appn-20200806
false000144168300014416832020-08-062020-08-06

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2020
Appian Corporation
(Exact name of Registrant as Specified in Its Charter)
Delaware
001-38098
54-1956084
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(I.R.S. Employer
 Identification No.)
7950 Jones Branch Drive
22102
McLean,VA
(Zip Code)
(Address of principal executive offices)
Registrant’s Telephone Number, Including Area Code: (703) 442-8844

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading symbolName of each exchange on which registered
Class A Common StockAPPNThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 




Item 2.02 Results of Operations and Financial Condition.
On August 6, 2020, Appian Corporation (the "Company") issued a press release announcing its financial results for the second quarter ended June 30, 2020, as well as information regarding a conference call to discuss these financial results and the Company's recent business highlights and financial outlook. The Company's press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
 
Exhibit
Number
  Description
99.1  



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Appian Corporation
Date: August 6, 2020By:/s/ Mark Lynch
Mark Lynch
Chief Financial Officer

Document

Exhibit 99.1

Appian Announces Second Quarter 2020 Financial Results
Cloud subscriptions revenue increased 30% year-over-year to $29.6 million

McLean, VA – August 6, 2020 Appian (Nasdaq: APPN) today announced financial results for the second quarter ended June 30, 2020.

“Recent circumstances have demonstrated the importance of quick adaptability. Organizations are turning to rapid-development technologies like Appian's low-code automation platform to build their applications and processes," said Matt Calkins, CEO & Founder.

Second Quarter 2020 Financial Highlights:

Revenue: Cloud subscription revenue was $29.6 million for the second quarter of 2020, up 30% compared to the second quarter of 2019. Total subscriptions revenue, which includes sales of SaaS subscriptions, on-premises term license subscriptions and maintenance and support, increased 12% year-over-year to $41.4 million for the second quarter of 2020. Professional services revenue was $25.4 million for the second quarter of 2020, compared to $28.4 million for the second quarter of 2019. Total revenue was $66.8 million for the second quarter of 2020, up 2% compared to the second quarter of 2019. Cloud subscription revenue retention rate was 113% as of June 30, 2020. Gross renewal rate was 98% as of June 30, 2020.
Operating loss and non-GAAP operating loss: GAAP operating loss was $(12.1) million for the second quarter of 2020, compared to $(9.8) million for the second quarter of 2019. Non-GAAP operating loss was $(8.5) million for the second quarter of 2020, compared to $(7.1) million for the second quarter of 2019.
Net loss and non-GAAP net loss: GAAP net loss was $(11.8) million for the second quarter of 2020, compared to $(10.1) million for the second quarter of 2019. GAAP net loss per share was $(0.17) for the second quarter of 2020, based on 68.4 million weighted-average shares outstanding, compared to $(0.16) for the second quarter of 2019 based on 64.8 million weighted-average shares outstanding. Non-GAAP net loss was $(8.2) million for the second quarter of 2020, compared to $(7.2) million for the second quarter of 2019. Non-GAAP net loss per share was $(0.12) for the second quarter of 2020, based on 68.4 million basic and diluted shares outstanding, consistent with $(0.11) for the second quarter of 2019, based on 64.8 million basic and diluted shares outstanding.
Adjusted EBITDA: Adjusted EBITDA loss was $(7.0) million for the second quarter of 2020, compared to $(6.0) million for the second quarter of 2019.
Balance sheet and cash flows: As of June 30, 2020, Appian had cash and cash equivalents of $256.1 million, compared to $149.2 million at March 31, 2020, primarily reflecting the completion of Appian’s underwritten public offering of 1,931,206 shares of Appian Class A common stock in June 2020. Net cash used in operating activities was $(3.1) million for the three months ended June 30, 2020 compared to $16.1 million of net cash provided by operating activities for the same period in 2019. The $16.1 million of net cash provided by operating activities for the three months ended June 30, 2019 includes $12.5 million of tenant improvement allowance reimbursements received associated with the build-out of Appian's new headquarters.

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.”




Second Quarter 2020 Business Highlights:

Appian launched the Workforce Safety solution to safely return employees to facilities during the COVID pandemic.
Appian launched the CampusPassTM solution for colleges and universities to safely reopen campuses during the COVID pandemic.
The United States Marine Corps has included Appian’s low-code automation platform on its list of approved Platform as a Service (PaaS) tools.
Appian and KPMG announced an Intelligent Data Privacy offering, helping businesses manage compliance with the California Consumer Privacy Act (CCPA).
DocuSign and Appian announced a no-code integration, adding market-leading electronic signature capabilities to Appian's low-code automation platform.
Box and Appian announced the availability of a no-code integration, uniting Box's best-of-breed content management with Appian's low-code automation platform.
Appian released the latest version of its low-code automation platform.

