Appian Announces First Quarter 2018 Financial Results

5/3/2018, 10:05 PM (Source: GlobeNewswire)

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Subscription revenue increased 36% year-over-year to $25.5 million

Total revenue increased 35% year-over-year to $51.7 million

RESTON, Va., May 03, 2018 (GLOBE NEWSWIRE) --  Appian (NASDAQ:APPN) today announced financial results for the first quarter ended March 31, 2018.

"At our global user conference last week, we announced native artificial intelligence capabilities and an Intelligent Contact Center application. These features help clients offer better service to their customers," said Matt Calkins, CEO & Founder.

First Quarter 2018 Financial Highlights:

  • Revenue: Subscription revenue was $25.5 million for the first quarter of 2018, up 36% compared to the first quarter of 2017. Total subscriptions, software and support revenue was $27.0 million for the first quarter of 2018, an increase of 26% year over year.  Professional services revenue was $24.7 million for the first quarter of 2018, an increase of 46% year over year. Total revenue was $51.7 million for the first quarter of 2018, up 35% compared to the first quarter of 2017.  Subscription revenue retention rate was 119% as of March 31, 2018.

  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(10.2) million for the first quarter of 2018, compared to $(3.5) million for the first quarter of 2017.  Non-GAAP operating loss was $(8.0) million for the first quarter of 2018, compared to $(3.5) million for the first quarter of 2017.

  • Net loss and non-GAAP net loss: GAAP net loss was $(9.6) million for the first quarter of 2018, compared to $(3.4) million for the first quarter of 2017.  GAAP net loss per share attributable to common stockholders was $(0.16) for the first quarter of 2018 based on 60.9 million weighted-average shares outstanding, compared to $(0.10) for the first quarter of 2017 based on 34.3 million weighted-average shares outstanding.  Non-GAAP net loss was $(7.3) million for the first quarter of 2018, compared to $(3.4) million for the first quarter of 2017.  Non-GAAP net loss per share was $(0.12) for the first quarter of 2018, based on 60.9 million basic and diluted shares outstanding, compared to $(0.06) for the first quarter of 2017, based on 52.4 million basic and diluted shares outstanding.

  • Balance sheet and cash flows: As of March 31 2018, Appian had cash and cash equivalents of $60.9 million. Cash used in operating activities was $(13.8) million for the three months ended March 31, 2018 compared to $3.7 million of cash flow from operating activities for the same period in 2017.

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 2018 Business Highlights:

  • Signed a global agreement with Banco Santander, the largest bank in the Eurozone by market capitalization.  Banco Santander will leverage Appian’s platform in the cloud for enterprise process improvement.

  • Named a leader by Forrester Research, Inc. in the analyst firm’s “The Forrester Wave: Cloud-Based Dynamic Case Management, Q1 2018” report. Appian received the highest score in the “Current Offering” category and among the highest scores in the “Strategy” category in the report.  Appian also achieved the highest score possible in the "Market approach" and "Planned enhancements" criteria.

  • Extended a strategic alliance relationship with VASS with executive commitments to grow in new markets and acquire new customers.

  • Frost & Sullivan named Appian top 2018 Digital Transformation Platform in Life Sciences & Pharmaceuticals for its cloud-based, low code software application platform.

Financial Outlook:

As of May 3, 2018, guidance for the second quarter 2018 and full year 2018 is as follows:

  • Second Quarter 2018 Guidance:
    ◦  Subscription revenue is expected to be in the range of $25.8 million and $26.0 million, representing year-over-year growth of between 30% and 31%.
    ◦  Total revenue is expected to be in the range of $50.2 million and $50.4 million, representing year-over-year growth of between 16% and 17%.
    ◦  Non-GAAP operating loss is expected to be in the range of $(10.5) million and $(10.1) million.
    ◦  Non-GAAP net loss per share is expected to be in the range of $(0.18) and $(0.17).  This assumes 61.4 million weighted average common shares outstanding.

