管理層發言
Hello, everyone, and welcome to the Intapp Third Quarter Fiscal 2026 Earnings Webcast. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to Senior Vice President, Investor Relations, David Trone. The floor is yours.
Thank you. Welcome to Intapp's Fiscal Third Quarter 2026 Financial Results. On the call with me today are John Hall, Chairman and CEO, 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 2026. These forward-looking statements are based on management's current views and expectations, entail 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. 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.
Thanks, David. Good afternoon, everyone. Thank you for joining us. Q3 was a strong quarter, one that reflects both the health of our core business and the momentum building behind where Intapp is headed. Today, I'll share our Q3 results, reflect on what we put in motion at Investor Day at Amplify in February and walk through the client wins and early signals that speak to the opportunity ahead. First, the numbers. We achieved solid quarterly results in Q3, supported by the addition of new clients and the expansion of client accounts around the world. Our cloud ARR grew to $459 million, up 31% year-over-year. Cloud now represents 82% of our total ARR of $560 million. In the quarter, we earned SaaS revenue of nearly $108 million, up 27% year-over-year and total revenue of $146 million, up 13% year-over-year. February was a significant month for Intapp. We brought Amplify, our annual client and product showcase to New York and London, and we hosted our second Investor Day.
Together, those events put a single thesis on the table. Intapp is entering its most consequential chapter with strength, and we have a tremendous roadmap ahead to unlock new value for our clients. If you weren't there, I'd encourage you to watch the recordings. I want to use the next few minutes to revisit that thesis. Demand for the professional firms we serve is growing, and we expect that to continue. As the economy expands, companies need outside counsel for high-stakes litigation, bankers for acquisitions and auditors for assurance. These firms provide functions that are fundamental to capitalism: expert advice and accepted third-party accountability that clients can't replicate internally. Their core economic value has nothing to do with technology, but their staying competitive does. These firms must transform and the opportunity to use AI to become more efficient, more capable and more competitive is significant.
And the firms that move decisively will be the ones that win. But they're also learning something after experimenting with first-generation horizontal tools. Generic AI wasn't built for how these highly regulated firms actually work or for the professional trust and compliance standards they're required to uphold. For these firms, professional compliance is an existential issue. That's why we built Celeste, an AI-native agentic platform designed from the ground up for professional firms. Celeste delivers expert agents directly into the workflows that drive firm performance: business origination, deal and asset management, business intake and compliance, and revenue management, built for firms not adapted from tools built for everyone else. Celeste works as a stand-alone platform and as a context and compliance layer that makes other leading AI tools more effective inside a firm, giving them the firm-specific context and professional compliance protections they need to operate in a highly regulated environment.
Leading AI companies joined us on stage at Amplify as we launched Celeste. We are re-architecting our core business applications to run as expert agents powered by Celeste. We demonstrated expert agents for deal development, professional compliance and revenue management, all grounded in Intapp data and systems, all running on Celeste. These innovations expand our addressable market meaningfully. As AI automates knowledge work inside firms, Intapp can move beyond competing for software budgets and capture a larger share of overall personnel budgets, pricing for the value that expert agents create and for the volume of activity flowing through the platform, matters opened, deals managed, engagements resourced, compliance actions approved. Celeste enables consumption-based pricing alongside our existing enterprise and seat models, giving us more ways to grow with our clients as adoption deepens.
We are entering the agent market from a position of significant structural advantage. With thousands of firms already running on Intapp, we manage their end-to-end business workflows, their most critical data and their professional compliance programs. Now with a trusted professionally compliant agentic platform, no competitor can match that position. We grow as the firms do, and there is no one better positioned to lead this next chapter. At Amplify, three of the most consequential companies in AI spoke publicly about why they're building with Intapp. Our strategic alliance with Microsoft continues to deepen. On stage, Microsoft was direct about what enterprise AI actually requires for professional firms. AI is becoming part of the enterprise backbone. In order to make this really work at the enterprise level, especially for sensitive firms, we really need to think about walls to make sure that the data only shows up for the right people at the right time.
