Appian Announces Third Quarter 2019 Financial Results
October 31 2019 - 4:05PM
Appian (NASDAQ: APPN) today announced financial results for
the third quarter ended September 30, 2019.
"We exceeded our guidance once again this quarter. Our
ease-of-use and speed continue to differentiate us in sales cycles,
allowing us to sell into new organizations and expand within our
existing customers,” said Matt Calkins, CEO & Founder.
Third Quarter 2019 Financial
Highlights:
- Revenue: Subscription revenue was $40.4
million for the third quarter of 2019, up 38% compared to the third
quarter of 2018. Total subscriptions, software and support revenue
was $41.6 million for the third quarter of 2019, an increase of 35%
year-over-year. Professional services revenue was $27.8
million for the third quarter of 2019, an increase of 16%
year-over-year. Total revenue was $69.4 million for the third
quarter of 2019, up 26% compared to the third quarter of 2018.
Subscription revenue retention rate was 119% as of September 30,
2019.
- Operating loss and non-GAAP operating loss:
GAAP operating loss was $(10.3) million for the third quarter of
2019, compared to $(14.9) million for the third quarter of
2018. Non-GAAP operating loss was $(7.2) million for the
third quarter of 2019, compared to $(8.1) million for the third
quarter of 2018.
- Net loss and non-GAAP net loss: GAAP net loss
was $(12.4) million for the third quarter of 2019, compared to
$(15.0) million for the third quarter of 2018. GAAP net loss per
share attributable to common stockholders was $(0.19) for the third
quarter of 2019 based on 65.5 million weighted average shares
outstanding, compared to $(0.24) for the third quarter of 2018
based on 62.5 million weighted average shares outstanding. Non-GAAP
net loss was $(9.3) million for the third quarter of 2019, compared
to $(8.2) million for the third quarter of 2018. Non-GAAP net loss
per share was $(0.14) for the third quarter of 2019, based on 65.5
million basic and diluted weighted average shares outstanding,
compared to $(0.13) for the third quarter of 2018, based on 62.5
million basic and diluted weighted average shares
outstanding.
- Balance sheet and cash flows: As of September
30, 2019, Appian had cash and cash equivalents of $165.6 million,
compared with $81.1 million at June 30, 2019, primarily reflecting
the completion of the Company’s underwritten public offering of
1,825,000 shares of Appian Class A common stock in September 2019.
Net cash used in operating activities was $(14.9) million for the
three months ended September 30, 2019 compared with $(0.3) million
of net cash used in operating activities for the same period in
2018.
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.”
Third Quarter 2019 Business
Highlights:
- Appian named leader in “Gartner’s 2019 Magic Quadrant for
Enterprise Low-Code Application Platforms” report.
- Anglian Water selects Appian Low-Code Platform to digitize and
automate new capital projects.
- Charities Trust selects Appian for new Charity Portal to
distribute over £100 million in donations per annum.
- Public offering of 2,329,000 shares of Class A common stock
priced. 1,825,000 shares were offered by Appian and 504,000 shares
were offered by existing stockholders of Appian.
Financial Outlook:
As of October 31, 2019, guidance for the fourth
quarter 2019 and full year 2019 is as follows:
- Fourth Quarter 2019 Guidance:
- Subscription revenue is expected to be in the range of $42.0
million and $42.5 million, representing year-over-year growth of
between 24% and 26%.
- Total revenue is expected to be in the range of $69.1 million
and $70.1 million, representing year-over-year growth of between
15% and 16%.
- Non-GAAP operating loss is expected to be in the range of
$(10.0) million and $(9.5) million.
- Non-GAAP net loss per share is expected to be in the range of
$(0.15) and $(0.14). This assumes 67.3 million basic and diluted
weighted average common shares outstanding
- Full Year 2019 Guidance:
- Subscription revenue is now expected to be in the range of
$154.0 million and $154.5 million, representing year-over-year
growth of between 33% and 34%.
- Total revenue is now expected to be in the range of $265.0
million and $266.0 million, representing year-over-year growth of
17%.
- Non-GAAP operating loss is expected to be in the range of
$(35.0) million and $(33.0) million.
- Non-GAAP net loss per share is now expected to be in the range
of $(0.57) and $(0.54). This assumes 65.5 million basic and
diluted weighted average common shares outstanding.
