Core Insights - The technology sector is often dominated by the Magnificent Seven tech stocks, but there are significant investment opportunities in companies with strong fundamentals outside this group [1] - Appian Corporation, Monday.com, and Analog Devices are highlighted as compelling investment alternatives, each offering unique value propositions [20] Appian Corporation - Appian empowers businesses with its low-code platform, integrating AI, process automation, and data management [2] - In Q4 2024, Appian's cloud subscription revenue increased by 19% year-over-year to $98.9 million, contributing to total revenue of $166.7 million, a 15% increase [3] - For the full year 2024, cloud subscription revenue grew 21% to $368.0 million, with total revenue increasing 13% to $617.0 million [4] - The stock price is currently around $34.69, with a consensus Hold rating and an average price target of $40.17, indicating potential upside [5][6] Monday.com - Monday.com provides a cloud-based Work OS platform for managing projects and workflows, allowing for customized applications [7] - Q4 revenue reached $268.0 million, a 32% year-over-year increase, with a GAAP operating income of $9.6 million [8] - For the full year, revenue soared 33% to $972.0 million, with a strong net dollar retention rate of 112% [9] - The stock is trading near $306.50, with a Moderate Buy consensus and an average price target of $353.32, reflecting strong investor confidence [10][12] Analog Devices - Analog Devices specializes in high-performance analog and mixed-signal integrated circuits, essential for various electronic devices [13] - In Q1 2025, revenue was $2.42 billion, a 4% year-over-year decline but exceeded analyst expectations, with strong performance in Industrial and Automotive segments [15] - The company increased its dividend by 8% to $0.99 per share and authorized a $10 billion share repurchase program [16] - The stock is trading around $238.91, with a Moderate Buy consensus and an average price target of $255.41, indicating potential upside [17][19] Investment Outlook - Appian and Monday.com present higher growth potential but with corresponding volatility, while Analog Devices offers stability and dividends [21] - Incorporating these companies into a diversified technology portfolio can improve returns and mitigate risk [22]

Core Insights - The article highlights that while AI has gained significant attention in the market recently, the foundational concept of automation has been a focus for many tech companies for years prior to the AI boom [1] Group 1: Industry Trends - The rise of AI is linked to a broader trend of automation that has been developing within the technology sector [1] - Companies are increasingly leveraging automation technologies to enhance efficiency and drive innovation [1] Group 2: Company Insights - Appian Corporation is mentioned as a key player in the automation space, indicating its relevance in the ongoing technological evolution [1] - The author, Gary Alexander, has extensive experience in both Wall Street and Silicon Valley, providing insights into the themes shaping the tech industry [1]

Customer Growth - As of December 31, 2024, the company had over 1,000 customers, with the number of customers paying over $1 million in annual recurring revenue increasing from 110 in 2023 to 126 in 2024[32] Financial Position - The company held cash and cash equivalents of $118.6 million and $41.3 million in fixed income securities as of December 31, 2024, which are subject to market risk due to interest rate fluctuations[286][287] - As of December 31, 2024, the company had outstanding debt of $250.4 million, with a hypothetical increase of one percentage point in interest rates potentially increasing annual interest expense by approximately $2.5 million[288] - A hypothetical 100 basis point change in interest rates would not have had a material effect on the fair market value of the company's investment portfolio as of December 31, 2024[287] Revenue Composition - The company expects subscriptions revenue as a percentage of total revenue to continue increasing, while professional services revenue as a percentage of total revenue is expected to decrease[43] Intellectual Property - The company has 21 granted patents and 20 pending patents related to its platform and technology, with none expiring before 2034[36] Competitive Position - The company competes favorably in terms of platform features, security, performance, and total cost of ownership, as validated by Gartner ranking it 1 for Complex Internal Applications in 2024[34] - The company has experienced significant competition and must continue to innovate to maintain its market position[46] Market Opportunities - The company anticipates that the market opportunity will expand, particularly with the competitive impact of AI and the need for technological adaptation[43] Cloud Dependency - The company relies on Amazon Web Services (AWS) for its cloud offering, and any disruption could adversely affect its business[47] Shareholder Structure - The company has a dual-class stock structure, concentrating voting control with its founder, which may limit the influence of other shareholders[46] Inflation and Currency Risks - The company is exposed to inflation risks, particularly in personnel costs and third-party services, which may adversely affect gross profit margins if inflation pressures increase[290] - The company's reporting currency is the U.S. dollar, and a 10% change in foreign currency exchange rates could impact total revenue by approximately 4% and operating loss by approximately 8%[291] - The company has not engaged in hedging foreign currency transactions to date, although it may consider this in the future[292]

