Core Insights - Appian reported Q3 CY2025 revenue of $187 million, a 21.4% year-on-year increase, exceeding analyst estimates of $174.1 million by 7.4% [1][6] - The company’s non-GAAP profit was $0.32 per share, significantly above the consensus estimate of $0.05 [1][6] - Revenue guidance for Q4 CY2025 is set at $189 million, surpassing analyst expectations of $187.4 million [1][6] Performance Highlights - The positive market reaction was attributed to strong cloud subscription performance and operational efficiency [3] - Over 25% of Appian's customer base is now utilizing Appian AI, contributing to a 50% increase in large software deals [3] - The company achieved a net revenue retention rate of 111%, consistent with the previous quarter [6] Future Outlook - Management anticipates continued demand driven by AI, with upcoming product releases like Agent Studio expected to enhance adoption [4] - The company plans to balance sales headcount growth with sustainable margin expansion, projecting more modest margin growth ahead [4] - Full-year adjusted EPS guidance has been raised to $0.52, reflecting a 62.5% increase [6]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Appian (APPN) reported $187 million in revenue for Q3 2025, marking a year-over-year increase of 21.4% and exceeding the Zacks Consensus Estimate by 7.58% [1] - The company's EPS for the quarter was $0.32, significantly higher than the $0.15 reported a year ago, resulting in a surprise of 540% compared to the consensus estimate of $0.05 [1] Financial Performance - Subscriptions gross margin was reported at 87.9%, slightly below the estimated 88.1% [4] - Professional services gross margin stood at 30.9%, surpassing the average estimate of 28% [4] - Revenue from professional services reached $39.82 million, exceeding the estimated $33.67 million and reflecting a year-over-year increase of 28.7% [4] - Subscription revenue was $147.19 million, above the average estimate of $140.16 million, representing a year-over-year growth of 19.6% [4] Market Performance - Over the past month, Appian's shares have returned -0.7%, while the Zacks S&P 500 composite increased by 1.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Appian's shares surged 18.8% following the release of strong Q3 2025 financial results that exceeded analyst expectations and included an increased full-year forecast [1] - The company reported total revenue of $187 million, marking a 21.4% year-over-year increase, significantly surpassing Wall Street estimates [1] - Appian achieved a positive operating margin of 7%, a notable improvement from the negative 4.6% margin in the same quarter last year [1] - Adjusted earnings per share reached $0.32, well above the analyst expectation of $0.05, and the company raised its full-year 2025 guidance for adjusted earnings per share [1] Market Reaction - Appian's stock has shown high volatility, with 21 moves greater than 5% in the past year, indicating that the recent news has significantly influenced market perception [3] - The broader tech-heavy Nasdaq index fell approximately 1.4%, reflecting a wave of caution among investors, particularly concerning high valuations in the wake of an AI-driven rally [4] - Despite Appian's positive results, other tech stocks like Palantir Technologies experienced declines, highlighting a shift in investor sentiment towards profit-taking and valuation concerns [4] Performance Metrics - Year-to-date, Appian's shares are up 14.7%, trading at $38.08, close to its 52-week high of $41.56 from November 2024 [5] - An investment of $1,000 in Appian's shares five years ago would now be worth $420.40, indicating a significant decline in value over that period [5]

Revenue Performance - Cloud subscriptions revenue for the three months ended September 30, 2025, was $113,596, representing a 20.8% increase from $94,075 in the same period of 2024[128]. - For the nine months ended September 30, 2025, cloud subscriptions revenue reached $320,337, a 19.0% increase from $269,106 in the prior year[128]. - Subscriptions revenue for Q3 2025 reached $147.2 million, a 19.5% increase from $123.1 million in Q3 2024, driven by a $19.5 million increase in cloud subscriptions revenue[152]. - Total revenue for Q3 2025 was $187.0 million, up $33.0 million or 21% compared to $154.1 million in Q3 2024, with professional services revenue increasing by 28.7% to $39.8 million[152]. - Total revenue increased by $73.7 million, or 16.4%, to $524.1 million in the nine months ended September 30, 2025, driven by a $60.4 million increase in subscriptions revenue[161]. - Total revenue for the nine months ended September 30, 2025, was $49,138,000, compared to $38,973,000 for the same period in 2024, representing a year-over-year