Appian Announces First Quarter 2019 Financial Results
May 2, 2019
Subscription revenue increased 32% year-over-year to $33.6 million
Total revenue increased 15% year-over-year to $59.6 million
Reston, VA – May 2, 2019 – 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:
- Revenue: Subscription revenue was $33.6 million for the first quarter of 2019, up 32% compared to the first quarter of 2018. Total subscriptions, software and support revenue was $34.9 million for the first quarter of 2019, an increase of 30% year-over-year. Professional services revenue was $24.7 million for the first quarter of 2019, equal to the prior year period. Total revenue was $59.6 million for the first quarter of 2019, up 15% compared to the first quarter of 2018. Subscription revenue retention rate was 116% as of March 31, 2019.
- Operating loss and non-GAAP operating loss: GAAP operating loss was $(17.4) million for the first quarter of 2019, compared to $(10.2) million for the first quarter of 2018. Non-GAAP operating loss was $(10.2) million for the first quarter of 2019, compared to $(8.0) million for the first quarter of 2018.
- Net loss and non-GAAP net loss: GAAP net loss was $(17.5) million for the first quarter of 2019, compared to $(9.6) million for the first quarter of 2018. GAAP net loss per share attributable to common stockholders was $(0.27) for the first quarter of 2019 based on 64.3 million weighted-average shares outstanding, compared to $(0.16) for the first quarter of 2018 based on 60.9 million weighted-average shares outstanding. Non-GAAP net loss was $(10.3) million for the first quarter of 2019, compared to $(7.3) million for the first quarter of 2018. Non-GAAP net loss per share was $(0.16) for the first quarter of 2019, based on 64.3 million basic and diluted shares outstanding, compared to $(0.12) for the first quarter of 2018, based on 60.9 million basic and diluted shares outstanding.
- Balance sheet and cash flows: As of March 31, 2019, Appian had cash and cash equivalents of $75.4 million. Net cash used in operating activities was $(4.1) million for the three months ended March 31, 2019 compared to $(13.8) million of net cash used in operating activities for the same period in 2018. In accordance with U.S. GAAP, the $4.5 million of tenant improvement allowance reimbursements received during the three months ended March 31, 2019 are a source of cash in operating activities, while the $16.6 million of capital expenditures, largely for the build-out of our new headquarters and the purchase of property and equipment, are recorded as cash used in investing activities.
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:
- Named a Leader by Gartner in its 2019 Magic Quadrant for Intelligent Business Process Management Suites (iBPMS). This marks the ninth time in a row that Appian has been named a Leader by Gartner in this market.
- Announced the next release of its low-code platform, making it easier than ever to build powerful enterprise applications up to 20x faster. The new version accelerates development and expands low-code/no-code platform capabilities in a number of key areas, including integration, robotic process automation (RPA), interface design, enterprise mobility, and customer engagement.
- Announced that UnionBank of the Philippines used the Appian Platform to launch its first fully digital branch.
As of May 2, 2019, guidance for the second quarter 2019 and full year 2019 is as follows:
Second Quarter 2019 Guidance:
- Subscription revenue is expected to be in the range of $36.5 million and $36.7 million, representing year-over-year growth of between 35% and 36%.
- Total revenue is expected to be in the range of $63.3 million and $63.8 million, representing year-over-year growth of between 6% and 7%.
- Non-GAAP operating loss is expected to be in the range of $(11.5) million and $(11.0) million.
- Non-GAAP net loss per share is expected to be in the range of $(0.18) and $(0.17). This assumes 64.8 million weighted average common shares outstanding.
Full Year 2019 Guidance:
- Subscription revenue is now expected to be in the range of $150.5 million and $152.0 million, representing year-over-year growth of between 30% and 31%.
- Total revenue is now expected to be in the range of $255.0 million and $258.0 million, representing year-over-year growth of between 13% and 14%.
- Non-GAAP operating loss is now expected to be in the range of $(35.5) million and $(32.5) million.
- Non-GAAP net loss per share is now expected to be in the range of $(0.55) and $(0.50). This assumes 65.0 million non-GAAP weighted average common shares outstanding.
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.
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.
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.
ICR for Appian
Appian 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.