Summary
Appian reported total revenue of $187.0 million for the fiscal 2025 third quarter ended September 30, 2025, up 21.4% from the prior-year quarter. Year-to-date revenue was $524.1 million, up 16.4% from the prior-year YTD. Gross profit was $141.7 million in the quarter, up 21.2% from the prior-year quarter, and $395.9 million year to date, up 17.9% from the prior-year YTD. The quarterly gross margin was 75.8%, down 0.1 percentage points from the prior-year quarter, while the year-to-date gross margin was 75.6%, up 1.0 percentage point from the prior-year YTD. GAAP operating income was $13.1 million, a swing to a profit from the prior-year quarter, and the quarterly operating margin was 7.0%, up 11.7 percentage points from the prior-year quarter. Year-to-date operating income was $1.3 million, also a swing to a profit from the prior-year YTD, and the year-to-date operating margin was 0.2%, up 14.9 percentage points from the prior-year YTD. GAAP net income was $7.8 million in the quarter, up 472.6% from the prior-year quarter, and diluted EPS was $0.10, up $0.13 from the prior-year quarter. On a non-GAAP basis, operating income was $29.8 million, net income was $24.4 million, and diluted EPS was $0.32. Adjusted EBITDA was $32.2 million.
Appian generated $18.7 million of operating cash flow in the quarter, up 327.0% from the prior-year quarter. Year-to-date operating cash flow was $61.7 million, up 982.8% from the prior-year YTD. Capital expenditures were $0.65 million in the quarter, up 84.2% from the prior-year quarter, and $2.45 million year to date, down 25.4% from the prior-year YTD. Deferred revenue was $283.8 million, up 24.7% from the prior-year quarter. Remaining performance obligations, or RPO, were $577.2 million, up 22.7% from the prior-year quarter. The cloud subscriptions revenue retention rate was 111% as of September 30, 2025, compared with 117% as of September 30, 2024. Management also reported non-GAAP net income of $24.4 million and non-GAAP diluted EPS of $0.32 for the quarter.
Recent business highlights included Appian being named a Leader in the IDC MarketScape Worldwide Business Automation Platforms 2025 Vendor Assessment and a Leader in the Digital Process Automation Software Report by an independent research firm. The company highlighted MagMutual's transformation with Appian and the latest Appian platform release delivering enterprise-ready AI. The MD&A describes the platform's focus on process orchestration, data fabric, process intelligence, and AI embedded in business processes. Revenue concentration remains a factor: government agencies represented 32.4% of total revenue in the quarter, with U.S. federal agencies at 25.0%. International customers generated 39.7% of total revenue in the quarter.
For the fourth quarter of 2025, Appian guided cloud subscriptions revenue to $115.0 million to $117.0 million, representing year-over-year growth of 16% to 18%. Fourth-quarter total revenue is expected to be $187.0 million to $191.0 million, a year-over-year increase of 12% to 15%. Fourth-quarter adjusted EBITDA is expected to be $10.0 million to $13.0 million, and non-GAAP net income per share is expected to be $0.04 to $0.08, assuming 74.5 million weighted average common shares outstanding. For the full year 2025, cloud subscriptions revenue is expected to be $435.0 million to $437.0 million, representing year-over-year growth of 18% to 19%. Full-year total revenue is expected to be $711.0 million to $715.0 million, a year-over-year increase of 15% to 16%. Full-year adjusted EBITDA is expected to be $67.0 million to $70.0 million, and full-year non-GAAP net income per share is expected to be $0.50 to $0.54, assuming 74.6 million weighted average common shares outstanding.
Risks include the length and variability of Appian's sales cycle, competition in its markets, and the possibility that AI could disrupt its markets in unpredictable ways. The company also cites its ability to sustain revenue growth, manage growth, and maintain customer satisfaction. Government revenue concentration and the composition of the customer base are named risks. Appian operates in a competitive and rapidly changing environment, and new risks emerge over time. The company also notes litigation with Pegasystems in its MD&A, with related legal and professional fees affecting general and administrative expense. Management believes existing cash and short-term investments, together with available borrowings, will support working capital and capital expenditure requirements for at least the next twelve months.
