• Appian Announces Second Quarter 2024 Financial Results

    Источник: Nasdaq GlobeNewswire / 01 авг 2024 07:05:00   America/New_York

    MCLEAN, Va., Aug. 01, 2024 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the second quarter ended June 30, 2024.

    “Due to enhanced functionality launched this quarter, Appian AI usage nearly doubled,” said Matt Calkins, CEO & Founder. “Looking ahead, we are accelerating our path to profitability. We now expect to achieve adjusted EBITDA breakeven for the full year 2024.”

    Second Quarter 2024 Financial Highlights:

    • Revenue: Cloud subscription revenue was $88.4 million, up 19% compared to the second quarter of 2023. Total subscriptions revenue, which includes sales of our cloud subscriptions, on-premises term license subscriptions, and maintenance and support, increased 20% year-over-year to $113.0 million. Professional services revenue was $33.5 million, a decrease of 1% compared to the second quarter of 2023. Total revenue was $146.5 million, up 15% compared to the second quarter of 2023. Cloud subscription revenue retention rate was 118% as of June 30, 2024.
    • Operating loss and non-GAAP operating loss: GAAP operating loss was $(39.2) million, compared to $(40.7) million for the second quarter of 2023. Non-GAAP operating loss was $(13.1) million, compared to $(27.1) million for the second quarter of 2023.
    • Net loss and non-GAAP net loss: GAAP net loss was $(43.6) million, compared to $(42.4) million for the second quarter of 2023. GAAP net loss per share was $(0.60) for the second quarter of 2024, compared to $(0.58) for the second quarter of 2023. Non-GAAP net loss was $(19.1) million, compared to $(28.5) million for the second quarter of 2023. Non-GAAP net loss per share was $(0.26), compared to $(0.39) net loss per share for the second quarter of 2023. GAAP and non-GAAP net loss for the second quarter of 2024 included $0.2 million of foreign currency exchange losses. GAAP and non-GAAP net loss for the second quarter of 2023 included $1.2 million of foreign currency exchange gains. We do not forecast foreign exchange rate movements.
    • Adjusted EBITDA: Adjusted EBITDA loss was $(10.5) million, compared to adjusted EBITDA loss of $(24.7) million for the second quarter of 2023.
    • Balance sheet and cash flows: As of June 30, 2024, Appian had total cash, cash equivalents, and investments of $149.1 million. Net cash used by operating activities was $(17.6) million for the three months ended June 30, 2024, compared to $(11.9) 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:

    Financial Outlook:

    As of August 1, 2024, guidance for 2024 is as follows:

    • Third Quarter 2024 Guidance:
      • Cloud subscription revenue is expected to be between $89.0 million and $91.0 million, representing year-over-year growth of 15% to 18%.
      • Total revenue is expected to be between $149.0 million and $153.0 million, representing a year-over-year increase of 9% to 12%.
      • Adjusted EBITDA is expected to be between breakeven and $3.0 million.
      • Non-GAAP net loss per share is expected to be between $(0.10) and $(0.06), assuming weighted average common shares outstanding of 72.4 million.
    • Full Year 2024 Guidance:
      • Cloud subscription revenue is expected to be between $358.0 million and $360.0 million, representing year-over-year growth of 18%.
      • Total revenue is expected to be between $610.0 million and $615.0 million, representing a year-over-year increase of 12% to 13%.
      • Adjusted EBITDA is expected to be between $(3.0) million and $3.0 million.
      • Non-GAAP net loss per share is expected to be between $(0.61) and $(0.52), assuming weighted average common shares outstanding of 72.6 million.

    Conference Call Details:

    Appian will host a conference call today, August 1, 2024, at 8:30 a.m. ET to discuss Appian's financial results for the second quarter ended June 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 http://investors.appian.com.

