• Appian Announces Fourth Quarter and Full Year 2020 Financial Results

    Source: Nasdaq GlobeNewswire / 18 Feb 2021 15:05:01   America/Chicago

    Fourth quarter cloud subscription revenue increased 40% year-over-year to $36.9 million

    Full year cloud subscription revenue increased 36% year-over-year to $129.2 million

    MCLEAN, Va., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the fourth quarter and full year ended December 31, 2020.

    “For the full year, we exceeded our guidance and grew cloud subscription revenue by 36% to $129.2 million. Low-code emerged in 2020 as a successful way for organizations to remain nimble in the face of change. Appian is leading this market because our low-code platform is more than 10x faster, our partner ecosystem is growing, and our customers are happy,” said Matt Calkins, CEO & Founder.

    Fourth Quarter 2020 Financial Highlights:

    • Revenue: Cloud subscription revenue was $36.9 million for the fourth quarter of 2020, up 40% compared to the fourth quarter of 2019. Total subscriptions revenue, which includes sales of SaaS subscriptions, on-premises term license subscriptions and maintenance and support, increased 33% year-over-year to $56.1 million for the fourth quarter of 2020. Professional services revenue was $25.5 million for the fourth quarter of 2020, compared to $26.5 million for the fourth quarter of 2019. Total revenue was $81.6 million for the fourth quarter of 2020, up 19% compared to the fourth quarter of 2019. Cloud subscription revenue retention rate was 119% as of December 31, 2020.

    • Operating loss and non-GAAP operating loss: GAAP operating loss was $(9.7) million for the fourth quarter of 2020, compared to $(13.1) million for the fourth quarter of 2019. Non-GAAP operating loss was $(5.1) million for the fourth quarter of 2020, compared to $(9.7) million for the fourth quarter of 2019.

    • Net loss and non-GAAP net loss: GAAP net loss was $(6.4) million for the fourth quarter of 2020, compared to $(10.8) million for the fourth quarter of 2019. GAAP net loss per share was $(0.09) for the fourth quarter of 2020, based on 70.4 million weighted average shares outstanding, compared to $(0.16) for the fourth quarter of 2019, based on 67.3 million weighted average shares outstanding. Non-GAAP net loss was $(1.8) million for the fourth quarter of 2020, compared to $(7.4) million for the fourth quarter of 2019. Non-GAAP net loss per share was $(0.03) for the fourth quarter of 2020, based on 70.4 million weighted average shares outstanding, compared to $(0.11) per share for the fourth quarter of 2019, based on 67.3 million weighted average shares outstanding.

    • Adjusted EBITDA: Adjusted EBITDA loss was $(3.7) million for the fourth quarter of 2020, compared to $(8.2) million for the fourth quarter of 2019.

    Full Year 2020 Financial Highlights:

    • Revenue: Cloud subscription revenue was $129.2 million for the full year 2020, up 36% compared to the full year 2019. Total subscriptions revenue was $198.7 million for the full year 2020, an increase of 31% from the prior year. Professional services revenue was $105.9 million for the full year 2020, a decrease of 3% from the prior year. Total revenue was $304.6 million for the full year 2020, up 17% compared to the full year 2019.

    • Operating loss and non-GAAP operating loss: GAAP operating loss was $(37.9) million for the full year 2020, compared to $(50.5) million for the full year 2019. Non-GAAP operating loss was $(22.6) million for the full year 2020, compared to $(34.0) million for the full year 2019.

    • Net loss and non-GAAP net loss: GAAP net loss was $(33.5) million for the full year 2020, compared to $(50.7) million for the full year 2019. GAAP net loss per share was $(0.48) for the full year 2020, based on 69.1 million weighted average shares outstanding, compared to $(0.77) for the full year 2019, based on 65.5 million weighted average shares outstanding. Non-GAAP net loss was $(18.2) million for the full year 2020, compared to $(34.1) million for the full year 2019. Non-GAAP net loss per share was $(0.26) for the full year 2020, based on 69.1 million weighted average shares outstanding, compared to $(0.52) per share for the full year 2019, based on 65.5 million weighted average shares outstanding.