Winston Weinberg, CEO of Harvey, discussed their collaboration with Intapp as a way to help clients succeed. "Intapp has been working on this for so long, and you have built such an incredible structure and trust with all the clients, making sure that we can integrate with all of your systems and making it the best for the end user." Elanor Dorfman, Head of Industries at Anthropic, articulated why our two platforms are built to work together, "we're very ecosystem-driven. We build primitives that we then work with our partners like Intapp to deliver, so customers experience customized value inside of these products." This is exactly the way we want to deliver AI into regulated enterprise environments. This is what it looks like when the market validates your position. And the signals we're seeing from clients and prospects back that up. Let me share a few highlights. Amplify grew over 40% more client attendees than last year with an 80% increase in digital impressions and more than 110% increase in client and partner engagement across social and digital channels.
The appetite for Celeste is clear. Celeste content is generating three times the average engagement across our channels, and the Celeste overview is averaging over nine minutes per individual visit, the highest in our portfolio. Our April webinar series featuring Celeste, one for each industry vertical, set company records for both registrants and attendees. And sales development meetings in April exceeded monthly goals by over 65%, a new high watermark. That momentum runs alongside a business that continues to execute and now with Celeste. Q3 growth came from all three of our core motions: new clients, expansion within existing accounts and cloud migrations, while we continue building traction across newer verticals, products and geographies. In our legal vertical, we saw a continuing trend of firms seeking to modernize and expand their technology while continuing to require the trust and professional compliance expertise we provide.
We mentioned last quarter that Ropes & Gray, an Am Law 100 firm, chose our compliance solutions to modernize intake and conflicts. This quarter, they decided to add to those solutions, choosing DealCloud to help accelerate their business development activity and Celeste to drive their agentic agenda. PLT, a current client utilizing conflicts, chose to further modernize their solutions and migrate to the cloud with Intapp Time. They also purchased Intapp Terms with Assist and Walls as they work to simplify their tech stack via a single provider. Kobre & Kim chose Intapp Time to increase overall efficiency and provide enhanced features to improve compliance. And an Am Law 100 firm chose Intapp Time for its trusted AI capabilities after a well-funded AI start-up competitor fell short of what their firm actually required. This is a pattern in the market. In the accounting industry, technology purchases continue to be driven by both the need for AI capabilities and the continuing competition resulting from private equity investments and mergers.
Among the firms that turned to Intapp for AI-driven modernization this quarter, Mauldin & Jenkins, an Accounting Today Top 100 firm, needed a central place to track, monitor and review engagements. They chose Intapp Employee Compliance to deliver reliable confirmation with regulatory requirements. U.K.-based Summer Group looked to Intapp to solve inefficiencies from multiple systems brought together from acquisitions. Using Intapp Collaboration, they will be able to streamline operations and improve collaboration across the firm. The European offices of two major accounting firms chose Intapp as well. One purchased Intapp Collaboration to increase internal productivity and satisfaction. The other purchased both Intapp Collaboration and Walls to ensure greater control over data with geographic sensitivities. In our financial services verticals, firms continue to choose our purpose-built solutions for their industry specificity.
A global private investment firm replaced a competing platform with Intapp DealCloud, choosing industry depth over a generic solution in order to drive adoption and value firm-wide. We also added new clients in real assets. A leading residential builder chose Intapp Properties to consolidate their workflows into one centralized repository. And Essential Properties, an internally managed REIT, chose Intapp Properties to meet their growing demand for modern technology solutions. Q3 was a strong quarter, and it came at a defining moment. We launched Celeste in limited availability. Our clients are engaged and the early signals are strong. Our ecosystem is aligned, and our core business continues to execute across new logos, expansions and migrations. What comes next is what we've been building toward. Professional firms are transforming. The firm AI market is growing. And as Celeste moves toward broader availability, no one is better positioned to lead it than Intapp. To our clients, partners, investors, Board and the global Intapp team, thank you. This is the result of your trust and dedication. David, over to you.
Thank you, John, and thanks to everyone for joining us today. I'd also like to acknowledge those who participated in our Investor Day in February, both virtually and in person. Alongside our annual Amplify event, it marked an important step forward in articulating Intapp's firm AI strategy. We highlighted three key areas: the introduction of Celeste, our agentic AI platform, purpose-built for professional firms and the incremental TAM it unlocks; the strength of our enterprise go-to-market motion; and our framework and line of sight to $1 billion in total ARR. We remain confident in that trajectory, underpinned by our differentiated position, serving highly regulated professionals with professional trust, compliance-native, workflow-critical industry-specific AI solutions. Turning to the quarter. We delivered strong fiscal third quarter results, reflecting continued momentum in our cloud business and growing market adoption of our AI offerings.
