From Nasdaq: 2025-02-19 12:15:13

Appian (NASDAQ: APPN) reported its fourth-quarter 2024 earnings, with cloud subscription revenue growing 19% to $98.9 million. Total revenue increased by 15% to $166.7 million. Adjusted EBITDA was positive $21.2 million, and cloud subscription revenue retention rate was 116%. Appian’s CEO, Matt Calkins, highlighted the company’s focus on creating real value with AI by integrating it into high-volume workflows. The company aims to enhance AI’s impact by deploying it directly where it can be most beneficial, emphasizing the synergy between AI and process automation technology. The company runs billions of transactions daily on AWS and expects significant growth potential in utilizing AI within processes to double its value. An international health technology company utilizes AI through Appian to streamline order fulfillment. A top U.S. mortgage lender automates audit processes, increasing efficiency by four times. Appian’s process platform provides visibility and scalability for AI implementation, benefiting various industries and government agencies. Appian continues to expand its customer base, with existing customers upgrading licenses to leverage advanced functionalities like AI. Notable success stories include a leading U.S. insurance provider generating $2 billion in additional revenue annually and a medical transportation company reducing appeal disputes processing times by 88%. Appian, a leader in a growing market, prioritizes growth and invites everyone to their annual conference, Appian World, in Denver from April 27 to 30. Financial highlights for Q4 2024 show cloud subscription revenue up 19% to $98.9 million and total revenue up 15% to $166.7 million. International operations contributed 35% of total revenue. Non-GAAP gross margin was 80%, and adjusted EBITDA was positive $21.2 million. For full-year 2024, cloud subscription revenue grew 21% to $368 million, total revenue was $617 million, and adjusted EBITDA was positive $20.3 million. Cloud subscription revenue is seen as a better indicator of business momentum. Appian reports strong end to 2024 with subscriptions revenue reflecting true scale of business. Q1 2025 guidance predicts cloud subscription revenue between $97 million and $99 million, total revenue between $162 million and $164 million, and adjusted EBITDA between positive $8 million and $10 million. Full-year 2025 expectations include cloud subscription revenue of $419 million to $420 million and total revenue of $680 million to $684 million. Appian plans to focus on practical AI solutions and agent strategy innovation to create real value for customers in 2025. Appian CEO, Matthew Calkins, discusses the company’s unique approach to AI, focusing on embedding AI into the core of work processes for maximum impact. He believes this approach sets Appian apart in the market and is the key to success. The company’s go-to-market strategy is also evolving, with a renewed focus on productivity and leadership. Appian’s ability to access diverse data sources across enterprises gives them a competitive edge over rivals. Financial performance across key verticals like financial services, public sector, insurance, and life sciences remains strong, with a positive outlook for the future. Pricing for AI agents is based on usage, aligning with industry trends. The company is planning to subsidize the use of agents to encourage more customer adoption, with potential pricing changes in the future. The Net Revenue Retention rate is within the stated range of 110% to 120%, with a 99% gross renewal rate. The company did not aggressively target the installed base with the new pricing structure, focusing on bringing customers onto the new tiered pricing structure through AI functionality. Sales incentives have been adjusted to prioritize larger deals and strategic adoptions. The company has a strong pipeline for the GAM suite, with potential for significant contributions in 2025 due to increased efficiency focus.

Overall, the company is focused on fundamental sales strategies and clear messaging in a market saturated with AI offerings. The recent sales kickoff was successful in emphasizing the core aspects of the business and motivating the team towards larger transactions and strategic adoptions. The company believes that the installed base holds potential for growth and intends to craft a pricing system that benefits both parties. The GAM suite has a strong pipeline and successful deployments, positioning it well for increased efficiency demands in the market. 1. The Motley Fool encourages readers to do their own research before utilizing any content. They have positions in and recommend Appian.

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Read more at Nasdaq: Appian (APPN) Q4 2024 Earnings Call Transcript