Q1 2025 Earnings Call Presentation Q3 2025 Earnings Call Presentation Matt Calkins, Founder & CEO Mark Lynch, Interim CFO Matt Calkins, CEO Serge Tanjga, 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 fourth quarter ...

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]

Market Overview - The Low-code Development Platform Market is projected to grow from USD 26.30 billion in 2025 to USD 67.12 billion by 2030, with a CAGR of 20.61% during the forecast period [1] - Growth is driven by the demand for rapid application development, modernization of legacy systems, and increased adoption across various industries [1] Key Trends - **Cloud-First Deployment Models**: The shift towards cloud-first deployment models is enhancing flexibility and scalability, with cloud platforms becoming a significant part of low-code adoption due to reduced infrastructure costs and support for remote work [3] - **Integration of Artificial Intelligence**: AI integration in low-code platforms is streamlining development processes, enabling automation of repetitive tasks and empowering citizen developers, thus accelerating delivery timelines [4] - **Regulatory Compliance**: Compliance and regulatory demands are influencing low-code adoption, particularly in industries like BFSI and healthcare, where strong audit trails and adherence to data regulations are required [5][6] - **Modernization of Legacy Systems**: Enterprises are replacing outdated systems with low-code solutions to reduce maintenance costs and improve operational agility, highlighting the role of low-code platforms in maintaining competitive advantage [7] Market Segmentation - The market is segmented by component (platform and services), application type (web-based, mobile-based, desktop/server-based, API-centric & micro-services), deployment mode (cloud and on-premise), organization size (SMEs and large enterprises), and industry verticals including BFSI, healthcare, and IT [10] Key Players - Major players in the market include Salesforce.com Inc., Microsoft Corporation, Appian Corporation, Oracle Corporation, and OutSystems Inc., each offering unique low-code solutions tailored to various business needs [10][13] Conclusion - The Low-code Development Platform industry is experiencing robust growth as organizations seek faster and cost-effective software development options, with trends such as cloud-first models and AI-driven tools shaping the market [11][12]

Core Insights - Appian has been recognized as a Leader in the 2025 Gartner® Magic Quadrant™ for Business Orchestration and Automation Technologies (BOAT) [1][2] - The emergence of the BOAT market indicates a trend towards unified enterprise automation, with organizations preferring single platforms over multiple vendors for various automation needs [2] - Appian's platform integrates AI agents within business processes, enhancing automation capabilities and enabling organizations to manage complex workflows effectively [3][4] Company Overview - Appian is positioned as a comprehensive BOAT platform, allowing organizations to automate complex, multi-step work through its AI agents and unified data fabric [4] - The company aims to improve operational efficiency, reduce costs, and enhance customer experiences for its clients, which include some of the world's largest companies across various industries [5]

Core Insights - Appian Capital Advisory Limited has launched a critical minerals, metals, and mining fund for emerging markets in partnership with the International Finance Corporation (IFC), with a total capital commitment of up to US$1 billion [1][3][6] Fund Overview - The Fund is designed to align with IFC's investment mandate, focusing on financing private sector development in emerging markets while ensuring financial returns and measurable development impact [3][4] - It will co-invest alongside existing Appian funds, targeting equity, credit, and royalty investments in the metals and mining sectors, particularly in Africa and Latin America [4][6] - All investments will adhere to IFC's stringent performance criteria and environmental, social, and governance (ESG) standards [4][7] Investment Focus - The Fund's first investment is in Brazil's Santa Rita nickel-copper-cobalt mine, which is transitioning to underground production, with an expected output of approximately 30,000 tonnes per year of nickel equivalent and a mine life exceeding 30 years [5][6][7] - The Fund represents the first dedicated mining vehicle focused exclusively on emerging markets, financing mineral development projects across all stages, including construction, production, and expansion [6][7] Strategic Importance - The partnership between IFC and Appian marks IFC's first collaboration with a private equity investor specializing in mining, aimed at expanding access to critical resources and fostering economic growth [7][9] - Appian has a strong track record, having brought 12 mining projects into production since 2016, more than the five largest international mining companies combined [8][9] Management and Expertise - Appian manages approximately US$5.0 billion in assets, supported by a team of over 100 experienced investment professionals with expertise in identifying and optimizing metals and mining projects [7][11] - The Fund will provide management teams with access to Appian's technical and financial expertise, along with support from IFC and the World Bank for ESG and community development initiatives [7][9]

