Core Insights - Appian announced enhancements to its AI process automation platform, focusing on faster insights, greater scalability, and more secure AI access [1][3][10] Group 1: AI Enhancements - The latest release includes AI-powered semantic smart search that delivers results based on user intent rather than just keywords, improving query support and intelligent actions [4] - All Appian AI features are now available for self-managed and FedRAMP environments, ensuring secure access for all customers, including those in the public sector [5][10] Group 2: Data Fabric and Performance - Appian's data fabric now features automatic scaling to support high throughput query workloads, optimizing performance without manual intervention [7] - New asynchronous interface loading enhances application responsiveness by loading slower data in the background, improving user interaction with complex applications [8] Group 3: Reporting and Insights - The latest enhancements to Process HQ allow users to embed reports and dashboards directly into Appian Sites, facilitating easier sharing of insights [9] - Configurable drilldown reports enable users to explore enterprise data from multiple perspectives, providing deeper insights with a single click [9] Group 4: Strategic Focus - Appian emphasizes the integration of AI into core business processes, aiming to improve operational efficiency and customer service while maintaining governance and accountability [10][11]

Financial Data and Key Metrics Changes - Appian's cloud subscriptions revenue grew 21% to $106.9 million, while subscriptions revenue increased 17% to $132.7 million, and total revenue rose 17% to $170.6 million [5][21][24] - Adjusted EBITDA was $8.1 million, significantly better than the guidance of a loss between $5 million and $2 million, and compared to a loss of $10.5 million in the previous year [24][25] - Net income was $300,000 or breakeven per diluted share, compared to a net loss of $18.2 million or $0.25 per share for the previous year [25] Business Line Data and Key Metrics Changes - Professional services revenue was $38 million, up 13% year-over-year, while subscription revenue represented 78% of total revenue, compared to 77% in the previous year [21][24] - The cloud subscription revenue retention rate was 111%, down from 118% a year ago [21] Market Data and Key Metrics Changes - International operations contributed 38% of total revenue, unchanged from the previous year [21] - The U.S. public sector outperformed the global business in cloud revenue, new bookings, and software pipeline [11] Company Strategy and Development Direction - Appian's upmarket strategy is yielding results, with a focus on high-value transactions and leveraging AI to enhance its platform [6][7] - The company is optimistic about the modernization of legacy applications, driven by AI, which is expected to create significant market opportunities [13][14][18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the federal business, noting a shift towards direct engagement with software providers [13][64] - The company anticipates continued growth in cloud subscription revenue and total revenue for the full year 2025, with adjusted EBITDA expected to range between $49 million and $55 million [26] Other Important Information - David Crozier was appointed as the new Chief Marketing Officer, bringing extensive experience in enterprise software and AI [20] - The company is transitioning to a consumption-based pricing model, moving away from user-based pricing [67][69] Q&A Session Summary Question: App modernization journey and vendor contributions - Management acknowledged that app modernization is complex and emphasized their leadership in the market, with AI playing a crucial role in both extraction and instantiation processes [29][30] Question: NRR rate and its implications - Management explained that the NRR rate's decline to 111% is due to past downsells and highlighted the strength in acquiring new customers [34][36] Question: Competitive advantages against AI and other vendors - Management detailed that Appian's built-in functionalities and robust platform provide advantages that AI alone cannot replicate, emphasizing the importance of a comprehensive application environment [40][41][42] Question: Federal pipeline dynamics and AI's role - Management noted a positive shift in government purchasing behavior, with increased interest in efficiency and direct engagement with Appian [64][65] Question: Guidance changes and FX impact - Management clarified that the guidance increase is primarily due to fundamental business strength rather than changes in guidance philosophy or FX rates [60][61] Question: New sales leaders and go-to-market strategy - Management indicated that new hires are aligned with ongoing transformation efforts to enhance discipline and best practices across the organization [72] Question: Efficiency improvements and AI's impact - Management highlighted ongoing efforts to improve sales productivity and the potential for AI to drive further efficiencies across various functions [49][80]