increase of approximately 26%[177]. Customer Retention and Acquisition - The cloud subscriptions revenue retention rate as of September 30, 2025, was 111%, down from 117% in 2024, indicating a decline in revenue retention from existing customers[129]. - The average cloud subscriptions gross renewal rate over the last three years was 98%, reflecting strong customer retention[121]. - Appian's investment in professional services aims to drive customer success and facilitate platform adoption, supported by strategic partnerships with firms like Accenture and Deloitte[115]. - The company targets organizations with over 2,000 employees and $2 billion in annual revenue, focusing on key industries such as financial services and government[118]. - Appian's business model emphasizes maximizing customer lifetime value through subscription renewals and additional purchases, with significant customer acquisition costs involved[120]. Operating Income and Expenses - Operating income for Q3 2025 was $13.1 million, compared to a loss of $7.2 million in Q3 2024, indicating a significant improvement in profitability[150]. - General and administrative expenses are expected to increase in absolute dollars in 2025 due to investments in the information technology team[147]. - Sales and marketing expenses for Q3 2025 were $51.9 million, reflecting a marginal increase in headcount and continued investment in customer acquisition[143][144]. - Research and development expenses are projected to rise as the company focuses on enhancing its software platform, with a new product development center opened in India[146]. - The company anticipates continued growth in operating expenses, albeit at a more measured rate than in previous years[142]. - Non-GAAP total operating expense for the three months ended September 30, 2025, was $113.572 million, down from $128.597 million in the previous quarter, reflecting a decrease of 11.7%[176]. - Adjusted EBITDA for the three months ended September 30, 2025, was $29.762 million, compared to an operating loss of $7.157 million in the same period of 2024[176]. - Operating income for the nine months ended September 30, 2025, was $49,681,000, significantly improved from an operating loss of $8,470,000 in the same period of 2024[177]. Net Income and Cash Flow - Net income for the nine months ended September 30, 2025, was $6.3 million, a recovery from a net loss of $78.6 million in the same period of 2024[150]. - Net income for the three months ended September 30, 2025, was $24.394 million, with diluted net income per share of $0.32, compared to a net loss of $2.100 million in the same period of 2024[176]. - For the nine months ended September 30, 2025, net cash provided by operating activities was $61.7 million, a significant increase from a net cash used of $7.0 million in the same period of 2024[194]. - Cash and cash equivalents increased by 26.3% to $125.2 million as of September 30, 2025, up from $99.2 million at the end of September 2024[193]. Expenses and Financial Metrics - Cost of revenue for subscriptions increased by 26.1% to $17.8 million in Q3 2025, while total cost of revenue rose by 22.1% to $45.3 million[154]. - Subscriptions gross margin for Q3 2025 was 87.9%, slightly down from 88.6% in Q3 2024, while professional services gross margin improved to 30.9% from 25.6%[154]. - Research and development expense rose by $1.7 million, or 4%, to $40.3 million in Q3 2025, driven by increased personnel and IT costs[156]. - General and administrative expense increased by $1.7 million, or 5%, to $36.4 million in Q3 2025, primarily due to higher personnel costs and rent expenses[157]. - Other income, net decreased by $11.1 million, or 88.9%, to a loss of $1.4 million in Q3 2025, mainly due to foreign exchange losses[158]. - Interest expense decreased by $0.9 million, or 13.9%, to $6.2 million in Q3 2025, attributed to lower effective interest rates[159]. Future Outlook and Capital Requirements - The company plans to continue investing in growth, including platform enhancements and strategic acquisitions, to capitalize on market opportunities[126]. - Future capital requirements will depend on growth rate, R&D spending, and market acceptance of new products[186]. - The company has a non-cancellable cloud hosting arrangement with AWS totaling $220,000,000 over five years, with minimum annual spending requirements of $44,000,000[190]. - A hypothetical increase of one percentage point in interest rates would increase the company's annual interest expense by approximately $2.4 million[202]. - A 10% change in foreign currency exchange rates could impact total revenue by approximately $18 million and operating loss by about $8 million for the nine months ended September 30, 2025[204].

