Appian Announces Fourth Quarter and Full Year 2024 Financial Results

Fourth quarter cloud subscription revenue increased 19% year-over-year to $98.9 millionFull year cloud subscription revenue increased 21% year-over year to $368.0 million MCLEAN, Va., Feb. 19, 2025 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2024. “In 2024, Appian demonstrated its ability to grow with increasing efficiency. We specialize in creating value with AI, by deploying it in a process. While others bring work to AI, we bring AI to work,” said Matt Calkins, CEO & Founder. Fourth Quarter 2024 Financial Highlights: Revenue: Cloud subscription revenue was $98.9 million, up 19% compared to the fourth quarter of 2023. Total subscriptions revenue, which includes sales of our cloud subscriptions, on-premises term license subscriptions, and maintenance and support, increased 18% year-over-year to $136.8 million. Professional services revenue was $29.9 million, an increase of 1% compared to the fourth quarter of 2023. Total revenue was $166.7 million, up 15% compared to the fourth quarter of 2023. Cloud subscription revenue retention rate was 116% as of December 31, 2024.Operating income (loss) and non-GAAP operating income (loss): GAAP operating income was $5.0 million, compared to GAAP operating loss of $(16.8) million for the fourth quarter of 2023. Non-GAAP operating income was $18.7 million, compared to non-GAAP operating loss of $(1.4) million for the fourth quarter of 2023.Net loss and non-GAAP net income (loss): GAAP net loss was $(13.6) million, compared to $(10.0) million for the fourth quarter of 2023. GAAP net loss per share was $(0.18) for the fourth quarter of 2024, compared to $(0.14) for the fourth quarter of 2023. Non-GAAP net loss was $(0.2) million, compared to non-GAAP net income of $4.9 million for the fourth quarter of 2023. Non-GAAP net loss per share was breakeven, compared to the $0.06 net income per diluted share for the fourth quarter of 2023. GAAP and non-GAAP net loss for the fourth quarter of 2024 included $14.3 million, or $0.19 per share, of foreign currency exchange losses. GAAP net loss and non-GAAP net income for the fourth quarter of 2023 included $11.1 million, or $0.15 per share, of foreign currency exchange gains. We do not forecast foreign exchange rate movements.Adjusted EBITDA: Adjusted EBITDA was $21.2 million, compared to adjusted EBITDA of $1.0 million for the fourth quarter of 2023.Cash flows: Net cash provided by operating activities was $13.9 million for the three months ended December 31, 2024 compared to $(8.2) million of net cash used in operating activities for the same period in 2023. Full Year 2024 Financial Highlights: Revenue: Cloud subscription revenue was $368.0 million for the full year 2024, up 21% compared to the full year 2023. Total subscriptions revenue increased 19% year-over-year to $490.6 million for the full year 2024. Professional services revenue was $126.5 million for the full year 2024, compared to $133.0 million for the full year 2023. Total revenue was $617.0 million for the full year 2024, up 13% compared to the full year 2023.Operating loss and non-GAAP operating income (loss): GAAP operating loss was $(60.9) million for the full year 2024, compared to $(108.0) million for the full year 2023. Non-GAAP operating income was $10.2 million for the full year 2024, compared to non-GAAP operating loss $(54.3) million for the full year 2023.Net loss and non-GAAP net loss: GAAP net loss was $(92.3) million for the full year 2024, compared to $(111.4) million for the full year 2023. GAAP net loss per share was $(1.26) for the full year 2024, compared to $(1.52) for the full year 2023. Non-GAAP net loss was $(25.6) million for the full year 2024, compared to $(59.2) million for the full year 2023. Non-GAAP net loss per share was $(0.35) for the full year 2024, compared to the $(0.81) net loss per share for the full year 2023. GAAP and non-GAAP net loss for the full year 2024 included $16.8 million, or $(0.23) per share, of foreign currency exchange losses. GAAP and non-GAAP net loss for the full year 2023 included $8.7 million, or $0.12 per share, of foreign currency exchange gains.Adjusted EBITDA: Adjusted EBITDA