Appian (Nasdaq: APPN) today announced financial results for
the first quarter ended March 31, 2020.
“Appian is a platform for change. We've helped businesses around
the world adapt to COVID-19. When the crisis is over, we expect
strengthened demand for digital transformation, low-code, and
automation," said Matt Calkins, CEO & Founder.
First Quarter 2020 Financial
Highlights:
- Revenue: Cloud subscription revenue was $28.4
million for the first quarter of 2020, up 33% compared to the first
quarter of 2019. Total subscriptions revenue, which includes sales
of our SaaS subscriptions, on-premises term license subscriptions
and maintenance and support, increased 46% year-over-year to $50.4
million for the first quarter of 2020. Professional services
revenue was $28.4 million for the first quarter of 2020, compared
to $25.7 million for the first quarter of 2019. Total revenue was
$78.9 million for the first quarter of 2020, up 31% compared to the
first quarter of 2019. Cloud subscription revenue retention rate
was 115% as of March 31, 2020.
- Operating loss and non-GAAP operating loss:
GAAP operating loss was $(8.6) million for the first quarter of
2020, compared to $(15.3) million for the first quarter of
2019. Non-GAAP operating loss was $(5.1) million for the
first quarter of 2020, compared to $(8.1) million for the first
quarter of 2019.
- Net loss and non-GAAP net loss: GAAP net loss
was $(11.7) million for the first quarter of 2020, compared to
$(15.2) million for the first quarter of 2019. GAAP net loss
per share was $(0.17) for the first quarter of 2020, based on 67.5
million weighted-average shares outstanding, compared to $(0.24)
for the first quarter of 2019, based on 64.3 million
weighted-average shares outstanding. Non-GAAP net loss was
$(8.2) million for the first quarter of 2020, compared to $(8.0)
million for the first quarter of 2019. Non-GAAP net loss per
share was $(0.12) for the first quarter of 2020, based on 67.5
million basic and diluted shares outstanding, consistent with
$(0.12) for the first quarter of 2019, based on 64.3 million basic
and diluted shares outstanding.
- Adjusted EBITDA: Adjusted EBITDA loss was
$(3.6) million for the first quarter of 2020, compared to $(7.3)
million for the first quarter of 2019.
- Balance sheet and cash flows: As of March 31,
2020, Appian had cash and cash equivalents of $149.2 million. Net
cash used in operating activities was $(3.9) million for the three
months ended March 31, 2020 compared to $(4.1) million of net cash
used in operating activities for the same period in 2019.
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 2020 Business
Highlights:
- Deloitte and Appian formed a strategic alliance to modernize
mission systems for government and commercial clients.
- Appian offered a free application for enterprises and
government agencies to manage their COVID-19 response.
- Google and Appian expanded their partnership, enhancing the
Appian AI offering to include out-of-the-box AI capabilities
pre-configured for Intelligent Document Processing.
- Celonis, the market leader in AI-enhanced Process Mining and
Process Excellence software, and Appian announced a technology
partnership.
- Appian acquired a Robotic Process Automation (RPA) company
making the platform a one-stop shop for automation.
- Appian announced Appian RPA, providing full-stack automation
combining AI, RPA, workflow, decision rules and case management at
the speed of low-code.
- Appian released the latest version of its low-code automation
platform.
- Appian also announced the appointment of Eric Cross as Chief
Revenue Officer and Pavel Zamudio as Senior Vice President,
Customer Success.
Financial Outlook:
As of May 7, 2020, guidance for 2020 is as
follows:
- Second Quarter 2020 Guidance:
- Cloud subscription revenue is expected to be in the range of
$28.4 million and $28.7 million, representing year-over-year growth
of between 25% and 26%.
- Total revenue is expected to be in the range of $60.0 million
and $61.0 million, representing year-over-year decrease of between
8% and 7%.1
- Adjusted EBITDA loss is expected to be in the range of $(16.0)
million and $(14.0) million.
- Non-GAAP net loss per share is expected to be in the range of
$(0.26) and $(0.23). This assumes 67.7 million weighted average
common shares outstanding.