    1 https://register.vevent.com/register/BI1cb1198e099247ce9ec1e7337177a690

    About Appian

    Appian is a software company that automates business processes. The Appian AI Process Platform includes everything you need to design, automate, and optimize even the most complex processes, from start to finish. The world's most innovative organizations trust Appian to improve their workflows, unify data, and optimize operations—resulting in better growth and superior customer experiences. For more information, visit www.appian.com. [Nasdaq: APPN]

    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 costs of revenue, non-GAAP total cost of revenue, non-GAAP total operating expense, non-GAAP operating loss, non-GAAP income tax (benefit) expense, non-GAAP net loss, and non-GAAP net 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, and severance costs related to involuntary reductions in our workforce, or Severance Costs, and lease impairment charges related to actions taken reduce the footprint of our leased office spaces, or Lease Impairment Charges. 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 (benefit) 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 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 third quarter and full year 2024, future investment by Appian in its go-to-market initiatives, increased demand for the Appian AI-Powered Process 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 AI-Powered Process 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 Relations
    Jack Andrews
    703-442-8844
    investors@appian.com

    Media Contact
    Valerie Verlander
    703-260-7947
    valerie.verlander@appian.com


    APPIAN CORPORATION
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except par value and share data)
     
     As of
     June 30,
    2024    		 December 31,
    2023
     (unaudited)  
    Assets   
    Current assets   
    Cash and cash equivalents$120,787  $149,351 
    Short-term investments and marketable securities 28,345   9,653 
    Accounts receivable, net of allowances of $2,652 and $2,606, respectively 131,693   171,561 
    Deferred commissions, current 34,899   34,261 
    Prepaid expenses and other current assets 48,261   49,529 
    Total current assets 363,985   414,355 
    Property and equipment, net of accumulated depreciation of $29,011 and $25,141, respectively 40,841   42,682 
    Goodwill 26,305   27,106 
    Intangible assets, net of accumulated amortization of $4,763 and $4,152, respectively 3,040   3,889 
    Right-of-use assets for operating leases 32,848   39,975 
    Deferred commissions, net of current portion 56,231   59,764 
    Deferred tax assets 4,368   3,453 
    Other assets 26,963   36,279 
    Total assets$554,581  $627,503 
    Liabilities and Stockholders’ (Deficit) Equity   
    Current liabilities   
    Accounts payable$5,739  $6,174 
    Accrued expenses 13,797   11,046 
    Accrued compensation and related benefits 33,843   38,003 
    Deferred revenue 218,233   235,992 
    Debt 8,348   66,368 
    Operating lease liabilities 12,323   11,698 
    Other current liabilities 1,405   1,891 
    Total current liabilities 293,688   371,172 
    Long-term debt 245,625   140,221 
    Non-current operating lease liabilities 55,796   59,067 
    Deferred revenue, non-current 4,695   4,700 
    Deferred tax liabilities —   2 
    Other non-current liabilities 435   — 
    Total liabilities 600,239   575,162 
    Stockholders’ (deficit) equity   
    Class A common stock—par value $0.0001; 500,000,000 shares authorized as of June 30, 2024 and December 31, 2023 and 42,359,967 and 42,169,970 shares issued of June 30, 2024 and December 31, 2023, respectively 4   4 
    Class B common stock—par value $0.0001; 100,000,000 shares authorized as of June 30, 2024 and December 31, 2023 and 31,196,796 and 31,196,796 shares issued as of June 30, 2024 and December 31, 2023, respectively 3   3 
    Additional paid-in capital 608,528   595,781 
    Accumulated other comprehensive loss (11,812)  (23,555)
    Accumulated deficit (596,407)  (519,892)
    Treasury stock at cost, 1,213,686 shares as of June 30, 2024 (45,974)  — 
    Total stockholders’ (deficit) equity (45,658)  52,341 
    Total liabilities and stockholders’ (deficit) equity$554,581  $627,503 


    APPIAN CORPORATION
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except per share data)
     
