2024
54. 54We recognized the tax expense related to Global Intangible Low-Taxed Income (“GILTI”) as a period expense in the period the tax is incurred
55. 55Treasury Stock Retirement
56. 56Recently issued accounting pronouncements not yet effective
57. 57The acquisition-related costs incurred by the Company totaled $1.3 million, of which $0.5 million was incurred during the year ended December 31, 2025. These costs are recognized as an expense in the general and administrative item in the consolidated statements of income (loss)
58. 58The goodwill, which is generally not tax-deductible, is attributed to intangible assets that do not qualify for separate recognition, including the assembled workforce of the acquired business and the synergies expected to arise as a result of the acquisition
59. 59Mandatorily Redeemable Noncontrolling Interest
60. 60Intangible assets consist of acquired intangible assets and internally-developed software
61. 61Amortization expense for intangible assets was $3.2 million, $2.5 million, and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively
62. 626. Accounts Receivable, Net
63. 637. Property and Equipment, Net
64. 648. Accrued Expenses and Other Current Liabilities
65. 65$ 40,501 $ (24,399 ) $ (18,614 )
66. 66During the year ended December 31, 2025, state taxes in District of Columbia and New York City comprised greater than 50% of the tax effect in this category
67. 67Foreign-derived intangible income deduction
68. 68During the year ended December 31, 2025 and 2024, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $9.7 million and $8.7 million, respectively
69. 69(1) Includes the current portion of operating lease liabilities of $7.5 million, which is reflected in accrued expenses and other current liabilities in the consolidated balance sheets
70. 70In February 2024, the Company committed to contribute $50.0 million to the Fund. Refer to “Note 15 — Growth Equity Fund” for more information
71. 71During the year ended December 31, 2023, an $11.1 million increase in liability was recognized and included as other income (expense), net in the consolidated statements of income (loss)
72. 72On July 1, 2021, the Company granted 405,000 private placement warrants with a 5-year term and exercise price of $11.50. Management has determined that the private placement warrants are to be classified as liabilities to be marked to market at each reporting period
73. 73100% of the remaining Sponsor Earn-Out Shares that have not previously vested shall vest and be released if at any time through July 1, 2028, the Company consummates a subsequent transaction
74. 74Public Warrants to Acquire Common Stock
75. 75There were no put options held by MaivenPoint’s remaining noncontrolling interest shareholders, and therefore, there was no redeemable noncontrolling interest in MaivenPoint as of December 31, 2024
76. 76As of December 31, 2025, no portion of the Company’s $50.0 million commitment has been called or was callable
77. 7716. Stock-Based Compensation
78. 78The weighted-average grant date fair value of options granted in the years ended December 31, 2025, 2024 and 2023 was $8.34, $4.26 and $2.49, respectively
79. 79As of December 31, 2025, there was $3.6 million in unrecognized compensation costs related to all non-vested options. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 2.5 years
80. 80The total fair value of shares vested during the years ended December 31, 2025, 2024 and 2023 was $75.7 million, $51.3 million and $18.9 million, respectively
81. 8117. Fair Value Measurements
82. 82$ — $ 195,380 $ — $ 195,380
83. 83Mandatorily redeemable noncontrolling interest (2)
84. 84$ — $ 187,106 $ 3,938 $ 191,044
85. 85(2) The fair value of mandatorily redeemable noncontrolling interest is based on discounted redemption value using risk-free rates offered for similar financing with the same remaining maturities
86. 86$ 419,497 $ 330,482 $ 271,825
87. 8719. Other Income (Expense), net
88. 8820. Net Income (Loss) Per Share
89. 89Net income (loss) per share available to common stockholders, excluding sponsor earn-out stockholders
90. 9021. Related Party Transactions
91. 91Evaluation of Disclosure Controls and Procedures
92. 92Management’s Report on Internal Control over Financial Reporting
93. 93Changes in Internal Control over Financial Reporting
94. 94Opinion on Internal Control over Financial Reporting
95. 95Definition and Limitations of Internal Control over Financial Reporting
96. 96ITEM 9B. OTHER INFORMATION
97. 97ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
98. 98ITEM 11. EXECUTIVE COMPENSATION
99. 99ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
100. 100Financial Statements and Schedules
101. 101Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101). X