was $20.3 million for the full year 2024, compared to adjusted EBITDA loss of $(44.8) million for the full year 2023.Balance sheet and cash flows: As of December 31, 2024, Appian had total cash, cash equivalents, and investments of $159.9 million. Net cash provided by operating activities was $6.9 million for the full year 2024, compared to $(110.4) million of net cash used in operating activities for the full year 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 Named a Leader in Everest Group’s Process Orchestration Products PEAK Matrix® 2024Appian Unveils Latest Platform Release for Better Process and Better OutcomesAGL Energy Revolutionizes Retail Operations with AppianAppian Announces 2024 Partner Award Winners at Appian EuropeAppian Announces 2024 APJ Partner Award Winners Financial Outlook: As of February 19, 2025, guidance for 2025 is as follows: First Quarter 2025 Guidance: Cloud subscription revenue is expected to be between $97.0 million and $99.0 million, representing year-over-year growth of 12% to 14%.Total revenue is expected to be between $162.0 million and $164.0 million, representing a year-over-year increase of 8% to 9%.Adjusted EBITDA is expected to be between $8.0 million and $10.0 million.Non-GAAP net income per share is expected to be between $0.02 and $0.05, assuming weighted average common shares outstanding of 74.7 million. Full Year 2025 Guidance: Cloud subscription revenue is expected to be between $419.0 million and $421.0 million, representing year-over-year growth of 14%.Total revenue is expected to be between $680.0 million and $684.0 million, representing a year-over-year increase of 10%.Adjusted EBITDA is expected to be between $38.0 million and $42.0 million.Non-GAAP net income per share is expected to be between $0.17 and $0.22, assuming weighted average common shares outstanding of 75.1 million. Conference Call Details: Appian will host a conference call today, February 19, 2025, at 8:30 a.m. ET to discuss Appian's financial results for the fourth quarter ended December 31, 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. ___________________________________________________________1 https://register.vevent.com/register/BIce42c2bd07da42509fa81b5d008eb27d About Appian Appian is The Process Company. We deliver a software platform that helps organizations run better processes that reduce costs, improve customer experiences, and gain a strategic edge. Committed to client success, we serve many of the world’s largest companies across industries. For more information, visit 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 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 judgment 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 a shareholder, 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 expense (income), 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 income (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 first quarter and full year 2025, 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 ContactJack AndrewsVice President, Investor Relationsinvestors@appian.com Media ContactCindy ChengSenior Director, Global Communicationspr@appian.com APPIAN CORPORATIONCONSOLIDATED BALANCE SHEETS(in thousands, except par value and share data) As of December 31, 2024 2023 Assets Current assets Cash and cash equivalents$118,552 $149,351 Short-term investments and marketable securities 41,308 9,653 Accounts receivable, net of allowance of $3,396 and $2,606, respectively 195,069 171,561 Deferred commissions, current 36,630 34,261 Prepaid expenses and other current assets 43,984 49,529 Total current assets 435,543 414,355 Property and equipment, net of accumulated depreciation of $32,142 and $25,141, respectively 37,109 42,682 Goodwill 25,555 27,106 Intangible assets, net of accumulated amortization of $5,341 and $4,152, respectively 2,240 3,889 Right-of-use assets for operating leases 31,081 39,975 Deferred commissions, net of current portion 60,540 59,764 Deferred tax assets 4,129 3,453 Other assets 24,842 36,279 Total assets$621,039 $627,503 Liabilities and Stockholders’ Equity Current liabilities Accounts payable$4,322 $6,174 Accrued expenses 11,388 11,046 Accrued compensation and related