    • Adjusted EBITDA: Adjusted EBITDA loss was $(16.8) million for the full year 2020, compared to $(29.3) million for the full year 2019.

    • Balance sheet and cash flows: As of December 31, 2020, Appian had cash and cash equivalents and investments of $258.4 million. For the fourth quarter of 2020, net cash provided by operating activities was $5.8 million, compared to $(6.0) million of net cash used in operating activities for the same period in 2019. Net cash used in operating activities was $(7.6) million for the year ended December 31, 2020, compared to net cash used in operating activities of $(8.9) million for the year ended December 31, 2019. In accordance with U.S. GAAP, $17.0 million of tenant improvement allowance reimbursements received during the year ended December 31, 2019 are a source of cash in operating activities.

    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 2020 Business Highlights:

    Financial Outlook:

    As of February 18, 2021, guidance for the first quarter 2021 and full year 2021 is as follows:

    • First Quarter 2021 Guidance:
      • Cloud subscription revenue is expected to be in the range of $37.7 million and $38.2 million, representing year-over-year growth of between 33% and 35%.
      • Total revenue is expected to be in the range of $81.7 million and $82.7 million, representing a year-over-year increase of between 4% and 5%.
      • Adjusted EBITDA loss is expected to be in the range of $(9.0) million and $(8.0) million.
      • Non-GAAP net loss per share is expected to be in the range of $(0.15) and $(0.13). This assumes 70.8 million weighted average common shares outstanding.
    • Full Year 2021 Guidance:
      • Cloud subscription revenue is expected to be in the range of $167.5 million and $169.5 million, representing year-over-year growth of between 30% and 31%.
      • Total revenue is expected to be in the range of $353.0 million and $355.0 million, representing a year-over-year increase of between 16% and 17%.
      • Adjusted EBITDA loss is expected to be in the range of $(38.0) million and $(36.0) million.
      • Non-GAAP net loss per share is expected to be in the range of $(0.64) and $(0.60). This assumes 71.2 million weighted average common shares outstanding.

    Conference Call Details:

    Appian will host a conference call today, February 18, 2021, at 5:00 p.m. ET to discuss Appian's financial results for the fourth quarter and full year ended December 31, 2020 and business outlook.

    The live webcast of the conference call can be accessed on the Investor Relations page of Appian’s website at http://investors.appian.com. To access the call, please dial (877) 407-0792 in the U.S. or (201) 689-8263 internationally.  Following the call, an archived webcast will be available at the same location on the Investor Relations page.  A telephone replay will be available for one week at (844) 512-2921 in the U.S. or (412) 317-6671 internationally with recording access code 13715479.

    About Appian

    Appian (NASDAQ: APPN) helps organizations build apps and workflows rapidly, with a low-code automation platform. Combining people, technologies, and data in a single workflow, Appian can help companies maximize their resources and improve business results. Many of the world’s largest organizations use Appian applications to improve customer experience, achieve operational excellence, and simplify global risk management and compliance. For more information, visit www.appian.com.

    Non-GAAP Financial Measures

    To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Appian provides investors with certain non-GAAP financial measures, including non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, non-GAAP weighted average shares outstanding and adjusted EBITDA. These non-GAAP financial measures exclude the effect of stock-based compensation expense and losses on disposal of an asset. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and Appian’s non-GAAP measures may be different from non-GAAP measures used by other companies. For more information on these non-GAAP financial measures, please see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release. A reconciliation of non-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures.

    Appian uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Appian’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Appian’s performance by excluding certain expenses that may not be indicative of its recurring core business operating results. Appian believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Appian’s performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to historical performance as well as comparisons to competitors’ operating results. Appian believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by Appian’s institutional investors and the analyst community to help them analyze the health of Appian’s business.

