Appian Announces First Quarter 2022 Financial Results

First quarter cloud subscription revenue increased 37% year-over-year to $53.4 million

| Source: Appian Corporation Appian Corporation

MCLEAN, Va., May 05, 2022 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the first quarter ended March 31, 2022.

“We exceeded guidance and grew cloud subscription revenue by 37% in Q1. Our annual conference was well-attended and full of energy. We feel fortunate to have such a strong community around our low-code platform,” said Matt Calkins, CEO & Founder.

First Quarter 2022 Financial Highlights:

  • Revenue: Cloud subscription revenue was $53.4 million for the first quarter of 2022, up 37% compared to the first quarter of 2021. Total subscriptions revenue, which includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 31% year-over-year to $83.7 million for the first quarter of 2022. Professional services revenue was $30.5 million for the first quarter of 2022, compared to $25.1 million for the first quarter of 2021. Total revenue was $114.3 million for the first quarter of 2022, up 29% compared to the first quarter of 2021. Cloud subscription revenue retention rate was 117% as of March 31, 2022.
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(23.9) million for the first quarter of 2022, compared to $(10.5) million for the first quarter of 2021. Non-GAAP operating loss was $(5.1) million for the first quarter of 2022, compared to $(0.9) million for the first quarter of 2021.
  • Net loss and non-GAAP net loss: GAAP net loss was $(23.2) million for the first quarter of 2022, compared to $(13.6) million for the first quarter of 2021. GAAP net loss per share was $(0.32) for the first quarter of 2022, based on 72.2 million weighted-average shares outstanding, compared to $(0.19) for the first quarter of 2021, based on 70.7 million weighted-average shares outstanding. Non-GAAP net loss was $(4.4) million for the first quarter of 2022, compared to $(4.0) million for the first quarter of 2021. Non-GAAP net loss per share was $(0.06) for the first quarter of 2022, based on 72.2 million basic and diluted shares outstanding, consistent with the $(0.06) net loss per share for the first quarter of 2021, based on 70.7 million basic and diluted shares outstanding.
  • Adjusted EBITDA: Adjusted EBITDA loss was $(3.4) million for the first quarter of 2022, compared to adjusted EBITDA of $0.4 million for the first quarter of 2021.
  • Balance sheet and cash flows: As of March 31, 2022, Appian had total cash, cash equivalents, and investments of $168.4 million. Net cash used in operating activities was $(20.6) million for the three months ended March 31, 2022 compared to $(2.8) million of net cash used in operating activities for the same period in 2021.

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.”

First Quarter 2022 Business Highlights:

Financial Outlook:

As of May 5, 2022, guidance for 2022 is as follows:

  • Second Quarter 2022 Guidance:

    • Cloud subscription revenue is expected to be in the range of $55.8 million and $56.3 million, representing year-over-year growth of between 31% and 32%.

    • Total revenue is expected to be in the range of $102.8 million and $104.8 million, representing a year-over-year increase of between 24% and 26%.

    • Adjusted EBITDA loss is expected to be in the range of $(25.0) million and $(22.0) million.

    • Non-GAAP net loss per share is expected to be in the range of $(0.37) and $(0.33), assuming weighted average common shares outstanding of 72.4 million.

  • Full Year 2022 Guidance:

    • Cloud subscription revenue is expected to be in the range of $236.0 million and $238.0 million, representing year-over-year growth of between 32% and 33%.

    • Total revenue is expected to be in the range of $453.0 million and $457.0 million, representing a year-over-year increase of between 23% and 24%.

    • Adjusted EBITDA loss is expected to be in the range of $(53.0) million and $(50.0) million.

    • Non-GAAP net loss per share is expected to be in the range of $(0.82) and $(0.77), assuming weighted average common shares outstanding of 72.5 million.

Conference Call Details:

Appian will host a conference call today, May 5, 2022, at 4:30 p.m. ET to discuss Appian's financial results for the first quarter ended March 31, 2022 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 (877) 243-0931 in the U.S. or (212) 231-2935 internationally (Conference ID: 22017584). 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 22017584.

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 second 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data) 

 As of
 March 31, 2022 December 31, 2021
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$106,795  $100,796 
Short-term investments and marketable securities 53,438   55,179 
Accounts receivable, net of allowance of $1,402 and $1,400 as of March 31, 2022 and December 31, 2021, respectively 121,630   130,049 
Deferred commissions, current 25,670   24,668 
Prepaid expenses and other current assets 30,354   26,781 
Restricted cash, current 776   791 
Total current assets 338,663   338,264 
Property and equipment, net of accumulated depreciation of $15,473 and $14,106 as of March 31, 2022 and December 31, 2021, respectively 38,526   36,913 
Long-term investments 8,184   12,044 
Goodwill 27,271   27,795 
Intangible assets, net of accumulated amortization of $1,630 and $1,260 as of March 31, 2022 and December 31, 2021, respectively 6,615   7,144 
Operating right-of-use assets 27,556   27,897 
Deferred commissions, net of current portion 49,398   49,017 
Deferred tax assets 1,992   1,025 
Restricted cash, net of current portion 2,328   2,373 
Other assets 1,980   2,047 
Total assets$502,513  $504,519 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$4,476  $5,766 
Accrued expenses 18,654   15,483 
Accrued compensation and related benefits 27,834   35,126 
Deferred revenue, current 146,227   150,169 
Operating lease liabilities, current 8,135   8,110 
Other current liabilities 1,104   1,067 
Total current liabilities 206,430   215,721 
Operating lease liabilities, net of current portion 47,964   48,784 
Deferred revenue, net of current portion 1,888   2,430 
Deferred tax liabilities 98   209 
Other non-current liabilities 3,377   3,458 
Total liabilities 259,757   270,602 
Stockholders’ equity   
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 40,829,564 shares issued and outstanding as of March 31, 2022; 500,000,000 shares authorized and 39,964,298 shares issued and outstanding as of December 31, 2021 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 March 31, 2022; 100,000,000 shares authorized and 31,497,796 shares issued and outstanding as of December 31, 2021 3   3 
Additional paid-in capital 528,475   497,128 
Accumulated other comprehensive loss (5,041)  (5,687)
Accumulated deficit (280,685)  (257,531)
Total stockholders’ equity 242,756   233,917 
Total liabilities and stockholders’ equity$502,513  $504,519 
        

APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)

 Three Months Ended March 31,
  2022   2021 
Revenue   
Subscriptions$83,720  $63,766 
Professional services 30,546   25,089 
Total revenue 114,266   88,855 
Cost of revenue   
Subscriptions 8,206   5,854 
Professional services 22,710   17,675 
Total cost of revenue 30,916   23,529 
Gross profit 83,350   65,326 
Operating expenses   
Sales and marketing 45,916   35,984 
Research and development 29,839   20,690 
General and administrative 31,461   19,142 
Total operating expenses 107,216   75,816 
Operating loss (23,866)  (10,490)
Other expense   
Other expense, net 787   2,893 
Interest expense 74   81 
Total other expense 861   2,974 
Loss before income taxes (24,727)  (13,464)
Income tax (benefit) expense (1,573)  123 
Net loss$(23,154) $(13,587)
Net loss per share:   
Basic and diluted$(0.32) $(0.19)
Weighted average common shares outstanding:   
Basic and diluted 72,216,870   70,730,235 
        

APPIAN CORPORATION AND SUBSIDIARIES
STOCK-BASED COMPENSATION EXPENSE
(unaudited, in thousands)

 Three Months Ended March 31,
  2022   2021 
Cost of revenue   
Subscriptions$179  $297 
Professional services 1,057   641 
Operating expenses   
Sales and marketing 1,788   1,108 
Research and development 2,314   1,015 
General and administrative 1,605   4,833 
Total stock-based compensation expense$6,943  $7,894 
        

APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)

 Three Months Ended March 31,
  2022   2021 
Cash flows from operating activities   
Net loss$(23,154) $(13,587)
Adjustments to reconcile net loss to net cash used in operating activities   
Depreciation and amortization 1,773   1,278 
Bad debt expense (2)  — 
Change in fair value of available-for-sale securities 111   (8)
Deferred income taxes (1,073)  (448)
Stock-based compensation 6,943   7,894 
Changes in assets and liabilities   
Accounts receivable 8,416   12,651 
Prepaid expenses and other assets (3,579)  (279)
Deferred commissions (1,383)  (2,642)
Accounts payable and accrued expenses 2,338   1,159 
Accrued compensation and related benefits (6,798)  (1,955)
Other current and non-current liabilities 18   151 
Deferred revenue (3,764)  (7,192)
Operating lease liabilities (450)  168 
Net cash used in operating activities (20,604)  (2,810)
Cash flows from investing activities   
Purchases of investments (16,240)  — 
Proceeds from investments 21,729   5,625 
Purchases of property and equipment (3,390)  (468)
Net cash provided by investing activities 2,099   5,157 
Cash flows from financing activities   
Proceeds from exercise of common stock options 24,404   625 
Net cash provided by financing activities 24,404   625 
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 40   (682)
Net increase in cash, cash equivalents, and restricted cash 5,939   2,290 
Cash, cash equivalents, and restricted cash at beginning of period 103,960   112,462 
Cash, cash equivalents, and restricted cash at end of period$109,899  $114,752 
Supplemental disclosure of cash flow information   
Cash paid for interest$78  $88 
Cash paid for income taxes$197  $148 
        

APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in thousands, except share and per share data)

 Three Months Ended March 31,
  2022   2021 
Reconciliation of non-GAAP operating loss:   
GAAP operating loss$(23,866) $(10,490)
Add back:   
Stock-based compensation expense 6,943   7,894 
Litigation expenses(1) 11,792   1,687 
Non-GAAP operating loss$(5,131) $(909)
    
Reconciliation of non-GAAP net loss:   
GAAP net loss$(23,154) $(13,587)
Add back:   
Stock-based compensation expense 6,943   7,894 
Litigation expenses(1) 11,792   1,687 
Non-GAAP net loss$(4,419) $(4,006)
    
Non-GAAP earnings per share:   
Non-GAAP net loss$(4,419) $(4,006)
Non-GAAP weighted average shares used to compute net loss per share, basic and diluted 72,216,870   70,730,235 
Non-GAAP net loss per share, basic and diluted$(0.06) $(0.06)
    
Reconciliation of non-GAAP net loss per share, basic and diluted:   
GAAP net loss per share, basic and diluted$(0.32) $(0.19)
Add back:   
Non-GAAP adjustments to net loss per share 0.26   0.13 
Non-GAAP net loss per share, basic and diluted$(0.06) $(0.06)
    
Reconciliation of adjusted EBITDA:   
GAAP net loss$(23,154) $(13,587)
Other expense, net 787   2,893 
Interest expense 74   81 
Income tax (benefit) expense (1,573)  123 
Depreciation and amortization 1,773   1,278 
Stock-based compensation expense 6,943   7,894 
Litigation expenses(1) 11,792   1,687 
Adjusted EBITDA$(3,358) $369 

(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.