Appian Corporation Q4 FY2025 earnings call

Matt Calkins mentioned Appian executed strategy to sell big deals, strengthened position in U.S. public sector, increased operational efficiency with 11% adjusted EBITDA margin for full year 2025, announced $50 million stock buyback. Serge Tanjga discussed reporting changes, Q4 results with strong new business driven by AI traction, cloud subscription revenue, total revenue, profitability details, balance sheet info, and welcome of new board member.

In the fourth quarter of 2025, Appian's cloud subscriptions revenue grew 18% to $117.0 million. Subscriptions revenue grew 19% to $162.3 million. Total revenue grew 22% to $202.9 million. Adjusted EBITDA was $19.7 million. For the full year, cloud subscriptions revenue grew 19% to $437.4 million, subscriptions revenue grew 18% to $576.5 million, total revenue grew 18% to $726.9 million, adjusted EBITDA was $76.8 million. Cloud net ARR expansion was 114% in Q4. There were changes in reporting, reclassifying certain expenses, introducing cloud net ARR expansion metric, and refining customer definition.

Expect Q1 2026 cloud subscription revenue between $119M - $121M (20% y-o-y growth), total revenue $189M - $193M (15% y-o-y growth), adjusted EBITDA $19M - $22M. Full year 2026 cloud subscription revenue $502M - $510M (16% y-o-y growth), total revenue $801M - $817M (11% y-o-y growth), adjusted EBITDA $89M - $99M. Guidance assumes non-cloud subscription revenue flat, professional services growth, FX rates, and moderate investment in sales and engineering.

Investors concerned AI poses threat to software firms, AI is probabilistic and not reliable for high-value use cases, AI-generated code can't provide compliance, reliability, and support that Appian offers.

Q: Congrats on the great quarter, guys. Nice to see the cloud net expansion uptick quarter-over-quarter. I was thinking maybe on the guide, it looks like Q1 guide is a bit of an acceleration from Q4. I imagine part of that is that expansion ticking up. But maybe can you help us understand a bit more the visibility and the confidence that you have given that acceleration?

A: Srdjan Tanjga said Q1 benefits from strong new business in Q4 and FX tailwind.

Q: Matt, if you think about -- I'm totally aligned with you with your vision around AI and agentic needed like a control layer. Like how do you think what gives you the right to be that? Because like, obviously, a lot of other people are kind of trying to eye for that because that kind of position will be very strategic as well. So talk a little bit about what Appian brings to the table that you can go to customers and say, like, I should be that layer.

A: Matt Calkins said Appian has been the layer for a long time, with strong governance, detection, remediation, monitoring, self-improvement layers.

Q: Steven Enders asked about opportunity around AI, budgets, purchase decisions.

A: Matthew Calkins said AI is positive, helps access, win rate. Srdjan Tanjga added about proof of concepts, upgrades, upselling.

Q: James Wood asked about using AI internally to accelerate value delivery and challenges for LLM vendors.

A: Matthew Calkins said using AI thoroughly in development and deployments, Appian apps provide structure.

Q: Devin Au asked about '26 revenue guidance.

A: Srdjan Tanjga said no incremental conservatism, cloud is ratable, rest of business can be lumpier.

Q: Lucky Schreiner asked about cloud growth guide.

A: Srdjan Tanjga said majority due to FX bump in Q1