Subscription revenue increased 32% year-over-year to $33.6 million
Total revenue increased 15% year-over-year to $59.6 million

RESTON, Va., May 02, 2019 (GLOBE NEWSWIRE) -- Appian (NASDAQ: APPN) today announced financial results for the first quarter ended March 31, 2019.

"We increased 2019 subscription revenue guidance due to our ability to expand within our existing customer base, our influential partner ecosystem, and the Appian Guarantee,” said Matt Calkins CEO & Founder.

 First Quarter 2019 Financial Highlights:

  • Revenue: Subscription revenue was $33.6 million for the first quarter of 2019, up 32% compared to the first quarter of 2018. Total subscriptions, software and support revenue was $34.9 million for the first quarter of 2019, an increase of 30% year-over-year.  Professional services revenue was $24.7 million for the first quarter of 2019, equal to the prior year period. Total revenue was $59.6 million for the first quarter of 2019, up 15% compared to the first quarter of 2018. Subscription revenue retention rate was 116% as of March 31, 2019.
     
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(17.4) million for the first quarter of 2019, compared to $(10.2) million for the first quarter of 2018.  Non-GAAP operating loss was $(10.2) million for the first quarter of 2019, compared to $(8.0) million for the first quarter of 2018.
     
  • Net loss and non-GAAP net loss: GAAP net loss was $(17.5) million for the first quarter of 2019, compared to $(9.6) million for the first quarter of 2018.  GAAP net loss per share attributable to common stockholders was $(0.27) for the first quarter of 2019 based on 64.3 million weighted-average shares outstanding, compared to $(0.16) for the first quarter of 2018 based on 60.9 million weighted-average shares outstanding.  Non-GAAP net loss was $(10.3) million for the first quarter of 2019, compared to $(7.3) million for the first quarter of 2018.  Non-GAAP net loss per share was $(0.16) for the first quarter of 2019, based on 64.3 million basic and diluted shares outstanding, compared to $(0.12) for the first quarter of 2018, based on 60.9 million basic and diluted shares outstanding.
     
  • Balance sheet and cash flows: As of March 31, 2019, Appian had cash and cash equivalents of $75.4 million. Net cash used in operating activities was $(4.1) million for the three months ended March 31, 2019 compared to $(13.8) million of net cash used in operating activities for the same period in 2018.  In accordance with U.S. GAAP, the $4.5 million of tenant improvement allowance reimbursements received during the three months ended March 31, 2019 are a source of cash in operating activities, while the $16.6 million of capital expenditures, largely for the build-out of our new headquarters and the purchase of property and equipment, are recorded as cash used in investing activities.

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 2019 Business Highlights:

  • Named a Leader by Gartner in its 2019 Magic Quadrant for Intelligent Business Process Management Suites (iBPMS). This marks the ninth time in a row that Appian has been named a Leader by Gartner in this market.
  • Announced the next release of its low-code platform, making it easier than ever to build powerful enterprise applications up to 20x faster. The new version accelerates development and expands low-code/no-code platform capabilities in a number of key areas, including integration, robotic process automation (RPA), interface design, enterprise mobility, and customer engagement.
  • Announced that UnionBank of the Philippines used the Appian Platform to launch its first fully digital branch.

Financial Outlook:

As of May 2, 2019, guidance for the second quarter 2019 and full year 2019 is as follows:

  • Second Quarter 2019 Guidance:
    ○  Subscription revenue is expected to be in the range of $36.5 million and $36.7 million, representing year-over-year growth of between 35% and 36%.
    ○  Total revenue is expected to be in the range of $63.3 million and $63.8 million, representing year-over-year growth of between 6% and 7%. 
    ○  Non-GAAP operating loss is expected to be in the range of $(11.5) million and $(11.0) million.
    ○  Non-GAAP net loss per share is expected to be in the range of $(0.18) and $(0.17). This assumes 64.8 million weighted average common shares outstanding.
  • Full Year 2019 Guidance:
    ○  Subscription revenue is now expected to be in the range of $150.5 million and $152.0 million, representing year-over-year growth of between 30% and 31%.
    ○  Total revenue is now expected to be in the range of $255.0 million and $258.0 million, representing year-over-year growth of between 13% and 14%. 
    ○  Non-GAAP operating loss is now expected to be in the range of $(35.5) million and $(32.5) million.
    ○  Non-GAAP net loss per share is now expected to be in the range of $(0.55) and $(0.50).  This assumes 65.0 million non-GAAP weighted average common shares outstanding.

Conference Call Details:

Appian will host a conference call today, May 2, 2019, at 5:00 p.m. ET to discuss the Company’s financial results for the first quarter ended March 31, 2019 and business outlook. 

The live webcast of the conference call can be accessed on the Investor Relations page of the Company’s website at http://investors.appian.com. To access the call, please dial (877) 407-0792 in the U.S. or (201) 689-8263 internationally.  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 13689316.

About Appian

Appian (NASDAQ: APPN) provides a low-code development platform that accelerates the creation of high-impact business applications. Many of the world’s largest organizations use Appian 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 and non-GAAP weighted average shares outstanding. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or 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, please see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release.

