Appian Corporation Q2 FY2025 earnings call

• Upmarket strategy is working, with the sales organization reaching high-value transactions. • AI is having a tangible effect on revenues, pipeline, and value proposition. Examples include an international grocery retailer using Appian AI for supply chain logistics and a top global asset management firm deploying Appian AI. • Strong performance in the U.S. public sector, with federal business outgrowing global business in cloud revenue, new bookings, and software pipeline. • App modernization market opportunity with Appian's advantages: pre-written functionality, dialogue with AI during app creation, and consolidation of applications. • Personnel announcement: David Crozier joined as Chief Marketing Officer.

In the second quarter of 2025, Appian's Cloud subscriptions revenue grew 21% to $106.9 million. Subscriptions revenue grew 17% to $132.7 million. Total revenue grew 17% to $170.6 million. Subscriptions revenue represented 78% of total revenue. Professional services revenue was $38 million, up 13% compared to Q2 2024. Cloud subscription revenue retention rate was 111% as of June 30, 2025. International operations contributed 38% of total revenue.

• Q3 2025: Cloud subscription revenue expected to be between $109 million and $111 million (16%-18% growth year-over-year), total revenue between $172 million and $176 million (12%-14% growth year-over-year), adjusted EBITDA between $9 million and $12 million. • Full year 2025: Increased guidance for cloud subscription revenue (between $429 million and $433 million, 17%-18% growth year-over-year), total revenue (between $695 million and $703 million, 13%-14% growth year-over-year), and adjusted EBITDA (between $49 million and $55 million).

• Uncertainties in SEC filings where actual results may differ materially from expectations. • Concerns about generative AI and agentic computing potentially obviating existing vendors or the SaaS layer. • Potential impact of DOGE and other market volatilities on federal business.

Q: Raimo Lenschow asks about app modernization journey and cloud NRR.

A: Matt Calkins talks about app modernization complexity and Srdjan Tanjga discusses NRR limitations, stating NRR is an output and not how the company is run.

Q: Keith Weiss asks about Appian's advantages vs AI.

A: Matt Calkins and Srdjan Tanjga explain Appian's built-out functionality and engine vs car analogy, highlighting Appian's unique features not easily replicated by AI.

Q: Steven Lester Enders asks about Appian AI's impact on pipeline.

A: Matt Calkins talks about AI driving pipeline, changing customer conversations, and enhancing value proposition.

Q: Cole Erskine asks about federal pipeline and AI pricing.

A: Matt Calkins discusses federal market changes and Srdjan Tanjga explains pricing migration away from seat-based to consumption models.

Q: Devin Au asks about EMEA sales leaders and EBITDA outperformance.

A: Matt Calkins talks about EMEA leadership alignment and Srdjan Tanjga explains expense timing with minor headcount impact.

Q: Jacob Roberge asks about public sector business.

A: Matt Calkins and Srdjan Tanjga discuss healthy conversations and federal buying patterns.