Alongside strong quarterly performance across our growth, compliance and profitability offerings, our Celeste AI offering is now translating into meaningful contribution. Just a few months removed from our Celeste product announcement, over 15% of net new bookings in the quarter was driven by our Celeste AI solutions, including early monetization from firm AI pilots. We're seeing strong enterprise adoption across land, expand and vertical motions, reinforcing AI as a durable driver of cloud growth. Following our Amplify event, we also saw a meaningful uptick in demand generation, not just for Celeste, but across our broader product suite, driven by increased customer engagement with our AI capabilities. Cloud ARR grew 31% year-over-year to $459.3 million, supported by expansion within our $100,000-plus ARR client base and a 123% cloud net revenue retention rate. We continue to operate the business with discipline.
Gross and operating margins expanded year-over-year. Q3 marked a record free cash flow quarter, and we continued executing on our share repurchase program. Together, these results reflect our focus on driving operating leverage while investing for long-term growth. Our SaaS revenue was $107.9 million, up 27% year-over-year and now represents nearly three-quarters of total revenue, driven by both new client wins and expansion within the installed base. License revenue was $24.8 million, down 22% year-over-year, consistent with expectations as clients prepare for migration to the cloud. Professional services revenue totaled $13.4 million, up 7% year-over-year, supported by increased partner-led implementations. Total revenue was $146 million, up 13% year-over-year. Following the completion of our initial repurchase program, our Board authorized an additional $200 million in January. During Q3, we repurchased $100 million or approximately 3.9 million shares, bringing fiscal year-to-date repurchases to over 7 million shares.
This reflects both our confidence in the long-term value of the business and our continued focus on managing dilution. Our partner ecosystem is becoming an increasingly important growth lever. Our co-sell motion with Microsoft continued to gain traction in Q3 with strong alignment and expanding Azure marketplace participation and MACC utilization, driving improved deal velocity, larger transaction sizes and reduced execution risk in the enterprise engagements. At the same time, our broader partner network is scaling alongside our AI roadmap. As highlighted at Amplify, we are building a targeted ecosystem around Celeste to expand both capability and reach. Non-GAAP gross margin was 78.8%, up from 77.9% a year ago, driven by cloud mix and efficiency gains. Non-GAAP operating expenses were $89.3 million compared to $80.3 million in the prior year period, reflecting continued investment in go-to-market capacity, pipeline generation and scaled client and partner events, including Amplify.
Our non-GAAP operating income was $25.7 million, up from $20.3 million last year, and non-GAAP diluted EPS was $0.29. Free cash flow was $63.4 million, a record quarter, and we ended Q3 with $146.8 million in cash and cash equivalents. Some of our key metrics include cloud ARR grew 31% year-over-year to $459.3 million and total ARR increased 23%. Remaining performance obligations were $791.4 million, up 27% year-over-year, providing strong forward visibility. Clients generating at least $100,000 in ARR reached 858, representing more than 100 net adds year-over-year. We exited the quarter with over 1,375 clients at the $50,000-plus ARR. This cohort represents approximately 95% of total ARR and will be a go-forward quarterly disclosure. Turning to our guidance. For the fourth quarter of fiscal 2026, we expect SaaS revenue to be between $113.1 million and $114.1 million, total revenue between $149.1 million and $150.1 million, non-GAAP operating income between $28.4 million and $29.4 million and non-GAAP EPS between $0.36 and $0.38 based on approximately 79 million diluted shares.
For the full fiscal year, we expect SaaS revenue between $421 million and $422 million, total revenue between $574.3 million and $575.3 million, non-GAAP operating income between $102.7 million and $103.7 million, non-GAAP EPS between $1.22 and $1.24 based on approximately 82 million diluted shares. Thank you. And I'll now turn the call back to the operator.
分析師問答
Your first question comes from the line of Kevin McVeigh with UBS.
Congratulations on the continued execution. I wonder if you could give us just any initial feedback on Celeste and whether or not that's what's driving some of the uptick in the average client size because clearly, you're seeing pretty good momentum there and just maybe help dimensionalize that a little bit.
