Appian Announces First Quarter 2021 Financial Results

5/6, 10:01 PM (Source: GlobeNewswire)

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Cloud subscription revenue increased 38% year-over-year to $39.1 million
Subscriptions revenue increased 26% year-over-year to $63.8 million

MCLEAN, Va., May 06, 2021 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the first quarter ended March 31, 2021.

“Once again, we exceeded our guidance, grew cloud subscription revenue by 38%, and set a new high mark for gross profit margin. Appian leads in unifying the Low-code Automation market and providing agility to our customers,” said Matt Calkins, CEO & Founder.

First Quarter 2021 Financial Highlights:

  • Revenue: Cloud subscription revenue was $39.1 million for the first quarter of 2021, up 38% compared to the first quarter of 2020. Total subscriptions revenue, which includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 26% year-over-year to $63.8 million for the first quarter of 2021. Professional services revenue was $25.1 million for the first quarter of 2021, compared to $28.4 million for the first quarter of 2020. Total revenue was $88.9 million for the first quarter of 2021, up 13% compared to the first quarter of 2020. Cloud subscription revenue retention rate was 118% as of March 31, 2021.
  • Operating loss and non-GAAP operating loss: GAAP operating loss was $(10.5) million for the first quarter of 2021, compared to $(8.6) million for the first quarter of 2020. Non-GAAP operating loss was $(0.9) million for the first quarter of 2021, compared to $(5.1) million for the first quarter of 2020.
  • Net loss and non-GAAP net loss: GAAP net loss was $(13.6) million for the first quarter of 2021, compared to $(11.7) million for the first quarter of 2020. GAAP net loss per share was $(0.19) for the first quarter of 2021, based on 70.7 million weighted-average shares outstanding, compared to $(0.17) for the first quarter of 2020, based on 67.5 million weighted-average shares outstanding. Non-GAAP net loss was $(4.0) million for the first quarter of 2021, compared to $(8.2) million for the first quarter of 2020. Non-GAAP net loss per share was $(0.06) for the first quarter of 2021, based on 70.7 million basic and diluted shares outstanding, compared to the $(0.12) net loss per share for the first quarter of 2020, based on 67.5 million basic and diluted shares outstanding.
  • Adjusted EBITDA: Adjusted EBITDA was $0.4 million for the first quarter of 2021, compared to adjusted EBITDA loss of $(3.6) million for the first quarter of 2020.
  • Balance sheet and cash flows: As of March 31, 2021, Appian had total cash, cash equivalents, and investments of $255.1 million. Net cash used in operating activities was $(2.8) million for the three months ended March 31, 2021 compared to $(3.9) million of net cash used in operating activities for the same period in 2020.

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 2021 Business Highlights:

Financial Outlook:

As of May 6, 2021, guidance for 2021 is as follows:

  • Second Quarter 2021 Guidance:

    • Cloud subscription revenue is expected to be in the range of $41.0 million and $41.5 million, representing year-over-year growth of between 39% and 40%.
    • Total revenue is expected to be in the range of $77.0 million and $78.0 million, representing a year-over-year increase of between 15% and 17%.
    • Adjusted EBITDA loss is expected to be in the range of $(16.0) million and $(14.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.26) and $(0.23), assuming weighted average common shares outstanding of 71.0 million.
  • Full Year 2021 Guidance:

    • Cloud subscription revenue is expected to be in the range of $171.0 million and $172.0 million, representing year-over-year growth of between 32% and 33%.
    • Total revenue is expected to be in the range of $353.0 million and $355.0 million, representing a year-over-year increase of between 16% and 17%.
    • Adjusted EBITDA loss is expected to be in the range of $(38.0) million and $(36.0) million.
    • Non-GAAP net loss per share is expected to be in the range of $(0.68) and $(0.65), assuming weighted average common shares outstanding of 71.2 million.

Conference Call Details:

Appian will host a conference call today, May 6, 2021, at 5:00 p.m. ET to discuss Appian's financial results for the first quarter ended March 31, 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 (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 13717973.

Management will also present at the following investor conference:

  • 16th Annual Needham Virtual Technology & Media Conference. The presentation is scheduled for Monday, May 17th at 8:45 a.m. ET.

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 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. 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 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 Contact
Mark Lynch
Chief Financial Officer
703-442-8844
mark.lynch@appian.com

Media Contact
Ben Farrell
Vice President, Corporate Communications
703-442-1067
ben.farrell@appian.com


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
    
 As of
 March 31, December 31,
  2021   2020 
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$114,752  $112,462 
Short-term investments and marketable securities 118,012   109,826 
Accounts receivable, net of allowance of $1,400 as of each of March 31, 2021 and December 31, 2020 87,424   97,278 
Deferred commissions, current 18,749   17,899 
Prepaid expenses and other current assets 28,484   27,955 
Total current assets  367,421   365,420 
Property and equipment, net 34,682   35,404 
Long-term investments 22,317   36,120 
Goodwill 4,651   4,862 
Intangible assets, net of accumulated amortization of $513 and $429 as of March 31, 2021 and December 31, 2020, respectively 1,566   1,744 
Operating right-of-use assets 30,610   30,659 
Deferred commissions, net of current portion 35,991   34,198 
Deferred tax assets 482   489 
Other assets 2,875   3,625 
Total assets$500,595  $512,521 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$4,194  $2,967 
Accrued expenses 5,777   5,821 
Accrued compensation and related benefits 20,919   22,981 
Deferred revenue, current 107,893   116,256 
Operating lease liabilities, current 7,664   6,923 
Other current liabilities 509   940 
Total current liabilities  146,956   155,888 
Operating lease liabilities, net of current portion 50,572   51,194 
Deferred revenue, net of current portion 2,698   3,886 
Deferred tax liabilities 65   70 
Other non-current liabilities 4,744   4,878 
Total liabilities 205,035   215,916 
Stockholders’ equity   
Class A common stock - par value $0.0001; 500,000,000 shares authorized and 39,321,079 shares issued and outstanding as of March 31, 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 31,503,666 shares issued and outstanding as of March 31, 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 479,017   470,498 
Accumulated other comprehensive loss (987)  (5,010)
Accumulated deficit (182,477)  (168,890)
Total stockholders’ equity 295,560   296,605 
Total liabilities and stockholders’ equity$500,595  $512,521 
    