benefits 34,223 38,003 Deferred revenue 281,760 235,992 Debt 9,598 66,368 Operating lease liabilities 12,378 11,698 Other current liabilities 1,087 1,891 Total current liabilities 354,756 371,172 Long-term debt 240,826 140,221 Non-current operating lease liabilities 52,189 59,067 Deferred revenue, non-current 5,477 4,700 Deferred tax liabilities — 2 Other non-current liabilities 431 — Total liabilities 653,679 575,162 Stockholders’ equity Class A common stock—par value $0.0001; 500,000,000 shares authorized as of December 31, 2024 and 2023 and 42,938,701 and 42,169,970 shares issued and outstanding as of December 31, 2024 and 2023, respectively 4 4 Class B common stock—par value $0.0001; 100,000,000 shares authorized as December 31, 2024 and 2023 and 31,090,085 and 31,196,796 shares issued and outstanding as of December 31, 2024 and 2023, respectively 3 3 Additional paid-in capital 591,281 595,781 Accumulated other comprehensive loss (11,774) (23,555)Accumulated deficit (612,154) (519,892)Total stockholders’ equity (32,640) 52,341 Total liabilities and stockholders’ equity$621,039 $627,503 APPIAN CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2024 2024 2023 2024 2023 (unaudited) Revenue Subscriptions$136,779 $115,783 $490,568 $412,337 Professional services 29,906 29,536 126,454 133,026 Total revenue 166,685 145,319 617,022 545,363 Cost of revenue Subscriptions 13,873 11,071 53,487 43,563 Professional services 21,812 23,244 96,692 99,759 Total cost of revenue 35,685 34,315 150,179 143,322 Gross profit 131,000 111,004 466,843 402,041 Operating expenses Sales and marketing 55,272 61,043 230,885 242,381 Research and development 37,188 34,596 154,977 153,098 General and administrative 33,507 32,193 141,834 114,535 Total operating expenses 125,967 127,832 527,696 510,014 Operating income (loss) 5,033 (16,828) (60,853) (107,973)Other non-operating expense (income) Other expense (income), net 12,655 (12,966) 6,773 (17,603)Interest expense 5,661 5,072 23,582 17,862 Total other non-operating expense (income) 18,316 (7,894) 30,355 259 Loss before income taxes (13,283) (8,934) (91,208) (108,232)Income tax expense 364 1,072 1,054 3,209 Net loss$(13,647) $(10,006) $(92,262) $(111,441)Net loss per share: Basic and diluted$(0.18) $(0.14) $(1.26) $(1.52)Weighted average common shares outstanding: Basic and diluted 73,953 73,310 72,988 73,102 APPIAN CORPORATIONSTOCK-BASED COMPENSATION EXPENSE(in thousands) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 (unaudited) Cost of revenue Subscriptions$207 $212 $848 $925Professional services 1,310 1,457 5,674 6,055Operating expenses Sales and marketing 1,930 2,380 8,200 10,842Research and development 2,857 3,020 11,716 12,486General and administrative 2,730 3,103 12,607 13,079Total stock-based compensation expense$9,034 $10,172 $39,045 $43,387 APPIAN CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss$(92,262) $(111,441)Adjustments to reconcile net loss to net cash provided by (used by) operating activities: Stock-based compensation 39,045 43,387 Depreciation expense and amortization of intangible assets 10,030 9,473 Lease impairment charges 5,462 — Bad debt expense 1,760 1,091 Amortization of debt issuance costs 589 444 Benefit for deferred income taxes (899) (1,541)Foreign currency transaction losses (gains), net 16,745 (12,263)Changes in assets and liabilities: Accounts receivable (28,353) (1,868)Prepaid expenses and other assets 16,551 (54,753)Deferred commissions (3,144) (8,043)Accounts payable and accrued expenses (871) (1,394)Accrued compensation and related benefits (2,947) (3,157)Other current and non-current liabilities (1,478) (1,134)Deferred revenue 49,309 28,668 Operating lease assets and liabilities (2,659) 2,089 Net cash provided by (used by) operating activities 6,878 (110,442)Cash flows from investing activities: Proceeds from maturities of investments 20,038 91,670 Purchases of investments (51,630) (53,443)Purchases of property and equipment (3,798) (9,637)Net cash (used by) provided by investing activities (35,390) 28,590 Cash flows from financing activities: Proceeds from borrowings 50,000 92,000 Payments for debt issuance costs (463) (276)Debt repayments (6,250) (3,563)Repurchase of common stock (50,019) — Payments for employee taxes related to the net share settlement of equity awards (7,987) (9,748)Proceeds from exercise of common stock options 14,461 752 Net cash (used by) provided by financing activities (258) 79,165 Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash (2,029) 1,657 Net decrease in cash, cash equivalents, and restricted cash (30,799) (1,030)Cash, cash equivalents, and restricted cash at beginning of period 149,351 150,381 Cash, cash equivalents, and restricted cash at end of period$118,552 $149,351 Supplemental cash flow information: Cash paid for interest$22,574 $16,906 Cash paid for income taxes$3,334 $3,999 Supplemental non-cash investing and financing information: Accrued capital expenditures$155 $654 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 MeasureThree Months Ended December 31, 2024Subscriptions cost of revenue$13,873 $(207) $— $— $— $— $— $13,666 Professional services cost of revenue 21,812 (1,310) — — — — — 20,502 Total cost of revenue 35,685 (1,517) — — — — — 34,168 Total operating expense 125,967 (7,517) (1,160) (3,152) — (318) — 113,820 Operating income 5,033 9,034 1,160 3,152 — 318 — 18,697 Income tax expense 364 241 — — — — — 605 Net (loss) income (13,647) 8,793 1,160 3,152 — 318 — (224)Net (loss) income per share, basic and diluted(a)$(0.18) $0.12 $0.02 $0.04 $— $— $— $— Year Ended December 31, 2024 Subscriptions cost of revenue$53,487 $(848) $— $— $— $— $— $52,639 Professional services cost of revenue 96,692 (5,674) — — (1,398) — — 89,620 Total cost of revenue 150,179 (6,522) — — (1,398) — — 142,259 Total operating expense 527,696 (32,523) (4,602) (15,795) (4,136) (6,104) — 464,536 Operating (loss) income (60,853) 39,045 4,602 15,795 5,534 6,104 — 10,227 Income tax expense 1,054 1,499 — — 1,096 — — 3,649 Net (loss) income (92,262) 37,546 4,602 15,795 4,438 6,104 (1,799) (25,576)Net (loss) income per share, basic and diluted$(1.26) $0.51 $0.06 $0.22 $0.06 $0.08 $(0.02) $(0.35) (a) Per share amounts do not foot due to rounding. GAAP Measure Stock-Based Compensation Litigation Expense JPI Amortization Severance Costs Non-GAAP MeasureThree Months Ended December 31, 2023Subscriptions cost of revenue$11,071 $(212) $— $— $— $10,859 Professional services cost of revenue 23,244 (1,457) — — — 21,787 Total cost of revenue 34,315 (1,669) — — — 32,646 Total operating expense 127,832 (8,503) (708) (4,553) — 114,068 Operating (loss) income (16,828) 10,172 708 4,553 — (1,395)Income tax expense 1,072 571 — — — 1,643 Net (loss) income (10,006) 9,601 708 4,553 — 4,856 Net (loss)) income per share, basic(a)$(0.14) $0.13 $0.01 $0.06 $— $0.07 Net (loss) income per share, diluted(b)$(0.14) $0.13 $0.01 $0.06 $— $0.06 Year Ended December 31, 2023Subscriptions cost of revenue$43,563 $(925) $— $— $(30) $42,608 Professional services cost of revenue 99,759 (6,055) — — (158) 93,546 Total cost of revenue 143,322 (6,980) — — (188) 136,154 Total operating expense 510,014 (36,407) 2,064 (6,038) (6,111) 463,522 Operating (loss) income (107,973) 43,387 (2,064) 6,038 6,299 (54,313)Income tax expense 3,209 1,302 — — 139 4,650 Net (loss) income (111,441) 42,085 (2,064) 6,038 6,160 (59,222)Net (loss) income per share, basic and diluted$(1.52) $0.58 $(0.03) $0.08 $0.08 $(0.81) (a) Per share amounts do not foot due to rounding.(b) Accounts for the impact of 2.0 million shares of dilutive securities resulting in total diluted shares of 75.3 million. Three Months Ended December 31, Year Ended December 31, 2024 2024 2023 2024 2023 Reconciliation of adjusted EBITDA: GAAP net loss$(13,647) $(10,006) $(92,262) $(111,441)Other expense (income), net 12,655 (12,966) 6,773 (17,603)Interest expense 5,661 5,072 23,582 17,862 Income tax expense 364 1,072 1,054 3,209 Depreciation expense and amortization of intangible assets 2,527 2,427 10,030 9,473 Stock-based compensation expense 9,034 10,172 39,045 43,387 Litigation Expense 1,160 708 4,602 (2,064)JPI Amortization 3,152 4,553 15,795 6,038 Severance Costs — — 5,534 6,299 Lease Impairment and Lease-Related Charges 318 — 6,104 — Adjusted EBITDA$21,224 $1,032 $20,257 $(44,840)

Appian Announces Fourth Quarter and Full Year 2024 Financial Results

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