Summary
Appian reported third-quarter fiscal 2024 total revenue of $154.1 million, up 12.4% from the prior-year quarter. Gross profit was $117.0 million, up 15.8%. Gross margin reached 75.9%, up 2.2 percentage points. The GAAP operating loss narrowed to $7.2 million, an improvement of 53.0% from the prior-year quarter. Net loss was $2.1 million, up 90.6% as the loss narrowed. Diluted EPS was -$0.03, up 90.0% as the loss narrowed. Operating margin was negative 4.6%, up 6.5 percentage points. On a non-GAAP basis, operating income was $8.3 million, compared with a non-GAAP operating loss of $7.7 million in the prior-year quarter. Non-GAAP net income was $11.4 million, compared with a non-GAAP net loss of $14.6 million. Non-GAAP diluted EPS was $0.15, compared with a non-GAAP net loss per share of $0.20. Adjusted EBITDA was $10.8 million, compared with an adjusted EBITDA loss of $5.3 million. The quarter's net loss included foreign currency exchange gains, while the prior-year quarter included foreign currency exchange losses.
Cash generation improved. Operating cash flow was negative $8.2 million for the quarter, up 87.3%. For the nine months, operating cash flow was negative $7.0 million, up 93.2%. Capital expenditures were $0.4 million, down 24.9% from the prior-year quarter. Deferred revenue was $227.6 million, up 15.0%. Remaining performance obligations were $470.4 million, up 20.0%. The cloud subscriptions revenue retention rate was 117% as of September 30, 2024. For the nine months, total revenue was $450.3 million, up 12.6%. The nine-month net loss was $78.6 million, up 22.5% as the loss narrowed. Nine-month gross margin was 74.6%, up 1.8 percentage points, and nine-month operating margin was negative 14.6%, up 8.2 percentage points.
Operational highlights included new AI-driven requirements management and ProcureSight integration for government procurement, a new version of the Appian Platform with AI-driven innovations, the election of Carl Boe Hartman II to the board, and the appointment of Mark Dorsey as chief revenue officer. Management said growth remains the top priority and projected positive adjusted EBITDA for the full year 2024. For the fourth quarter of 2024, guidance calls for cloud subscription revenue growth of 14% to 17% year over year, adjusted EBITDA of $6.0 million to $8.0 million, and non-GAAP net loss per share of $(0.03) to breakeven. For the full year 2024, guidance calls for cloud subscription revenue growth of 20% year over year, adjusted EBITDA of $5.0 million to $7.0 million, and non-GAAP net loss per share of $(0.38) to $(0.35).
Risks remain. The sales cycle is long and variable, competition is intense, and AI is a disruptive set of technologies that may affect markets dramatically and unpredictably. Revenue from U.S. federal government agencies represented 23.2% of total revenue in the quarter, up from 21.1% in the prior-year quarter. International revenue was 36.3% of total revenue in the quarter. Professional services revenue declined, and the company expects professional services gross margin to be slightly lower in 2024 than in 2023. Gross margin may fluctuate. The company faces litigation with Pegasystems and carries a judgment preservation insurance policy. It has a non-cancellable cloud hosting arrangement with Amazon Web Services with purchase commitments of $131.0 million over five years and minimum spending requirements of $28.0 million in both the fourth and fifth years. The credit agreement includes covenants, and interest expense rose due to additional borrowings. Foreign exchange movements can swing results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $154.1M | $146.4M | +5.2% | $137.1M | +12.4% |
| Gross profit | $117.0M | $107.0M | +9.3% | $101.0M | +15.8% |
| Gross margin | 75.9% | 73.1% | +2.8 pp | 73.7% | +2.2 pp |
| Research & development | $38.6M | $39.4M | -2.2% | $37.1M | +3.9% |
| Sales & marketing | $50.9M | $66.6M | -23.6% | $55.7M | -8.6% |
| General & administrative | $34.7M | $40.2M | -13.7% | $23.4M | +48.0% |
| Total operating expenses | $124.1M | $146.2M | -15.1% | $116.2M | +6.8% |
| Operating income (loss) | -$7.2M | -$39.2M | +81.7% | -$15.2M | +53.0% |
| Operating margin | -4.7% | -26.8% | +22.1 pp | -11.1% | +6.4 pp |
| Net income (loss) | -$2.1M | -$43.6M | +95.2% | -$22.3M | +90.6% |
| Net margin | -1.4% | -29.8% | +28.4 pp | -16.2% | +14.9 pp |
| Diluted EPS | -$0.03 | -$0.60 | +$0.57 | -$0.30 | +$0.27 |
Risks
Revenue from U.S. federal government agencies represented 23.2% and 22.5% of total revenue for the three and nine months ended September 30, 2024, up from 21.1% and 20.6% in the prior-year periods, increasing dependence on federal spending.
General and administrative expense increased 48.0% in the three months ended September 30, 2024, driven by higher legal fees and a $5.7 million decrease in insurance reimbursements tied to the Pegasystems litigation, with JPI amortization also raising costs.
Professional services gross margin decreased to 22.4% for the nine months ended September 30, 2024 from 26.1% in the prior-year period, and the company expects 2024 professional services gross margin to be slightly lower than 2023, with quarterly fluctuations.
Professional services revenue decreased 7.1% in the quarter and 6.7% year to date, while the company expects to rely increasingly on strategic partners such as Accenture, Deloitte, and TCS to deploy its software, creating execution dependence.
New sales representatives can take six months to a year to become productive, and sales and marketing headcount decreased 21% from September 30, 2023 to September 30, 2024, which may slow customer acquisition.
Interest expense increased 25.4% in the quarter and 40.1% year to date due to additional credit facility borrowings, and the company must meet financial covenants under its Credit Agreement maturing November 2027.
The company has a non-cancellable cloud hosting arrangement with Amazon Web Services with minimum purchase commitments totaling $131.0 million over five years, including $28.0 million in each of the fourth and fifth years.
SaaS KPIs
All quarters →Adjusted EBITDA
Cloud Subscriptions Revenue Retention Rate
Cloud Subscriptions Revenue
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from APPIAN CORP's SEC filings for Q3 FY2024 (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 1, 2026.