Appian (Nasdaq: APPN) today announced financial results for the third quarter ended September 30, 2024.

“Appian continues to grow even as we become more efficient. Growth remains our top priority. We now project positive adjusted EBITDA for the full year 2024,” said Matt Calkins, CEO & Founder.

Third Quarter 2024 Financial Highlights:

  • Revenue: Cloud subscription revenue was $94.1 million, up 22% compared to the third quarter of 2023. Total subscriptions revenue, which includes sales of our cloud subscriptions, on-premises term license subscriptions, and maintenance and support, increased 19% year-over-year to $123.1 million. Professional services revenue was $30.9 million, a decrease of 7% compared to the third quarter of 2023. Total revenue was $154.1 million, up 12% compared to the third quarter of 2023. Cloud subscription revenue retention rate was 117% as of September 30, 2024.
  • Operating loss and non-GAAP operating income and loss: GAAP operating loss was $(7.2) million, compared to $(15.2) million for the third quarter of 2023. Non-GAAP operating income was $8.3 million, compared to non-GAAP operating loss of $(7.7) million for the third quarter of 2023.
  • Net loss and non-GAAP net income and loss: GAAP net loss was $(2.1) million, compared to $(22.3) million for the third quarter of 2023. GAAP net loss per share was $(0.03) for the third quarter of 2024, compared to $(0.30) for the third quarter of 2023. Non-GAAP net income was $11.4 million, compared to non-GAAP net loss of $(14.6) million for the third quarter of 2023. Non-GAAP diluted net income per share was $0.15, compared to $(0.20) net loss per share for the third quarter of 2023. GAAP net loss and non-GAAP net income for the third quarter of 2024 included $9.2 million of foreign currency exchange gains. GAAP and non-GAAP net loss for the third quarter of 2023 included $4.3 million of foreign currency exchange losses. We do not forecast foreign exchange rate movements.
  • Adjusted EBITDA: Adjusted EBITDA was $10.8 million, compared to adjusted EBITDA loss of $(5.3) million for the third quarter of 2023.
  • Balance sheet and cash flows: As of September 30, 2024, Appian had total cash, cash equivalents, and investments of $140.0 million. Net cash used by operating activities was $(8.2) million for the three months ended September 30, 2024, compared to $(65.0) million of net cash used by operating activities for the same period in 2023.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Recent Business Highlights:

  • Appian Accelerates Government Procurement with AI in New Requirements Management - ProcureSight Integration
  • Latest Version of the Appian Platform Transforms Enterprise Data and Process Automation with AI-Driven Innovations
  • Appian Elects Carl “Boe” Hartman II to Board of Directors
  • Appian Names Mark Dorsey Chief Revenue Officer

Financial Outlook:

As of November 7, 2024, guidance for 2024 is as follows:

  • Fourth Quarter 2024 Guidance:
    • Cloud subscription revenue is expected to be between $95.0 million and $97.0 million, representing year-over-year growth of 14% to 17%.
    • Total revenue is expected to be between $163.5 million and $165.5 million, representing a year-over-year increase of 13% to 14%.
    • Adjusted EBITDA is expected to be between $6.0 million and $8.0 million.
    • Non-GAAP net loss per share is expected to be between $(0.03) and breakeven, assuming weighted average common shares outstanding of 74.0 million.
  • Full Year 2024 Guidance:
    • Cloud subscription revenue is expected to be between $364.0 million and $366.0 million, representing year-over-year growth of 20%.
    • Total revenue is expected to be between $613.0 million and $615.0 million, representing a year-over-year increase of 12% to 13%.
    • Adjusted EBITDA is expected to be between $5.0 million and $7.0 million.
    • Non-GAAP net loss per share is expected to be between $(0.38) and $(0.35), assuming weighted average common shares outstanding of 73.0 million.

Conference Call Details:

Appian will host a conference call today, November 7, 2024, at 8:30 a.m. ET to discuss Appian's financial results for the third quarter ended September 30, 2024 and business outlook.

To access the call, navigate to the following link(1). Once registered, participants can dial in using their phone with a dial in and PIN, or they can choose the Call Me option for instant dial to their phone. The live webcast of the conference call can also be accessed on the Investor Relations page of our website at https://investors.appian.com.

