0001441683-23-000056 | 10-Q | XBRL Viewer

Debt (Tables)

3 Months Ended

Mar. 31, 2023

The following table summarizes outstanding debt balances (in thousands):


	As of
	March 31, 2023		December 31, 2022
Borrowings under revolving credit facility expiring November 3, 2027	$	62,000	$	—
Secured term loan facility	148,625		119,375
Less: Debt issuance costs	(1,465)		(1,256)
Total debt, net of debt issuance costs	$	209,160	$	118,119

Debt, current	$	65,432	$	2,740
Long-term debt, net of current portion	143,728		115,379
Total debt	$	209,160	$	118,119

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (36,829)	$ (23,154)
Comprehensive loss, net of income taxes
Foreign currency translation adjustments	(746)	757
Unrealized gains (losses) on available-for-sale securities	46	(111)
Total other comprehensive loss, net of income taxes	$ (37,529)	$ (22,508)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Goodwill [Roll Forward]
Beginning balance	$ 26,349	$ 27,795
Foreign currency translation adjustments	362	(1,446)
Ending balance	$ 26,711	$ 26,349

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial reporting. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on February 16, 2023. In addition, certain reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation, specifically as it relates to our presentation of certain adjustments to reconcile net loss to net cash used by operating activities in our consolidated statements of cash flows.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates.

Significant estimates embedded in the condensed consolidated financial statements include, but are not limited to, revenue recognition, income taxes and the related valuation allowance, costs to obtain a contract with a customer, and stock-based compensation.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cost of Revenue

Subscriptions

Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs such as payroll and benefits for our technology operations and customer support teams, amortization of developed technology, and allocated facility costs and overhead.

Professional Services

Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, third-party contractor costs, allocated facility costs and overhead, and the costs of billable expenses such as travel and lodging. The unpredictability of the timing of providing services related to significant professional services agreements sold on a standalone basis may cause significant fluctuations in our quarterly financial results.

Concentration of Credit and Customer Risk

Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, restricted cash, accounts receivable, and our short- and long-term investments. Deposits held with banks may exceed the amount of insurance provided on such deposits.

In March 2023, Silicon Valley Bank’s (“SVB”) U.S. operations were placed into receivership by the Federal Deposit Insurance Corporation (“FDIC”), and its U.K. operations were placed into a Bank Insolvency Procedure by the Bank of England. SVB’s U.S. operations were later sold to First Citizens Bank and Trust Company (“First Citizens”), and its U.K. operations were sold to HSBC UK Bank, Plc (“HSBC”).

We have access to all of our cash, cash equivalents, and investments that were in accounts previously held by SVB, and we do not expect a material impact to our ongoing operations stemming from the SVB matter. Refer to Note 8 for further discussion regarding the receivership’s impact on our credit facility. We believe the financial institutions holding our cash deposits are financially sound.

With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss.

Cash , Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consists of cash designated to settle an escrow liability stemming from a holdback agreement enacted pursuant to our acquisition of Lana Labs GmbH. We paid 25% of the balance on September 28, 2022, and the remaining 75% of the balance is due on August 11, 2023.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful AccountsAccounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit losses on our receivables. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense.

Assets Recognized from the Costs to Obtain a Contract with a Customer

We capitalize costs of obtaining a contract with a customer, which consists of sales commissions paid to our sales team, that are incremental costs to obtaining customer contracts. These costs are recorded as deferred commissions in the consolidated balance sheets. Costs to obtain a contract for a new customer or upsell are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determine the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We also capitalize the incremental fringe benefits associated with commission expenses paid to our direct sales team. Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less.

Amortization associated with deferred commission is recorded to sales and marketing expense in our consolidated statements of operations.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred.

The following table outlines the useful lives of our major asset categories:


Asset Category						Useful Life (in years)
Computer software						3
Computer hardware						3
Equipment						5
Office furniture and fixtures						10
Leasehold improvements						(a)

(a) Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Recent Accounting Pronouncements

Adopted

We did not adopt any new accounting guidance in 2023 that had a material impact on our condensed consolidated financial statements or disclosures.

Not Yet Adopted

There is no pending accounting guidance that we expect to have a material impact on our condensed consolidated financial statements or disclosures.

Revenue Recognition

We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform.

Performance Obligations and Timing of Revenue Recognition

We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern

of transfer to the customer. Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time.

Subscriptions Revenue

Subscriptions revenue is primarily related to (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis or through non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front.

