Appian Announces Fourth Quarter and Full Year 2021 Financial Results

McLean, Virginia, UNITED STATES


Fourth quarter cloud subscription revenue increased 39% year-over-year to $51.2 million
Full year cloud subscription revenue increased 39% year-over-year to $179.4 million

MCLEAN, Va., Feb. 17, 2022 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2021.

"Appian cloud subscription revenue grew 39% for the full year. We enter 2022 with an accelerating business, a unified low-code platform, a growing ecosystem, and happy customers," said Matt Calkins, CEO & Founder.

Fourth Quarter 2021 Financial Highlights:

  • Revenue: Cloud subscription revenue was $51.2 million for the fourth quarter of 2021, up 39% compared to the fourth quarter of 2020. Total subscriptions revenue, which includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 35% year-over-year to $75.8 million for the fourth quarter of 2021. Professional services revenue was $29.2 million for the fourth quarter of 2021, compared to $25.5 million for the fourth quarter of 2020. Total revenue was $105.0 million for the fourth quarter of 2021, up 29% compared to the fourth quarter of 2020. Cloud subscription revenue retention rate was 116% as of December 31, 2021.
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(25.9) million for the fourth quarter of 2021, compared to $(9.7) million for the fourth quarter of 2020. Non-GAAP operating loss was $(11.7) million for the fourth quarter of 2021, compared to $(5.1) million for the fourth quarter of 2020.
  • Net loss and non-GAAP net loss: GAAP net loss was $(25.8) million for the fourth quarter of 2021, compared to $(6.4) million for the fourth quarter of 2020. GAAP net loss per share was $(0.36) for the fourth quarter of 2021, based on 71.3 million weighted-average shares outstanding, compared to $(0.09) for the fourth quarter of 2020, based on 70.4 million weighted-average shares outstanding. Non-GAAP net loss was $(11.6) million for the fourth quarter of 2021, compared to $(1.8) million for the fourth quarter of 2020. Non-GAAP net loss per share was $(0.16) for the fourth quarter of 2021, based on 71.3 million basic and diluted shares outstanding, compared to the $(0.03) net loss per share for the fourth quarter of 2020, based on 70.4 million basic and diluted shares outstanding.
  • Adjusted EBITDA: Adjusted EBITDA loss was $(10.0) million for the fourth quarter of 2021, compared to adjusted EBITDA loss of $(3.7) million for the fourth quarter of 2020.
  • Cash flows: Net cash used in operating activities was $(19.4) million for the three months ended December 31, 2021 compared to $5.8 million of net cash provided by operating activities for the same period in 2020.

Full Year 2021 Financial Highlights:

  • Revenue: Cloud subscription revenue was $179.4 million for the full year 2021, up 39% compared to the full year 2020. Total subscriptions revenue, which includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 33% year-over-year to $263.7 million for the full year 2021. Professional services revenue was $105.5 million for the full year 2021, compared to $105.9 million for the full year 2020. Total revenue was $369.3 million for the full year 2021, up 21% compared to the full year 2020.
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(83.9) million for the full year 2021, compared to $(37.9) million for the full year 2020. Non-GAAP operating loss was $(43.7) million for the full year 2021, compared to $(22.6) million for the full year 2020.
  • Net loss and non-GAAP net loss: GAAP net loss was $(88.6) million for the full year 2021, compared to $(33.5) million for the full year 2020. GAAP net loss per share was $(1.25) for the full year 2021, based on 71.0 million weighted-average shares outstanding, compared to $(0.48) for the full year 2020, based on 69.1 million weighted-average shares outstanding. Non-GAAP net loss was $(48.3) million for the full year 2021, compared to $(18.2) million for the full year 2020. Non-GAAP net loss per share was $(0.68) for the full year 2021, based on 71.0 million basic and diluted shares outstanding, compared to the $(0.26) net loss per share for the full year 2020, based on 69.1 million basic and diluted shares outstanding.
  • Adjusted EBITDA: Adjusted EBITDA loss was $(37.9) million for the full year 2021, compared to adjusted EBITDA loss of $(16.8) million for the full year 2020.
  • Balance sheet and cash flows: As of December 31, 2021, Appian had total cash, cash equivalents, and investments of $168.0 million. Net cash used in operating activities was $(53.9) million for the full year 2021 compared to $(7.6) million of net cash used in operating activities for the full year in 2020.