About Appian

Appian is a software company that orchestrates business processes. The Appian Platform empowers leaders to design, automate, and optimize important processes from start to finish. With our industry-leading platform and commitment to customer success, Appian is trusted by top organizations to drive transformational process change. For more information, visit appian.com. [Nasdaq: APPN]

1 https://register.vevent.com/register/BI4a3543c2295f4f5085f10a575f9a8298

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Appian provides investors with certain non-GAAP financial performance measures. Appian uses these non-GAAP financial performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Appian’s management believes these non-GAAP financial measures provide meaningful supplemental information regarding Appian’s performance by excluding certain expenses that may not be indicative of our recurring core business operating results. Appian believes both management and investors benefit from referring to these non-GAAP financial measures in assessing Appian’s performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to historical performance as well as comparisons to competitors’ operating results. Appian believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by Appian’s institutional investors and the analyst community to help them analyze the health of Appian’s business.

The non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP total operating expense, non-GAAP operating loss, non-GAAP income tax expense, non-GAAP net income (loss), and non-GAAP net income (loss) per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgement preservation insurance policy, or JPI Amortization, severance costs related to involuntary reductions in our workforce, or Severance Costs, lease impairment and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges, and a short-swing profit disgorgement paid to us by an investor, or Short-Swing Profit Payment. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

Appian also discusses adjusted EBITDA, a non-GAAP financial performance measure it believes offers a useful view of the overall operation of its businesses. The company defines adjusted EBITDA as net loss before (1) other (income) expense, net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, (8) Severance Costs, and (9) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net loss. Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete measure of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net loss as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to the financial information prepared and presented in accordance with GAAP, and Appian’s non-GAAP measures may be different from non-GAAP measures used by other companies. For more information on these non-GAAP financial measures, see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release. Appian provides guidance ranges for non-GAAP net loss per share and adjusted EBITDA; however, we are not able to reconcile these amounts to their comparable GAAP financial measures without unreasonable efforts because certain information necessary to calculate such measures on a GAAP basis is unavailable, subject to high variability, dependent on future events outside of our control, and cannot be predicted. In addition, Appian believes such reconciliations could imply a degree of precision that might be confusing or misleading to investors. The actual effect of the reconciling items that Appian may exclude from these non-GAAP expense numbers, when determined, may be significant to the calculation of the comparable GAAP measures.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical facts, including statements regarding Appian’s future financial and business performance for the fourth quarter and full year 2024, future investment by Appian in its go-to-market initiatives, increased demand for the Appian Platform, market opportunity and plans and objectives for future operations, including Appian’s ability to drive continued subscriptions revenue and total revenue growth, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” and similar expressions are intended to identify forward-looking statements. Appian has based these forward-looking statements on its current expectations and projections about future events and financial trends that Appian believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including the risks and uncertainties associated with Appian’s ability to grow its business and manage its growth, Appian’s ability to sustain its revenue growth rate, continued market acceptance of Appian’s Platform and adoption of low-code solutions to drive digital transformation, the fluctuation of Appian’s operating results due to the length and variability of its sales cycle, competition in the markets in which Appian operates, AI being a disruptive set of technologies that may affect the markets for Appian’s software dramatically and in unpredictable ways, risks and uncertainties associated with the composition and concentration of Appian’s customer base and their demand for its platform and satisfaction with the services provided by Appian, Appian’s ability to operate in compliance with applicable laws and regulations, Appian’s strategic relationships with third parties, and additional risks and uncertainties set forth in the “Risk Factors” section of Appian’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Moreover, Appian operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Appian’s management to predict all risks nor can Appian assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Appian may make. In light of these risks, uncertainties, and assumptions, Appian cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Appian is under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law.