Financial Data and Key Metrics Changes - In Q2 2025, Appian's cloud subscriptions revenue grew 21% to $106.9 million, total subscriptions revenue increased 17% to $132.7 million, and total revenue rose 17% to $170.6 million [5][24] - Adjusted EBITDA was $8.1 million, a significant improvement from a loss of $10.5 million in the previous year [24] - The cloud subscription revenue retention rate was 111%, down from 118% a year ago [24] Business Line Data and Key Metrics Changes - Professional services revenue was $38 million, up 13% compared to the previous year [24] - Subscription revenue represented 78% of total revenue, compared to 77% in the year-ago period [24] Market Data and Key Metrics Changes - International operations contributed 38% of total revenue, unchanged from the previous year [24] - The company noted strong performance in the U.S. public sector, with federal business outpacing global business in cloud revenue and new bookings [11] Company Strategy and Development Direction - Appian's upmarket strategy is proving effective, with a focus on high-value transactions [6] - The company is leveraging AI to enhance its platform, allowing for higher pricing and new industry opportunities [7][8] - Appian is positioned to capitalize on the modernization of legacy applications, which is expected to grow significantly as AI reduces costs [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the federal business, validating their expectations with strong results [13] - The company anticipates continued growth driven by AI and modernization trends, with a focus on efficiency and customer satisfaction [22][66] Other Important Information - A new Chief Marketing Officer, David Crozier, has joined the company, bringing extensive experience in enterprise software and AI [20] - The company is shifting towards a consumption-based pricing model while maintaining flexibility in its pricing strategies [68] Q&A Session Summary Question: Status of app modernization journey and vendor reliance - Management indicated that app modernization is complex and will require both services and software solutions, with confidence in their leadership position in this market [29][30] Question: Explanation of the NRR decline - The decline to 111% was attributed to previous downsells and a higher percentage of new business coming from new customers, indicating strength in acquiring new logos [32][33] Question: Competitive advantages against AI and other vendors - Appian's platform offers built-in functionality that AI cannot replicate, such as security and scalability, providing a durable competitive advantage [40][41] Question: Impact of AI on customer conversations and pipeline - AI has significantly enhanced the value proposition, changing customer perceptions and driving pipeline growth [56][58] Question: Guidance changes and FX impact - The increase in guidance is primarily due to fundamental business strength rather than changes in guidance philosophy or FX rates [60][61] Question: Federal pipeline dynamics and AI's role - The federal market is shifting towards direct relationships with software providers, which is favorable for Appian, and AI is expected to enhance efficiency in government operations [65][66] Question: New sales leaders' impact on go-to-market strategy - New leadership appointments are aimed at enhancing alignment and best practices across the organization, continuing the ongoing transformation [73] Question: Details on expense shifts affecting EBITDA - The outperformance in EBITDA was due to the tactical movement of marketing and consulting expenses to the second half of the year [75]

Financial Data and Key Metrics Changes - In Q1 2025, Appian's cloud subscription revenue grew 15% year over year to $99.8 million, while total revenue increased 11% year over year to $166.4 million [5][31] - Adjusted EBITDA was $16.8 million, a significant improvement from an adjusted EBITDA loss of $1.3 million in the same period last year [35] - Non-GAAP net income was $9.8 million or $0.13 per diluted share, compared to a non-GAAP net loss of $4.9 million or $0.07 per share for Q1 2024 [35] Business Line Data and Key Metrics Changes - Cloud subscriptions revenue represented 81% of total revenue, up from 79% in the year-ago period [32] - Professional services revenue was $32.1 million, flat compared to Q1 2024, with expectations for a long-term decline as a percentage of total revenue [32] Market Data and Key Metrics Changes - International operations contributed 36% of total revenue, down from 37% in the year-ago period [33] - Federal government bookings grew 59% year over year, indicating strong performance in the public sector [21][110] Company Strategy and Development Direction - The company is focusing on AI integration within its processes, emphasizing practical applications over hype [6][10] - Appian aims to transition away from per-seat pricing models to alternative pricing mechanisms that reflect AI's value [83] - The introduction of a multi-tiered pricing model for AI features has resulted in revenue from AI-inclusive tiers more than doubling in Q1 [12] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the federal government's spending patterns and overall business momentum despite macroeconomic uncertainties [39][48] - The company has not seen material changes in its sales pipeline, indicating stability in its business operations [39] Other Important Information - Appian's weighted rule of 40 score is 27, combining growth and margin metrics [27] - The company plans to report on new internal metrics to provide better visibility into its performance [28] Q&A Session Summary Question: About government performance and potential pull forward into Q1 - Management does not believe pull forwards were a meaningful factor in Q1 and remains cautiously optimistic about Q3 [46][48] Question: Regarding cloud net retention rates and spending hesitation - Management noted that the net retention rate is a trailing metric and attributed the dip to unrelated down sells and leveling off of revenue growth from some customers [49][50] Question: On AI and the new agentic world - Management emphasized the importance of practical results from AI applications and the need for structured processes to support AI deployment [56][60] Question: Incremental monetization from AI usage - Management is pleased with customer willingness to spend on AI and sees significant value in demonstrating tangible results [65][67] Question: About the new CFO's focus areas - Management expressed excitement about the new CFO's contributions but did not disclose specific strategic details [68][69] Question: On intelligent document processing (IDP) success - Management highlighted the advancements in IDP, which now requires no training on document formats, leading to higher accuracy and customer satisfaction [102][104] Question: Federal government revenue growth compared to expectations - Management indicated that federal revenue growth exceeded expectations, with a year-over-year increase of 21% [110]

