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]