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Appian's (APPN) Loss Narrows in Q4, Revenues Increase Y/Y

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Appian (APPN - Free Report) reported fourth-quarter 2020 adjusted loss of 3 cents per share, narrower than the adjusted loss of 11 cents per share posted in the year-ago quarter. The Zacks Consensus Estimate for adjusted loss for the quarter was pegged at 17 cents per share.

Revenues of $81.6 million beat the consensus mark by 11%. Moreover, the figure increased 19% year over year.

The top line benefited from higher customer wins driven by the robust adoption of the company’s low-code automation platform.

In addition, significant contributions from a solid partner base, including Box (BOX - Free Report) , Alphabet (GOOGL - Free Report) , Accenture (ACN - Free Report) , KPMG, Cognizant and Deloitte, which spurred demand for Appian’s solutions, was a major growth driver.

 

Appian Corporation Price, Consensus and EPS Surprise Appian Corporation Price, Consensus and EPS Surprise

Appian Corporation price-consensus-eps-surprise-chart | Appian Corporation Quote

Segment Details

Subscription revenues climbed 33.2% year over year to $56.1 million. However, Professional service revenues declined 3.7% year on year to $25.5 million.

Within Subscription revenues, revenues from cloud subscriptions surged 40% from the year-ago reported figure to $36.9 million. Revenues from on-premises term license subscriptions, along with maintenance and support, jumped 24.6% and 14.1% year over year, respectively to $14.4 million and $4.7 million, respectively.

Markedly, as of Dec 31, 2020, the Cloud subscription revenue retention rate came in at 119% compared with 115% as of Sep 30, 2020.

Notably, in 2020, the company expanded its customer base by adding 167 net new subscription customers, adding 50% more customers from 2019.

Operating Details

Gross profit for the reported quarter came in at $59.7 million, up 30.2% year over year. Also, the gross margin expanded 630 basis points (bps) year over year to 73.1%.

Selling and marketing expenses flared up 13.3% year over year to $35.4 million. Research and development expenses shot up 20.8% year on year to $18.9 million. General and administrative expenses went up 25.3% year over year to $15.1 million.

On a non-GAAP basis, operating loss was $5.1 million, lower than the year-ago quarter’s reported operating loss of $9.7 million.

Adjusted EBITDA loss was $3.7 million in the reported quarter compared with the year-ago quarter’s $8.2 million.

Balance Sheet & Other Details

As of Dec 31, 2020, Appian had cash and cash equivalents worth $112.5 million compared with $251.1 million as of Sep 30, 2020.

In the fourth quarter, cash used in operating activities came in at $7.6 million compared with the year-ago quarter’s $8.9 million.

Guidance

For first-quarter 2021, this Zacks Rank #4 (Sell) company projects revenues in the range of $81.7-$82.7 million, suggesting year-over-year growth of 4-5%. Cloud subscription revenues are estimated between $37.7 million and $38.2 million, indicating a 33-35% year-over-year jump.

Further, adjusted EBITDA loss is anticipated between $8 million and $9 million. Also, adjusted loss per share is expected in the 13-15 cents band.

For 2021, Appian expects revenues to lie between $353 million and $355 million, calling for growth of 16-17% year over year. Cloud subscription revenues are projected at $167.5-$169.5 million, suggesting a 30-31% year-on-year increase.

Adjusted EBITDA loss is predicted between $36 million and $38 million. Also, adjusted loss per share is expected in the 60-64 cents band.

Strong adoption of Appian’s low-code automation platform among existing customers as well as an expanding customer base led by contributions from the company’s partnerships is likely to continue fueling top-line growth.

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