GlobeNewswire Inc | Feb 18, 2021 04:05PM EST

February 18, 2021

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:

-- Appian RPA achieved the Federal Risk and Authorization Management Program (FedRAMP) certification, the only robotics process automation product to have its cloud components natively certified. -- Appian was named a Leader in Gartners 2020 Magic Quadrant for Enterprise Low-Code Application Platforms report for the second consecutive year. -- Appian was named a Leader in Nucleus Researchs 2020 Value Matrix for Low-Code Application Platforms report. -- Appian launched the Connected Claims solution for insurers to streamline the insurance claims process. -- Appian launched the Award Management solution for government organizations to automate an early stage of the award management process. -- Appian was named a 2020 Top Workplace by The Washington Post for the seventh consecutive year and the #1 technology employer.

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 Appians 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 worlds 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 Appians 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. Appians management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Appians 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 Appians performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate managements 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 Appians institutional investors and the analyst community to help them analyze the health of Appians 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 Appians future financial and business performance for the first quarter and full year 2021, the impact of COVID-19 on Appians 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 Appians 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 Appians ability to grow its business and manage its growth, Appians ability to sustain its revenue growth rate, continued market acceptance of Appians platform and adoption of low-code solutions to drive digital transformation, the fluctuation of Appians 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 Appians customer base and their demand for its platform and satisfaction with the services provided by Appian, the potential fluctuation of Appians future quarterly results of operations, Appians ability to shift its revenue towards subscriptions and away from professional services, Appians ability to operate in compliance with applicable laws and regulations, Appians strategic relationships with third parties and use of third-party licensed software and its platforms compatibility with third-party applications, and the timing of Appians 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 Appians 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 Appians 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 ContactScott WalkerDirector, Investor Relations703-496-4573scott.walker@appian.com

Media ContactNicole GreggsDirector, Media Relations703-260-7868nicole.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 $1,400and $600 as of December 31, 2020 and December 31, 97,278 70,408 2019, respectivelyDeferred 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 1,744 - amortization of $429 as of December 31, 2020Operating 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 51,194 44,416 portionFinance 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 38,971,324shares issued and outstanding as of December31, 4 3 2020; 500,000,000 shares authorized and34,525,386 shares issued and outstanding as ofDecember 31, 2019Class B common stock - par value $0.0001;100,000,000 shares authorized and 31,707,866shares issued and outstanding as of December31, 3 3 2020; 100,000,000 shares authorized and32,942,636 shares issued and outstanding as ofDecember31, 2019Additional 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 25,534 26,510 105,863 109,053 servicesTotal revenue 81,630 68,618 304,573 260,352 Cost of revenueSubscriptions 5,641 4,993 20,826 17,098 Professional 16,299 17,780 67,940 76,743 servicesTotal cost of 21,940 22,773 88,766 93,841 revenueGross profit 59,690 45,845 215,807 166,511 Operating expensesSales and 35,425 31,254 130,316 117,440 marketingResearch and 18,875 15,625 70,241 58,043 developmentGeneral and 15,076 12,028 53,152 41,496 administrativeTotaloperating 69,376 58,907 253,709 216,979 expensesOperating loss (9,686 ) (13,062 ) (37,902 ) (50,468 ) Other income: Other income, (3,941 ) (2,822 ) (5,786 ) (941 ) netInterest 88 131 478 367 expenseTotal other (3,853 ) (2,691 ) (5,308 ) (574 ) incomeLoss before (5,833 ) (10,371 ) (32,594 ) (49,894 ) income taxesIncome tax 548 426 883 820 expenseNet loss $ (6,381 ) $ (10,797 ) $ (33,477 ) $ (50,714 ) Net loss per share:Basic and $ (0.09 ) $ (0.16 ) $ (0.48 ) $ (0.77 ) dilutedWeightedaverage common sharesoutstanding:Basic and 70,362,387 67,316,098 69,050,565 65,479,327 diluted

APPIAN CORPORATION AND SUBSIDIARIES STOCK-BASED COMPENSATION EXPENSE (in thousands) Three Months Ended Year Ended December December 31, 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 $ 4,611 $ 3,388 $ 15,279 $ 16,443 compensation expense

APPIAN CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2020 2019Cash 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 22 - securitiesDeferred 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 108,260 101,653 discountsPayments 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 3,216 623 cash equivalentsNet (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 $ ? $ 4,475 furniture and fixtures and computer hardware

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 Reconciliationof non-GAAP operatingloss:GAAP operating $ (9,686 ) $ (13,062 ) $ (37,902 ) $ (50,468 ) lossAdd back: Stock-basedcompensation 4,611 3,388 15,279 16,443 expenseNon-GAAP $ (5,075 ) $ (9,674 ) $ (22,623 ) $ (34,025 ) operating loss Reconciliationof non-GAAP net loss:GAAP net loss $ (6,381 ) $ (10,797 ) $ (33,477 ) $ (50,714 ) Add back: Stock-basedcompensation 4,611 3,388 15,279 16,443 expenseLoss ondisposal of ? ? 22 146 property andequipmentNon-GAAP net $ (1,770 ) $ (7,409 ) $ (18,176 ) $ (34,125 ) loss Non-GAAPearnings per share:Non-GAAP net $ (1,770 ) $ (7,409 ) $ (18,176 ) $ (34,125 ) loss

Non-GAAPweightedaverage sharesused to 70,362,387 67,316,098 69,050,565 65,479,327 compute netloss pershare, basicand dilutedNon-GAAP netloss per $ (0.03 ) $ (0.11 ) $ (0.26 ) $ (0.52 ) share, basicand diluted Reconciliationof non-GAAPnet loss per share, basicand diluted:GAAP net lossper share, $ (0.09 ) $ (0.16 ) $ (0.48 ) $ (0.77 ) basic anddilutedAdd back: Non-GAAPadjustments to 0.06 0.05 0.22 0.25 net loss pershareNon-GAAP netloss per $ (0.03 ) $ (0.11 ) $ (0.26 ) $ (0.52 ) share, basicand diluted Reconciliationof adjusted EBITDA:GAAP net loss $ (6,381 ) $ (10,797 ) $ (33,477 ) $ (50,714 ) Other (3,941 ) (2,822 ) (5,786 ) (941 ) (income), netInterest 88 131 478 367 expenseIncome tax 548 426 883 820 expenseDepreciationand 1,366 1,469 5,851 4,742 amortizationexpenseStock-basedcompensation 4,611 3,388 15,279 16,443 expenseAdjusted $ (3,709 ) $ (8,205 ) $ (16,772 ) $ (29,283 ) EBITDA