Cloud Subscriptions

We generate cloud-based subscriptions revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one to three years in length. We bill customers and collect payment for subscriptions to our platform in advance, and they are non-cancellable.

Term License Subscriptions

Our term license subscription revenue is derived from customers with on-premises installations of our platform. The majority of our contracts are one year in length. Although term license subscriptions are sold with maintenance and support, the software is fully functional at the beginning of the subscription and is considered a distinct performance obligation. If a cloud-based subscription includes the right for the customer to take possession of the license, the revenue is treated as a term license. Revenue from term license subscriptions is recognized when control of the software license has transferred to the customer, which is the later of delivery or commencement of the contract term.

Maintenance and Support

Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the contract period, which is the period over which the customer has continuous access to maintenance and support.

Professional Services Revenue

Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance as well as training services related to our platform. Our professional services are considered distinct performance obligations when sold standalone or with other products.

Consulting Services

We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone basis and either (1) under a fixed-fee arrangement or (2) on a time and materials basis. Consulting services contracts are considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the customer's ability to use the other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. For time and materials-based consulting contracts, we

have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to date.

Training Services

We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered.

Significant Judgments and Estimates

Determining the Transaction Price

The transaction price is the total amount of consideration we expect to receive in exchange for the service offerings in a contract and may include both fixed and variable components. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the transaction price for the three months ended March 31, 2023 and 2022 was insignificant. Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such true-up adjustments are not expected to be material.

Allocating the Transaction Price Based on Standalone Selling Prices (“SSP”)

We allocate the transaction price to each performance obligation in a contract based on its relative SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows:

1.Cloud subscriptions - Given the highly variable selling price of our cloud subscriptions, we establish the SSP of our cloud subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating the SSP of our cloud subscriptions is an appropriate allocation of the transaction price.

2.Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have established the SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and maintenance and support, we have concluded the residual approach to estimating the SSP of term license subscriptions is an appropriate allocation of the transaction price.

3.Maintenance and support - We establish the SSP of maintenance and support as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses.

4.Consulting and training services - The SSP of consulting and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold.

Contract Balances

Stock-Based Compensation Expense

We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. We account for forfeitures as they occur rather than estimating expected forfeitures.

Fair Value Measurements

U.S. GAAP establishes a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:

•Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3. Unobservable inputs for which there is little or no market data and which require us to develop our own estimates and assumptions reflecting those that a market participant would use.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of March 31, 2023 and December 31, 2022.

The valuation techniques that may be used to measure fair value are as follows:

•Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts; and

•Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost).

Investments

InvestmentsOur investment portfolio consists largely of debt investments classified as available-for-sale. Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, are recorded in Other comprehensive income (loss).

Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands):


	As of
	March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
Cash and cash equivalents	$	198,679	$	148,132	$	106,795	$	100,796
Restricted cash, current	2,280		2,249		776		791
Restricted cash, net of current portion	—		—		2,328		2,373
Total cash, cash equivalents, and restricted cash	$	200,959	$	150,381	$	109,899	$	103,960

Restrictions on Cash and Cash Equivalents

The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands):


	As of
	March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
Cash and cash equivalents	$	198,679	$	148,132	$	106,795	$	100,796
Restricted cash, current	2,280		2,249		776		791
Restricted cash, net of current portion	—		—		2,328		2,373
Total cash, cash equivalents, and restricted cash	$	200,959	$	150,381	$	109,899	$	103,960

Schedule of Property and Equipment, Useful Life

The following table outlines the useful lives of our major asset categories:


Asset Category						Useful Life (in years)
Computer software						3
Computer hardware						3
Equipment						5
Office furniture and fixtures						10
Leasehold improvements						(a)

(a) Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Basic and Diluted Loss per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Securities Excluded From Calculation of Weighted Average Common Shares

The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been antidilutive to earnings per share:


	Three Months Ended March 31,
	2023	2022
Stock options	2,678,476	2,128,943
Non-vested restricted stock units	1,190,286	1,340,037

Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 198,679	$ 148,132	$ 106,795	$ 100,796
Restricted cash, current	2,280	2,249	776	791
Restricted cash, net of current portion	0	0	2,328	2,373
Total cash, cash equivalents, and restricted cash	$ 200,959	$ 150,381	$ 109,899	$ 103,960

