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Appian Announces Second Quarter 2021 Financial Results

August 5, 2021 4:02 PM

Cloud subscription revenue increased 44% year-over-year to $42.5 millionSubscriptions 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:

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:

Financial Outlook:

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

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:

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 ContactSrinivas Anantha, CFA703-442-8844[email protected]

Media ContactBen Farrell703-442-1067[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.

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Source: Appian Corporation

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