     Three Months Ended June 30, Six Months Ended June 30,
      2024   2023   2024   2023 
     (unaudited)
    Revenue       
    Subscriptions$112,974  $93,794  $230,668  $192,751 
    Professional services 33,476   33,921   65,617   70,199 
    Total revenue 146,450   127,715   296,285   262,950 
    Cost of revenue       
    Subscriptions 13,262   10,779   25,532   21,227 
    Professional services 26,151   26,066   51,878   51,711 
    Total cost of revenue 39,413   36,845   77,410   72,938 
    Gross profit 107,037   90,870   218,875   190,012 
    Operating expenses       
    Sales and marketing 66,592   62,581   124,748   125,671 
    Research and development 39,446   39,743   79,217   81,367 
    General and administrative 40,193   29,208   73,639   58,902 
    Total operating expenses 146,231   131,532   277,604   265,940 
    Operating loss (39,194)  (40,662)  (58,729)  (75,928)
    Other non-operating expense       
    Other (income) expense, net (1,545)  (3,886)  6,662   (6,576)
    Interest expense 6,107   4,755   11,753   7,873 
    Total other non-operating expense 4,562   869   18,415   1,297 
    Loss before income taxes (43,756)  (41,531)  (77,144)  (77,225)
    Income tax (benefit) expense (164)  824   (629)  1,959 
    Net loss$(43,592) $(42,355) $(76,515) $(79,184)
    Net loss per share:       
    Basic and diluted$(0.60) $(0.58) $(1.05) $(1.09)
    Weighted average common shares outstanding:       
    Basic and diluted 72,300   73,041   72,800   72,956 


    APPIAN CORPORATION
    STOCK-BASED COMPENSATION EXPENSE
    (in thousands)
     
     Three Months Ended June 30, Six Months Ended June 30,
     2024 2023 2024 2023
     (unaudited)
    Cost of revenue       
    Subscriptions$217 $230 $430 $502
    Professional services 1,461  1,472  3,039  3,063
    Operating expenses       
    Sales and marketing 1,997  2,772  4,524  5,217
    Research and development 2,919  2,910  5,920  6,536
    General and administrative 3,306  3,764  6,593  6,886
    Total stock-based compensation expense$9,900 $11,148 $20,506 $22,204


    APPIAN CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (unaudited, in thousands)
     
     Six Months Ended June 30,
      2024   2023 
    Cash flows from operating activities   
    Net loss$(76,515) $(79,184)
    Adjustments to reconcile net loss to net cash provided by (used by) operating activities   
    Stock-based compensation 20,506   22,204 
    Depreciation expense and amortization of intangible assets 4,941   4,705 
    Lease impairment charges 5,462   — 
    Bad debt expense 253   419 
    Amortization of debt issuance costs 290   223 
    Benefit for deferred income taxes (982)  (518)
    Foreign currency transaction losses, net 12,787   — 
    Changes in assets and liabilities   
    Accounts receivable 37,114   28,663 
    Prepaid expenses and other assets 10,524   (4,924)
    Deferred commissions 2,897   123 
    Accounts payable and accrued expenses 2,882   719 
    Accrued compensation and related benefits (3,808)  (6,240)
    Other current and non-current liabilities 121   1,066 
    Deferred revenue (14,267)  (6,574)
    Operating lease assets and liabilities (954)  2,116 
    Net cash provided by (used by) operating activities 1,251   (37,202)
    Cash flows from investing activities   
    Proceeds from maturities of investments 9,657   35,876 
    Payments for investments (28,354)  (53,443)
    Purchases of property and equipment (2,932)  (7,805)
    Net cash used by investing activities (21,629)  (25,372)
    Cash flows from financing activities   
    Proceeds from borrowings 50,000   92,000 
    Payments for debt issuance costs (463)  (411)
    Debt repayments (2,500)  (1,687)
    Repurchase of common stock (50,019)  — 
    Payments for employee taxes related to the net share settlement of equity awards (4,221)  (4,775)
    Proceeds from exercise of common stock options 508   559 
    Net cash (used by) provided by financing activities (6,695)  85,686 
    Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash (1,491)  309 
    Net (decrease) increase in cash, cash equivalents, and restricted cash (28,564)  23,421 
    Cash, cash equivalents, and restricted cash at beginning of period$149,351  $150,381 
    Cash, cash equivalents, and restricted cash at end of period$120,787  $173,802 
        
    Supplemental disclosure of cash flow information   
    Cash paid for interest$11,168  $2,731 
    Cash paid for income taxes$1,436  $1,472 
    Supplemental disclosure of non-cash investing and financing activities   
    Accrued capital expenditures$182  $392 


