Appian(US:APPN)2023-05-08 16:00Revenue Performance - Cloud subscription revenue for Q1 2023 was $69.7 million, representing a 30.6% increase from $53.4 million in Q1 2022[132]. - Revenue from government agencies accounted for 20.5% of total revenue in Q1 2023, up from 18.1% in Q1 2022[123]. - For Q1 2023, 73.2% of total revenue was derived from subscription sales, while 26.8% came from professional services[130]. - Total revenue increased by $21.0 million, or 18.4%, to $135.2 million for the three months ended March 31, 2023, compared to $114.3 million for the same period in 2022[157]. - Subscription revenue rose by $15.2 million, or 18.2%, driven by a $16.3 million increase in cloud subscription revenue[157]. - Professional services revenue increased by $5.7 million, or 18.8%, primarily due to a $6.4 million increase in sales to new customers[158]. Cost and Expenses - Total cost of revenue increased by $5.2 million, or 16.7%, to $36.1 million, with subscriptions cost rising by 27.3%[159]. - Sales and marketing expenses increased by $17.2 million, or 37.4%, to $63.1 million, primarily due to a 29.0% increase in sales and marketing personnel headcount[161]. - Research and development expenses rose to $41.6 million, reflecting ongoing investments in enhancing the software platform[146]. - General and administrative expenses are expected to decrease in 2023 due to anticipated declines in legal costs[147]. - General and administrative expense decreased by $1.8 million, or 5.6%, to $29.7 million for the three months ended March 31, 2023, compared to $31.5 million in the same period in 2022[164]. Profitability and Loss - Gross profit margin improved slightly to 73.3% for the three months ended March 31, 2023, compared to 72.9% in the same period in 2022[160]. - Net loss for the three months ended March 31, 2023, was $36.8 million, compared to a net loss of $23.2 million for the same period in 2022[152]. - Non-GAAP net loss for the three months ended March 31, 2023, was $19.7 million, compared to a non-GAAP net loss of $4.4 million in the same period in 2022[174]. Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2023, were $198.7 million, up from $148.1 million as of December 31, 2022[183]. - Short-term investments and marketable securities increased to $55.8 million as of March 31, 2023, from $47.9 million as of December 31, 2022[183]. - The company had working capital of $145.5 million as of March 31, 2023, compared to $150.0 million as of December 31, 2022[183]. - Net cash used by operating activities was $25.3 million for the three months ended March 31, 2023, compared to $20.6 million for the same period in 2022, primarily due to a $13.7 million increase in net losses[195]. - Net cash provided by financing activities was $88.1 million for the three months ended March 31, 2023, an increase from $24.4 million in the same period in 2022, mainly due to a $92.0 million increase in proceeds from borrowings[197]. Strategic Initiatives - The business model focuses on maximizing customer lifetime value, with significant investments in customer acquisition and sales team expansion[125]. - The company plans to continue investing in its platform and infrastructure to support long-term growth and may pursue strategic acquisitions[131]. - The company targets organizations with over 2,000 employees and $2 billion in annual revenue for its sales efforts[123]. - The company has established partnerships with firms like KPMG, Accenture, and Deloitte to enhance customer coverage and solution delivery capabilities[122]. Debt and Financial Commitments - As of March 31, 2023, the company had outstanding debt of $210.6 million, with a potential increase in interest expense of approximately $2.1 million annually for a hypothetical 100 basis point increase in interest rates[204]. - The company entered into a Senior Secured Credit Facilities Credit Agreement in 2022, providing a five-year term loan facility of $120.0 million and a revolving credit facility of up to $60.0 million[185]. - The company has a minimum purchase commitment of $131.0 million over five years with Amazon Web Services, with $9.4 million spent in the three months ended March 31, 2023[190]. Market Conditions - The company is closely monitoring liquidity and market conditions following the receivership of Silicon Valley Bank, but does not expect a material impact on operations[191][192]. - A 10% change in foreign currency exchange rates would have impacted total revenue by approximately 3% and operating loss by approximately 1% for the three months ended March 31, 2023[206].