Participants

David Trone; Senior Vice President, Investor Relations; Intapp Inc

John Hall; Chairman of the Board, Chief Executive Officer; Intapp Inc

David Morton; Chief Financial Officer; Intapp Inc

Alexei Gogolev; Analyst; JPMorgan Chase & Co

Matthew Kikkert; Analyst; Stifel Financial Corp

John Kloecker; Analyst; Raymond James

Bobby Dion; Analyst; Truist Securitites

George Kurosawa; Analyst; Citi

Brian Schwartz; Analyst; Oppenheimer & Co Inc

Koji Ikeda; Analyst; Bank of America

Presentation

Operator

Hello everyone and welcome to the Intapp fiscal third-quarter 2025 webcast. (Operator Instructions) Please be advised that today's conference is being recorded.
Now, it's my pleasure to turn the call over to the Senior Vice President of Investor Relations, David Trone. The floor is yours.

David Trone

Thank you. Welcome to Intapp's fiscal third-quarter 2025 financial results. On the call with me today are John Hall, Chairman and CEO of Intapp; and David Morton, Chief Financial Officer.
During the course of this conference call, we may make forward-looking statements regarding trends, strategies, and the anticipated performance of our business, including guidance provided for our fiscal fourth quarter and full year 2025.
These forward-looking statements are based on management's current views and expectations. Certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Intapp disclaims any obligation to update or revise any forward-looking statements except as required by law.
Further on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP diluted net income per share, and free cash flow. As a reminder, all of our financial figures we will discuss today are non-GAAP except for revenue and revenue growth, cash and cash equivalents, and total remaining performance obligations.
Our GAAP financial results, along with reconciliations of GAAP to non-GAAP financial measures, can be found in today's earnings release and its supplemental financial tables, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC prior to this call, or a supplemental financial presentation, which is available on our website.
With that, I'll hand the conversation over to John.

