Appian Announces Second Quarter 2021 Financial Results

Appian Announces Second Quarter 2021 Financial Results

Cloud subscription revenue increased 44% year-over-year to $42.5 million
Subscriptions revenue increased 37% year-over-year to $56.9 million

MCLEAN, Va., Aug. 05, 2021 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the second quarter ended June 30, 2021.

“In Q2, Appian increased cloud subscription revenue by 44% and announced the acquisition of a leading process mining firm. With this acquisition, we are unifying process mining and low-code automation. Companies can now discover their processes and automate them within the Appian platform,” said Matt Calkins, CEO & Founder.

Second Quarter 2021 Financial Highlights:

  • Revenue: Cloud subscription revenue was $42.5 million for the second quarter of 2021, up 44% compared to the second quarter of 2020. Total subscriptions revenue, which includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 37% year-over-year to $56.9 million for the second quarter of 2021. Professional services revenue was $26.1 million for the second quarter of 2021, compared to $25.4 million for the second quarter of 2020. Total revenue was $83.0 million for the second quarter of 2021, up 24% compared to the second quarter of 2020. Cloud subscription revenue retention rate was 121% as of June 30, 2021.
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(24.6) million for the second quarter of 2021, compared to $(12.1) million for the second quarter of 2020. Non-GAAP operating loss was $(17.6) million for the second quarter of 2021, compared to $(8.5) million for the second quarter of 2020.
  • Net loss and non-GAAP net loss: GAAP net loss was $(23.8) million for the second quarter of 2021, compared to $(11.8) million for the second quarter of 2020. GAAP net loss per share was $(0.34) for the second quarter of 2021, based on 71.0 million weighted-average shares outstanding, compared to $(0.17) for the second quarter of 2020, based on 68.4 million weighted-average shares outstanding. Non-GAAP net loss was $(16.9) million for the second quarter of 2021, compared to $(8.2) million for the second quarter of 2020. Non-GAAP net loss per share was $(0.24) for the second quarter of 2021, based on 71.0 million basic and diluted shares outstanding, compared to the $(0.12) net loss per share for the second quarter of 2020, based on 68.4 million basic and diluted shares outstanding.
  • Adjusted EBITDA: Adjusted EBITDA loss was $(16.3) million for the second quarter of 2021, compared to adjusted EBITDA loss of $(7.0) million for the second quarter of 2020.
  • Balance sheet and cash flows: As of June 30, 2021, Appian had total cash, cash equivalents, and investments of $249.7 million. Net cash used in operating activities was $(6.6) million for the three months ended June 30, 2021 compared to $(3.1) million of net cash used in operating activities for the same period 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.”

Second Quarter 2021 Business Highlights:

  • Appian announced KPMG, Accenture, PwC, Wipro, Infosys, Vuram, Appcino, GxP Partners, and Needzaio as recipients of 2021 Partner awards. The awards recognize their achievements and contributions to the Appian community.
  • Bankhaus von der Heydt, one of Europe's oldest banks, delivers new products 10x faster with the Appian Low-code Automation Platform.
  • CNA Financial Corporation, a top commercial insurer, wins the Celent 2021 Model Insurer Award. They were selected for developing CNA ComPass, a solution built on the Appian Low-code Automation Platform.
  • Entelgy, a consultancy company, deployed the Appian Low-code Automation Platform and accelerated the time between invoicing and payment by 35%. They process 98% of all invoices without human intervention, using Appian Robotic Process Automation.
  • Appian unveiled the latest version of its low-code automation platform, including enhanced AI-driven Intelligent Document Processing (IDP), new design guidance and developer collaboration features, and enhanced DevSecOps capabilities.

Financial Outlook:

As of August 5, 2021, guidance for 2021 is as follows:

  • Third Quarter 2021 Guidance:

    • Cloud subscription revenue is expected to be in the range of $45.0 million and $45.5 million, representing year-over-year growth of between 31% and 33%.
    • Total revenue is expected to be in the range of $90.5 million and $91.0 million, representing a year-over-year increase of between 17% and 18%.
    • Adjusted EBITDA loss is expected to be in the range of $(13.0) million and $(11.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.20) and $(0.17), assuming weighted average common shares outstanding of 71.3 million.
  • Full Year 2021 Guidance:

    • Cloud subscription revenue is expected to be in the range of $174.0 million and $175.0 million, representing year-over-year growth of 35%.
    • Total revenue is expected to be in the range of $355.0 million and $357.0 million, representing a year-over-year increase of 17%.
    • Adjusted EBITDA loss is expected to be in the range of $(40.0) million and $(38.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.68) and $(0.65), assuming weighted average common shares outstanding of 71.3 million.

