Summary
Appian's fiscal 2026 second quarter revenue reached $203.3 million, up 19.1% from the prior-year quarter. Year-to-date revenue was $405.4 million, up 20.3%. Gross margin held at 71.2%, essentially flat with the prior-year quarter. Operating margin improved to negative 2.7%, up 3.8 percentage points. The GAAP operating loss narrowed to $5.4 million. GAAP net loss widened to $11.8 million, and GAAP diluted EPS was negative $0.16. The gap between GAAP and non-GAAP results remains wide.
The non-GAAP picture was stronger. Non-GAAP operating income was $13.6 million, compared with $5.6 million in the prior-year quarter. Non-GAAP net income was $9.2 million, compared with $0.3 million. Adjusted EBITDA was $16.2 million, compared with $8.1 million. Operating cash flow was $12.1 million for the quarter, up 722.8% from the prior-year quarter, and year-to-date operating cash flow was $60.9 million, up 41.6%. Deferred revenue was $321.5 million, up 16.6%, while remaining performance obligations were $625.3 million, up 13.0%. On a GAAP basis, year-to-date operating loss narrowed to $2.3 million and year-to-date net loss widened to $13.3 million. The quarterly net loss widened even as operating loss narrowed because other expense swung from income to expense, driven by foreign exchange movements.
Operationally, cloud net annualized recurring revenue expansion was 115% as of June 30, 2026. The U.S. federal government remained a large customer group, at 26.1% of total revenue for the quarter, and 38.2% of revenue came from outside the United States. No single end-customer accounted for more than 10% of total revenue. Headcount grew across the business: 19% in professional services and product support, 13% in sales and marketing, 7% in research and development, and 17% in general and administrative. Appian operates in 16 countries and has been automating processes for 25 years. Management pitches the platform as a way to embed AI into workflows with controls and guardrails. Strategic partners include Accenture, Capgemini, Deloitte, Indra Group, KPMG, PwC, and TCS.
Guidance points to continued top-line growth. For the third quarter of 2026, cloud subscriptions revenue is expected to be between $133.0 million and $135.0 million, representing year-over-year growth of 17% to 19%. Total revenue is expected to be between $214.0 million and $218.0 million, representing a year-over-year increase of 14% to 17%. Adjusted EBITDA is expected to be between $30.0 million and $33.0 million, and non-GAAP earnings per share is expected to be between $0.31 and $0.35 on 72.6 million weighted average shares. For full year 2026, cloud subscriptions revenue is expected to be between $525.0 million and $529.0 million, representing year-over-year growth of 20% to 21%. Total revenue is expected to be between $845.0 million and $853.0 million, representing a year-over-year increase of 16% to 17%. Adjusted EBITDA is expected to be between $104.0 million and $110.0 million, and non-GAAP earnings per share is expected to be between $1.04 and $1.12 on 73.2 million weighted average shares.
The main risks are competition in process automation, the disruptive impact of AI, and dependence on large enterprise and government customers. U.S. federal government revenue was 26.1% of the quarter's total, so budget shifts matter. The Pegasystems litigation continues to generate legal costs and management attention. Foreign exchange swings can move other income or expense sharply, as they did this quarter. Working capital moved to a deficit at June 30, 2026. The company also carries debt and has minimum cloud hosting commitments. Appian faces execution risk as it invests in sales, marketing, and research and development while trying to maintain profitability. The company refinanced its existing credit facility in early August 2026, which it says will provide ongoing liquidity for working capital and other strategic initiatives.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $203.3M | $202.2M | +0.5% | $170.6M | +19.1% |
| Gross profit | $144.7M | $147.8M | -2.0% | $126.7M | +14.2% |
| Gross margin | 71.2% | 73.1% | -1.9 pp | 74.3% | -3.1 pp |
| Research & development | $47.3M | $46.3M | +2.1% | $40.3M | +17.2% |
| Sales & marketing | $70.1M | $64.6M | +8.5% | $60.5M | +16.0% |
| General & administrative | $32.8M | $33.7M | -2.7% | $36.9M | -11.2% |
| Total operating expenses | $150.2M | $144.6M | +3.9% | $137.7M | +9.1% |
| Operating income (loss) | -$5.4M | $3.2M | -272.4% | -$11.0M | +50.5% |
| Operating margin | -2.7% | 1.6% | -4.2 pp | -6.4% | +3.8 pp |
| Net income (loss) | -$11.8M | -$1.5M | -674.9% | -$312.0K | -3687.5% |
| Net margin | -5.8% | -0.8% | -5.1 pp | -0.2% | -5.6 pp |
| Diluted EPS | -$0.16 | -$0.02 | -$0.14 | $0.00 | -$0.16 |
Risks
Revenue generated from U.S. federal government agencies was 26.1% of total revenue in the three months ended June 30, 2026 and 26.0% for the six months, up from 25.9% and 24.9% in the prior-year periods. A single large government vertical with procurement tied to budgets and competitive awards leaves results exposed to changes in federal spending or contract timing.
Legal fees associated with the litigation against Pegasystems rose $3.8 million in the three months ended June 30, 2026 and $9.0 million for the six months, driving a $4.9 million (17.6%) quarterly increase in general and administrative expense. Litigation Expense of $6.3 million and $13.2 million in the respective periods is excluded from non-GAAP results, meaning GAAP profitability depends on the pace and outcome of the cases.
Other expense, net was $0.8 million in the three months ended June 30, 2026 versus $17.6 million of other income in the prior-year quarter, primarily due to $2.3 million of foreign exchange losses versus $15.6 million of foreign exchange gains. This swing, together with the $55.7 million increase in share repurchases, was a major driver of GAAP net loss widening to $11.8 million for the quarter from $0.3 million.
Total gross margin was flat quarter over quarter at 71.2% but declined 0.3 percentage points year to date to 72.1%, and subscriptions gross margin fell to 83.9% from 84.4% in the quarter as cost of subscriptions revenue rose 22.7% while cloud hosting costs and headcount climbed. Management expects subscriptions gross margin to keep fluctuating quarterly.
Working capital fell to negative $1.8 million as of June 30, 2026 from $67.3 million at December 31, 2025, and cash and cash equivalents declined to $121.1 million. The company refinanced into a new $300.0 million Senior Secured Credit Agreement on August 5, 2026 and reduced its cash balance by $36.6 million to reduce indebtedness, leaving $140.0 million drawn on the revolver and $60.0 million outstanding on the term loan.
Headcount rose sharply across the cost base (19% in professional services and product support, 13% in sales and marketing, 17% in general and administrative, 7% in research and development year over year), lifting personnel costs in every category. Sales representatives take six months to a year to become productive, so continued hiring raises operating expenses ahead of any revenue contribution.
SaaS KPIs
All quarters →Adjusted EBITDA
Cloud Subscriptions Revenue
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from APPIAN CORP's SEC filings for Q2 FY2026 (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.