Conference Call Details:
Appian will host a conference call today,
October 31, 2019, at 5:00 p.m. ET to discuss the Company’s
financial results for the third quarter ended September 30, 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
13695306.
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 basic and diluted weighted
average common 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 fourth
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 ContactWill MainaICR
for Appian703-442-1091investors@appian.com
Media ContactNicole
GreggsDirector, Media
Relations703-260-7868nicole.greggs@appian.com
APPIAN
CORPORATION AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in thousands,
except share and per share data) |
(unaudited) |
|
|
|
|
|
As
of |
|
As
of |
|
September |
|
December
31, |
|
|
2019 |
|
|
|
2018 |
|
|
(unaudited) |
|
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
165,554 |
|
|
$ |
94,930 |
|
Accounts receivable, net of allowance of $600 as of September
30, 2019 and December 31, 2018 |
|
70,792 |
|
|
|
79,383 |
|
Deferred commissions, current |
|
18,468 |
|
|
|
14,020 |
|
Prepaid expenses and other current assets |
|
10,200 |
|
|
|
21,293 |
|
Total current assets |
|
265,014 |
|
|
|
209,626 |
|
Property and
equipment, net |
|
40,023 |
|
|
|
7,539 |
|
Deferred
commissions, net of current portion |
|
13,069 |
|
|
|
15,088 |
|
Deferred tax
assets |
|
560 |
|
|
|
326 |
|
Other
assets |
|
561 |
|
|
|
601 |
|
Total assets |
$ |
319,227 |
|
|
$ |
233,180 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
5,316 |
|
|
$ |
9,249 |
|
Accrued expenses |
|
7,916 |
|
|
|
7,464 |
|
Accrued compensation and related benefits |
|
11,458 |
|
|
|
13,796 |
|
Deferred revenue, current |
|
100,497 |
|
|
|
95,523 |
|
Capital leases, current |
|
1,429 |
|
|
|
- |
|
Other current liabilities |
|
2,067 |
|
|
|
2,369 |
|
Total current liabilities |
|
128,683 |
|
|
|
128,401 |
|
Deferred tax
liabilities |
|
136 |
|
|
|
42 |
|
Deferred
revenue, net of current portion |
|
13,557 |
|
|
|
16,145 |
|
Deferred
rent, net of current portion |
|
21,280 |
|
|
|
15,400 |
|
Capital
leases, net of current portion |
|
2,763 |
|
|
― |
Total liabilities |
|
166,419 |
|
|
|
159,988 |
|
Stockholders’ equity |
|
|
|
Class A
common stock—par value $0.0001; 500,000,000 shares authorized and
34,204,362 shares issued and outstanding as of September 30, 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
32,942,636 shares issued and outstanding as of September 30,
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 |
|
336,694 |
|
|
|
218,284 |
|
Accumulated
other comprehensive income |
|
1,106 |
|
|
|
542 |
|
Accumulated
deficit |
|
(184,998 |
) |
|
|
(145,640 |
) |
Total stockholders’ equity |
|
152,808 |
|
|
|
73,192 |
|
Total liabilities and stockholders’ equity |
$ |
319,227 |
|
|
$ |
233,180 |
|
|
|
|
|
APPIAN
CORPORATION AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands,
except share and per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Revenue: |
|
|
|
|
|
|
|
Subscriptions, software and support |
$ |
41,599 |
|
|
$ |
30,905 |
|
|
$ |
115,767 |
|
|
$ |
90,904 |
|
Professional services |
|
27,788 |
|
|
|
24,043 |
|
|
|
80,110 |
|
|
|
75,623 |
|
Total
revenue |
|
69,387 |
|
|
|
54,948 |
|
|
|
195,877 |
|
|
|
166,527 |
|
Cost of
revenue: |
|
|
|
|
|
|
|
Subscriptions, software and support |