Conference Call Details:

Appian will host a conference call today, August 5, 2021, at 5:00 p.m. ET to discuss Appian's financial results for the second quarter ended June 30, 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 (800) 430-8332 in the U.S. or (323) 347-3277 internationally (Conference ID: 6145770). 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 6145770.

Management will present at the following investor conferences:

  • Oppenheimer 24th Annual Technology, Internet & Communications Conference. The presentation is scheduled for Tuesday, August 10th at 8:15 a.m. ET.
  • Keybanc’s 2021 Technology Leadership Forum. Management will be participating in a panel: The Evolving Automation Software Stack – From RPA to Low Code/No-Code, scheduled for Wednesday, August 11th at 10:00 a.m. ET. Management will also participate in a fire-side chat presentation scheduled for Wednesday, August 11th at 12:40 p.m. ET

About Appian

Appian helps organizations build apps and workflows rapidly, with a low-code automation platform. Combining people, technologies, and data in a single workflow, Appian can help companies maximize their resources and improve business results. 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, 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, please 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 third quarter and full year 2021, the impact 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, 2020 filed with the Securities and Exchange Commission on February 18, 2021 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
[email protected] 

Media Contact
Ben Farrell
703-442-1067
[email protected] 



APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
    
    
 As of
 June 30, December 31,
  2021   2020 
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$131,279  $112,462 
Short-term investments and marketable securities 111,324   109,826 
Accounts receivable, net of allowance of $1,400 as of each of June 30, 2021 and December 31, 2020 82,301   97,278 
Deferred commissions, current 20,162   17,899 
Prepaid expenses and other current assets 28,074   27,955 
Total current assets  373,140   365,420 
Property and equipment, net 34,064   35,404 
Long-term investments 7,048   36,120 
Goodwill 4,707   4,862 
Intangible assets, net of accumulated amortization of $623 and $429 as of June 30, 2021 and December 31, 2020, respectively 1,480   1,744 
Operating right-of-use assets 30,528   30,659 
Deferred commissions, net of current portion 39,275   34,198 
Deferred tax assets 607   489 
Other assets 3,066   3,625 
Total assets$493,915  $512,521 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$5,020  $2,967 
Accrued expenses 7,276   5,821 
Accrued compensation and related benefits 25,699   22,981 
Deferred revenue, current 113,805   116,256 
Operating lease liabilities, current 7,854   6,923 
Other current liabilities 6   940 
Total current liabilities  159,660   155,888 
Operating lease liabilities, net of current portion 50,185   51,194 
Deferred revenue, net of current portion 2,905   3,886 
Deferred tax liabilities 35   70 
Other non-current liabilities 4,784   4,878 
Total liabilities 217,569   215,916 
Stockholders’ equity   
Class A common stock - par value $0.0001; 500,000,000 shares authorized and 39,581,079 shares issued and outstanding as of June 30, 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 31,499,516 shares issued and outstanding as of June 30, 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 485,079   470,498 
Accumulated other comprehensive loss (2,438)  (5,010)
Accumulated deficit (206,302)  (168,890)
Total stockholders’ equity 276,346   296,605 
Total liabilities and stockholders’ equity$493,915  $512,521 
    


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
        
        
 Three Months Ended June 30, Six Months Ended June 30,
  2021   2020   2021   2020 
Revenue       
Subscriptions$56,946  $41,418  $120,712  $91,854 
Professional services 26,053   25,357   51,142   53,785 
Total revenue 82,999   66,775   171,854   145,639 
Cost of revenue       
Subscriptions 6,860   4,701   12,714   10,084 
Professional services 18,975   16,455   36,650   35,191 
Total cost of revenue 25,835   21,156   49,364   45,275 
Gross profit 57,164   45,619   122,490   100,364 
Operating expenses       
Sales and marketing 40,520   29,086   76,504   63,258 
Research and development 23,862   17,178   44,552   33,216 
General and administrative 17,358   11,450   36,500   24,591 
Total operating expenses  81,740   57,714   157,556   121,065 
Operating loss (24,576)  (12,095)  (35,066)  (20,701)
Other (income) expense       
Other (income) expense, net (1,081)  (682)  1,812   2,432 
Interest expense 80   128   161   271 
Total other (income) expense (1,001)  (554)  1,973   2,703 
Loss before income taxes (23,575)  (11,541)  (37,039)  (23,404)
Income tax expense 250   274   373   80 
Net loss$(23,825) $(11,815) $(37,412) $(23,484)
Net loss per share:       
Basic and diluted$(0.34) $(0.17) $(0.53) $(0.35)
Weighted average common shares outstanding:       
Basic and diluted 70,952,917   68,369,823   70,842,263   67,949,270 
        