Story Continues

John Hall

Thank you, David. Good afternoon, everyone. Thank you for joining us today as we share the results of our fiscal third quarter. I'm happy to say that once again, we've achieved strong quarterly results driven by the launch of new solutions and AI capabilities, an exciting new acquisition, new partnerships, and an expanding client base around the world.
In Q3, our cloud ARR grew to $352 million, up 28% year over year. Cloud now represents 77% of our total ARR of $455 million. In the quarter, we earned SaaS revenue of $85 million up 28% year over year. And total revenue of $129 million, up 17% year over year.
Now, I'd like to share some key innovations and growth drivers from our fiscal third quarter. In February, we hosted our premier product event, Intapp Amplify in New York, which was attended by leaders from more than 400 of our client firms. We previewed our latest advancements in alignment with our growth AI strategy, and we demonstrated our ongoing commitment to tailored innovation.
First, we announced the general availability of Intapp DealCloud Activator, a research-backed, AI-enabled growth platform that gives professionals the tools, insights, and coaching they need to build, scale, and apply the most successful business development behaviors.
We've previewed our transformed Intapp time product scheduled for release this summer. The new Intapp time uses generative AI and a modernized user experience to make timekeeping faster and easier for professionals. Complete and accurate time entries help firms grow and better realize revenue, while making clients happier by reducing errors and non-compliant billing.
We introduced Intapp walls for AI, which offers protection against the oversharing of confidential data by AI tools, letting firms constantly deploy AI no matter the provider.
We also added three new features to Intapp Assist for DealCloud. First is an origination capability that uses applied AI to deliver search results based on users' investment criteria and preferences, helping to uncover more opportunities faster than ever before.
Next is a smart tagging capability that further automates data capture and enhances organization, ensuring that firm intelligence, like client activity, deal status, and prospective opportunities is easy to find, understand, and use. And we delivered a prompt studio feature that helps investors, advisors tailor their AI to generate highly personalized insights specific to their role, giving them even better performing AI for their unique investment and client strategies in pursuit of growth.
Zach Polley, an associate at Alterna Equity Partners, told us, in-tap assist enables us to include more information on intermediaries and target companies. With smart tagging and AI suggestions, information is inputted faster than ever with 100% accuracy, allowing us to include more and get more done in a shorter timeframe. Following the success and client response to Intapp Amplify in New York, we're looking forward to bringing the event to London this May as well.
We're also pleased to be continuing our success in real assets. A key win from this quarter is with the large US-based real assets firm. They recently replaced a legacy horizontal CRM with DealCloud to access better investor relationship data and accelerate fundraising as they establish new investment lines. We're continuing to grow and enhance our real assets offering through the strategic acquisition of TermSheet, a software provider for real estate teams.
Bringing together DealCloud and TermSheet adds additional capabilities and expands our ability to serve new personas within real assets. Combined, DealCloud and TermSheet will deliver a powerful operating system tailored for every aspect of the real assets investment lifecycle.
One of our clients told us that this strategic move differentiates Intapp from more narrow tail management solutions, validating that we've chosen a partner who will innovate to help us grow. We're pleased to welcome the TermSheet team to Intapp, further building our unparalleled team of industry experts.
Our partner ecosystem also continues to be an important cornerstone of our company's strategy. We're continuing to achieve strong growth, signing eight new partners this quarter and bringing our partner ecosystem to more than 140. New partners span technology integration, services, data, and software companies, including Infobode, a research news and insights platform for the real estate industry; and Subscribe, a provider of complementary investor onboarding capabilities.
Additionally, in March, we co-hosted our third annual CIO Leadership Summit with Microsoft for a group of select legal, accounting, and consulting CIOs. Held at Microsoft's Redmond campus, the summit focused on driving innovation and accelerating productivity through AI and cloud technologies. It also highlighted the power of our partnership, including the many key integrations that enable operational transformation and enhanced collaboration.
Okay, I'll turn now to Q3 wins, both new clients and expansions, as well as cloud migrations. First, I'm pleased to share that we're continuing to grow through the addition of new clients. Here are a few examples from the quarter.
New Forests, a global investment manager of nature-based real assets and natural capital strategies, chose DealCloud to streamline its reporting and communications and to better track investors and fundraising for a more tailored approach to relationship management. Next, Omnes Capital, a private equity firm dedicated to energy transition, replaced a legacy horizontal CRM with a DealCloud to increase adoption and better manage investor relations and communications.
Next, Australian law firm, Gatins, chose Intapp Intake and Intapp Conflicts to improve compliance with new anti-money laundering and counter-terrorism financing regulations. And next, a global law firm based in Europe, selected Intapp Conflicts, Intake, and Terms to support its strategic growth with improved data quality and streamlined processes for regulatory adherence.
This quarter, we also continued to see a keen focus on independence in accounting, with first choosing in-tap employee compliance to replace homegrown or legacy solutions and manual processes. These include Crow, a top 20 US based accounting firm; and Cowen & Company, a top 50 accounting firm. As well as this quarter, upselling and cross-selling success in our existing accounts continue to drive strong cloud net revenue retention. I'll share some notable examples.
First, existing client, D&B, Norway's largest financial services group and bank, increased its number of DealCloud seats after acquiring Carnegie Bank and standardizing on our platform. Next, a US-based global alternative investment firm added additional DealCloud seats to bring all Deal Teams onto the same platform and create one central point of information.
Next, an AMLA 200 client focused on M&A transactions replaced its legacy horizontal CRM with DealCloud. This furthers their goal of creating a legal ecosystem in the cloud along with Intapp Time, Conflicts, Intake, Terms, and Walls.
And next, Accordion, a private equity focused consulting firm that I mentioned in the past when they purchased DealCloud, added Intapp Conflicts to help them bring on new business without conflicts of interest among their clients and PE investors.
Finally, we continue to help more legal clients, including Fennimore, Blazer-Wile, Jackson Lewis, and Smith Gambrell migrate Intapp Time to the cloud. Once implemented, they'll have access to a more modern web client, new AI features, and continuous innovation, including the new Intapp Time announced at Amplify.
In conclusion, we're proud of our strong third quarter performance, and we continue to be optimistic about our growth opportunities. As our Q3 performance has shown, we are growing by adding new capabilities and increasing our global enterprise go-to-market reach. We see continued opportunity to add new clients across a broad TAM and to deliver greater value. by expanding our existing client base.
We're serving a durable end market with our subscription revenue model, industry specific cloud platform, and applied AI and compliance capabilities. We have a great growth opportunity to drive AI, cloud adoption, and modernization across all the industries we serve. As always, I'd like to thank our clients, our partners, our investors, our board, and our global Intapp team for their teamwork and dedication. Thank you all very much.
Okay, David, over to you.