Investor RelationsJack Andrews 703-442-8844investors@appian.com

Media ContactValerie Verlander703-260-7947valerie.verlander@appian.com

APPIAN CORPORATIONCONSOLIDATED BALANCE SHEETS(in thousands, except par value and share data)
 
  As of
  September 30, 2024   December 31, 2023
  (unaudited)    
Assets      
Current assets      
Cash and cash equivalents $ 99,193     $ 149,351  
Short-term investments and marketable securities   40,798       9,653  
Accounts receivable, net of allowances of $2,850 and $2,606, respectively   140,213       171,561  
Deferred commissions, current   34,785       34,261  
Prepaid expenses and other current assets   45,483       49,529  
Total current assets   360,472       414,355  
Property and equipment, net of accumulated depreciation of $30,329 and $25,141, respectively   39,190       42,682  
Goodwill   27,462       27,106  
Intangible assets, net of accumulated amortization of $5,356 and $4,152, respectively   2,790       3,889  
Right-of-use assets for operating leases   32,231       39,975  
Deferred commissions, net of current portion   54,576       59,764  
Deferred tax assets   4,827       3,453  
Other assets   28,365       36,279  
Total assets $ 549,913     $ 627,503  
Liabilities and Stockholders’ (Deficit) Equity      
Current liabilities      
Accounts payable $ 6,928     $ 6,174  
Accrued expenses   11,310       11,046  
Accrued compensation and related benefits   31,171       38,003  
Deferred revenue   224,199       235,992  
Debt   9,598       66,368  
Operating lease liabilities   12,470       11,698  
Other current liabilities   2,798       1,891  
Total current liabilities   298,474       371,172  
Long-term debt   243,225       140,221  
Non-current operating lease liabilities   54,270       59,067  
Deferred revenue, non-current   3,370       4,700  
Deferred tax liabilities   —       2  
Other non-current liabilities   375       —  
Total liabilities   599,714       575,162  
Stockholders’ (deficit) equity      
Class A common stock—par value $0.0001; 500,000,000 shares authorized as of September 30, 2024 and December 31, 2023 and 42,361,024 and 42,169,970 shares issued of September 30, 2024 and December 31, 2023, respectively   4       4  
Class B common stock—par value $0.0001; 100,000,000 shares authorized as of September 30, 2024 and December 31, 2023 and 31,195,739 and 31,196,796 shares issued as of September 30, 2024 and December 31, 2023, respectively   3       3  
Additional paid-in capital   614,204       595,781  
Accumulated other comprehensive loss   (22,809 )     (23,555 )
Accumulated deficit   (598,507 )     (519,892 )
Treasury stock at cost, 1,127,138 shares as of September 30, 2024   (42,696 )     —  
Total stockholders’ (deficit) equity   (49,801 )     52,341  
Total liabilities and stockholders’ (deficit) equity $ 549,913     $ 627,503  

APPIAN CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)
 
  Three Months Ended September 30, 2024   Nine Months Ended September 30, 2024
    2024       2023       2024       2023  
  (unaudited)
Revenue              
Subscriptions $ 123,121     $ 103,803     $ 353,789     $ 296,554  
Professional services   30,931       33,291       96,548       103,490  
Total revenue   154,052       137,094       450,337       400,044  
Cost of revenue              
Subscriptions   14,082       11,265       39,614       32,492  
Professional services   23,002       24,804       74,880       76,515  
Total cost of revenue   37,084       36,069       114,494       109,007  
Gross profit   116,968       101,025       335,843       291,037  
Operating expenses              
Sales and marketing   50,865       55,667       175,613       181,338  
Research and development   38,572       37,135       117,789       118,502  
General and administrative   34,688       23,440       108,327       82,342  
Total operating expenses   124,125       116,242       401,729       382,182  
Operating loss   (7,157 )     (15,217 )     (65,886 )     (91,145 )
Other non-operating (income) expense              
Other (income) expense, net   (12,544 )     1,939       (5,882 )     (4,637 )
Interest expense   6,168       4,917       17,921       12,790  
Total other non-operating (income) expense   (6,376 )     6,856       12,039       8,153  
Loss before income taxes   (781 )     (22,073 )     (77,925 )     (99,298 )
Income tax expense   1,319       178       690       2,137  
Net loss $ (2,100 )   $ (22,251 )   $ (78,615 )   $ (101,435 )
Net loss per share:              
Basic and diluted $ (0.03 )   $ (0.30 )   $ (1.08 )   $ (1.39 )
Weighted average common shares outstanding:              
Basic and diluted   72,396       73,178       72,664       73,032  