    Forward-Looking Statements

    This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including statements regarding Appian’s future financial and business performance for the first quarter and full year 2021, the impact of COVID-19 on Appian’s business and on the global economy, future investment by Appian in its go-to-market initiatives, increased demand for the Appian platform, market opportunity and plans and objectives for future operations, including Appian’s ability to drive continued subscription revenue and total revenue growth, are forward-looking statements. The words "anticipate," believe," "continue," "estimate," "expect," "intend," "may," "will" and similar expressions are intended to identify forward-looking statements. Appian has based these forward-looking statements on its current expectations and projections about future events and financial trends that Appian believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including the risks and uncertainties associated with Appian’s ability to grow its business and manage its growth, Appian’s ability to sustain its revenue growth rate, continued market acceptance of Appian’s platform and adoption of low-code solutions to drive digital transformation, the fluctuation of Appian’s operating results due to the length and variability of its sales cycle, competition in the markets in which Appian operates, risks and uncertainties associated with the composition and concentration of Appian’s customer base and their demand for its platform and satisfaction with the services provided by Appian, the potential fluctuation of Appian’s future quarterly results of operations, Appian’s ability to shift its revenue towards subscriptions and away from professional services, Appian’s ability to operate in compliance with applicable laws and regulations, Appian’s strategic relationships with third parties and use of third-party licensed software and its platform’s compatibility with third-party applications, and the timing of Appian’s recognition of subscription revenue, which may delay the effect of near term changes in sales on its operating results, and the additional risks and uncertainties set forth in the "Risk Factors" section of Appian’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on February 18, 2021 and other reports that Appian has filed with the Securities and Exchange Commission. Moreover, Appian operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Appian’s management to predict all risks, nor can Appian assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Appian may make. In light of these risks, uncertainties and assumptions, Appian cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. Appian is under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law.

    Investor Contact
    Scott Walker
    Director, Investor Relations
    703-496-4573
    scott.walker@appian.com 

    Media Contact
    Nicole Greggs
    Director, Media Relations
    703-260-7868
    nicole.greggs@appian.com 

      
      
    APPIAN CORPORATION AND SUBSIDIARIES 
    CONDENSED CONSOLIDATED BALANCE SHEETS 
    (in thousands, except share and per share data) 
         
         
     As of  As of  
     December 31, December 31, 
     2020 2019 
         
    Assets    
    Current assets    
    Cash and cash equivalents$112,462  $159,755  
    Short-term investments and marketable securities 109,826   -  
    Accounts receivable, net of allowance of $1,400 and $600 as of December 31, 2020 and December 31, 2019, respectively 97,278   70,408  
    Deferred commissions, current 17,899   14,543  
    Prepaid expenses and other current assets 27,955   32,955  
    Total current assets  365,420   277,661  
    Property and equipment, net 35,404   39,554  
    Long-term investments 36,120   -  
    Goodwill 4,862   -  
    Intangible assets, net of accumulated amortization of $429 as of December 31, 2020 1,744   -  
    Operating right-of-use assets 30,659   24,205  
    Deferred commissions, net of current portion 34,198   28,979  
    Deferred tax assets 489   494  
    Other assets 3,625   592  
    Total assets$512,521  $371,485  
    Liabilities and Stockholders’ Equity    
    Current liabilities    
    Accounts payable$2,967  $5,222  
    Accrued expenses 5,821   7,488  
    Accrued compensation and related benefits 22,981   10,691  
    Deferred revenue, current 116,256   82,201  
    Operating lease liabilities, current 6,923   3,836  
    Finance lease liabilities, current -   1,447  
    Other current liabilities 940   1,395  
    Total current liabilities  155,888   112,280  
    Operating lease liabilities, net of current portion 51,194   44,416  
    Finance lease liabilities, net of current portion -   2,375  
    Deferred revenue, net of current portion 3,886   7,139  
    Deferred tax liabilities 70   38  
    Other non-current liabilities 4,878   -  
    Total liabilities 215,916   166,248  
    Stockholders’ equity    
    Class A common stock - par value $0.0001; 500,000,000 shares authorized and 38,971,324 shares issued and outstanding as of December 31, 2020; 500,000,000 shares authorized and 34,525,386 shares issued and outstanding as of December 31, 2019 4   3  
    Class B common stock - par value $0.0001; 100,000,000 shares authorized and 31,707,866 shares issued and outstanding as of December 31, 2020; 100,000,000 shares authorized and 32,942,636 shares issued and outstanding as of December 31, 2019 3   3  
    Additional paid-in capital 470,498   340,929  
    Accumulated other comprehensive loss (5,010)  (285) 
    Accumulated deficit (168,890)  (135,413) 
    Total stockholders’ equity 296,605   205,237  
    Total liabilities and stockholders’ equity$512,521  $371,485  
         


