appn-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38098

APPIAN CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware						54-1956084
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

7950 Jones Branch Drive McLean, VA						22102
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (703) 442-8844

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Class A Common Stock	APPN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Small reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 5, 2023, there were 41,663,928 shares of the registrant’s Class A common stock and 31,297,596 shares of the registrant’s Class B common stock, each with a par value of $0.0001 per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	3
	Consolidated Statements of Operations for the three months ended March 31 , 202 3 and March 3 1 , 202 2	4
	Consolidated Statements of Comprehensive Loss for the three months ended March 3 1 , 202 3 and March 31, 202 2	5
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31 , 202 3 and March 3 1 , 20 2 2	6
	Consolidated Statements of Cash Flows for the three months ended March 3 1 , 202 3 and March 3 1 , 202 2	7
	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

APPIAN CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share data)


	As of
	March 31, 2023		December 31, 2022
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	198,679	$	148,132
Short-term investments and marketable securities	55,803		47,863
Accounts receivable, net of allowance of $2,182 and $2,125, respectively	147,579		165,964
Deferred commissions, current	30,697		30,196
Prepaid expenses and other current assets	36,556		28,093
Restricted cash, current	2,280		2,249
Total current assets	471,594		422,497
Property and equipment, net of accumulated depreciation of $19,128 and $18,864, respectively	45,877		41,855

Goodwill	26,711		26,349
Intangible assets, net of accumulated amortization of $3,125 and $2,715, respectively	4,950		5,251
Right-of-use assets for operating leases	35,425		37,248
Deferred commissions, net of current portion	55,601		55,788
Deferred tax assets	1,596		1,940
Other assets	3,064		3,286
Total assets	$	644,818	$	594,214
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	3,872	$	7,997
Accrued expenses	15,373		12,227
Accrued compensation and related benefits	31,443		40,718
Deferred revenue	193,902		194,768
Debt	65,432		2,740
Operating lease liabilities	8,980		8,681
Other current liabilities	4,763		3,121
Total current liabilities	323,765		270,252
Long-term debt	143,728		115,379
Operating lease liabilities	56,073		57,225
Deferred revenue	4,750		5,556
Deferred tax liabilities	103		102

Total liabilities	528,419		448,514
Stockholders’ equity
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 41,457,783 shares issued and outstanding as of March 31, 2023; 500,000,000 shares authorized and 41,320,091 shares issued and outstanding as of December 31, 2022	4		4
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 31,497,596 shares issued and outstanding as of March 31, 2023; 100,000,000 shares authorized and 31,497,796 shares issued and outstanding as of December 31, 2022	3		3
Additional paid-in capital	569,618		561,390
Accumulated other comprehensive loss	(7,946)		(7,246)
Accumulated deficit	(445,280)		(408,451)
Total stockholders’ equity	116,399		145,700
Total liabilities and stockholders’ equity	$	644,818	$	594,214

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

APPIAN CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)


	Three Months Ended March 31,
	2023		2022
Revenue
Subscriptions	$	98,957	$	83,720
Professional services	36,278		30,546
Total revenue	135,235		114,266
Cost of revenue
Subscriptions	10,448		8,206
Professional services	25,645		22,710
Total cost of revenue	36,093		30,916
Gross profit	99,142		83,350
Operating expenses
Sales and marketing	63,090		45,916
Research and development	41,624		29,839
General and administrative	29,694		31,461
Total operating expenses	134,408		107,216
Operating loss	(35,266)

SEC Form 10-Q filed by Appian Corporation