Accounting Policies - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) agency	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Number of government agencies \| agency	3
Allowance for doubtful accounts	$ 2,182		$ 2,125
Capitalized contract cost, amortization period (in years)	5 years
Commission expense	$ 11,000	$ 8,200
September 28, 2022
Summary Of Significant Accounting Policies [Line Items]
Percentage of restricted cash balance	0.25
August 11, 2023
Summary Of Significant Accounting Policies [Line Items]
Percentage of restricted cash balance	0.75
Sales Revenue, Net \| Customer Concentration Risk \| Foreign Customers
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	33.40%	33.50%
Sales Revenue, Net \| Customer Concentration Risk \| Government Agencies
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	20.50%	18.10%
Sales Revenue, Net \| Customer Concentration Risk \| Federal Government Agencies
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	4.20%	4.60%

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Goodwill was comprised of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	Carrying Amount
Balance as of December 31, 2021	$	27,795

Foreign currency translation adjustments	(1,446)
Balance as of December 31, 2022	26,349

Foreign currency translation adjustments	362
Balance as of March 31, 2023	$	26,711

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Developed technology	$	6,987	$	6,893
Customer relationships - Non-Robotic Process Automation (“RPA”)	838		827
Customer relationships - RPA	250		246
Intangible assets, gross	8,075		7,966
Less: accumulated amortization	(3,125)		(2,715)
Intangible assets, net	$	4,950	$	5,251

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table shows the projected annual amortization expense related to amortizable intangible assets as of March 31, 2023:


	Projected Amortization
2023 (excluding the three months ended March 31, 2023)	$	1,118
2024	1,491
2025	1,186
2026	763
2027	94

Thereafter	298
Total projected amortization expense	$	4,950

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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+ Details

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 0.4	$ 0.4
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	3 years 2 months 12 days
Customer relationships - Non-Robotic Process Automation (“RPA”)
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	8 years 4 months 24 days
Customer relationships - RPA
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	6 years 9 months 18 days

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations

The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Cost of revenue
Subscriptions	$	272	$	179
Professional services	1,591		1,057
Operating expenses
Sales and marketing	2,445		1,788
Research and development	3,626		2,314
General and administrative	3,122		1,605
Total stock-based compensation expense	$	11,056	$	6,943

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating cash outflows for operating leases	$ 1,132	$ 2,085
Amortization of operating lease ROU assets	652	306
Interest expense on operating lease liabilities	$ 1,495	$ 1,321

Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract assets balances	$ 14.9	$ 14.3
Revenue recognized	85.4
Performance obligations	366.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 237.7
Revenue, remaining performance obligation, period (in months)	12 months
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Cloud subscriptions contracts term (in years)	1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Cloud subscriptions contracts term (in years)	3 years

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies Minimum Purchase Commitments In July 2021, we executed a non-cancellable cloud hosting arrangement with Amazon Web Services (“AWS”) that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $131.0 million over five years. The agreement, which is in its second year, contains minimum spending requirements of $25.0 million in the second year and $28.0 million in each of the third, fourth, and fifth years. Spending under this agreement for the three months ended March 31, 2023 and 2022 totaled $9.4 million and $7.8 million, respectively. The timing of payments under the agreement may vary. However, we expect to meet our minimum purchase commitments for the remainder of the contract term. Exclusive of the AWS contract, we have other non-cancellable agreements for subscription software products that contain provisions stipulating minimum purchase commitments. However, the annual purchase commitments under these contracts are, individually and in the aggregate, immaterial to our condensed consolidated financial statements. Pegasystems Litigation On May 29, 2020, we filed a civil complaint against Pegasystems, Inc. (“Pegasystems”) and Youyong Zou, a Virginia resident, in the Circuit Court for Fairfax County, Virginia. Appian Corp v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). On May 10, 2022, we announced the jury awarded us $2.036 billion in damages for misappropriation of our trade secrets and $1 in damages for violating the Virginia Computer Crimes Act. Pegasystems filed several post-trial motions seeking relief in the form of reducing the damages award or setting aside the jury’s verdict and either granting a new trial or entering judgment in Pegasystems’ favor. All of these motions were denied, and final judgment was entered by the Court on September 15, 2022. The final judgment reaffirmed the $2.036 billion in damages and also ordered Pegasystems to pay Appian $23.6 million in attorney's fees associated with the case as well as statutory post-judgment interest on the judgment at an annual rate of 6%, or approximately $122.0 million per year. Defendant Youyong Zou has satisfied the judgment of $5,000 (plus interest) against him in lieu of appealing that judgment. On September 15, 2022, Pegasystems filed a notice of appeal, and on February 6, 2023, Pegasystems filed its opening brief with the Court of Appeals of Virginia. On March 29, 2023, we filed our response brief. Pegasystems filed a reply brief on May 3, 2023. The timeline of the case is solely within the control of the Court of Appeals until it rules. Pegasystems is not required to pay us the judgment, attorney’s fees, or post-judgment interest until all appeals are exhausted. We cannot predict the outcome of any appeals or the time it will take to resolve them. Consistent with other judgments, there is no guarantee we will be able to collect all or any portion of the judgment. Consequently, we will not record the award in our consolidated financial statements until all contingencies are resolved and we collect on the judgment. Other Legal Matters From time to time, we are subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of business. Other than as disclosed elsewhere in this Quarterly Report, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended
Segment and Geographic Information (Details) $ in Thousands	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)
Segment Reporting [Abstract]
Number of operating segments \| segment	1
Number of reportable segments \| segment	1
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 135,235	$ 114,266
Domestic
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	90,005	76,039
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 45,230	$ 38,227