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
    
 Three Months Ended March 31,
  2021   2020 
Revenue   
Subscriptions$63,766  $50,436 
Professional services 25,089   28,428 
Total revenue 88,855   78,864 
Cost of revenue   
Subscriptions 5,854   5,383 
Professional services 17,675   18,736 
Total cost of revenue 23,529   24,119 
Gross profit 65,326   54,745 
Operating expenses   
Sales and marketing 35,984   34,172 
Research and development 20,690   16,038 
General and administrative 19,142   13,141 
Total operating expenses  75,816   63,351 
Operating loss (10,490)  (8,606)
Other expense   
Other expense, net 2,893   3,114 
Interest expense 81   143 
Total other expense 2,974   3,257 
Loss before income taxes (13,464)  (11,863)
Income tax expense (benefit) 123   (194)
Net loss$(13,587) $(11,669)
Net loss per share:   
Basic and diluted$(0.19) $(0.17)
Weighted average common shares outstanding:   
Basic and diluted 70,730,235   67,528,331 
    


APPIAN CORPORATION AND SUBSIDIARIES 
STOCK BASED COMPENSATION EXPENSE 
(unaudited, in thousands) 
     
 Three Months Ended March 31, 
  2021  2020 
Cost of revenue    
Subscriptions$297 $213 
Professional services 641  212 
Operating expenses    
Sales and marketing 1,108  753 
Research and development 1,015  553 
General and administrative 4,833  1,745 
Total stock-based compensation expense$7,894 $3,476 
     


APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
    
 Three Months Ended March 31,
  2021   2020 
Cash flows from operating activities:   
Net loss$(13,587) $(11,669)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 1,278   1,511 
Bad debt expense   200 
Loss on disposal of property and equipment   7 
Change in fair value of available-for-sale securities (8)  
Deferred income taxes (448)   
Stock-based compensation 7,894   3,476 
Changes in assets and liabilities:    
Accounts receivable 12,651   5,751 
Prepaid expenses and other assets (279)  37 
Deferred commissions (2,642)  525 
Accounts payable and accrued expenses 1,159   (1,800)
Accrued compensation and related benefits (1,955)  (399)
Other current and non-current liabilities 151   (154)
Deferred revenue (7,192)  (2,503)
Operating lease liabilities 168   1,159 
Net cash used in operating activities  (2,810)  (3,859)
Cash flows from investing activities:   
Proceeds from sale of investments 5,625   
 
Payments for acquisitions, net of cash acquired    (6,138)
Purchases of property and equipment (468)  (202)
Net cash provided by (used in) investing activities  5,157   (6,340)
Cash flows from financing activities:   
Principal payments on finance leases 
   (357)
Proceeds from exercise of common stock options 625   670 
Net cash provided by financing activities  625   313 
Effect of foreign exchange rate changes on cash and cash equivalents (682)  (706)
Net increase (decrease) in cash and cash equivalents 2,290   (10,592)
Cash and cash equivalents, beginning of period 112,462   159,755 
Cash and cash equivalents, end of period$114,752  $149,163 
Supplemental disclosure of cash flow information:   
Cash paid for interest$88  $49 
Cash paid for income taxes$148  $43 



 
APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in thousands, except share and per share data)
    
 Three Months Ended March 31,
  2021   2020 
Reconciliation of non-GAAP operating loss:   
GAAP operating loss$(10,490) $(8,606)
Add back:   
Stock-based compensation expense 7,894   3,476 
Litigation expenses(1) 1,687    
Non-GAAP operating loss$(909) $(5,130)
    
Reconciliation of non-GAAP net loss:   
GAAP net loss$(13,587) $(11,669)
Add back:   
Stock-based compensation expense 7,894   3,476 
Litigation expenses(1) 1,687    
Loss on disposal of property and equipment    7 
Non-GAAP net loss$(4,006) $(8,186)
    
Non-GAAP earnings per share:   
Non-GAAP net loss$(4,006) $(8,186)
Non-GAAP weighted average shares used to compute net loss per share, basic and diluted 70,730,235   67,528,331 
Non-GAAP net loss per share, basic and diluted$(0.06) $(0.12)
    
Reconciliation of non-GAAP net loss per share, basic and diluted:   
GAAP net loss per share, basic and diluted$(0.19) $(0.17)
Add back:   
Non-GAAP adjustments to net loss per share 0.13   0.05 
Non-GAAP net loss per share, basic and diluted$(0.06) $(0.12)
    
Reconciliation of adjusted EBITDA:   
GAAP net loss$(13,587) $(11,669)
Other expense, net 2,893   3,114 
Interest expense 81   143 
Income tax expense (benefit) 123   (194)
Depreciation and amortization expense 1,278   1,511 
Stock-based compensation expense 7,894   3,476 
Litigation expenses(1) 1,687    
Adjusted EBITDA$369  $(3,619)
  
(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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