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Appian Announces First Quarter 2019 Financial Results

May 2, 2019 4:06 PM

Subscription revenue increased 32% year-over-year to $33.6 millionTotal 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:

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:

Financial Outlook:

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

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 ContactStaci MortensonICR for Appian703-442-1091[email protected]

Media ContactNicole GreggsDirector, Media Relations703-260-7868[email protected]

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)

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Source: Appian Corporation

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