  • Full Year 2018 Guidance:
    ◦  Subscription revenue is now expected to be in the range of $107.6 million and $108.6 million, representing year-over-year growth of between 30% and 31%.
    ◦  Total revenue is now expected to be in the range of $202.0 million and $205.0 million, representing year-over-year growth of between 14% and 16%.
    ◦  Non-GAAP operating loss is now expected to be in the range of $(38.9) million and $(36.9) million.
    ◦  Non-GAAP net loss per share is now expected to be in the range of $(0.64) and $(0.61).  This assumes 61.6 million non-GAAP weighted average common shares outstanding.

Conference Call Details:

Appian will host a conference call today, May 3, 2018, at 5:00 p.m. ET to discuss the Company’s financial results for the first quarter ended March 31, 2018 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 13678551.

About Appian

Appian (NASDAQ:APPN) provides a leading low-code software development platform that enables organizations to rapidly develop powerful and unique applications. The applications created on Appian’s platform help companies drive digital transformation and competitive differentiation. 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 2018, 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, 2017 filed with the Securities and Exchange Commission on February 23, 2018 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 Contact
Staci Mortenson
ICR for Appian
703-442-1091
investors@appian.com 

Media Contact
Nicole Greggs
Director, Media Relations
703-260-7868
nicole.greggs@appian.com 



APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)

    
 As of
March 31,
2018
 As of
December 31,
2017
 (unaudited)  
Assets   
Current assets     
Cash and cash equivalents$        60,876  $73,758 
Accounts receivable, net of allowance of $40052,518  55,315 
Deferred commissions, current9,247  9,117 
Prepaid expenses and other current assets7,094  7,032 
Total current assets129,735  145,222 
Property and equipment, net3,359  2,663 
Deferred commissions, net of current portion11,931  12,376 
Deferred tax assets240  281 
Other assets533  510 
Total assets$145,798  $161,052 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$2,713  $5,226 
Accrued expenses7,059  6,467 
Accrued compensation and related benefits8,932  12,075 
Deferred revenue, current68,753  70,165 
Other current liabilities1,419  1,182 
Total current liabilities88,876  95,115 
Deferred tax liabilities12  87 
Deferred revenue, net of current portion17,055  18,922 
Other long-term liabilities1,227  1,404 
Total liabilities107,170  115,528 
Stockholders’ equity   
Class A common stock—par value $0.0001; 500,000,000 shares authorized and
18,891,315 shares issued and outstanding as of March 31, 2018; 500,000,000 shares
authorized and 13,030,081 shares issued and outstanding as of December 31, 2017
2  1 
Class B common stock—par value $0.0001; 100,000,000 shares authorized and
42,318,846 shares issued and outstanding as of March 31, 2018; 100,000,000 shares
authorized, 47,569,796 shares issued and outstanding as of December 31, 2017
4  5 
Additional paid-in capital144,490  141,268 
Accumulated other comprehensive (loss) income(126) 439 
Accumulated deficit(105,742) (96,189)
Total stockholders’ equity38,628  45,524 
Total liabilities and stockholders’ equity$145,798  $161,052 
        
        


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)

  
 Three Months Ended March 31,
 2018 2017
Revenue:   
Subscriptions, software and support$26,952  $21,444 
Professional services24,744  16,885 
Total revenue51,696  38,329 
Cost of revenue:   
Subscriptions, software and support2,628  2,062 
Professional services18,421  10,628 
Total cost of revenue21,049  12,690 
Gross profit30,647  25,639 
Operating expenses:   
Sales and marketing22,964  17,003 
Research and development9,870    7,300 
General and administrative8,060  4,849 
Total operating expenses40,894  29,152 
Operating loss(10,247) (3,513)
Other (income) expense:   
Other (income), net(918) (499)
Interest expense13  256 
Total other (income)(905) (243)
Net loss before income taxes(9,342) (3,270)
Income tax expense211  125 
Net loss(9,553) (3,395)
Accretion of dividends on convertible preferred stock  214 
Net loss attributable to common stockholders$(9,553) $(3,609)
Net loss per share attributable to common stockholders:                      
Basic and diluted$(0.16) $(0.10)
Weighted average common shares outstanding:   
Basic and diluted60,850,521  34,274,718 
      
