Appian(US:APPN)2022-08-05 00:11Financial Data and Key Metrics Changes - In Q2 2022, Appian's cloud subscription revenue grew 34% year-over-year to $57.1 million, while total revenue increased 33% to $110.1 million [6][19] - Subscription revenue was $76.7 million, reflecting a 35% year-over-year growth [7][19] - Adjusted EBITDA loss was $25 million, compared to a loss of $16.3 million in the same period last year [23][24] - Non-GAAP net loss was $33.4 million, or $0.46 per share, compared to a loss of $16.9 million, or $0.24 per share, in Q2 2021 [24] Business Line Data and Key Metrics Changes - Professional services revenue was $33.4 million, an increase of 28% year-over-year, driven by strong performance in the U.S. public sector, U.S. commercial, and APAC [19][20] - Subscriptions revenue accounted for 70% of total revenue, compared to 69% in the prior year [21] Market Data and Key Metrics Changes - International operations contributed 35% of total revenue, consistent with the previous year, with growth driven by APAC and EMEA regions [21] - Cloud software net new ACV bookings were approximately 80% of total net new software bookings in the first half of 2022 [21] Company Strategy and Development Direction - Appian is focusing on the convergence of low-code markets, integrating process mining, workflow, and automation into a unified platform [7][8] - The company plans to continue hiring, opening new offices, and acquiring new customers even in a potential downturn [9] - Appian launched new solutions, including Appian Portals and enhancements to its government acquisition management program suite, to broaden its appeal [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed a bearish outlook on the economy but noted that Appian is not currently experiencing any downturn symptoms [8][9] - The company aims to grow cautiously through economic uncertainty, leveraging its strong customer retention and value proposition [9][35] - Management emphasized the importance of efficiency and optimization in their messaging to customers, especially in a challenging economic environment [9][40] Other Important Information - Appian opened a new product development center in Chennai, India, to enhance operational efficiency and expand its product team [17] - The company welcomed a new Chief Revenue Officer, Chris Jones, to strengthen its sales organization [17] Q&A Session Summary Question: Can you provide context on the guidance and assumptions for Q3 and Q4? - Management indicated that guidance reflects economic uncertainty and includes FX considerations, with no significant changes in sales cycles observed [31][32] Question: What trends are seen in core verticals and exposure to SMB customers? - Management noted a low churn rate of 99% and attributed it to the appeal of their value proposition, with no significant exposure to SMBs or startups [35][36] Question: Can you discuss the opportunity for international government entities? - Management highlighted the growth potential in international public sector deals and the importance of partners in securing these opportunities [38] Question: Has the IL-5 certification led to new business? - Management acknowledged the certification's significance but noted that it has not yet resulted in new business due to long public sector sales cycles [43] Question: How is the strength of new products like Portals impacting customer awareness? - Management stated that new products are broadening user engagement and raising awareness of the Appian platform [48] Question: What is the outlook for profitability amidst economic uncertainty? - Management emphasized a cautious growth strategy, focusing on prudent investments that align with long-term revenue growth [58] Question: How is the mix of pricing options evolving? - Management indicated that the unlimited pricing option remains a minority choice, with most customers preferring flexible pricing models [60]