|
4,484 |
|
|
|
3,261 |
|
|
|
12,105 |
|
|
|
8,713 |
|
Professional services |
|
19,467 |
|
|
|
16,831 |
|
|
|
58,963 |
|
|
|
54,002 |
|
Total cost
of revenue |
|
23,951 |
|
|
|
20,092 |
|
|
|
71,068 |
|
|
|
62,715 |
|
Gross
profit |
|
45,436 |
|
|
|
34,856 |
|
|
|
124,809 |
|
|
|
103,812 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
28,858 |
|
|
|
25,467 |
|
|
|
89,951 |
|
|
|
75,815 |
|
Research and development |
|
15,697 |
|
|
|
11,737 |
|
|
|
42,418 |
|
|
|
32,392 |
|
General and administrative |
|
11,191 |
|
|
|
12,537 |
|
|
|
29,468 |
|
|
|
29,022 |
|
Total
operating expenses |
|
55,746 |
|
|
|
49,741 |
|
|
|
161,837 |
|
|
|
137,229 |
|
Operating
loss |
|
(10,310 |
) |
|
|
(14,885 |
) |
|
|
(37,028 |
) |
|
|
(33,417 |
) |
Other
expense: |
|
|
|
|
|
|
|
Other expense, net |
|
2,016 |
|
|
|
110 |
|
|
|
1,700 |
|
|
|
1,785 |
|
Interest expense |
|
96 |
|
|
|
67 |
|
|
|
236 |
|
|
|
134 |
|
Total other
expense |
|
2,112 |
|
|
|
177 |
|
|
|
1,936 |
|
|
|
1,919 |
|
Loss before
income taxes |
|
(12,422 |
) |
|
|
(15,062 |
) |
|
|
(38,964 |
) |
|
|
(35,336 |
) |
Income tax
expense (benefit) |
|
5 |
|
|
|
(34 |
) |
|
|
394 |
|
|
|
212 |
|
Net
loss |
|
(12,427 |
) |
|
|
(15,028 |
) |
|
|
(39,358 |
) |
|
|
(35,548 |
) |
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
Basic and diluted |
$ |
(0.19 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.58 |
) |
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
65,508,113 |
|
|
|
62,480,927 |
|
|
|
64,860,342 |
|
|
|
61,583,610 |
|
|
|
|
|
|
|
|
|
APPIAN
CORPORATION AND SUBSIDIARIES |
STOCK BASED
COMPENSATION EXPENSE |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
Cost of
revenue: |
|
|
|
|
|
|
|
Subscriptions, software and support |
$ |
147 |
|
$ |
138 |
|
$ |
462 |
|
$ |
355 |
Professional services |
|
243 |
|
|
222 |
|
|
2,461 |
|
|
645 |
Operating
expenses |
|
|
|
|
|
|
|
Sales and marketing |
|
776 |
|
|
736 |
|
|
3,971 |
|
|
1,781 |
Research and development |
|
433 |
|
|
373 |
|
|
2,983 |
|
|
1,106 |
General and administrative |
|
1,542 |
|
|
5,332 |
|
|
3,178 |
|
|
7,360 |
Total stock-based compensation expense |
$ |
3,141 |
|
$ |
6,801 |
|
$ |
13,055 |
|
$ |
11,247 |
|
|
|
|
|
|
|
|
APPIAN
CORPORATION AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
(unaudited) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
|
2018 |
|
Cash
flows from operating activities: |
|
|
|
Net loss |
$ |
(39,358 |
) |
|
$ |
(35,548 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
Depreciation and amortization |
|
3,273 |
|
|
|
1,452 |
|
Loss (gain) on disposal of equipment |
|
146 |
|
|
|
(4 |
) |
Bad debt expense |
|
97 |
|
|
|
2 |
|
Deferred income taxes |
|
(191 |
) |
|
|
69 |
|
Stock-based compensation |
|
13,055 |
|
|
|
11,247 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
9,051 |
|
|
|
(6,226 |
) |
Prepaid expenses and other assets |
|
11,351 |
|
|
|
76 |
|
Deferred commissions |
|
(2,428 |
) |
|
|
(5,531 |
) |
Accounts payable and accrued expenses |
|
(3,910 |
) |
|
|
1,255 |
|
Accrued compensation and related benefits |
|
(2,159 |
) |
|
|
1,814 |
|
Other current liabilities |
|
(251 |
) |
|
|
376 |
|
Deferred revenue |
|
2,646 |
|
|
|
7,862 |
|
Deferred rent, non-current |
|
5,718 |
|
|
|
(797 |
) |
Net cash used in operating activities |
|
(2,960 |
) |
|
|
(23,953 |
) |
Cash
flows from investing activities: |