Core Viewpoint - Appian's strong quarterly earnings results have led to a significant increase in its stock price, contrasting with a generally negative market trend Group 1: Earnings Performance - Appian exceeded fourth-quarter expectations, achieving breakeven adjusted earnings while analysts anticipated a slight loss [2] - Sales significantly surpassed analysts' consensus, and the company's 2025 guidance for adjusted EPS was higher than expected [2] - Cloud subscription revenue grew 19% year-over-year, with a retention rate of 116%, indicating strong performance in its most profitable segment [3] Group 2: Future Outlook - The company expects cloud subscription revenue growth to decelerate to 14% in 2025 from 21% in 2024, raising concerns about future growth rates [2] - Despite the deceleration, if Appian can maintain double-digit growth while expanding margins, it may still have a promising future [2] Group 3: Financial Health - Operating cash flow improved to approximately $14 million in the fourth quarter, compared to negative $8.2 million in the same period last year [3] - Appian ended 2024 with nearly $160 million in cash, and the positive operating cash flow has increased investor confidence in its balance sheet [3]

Q4 2024 Earnings Call Presentation Matt Calkins, Founder & CEO Mark Lynch, Interim CFO Disclaimer. In this presentation, we may make statements related to our business that are forward-looking statements under federal securities laws and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial results, trends and guidance for the first quarter and full year 2025, the impact of macroeconomic changes, the benefits of ...

Financial Data and Key Metrics Changes - In Q4 2024, Appian Corporation's cloud subscription revenue grew 19% to $98.9 million, while total revenue increased 15% to $166.7 million [7][40] - For the full year 2024, cloud subscription revenue reached $368 million, representing a 21% growth year over year [47] - Adjusted EBITDA for Q4 was positive $21.2 million, significantly above guidance [43] - Non-GAAP gross margin was 80% in Q4, the best performance since the IPO [8][42] Business Line Data and Key Metrics Changes - Subscriptions revenue grew by 18% to $136.8 million in Q4, with subscriptions revenue representing 82% of total revenue [38][40] - Professional services revenue was $29.9 million, a slight increase of 1% year over year, but expected to decline as a percentage of total revenue over the long term [39][40] Market Data and Key Metrics Changes - International operations contributed 35% of total revenue, a slight decrease from 36% in the previous year [41] - Cloud software net new ACV bookings were approximately 65% of total net new software bookings in Q4, down from 80% in the prior year [41] Company Strategy and Development Direction - Appian Corporation aims to leverage AI to enhance process automation, emphasizing the integration of AI within existing workflows [10][11] - The company is focusing on upselling existing customers and expanding its product offerings, with two-thirds of customers purchasing more software in 2024 [31][32] - The strategic priority for 2025 is to maintain a focus on core principles, market identity, and operational rigor [35] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding opportunities in the public sector amidst uncertainty in federal spending [61][62] - The company anticipates a return to a more typical revenue mix of 80% cloud and 20% on-premise in the upcoming year [62] - Management highlighted the importance of demonstrating the practical value of AI to customers, aiming for a more structured approach to AI deployment [66] Other Important Information - The company plans to remove foreign exchange gains and losses from its non-GAAP EPS calculation starting in 2025 [57] - Cash and cash equivalents as of December 31, 2024, were $159.9 million, slightly up from $159 million the previous year [46] Q&A Session Summary Question: What are the underlying assumptions regarding public sector guidance given the uncertainty in US federal spending? - Management feels cautious about the public sector's outlook and cannot predict the impact of federal budget changes [61][62] Question: What can be expected from the product roadmap regarding the agent strategy? - The focus will be on demonstrating the practical value of agents within structured processes, aiming for a more intuitive approach to AI [66] Question: How does Appian Corporation's approach to AI differ from competitors? - Appian Corporation emphasizes embedding AI directly into workflows rather than treating it as a separate entity, positioning it at the center of work processes [71][72] Question: What are the trends in demand across core verticals? - Performance and pipeline were evenly distributed among key verticals: financial services, public sector, insurance, and life sciences [83] Question: How is pricing evolving around AI agents? - Agents will be priced by usage, with a current strategy to subsidize their use to encourage adoption [88]