Group 1 - Appian reported quarterly earnings of $0.32 per share, significantly exceeding the Zacks Consensus Estimate of $0.05 per share, representing an earnings surprise of +540.00% [1] - The company achieved revenues of $187 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.58%, compared to $154.05 million in the same quarter last year [2] - Appian has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Group 2 - The stock has underperformed the market, losing about 11.1% since the beginning of the year, while the S&P 500 has gained 15.6% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of the recent earnings numbers [3][4] - Current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $187.12 million, and for the current fiscal year, it is $0.32 on revenues of $698.02 million [7] Group 3 - The Internet - Software industry, to which Appian belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Appian's stock performance [5][6]

Financial Data and Key Metrics Changes - In Q3 2025, Appian's total revenue grew 21% year-over-year to $187 million, with cloud subscriptions revenue increasing 21% to $113.6 million and total subscriptions revenue rising 20% to $147.2 million [4][18] - Adjusted EBITDA was $32.2 million, significantly higher than the guidance of $9-$12 million and up from $10.8 million in the same quarter last year [20][23] - Net income reached $24.4 million, or $0.32 per diluted share, compared to $1.8 million, or $0.02 per diluted share, in Q3 2024 [20] Business Line Data and Key Metrics Changes - Cloud subscription revenue retention rate was 111%, stable compared to the previous quarter but down from 117% a year ago [19] - Professional services revenue increased by 29% year-over-year to $39.8 million, with a gross margin of 34%, up from 30% in the previous year [18][19] Market Data and Key Metrics Changes - International operations contributed 40% of total revenue, up from 36% in the year-ago period, indicating strong growth in international markets [19] - Cloud net new ACV bookings accounted for approximately 90% of total net new software bookings in Q3, reflecting strong demand [19] Company Strategy and Development Direction - The company is focusing on integrating AI with business processes, emphasizing the importance of connecting AI to real work to enhance its value [5][8] - Appian's up-market strategy is driving growth, with over 50% more new seven-figure software deals booked compared to the previous year [15][17] - The launch of new features like Agent Studio is expected to enhance AI capabilities and drive further adoption among customers [13][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the government sector's purchasing patterns, noting a shift towards efficiency and openness to AI solutions despite the temporary impact of the government shutdown [31] - The company anticipates continued growth in cloud subscription revenue and total revenue for Q4 2025, with adjusted EBITDA expected to be between $10 million and $13 million [22][23] Other Important Information - The company is increasing its full-year guidance for cloud subscription revenue and total revenue, expecting cloud subscription revenue to be between $435 million and $437 million, representing year-over-year growth of 18% to 19% [23][24] - The upcoming release of Agent Studio is highly anticipated, with positive feedback from early customer programs indicating strong demand for the new capabilities [32] Q&A Session Summary Question: What drove the strength in cloud ACV bookings this quarter? - Management attributed the strength to a broad market improvement and the success of the up-market strategy, rather than specific sectors [27] Question: How does the company view its go-to-market transformation progress? - Management feels they are in the fourth or fifth inning of the transformation, with plans to return to growth in the sales organization while maintaining productivity [28] Question: What is the outlook for government business given the shutdown? - Management remains bullish about government business, noting that the shutdown is temporary and that long-term changes in purchasing patterns are positive [31] Question: What feedback has been received regarding the upcoming AI Studio release? - The beta program for AI Studio was oversubscribed, with positive feedback indicating strong anticipation for the release [32] Question: How does the company differentiate itself in the AI market? - Management emphasized the importance of connecting AI to data and processes, positioning Appian as a leader in providing complementary technologies to AI [35] Question: What is the expected path for profitability moving forward? - Management expects modest margin expansion in the future, focusing on sustainable revenue growth and continued efficiency improvements [38] Question: What is driving the strong performance in international markets? - The growth is attributed to AI adoption and higher-level conversations with decision-makers, along with favorable foreign exchange rates [39] Question: What is the outlook for professional services margins? - Management noted that while the current high margins may not be sustainable, they expect continued high profitability in professional services moving forward [41]

Q3 2025 Financial Highlights - Cloud subscriptions revenue reached $1136 million, a 21% year-over-year increase[9] - Total revenue for Q3 2025 was $1870 million, also up 21% year-over-year[9] - Subscriptions revenue in Q3 2025 amounted to $1472 million, reflecting a 20% year-over-year growth[9] - Adjusted EBITDA for Q3 2025 stood at $322 million[8] Gross Margin Performance - Subscriptions gross margin was 88%[9] - Professional services gross margin was 34%[9] - Overall gross margin was 77%[9] Revenue Retention and Renewal - Cloud Subscriptions Revenue Retention was 111% as of September 30, 2025[37] - Cloud Gross Renewal Rate was 98% in Q3 2025[14] Q4 2025 Guidance - Cloud subscriptions revenue is projected to be between $1150 million and $1170 million, representing a year-over-year growth of 16% to 18%[38] - Total revenue is expected to range from $1870 million to $1910 million, indicating a year-over-year increase of 12% to 15%[38] - Adjusted EBITDA is forecasted to be between $100 million and $130 million[38] - Non-GAAP diluted earnings per share are anticipated to be between $004 and $008[38]