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 that 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 that 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 2019, 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 subscription 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, and the timing of Appian’s recognition of subscription 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, 2018 filed with the Securities and Exchange Commission on February 21, 2019 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
Staci Mortenson
ICR for Appian
703-442-1091
investors@appian.com

Media Contact
Nicole Greggs
Director, Media Relations
703-260-7868
nicole.greggs@appian.com

 
APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
    
 As of  As of 
 March 31, December 31,
 2019 2018
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$75,353  $94,930 
Accounts receivable, net of allowance of $600 as of March 31, 2019 and December 31, 2018 81,012   79,383 
Deferred commissions, current 15,095   14,020 
Prepaid expenses and other current assets 20,262   21,293 
Total current assets  191,722   209,626 
Property and equipment, net 23,340   7,539 
Deferred commissions, net of current portion 15,555   15,088 
Deferred tax assets 328   326 
Other assets 562   601 
Total assets$231,507  $233,180 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$6,364  $9,249 
Accrued expenses 12,111   7,464 
Accrued compensation and related benefits 12,277   13,796 
Deferred revenue, current 100,065   95,523 
Other current liabilities 2,102   2,369 
Total current liabilities  132,919   128,401 
Deferred tax liabilities 41   42 
Deferred revenue, net of current portion 14,990   16,145 
Deferred rent, net of current portion 19,264   15,400 
Total liabilities 167,214   159,988 
Stockholders’ equity   
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 30,882,834 shares
  issued and outstanding as of March 31, 2019; 500,000,000 shares authorized and 29,626,054 shares
  issued and outstanding as of December 31, 2018
 3   3 
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 33,798,188 shares
  issued and outstanding as of March 31, 2019; 100,000,000 shares authorized and 34,290,383 shares
  issued and outstanding as of December 31, 2018
 3   3 
Additional paid-in capital 226,582   218,284 
Accumulated other comprehensive income 882   542 
Accumulated deficit (163,177)  (145,640)
Total stockholders’ equity 64,293   73,192 
Total liabilities and stockholders’ equity$231,507  $233,180 
    

 

 
APPIAN CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
    
 Three Months Ended March 31,
 2019 2018
Revenue:   
 Subscriptions, software and support$34,909  $26,952 
 Professional services 24,670   24,744 
Total revenue 59,579   51,696 
Cost of revenue:   
 Subscriptions, software and support 3,585   2,628 
 Professional services 20,481   18,421 
Total cost of revenue 24,066   21,049 
Gross profit 35,513   30,647 
Operating expenses:   
 Sales and marketing 29,945   22,964 
 Research and development 13,956   9,870 
 General and administrative 9,016   8,060 
Total operating expenses 52,917   40,894 
Operating loss (17,404)  (10,247)
Other expense (income):   
 Other income, net (60)  (918)
 Interest expense 71   13 
Total other expense (income) 11   (905)
Loss before income taxes (17,415)  (9,342)
Income tax expense 122   211 
Net loss (17,537)  (9,553)
Net loss per share attributable to common stockholders:   
 Basic and diluted$(0.27) $(0.16)
Weighted average common shares outstanding:   
 Basic and diluted 64,306,667   60,850,521 
    

 

 
APPIAN CORPORATION AND SUBSIDIARIES
STOCK BASED COMPENSATION EXPENSE
(in thousands)
(unaudited)
    
 Three Months Ended March 31,
 2019
 2018
Cost of revenue:   
 Subscriptions, software and support$154  $110 
 Professional services 1,974   220 
Operating Expenses   
 Sales and marketing 2,381   507 
 Research and development 2,115   391 
 General and administrative 601   1,012 
  Total stock-based compensation expense$7,225  $2,240 
    

 

 
Appian Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
    
 Three Months Ended March 31,
 2019 2018
Cash flows from operating activities:   
Net loss$(17,537) $(9,553)
Adjustments to reconcile net loss to net cash used in
  operating activities:
   
Depreciation and amortization 798   268 
Deferred income taxes (3)  76 
Stock-based compensation 7,225   2,240 
Changes in assets and liabilities:    
Accounts receivable (1,702)  1,932 
Prepaid expenses and other assets 1,252   (1,085)
Deferred commissions (1,542)  315 
Accounts payable and accrued expenses 1,577   (2,161)
Accrued compensation and related benefits (1,485)  (2,743)
Other current liabilities (138)  909 
Deferred revenue 3,718   (3,849)
Deferred rent, non-current 3,698   (182)
Net cash used in operating activities  (4,139)  (13,833)
Cash flows from investing activities:   
Purchases of property and equipment (16,595)  (1,036)
Net cash used in investing activities  (16,595)  (1,036)
Cash flows from financing activities:   
Proceeds from exercise of common stock options 1,073   983 
Net cash provided by financing activities  1,073   983 
Effect of foreign exchange rate changes on cash and cash equivalents 84   1,004 
Net decrease in cash and cash equivalents (19,577)  (12,882)
Cash and cash equivalents, beginning of period 94,930   73,758 
Cash and cash equivalents, end of period$75,353  $60,876 
Supplemental disclosure of cash flow information:   
Cash paid for interest$69  $8 
Cash paid for income taxes$43  $57 
    

 

 
APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except share and per share data)
(unaudited)
    
    
 Three Months Ended March 31,
 2019 2018
Reconciliation of non-GAAP operating loss:   
GAAP operating loss$(17,404) $(10,247)
Add back:   
Stock-based compensation expense 7,225   2,240 
Non-GAAP operating loss$(10,179) $(8,007)
    
Reconciliation of non-GAAP net loss:   
GAAP net loss$(17,537) $(9,553)
Add back:   
Stock-based compensation expense 7,225   2,240 
Non-GAAP net loss$(10,312) $(7,313)
    
Non-GAAP earnings per share:   
Non-GAAP net loss$(10,312) $(7,313)
Non-GAAP weighted average shares used to compute net loss per share
  attributable to common stockholders, basic and diluted
 64,306,667   60,850,521 
Non-GAAP net loss per share, basic and diluted$(0.16) $(0.12)
    
Reconciliation of non-GAAP net loss per share, basic and diluted:   
GAAP net loss per share attributable to common stockholders, basic and diluted$(0.27) $(0.16)
Add back:   
Non-GAAP adjustments to net loss per share 0.11   0.04 
Non-GAAP net loss per share, basic and diluted$(0.16) $(0.12)