    APPIAN CORPORATION
    RECONCILIATION 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 Charges Non-GAAP Measure
    Three Months Ended June 30, 2024
    Subscriptions cost of revenue$13,262  $(217) $—  $—  $—  $—  $13,045 
    Professional services cost of revenue 26,151   (1,461)  —   —   (1,398)  —   23,292 
    Total cost of revenue 39,413   (1,678)  —   —   (1,398)  —   36,337 
    Total operating expense 146,231   (8,222)  (721)  (4,504)  (4,136)  (5,462)  123,186 
    Operating loss (39,194)  9,900   721   4,504   5,534   5,462   (13,073)
    Income tax (benefit) expense (164)  537   —   —   1,096   —   1,469 
    Net loss (43,592)  9,363   721   4,504   4,438   5,462   (19,104)
    Net loss per share, basic and diluted$(0.60) $0.13  $0.01  $0.06  $0.06  $0.08  $(0.26)
                  
    Six Months Ended June 30, 2024
    Subscriptions cost of revenue$25,532  $(430) $—  $—  $—  $—  $25,102 
    Professional services cost of revenue 51,878   (3,039)  —   —   (1,398)  —   47,441 
    Total cost of revenue 77,410   (3,469)  —   —   (1,398)  —   72,543 
    Total operating expense 277,604   (17,037)  (1,463)  (9,008)  (4,136)  (5,462)  240,498 
    Operating loss (58,729)  20,506   1,463   9,008   5,534   5,462   (16,756)
    Income tax (benefit) expense (629)  1,141   —   —   1,096   —   1,608 
    Net loss (76,515)  19,365   1,463   9,008   4,438   5,462   (36,779)
    Net loss per share, basic and diluted(a)$(1.05) $0.27  $0.02  $0.12  $0.06  $0.08  $(0.51)

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

     GAAP Measure Stock-Based Compensation Litigation Expense Severance Costs Non-GAAP Measure
    Three Months Ended June 30, 2023
    Subscriptions cost of revenue$10,779  $(230) $—  $(19) $10,530 
    Professional services cost of revenue 26,066   (1,472)  —   (35)  24,559 
    Total cost of revenue 36,845   (1,702)  —   (54)  35,089 
    Total operating expense 131,532   (9,446)  (347)  (2,041)  119,698 
    Operating loss (40,662)  11,148   347   2,095   (27,072)
    Income tax expense 824   221   7   42   1,094 
    Net loss (42,355)  11,369   354   2,137   (28,495)
    Net loss per share, basic and diluted$(0.58) $0.16  $—  $0.03  $(0.39)
              
    Six Months Ended June 30, 2023
    Subscriptions cost of revenue$21,227  $(502) $—  $(30) $20,695 
    Professional services cost of revenue 51,711   (3,063)  —   (158)  48,490 
    Total cost of revenue 72,938   (3,565)  —   (188)  69,185 
    Total operating expense 265,940   (18,639)  (2,189)  (6,111)  239,001 
    Operating loss (75,928)  22,204   2,189   6,299   (45,236)
    Income tax expense 1,959   563   56   160   2,738 
    Net loss (79,184)  22,767   2,245   6,459   (47,713)
    Net loss per share, basic and diluted(a)$(1.09) $0.31  $0.03  $0.09  $(0.65)

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

     Three Months Ended June 30, Six Months Ended June 30,
      2024   2023   2024   2023 
    Reconciliation of adjusted EBITDA:       
    GAAP net loss$(43,592) $(42,355) $(76,515) $(79,184)
    Other (income) expense, net (1,545)  (3,886)  6,662   (6,576)
    Interest expense 6,107   4,755   11,753   7,873 
    Income tax (benefit) expense (164)  824   (629)  1,959 
    Depreciation expense and amortization of intangibles assets 2,580   2,364   4,941   4,705 
    Stock-based compensation expense 9,900   11,148   20,506   22,204 
    Litigation Expense 721   347   1,463   2,189 
    JPI Amortization 4,504   —   9,008   — 
    Severance Costs 5,534   2,095   5,534   6,299 
    Lease Impairment Charges 5,462   —   5,462   — 
    Adjusted EBITDA$(10,493) $(24,708) $(11,815) $(40,531)

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