- Full Year 2020 Guidance:
- Given the uncertainty regarding the duration of COVID-19 and
its impact on the global economy, there is a broad range of
possible results for this year. Therefore, Appian is withdrawing
the full year 2020 guidance it provided on February 20, 2020 for
cloud subscription revenue, total revenue, adjusted EBITDA, and
non-GAAP net loss per share.
1In the first quarter of 2020, Appian recognized
approximately $4 million of on-premises term license subscriptions
revenue associated with deals that closed during the first quarter
of 2020 that Appian had expected to close in the second quarter of
2020 when Appian provided its first quarter 2020 guidance in
February 2020.
Conference Call Details:
Appian will host a conference call today, May 7,
2020, at 5:00 p.m. ET to discuss Appian's financial results for the
first quarter ended March 31, 2020 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 (866)
575-6539 in the U.S. or (323) 994-2093 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
5243081.
About Appian
Appian (NASDAQ: APPN) provides a low-code automation 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, non-GAAP weighted average shares outstanding and adjusted
EBITDA. These non-GAAP financial measures exclude the effect of
stock-based compensation expense and gain or loss on disposal of an
asset. 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. 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 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, 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 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,
2019 filed with the Securities and Exchange Commission on February
20, 2020 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 ContactScott Walker
Director, Investor Relations703-496-4573scott.walker@appian.com
Media ContactNicole
GreggsDirector, Media
Relations703-260-7868nicole.greggs@appian.com
APPIAN CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
data)
|
As of |
|
As of |
|
March 31, 2020 |
|
December 31, 2019 |
|
(unaudited) |
|
|
Assets |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
149,163 |
|
|
$ |
159,755 |
|
Accounts receivable, net of allowance of $800 and $600 as of March
31, 2020 and December 31, 2019, respectively |
65,153 |
|
|
70,408 |
|
Deferred commissions, current |
14,686 |
|
|
14,543 |
|
Prepaid expenses and other current assets |
26,469 |
|
|
32,955 |
|
Total current assets |
255,471 |
|
|
277,661 |
|
Property and equipment,
net |
38,325 |
|
|
39,554 |
|
Goodwill |
4,348 |
|
|
— |
|
Intangible assets, net of
accumulated amortization of $96 as of March 31, 2020 |
1,847 |
|
|
— |
|
Operating right-of-use
assets |
23,340 |
|
|
24,205 |
|
Deferred commissions, net of
current portion |
28,311 |
|
|
28,979 |
|
Deferred tax assets |
456 |
|
|
494 |
|
Other assets |
7,364 |
|
|
592 |
|
Total
assets |
359,462 |
|
|
371,485 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current
liabilities |
|
|
|
Accounts payable |
$ |
3,580 |
|
|
$ |
5,222 |
|
Accrued expenses |
7,536 |
|
|
7,488 |
|
Accrued compensation and related benefits |
10,074 |
|
|
10,691 |
|
Deferred revenue, current |
81,279 |
|
|
82,201 |
|
Operating lease liabilities, current |
3,755 |
|
|
3,836 |
|
Finance lease liabilities, current |
1,466 |
|
|
1,447 |
|
Other current liabilities |
1,160 |
|
|
1,395 |
|
Total current liabilities |
108,850 |
|
|