David Morton

Thank you, John, and thanks to everyone for joining us today. A special thank you as well to those who turned into our Amplify keynote in February to hear about Intapp's latest product advancements and roadmap strategy across our vertical specific solutions. As a product-led growth company, our rate of pace of innovation over the past year has been exceptional.
With that, I am pleased to report a solid third quarter performance. The durability of our cloud business was evident in Q3 driven by progress with large accounts across verticals and geographies, as well as success in transitioning client spend to the cloud. We also continue to demonstrate improving efficiencies and leverage within the model. We are confident in our ability to deliver profitable growth, as we close out fiscal 2025 and enter fiscal 2026, well positioned to capitalize on the positive digitalization and cloud native trends in front of us.
Let's begin with fiscal Q3 results. SaaS revenue was $84.9 million, up 28% year over year, driven by new client acquisitions, contract expansions, and the migration of on-premise products to the cloud. As of March 31, 93% of our clients have at least one cloud module, up one point sequentially.
License revenue was $31.7 million in fiscal Q3, up 2% year over year. Positive contributions continue to be on-prem price increases and contract expansions and renewals. And these were largely offset this quarter by our steady pace migrating clients to the cloud and onto our SaaS offerings.
Professional services revenue totaled $12.5 million, down 6% year over year. The strategic decision to outsource more activities to the partners has allowed us to place greater emphasis on enhancing client satisfaction and driving cost of pipeline generation, supporting our long-term cloud growth objectives.
Total revenue was $129.1 million, up 17% year to year, driven primarily by sales of our cloud solutions. Revenue from our international operations accounted for over third of our total revenue this quarter and continues to provide growth opportunities. International revenue grew 20% year over year in Q3.
We kicked off our calendar 2025 with noteworthy execution on our acquisition and partnership growth strategies. First, as John mentioned earlier, the acquisition of term sheet marks an important next step in deepening our expertise and real assets, building on strong organic momentum including multiple new logo wins this quarter. This combination will broaden our capabilities to fully serve real estate teams across their investment life cycles and personas.
With this acquisition, we continue to reinforce the core tenets of our ecosystem expansion track record, strengthening the breadth and depth of our vertical specific offerings and delivering long-term value to our end markets. On that note, our broader alliances and partner ecosystem saw progress this quarter with the newly signed [Infoboad], a real estate data partner, complimentary to our term sheet acquisition, our partner network grew to over 140 in Q3.
Our [COCEL] motion continues to build the client pipeline, drive wins, and strengthen retention as a long-term growth leader. We are optimistic about our investment in and the increasing impact of Intapp's enhanced partner program to strengthen our capabilities across deal generation, technology, data, and implementation. As partner certifications have increased 75% year over year, we're on a strong pace for our partner ecosystem and platform to become more of a material contribution to fiscal 2026 demand generation and greater assistance on revenue realization.
As we continue to focus on our margin and operational efficiencies, Q3 non-GAAP gross margin was 77.9% up from 75.1% in the prior year period, reflecting continued progress toward breakeven professional services gross margins and reducing the relative top line contribution from that business.
Non-GAAP operating expenses totaled $80.3 million compared to $71.9 million in the prior year period, reflecting our continued investment and our product-led growth. Non-GAAP operating income was $20.3 million as compared to $11.2 million in the prior year period.
Non-GAAP diluted EPS was $0.26 in the third quarter of fiscal 2025 as compared to $0.14 in the prior year period.
Free cash flow, which is defined as our cash flow from operations less capital expenditures was $35.1 million for the third quarter or 27% of total revenue. We exited the quarter with $323.2 million of cash and cash equivalents.
Turning to our key metrics, cloud ARR was up 28% year over year, while total ARR was up 19% year over year. Total remaining performance obligations were $621.5 million, up 33% year to year. We remain committed to executing our land and expand go-to-market model, which yielded a quarter-end 748 clients with annual recurring revenue of at least $100,000, up from 673 in the previous year, our $100,000 plus ARR clients now comprise 28% of our total clients of over 2,650.
Our 119% cloud net revenue retention rate in Q3 highlights the consistency with which we retain and steadily grow business with existing cloud clients.
Now turning to our outlook, for the fourth quarter of fiscal 2025, we expect fast revenue of between $89 million and $90 million. As these are newly provided revenue outlook metrics, we are also providing the implied year-to-year growth outlook between 26% and 27%.
Total revenue in the range of $131.5 million and 132.5 million. Non-GAAP operating income in the range of $20 million and $21 million. And non-GAAP EPS results of $0.22 to $0.24, using a diluted share count weighted for the quarter of approximately 85 million common shares outstanding.
For the full fiscal 2025, we expect SASS revenue of between $330.8 million and $331.8 million. As these are newly provided revenue outlook metrics, we also provide the implied year-over-year growth outlook of 28%.
Total revenue in the range of $500.6 million and $501.6 million. We also expect non-GAAP operating income in the range of $74.3 million and $75.3 million. And non-GAAP EPS in the range of 88 to 90 cents used in a diluted share count weighted for the fiscal year 2025 of approximately 84 million common shares outstanding.
Thank you. And I'll now turn the call back to the operator.