Thanks, Kevin. The feedback on Celeste has been tremendous. We had a very exciting set of programs at Amplify, where people got to see it for the first time. We released it in limited availability, so we've been managing the number of clients that we're engaging with. But the list of people who have looked at it and had us come and talk to them about what it can do is off the charts. So we're very excited about how well it's been received. And what's been really interesting to hear back from the prospects is they've really struggled with some of the first-generation tools in exactly the areas that we designed Celeste to address. So MCP is an important technology architecture for this generation, but it is revealing and creating a lot of new repositories of business information that are essentially ungoverned by the firm's professional compliance requirements. What we've done with the Celeste architecture is exactly what addresses this core point.
So there's a lot of excitement about the opportunity, and we've been working with several of the limited availability clients on some really exciting solutions already. And we were able to share with you all that Ropes & Gray bought the product in the quarter, and we have a group that is in the pipeline to do more. I think there's a really exciting opportunity for us to enter into this agentic space here. Obviously, we announced the product two-thirds of the way through Q3. So it was a small part of the time that we had in market in the quarter.
That's helpful. Really helpful, John. And just a follow-up there. As the clients have started to season some of the LLMs, have they shifted preference in terms of any specific LLMs or they kind of stayed the course?
Well, that's also interesting. We're seeing a wide range across the market. There are people who had committed to OpenAI and ChatGPT early. We're seeing folks who have adopted Claude and like the Anthropic models. We're seeing a big footprint for Microsoft Copilot because this is such a Microsoft-oriented market and the overall relationship they have with Microsoft and the ability of Copilot to work with that whole environment is important to them. So it's a very interesting mix; we're even seeing some clients asking us about some of the other systems like xAI and Google. So I think that there is a rich competition going for those models out there. Celeste is importantly designed with a lot of feedback from our clients to be model-agnostic. So we will allow clients to use whichever model fits best for their firm or even for each solution because some people prefer certain models for certain solution areas versus others, and they want to have a mix inside their firm. We provide the professional compliance capability and the agentic orchestration for all of those across multiple solution types and multiple models at the same time. So people really like that design.
Your next question comes from the line of Alexei Gogolev of JPMorgan.
This is Bella Camaj on for Alexei. So starting with the adjusted EBIT guidance, it looks like the full year guidance raise was smaller in magnitude than the Q3 beat. Is that mainly just a product of expense timing with Q3 spend being pushed into Q4? Or are you planning to step up investment next quarter into Celeste or other initiatives?
Thank you for the question. Yes, if you step back to over two years ago, when we started framing the conversation around the leverage that we'll be driving toward the 300 to 500 basis points, clearly, the first year we drove over 600 basis points this past year. The implied guide will land you around the 300 basis points while letting us continue to invest ratably across our go-to-market efforts with everything we've announced at the last Amplify event. We're getting really good traction and our product rate of innovation has been nothing but spectacular. So when you think about not having 100% leverage per se of all your incremental revenue, that's kind of how we've been scaling the company appropriately. Also, you get into a little bit of timing. What I mean by that is in Q2, you provide an annual guide that's across $4 million, whereas now we're very centered in, of course, the last quarter of the fiscal year, that guide midpoint is across only $1 million. So you get into a little bit of rounding there, too. Obviously, we're going to continue to drive our top-line growth and continue to scale the company appropriately as we've guided both in our long-term and near-term targets.
Got it. That's helpful. And just a follow-up question. Looking at the impressive cloud net revenue retention performance, could you quantify the mix between the drivers there, such as seat adds, module attach or AI-related expansion? And how should we think about net revenue retention normalizing over the next few quarters?
Yes. We gave some windows of near-term success of what's added to that, both with our incremental disclosures at Investor Day. I would say those trends continue, both through our cross-sell and up-sell motion. Our NRR of the 123% to 124% cadence that we've been operating at has some durability, and we're continuing to see the cohort that we're selling to in this enterprise motion, which also ties into the $50,000-plus ARR cohort adds that we saw over this past quarter. So all in all, the team executed really strongly, and they're driving both the actions on incremental up-sell as well as cross-sell across the board.
Our next question comes from the line of Terry Tillman with Truist Securities.