Core Insights - Appian demonstrated strong revenue growth and exceeded earnings expectations despite challenges in professional services revenue [1][2] - The company reported a breakeven Non-GAAP EPS, overcoming an anticipated loss, with total revenue of $166.7 million, slightly above expectations [2][3] Financial Performance - Total revenue for Q4 2024 was $166.7 million, a 14.7% increase from $145.3 million in Q4 2023 [3] - Cloud subscription revenue reached $98.9 million, reflecting a 19.0% year-over-year growth from $83.1 million [3] - Adjusted EBITDA surged to $21.2 million, a dramatic increase of 2020.0% compared to the previous year [3][7] - The company transitioned from a GAAP operating loss to a GAAP operating income of $5 million in Q4 [7] Business Overview - Appian is a leader in low-code solutions, integrating AI and process automation to enhance operational efficiency for enterprises [4] - The company has focused on expanding its cloud subscription offerings and improving go-to-market strategies, particularly in sectors like government and financial services [5] Challenges and Areas for Improvement - Professional services revenue showed minimal growth of just 1% for the quarter and a decline of 5% for the full year, indicating a need for strategic focus [8] - The net loss included $14.3 million in foreign currency losses, highlighting external market challenges [8] Future Outlook - Management forecasts a 14% growth in cloud subscription revenue and a 10% increase in total revenue for 2025 [10] - Expectations for further improvements in adjusted EBITDA and non-GAAP net income per share reflect confidence in ongoing strategic enhancements [10]

Core Insights - Appian (APPN) reported break-even quarterly earnings per share, exceeding the Zacks Consensus Estimate of a loss of $0.01, and compared to earnings of $0.06 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $166.69 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.59%, and this is an increase from year-ago revenues of $145.32 million [2] - Appian has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The sustainability of Appian's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the coming quarter is $0.03 on revenues of $164.44 million, and for the current fiscal year, it is $0.17 on revenues of $678.87 million [7] Industry Context - The Internet - Software industry, to which Appian belongs, is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Appian's stock performance [5][6]

Exhibit 99.1 Appian Announces Fourth Quarter and Full Year 2024 Financial Results Fourth quarter cloud subscription revenue increased 19% year-over-year to $98.9 million Full year cloud subscription revenue increased 21% year-over year to $368.0 million McLean, VA – February 19, 2025 – Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2024. "In 2024, Appian demonstrated its ability to grow with increasing efficiency. We specialize in creating val ...

Fourth quarter cloud subscription revenue increased 19% year-over-year to $98.9 millionFull year cloud subscription revenue increased 21% year-over year to $368.0 million MCLEAN, Va., Feb. 19, 2025 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2024. “In 2024, Appian demonstrated its ability to grow with increasing efficiency. We specialize in creating value with AI, by deploying it in a process. While others bring work to ...