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.”

Fourth Quarter 2021 Business Highlights:

Financial Outlook:

As of February 17, 2022, guidance for 2022 is as follows:

  • First Quarter 2022 Guidance:

    • Cloud subscription revenue is expected to be in the range of $52.1 million and $52.6 million, representing year-over-year growth of between 33% and 35%.
    • Total revenue is expected to be in the range of $106.0 million and $108.0 million, representing a year-over-year increase of between 19% and 22%.
    • Adjusted EBITDA loss is expected to be in the range of $(9.0) million and $(7.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.15) and $(0.12), assuming weighted average common shares outstanding of 72.2 million.

  • Full Year 2022 Guidance:

    • Cloud subscription revenue is expected to be in the range of $234.0 million and $236.0 million, representing year-over-year growth of between 30% and 32%.
    • Total revenue is expected to be in the range of $444.0 million and $446.0 million, representing a year-over-year increase of between 20% and 21%.
    • Adjusted EBITDA loss is expected to be in the range of $(53.0) million and $(51.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.83) and $(0.80), assuming weighted average common shares outstanding of 72.5 million.

Conference Call Details:

Appian will host a conference call today, February 17, 2022, at 4:30 p.m. ET to discuss Appian's financial results for the fourth quarter and full year ended December 31, 2021 and business outlook.

The live webcast of the conference call can be accessed on the Investor Relations page of Appian’s website at http://investors.appian.com. To access the call, please dial (888) 204-4368 in the U.S. or (323) 994-2093 internationally (Conference ID: 5263699). Following the call, an archived webcast will be available at the same location on the Investor Relations page. A telephone replay will be available for one week at (844) 512-2921 in the U.S. or (412) 317-6671 internationally with recording access code 5263699.

About Appian

Appian provides a low-code platform that accelerates the creation of high-impact business applications and workflows, enabling our customers to automate the most important aspects of their business. Global organizations use our applications to improve customer experience, achieve operational excellence, and simplify global risk management and compliance. For more information, visit www.appian.com.

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 measures, including non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, non-GAAP weighted average shares outstanding, and adjusted EBITDA. These non-GAAP financial measures exclude the effect of stock-based compensation expense, gains or losses on disposals of assets, and certain litigation-related expenses consisting of legal and other professional fees which are not indicative of our core operating performance and are not part of our normal course of business.

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. A reconciliation of non-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures.

Appian uses these non-GAAP financial 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 its 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.

Forward-Looking Statements

This press release includes forward-looking statements. 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 2022, the impact of COVID-19, including the emergence of new variant strains of COVID-19, on our business and on the global economy, 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," 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, 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, the potential fluctuation of Appian’s future quarterly results of operations, Appian’s ability to shift its revenue towards subscriptions and away from professional services, Appian’s ability to operate in compliance with applicable laws and regulations, Appian’s strategic relationships with third parties and use of third-party licensed software and its platform’s compatibility with third-party applications, the timing of Appian’s recognition of subscriptions revenue which may delay the effect of near term changes in sales on its operating results, and the additional risks and uncertainties set forth in the "Risk Factors" section of Appian’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 17, 2022 and other reports that Appian has filed 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 Contact
Srinivas Anantha, CFA
703-442-8844
investors@appian.com

Media Contact
Ben Farrell
703-442-1067
ben.farrell@appian.com

 
APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data) 
 