APPIAN CORPORATION AND SUBSIDIARIES
STOCK BASED COMPENSATION EXPENSE
(unaudited, in thousands)
        
        
 Three Months Ended June 30, Six Months Ended June 30,
 2021 2020 2021 2020
Cost of revenue       
Subscriptions$295 $229 $592 $442
Professional services 865  317  1,506  529
Operating expenses       
Sales and marketing 1,197  657  2,305  1,410
Research and development 1,069  619  2,084  1,172
General and administrative 1,172  1,792  6,005  3,537
Total stock-based compensation expense$4,598 $3,614 $12,492 $7,090
        


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
    
    
 Six Months Ended June 30,
  2021   2020 
Cash flows from operating activities:   
Net loss$(37,412) $(23,484)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 2,561   2,980 
Bad debt expense 32   200 
Loss on disposal of property and equipment―  22 
Change in fair value of available-for-sale securities (31) ―
Deferred income taxes (144)  (168)
Stock-based compensation 12,492   7,090 
Changes in assets and liabilities:    
Accounts receivable 16,720   (2,084)
Prepaid expenses and other assets 243   1,922 
Deferred commissions (7,340)  (295)
Accounts payable and accrued expenses 3,000   (1,674)
Accrued compensation and related benefits 2,808   2,575 
Other current and non-current liabilities (563)  1,271 
Deferred revenue (1,791)  2,310 
Operating lease liabilities 52   2,378 
Net cash used in operating activities  (9,373)  (6,957)
Cash flows from investing activities:   
Proceeds from sale of investments 27,604  ―
Payments for acquisitions, net of cash acquired―  (6,138)
Purchases of property and equipment (1,027)  (686)
Net cash provided by (used in) investing activities  26,577   (6,824)
Cash flows from financing activities:   
Principal payments on finance leases―  (716)
Proceeds from public offering, net of underwriting discounts―  108,260 
Payments of costs related to public offerings―  (18)
Proceeds from exercise of common stock options 2,089   2,242 
Net cash provided by financing activities  2,089   109,768 
Effect of foreign exchange rate changes on cash and cash equivalents (476)  404 
Net increase in cash and cash equivalents 18,817   96,391 
Cash and cash equivalents, beginning of period 112,462   159,755 
Cash and cash equivalents, end of period$131,279  $256,146 
Supplemental disclosure of cash flow information:   
Cash paid for interest$173  $88 
Cash paid for income taxes$806  $139 


APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in thousands, except share and per share data)
        
        
 Three Months Ended June 30, Six Months Ended June 30,
  2021   2020   2021   2020 
Reconciliation of non-GAAP operating loss:       
GAAP operating loss$(24,576) $(12,095) $(35,066) $(20,701)
Add back:       
Stock-based compensation expense 4,598   3,614   12,492   7,090 
Litigation expenses(1) 2,353  ―  4,040  ―
Non-GAAP operating loss$(17,625) $(8,481) $(18,534) $(13,611)
        
Reconciliation of non-GAAP net loss:       
GAAP net loss$(23,825) $(11,815) $(37,412) $(23,484)
Add back:       
Stock-based compensation expense 4,598   3,614   12,492   7,090 
Litigation expenses(1) 2,353  ―  4,040  ―
Loss on disposal of property and equipment―  15  ―  22 
Non-GAAP net loss$(16,874) $(8,186) $(20,880) $(16,372)
        
Non-GAAP earnings per share:       
Non-GAAP net loss$(16,874) $(8,186) $(20,880) $(16,372)
Non-GAAP weighted average shares used to compute net loss per share, basic and diluted 70,952,917   68,369,823   70,842,263   67,949,270 
Non-GAAP net loss per share, basic and diluted$(0.24) $(0.12) $(0.29) $(0.24)
        
Reconciliation of non-GAAP net loss per share, basic and diluted:       
GAAP net loss per share, basic and diluted$(0.34) $(0.17) $(0.53) $(0.35)
Add back:       
Non-GAAP adjustments to net loss per share 0.10   0.05   0.24   0.11 
Non-GAAP net loss per share, basic and diluted$(0.24) $(0.12) $(0.29) $(0.24)
        
Reconciliation of adjusted EBITDA:       
GAAP net loss$(23,825) $(11,815) $(37,412) $(23,484)
Other (income) expense, net (1,081)  (682)  1,812   2,432 
Interest expense 80   128   161   271 
Income tax expense 250   274   373   80 
Depreciation and amortization expense 1,283   1,469   2,561   2,980 
Stock-based compensation expense 4,598   3,614   12,492   7,090 
Litigation expenses(1) 2,353  ―  4,040  ―
Adjusted EBITDA$(16,342) $(7,012) $(15,973) $(10,631)
(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.