The quarter showed a swing to GAAP profitability and positive operating cash flow, supported by revenue growth and cost management. The fourth-quarter and full-year guidance point to continued growth. Retention slipped to 111% from 117%, and government concentration remains a watch item. Appian's non-GAAP profitability measures exclude stock-based compensation, litigation expense, JPI amortization, lease impairment charges, and unrealized foreign exchange gains and losses, among other items.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $187.0M | $170.6M | +9.6% | $154.1M | +21.4% |
| Gross profit | $141.7M | $126.7M | +11.8% | $117.0M | +21.2% |
| Gross margin | 75.8% | 74.3% | +1.5 pp | 75.9% | -0.2 pp |
| Research & development | $40.3M | $40.3M | -0.2% | $38.6M | +4.4% |
| Sales & marketing | $51.9M | $60.5M | -14.1% | $50.9M | +2.1% |
| General & administrative | $36.4M | $36.9M | -1.3% | $34.7M | +5.0% |
| Total operating expenses | $128.6M | $137.7M | -6.6% | $124.1M | +3.6% |
| Operating income (loss) | $13.1M | -$11.0M | +219.4% | -$7.2M | +283.2% |
| Operating margin | 7.0% | -6.4% | +13.4 pp | -4.7% | +11.7 pp |
| Net income (loss) | $7.8M | -$312.0K | +2608.0% | -$2.1M | +472.6% |
| Net margin | 4.2% | -0.2% | +4.4 pp | -1.4% | +5.5 pp |
| Diluted EPS | $0.10 | $0.00 | +$0.10 | -$0.03 | +$0.13 |
Risks
Revenue from government agencies represented 32.4% of total revenue for the three months ended September 30, 2025 and 33.3% for the nine months ended September 30, 2025, with U.S. federal agencies at 25.0% and 24.9%, respectively, up from 31.0%/30.6% and 23.2%/22.5% in the prior-year periods. This concentration exposes results to government budget, procurement, and shutdown risks.
Cloud subscriptions revenue retention rate declined to 111% as of September 30, 2025 from 117% as of September 30, 2024. A lower retention rate can reduce recurring revenue growth and indicates increased churn, downsells, or pricing pressure.
Revenue generated outside the United States was 39.7% and 38.2% of total revenue for the three and nine months ended September 30, 2025, up from 36.3% and 37.2% in the prior-year periods. Other income, net for the nine months ended September 30, 2025 included $19.4 million of foreign exchange gains versus $2.5 million of foreign exchange losses in the prior-year period, showing earnings volatility from currency movements.
The MD&A states new sales representatives can take six months to a year to become productive given the length of the sales cycle, and professional services revenue timing can cause significant quarterly fluctuations. This creates execution risk for growth investments.
Total gross margin was 75.8% for the three months ended September 30, 2025, down 0.1 percentage points from 75.9% in the prior-year quarter, and subscriptions gross margin was 87.9% versus 88.6%. MD&A expects gross margin to fluctuate quarterly due to mix, hosting costs, and professional services utilization.
The company has a $200.0 million term loan and up to $100.0 million revolving credit facility maturing November 3, 2027, with $62.0 million of borrowing capacity used and $14.7 million of letters of credit outstanding. MD&A forward-looking statements reference ability to meet financial covenants under the Credit Agreement.
Appian has a non-cancellable cloud hosting arrangement with AWS with purchase commitments totaling $220.0 million over five years and minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending was $37.6 million for the nine months ended September 30, 2025, so a demand slowdown could require payments above usage.
The company holds a $2.036 billion judgment against Pegasystems and a related judgment preservation insurance policy; litigation expense increased $2.9 million in the nine months ended September 30, 2025. Ongoing litigation and related costs could affect results.
Appian relies on strategic partnerships with Accenture, Capgemini, Deloitte, EY, KPMG, PwC, and TCS to refer customers and provide professional services, and intends to expand partner-delivered services. Partner performance or capacity issues could impair customer success and adoption.
SaaS KPIs
All quarters →Cloud Subscriptions Revenue Retention Rate
Summary, forecast, risks and KPIs are extracted from APPIAN CORP's SEC filings for Q3 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 1, 2026.