Financial Data and Key Metrics Changes - In Q1 2025, Appian's cloud subscription revenue grew 15% year over year to $99.8 million, while total revenue increased 11% year over year to $166.4 million [4][30] - Adjusted EBITDA was $16.8 million, a significant improvement from an adjusted EBITDA loss of $1.3 million in the same quarter last year [34] - Non-GAAP net income was $9.8 million or $0.13 per diluted share, compared to a non-GAAP net loss of $4.9 million or $0.07 per share for Q1 2024 [34] Business Line Data and Key Metrics Changes - Cloud subscriptions revenue represented 81% of total revenue, up from 79% in the year-ago period [31] - Professional services revenue was flat at $32.1 million compared to Q1 2024, with expectations for a long-term decline as a percentage of total revenue [31][32] - The cloud subscription revenue retention rate was 112%, down from 120% a year ago [32] Market Data and Key Metrics Changes - International operations contributed 36% of total revenue, slightly down from 37% in the previous year [32] - Federal government bookings grew 59% year over year, indicating strong performance in the public sector [20][104] Company Strategy and Development Direction - The company is focusing on AI integration within its processes, emphasizing practical applications over hype [5][7] - Appian aims to monetize AI features, with revenue from AI-inclusive tiers more than doubling to $9 million in Q1 [11][62] - The introduction of a multi-tiered pricing model allows for better monetization of AI and exclusive features [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the evolving opportunities in the federal government sector despite macroeconomic uncertainties [20][38] - The company is taking a prudent approach to guidance for the remainder of 2025, with expected cloud subscriptions revenue growth between 14-16% for Q2 [38][39] - Management highlighted the importance of maintaining sales and marketing efficiency, with net new bookings per sales rep rising over 30% compared to the previous year [27][81] Other Important Information - Appian's new Chief Financial Officer, Serge Tanga, is expected to contribute significantly to the company's strategy and financial planning [29] - The company plans to report on a new metric called "weighted rule of 40," which combines growth and margin metrics [26] Q&A Session Summary Question: Was there any pull forward in government performance due to uncertainty around ordering patterns? - Management indicated that pull forwards were not a meaningful factor in Q1 and expressed cautious optimism for Q3 [42][44] Question: What drove the decline in cloud net retention rates? - Management explained that the decline was due to down sells from the previous year and leveling off of revenue growth from some customers [46][48] Question: How does Appian differentiate itself in the AI and agentic space? - Management emphasized the importance of practical applications of AI and the need for structured processes to support AI deployment [52][56] Question: What is the expected contribution from AI in 2025? - Management is optimistic about the willingness of customers to spend on AI and plans to transition away from per seat pricing [78][80] Question: How durable are the recent sales productivity gains? - Management believes the productivity gains are durable and stem from recent innovations and improved sales practices [82][84] Question: What is the impact of narrowing the channel focus on go-to-market efficiency? - Management noted that focusing on trusted partners has significantly expanded the partner-generated pipeline [88][90]

Core Insights - Appian empowers customers to integrate AI directly into their business processes, enhancing governance and accountability for better outcomes [1][10] - The company emphasizes a process-first approach, which has led to transformative results for various clients [2][4] Customer Adoption and Impact - Appian's customer AI adoption has surged 7.9 times year-over-year, with 70% of Appian Cloud customers utilizing AI for various applications [3] - Acclaim Autism reduced patient intake time by 83% using Appian AI to process unstructured medical documents [5] - Century Fire Protection cut invoice processing time by 36% and reduced missed discounts by 50% through an AI-driven accounts payable application [6] - Hitachi expects a 20% reduction in operating expenses and a 60% improvement in time-to-market by optimizing internal processes with Appian [7] - The Texas Department of Public Safety improved procurement efficiency by deploying a generative AI chatbot, providing instant access to regulatory information for over 10,000 stakeholders [8] - The University of South Florida enhanced academic advising by using Appian AI, allowing advisors to save time and provide personalized support to students [9] Product Features and Strategy - The latest product release allows customers to embed AI in any interface, further powering their processes [4] - Appian's strategy focuses on embedding AI within processes to optimize operations, enhance accuracy, and accelerate outcomes [10] Company Overview - Appian is recognized as The Process Company, delivering a software platform that helps organizations improve processes, reduce costs, and enhance customer experiences [12]