Summary
Appian's second quarter of 2025 showed sharp improvement in profitability on the back of double-digit revenue growth. Total revenue for the quarter ended June 30, 2025 rose 16.5% to $170.64 million from $146.45 million in the prior-year quarter. Gross profit increased 18.4% to $126.72 million, and gross margin expanded to 74.3% from 73.1%. The operating loss narrowed to $10.98 million from $39.19 million. Operating margin improved to -6.4% from -26.8%. Net loss narrowed to $0.31 million from $43.59 million. Diluted earnings per share was $0.00, compared with -$0.60 in the second quarter of 2024. Non-GAAP results also swung positive: non-GAAP operating income was $5.6 million versus a non-GAAP operating loss of $13.1 million a year earlier. Adjusted EBITDA was $8.1 million, compared with an adjusted EBITDA loss of $10.5 million. Non-GAAP net income was $0.3 million versus a non-GAAP net loss of $18.2 million, and non-GAAP net income per share was breakeven compared with a $0.25 net loss per share.
The top-line expansion came with a notable shift in customer mix. Revenue from government agencies represented 34.1% of total revenue for the three months ended June 30, 2025, up from 31.4% in the same period of 2024. U.S. federal government agencies accounted for 25.9% of total revenue, up from 22.6%. International customers generated 38.4% of total revenue for the quarter, slightly above the 38.2% share a year ago. Appian's cloud subscriptions revenue retention rate was 111% as of June 30, 2025, down from 118% as of June 30, 2024. The company continued to trim costs. Sales and marketing headcount fell 25% from June 30, 2024 to June 30, 2025. Professional services and product support headcount declined 8%, and general and administrative headcount was down 5%. Those reductions helped lower operating expenses and drove the operating loss lower.
Cash flow and backlog metrics were mixed but mostly positive. Operating cash flow was -$1.94 million for the second quarter, much better than -$17.62 million in the prior-year quarter. For the first six months of 2025, operating cash flow was $43.03 million, up sharply from $1.25 million in the first six months of 2024. Capital expenditures were $1.15 million in the quarter, up from $0.73 million a year earlier, while year-to-date capital expenditures were $1.80 million, down from $2.93 million. Deferred revenue stood at $275.72 million at June 30, 2025, up 23.7% from $222.93 million a year earlier. Remaining performance obligations were $553.20 million, up 17.9% from $469.40 million. Those figures suggest a healthy pipeline of contracted work.
Guidance points to continued growth but at a slower pace. For the third quarter of 2025, Appian expects cloud subscriptions revenue between $109.0 million and $111.0 million, representing year-over-year growth of 16% to 18%. Total revenue is guided to $172.0 million to $176.0 million, an increase of 12% to 14%. Adjusted EBITDA is expected between $9.0 million and $12.0 million, and non-GAAP net income per share between $0.03 and $0.07. For the full year 2025, the company guides cloud subscriptions revenue to $429.0 million to $433.0 million, growth of 17% to 18%. Total revenue is expected between $695.0 million and $703.0 million, an increase of 13% to 14%. Full-year adjusted EBITDA is guided to $49.0 million to $55.0 million, and non-GAAP net income per share to $0.28 to $0.36.
Risks remain. The company faces a lengthy and variable sales cycle, competition, and the possibility that AI disrupts its markets. Customer concentration is a concern, especially with government agencies now representing 34.1% of revenue and U.S. federal agencies 25.9%. Foreign exchange fluctuations can swing results; the second quarter included large foreign exchange gains. Appian is still involved in litigation with Pegasystems, including a $2.036 billion judgment and a $57.3 million judgment preservation insurance policy. The credit agreement contains covenants, and the company has a non-cancellable cloud hosting arrangement with AWS with purchase commitments of $220.0 million over five years and minimum annual spending requirements of $44.0 million from November 2024 to October 2029. In May 2025, the board authorized a $10.0 million share repurchase program; the company repurchased 0.3 million shares at an average price of $31.91 for $10.0 million in the second quarter. Despite these risks, the quarter showed real progress on profitability and cash generation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $170.6M | $166.4M | +2.5% | $146.4M | +16.5% |
| Gross profit | $126.7M | $127.5M | -0.6% | $107.0M | +18.4% |
| Gross margin | 74.3% | 76.6% | -2.4 pp | 73.1% | +1.2 pp |
| Research & development | $40.3M | $39.5M | +2.1% | $39.4M | +2.3% |
| Sales & marketing | $60.5M | $54.6M | +10.8% | $66.6M | -9.2% |
| General & administrative | $36.9M | $34.3M | +7.7% | $40.2M | -8.2% |
| Total operating expenses | $137.7M | $128.3M | +7.3% | $146.2M | -5.8% |
| Operating income (loss) | -$11.0M | -$834.0K | -1217.0% | -$39.2M | +72.0% |
| Operating margin | -6.4% | -0.5% | -5.9 pp | -26.8% | +20.3 pp |
| Net income (loss) | -$312.0K | -$1.2M | +73.5% | -$43.6M | +99.3% |
| Net margin | -0.2% | -0.7% | +0.5 pp | -29.8% | +29.6 pp |
| Diluted EPS | $0.00 | -$0.02 | +$0.02 | -$0.60 | +$0.60 |
Risks
Revenue from government agencies represented 34.1% of total revenue for the three months ended June 30, 2025, up from 31.4% in the prior-year period, with U.S. federal government revenue at 25.9% of total revenue. This concentration exposes Appian to government budget cycles, procurement delays, and policy changes.
Cloud subscriptions revenue retention rate decreased to 111% as of June 30, 2025 from 118% as of June 30, 2024. The company also notes new sales representatives take six months to a year to become productive and sales and marketing headcount decreased 25% from June 30, 2024 to June 30, 2025, which may impair growth.
Litigation-related expenses attributable to the Pegasystems legal case increased $1.8 million in the three months ended June 30, 2025 and $2.7 million in the six months ended June 30, 2025 compared to the prior-year periods. The company holds a $2.036 billion judgment and a judgment preservation insurance policy, but ongoing litigation costs and uncertainty remain.
The company used $62.0 million of borrowing capacity under its $100.0 million revolving credit facility as of June 30, 2025 and must comply with financial covenants under its Credit Agreement maturing November 3, 2027. Any covenant breach or inability to access capital could adversely affect operations.
Appian has a non-cancellable cloud hosting arrangement with AWS with minimum purchase commitments totaling $220.0 million over five years, including minimum annual spending of $44.0 million from November 2024 to October 2029. Spending under this agreement was $23.3 million for the six months ended June 30, 2025.
MD&A emphasizes embedding AI within business processes as a differentiator, but the company operates in increasingly competitive markets where its ability to grow its customer base depends on differentiating its platform. Competition in AI and process automation may pressure pricing and market share.
SaaS KPIs
All quarters →Cloud Subscriptions Revenue Retention Rate
Cloud Subscriptions Revenue
Summary, forecast, risks and KPIs are extracted from APPIAN CORP's SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.