Appian(US:APPN)2024-02-14 16:00Customer Base and Revenue - As of December 31, 2023, the company had approximately 1,000 customers, with the number of customers paying over $1 million in annual recurring revenue increasing from 94 in 2022 to 110 in 2023[26] - The company has seen an increase in the number of customers with over 2,000 employees and $2 billion in annual revenue, indicating a focus on larger organizations[26] - The company anticipates that subscriptions revenue as a percentage of total revenue will continue to increase, while professional services as a percentage of total revenue will continue to decrease[36] Competition and Market Position - The company faces significant competition from custom software providers, low-code platforms, and automation technology providers[28] - The company is ranked 1 for Business Workflow Automation with Integration Use Case in the 2023 Gartner Critical Capabilities for Enterprise Low-Code Application Platforms report[30] Financial Performance and Risks - The company has experienced losses in the past and may not achieve or sustain profitability in the future[38] - Outstanding debt as of December 31, 2023, was $206.6 million, with a hypothetical 1% increase in interest rates potentially increasing annual interest expense by approximately $2.1 million[288] - 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[290] Investments and Development - The company expects to continue to invest in research and development, which may increase expenses in absolute dollar values[36] - The company has 16 granted patents and nine patents pending related to its platform and technology, with none expiring before 2034[31] Financial Position and Currency Risks - As of December 31, 2023, the company had cash and cash equivalents of $149.4 million, primarily held for reinvestment and working capital purposes[286] - The company held $9.7 million in fixed income securities, which are subject to market risk due to interest rate fluctuations[287] - The reporting currency is the U.S. dollar, with foreign currency risks primarily related to the British pound, Euro, Australian dollar, and Swiss franc[291] - A 10% change in foreign currency exchange rates could impact total revenue by approximately 4% and operating loss by about 2%[291] - The company has not engaged in hedging foreign currency transactions to date but may consider it in the future[292] Operational Dependencies - The company relies on Amazon Web Services (AWS) for its cloud offering, and any disruption could adversely affect its business[39] - The company has a dual-class stock structure that concentrates voting control with its CEO, potentially limiting influence from other shareholders[39]