Financial Outlook:

As of August 6, 2020, guidance for 2020 is as follows:

Third Quarter 2020 Guidance:
Cloud subscription revenue is expected to be in the range of $31.4 million and $31.9 million, representing year-over-year growth of between 28% and 30%.
Total revenue is expected to be in the range of $70.5 million and $71.5 million, representing a year-over-year increase of between 7% and 8%.
Adjusted EBITDA loss is expected to be in the range of $(11.0) million and $(10.0) million.
Non-GAAP net loss per share is expected to be in the range of $(0.18) and $(0.16). This assumes 70.0 million weighted average common shares outstanding.

Full Year 2020 Guidance:
Given the continued uncertainty regarding the duration of COVID-19 and its impact on the global economy, there is a broad range of possible results for this year. Therefore, Appian is not providing a financial outlook for full year 2020.

Conference Call Details:
Appian will host a conference call today, August 6, 2020, at 5:00 p.m. ET to discuss Appian's financial results for the second quarter ended June 30, 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 (800) 437-2398 in the U.S. or (323) 289-6576 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 3672818.

About Appian
Appian (NASDAQ: APPN) provides a low-code automation platform that accelerates the creation of high-impact business applications. 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 gains or 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 third quarter, 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, 2019 filed with the Securities and Exchange Commission on February 20, 2020 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
June 30, 2020December 31, 2019
(unaudited)
Assets
Current assets
Cash and cash equivalents$256,146  $159,755  
Accounts receivable, net of allowance of $800 and $600 as of June 30, 2020 and December 31, 2019, respectively
71,853  70,408  
Deferred commissions, current15,122  14,543  
Prepaid expenses and other current assets26,289  32,955  
Total current assets369,410  277,661  
Property and equipment, net37,437  39,554  
Goodwill4,443  —  
Intangible assets, net of accumulated amortization of $196 as of June 30, 2020
1,790  —  
Operating right-of-use assets23,156  24,205  
Deferred commissions, net of current portion28,694  28,979  
Deferred tax assets583  494  
Other assets5,847  592  
Total assets$471,360  $371,485  
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$4,128  $5,222  
Accrued expenses7,307  7,488  
Accrued compensation and related benefits13,183  10,691  
Deferred revenue, current87,550  82,201  
Operating lease liabilities, current5,427  3,836  
Finance lease liabilities, current1,549  1,447  
Other current liabilities592  1,395  
Total current liabilities119,736  112,280  
Operating lease liabilities, net of current portion44,142  44,416  
Finance lease liabilities, net of current portion1,556  2,375  
Deferred revenue, net of current portion4,595  7,139  
Deferred tax liabilities437  38  
Other non-current liabilities2,092  —  
Total liabilities172,558  166,248  
Stockholders’ equity
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 37,558,379 shares issued and outstanding as of June 30, 2020; 500,000,000 shares authorized and 34,525,386 shares issued and outstanding as of December 31, 2019
  
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 32,281,936 shares issued and outstanding as of June 30, 2020; 100,000,000 shares authorized and 32,942,636 shares issued and outstanding as of December 31, 2019
  
Additional paid-in capital458,174  340,929  
Accumulated other comprehensive loss(482) (285) 
Accumulated deficit(158,897) (135,413) 
Total stockholders’ equity298,802  205,237  
Total liabilities and stockholders’ equity$471,360  $371,485  





APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue
Subscriptions$41,418  $36,860  $91,854  $71,417  
Professional services25,357  28,415  53,785  54,162  
Total revenue66,775  65,275  145,639  125,579  
Cost of revenue
Subscriptions4,701  4,036  10,084  7,621  
Professional services16,455  19,015  35,191  39,496  
Total cost of revenue21,156  23,051  45,275  47,117  
Gross profit45,619  42,224  100,364  78,462  
Operating expenses
Sales and marketing29,086  29,992  63,258  58,583  
Research and development17,178  12,765  33,216  26,721  
General and administrative11,450  9,261  24,591  18,277  
Total operating expenses57,714  52,018  121,065  103,581  
Operating loss(12,095) (9,794) (20,701) (25,119) 
Other (income) expense
Other (income) expense, net(682) (79) 2,432  (381) 
Interest expense128  69  271  140  
Total other (income) expense(554) (10) 2,703  (241) 
Loss before income taxes(11,541) (9,784) (23,404) (24,878) 
Income tax expense274  267  80  389  
Net loss$(11,815) $(10,051) $(23,484) $(25,267) 
Net loss per share:
Basic and diluted$(0.17) $(0.16) $(0.35) $(0.39) 
Weighted average common shares outstanding:
Basic and diluted68,369,823  64,753,044  67,949,270  64,531,089  