112,280 |
|
Operating lease liabilities,
net of current portion |
44,778 |
|
|
44,416 |
|
Finance lease liabilities, net
of current portion |
1,998 |
|
|
2,375 |
|
Deferred revenue, net of
current portion |
5,684 |
|
|
7,139 |
|
Deferred tax liabilities |
421 |
|
|
38 |
|
Total
liabilities |
161,731 |
|
|
166,248 |
|
Stockholders’
equity |
|
|
|
Class A common stock—par value
$0.0001; 500,000,000 shares authorized and 34,731,245 shares issued
and outstanding as of March 31, 2020; 500,000,000 shares authorized
and 34,525,386 shares issued and outstanding as of December 31,
2019 |
3 |
|
|
3 |
|
Class B common stock—par value
$0.0001; 100,000,000 shares authorized and 32,913,836 shares issued
and outstanding as of March 31, 2020; 100,000,000 shares authorized
and 32,942,636 shares issued and outstanding as of December 31,
2019 |
3 |
|
|
3 |
|
Additional paid-in
capital |
345,075 |
|
|
340,929 |
|
Accumulated other
comprehensive loss |
(268 |
) |
|
(285 |
) |
Accumulated deficit |
(147,082 |
) |
|
(135,413 |
) |
Total stockholders’
equity |
197,731 |
|
|
205,237 |
|
Total liabilities and
stockholders’ equity |
$ |
359,462 |
|
|
$ |
371,485 |
|
|
|
|
|
|
|
|
|
APPIAN CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except share and per share
data)
|
Three Months Ended March 31, |
|
2020 |
2019 |
Revenue: |
|
|
|
Subscriptions |
$ |
50,436 |
|
|
$ |
34,557 |
|
Professional services |
28,428 |
|
|
25,747 |
|
Total revenue |
78,864 |
|
|
60,304 |
|
Cost of revenue: |
|
|
|
Subscriptions |
5,383 |
|
|
3,585 |
|
Professional services |
18,736 |
|
|
20,481 |
|
Total cost of revenue |
24,119 |
|
|
24,066 |
|
Gross profit |
54,745 |
|
|
36,238 |
|
Operating expenses: |
|
|
|
Sales and marketing |
34,172 |
|
|
28,591 |
|
Research and development |
16,038 |
|
|
13,956 |
|
General and administrative |
13,141 |
|
|
9,016 |
|
Total operating expenses |
63,351 |
|
|
51,563 |
|
Operating loss |
(8,606 |
) |
|
(15,325 |
) |
Other expense (income): |
|
|
|
Other expense (income), net |
3,114 |
|
|
(302 |
) |
Interest expense |
143 |
|
|
71 |
|
Total other expense
(income) |
3,257 |
|
|
(231 |
) |
Loss before income taxes |
(11,863 |
) |
|
(15,094 |
) |
Income tax (benefit)
expense |
(194 |
) |
|
122 |
|
Net loss |
$ |
(11,669 |
) |
|
$ |
(15,216 |
) |
Net loss per share: |
|
|
|
Basic and diluted |
$ |
(0.17 |
) |
|
$ |
(0.24 |
) |
Weighted average common shares
outstanding: |
|
|
|
Basic and diluted |
67,528,331 |
|
|
64,306,667 |
|
APPIAN CORPORATION AND
SUBSIDIARIESSTOCK BASED COMPENSATION
EXPENSE(in thousands)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
(unaudited) |
Cost of revenue |
|
|
|
Subscriptions |
$ |
213 |
|
|
$ |
154 |
|
Professional services |
212 |
|
|
1,974 |
|
Operating expenses |
|
|
|
Sales and marketing |
753 |
|
|
2,381 |
|
Research and development |
553 |
|
|
2,115 |
|
General and administrative |
1,745 |
|
|
601 |
|
Total stock-based compensation expense |
$ |
3,476 |
|
|
$ |
7,225 |
|
|
|
|
|
|
|
|
|
APPIAN CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in thousands)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(11,669 |
) |
|
$ |
(15,216 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
Depreciation and amortization |
1,511 |
|
|
798 |
|
Bad debt expense |
200 |
|
|
— |
|
Loss on disposal of property and equipment |
7 |
|
|
— |
|
Deferred income taxes |
— |
|
|
(3 |
) |
Stock-based compensation |
3,476 |
|
|
