appn-20210331

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, 2021


☐			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 3, 2021, there were 39,346,857 shares of the registrant’s Class A common stock and 31,499,516 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
	Condensed Consolidated Balance Sheets as of March 31 , 202 1 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the three months ended March 3 1 , 202 1 and March 31, 2020 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 3 1 , 202 1 and March 31, 2020 (unaudited)	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended March 31, 202 1 and March 31, 2020 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 1 and March 31, 2020 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	39
Signature		40

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

APPIAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	As of
	March 31, 2021		December 31, 2020
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	114,752	$	112,462
Short-term investments and marketable securities	118,012		109,826
Accounts receivable, net of allowance of $1,400 as of each of March 31, 2021 and December 31, 2020	87,424		97,278
Deferred commissions, current	18,749		17,899
Prepaid expenses and other current assets	28,484		27,955
Total current assets	367,421		365,420
Property and equipment, net	34,682		35,404
Long-term investments	22,317		36,120
Goodwill	4,651		4,862
Intangible assets, net of accumulated amortization of $513 and $429 as of March 31, 2021 and December 31, 2020, respectively	1,566		1,744
Operating right-of-use assets	30,610		30,659
Deferred commissions, net of current portion	35,991		34,198
Deferred tax assets	482		489
Other assets	2,875		3,625
Total assets	$	500,595	$	512,521
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,194	$	2,967
Accrued expenses	5,777		5,821
Accrued compensation and related benefits	20,919		22,981
Deferred revenue, current	107,893		116,256
Operating lease liabilities, current	7,664		6,923
Other current liabilities	509		940
Total current liabilities	146,956		155,888
Operating lease liabilities, net of current portion	50,572		51,194
Deferred revenue, net of current portion	2,698		3,886
Deferred tax liabilities	65		70
Other non-current liabilities	4,744		4,878
Total liabilities	205,035		215,916
Stockholders’ equity
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 39,321,079 shares issued and outstanding as of March 31, 2021; 500,000,000 shares authorized and 38,971,324 shares issued and outstanding as of December 31, 2020	4		4
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 31,503,666 shares issued and outstanding as of March 31, 2021; 100,000,000 shares authorized and 31,707,866 shares issued and outstanding as of December 31, 2020	3		3
Additional paid-in capital	479,017		470,498
Accumulated other comprehensive loss	(987)		(5,010)
Accumulated deficit	(182,477)		(168,890)
Total stockholders’ equity	295,560		296,605
Total liabilities and stockholders’ equity	$	500,595	$	512,521

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

APPIAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)


	Three Months Ended March 31,
	2021		2020
Revenue
Subscriptions	$	63,766	$	50,436
Professional services	25,089		28,428
Total revenue	88,855		78,864
Cost of revenue
Subscriptions	5,854		5,383
Professional services	17,675		18,736
Total cost of revenue	23,529		24,119
Gross profit	65,326		54,745
Operating expenses
Sales and marketing	35,984		34,172
Research and development	20,690		16,038
General and administrative	19,142		13,141
Total operating expenses	75,816		63,351
Operating loss	(10,490)		(8,606)
Other expense
Other expense, net	2,893		3,114
Interest expense	81		143
Total other expense	2,974		3,257
Loss before income taxes	(13,464)		(11,863)
Income tax expense (benefit)	123		(194)
Net loss	$	(13,587)	$	(11,669)
Net loss per share:
Basic and diluted	$	(0.19)	$	(0.17)
Weighted average common shares outstanding:
Basic and diluted	70,730,235		67,528,331

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

APPIAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)


	Three Months Ended March 31,
	2021		2020
Net loss	$	(13,587)	$	(11,669)
Comprehensive income, net of income taxes
Foreign currency translation adjustment	4,015		17
Unrealized gains on available-for-sale securities	8		—
Total other comprehensive loss, net of income taxes	$	(9,564)	$	(11,652)

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

APPIAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(unaudited, in thousands, except share data)


						Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
	Common Stock			Additional Paid-In Capital				Accumulated Deficit
	Shares	Amount
Balance, January 1, 2021	70,679,190	$	7	$	470,498	$	(5,010)	$	(168,890)	$	296,605
Net loss	—	—		—		—		(13,587)		(13,587)
Issuance of common stock to directors	960	—		—		—		—		—
Vesting of restricted stock units	56,326	—		—		—		—		—
Exercise of stock options	88,269	—		625		—		—		625
Stock-based compensation expense	—	—		7,894		—		—		7,894
Other comprehensive income	—	—		—		4,023		—		4,023
Balance, March 31, 2021	70,824,745	$	7	$	479,017	$	(987)	$	(182,477)	$	295,560

Balance, January 1, 2020	67,468,022	$	6	$	340,929	$	(285)	$	(135,413)	$	205,237
Net loss	—	—		—		—		(11,669)		(11,669)
Issuance of common stock to directors	1,946	—		—		—		—		—
Vesting of restricted stock units	46,031	—		—		—		—

SEC Form 10-Q filed by Appian Corporation