Core Viewpoint - Appian is set to release its financial results for Q3 2025 on November 6, 2025, before the U.S. markets open, and will host a conference call to discuss these results and the business outlook [1]. Group 1: Financial Results Announcement - The financial results for the third quarter ended September 30, 2025, will be announced before the U.S. financial markets open on November 6, 2025 [1]. - A conference call will be held at 8:30 a.m. Eastern Time to review the financial results and business outlook [2]. Group 2: Conference Call Details - Participants can access the conference call via a registration link and will need a phone with a dial-in and PIN [2]. - The conference call will also be available live via webcast on the Investor Relations page of Appian's website [2]. - A replay of the conference call will be accessible on the Investor Relations page after the live event [2]. Group 3: Company Overview - Appian is recognized as The Process Company, providing a software platform that enhances organizational processes, reduces costs, improves customer experiences, and offers a strategic advantage [3]. - The company serves many of the world's largest companies across various industries, emphasizing its commitment to client success [3].

Core Insights - Appian has been recognized as a Leader in The Forrester Wave™: Digital Process Automation Software, Q3 2025, highlighting its strong position in the market for AI process automation [1][2]. Group 1: Recognition and Strengths - The Forrester report indicates that Appian is particularly suited for organizations looking to implement complex and scaled digital process automation deployments [2]. - Customers have praised Appian for its rapid prototyping and flexible UI development tools, which facilitate application changes, as well as its data fabric and orchestration capabilities that address integration challenges, such as data extraction from SAP [2]. - Appian's data fabric unifies data for AI, and its process intelligence capabilities ensure excellent governance, alongside a superior roadmap for enhancing AI integration, scalability, and developer productivity [2]. Group 2: Future Trends - The report suggests that AI agents will be pivotal in driving the next wave of digital process automation innovation, prompting businesses to seek vendors that integrate these agents with existing DPA strengths rather than merely showcasing agent-building capabilities [3]. Group 3: Company Overview - Appian is positioned as The Process Company, delivering a software platform that enhances organizational processes, reduces costs, improves customer experiences, and provides a strategic advantage [5].

Core Insights - Financial services firms are facing challenges with legacy systems that hinder innovation and compliance, necessitating modernization without a full overhaul [3][4] - A targeted approach using an "agility layer" allows firms to modernize core systems incrementally, unifying data and accelerating innovation while minimizing risks [6][11] Legacy System Challenges - Many core IT systems are outdated and expensive to maintain, complicating the ability to meet customer expectations and regulatory demands [3][4] - Traditional "rip-and-replace" strategies can lead to operational outages, lost revenue, and complex data migrations that are time-consuming [5] Agility Layer Concept - The agility layer serves as a flexible framework that connects legacy systems with modern applications, enabling rapid innovation [7][11] - A key component of the agility layer is a data fabric, which unifies data from separate systems without relocating it, creating a single, trusted data model [8] Incremental Modernization Strategy - A successful modernization strategy begins with mapping current systems and identifying inefficiencies, using tools like process mining to reveal bottlenecks [9][10] - Addressing critical workflows incrementally allows firms to unlock efficiencies and build a foundation for broader transformation, targeting high-impact areas for rapid ROI [10][11]

Core Viewpoint - Morgan Stanley expresses optimism about Appian's strategic transformation under new leadership, despite the potential delay in reaching a growth inflection point, believing the company's actual positioning is better than market expectations [1][2]. Company Overview - Appian is a low-code enterprise platform as a service company focused on business process management, offering an integrated automation platform for designing, automating, and optimizing end-to-end processes and complex business operations [1]. Technological Differentiation - Appian's differentiation lies in its "process-first" platform centered around Data Fabric, unifying enterprise data under a semantic layer, allowing applications and AI agents to process dispersed data sources efficiently [4]. Market Strategy - The company has restructured its go-to-market (GTM) strategy to prioritize larger, higher-quality enterprise deals, moving away from smaller transactions, with a focus on seven- and eight-figure deals for better scalability and unit economics [5]. Federal Market Opportunities - Appian sees significant growth potential in the U.S. federal market, which constitutes about 25% of its business, driven by policy changes favoring direct procurement from suppliers rather than through third-party contractors [7].