APPIAN CORPORATIONSTOCK-BASED COMPENSATION EXPENSE(in thousands)
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2024   2023   2024   2023
  (unaudited)
Cost of revenue              
Subscriptions $ 211   $ 211   $ 641   $ 713
Professional services   1,325     1,535     4,364     4,598
Operating expenses              
Sales and marketing   1,746     3,245     6,270     8,462
Research and development   2,939     2,930     8,859     9,466
General and administrative   3,284     3,090     9,877     9,976
Total stock-based compensation expense $ 9,505   $ 11,011   $ 30,011   $ 33,215

APPIAN CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in thousands)
 
  Nine Months Ended September 30,
    2024       2023  
Cash flows from operating activities      
Net loss $ (78,615 )   $ (101,435 )
Adjustments to reconcile net loss to net cash used by operating activities      
Stock-based compensation   30,011       33,215  
Depreciation expense and amortization of intangible assets   7,503       7,046  
Lease impairment charges   5,462       —  
Bad debt expense   619       690  
Amortization of debt issuance costs   439       342  
Benefit for deferred income taxes   (1,281 )     (808 )
Foreign currency transaction losses, net   2,895       —  
Changes in assets and liabilities      
Accounts receivable   30,859       30,665  
Prepaid expenses and other assets   12,279       (61,555 )
Deferred commissions   4,665       (56 )
Accounts payable and accrued expenses   1,495       (657 )
Accrued compensation and related benefits   (6,975 )     (6,671 )
Other current and non-current liabilities   535       (2,026 )
Deferred revenue   (15,096 )     (3,186 )
Operating lease assets and liabilities   (1,788 )     2,238  
Net cash used by operating activities   (6,993 )     (102,198 )
Cash flows from investing activities      
Proceeds from maturities of investments   11,631       62,590  
Payments for investments   (42,638 )     (53,443 )
Purchases of property and equipment   (3,287 )     (8,278 )
Net cash (used by) provided by investing activities   (34,294 )     869  
Cash flows from financing activities      
Proceeds from borrowings   50,000       92,000  
Payments for debt issuance costs   (463 )     (411 )
Debt repayments   (3,750 )     (2,625 )
Repurchase of common stock   (50,019 )     —  
Payments for employee taxes related to the net share settlement of equity awards   (4,883 )     (7,240 )
Proceeds from exercise of common stock options   619       664  
Net cash (used by) provided by financing activities   (8,496 )     82,388  
Effect of foreign exchange rate changes on cash and cash equivalents   (375 )     (679 )
Net decrease in cash and cash equivalents   (50,158 )     (19,620 )
Cash, cash equivalents and restricted cash at beginning of period $ 149,351     $ 150,381  
Cash and cash equivalents at end of period $ 99,193     $ 130,761  
       
Supplemental disclosure of cash flow information      
Cash paid for interest $ 17,193     $ 11,960  
Cash paid for income taxes $ 1,925     $ 2,944  
Supplemental disclosure of non-cash investing and financing activities      
Accrued capital expenditures $ 109     $ 27  

APPIAN CORPORATIONRECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES(unaudited, in thousands, except per share data)
 
  GAAP Measure   Stock-Based Compensation   Litigation Expense   JPI Amortization   Severance Costs   Lease Impairment and Lease-Related Charges   Short-Swing Profit Payment   Non-GAAP Measure
Three Months Ended September 30, 2024
Subscriptions cost of revenue $ 14,082     $ (211 )   $ —     $ —     $ —     $ —     $ —     $ 13,871  
Professional services cost of revenue   23,002       (1,325 )     —       —       —       —       —       21,677  
Total cost of revenue   37,084       (1,536 )     —       —       —       —       —       35,548  
Total operating expense   124,125       (7,969 )     (1,979 )     (3,635 )     —       (324 )     —       110,218  
Operating (loss) income   (7,157 )     9,505       1,979       3,635       —       324       —       8,286  
Income tax expense   1,319       117       —       —       —       —       —       1,436  
Net (loss) income   (2,100 )     9,388       1,979       3,635       —       324       (1,799 )     11,427  
Net (loss) income per share, basic $ (0.03 )   $ 0.13     $ 0.03     $ 0.05     $ —     $ —     $ (0.02 )   $ 0.16  
Net (loss) income per share, diluted(a,b) $ (0.03 )   $ 0.13     $ 0.03     $ 0.05     $ —     $ —     $ (0.02 )   $ 0.15  
                               