This is Luke on for Terry. So I know you mentioned the revenue monetization for Celeste will come. But what are some key milestones and KPIs in terms of integrating Celeste that you are looking for in the coming quarters and years?
Thanks for the question. We have a strong roadmap for the rollout of Celeste through this limited availability period and into general availability. There's a whole series of engagements with our clients that we're doing across our target markets. In addition to Celeste as a stand-alone platform, you can buy each of our products now with Celeste integrated into it. So DealCloud with Celeste, Compliance with Celeste, et cetera. There's a set of solutions that clients have already asked us to help them build out with agents, which gives us access to a whole new value proposition and TAM inside the firms. In addition to the traditional opportunity to sell our software into the IT budget, the firms are creating a second budget for AI solutions specifically, which we're now able to sell into. And we're looking increasingly at the conversations with firms about their personnel budget because part of the promise of the agentic strategy is, can you offset some of your hiring in the future with agents rather than additional headcount as your firm continues to scale.
So if you look across our solution areas, we're bringing agents into each of them and the key milestones will be the extension of our products into agentic workflows in each of those key areas. The value for that is enormous. We've had some very positive experiences with a lot of the engagements that we've had since the limited availability launch. You'll see more news from us as we grow and roll out more of the agentic solutions inside each of the areas that we serve.
Awesome. And then I was hoping for a follow-up going into the compliance officer hiring that you mentioned within your client base. Could you double click into that and potentially share any use cases from there?
Yes. The compliance officer—who may go by several titles—is an increasingly sought-after role across the firms in our market because of their unique professional compliance obligations. Intapp has always had a very strong business being the system that enables firms to run strong professional compliance programs, avoiding conflicts of interest, meeting their duties of loyalty, meeting their duties of independence, and managing material nonpublic information across deals and across clients and investors in a way that the firms really trust us to have the deep understanding of what this existential risk is to their firm. The compliance officers that are being hired are increasingly getting involved in the AI strategy of these firms because there's such a risk as AI rolls out of these firms of creating ungoverned repositories of new information. Many of these systems encourage users to drag documents and information into them so they can do really exciting analysis.
What's happening is larger and larger pools of ungoverned information are being formed inside these firms as they try these first-generation AI tools. They've been in the market long enough now that the compliance officers, the risk officers and the AI leaders are getting together and saying we need to start looking at how to manage the information governance risk and the professional compliance risk that goes along with all these tools. The experience they've had these first couple of years has really set them up well to meet us when we come to talk to them about the Celeste design, and they appreciate what we've built in from the ground up in this AI-native agentic platform that is designed to help manage and govern the AI from the Intapp systems but also from the other AI systems they're adopting. We're the trusted provider in this category, and there really isn't a great counterpart in the competitive arena where we face a lot of competition.
This is an area where we have a lot of ability to affect the risk profile of these firms in a way compliance officers are going to be delighted with and which they need to do. So we're excited about this, and the growth in that role is something we're really targeting in our go-to-market.
Your next question comes from the line of Parker Lane with Stifel.
John, as you look at the different use cases and workflows for Celeste, be it compliance or intake or business origination, are there any particular areas that clients are looking to tackle first here with the launch of Celeste and the initial bookings momentum? Is that relatively representative of the existing apps that people have or anything that has hit the ground running that you'd call out?
Thanks, Parker. We have focused initially on the areas that the firms are already working with us. Obviously, that's going to be the fastest go-to-market for a general-purpose compliant agentic platform: to work with them in the areas that we can demonstrate value very quickly and then grow from there. So the first areas would be intake, business acceptance and all the compliance issues associated with how firms onboard new clients, which is key to their growth; business origination, sourcing and origination and all the work firms do sourcing fundraising or sourcing opportunities to deploy funds. It's also in the lateral area. A lot of the firms grow by hiring lateral partners and bringing books of business or particular areas of expertise with them. This is a very complex maneuver but is central to a big part of the market's growth strategy. There's also the private equity trend coming into accounting and consulting, the area of helping firms with mergers and getting through the compliance issues of bringing these larger and larger accounting firms together.