Question and Answer Session

Operator

(Operator Instructions) Alexei Gogolev, JP Morgan.

Alexei Gogolev

Hello, everyone, John, first question for you. For a while you've highlighted that much of your business is acyclic. Can you talk about various indicators of that in your recent client conversations? And how much does deal activity drive growth of your business?

John Hall

Sure, thanks, Alexei. As you know, we bootstrapped the company all the way to IPO, serving this traditionally underserved and market specific platform. The law firms, the accounting firms, the consulting firms, the investment banks, the private capital firms have a pretty steady demand to move to the cloud and to adopt AI that fuels the company's consistent growth.
The indicators that we watch, obviously pipeline; we watch sales cycle; we watch the overall deployment time that helps folks to get to the next stage where they can expand further the platform for us; the macro discussion that's going on around tariffs and everything; obviously all the firms are talking about, we have not seen indications in their operational digitalization move that's affected them. It's been very consistent demand through this period.
And we've had that experience through previous economic cycles. We grew right through the 2008 recession and right through COVID. So overall, I think that the fundamental driver here is the need for these firms to catch up with the rest of the industries to finally get to the cloud and they have an unusual opportunity to take advantage of AI given the type of work that they do.

Alexei Gogolev

Great, thank you, John. And Dave, a quick question for you about international revenue. All the growth and constant currency, please.

David Morton

Yes, primarily USD. So it's it's almost one and the same.

Alexei Gogolev

Okay, thank you.

Operator

Parker Lane, Stifel.

Matthew Kikkert

Hello, this is Matthew Kikkert for Parker. Thank you for taking my questions. So first, last quarter you talked about solid traction, selling the DealCloud into the legal vertical. Would you just talk a little bit about if you saw any continuation of that activity there this quarter and the pipeline around that specific motion?

John Hall

Thanks, Matthew. Yes, we are excited about what's happening with bringing DealCloud to legal as we are with the other industries as well. This was a question that the investors had when we came public and we've been highlighting firms that have been taking up DealCloud in legal specifically to help answer that question.
There's a lot of enthusiasm in these firms, particularly the large multi-practice firms talking specifically about legal, who are looking to grow by winning new clients, but also through cross-selling their services into their existing client base. There's also an underlying trend in legal, where the firms grow through, what they call, lateral hiring. They bring in law firm partners from other firms and with them a group of clients.
And a lot of the objective there is to bring that person's expertise into their existing client base or vice versa, bring the firm's variety of expertise into clients they bring with them. So that all drives an interest in a much more industry specific business development approach and DealCloud is purpose built for that style of business development.
So there's a lot of demand, and in fact, replacing of legacy horizontal CRM systems that don't understand how these professionals actually go to market through their network.

Matthew Kikkert

Okay, got it. And then secondly, with the company leaning more into AI recently, how should we think about level of incremental spend related to those features as it relates to your marketing expansion targets over the next, you know, two to three years?

John Hall

Well, I think the overall point we would make is that we are doing applied AI. So we are not building data centers or running models that would drive a lot of CapEx or other expense if you can add some color here. But the opportunity for us is to take this next generation of AI technologies and apply them to specific applications based on our years of experience and expertise in this market where we can really help the firms achieve the value potential inherent in this generation of technology.
We've done that through several generations of technology. And so that's why you hear us talking about intelligence applied in the brand overall and applied AI, consistent part of our story.
And the firms really appreciate that, because the general purpose systems, as exciting as they are, need some real attention in order for these firms to adopt specific applications that fit with their workflows, their personas, and the compliance needs in particular that these special firms have in the way that they use AI.

