Intapp (NASDAQ:INTA) shares fell sharply after its Q2 FY2025 earnings results. These results were pretty strong, but the stock still fell over 15% since then. Here’s what you need to know:
Intapp reported $80 million in SaaS revenue, which grew to $80 million. Cloud ARR also grew 29% to $331.1 million, though GAAP net losses widened to $10.2 million. Non-GAAP profitability improved to $0.21 EPS, but the lingering GAAP losses have still spooked investors.
Moreover, Q3 revenue guidance of $128.3 billion to $129.3 million met expectations, but the lack of a significant upward revision after a strong quarter has also disappointed some investors. Full-year EPS guidance at $0.83 to $0.87 also aligned with guidance but wasn’t revised up.
Such a huge decline for guidance not being revised up may look like an overreaction but you should remember that INTA stock still trades with a forward earnings multiple of 83. The expectations baked in here mean analysts expect exceptional performance. Similarly, Nvidia (NASDAQ:NVDA) would probably have a bad time if it just met expectations and didn’t accelerate its momentum.
For now, INTA stock likely isn’t undervalued. The current price implies some 15% upside potential vs. consensus price targets, but we could see more price target cuts due to the guidance disappointments.
Profitability is still unlikely before FY2026 and Cloud ARR growth has slowed slightly from 31% year-over-year in Q1 to 29% in Q2. Operating cash flow has doubled year-over-year to $49.7 million on a six-month basis and non-GAAP margins expanded to 76% vs. 73% year-over-year. Regardless, investors want clearer paths to GAAP breakeven.
It might not yet be time to buy INTA stock.