      


APPIAN CORPORATION AND SUBSIDIARIES
STOCK BASED COMPENSATION EXPENSE
(in thousands)
(unaudited)

  
 Three Months Ended March 31,
 2018 2017
Cost of revenue   
Subscriptions, software and support$110  $ 
Professional services220   
Operating expenses   
Sales and marketing507   
Research and development391   
General and administrative1,012   
Total stock-based compensation expense                                                           $2,240  $     — 
        
        


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

  
 Three Months Ended March 31,
 2018 2017
Cash flows from operating activities:   
Net loss$(9,553) $(3,395)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
   
Depreciation and amortization268  219 
Deferred income taxes76   
Stock-based compensation2,240   
Changes in assets and liabilities:   
Accounts receivable1,932  14,304 
Prepaid expenses and other assets(1,085) (2,771)
Deferred commissions315  (741)
Accounts payable and accrued expenses(2,161) (3,860)
Accrued compensation and related benefits(2,743) (1,408)
Other current liabilities909  100 
Deferred revenue(3,849) 1,393 
Other long-term liabilities(182) (136)
Net cash (used in) provided by operating activities(13,833) 3,705 
Cash flows from investing activities:   
Purchases of property and equipment(1,036) (105)
Net cash used in investing activities(1,036) (105)
Cash flows from financing activities:   
Proceeds from exercise of common stock options983   
Net cash provided by financing activities983   
Effect of foreign exchange rate changes on cash and cash equivalents1,004  16 
Net (decrease) increase in cash and cash equivalents(12,882) 3,616 
Cash and cash equivalents, beginning of period73,758  31,143 
Cash and cash equivalents, end of period$60,876  $34,759 
Supplemental disclosure of cash flow information:   
Cash paid for interest$8  $248 
Cash paid for income taxes$57  $54 
Supplemental disclosure of non-cash financing activities:   
Accretion of dividends on convertible preferred stock$  $214 
Deferred offering costs included in accounts payable and accrued expenses$  $1,251 
        
        


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,
 2018 2017
Reconciliation of non-GAAP operating loss:   
GAAP operating loss$(10,247) $(3,513)
Add back:   
Stock-based compensation expense2,240   
Non-GAAP operating loss$(8,007) $(3,513)
    
Reconciliation of non-GAAP net loss:   
GAAP net loss$(9,553) $(3,395)
Add back:   
Stock-based compensation expense2,240   
Non-GAAP net loss$(7,313) $(3,395)
    
Non-GAAP earnings per share:   
Non-GAAP net loss$(7,313) $(3,395)
Non-GAAP weighted average shares used to compute net loss per share
attributable to common stockholders, basic and diluted
60,850,521  52,437,876 
Non-GAAP net loss per share, basic and diluted$(0.12) $(0.06)
    
Reconciliation of non-GAAP net loss per share, basic and diluted:   
GAAP net loss per share attributable to common stockholders, basic and diluted$(0.16) $(0.10)
Add back:   
Non-GAAP adjustments to net loss per share0.04  0.04 
Non-GAAP net loss per share, basic and diluted$(0.12) $(0.06)
    
Reconciliation of non-GAAP weighted average shares outstanding, basic and diluted:   
GAAP weighted average shares used to compute net loss per share attributable to
common stockholders, basic and diluted
60,850,521  34,274,718 
Add back:   
Additional weighted average shares giving effect to conversion of preferred stock at
the beginning of the period
  18,163,158 
Non-GAAP weighted average shares used to compute net loss per share, basic
and diluted
60,850,521  52,437,876 
      


 

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