Matthew Kikkert

Terrific, thank you.

Operator

Alex Sklar, Raymond James.

John Kloecker

Hi, thank you. This is John Kloecker on for Alex this evening. So I wanted to touch on the Amplify product launch event. There's some really interesting new functionality there, particularly with the Intapp Assist use cases. Just hoping what can you tell us about the event in terms of demand gen? Is there any quantification in terms of pipeline build or customers re-engaged after that? I know you gave the 400 customers attending count, but is there any way you could give us any quantifiable sense for that?

John Hall

Thanks, John. We were very excited about the way that Intapp Amplify came together. This was our second year of doing an event in New York in February since COVID. And we had tremendous turnout, both in person and online. We launched a range of new capabilities across the platform. We talked about some of them in the prepared remarks there.
Your question about the Intapp Assist specifically, one of the things we highlighted with Intapp Assist was our new origination capability. So this is AI that helps firms who are seeking out, either new investors or new investment opportunities or new clients to use AI to pattern match opportunities that look a lot like the types of that they want to pursue and they've had success with in the past. And the reception has been fantastic.
We've had a lot of enthusiasm from the folks that were there, but also across our client base, because we've gone out with the Intapp Amplify story and all of the content of it and been meeting with clients around the world. We're also going to do a second edition of Intapp Amplify this year in London in May. So that whole program continues.
The pipeline has had a strong response. It wasn't simply what you asked about with Intapp Assist, but one of the things that we really saw incredible response was the next generation of their Intapp Time product, which is very well taken up in the marketplace. And now we're able to bring this next generation of AI and cloud capabilities into Intapp Time. And there was a line out the door at Amplify for folks to see demos and talk to us about taking that next step.
And then we highlighted several of the law firms that have successfully moved from on-prem to the cloud and are very excited about the opportunity to take up this new AI driven Intapp Time. So several things came out of the Amplify and it's part of our overall program as Dave mentioned, increased product R&D that is bringing more and more applied AI applications out of clients.

John Kloecker

Great, thank you.

Operator

Terry Tillman, Truist Securities.

Bobby Dion

Great, thanks for taking the questions. This is Bobby Dion for Terry. Just a couple on TermSheet. Firstly, can you expand on how the acquisition enhances your vertical strategy in real assets? And what is early feedback from clients and prospects look like since the announcement? And then add one follow-up. Thank you.

John Hall

Thanks, Bobby. We're very excited about joining forces with the TermSheet team. First of all, it's a tremendously expert group of people that really know the real assets, industry and the software needs of the real assets industry to incredible depth. And that's always been a theme of our company is to bring the world's experts in each of these industries and their business operations and what makes them unique.
So the team there is fantastic. They have developed some technologies that are really incredible that expand DealCloud's capabilities to serve additional personas in the real assets industry.
As you all may recall, we announced our expansion into real assets a little over a year ago at the New York event in February in 2024. We had been led into that industry because our multi-strategy asset manager clients wanted to use DealCloud across all of the asset classes that they invested, both for fundraising and raising new funds, as well as deploying capital and managing assets over their life.
And we had made some important developments in DealCloud, like mapping technologies and some of the geographic information system integrations in order to enable those asset managers to do that. And as we did that, we found that we were in a better and better position serve the broader community of real asset investors, the whole asset class, both investors, advisors, as well as operators.
The TermSheet team brings us technology to serve even more of those roles inside the real assets industry, which is very parallel. It's traditionally underserved. They have a unusual operating model that is not well suited to the traditional horizontal CRM's. And a lot of the technology that we're bringing from TermSheet is going to allow us to penetrate further and further into that market.
So it's a really exciting opportunity for us and it's a big industry that that means cloud and AI technology and has not been able to succeed with that from the traditional horizontal systems historically.

Bobby Dion

Great, I appreciate the color. Just secondly, I'm curious what are the key integration milestones for the Unified Solution with TermSheet? And when should we expect initial go-to-market activity or financial contribution? Thank you very much.