  As of
  December 31,
2021
 December 31,
2020
     
Assets    
Current assets    
Cash and cash equivalents $100,796  $112,462 
Short-term investments and marketable securities  55,179   109,826 
Accounts receivable, net of allowance of $1,400 as of each of December 31, 2021 and December 31, 2020  130,049   97,278 
Deferred commissions, current  24,668   17,899 
Prepaid expenses and other current assets  26,781   27,955 
Restricted cash, current  791    
 Total current assets  338,264   365,420 
Property and equipment, net  36,913   35,404 
Long-term investments  12,044   36,120 
Goodwill  27,795   4,862 
Intangible assets, net of accumulated amortization of $1,260 and $429 as of December 31, 2021 and December 31, 2020, respectively  7,144   1,744 
Operating right-of-use assets  27,897   30,659 
Deferred commissions, net of current portion  49,017   34,198 
Deferred tax assets  1,025   489 
Restricted cash, net of current portion  2,373    
Other assets  2,047   3,625 
Total assets $504,519  $512,521 
Liabilities and Stockholders’ Equity    
Current liabilities    
Accounts payable $5,766  $2,967 
Accrued expenses  15,483   5,821 
Accrued compensation and related benefits  35,126   22,981 
Deferred revenue, current  150,169   116,256 
Operating lease liabilities, current  8,110   6,923 
Other current liabilities  1,067   940 
 Total current liabilities  215,721   155,888 
Operating lease liabilities, net of current portion  48,784   51,194 
Deferred revenue, net of current portion  2,430   3,886 
Deferred tax liabilities  209   70 
Other non-current liabilities  3,458   4,878 
Total liabilities  270,602   215,916 
Stockholders’ equity    
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 39,964,298 shares issued and outstanding as of December 31, 2021; 500,000,000 shares authorized and 38,971,324 shares issued and outstanding as of December 31, 2020  4   4 
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 31,497,796 shares issued and outstanding as of December 31, 2021; 100,000,000 shares authorized and 31,707,866 shares issued and outstanding as of December 31, 2020  3   3 
Additional paid-in capital  497,128   470,498 
Accumulated other comprehensive loss  (5,687)  (5,010)
Accumulated deficit  (257,531)  (168,890)
Total stockholders’ equity  233,917   296,605 
Total liabilities and stockholders’ equity $504,519  $512,521 


APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
 
 Three Months Ended December 31, Year Ended December 31,
  2021   2020   2021   2020 
            
 (unaudited)   
Revenue:       
Subscriptions$75,786  $56,096  $263,738  $198,710 
Professional services 29,202   25,534   105,521   105,863 
Total revenue 104,988   81,630   369,259   304,573 
Cost of revenue:       
Subscriptions 7,524   5,641   27,330   20,826 
Professional services 20,698   16,299   76,763   67,940 
Total cost of revenue 28,222   21,940   104,093   88,766 
Gross profit 76,766   59,690   265,166   215,807 
Operating expenses:       
Sales and marketing 49,277   35,425   167,852   130,316 
Research and development 26,455   18,875   97,517   70,241 
General and administrative 26,978   15,076   83,704   53,152 
Total operating expenses 102,710   69,376   349,073   253,709 
Operating loss (25,944)  (9,686)  (83,907)  (37,902)
Other (income) expense       
Other (income) expense, net (557)  (3,941)  3,584   (5,786)
Interest expense 139   88   372   478 
Total other (income) expense (418)  (3,853)  3,956   (5,308)
Loss before income taxes (25,526)  (5,833)  (87,863)  (32,594)
Income tax expense 319   548   778   883 
Net loss$(25,845) $(6,381) $(88,641) $(33,477)
Net loss per share attributable to common stockholders:       
Basic and diluted$(0.36) $(0.09) $(1.25) $(0.48)
Weighted average common shares outstanding:       
Basic and diluted 71,333,582   70,362,387   71,036,490   69,050,565 


APPIAN CORPORATION AND SUBSIDIARIES
STOCK BASED COMPENSATION EXPENSE
(in thousands)
 
 Three Months Ended December 31, Year Ended December 31,
 2021 2020 2021 2020
          
 (unaudited)    
Cost of revenue       
Subscriptions$226 $265 $1,199 $943
Professional services 848  542  3,131  1,477
Operating expenses       
Sales and marketing 1,673  984  5,426  2,821
Research and development 1,877  877  5,224  2,718
General and administrative 1,528  1,943  8,864  7,320
Total stock-based compensation expense$6,152 $4,611 $23,844 $15,279


APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 Year Ended December 31,
  2021   2020 
Cash flows from operating activities:   
Net loss$(88,641) $(33,477)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 5,743   5,851 
Bad debt expense 410   984 
Loss on disposal of property and equipment 79   22 
Change in fair value of available-for-sale securities    22 
Deferred income taxes (498)  (184)
Stock-based compensation 23,844   15,279 
Changes in assets and liabilities:   
Accounts receivable (33,904)  (33,559)
Prepaid expenses and other assets 2,094   3,740 
Deferred commissions (21,588)  (8,575)
Accounts payable and accrued expenses 11,467   (4,238)
Accrued compensation and related benefits 12,598   11,801 
Other liabilities (444)  3,681 
Deferred revenue 33,378   27,626 
Operating lease assets and liabilities 1,544   3,407 
Net cash used in operating activities (53,918)  (7,620)
Cash flows from investing activities:   
Purchases of investments (41,870)  (145,968)
Payments for acquisitions, net of cash acquired (30,729)  (6,138)
Proceeds from investments 120,593    
Purchases of property and equipment (6,058)  (1,251)
Net cash provided by (used in) investing activities 41,936   (153,357)
Cash flows from financing activities:   
Principal payments on finance leases    (3,822)
Proceeds from public offerings, net of underwriting discounts    108,260 
Payments of costs related to public offerings    (346)
Proceeds from exercise of common stock options 2,786   6,376 
Net cash provided by financing activities 2,786   110,468 
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 694   3,216 
Net decrease in cash, cash equivalents, and restricted cash (8,502)  (47,293)
Cash, cash equivalents, and restricted cash at beginning of period$112,462  $159,755 
Cash, cash equivalents, and restricted cash at end of period$103,960  $112,462 
Supplemental disclosure of cash flow information:   
Cash paid for interest$323  $165 
Cash paid for income taxes$1,505  $1,182 
Supplemental disclosure of non-cash investing and financing information:   
Accrued capital expenditures$379  $ 


APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in thousands, except share and per share data)
 
 Three Months Ended December 31, Year Ended December 31,
  2021   2020   2021   2020 
Reconciliation of non-GAAP operating loss:       
GAAP operating loss$(25,944) $(9,686) $(83,907) $(37,902)
Add back:       
Stock-based compensation expense 6,152   4,611   23,844   15,279 
Litigation expenses(1) 8,130      16,400    
Non-GAAP operating loss$(11,662) $(5,075) $(43,663) $(22,623)
        
Reconciliation of non-GAAP net loss:       
GAAP net loss$(25,845) $(6,381) $(88,641) $(33,477)
Add back:       
Stock-based compensation expense 6,152   4,611   23,844   15,279 
Litigation expenses(1) 8,130      16,400    
Loss on disposal of property and equipment 1      79   22 
Non-GAAP net loss$(11,562) $(1,770) $(48,318) $(18,176)
        
Non-GAAP earnings per share:       
Non-GAAP net loss$(11,562) $(1,770) $(48,318) $(18,176)
Non-GAAP weighted average shares used to compute net loss per
share, basic and diluted
 71,333,582   70,362,387   71,036,490   69,050,565 
Non-GAAP net loss per share, basic and diluted$(0.16) $(0.03) $(0.68) $(0.26)
        
Reconciliation of non-GAAP net loss per share, basic and diluted:       
GAAP net loss per share, basic and diluted$(0.36) $(0.09) $(1.25) $(0.48)
Add back:       
Non-GAAP adjustments to net loss per share 0.20   0.06   0.57   0.22 
Non-GAAP net loss per share, basic and diluted$(0.16) $(0.03) $(0.68) $(0.26)
        
Reconciliation of adjusted EBITDA:       
GAAP net loss$(25,845) $(6,381) $(88,641) $(33,477)
Other (income) expense, net (557)  (3,941)  3,584   (5,786)
Interest expense 139   88   372   478 
Income tax expense 319   548   778   883 
Depreciation and amortization 1,672   1,366   5,743   5,851 
Stock-based compensation expense 6,152   4,611   23,844   15,279 
Litigation expenses(1) 8,130      16,400    
Adjusted EBITDA$(9,990) $(3,709) $(37,920) $(16,772)

(1) Consists of professional fees and other costs incurred in connection with two separate lawsuits, one involving reciprocal false advertising and related claims with a competitor and one involving an effort to enforce our intellectual property. We believe the costs incurred related to these cases are outside of our ordinary course of business; therefore, exclusion of such costs aids to provide supplemental information and comparable financial results from period to period.