Nine Months Ended September 30, 2024
Subscriptions cost of revenue $ 39,614     $ (641 )   $ —     $ —     $ —     $ —     $ —     $ 38,973  
Professional services cost of revenue   74,880       (4,364 )     —       —       (1,398 )     —       —       69,118  
Total cost of revenue   114,494       (5,005 )     —       —       (1,398 )     —       —       108,091  
Total operating expense   401,729       (25,006 )     (3,442 )     (12,643 )     (4,136 )     (5,786 )     —       350,716  
Operating (loss) income   (65,886 )     30,011       3,442       12,643       5,534       5,786       —       (8,470 )
Income tax expense   690       1,258       —       —       1,096       —       —       3,044  
Net (loss) income   (78,615 )     28,753       3,442       12,643       4,438       5,786       (1,799 )     (25,352 )
Net (loss) income per share, basic and diluted(b) $ (1.08 )   $ 0.40     $ 0.05     $ 0.17     $ 0.06     $ 0.08     $ (0.02 )   $ (0.35 )

(a) Accounts for the impact of 1.8 million shares of dilutive securities resulting in total diluted shares of 74.2 million.(b) Per share amounts do not foot due to rounding.

  GAAP Measure   Stock-Based Compensation   Litigation Expense   JPI Amortization   Severance Costs   Non-GAAP Measure
Three Months Ended September 30, 2023
Subscriptions cost of revenue $ 11,265     $ (211 )   $ —     $ —     $ —     $ 11,054  
Professional services cost of revenue   24,804       (1,535 )     —       —       —       23,269  
Total cost of revenue   36,069       (1,746 )     —       —       —       34,323  
Total operating expense   116,242       (9,265 )     4,961       (1,485 )     —       110,453  
Operating (loss) income   (15,217 )     11,011       (4,961 )     1,485       —       (7,682 )
Income tax expense   178       88       —       —       —       266  
Net (loss) income   (22,251 )     11,099       (4,961 )     1,485       —       (14,628 )
Net (loss) income per share, basic and diluted $ (0.30 )   $ 0.15     $ (0.07 )   $ 0.02     $ —     $ (0.20 )
                       
Nine Months Ended September 30, 2023
Subscriptions cost of revenue $ 32,492     $ (713 )   $ —     $ —     $ (30 )   $ 31,749  
Professional services cost of revenue   76,515       (4,598 )     —       —       (158 )     71,759  
Total cost of revenue   109,007       (5,311 )     —       —       (188 )     103,508  
Total operating expense   382,182       (27,904 )     2,772       (1,485 )     (6,111 )     349,454  
Operating (loss) income   (91,145 )     33,215       (2,772 )     1,485       6,299       (52,918 )
Income tax expense   2,137       731       —       —       139       3,007  
Net (loss) income   (101,435 )     33,946       (2,772 )     1,485       6,438       (62,338 )
Net (loss) income per share, basic and diluted(a) $ (1.39 )   $ 0.46     $ (0.04 )   $ 0.02     $ 0.09     $ (0.86 )

(a) Per share amounts do not foot due to rounding.

  Three Months Ended September 30,   Nine Months Ended September 30,
    2024       2023       2024       2023  
Reconciliation of adjusted EBITDA:              
GAAP net loss $ (2,100 )   $ (22,251 )   $ (78,615 )   $ (101,435 )
Other (income) expense, net   (12,544 )     1,939       (5,882 )     (4,637 )
Interest expense   6,168       4,917       17,921       12,790  
Income tax expense   1,319       178       690       2,137  
Depreciation expense and amortization of intangible assets   2,562       2,340       7,503       7,046  
Stock-based compensation expense   9,505       11,011       30,011       33,215  
Litigation Expense   1,979       (4,961 )     3,442       (2,772 )
JPI Amortization   3,635       1,485       12,643       1,485  
Severance Costs   —       —       5,534       6,299  
Lease Impairment and Lease-Related Charges   324       —       5,786       —  
Adjusted EBITDA $ 10,848     $ (5,342 )   $ (967 )   $ (45,872 )
Appian (NASDAQ:APPN)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Appian Charts.
Appian (NASDAQ:APPN)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Appian Charts.