John Hall

Thank you. Yes, we're already in the integration program. The teams are working together. We had a summit last week in New York. I was there for our Board meeting and we got to meet some of the team members. It's an exciting group that has a lot of energy to go win this market.
Some of the integration milestones have to do with bringing together the brands, bringing together the product for the clients and real assets. As I mentioned in the script, we have some really positive feedback from firms who had looked at term sheet and looked at DealCloud and said this was a great move for Intapp to make and it validated their choice for us as an overall platform for their business. And we're getting a lot of encouragement from the clients to bring the products together as fast as we can. So we're excited about where this is going.

Bobby Dion

Thank you.

Operator

George Kurosawa, Citi.

George Kurosawa

Hi, I'm for Steven Enders. Thanks for taking the questions. I'm looking across the metrics for the quarter. I did notice calculated buildings came in a little below our estimate. There can be a lumpy metrics. Anything one time in nature or timing related that we should keep in mind when we're interpreting that metric?

John Hall

Yeah, we've always narrated, because of the noise, not only in billings and in some of the DR and so forth, just because of our fixed fee models with our partner ecosystem, we look more to our remaining performance obligation to give you kind of the forward leading indicators, which was very nice.
but coming off the the billings itself, you also have to remember we're coming off high in FQ2, so there's going to be not only seasonality coming off of that, as well as some timing. So there's nothing else to narrate on that specifically.

George Kurosawa

Okay, that's helpful. And then I guess a little related. I know I'm a quarter early here, but I did want to ask about, you know, if there's any kind of color you can give us early view into FY26, and we're trying to triangulate our models between RPO growth, ARR growth, billings growth. And then I guess on the margin side, whether you're thinking about FY26 is more of a margin harvesting year or more of an investment year? Thank you.

David Morton

Well, we'll always continue to invest so and will continue to drive leverage in our model as well. But it'd be far too early and probably not prudent for us to articulate anything as we get into '26 at this point in time.
With that said, we continue to work very hard on building up our demand gen. We continue to drive pipe across all of our leading platform of offerings. We like how that continues to develop, not only for this interquarter, but then also for the back half of the year.
And so as you've seen our continued investment, not only in the go-to-market, but also in our product and engineering, you've seen with the advancement of our new product offerings with Amplify that John narrated on, and you continue to also hear us talk about our partner ecosystem, which continues to drive COCEL motions on that as well. So we like where things are being positioned, we think it's a good setup, but as far as quantifying anything heading into '26 and be far too early for us to do that at that.

George Kurosawa

Fair enough. Appreciate the color and thanks for taking the questions.

Operator

Brian Schwartz, Oppenheimer.

Brian Schwartz

Yeah, hi. Thanks for taking my questions this afternoon. John, wanted to see if you could just give us an update in terms of the arc of improvements you're seeing from the sales reorganization that you did at the beginning of the year to target large accounts. I'm just wondering if you're starting to see some of the fruits from those changes you made at the beginning of the year or if that's still on the come for the business? And then I have a follow-up for David.

John Hall

Thanks, Brian. Yes, we did make an adjustment to the sales organization at the beginning of the fiscal year to move more resources to the larger end of our market, which we call enterprise accounts versus our mid-market accounts. 70% of our TAM is in firms of that class. And there's a tremendous opportunity for us both to win new clients and to expand within our existing clients. And the team has done an excellent job of getting out and covering even deeper the accounts at that end of the market.
We've also had some very good success with a lot of the technology investment that we've made over the past couple years to do things around scalability and interoperability and security and compliance for firms of that class. Obviously, larger deals, high six-figure, seven-figure deals are slower from a fill cycle process, but they also pay off when they land.
So we're seeing a very strong pipeline there, and I'm excited about the move that we made. It was well executed, and a lot of the team has developed pipeline there that's really in great shape. So it's an exciting time for us in that.

Brian Schwartz

Thanks, John. And then the follow-up questions just on the model I have for David. One on the near term, just on the revenue guide in 4Q, what are you expecting from TermSheet? And then as we think about calibrating our model, can you give us any directional advice on how you think stock-based compensation should trend? It's just kind of varied as a percentage of revenue over the last two years. Just wondering anything that you could help us directionally with the model for fiscal '26. Thanks for taking my questions this afternoon.

