Intapp stock plunges 13% on earnings beat and weaker outlook
Cloud software growth fails to offset guidance concerns as cash burns from $150M buyback
Intapp Inc. shares tumbled 12.9% on Wednesday after the cloud software provider reported stronger-than-expected quarterly results but delivered fiscal 2026 guidance that fell short of investor expectations, raising concerns about capital allocation and cash burn.
The Palo Alto-based company reported fiscal second quarter revenue of $140.2 million, exceeding analyst estimates of $138.2 million, according to data compiled by FactSet. Adjusted earnings per share reached $0.33, beating the $0.26 consensus by 27%. Yet investors focused on the company's forward outlook, with fiscal 2026 non-GAAP EPS projected between $1.20 and $1.24, below what many analysts had anticipated.
The dramatic sell-off came on exceptionally heavy trading volume, with 4.2 million shares changing hands compared to the stock's average daily volume of 800,000, signaling heightened investor concern. Intapp's shares have now lost nearly 53% over the past 12 months and are trading 62% below their 52-week high of $77.74, reached in early 2025.
Beneath the headline numbers, Intapp's core business metrics remained strong. SaaS revenue climbed 28% year-over-year to $102.5 million, while cloud annual recurring revenue surged 31% to $433.6 million. Perhaps most notably, the company maintained an impressive 124% net retention rate, indicating existing customers continue to expand their spending on Intapp's platform.
"Intapp delivered solid operational performance this quarter with strong revenue growth and margin expansion," the company stated in its earnings release. "Our cloud momentum continues as organizations in the professional services and financial sectors increasingly adopt our integrated platform solutions."
However, investors scrutinized the company's balance sheet, which revealed a significant cash depletion over the past six months. Cash and cash equivalents dropped from $313 million to $191 million, primarily due to aggressive share repurchases totaling $150 million. The buyback program, intended to return value to shareholders, instead sparked concerns about financial flexibility at a time when growth investors are prioritizing cash preservation over shareholder returns.
The cash burn has raised questions about Intapp's capital allocation strategy, particularly given the company's continued operating losses on a GAAP basis. For the fiscal year ending June 2025, Intapp reported a net loss of $19.8 million, though non-GAAP operating income has shown improvement.
Analysts maintain a cautious stance on the stock, with an average price target of $57.88 suggesting significant upside from current levels. Of the 10 analysts covering Intapp, five rate it as a buy or strong buy, four recommend holding, and one advises selling, according to market data.
"While Intapp's underlying business metrics remain robust, the guidance reset and accelerating cash burn raise legitimate questions about the company's path to sustainable profitability," said analysts covering the software sector. "The market is clearly signaling that execution on the guidance front and disciplined capital allocation will be critical in coming quarters."
Looking ahead, Intapp faces the challenge of balancing its growth investments with shareholder expectations for improved cash generation. The company's FY2026 revenue guidance of $569.3 million to $573.3 million represents roughly 9% year-over-year growth, a deceleration from recent quarters that may further pressure the stock.
For a company that has positioned itself as a growth story in the specialized software market for legal and financial services firms, Wednesday's dramatic sell-off reflects Wall Street's increasing demand for not just growth, but profitability and financial discipline. With shares now trading at 28.9 times forward earnings, Intapp must demonstrate that it can achieve its growth targets while stemming cash outflows and delivering on its earnings outlook.