A big market with an awkward shape
The company builds software for law firms, accounting firms, investment banks, private equity shops, and consultancies. CEO John Hall describes the customer base as “large partnership firms,” a category he estimates at around $4 trillion in annual revenue in the United States. So it’s a large market but also a tricky one to serve, and most software companies simply don’t chase it.
Building the model is not the hard part. Knowing which of a firm’s 3,000 employees may see which document, and proving it afterward, is. Large multipurpose AI vendors don’t have the lived-in data set to copy Intapp’s approach.
A generic AI assistant will tell you what it knows. That is the problem. Image source: Getty Images.
What “governed AI” actually means
Intapp launched its agentic AI platform, Celeste, at a February product event. It reached general availability on July 15. In a call with The Motley Fool, Hall outlined the distinction between Celeste and AI tools Harvey (an Intapp partner) and Legora, which target the practice of law, as well as horizontal assistants ChatGPT Enterprise.
The difference is permission. A generic AI assistant answers the question it is asked to the best of its automated ability.
“One of the problems with the horizontal systems is that they tell the truth,” Hall said. “But you may not be a person who is supposed to get that answer inside the firm.”
The failure mode of a chatbot at a law firm is not hallucination. It is honesty. Somebody asks about a deal they are ethically walled off from, and a regular AI assistant helpfully tells them about it anyway. It may take some prodding and creative prompting, but the info is there to .
Celeste is designed to know who is asking. Ethical walls, material nonpublic information rules, and independence requirements apply to the software the same way they apply to employees. A partner walled off from a deal gets the same answer from Celeste as a colleague would: no answer at all. Every interaction leaves an audit trail, because regulators may have questions about it.
Building a large language model is hard. Building one that knows which of a firm’s employees may not know a given fact and can prove it in an audit two years later is a different kind of hard. That is the bet.
The report card
Intapp’s fiscal year closed on June 30, and the numbers were robust.
Cloud annual recurring revenue (ARR) reached $495.7 million, up 29% year over year. Total ARR was $590.5 million, up 22%. Top-line revenue came in at $577.8 million for the year, a 15% increase.
And Intapp is profitable on an adjusted basis. Adjusted net income was $103.6 million. Free cash flow hit $144.7 million, or 25% of revenue, three years ahead of management’s long-term targets.
The number of clients paying more than $1 million a year grew from 109 to 142. Microsoft co-sold eight of the 10 biggest deals. More than 30 cloud migrations were signed in the fourth quarter, a company record.
The stock has responded. As of Aug. 14, s are up roughly 20% since the report and 93% over the past three months. s are still down 16% from last December’s all-time peak, though.
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NASDAQ: INTA
Intapp
Today’s Change
(-2.22%) $-0.91
Current Price
$40.11
Key Data Points
Market Cap
$3.1BMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.
Day’s Range
$39.45 – $41.38
52wk Range
$19.01 – $47.93
Volume
413.1K
Avg Vol
951.4K
Gross Margin
74.98%
The part where enthusiasm meets a price chart
At a $3.07 billion market cap, Intapp trades around 5.3 times sales and 20.4 times forward earnings estimates. That’s not outrageous for 27% subscription growth with real cash flow attached. But the average analyst price target of $39.43 sits below the current quote.
Management sees a $50 billion addressable market for agentic professional services software. If that’s reachable, Intapp has a lot of growing left to do.
Celeste only became generally available after the 2026 fiscal year ended. Its market traction and monetization are what to watch: There are no shortcuts to 25 years of knowing exactly how a law firm thinks.
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About the Author
Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL’s Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.
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