Appian Announces Fourth Quarter and Full Year 2018 Financial Results

Fourth quarter subscription revenue increased 44% year-over-year to $33.8 million
Fourth quarter total revenue increased 19% year-over-year to $60.2 million

Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2018.

 “Appian is the first and only company to go public as a low-code vendor so far. Our growth in 2018 demonstrates our leadership in the low-code industry,” said Matt Calkins, CEO & Founder.

 Fourth Quarter 2018 Financial Highlights:     

·         Revenue: Subscription revenue was $33.8 million for the fourth quarter of 2018, up 44% compared to the fourth quarter of 2017. Total subscriptions, software and support revenue increased 38% year-over-year to $35.1 million for the fourth quarter of 2018. Professional services revenue was $25.1 million for the fourth quarter of 2018, compared to $25.2 million for the fourth quarter of 2017. Total revenue was $60.2 million for the fourth quarter of 2018, up 19% compared to the fourth quarter of 2017. Subscription revenue retention rate was 117% as of December 31, 2018.

·         Operating loss and non-GAAP operating loss: GAAP operating loss was $(13.3) million for the fourth quarter of 2018, compared to $(7.0) million for the fourth quarter of 2017. Non-GAAP operating loss was $(8.5) million for the fourth quarter of 2018, compared to $(4.9) million for the fourth quarter of 2017.

·         Net loss and non-GAAP net loss: GAAP net loss was $(13.9) million for the fourth quarter of 2018, compared to $(6.9) million for the fourth quarter of 2017. GAAP net loss per share attributable to common stockholders was $(0.22) for the fourth quarter of 2018 based on 63.8 million weighted-average shares outstanding, compared to $(0.11) for the fourth quarter of 2017 based on 60.4 million weighted-average shares outstanding. Non-GAAP net loss was $(9.1) million for the fourth quarter of 2018, compared to $(4.8) million for the fourth quarter of 2017. Non-GAAP net loss per share was $(0.14) for the fourth quarter of 2018, based on 63.8 million basic and diluted shares outstanding, compared to $(0.08) for the fourth quarter of 2017, based on 60.4 million basic and diluted shares outstanding

Full Year 2018 Financial Highlights:

·         Revenue: Subscription revenue was $115.7 million for the full year 2018, up 40% compared to the full year 2017. Total

subscriptions, software and support revenue was $126.0 million for the full year 2018, an increase of 38% from the prior year. Professional services revenue was $100.7 million for the full year 2018, an increase of 18% from the prior year. Total revenue was $226.7 million for the full year 2018, up 28% compared to the full year 2017.

·         Operating loss and non-GAAP operating loss: GAAP operating loss was $(46.7) million for the full year 2018, compared to $(31.8) million for full year 2017. Non-GAAP operating loss was $(30.7) million for the full year 2018, compared to $(18.8) million for the full year 2017.

·         Net loss and non-GAAP net loss: GAAP net loss was $(49.5) million for the full year 2018, compared to $(31.0) million for the full year 2017. GAAP net loss per basic and diluted share attributable to common stockholders was $(0.80) for the year 2018 based on 62.1 million weighted average shares outstanding, compared to $(0.63) for the full year 2017 based on 49.5 million weighted average shares outstanding.

·         Non-GAAP net loss was $(33.4) million for the full year 2018, compared to $(17.3) million for the full year 2017. Non-GAAP net loss per share was $(0.54) for the full year 2018, based on 62.1 million basic and diluted shares outstanding, compared to $(0.30) for the full year 2017, based on 57.0 million basic and diluted shares outstanding.

·         Balance sheet and cash flows: As of December 31, 2018, Appian had cash and cash equivalents of $94.9 million. For the fourth quarter of 2018, cash used in operating activities was $(7.4) million, compared with cash provided by operating activities of $1.0 million in the fourth quarter of 2017. Cash used in operating activities was $(31.3) million for the year ended December 31, 2018, compared to $(9.1) million for the year ended December 31, 2017.

 A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 Fourth Quarter 2018 Business Highlights:

·         Announced “The Appian Guarantee”, which states that new Appian Cloud customers can deploy their first project in just eight weeks and that a technical person can learn Appian in only two weeks. The Appian Guarantee emphasizes Appian’s accessibility edge in the low-code market.

·         Announced Appian will work with Geoscience Australia, part of the Australian Government under the Department of Industry, Innovation and Science, to improve and digitize the processes supporting travel card integration within the organization’s financial systems.

Financial Outlook:

As of February 21, 2019, guidance for the first quarter 2019 and full year 2019 is as follows:

·         First Quarter 2019 Guidance:

·         Subscription revenue is expected to be in the range of $33.3 million and $33.6 million, representing year-over-year growth of between 31% and 32%.

·         Total revenue is expected to be in the range of $59.5 million and $59.8 million, representing year-over-year growth of between 15% and 16%.

·         Non-GAAP operating loss is expected to be in the range of $(10.5) million and $(10.0) million.

·         Non-GAAP net loss per share is expected to be in the range of $(0.17) and $(0.16). This assumes 64.3 million weighted average common shares outstanding.

·         Full Year 2019 Guidance:

·         Subscription revenue is expected to be in the range of $148.0 million and $150.0 million, representing year-over-year growth of between 28% and 30%.

·         Total revenue is expected to be in the range of $258.5 million and $262.5 million, representing year-over-year growth of between 14% and 16%.

·         Non-GAAP operating loss is expected to be in the range of $(29.5) million and $(27.5) million.

·         Non-GAAP net loss per share is expected to be in the range of $(0.46) and $(0.42). This assumes 65.1 million non-GAAP weighted average common shares outstanding.