Appian Corp. Q1 FY2025 earnings call

• Cloud subscription revenue grew 15% YOY to $99.8M, subscriptions revenue grew 14% to $134.4M, total revenue grew 11% YOY. Adjusted EBITDA was $16.8M. - Held Appian World, focusing on AI and AI agents, with customers like Aeon, NASA, etc. sharing success stories. - 70% of cloud customers adopted AI, production AI usage grew 7.9x YOY in Q1. - Launched multi-tiered pricing model, revenue from AI inclusive tiers doubled in Q1 to $9M. - Federal Government bookings grew 59% YOY in Q1. - New customers and big expansions in key verticals, e.g., U.S. civilian agency, U.S. Agency supporting DoD, top Australian bank. - Introduced weighted rule of 40 and focus on sales and marketing efficiency, with net new bookings per sales rep up over 30% YOY.

In the first quarter 2025, Appian's cloud subscription revenue grew 15% year-over-year to $99.8 million. Subscriptions revenue grew 14% to $134.4 million. Total revenue grew 11% year-over-year to $166.4 million. Cloud subscription revenue retention rate was 112% as of March 31. Professional services revenue was $32.1 million, flat growth compared to the first quarter of 2024. Subscriptions revenue represented 81% of total revenue.

• Q2 2025: Cloud subscriptions revenue expected $101M - $103M (14%-16% YOY growth), total revenue $158M - $162M (8%-11% YOY growth), adjusted EBITDA -$5M to -$2M. - Full year 2025: Cloud subscriptions revenue expected $419M - $423M (14%-15% YOY growth), total revenue $680M - $688M (10%-12% YOY growth), adjusted EBITDA $40M - $46M. - Guidance assumes Q2 professional services revenue flat YOY, term license revenue down low double digits YOY, etc.

• Macro-economic uncertainty. - Changes within the Federal Government leading to a wider range of potential outcomes.

Q: Concern about potential pull forward in federal government orders in Q1 and baseline assumptions for Q3?

A: Matt Calkins said no meaningful pull forwards in Q1, and cautiously optimistic about Q3.

Q: About cloud net retention rate dip and enterprise commercial side spending hesitation?

A: Mark Lynch said it's a trailing metric, due to down sells in Q1 2024 and some customer revenue growth rate leveling off.

Q: On AI and new agentic world, how Appian fits in?

A: Matt Calkins said process infrastructure is a prerequisite for productive AI agents, and Appian's process infrastructure provides necessary structure.

Q: On incremental monetization of AI, thoughts on usage driving revenue opportunities?

A: Matt Calkins said pleased with customers' willingness to spend on AI, showing value.

Q: On data fabric queries growth and comparison to others?

A: Matt Calkins said Appian's data fabric is different, being a semantic layer with read/write, performance tuned, and security features.

Q: On durability of sales productivity gains?

A: Matt Calkins said they are durable, stemming from recent innovations and sales organization professionalism.

Q: On GAM Suite ACV uplift?

A: Matt Calkins said GAM Suite is a separate product with a substantial price, a seven-figure a year proposition.

Q: On product announcements from Appian World and replication to AI agents?

A: Matt Calkins talked about various AI-related product announcements at Appian World, including Intelligent Document Processing and AI authoring of applications.