And then in the time area, we have incredible opportunity to deploy agents in the whole realm of business utilization: how are firms using the resources they have, how are they starting to use AI in place of people and how are they going to capture that activity as a way to figure out what their pricing and profitability management needs to be. So all the business-of-the-firm areas that Intapp has built such a strong position in are perfect for us rolling out Celeste, and it's complementary to a lot of the areas in the practices where firms have deployed other tools but haven't had a great solution for the business side. Half to two-thirds of the population of the firm spends most of their time on these things. So it's a huge area for us, and we're very excited about how that's rolling out.
That's great feedback. And Dave, I think you mentioned that 15% of net new bookings are from Celeste. I'd love to hear how the initial conversations have gone around the monetization of that and the business model there. Obviously, you haven't priced on seats fully in the past, but this is even a different business model altogether. So can you just give us some initial impressions of how those conversations have gone?
Yes. I'll add some and then invite John as well. To be clear, it was approximately 15% of net new bookings. There was some impressive overall performance last quarter across the board. After Amplify, the demand and outreach directly from our key clients as well as net new clients has been strong. So it's been kind of pulling everything through, not only within those specific SKUs or that platform, but across a lot of our other products as well because customers would like that whole suite. It's been more of a portfolio conversation. They'll continue to engage with us as we look forward to future deployments, and everything we've seen thus far has been very positive. John, I don't know if you wanted to add any other notes on some of those as well.
I gave a few stats in the prepared remarks about the engagement across the client base. It's incredible the volume of people who are interested in getting engaged. I think it really speaks to one of the limitations of the general horizontal models that people have been trying to work with, and they really appreciate the architecture and the compliance design that we're bringing in. I also am super excited because we were only in the market for four or five weeks of the quarter there at the end, and these are generally enterprise engagements. People need a little time to go through, work with the product and come to the conclusion they want to come on board, and for us to get to this progress in just four or five weeks, I'm thrilled. Moreover, the pipeline going forward is very strong. So I think we're really tapping into an area here. It's still early, obviously, but I think we're really tapping into an area of need. Firms are trying to figure out how to get the best value and leverage out of this AI strategy, but they need to do it in an industry-aware, compliance-aware way. I think the opportunity here is huge.
Your next question comes from the line of Steven Enders with Citi.
This is an analyst on for Steven Enders. I think my first question is—you mentioned winning over very well-funded generic LLMs. As your customers become more cognizant of token costs, how does this benefit or impact Intapp and Celeste adoption?
Thanks for the question. I think your question is about how firms react as they start to look at their scaling token costs. Firms have been experimenting in a lot of different ways with these tools. One of the things they've discovered is that generic models create a lot of traffic because they have to try things over and over or the system has to iterate to find the right answer, and it takes a few or several iterations each time. One of the design principles in Celeste with our semantic layer and our context engine is to really understand the deterministic information inside the firm that many of these solutions on the enterprise side are designed to retrieve and serve up as part of general business workflows. What they're discovering is the Celeste architecture is much better at getting truer facts and more reliable facts out of the business systems as part of workflows in a more effective and efficient way than many DIY models.
This is one of the deeper arguments for why there's a huge opportunity for vertical companies with deep expertise to build solutions for this LLM and agentic generation in a way that really understands how the correct architecture should be put together. Particularly for highly regulated industries like this one, it's not just a token cost issue, although that is something they need to manage. It's an information risk issue, which has serious implications for the firm's reputation, standing, compliance with clients, regulators and the courts. So I think there's a real argument here for a vertical-specific architecture like Celeste. I think it plays to our favor.
Perfect. That's very helpful. And my next question is just trying to understand the contribution of AI to net new. You said Celeste is about 15% of new ARR. And I think Assist last quarter was about 10% of net new. Is the math right that AI contributes to over 25%? How should we think about overall contribution from AI?
So it's growing. We incorporated the Assist technology into the new generation when we released Celeste. This quarter you had a period when we were selling Assist because we had not announced Celeste yet, and then in the last month of the quarter we were selling, marketing and delivering Celeste but only in limited availability. So what you're seeing is an evolution of the mix there.
Your next question comes from the line of Alex Sklar with Raymond James.
This is Johnathan McCary on for Alex. I'll start with John. You alluded to winning over a well-funded start-up in a bid for time. How often are you seeing those sorts of competitors in bake-offs and in which areas of the platform is that most common? And how important are partnerships with the likes of Anthropic and Microsoft when you're going into a competitive conversation like that with the prospect?