David Morton

Yeah, no, for sure. Term sheet for FQ4 is going to be very immaterial contribution. We can talk more about the contribution specifically for FY26, our next earnings call. Then as far as SBC, that will continue to trend down as a percentage of revenue. And so you should continue to see that stair step down as it did this quarter.

Brian Schwartz

Thank you.

Operator

Koji Ikeda, Bank of America.

Koji Ikeda

Yeah, hey guys. Thanks so much for taking the questions. A couple from me here. I wanted to ask a question on staff's revenue. And so when I look at the performance in the quarter, it looks like it came in slightly below the high end of the guide.
And when I look at the last three quarters, the three quarters that you've given this guide, you beat the high end once and you were below the high end twice. And so, just kind of wondering how we should be thinking about the performance of SaaS revenue, the visibility in SaaS revenue, and how we should be thinking about upside potential in this line item going forward?

John Hall

Yeah, I think a lot of that, Koji, just gets into when the deals have been exercised, not only signed, but then provided for. And so that gets into the timing of the quarter. And so anytime you come in with that level, I mean, obviously the visibility, it comes into a month, one month to execution and revenue yield.
And so yeah, we that that range is very narrow. And obviously, there's pros and cons, pros and -- puts and takes as to how we can overachieve that on any given point in time. So that's kind of the prudence we put into it. You know, obviously we're trying to execute even more to get even more upside off of that. But you know, it's always going to be within that envelope. Hopefully that answers your question on that. Yeah.

Koji Ikeda

No, that's super helpful and maybe a follow up here. I wanted to ask about how your customer conversations are going broadly in the uncertain macro environment, maybe split between professional services and financial services. Take it from that view, even if you could, you could get more granular if you like. If you want to talk specifically about law firms versus consulting versus investment banking versus private equity, I mean, any sort of deeper granularity in the demand environment would be greatly appreciated. Thank you.

John Hall

Sure, Koji. Thank you for the question. The private capital investment community pays our bill out of their management fee rather than out of any particular deal transaction fee. So we have a very stable and growing demand from those firms as they're trying to modernize their operation, compete with each other, adopt AI, pursue origination opportunities in the marketplace and very steady pipeline build from those firms, both new clients and expansion.
I mentioned a few examples on the call, specifically to emphasize that firms standardize on DealCloud when they put it in, they start with one group and expand over time. And that's so that they can continue to raise funds and deploy funds. consistently and get the insights across all of that activity for the benefit of the management team and their overall firm strategy and fund strategy.
On the advisor side, looking at accounting, consulting, the financial advisors like investment banks, and then the legal firms, they have had a very steady pull to digitalize their operation because they have not succeeded with the traditional horizontal systems. So I gave several examples and tried to do it each quarter of us replacing very well known horizontal CRM systems because we have the purpose built platform that's getting more and more traction and credibility across even the very largest firms in the enterprise class.
So I think it's an exciting vertical industry cloud category creation situation that we're in where we're really following the example of pioneers like Viva for each of their industry, those firms industries to bring the next generation cloud and AI platform to these folks. We have said over the years that if there's any of our end markets that's more sensitive to the cycle, it might be the investment bankers themselves, but we've had some very good and large wins.
I gave an example with D&B in Norway where they actually did an acquisition and standardized on cloud -- across the whole firm as part of that. And that's really the awesome situation where people have really said, is the platform for our future.
And so I think that's where we are at an important time in the overall industries move to be more cloud-based in their technology and more AI enabled, and also compliant. A really important part of our overall story is the fact that our platform is built to be compliant with the unique requirements, both ethical, professional, and statutory regulatory for this industry. And it really sets our overall platform apart.
So we've grown the company through direct client funding for all these years because we actually understand the idiosyncrasies of how this very large underserved industry works. And that's what's driving our business.

Koji Ikeda

Thank you.

Operator

Thank you. And this concludes our Q&A session. And I will turn it back to John Hall for final comments.

John Hall

Okay, well thanks everyone. We appreciate your attention and your questions. We have a great Q3 behind us and we're very excited about our continued momentum in fiscal '25. Thanks again for your time today and we look forward to talking to you next quarter.

Operator

Thank you, and with that, we conclude our program for today. We thank you for participating and you may now disconnect.

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