Appian(US:APPN)2024-11-07 16:29Revenue Performance - Cloud subscriptions revenue for the three months ended September 30, 2024, was $94,075,000, representing a 21.8% increase compared to $77,247,000 in the same period of 2023[120]. - For the nine months ended September 30, 2024, cloud subscriptions revenue reached $269,106,000, up 21.6% from $221,381,000 in 2023[120]. - Total revenue for the three months ended September 30, 2024, increased by $16.96 million, or 12.4%, to $154.05 million compared to $137.09 million in the same period in 2023, driven primarily by an increase in subscriptions revenue of $19.32 million[141]. - Total revenue increased by $50.3 million, or 12.6%, to $450.3 million for the nine months ended September 30, 2024, driven by a $57.2 million increase in subscriptions revenue[153]. - Subscriptions revenue reached $123.12 million, representing an 18.6% increase from $103.80 million in the same period last year, with a $16.8 million increase in cloud subscription revenue[141]. - Subscriptions revenue increased by $57.2 million, or 19.3%, to $353.8 million for the nine months ended September 30, 2024, while professional services revenue decreased by $6.9 million[153]. Customer Metrics - The cloud subscriptions revenue retention rate remained stable at 117% for both September 30, 2024, and 2023, indicating strong customer loyalty and expansion[121]. - For the three months ended September 30, 2024, 79.9% of total revenue was derived from subscriptions, compared to 75.7% in the same period of 2023[118]. - Revenue from U.S. federal government agencies accounted for 23.2% of total revenue for the three months ended September 30, 2024, compared to 21.1% in the same period of 2023[112]. - As of September 30, 2024, 36.3% of total revenue was generated from customers outside the United States, up from 35.3% in the same period of 2023[113]. Operating Expenses - Operating expenses are expected to increase in absolute dollars as the company invests in growing its teams, albeit at a more measured rate than prior years[130]. - Sales and marketing expenses decreased by $4.80 million, or 8.6%, to $50.87 million, primarily due to a 21% reduction in sales and marketing headcount[145]. - Research and development expenses increased to $38.57 million for the three months ended September 30, 2024, compared to $37.14 million in the same period in 2023, reflecting ongoing investment in platform enhancement[138]. - General and administrative expenses rose to $34.69 million, up from $23.44 million in the same period last year, largely due to increased costs associated with IT investments[135]. - General and administrative expense rose by $11.2 million, or 48.0%, to $34.7 million for the three months ended September 30, 2024, primarily due to a $7.7 million increase in professional fees[148]. Profitability and Loss - The company reported a net loss of $2.10 million for the three months ended September 30, 2024, an improvement from a net loss of $22.25 million in the same period in 2023[138]. - The company reported a net loss of $78.6 million for the nine months ended September 30, 2024, compared to a net loss of $25.4 million in 2023[170]. - Basic and diluted net loss per share for the nine months ended September 30, 2024, was $(1.08), compared to $(0.35) in the same period of 2023[170]. - Adjusted EBITDA is defined as net loss before other expenses, interest expense, income tax expense, depreciation, and other specified costs, providing a clearer view of operational performance[168]. Cash Flow and Investments - Cash and cash equivalents decreased to $99,193,000 as of September 30, 2024, down 24.1% from $130,761,000 as of September 30, 2023[186]. - Net cash used by operating activities was $6,993,000 for the nine months ended September 30, 2024, a significant decrease from $102,198,000 used in the same period of 2023, reflecting improved cash collections[187]. - Net cash used by investing activities was $34.3 million for the nine months ended September 30, 2024, compared to $0.9 million in net cash provided for the same period in 2023, primarily due to a $51.0 million decline in proceeds from the sale of investments[188]. - Net cash used by financing activities was $8.5 million for the nine months ended September 30, 2024, a significant decrease from $82.4 million of net cash provided in the same period in 2023, driven by a $50.0 million increase in common stock repurchases[188]. - The company has utilized $62,000,000 of its $100,000,000 revolving credit facility as of September 30, 2024, indicating active management of its capital resources[179]. Strategic Initiatives - The company plans to continue investing in its platform and infrastructure to maximize growth and meet evolving customer needs[119]. - The company plans to continue investing in sales and marketing to expand its geographical footprint and brand awareness, expecting an increase in sales and marketing expenses in absolute dollars[132]. - The company has established strategic partnerships with firms like Accenture and Deloitte to enhance customer acquisition and service delivery[110]. - The company entered into a share repurchase program in February 2024, repurchasing approximately 1.3 million shares for about $50,000,000 during the first quarter[183]. Market and Economic Risks - The company is exposed to inflation risks related to personnel costs and general overhead expenses, which may adversely affect gross profit margins if inflation pressures increase[195]. - The company is exposed to market risks primarily due to fluctuations in interest rates and foreign currency exchange rates[192]. - A 10% change in foreign currency exchange rates for the nine months ended September 30, 2024, would have impacted total revenue by approximately 4% and operating loss by approximately 6%[196]. - The company has not engaged in hedging of foreign currency transactions to date, although it may consider doing so in the future[197].