    APPIAN CORPORATION AND SUBSIDIARIES  
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
    (in thousands, except share and per share data) 
             
             
     Three Months Ended December 31, Year Ended December 31, 
     2020 2019 2020 2019 
           
     (unaudited)     
    Revenue        
    Subscriptions$56,096  $42,108  $198,710  $151,299  
    Professional services 25,534   26,510   105,863   109,053  
    Total revenue 81,630   68,618   304,573   260,352  
    Cost of revenue        
    Subscriptions 5,641   4,993   20,826   17,098  
    Professional services 16,299   17,780   67,940   76,743  
    Total cost of revenue 21,940   22,773   88,766   93,841  
    Gross profit 59,690   45,845   215,807   166,511  
    Operating expenses        
    Sales and marketing 35,425   31,254   130,316   117,440  
    Research and development 18,875   15,625   70,241   58,043  
    General and administrative 15,076   12,028   53,152   41,496  
    Total operating expenses  69,376   58,907   253,709   216,979  
    Operating loss (9,686)  (13,062)  (37,902)  (50,468) 
    Other income:        
    Other income, net (3,941)  (2,822)  (5,786)  (941) 
    Interest expense 88   131   478   367  
    Total other income (3,853)  (2,691)  (5,308)  (574) 
    Loss before income taxes (5,833)  (10,371)  (32,594)  (49,894) 
    Income tax expense 548   426   883   820  
    Net loss$(6,381) $(10,797) $(33,477) $(50,714) 
    Net loss per share:        
    Basic and diluted$(0.09) $(0.16) $(0.48) $(0.77) 
    Weighted average common shares outstanding:        
    Basic and diluted 70,362,387   67,316,098   69,050,565   65,479,327  
             


    APPIAN CORPORATION AND SUBSIDIARIES 
    STOCK-BASED COMPENSATION EXPENSE 
    (in thousands) 
             
             
     Three Months Ended December 31, Year Ended December 31, 
     2020 2019 2020 2019 
           
     (unaudited)     
    Cost of revenue:        
    Subscriptions$265 $185 $943 $647 
    Professional services 542  287  1,477  2,748 
    Operating expenses        
    Sales and marketing 984  771  2,821  4,742 
    Research and development 877  497  2,718  3,480 
    General and administrative 1,943  1,648  7,320  4,826 
    Total stock-based compensation expense$4,611 $3,388 $15,279 $16,443 
             