APPIAN CORPORATION AND SUBSIDIARIES
STOCK BASED COMPENSATION EXPENSE
(unaudited, in thousands)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Cost of revenue
Subscriptions$229  $161  $442  $315  
Professional services317  244  529  2,218  
Operating expenses
Sales and marketing657  814  1,410  3,195  
Research and development619  435  1,172  2,550  
General and administrative1,792  1,035  3,537  1,636  
Total stock-based compensation expense$3,614  $2,689  $7,090  $9,914  







APPIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended June 30,
20202019
Cash flows from operating activities:
Net loss
$(23,484) $(25,267) 
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization
2,980  1,933  
Bad debt expense200  97  
Loss on disposal of property and equipment22  145  
Deferred income taxes
(168) (47) 
Stock-based compensation
7,090  9,914  
Changes in assets and liabilities:
Accounts receivable
(2,084) 9,337  
Prepaid expenses and other assets
1,922  13,453  
Deferred commissions
(295) (4,790) 
Accounts payable and accrued expenses
(1,674) 5,458  
Accrued compensation and related benefits
2,575  (3,181) 
Other liabilities
1,271  (269) 
Deferred revenue
2,310  640  
Operating lease liabilities2,378  —  
Deferred rent, non-current
—  4,584  
Net cash (used in) provided by operating activities
(6,957) 12,007  
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired(6,138) —  
Purchases of property and equipment
(686) (27,689) 
Net cash used in investing activities
(6,824) (27,689) 
Cash flows from financing activities:
Principal payments on finance leases(716) —  
Proceeds from public offering, net of underwriting discounts108,260  —  
Payments of costs related to public offerings(18) —  
Proceeds from exercise of common stock options2,242  1,987  
Net cash provided by financing activities
109,768  1,987  
Effect of foreign exchange rate changes on cash and cash equivalents
404  (134) 
Net increase (decrease) in cash and cash equivalents
96,391  (13,829) 
Cash and cash equivalents, beginning of period
159,755  94,930  
Cash and cash equivalents, end of period
$256,146  $81,101  
Supplemental disclosure of cash flow information:
Cash paid for interest$88  $170  
Cash paid for income taxes$139  $116  
Supplemental disclosure of non-cash financing information:
Capital lease obligations to acquire new office furniture and fixtures$—  $3,673  




APPIAN CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in thousands, except share and per share data)

 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Reconciliation of non-GAAP operating loss:
GAAP operating loss$(12,095) $(9,794) $(20,701) $(25,119) 
Add back:
Stock-based compensation expense3,614  2,689  7,090  9,914  
Non-GAAP operating loss$(8,481) $(7,105) $(13,611) $(15,205) 
Reconciliation of non-GAAP net loss:
GAAP net loss$(11,815) $(10,051) $(23,484) $(25,267) 
Add back:
Stock-based compensation expense3,614  2,689  7,090  9,914  
Loss on disposal of property and equipment15  145  22  145  
Non-GAAP net loss$(8,186) $(7,217) $(16,372) $(15,208) 
Non-GAAP earnings per share:
Non-GAAP net loss$(8,186) $(7,217) $(16,372) $(15,208) 
Non-GAAP weighted average shares used to compute net loss per share, basic and diluted68,369,823  64,753,044  67,949,270  64,531,089  
Non-GAAP net loss per share, basic and diluted$(0.12) $(0.11) $(0.24) $(0.24) 
Reconciliation of non-GAAP net loss per share, basic and diluted:
GAAP net loss per share, basic and diluted$(0.17) $(0.16) $(0.35) $(0.39) 
Add back:
Non-GAAP adjustments to net loss per share0.05  0.05  0.11  0.15  
Non-GAAP net loss per share, basic and diluted$(0.12) $(0.11) $(0.24) $(0.24) 
Reconciliation of adjusted EBITDA:
GAAP net loss$(11,815) $(10,051) $(23,484) $(25,267) 
Other expense (income), net(682) (79) 2,432  (381) 
Interest expense128  69  271  140  
Income tax (benefit) expense274  267  80  389  
Depreciation and amortization expense1,469  1,135  2,980  1,933  
Stock-based compensation expense3,614  2,689  7,090  9,914  
Adjusted EBITDA$(7,012) $(5,970) $(10,631) $(13,272) 


v3.20.2
Cover
Aug. 06, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 06, 2020
Entity Registrant Name Appian Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-38098
Entity Tax Identification Number 54-1956084
Entity Address, Address Line One 7950 Jones Branch Drive
Entity Address, City or Town McLean,
Entity Address, State or Province VA
Entity Address, Postal Zip Code 22102
City Area Code 703
Local Phone Number 442-8844
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock
Trading Symbol APPN
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001441683