|
|
|
Purchases of property and equipment |
|
(31,430 |
) |
|
|
(2,187 |
) |
Proceeds from sale of equipment |
|
- |
|
|
|
4 |
|
Net cash used in investing activities |
|
(31,430 |
) |
|
|
(2,183 |
) |
Cash
flows from financing activities: |
|
|
|
Proceeds from public offering, net of any underwriting
discounts |
|
101,653 |
|
|
|
58,258 |
|
Payment of costs related to public offerings |
|
(12 |
) |
|
|
(353 |
) |
Proceeds from exercise of common stock options |
|
4,052 |
|
|
|
2,627 |
|
Principal payments on capital lease obligations |
|
(299 |
) |
|
|
- |
|
Net cash provided by financing activities |
|
105,394 |
|
|
|
60,532 |
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
(380 |
) |
|
|
(888 |
) |
Net
decrease in cash and cash equivalents |
|
70,624 |
|
|
|
33,508 |
|
Cash
and cash equivalents, beginning of period |
|
94,930 |
|
|
|
73,758 |
|
Cash
and cash equivalents, end of period |
$ |
165,554 |
|
|
$ |
107,266 |
|
Supplemental disclosure of cash flow
information: |
|
|
|
Cash paid for interest |
$ |
250 |
|
|
$ |
34 |
|
Cash paid for income taxes |
$ |
236 |
|
|
$ |
178 |
|
Supplemental disclosure of non-cash financing
information: |
|
|
|
Capital lease obligations to acquire new office furniture and
fixtures and computer hardware |
$ |
4,491 |
|
|
$ |
― |
|
Offering costs included in accounts payable and accrued
expenses |
$ |
338 |
|
|
$ |
76 |
|
|
|
|
|
|
|
|
|
APPIAN
CORPORATION AND SUBSIDIARIES |
RECONCILIATION OF GAAP MEASURES TO NON-GAAP
MEASURES |
(in thousands,
except share and per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Reconciliation of non-GAAP operating loss: |
|
|
|
|
|
|
|
GAAP operating loss |
$ |
(10,310 |
) |
|
$ |
(14,885 |
) |
|
$ |
(37,028 |
) |
|
$ |
(33,417 |
) |
Add back: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
3,141 |
|
|
|
6,801 |
|
|
|
13,055 |
|
|
|
11,247 |
|
Non-GAAP operating loss |
$ |
(7,169 |
) |
|
$ |
(8,084 |
) |
|
$ |
(23,973 |
) |
|
$ |
(22,170 |
) |
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP net loss: |
|
|
|
|
|
|
|
GAAP net loss |
$ |
(12,427 |
) |
|
$ |
(15,028 |
) |
|
$ |
(39,358 |
) |
|
$ |
(35,548 |
) |
Add back: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
3,141 |
|
|
|
6,801 |
|
|
|
13,055 |
|
|
|
11,247 |
|
Loss (gain) on disposal of asset |
|
1 |
|
|
|
(4 |
) |
|
|
146 |
|
|
|
(4 |
) |
Non-GAAP net loss |
$ |
(9,285 |
) |
|
$ |
(8,231 |
) |
|
$ |
(26,157 |
) |
|
$ |
(24,305 |
) |
|
|
|
|
|
|
|
|
Non-GAAP
earnings per share: |
|
|
|
|
|
|
|
Non-GAAP net loss |
$ |
(9,285 |
) |
|
$ |
(8,231 |
) |
|
$ |
(26,157 |
) |
|
$ |
(24,305 |
) |
Non-GAAP weighted average shares used to compute net loss per share
attributable to common stockholders, basic and diluted |
|
65,508,113 |
|
|
|
62,480,927 |
|
|
|
64,860,342 |
|
|
|
61,583,610 |
|
Non-GAAP net loss per share, basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP net loss per share, basic and
diluted: |
|
|
|
|
|
|
|
GAAP net loss per share attributable to common stockholders, basic
and diluted |
$ |
(0.19 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.58 |
) |
Add back: |
|
|
|
|
|
|
|
Non-GAAP adjustments to net loss per share |
|
0.05 |
|
|
|
0.11 |
|
|
|
0.21 |
|
|
|
0.19 |
|
Non-GAAP net loss per share, basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
|
|
|
|
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