    APPIAN CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
        
        
     Year Ended December 31,
     2020 2019
    Cash flows from operating activities:   
    Net loss$(33,477) $(50,714)
    Adjustments to reconcile net loss to net cash used in operating activities:   
    Depreciation and amortization 5,851   4,742 
    Bad debt expense 984   99 
    Loss on disposal of property and equipment 22   146 
    Change in fair value of available-for-sale securities 22   - 
    Deferred income taxes (184)  (334)
    Stock-based compensation 15,279   16,443 
    Changes in assets and liabilities:    
    Accounts receivable (33,559)  7,432 
    Prepaid expenses and other assets 3,740   8,972 
    Deferred commissions (8,575)  (9,319)
    Accounts payable and accrued expenses (4,238)  (4,039)
    Accrued compensation and related benefits 11,801   (3,072)
    Other liabilities 3,681   1,318 
    Deferred revenue 27,626   12,573 
    Operating lease liabilities 3,407   6,827 
    Net cash used in operating activities  (7,620)  (8,926)
    Cash flows from investing activities:   
    Purchases of investments (145,968)  - 
    Payments for acquisitions, net of cash acquired (6,138)  - 
    Purchases of property and equipment (1,251)  (32,421)
    Net cash used in investing activities  (153,357)  (32,421)
    Cash flows from financing activities:   
    Principal payments on finance leases (3,822)  (653)
    Proceeds from public offering, net of underwriting discounts 108,260   101,653 
    Payments of costs related to public offerings (346)  (350)
    Proceeds from exercise of common stock options 6,376   4,899 
    Net cash provided by financing activities  110,468   105,549 
    Effect of foreign exchange rate changes on cash and cash equivalents 3,216   623 
    Net (decrease) increase in cash and cash equivalents (47,293)  64,825 
    Cash and cash equivalents, beginning of period 159,755   94,930 
    Cash and cash equivalents, end of period$112,462  $159,755 
    Supplemental disclosure of cash flow information:   
    Cash paid for interest$165  $331 
    Cash paid for income taxes$1,182  $356 
    Supplemental disclosure of non-cash financing information:   
    Finance lease obligations to acquire new office furniture and fixtures and computer hardware$―  $4,475 


    APPIAN CORPORATION AND SUBSIDIARIES 
    RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES 
    (unaudited, in thousands, except share and per share data) 
             
             
     Three Months Ended December 31, Year Ended December 31, 
     2020 2019 2020 2019 
    Reconciliation of non-GAAP operating loss:        
    GAAP operating loss$(9,686) $(13,062) $(37,902) $(50,468) 
    Add back:        
    Stock-based compensation expense 4,611   3,388   15,279   16,443  
    Non-GAAP operating loss$(5,075) $(9,674) $(22,623) $(34,025) 
             
    Reconciliation of non-GAAP net loss:        
    GAAP net loss$(6,381) $(10,797) $(33,477) $(50,714) 
    Add back:        
    Stock-based compensation expense 4,611   3,388   15,279   16,443  
    Loss on disposal of property and equipment ―   ―   22   146  
    Non-GAAP net loss$(1,770) $(7,409) $(18,176) $(34,125) 
             
    Non-GAAP earnings per share:        
    Non-GAAP net loss$(1,770) $(7,409) $(18,176) $(34,125) 

    Non-GAAP weighted average shares used to compute net loss per share, basic and diluted    		 70,362,387   67,316,098   69,050,565   65,479,327  
    Non-GAAP net loss per share, basic and diluted$(0.03) $(0.11) $(0.26) $(0.52) 
             
    Reconciliation of non-GAAP net loss per share, basic and diluted:        
    GAAP net loss per share, basic and diluted$(0.09) $(0.16) $(0.48) $(0.77) 
    Add back:        
    Non-GAAP adjustments to net loss per share 0.06   0.05   0.22   0.25  
    Non-GAAP net loss per share, basic and diluted$(0.03) $(0.11) $(0.26) $(0.52) 
             
    Reconciliation of adjusted EBITDA:        
    GAAP net loss$(6,381) $(10,797) $(33,477) $(50,714) 
    Other (income), net (3,941)  (2,822)  (5,786)  (941) 
    Interest expense 88   131   478   367  
    Income tax expense 548   426   883   820  
    Depreciation and amortization expense 1,366   1,469   5,851   4,742  
    Stock-based compensation expense 4,611   3,388   15,279   16,443  
    Adjusted EBITDA$(3,709) $(8,205) $(16,772) $(29,283) 
             

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