Revenue Growth - Cloud subscriptions revenue increased 21% year-over-year to $113.6 million for Q3 2025[1] - Total revenue for Q3 2025 was $187.0 million, reflecting a 21% year-over-year increase[4] - Professional services revenue rose 29% year-over-year to $39.8 million in Q3 2025[4] - Total revenue for the three months ended September 30, 2025, was $187,004,000, representing a 21.4% increase from $154,052,000 in the same period of 2024[20] - Subscription revenue increased to $147,188,000 for the three months ended September 30, 2025, up 19.5% from $123,121,000 in the prior year[20] - For the nine months ended September 30, 2025, total revenue was $49,138 million, compared to $38,973 million for the same period in 2024, representing an increase of approximately 26%[28] Profitability - GAAP net income for Q3 2025 was $7.8 million, compared to a net loss of $(2.1) million in Q3 2024[4] - Non-GAAP net income for Q3 2025 was $24.4 million, up from $1.8 million in Q3 2024[4] - Net income for the three months ended September 30, 2025, was $7,825,000, compared to a net loss of $2,100,000 in the same period of 2024[20] - Operating income for the three months ended September 30, 2025, was $13,114,000, a significant improvement from an operating loss of $7,157,000 in the prior year[20] - Net income for the nine months ended September 30, 2025, was $34,449 million, compared to a net loss of $22,577 million for the same period in 2024, indicating a turnaround in profitability[28] - The company reported a basic net income per share of $0.47 for the nine months ended September 30, 2025, compared to a loss of $0.31 per share in the same period of 2024[28] Guidance and Future Outlook - Full year 2025 guidance for cloud subscriptions revenue is expected to be between $435.0 million and $437.0 million, representing 18% to 19% year-over-year growth[8] - Total revenue guidance for full year 2025 is expected to be between $711.0 million and $715.0 million, indicating a 15% to 16% year-over-year increase[8] - Fourth quarter 2025 guidance for total revenue is expected to be between $187.0 million and $191.0 million, representing a year-over-year increase of 12% to 15%[8] - The company plans to continue focusing on market expansion and new product development to sustain growth momentum in the upcoming quarters[28] Cash Flow and Financial Position - Cash and cash equivalents increased to $125,249,000 as of September 30, 2025, from $118,552,000 at the end of 2024[24] - Total assets decreased slightly to $611,735,000 as of September 30, 2025, from $621,039,000 at the end of 2024[18] - Total liabilities increased to $660,279,000 as of September 30, 2025, compared to $653,679,000 at the end of 2024[18] - Cash flows from operating activities for the nine months ended September 30, 2025, were $61,737,000, compared to a cash outflow of $6,993,000 in the prior year[24] Operating Expenses and Cost Management - Total operating expenses decreased to $128,597 million, down from $137,234 million, representing a reduction of 6.3% year-over-year[26] - Total operating expenses for the nine months ended September 30, 2025, were $351,090 million, down from $350,716 million in the same period of 2024, indicating effective expense control despite revenue growth[28] - The cost of subscriptions as a percentage of revenue decreased from 39,614 million in 2024 to 49,810 million in 2025, reflecting improved cost management[28] Stockholder and Legal Expenses - The company reported stock-based compensation expense of $10,260,000 for the three months ended September 30, 2025, up from $9,505,000 in the same period of 2024[22] - The company incurred litigation expenses of $6,324 million for the nine months ended September 30, 2025, compared to $3,442 million in the same period of 2024, indicating increased legal costs[29]

Core Insights - Appian reported a 21% year-over-year increase in cloud subscriptions revenue, reaching $113.6 million for Q3 2025 [1][5] - Total revenue for Q3 2025 also increased by 21% year-over-year to $187.0 million [1][5] Financial Highlights - Cloud subscriptions revenue grew by 21% compared to Q3 2024, while total subscriptions revenue rose 20% to $147.2 million [5] - Professional services revenue increased by 29% year-over-year to $39.8 million [5] - GAAP operating income was $13.1 million, a significant improvement from a loss of $(7.2) million in Q3 2024 [5] - Non-GAAP operating income reached $29.8 million, up from $8.3 million in the same quarter last year [5] - GAAP net income was $7.8 million, compared to a net loss of $(2.1) million in Q3 2024 [5] - Non-GAAP net income was $24.4 million, a substantial increase from $1.8 million in Q3 2024 [5] - Adjusted EBITDA for Q3 2025 was $32.2 million, compared to $10.8 million in Q3 2024 [5] - Net cash provided by operating activities was $18.7 million, a turnaround from $(8.2) million in Q3 2024 [5] Business Developments - Appian was recognized as a leader in the IDC MarketScape for Worldwide Business Automation Platforms 2025 [5] - The company was also named a leader in Digital Process Automation Software by an independent research firm [5] - The latest Appian platform release includes enterprise-ready AI capabilities [5] Financial Outlook - For Q4 2025, cloud subscriptions revenue is projected to be between $115.0 million and $117.0 million, indicating a year-over-year growth of 16% to 18% [5] - Total revenue for Q4 2025 is expected to be between $187.0 million and $191.0 million, representing a year-over-year increase of 12% to 15% [5] - Full-year 2025 guidance estimates cloud subscriptions revenue between $435.0 million and $437.0 million, reflecting an 18% to 19% growth [5] - Total revenue for the full year is anticipated to be between $711.0 million and $715.0 million, indicating a 15% to 16% increase [5]