7,225 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
5,751 |
|
|
(844 |
) |
Prepaid expenses and other assets |
37 |
|
|
1,252 |
|
Deferred commissions |
525 |
|
|
(2,895 |
) |
Accounts payable and accrued expenses |
(1,800 |
) |
|
1,577 |
|
Accrued compensation and related benefits |
(399 |
) |
|
(1,485 |
) |
Other current liabilities |
(154 |
) |
|
(138 |
) |
Deferred revenue |
(2,503 |
) |
|
1,908 |
|
Operating lease liabilities |
1,159 |
|
|
— |
|
Deferred rent, non-current |
— |
|
|
3,698 |
|
Net cash used in operating activities |
(3,859 |
) |
|
(4,123 |
) |
Cash flows from
investing activities: |
|
|
|
Payments for acquisitions, net of cash acquired |
(6,138 |
) |
|
— |
|
Purchases of property and equipment |
(202 |
) |
|
(16,595 |
) |
Net cash used in investing activities |
(6,340 |
) |
|
(16,595 |
) |
Cash flows from
financing activities: |
|
|
|
Principal payments on finance leases |
(357 |
) |
|
— |
|
Proceeds from exercise of common stock options |
670 |
|
|
1,073 |
|
Net cash provided by financing activities |
313 |
|
|
1,073 |
|
Effect of foreign
exchange rate changes on cash and cash equivalents |
(706 |
) |
|
68 |
|
Net decrease in cash
and cash equivalents |
(10,592 |
) |
|
(19,577 |
) |
Cash and cash
equivalents, beginning of period |
159,755 |
|
|
94,930 |
|
Cash and cash
equivalents, end of period |
$ |
149,163 |
|
|
$ |
75,353 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for
interest |
$ |
49 |
|
|
$ |
69 |
|
Cash paid for income
taxes |
$ |
43 |
|
|
$ |
43 |
|
APPIAN CORPORATION AND
SUBSIDIARIESRECONCILIATION OF GAAP MEASURES TO
NON-GAAP MEASURES(in thousands, except share and per share
data)(unaudited)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Reconciliation of non-GAAP
operating loss: |
|
|
|
GAAP operating loss |
$ |
(8,606 |
) |
|
$ |
(15,325 |
) |
Add back: |
|
|
|
Stock-based compensation expense |
3,476 |
|
|
7,225 |
|
Non-GAAP operating loss |
$ |
(5,130 |
) |
|
$ |
(8,100 |
) |
|
|
|
|
Reconciliation of non-GAAP net
loss: |
|
|
|
GAAP net loss |
$ |
(11,669 |
) |
|
$ |
(15,216 |
) |
Add back: |
|
|
|
Stock-based compensation expense |
3,476 |
|
|
7,225 |
|
Loss on disposal of property and equipment |
7 |
|
|
— |
|
Non-GAAP net loss |
$ |
(8,186 |
) |
|
$ |
(7,991 |
) |
|
|
|
|
Non-GAAP earnings per
share: |
|
|
|
Non-GAAP net loss |
$ |
(8,186 |
) |
|
$ |
(7,991 |
) |
Non-GAAP weighted average shares used to compute net loss per
share, basic and diluted |
67,528,331 |
|
|
64,306,667 |
|
Non-GAAP net loss per share, basic and diluted |
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
Reconciliation of non-GAAP net
loss per share, basic and diluted: |
|
|
|
GAAP net loss per share, basic and diluted |
$ |
(0.17 |
) |
|
$ |
(0.24 |
) |
Add back: |
|
|
|
Non-GAAP adjustments to net loss per share |
0.05 |
|
|
0.12 |
|
Non-GAAP net loss per share, basic and diluted |
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
Reconciliation of adjusted
EBITDA: |
|
|
|
GAAP net loss |
$ |
(11,669 |
) |
|
$ |
(15,216 |
) |
Other expense (income), net |
3,114 |
|
|
(302 |
) |
Interest expense |
143 |
|
|
71 |
|
Income tax (benefit) expense |
(194 |
) |
|
122 |
|
Depreciation and amortization expense |
1,511 |
|
|
798 |
|
Stock-based compensation expense |
3,476 |
|
|
7,225 |
|
Adjusted EBITDA |
$ |
(3,619 |
) |
|
$ |
(7,302 |
) |
|
|
|
|
|
|
|
|
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