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:
- Appian Government
Cloud received provisional authorization at Impact Level 5. Appian
is one of the first companies to ever receive this
authorization.
- Appian named a
“Customers’ Choice” again in 2022 by Gartner® Peer Insights™ Voice
of the Customer: Enterprise Low-Code Application Platforms. Appian
is the only vendor to receive the distinction across the four
categories for Large Enterprise ($1-10B), Midsize Enterprise
($50M-$1B), North America, and Europe, the Middle East and
Africa.
- Horizon Power
selects Appian for digital transformation journey. Horizon Power is
modernizing its processes to support future business growth and
provide industry leading experiences.
- SkillStorm
announced Appian partnership. SkillStorm will provide an exclusive
pipeline of custom-trained and certified Appian Developers at high
scale.
- Appian named Mark Matheos as Chief
Financial Officer. He has more than 20 years of proven financial
operations expertise, including over 5 years with Appian, serving
most recently as Appian’s Chief Accounting Officer.
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 ContactSrinivas
Anantha, CFA703-442-8844investors@appian.com
Media ContactBen
Farrell703-442-1067ben.farrell@appian.com
APPIAN CORPORATION AND
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESSTOCK-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
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESRECONCILIATION 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.
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