Thanks. In several areas, there have been venture-backed companies that have started in spaces we've had a long history in. We've been excited that we have such a rich enterprise position with strong data and strong compliance and strong trust in these firms that we're able to offer a very compelling case for why we have an enterprise-class system versus something smaller companies have put together. Competition has grown over the years inside the space, but one thing I'm very impressed by is what the team has done: we've actually seen firms who tried some of these newer tools for a little while and then turned them off and come back. A lot of the opportunity here is to build on the enterprise-grade capabilities we've developed over many years and bring Celeste in to meet clients' needs. The partnerships, particularly with Microsoft and with Anthropic, help us. Microsoft has a huge influence in this market.
Our ability to build on the Microsoft relationship overall helps us, particularly with enterprise-class firms that want to trust a scaled vendor. We have to keep up with competition in certain areas, but we have set the pace in many product areas, which keeps everybody on their toes. It's a vibrant market, and I'm very impressed with how well the team has developed our offering. I gave examples in the prepared remarks about our time wins so you have insight into how that's going in the market.
Very helpful. I'll pivot one for Dave. We heard about the increased focus on the 2,800 named accounts. What do you think is left to do there from a hiring perspective? And now in the AI world with Celeste out, what go-to-market adjustments are needed to succeed and enable those largest accounts with your AI offering?
Good question. We're going to continue to drive scale and efficiency with our sales and marketing motion, specifically densifying those key enterprise accounts. We still have a lot to do, but we like the progress we've made thus far, and we're already working on FY '27 plans and the massive amount of opportunities in front of us. More to come on that, but we like how everything is being set up.
Your next question comes from the line of Saket Kalia with Barclays.
John, maybe for you, I just want to zoom out. You spend a lot of time with customers. What do you hear from them around their hiring plans going forward? And because you've got such a diverse business, maybe you can compare and contrast how those are different, if at all, between professional services and financial services.
Thank you, Saket. We've been on quite a tour leading up to Amplify with our advisory board and after Amplify I've met many firms along with our executives. It's an interesting conversation. Almost everyone has said there's an opportunity for AI to bring efficiency into the business. They're not planning profound staffing changes over the next 12 months. Maybe the summer classes will be a little more controlled, but they don't feel ready to say all the work will be done with AI. Instead of reducing the size of the team, many firms plan to deploy more AI and more agents so they can continue to scale their businesses without hiring as many people going forward. That's a culturally sensitive way of scaling these partnership firms. Where they are looking to reduce expenses and automate activity, we're able to build an ROI case for agents that can be compelling, but firms are selective about where they do that.
Regarding professional services versus financial services, partnership firms are a little more sensitive. Firms that have converted to corporations or are private equity-backed are more focused on driving efficiency for the bottom line and may deploy AI more aggressively. I'm excited that in these expert-driven businesses where so much value is human-driven, it's in the business services areas that support those experts where firms are likely to make transformative moves with staffing. We are uniquely positioned on the business services side to help firms deploy agents, and this is exactly what Celeste is designed to do. So I think they will go first to the areas where we're set up to serve them.
Got it. That makes a ton of sense and is very helpful. Dave, maybe for you, on the back of that, it's great to hear about early success with Celeste. I realize the sample size is still small, but I'm curious how you think about the uplift you can get from existing customers as they add Celeste on.
It's a fair question. We're just scratching the surface. One part of our thesis is that Celeste unlocks a whole new SAM and TAM that we outlined at Investor Day. Our core IT SAM is about $20 billion, and there's an additional roughly $30 billion of non-IT spend—workforce spend—we think we can tap into. With just a few weeks in market, the appetite, pull-through and pipeline generation have been really encouraging. We expect to participate across different vectors: platform, consumption, seat pricing, alongside our traditional enterprise motions. More to come on that trajectory, but early signs are promising.
There are no further questions for the question-and-answer session. I'd now like to turn the call back over to John Hall for final comments.
Okay. Thanks, everyone. We appreciate your attention and questions. We have a great Q3 behind us, and we're excited about our continued momentum to finish out fiscal '26. Thanks again for your time today, and we look forward to talking to you again next quarter.
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