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
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
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
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
Class A Common Stock
Stockholders’ equity
Common stock	4	4
Class B Common Stock
Stockholders’ equity
Common stock	$ 3	$ 3

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Hosting costs	$	3,393	$	2,802
Legal costs	1,682		475
Marketing and tradeshow expenses	836		1,000
Third party license fees	799		1,223
Contract labor costs	1,527		1,465
Reimbursable employee expenses	854		1,004

Audit and tax expenses	1,393		911
Capital expenditures	2,233		744
Other accrued expenses	2,656		2,603
Total	$	15,373	$	12,227

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2021		71,462,094
Beginning balance at Dec. 31, 2021	$ 233,917	$ 7	$ 497,128	$ (5,687)	$ (257,531)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(23,154)				(23,154)
Issuance of common stock to directors (in shares)		2,395
Vesting of restricted stock units (in shares)		47,038
Exercise of stock options (in shares)		815,833
Exercise of stock options	24,404		24,404
Stock-based compensation expense	6,943		6,943
Other comprehensive income (loss)	646			646
Ending balance (in shares) at Mar. 31, 2022		72,327,360
Ending balance at Mar. 31, 2022	242,756	$ 7	528,475	(5,041)	(280,685)
Beginning balance (in shares) at Dec. 31, 2022		72,817,887
Beginning balance at Dec. 31, 2022	145,700	$ 7	561,390	(7,246)	(408,451)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(36,829)				(36,829)
Issuance of common stock to directors (in shares)		6,713
Vesting of restricted stock units (in shares)		111,296
Vesting of restricted stock units	(2,959)		(2,959)
Exercise of stock options (in shares)		19,483
Exercise of stock options	131		131
Stock-based compensation expense	11,056		11,056
Other comprehensive income (loss)	(700)			(700)
Ending balance (in shares) at Mar. 31, 2023		72,955,379
Ending balance at Mar. 31, 2023	$ 116,399	$ 7	$ 569,618	$ (7,946)	$ (445,280)

Investments and Fair Value Measurements - Amortized Cost Basis and Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Cost Basis
Due in one year or less	$ 149,860
Cost Basis	149,860	$ 87,354
Fair Value
Due in one year or less	149,884
Market Value	$ 149,884	$ 87,332

Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

3. Revenue

Revenue Recognition

The following table summarizes revenue recorded during the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Cloud subscriptions	$	69,692	$	53,379
Term license subscriptions	23,151		24,707
Maintenance and support	6,114		5,634
Total subscriptions	98,957		83,720
Professional services	36,278		30,546
Total revenue	$	135,235	$	114,266

Performance Obligations and Timing of Revenue Recognition

of transfer to the customer. Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time.

Subscriptions Revenue

Cloud Subscriptions

Term License Subscriptions

Maintenance and Support

Professional Services Revenue

Consulting Services

have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to date.

Training Services

Significant Judgments and Estimates

Determining the Transaction Price

Allocating the Transaction Price Based on Standalone Selling Prices (“SSP”)

Contract Balances

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. As of March 31, 2023 and December 31, 2022, contract assets of $14.9 million and $14.3 million, respectively, are included in the Prepaid expenses and other current assets and Other assets line items in our consolidated balance sheets.

Contract liabilities consist of deferred revenue and include payments received in advance of the satisfaction of performance obligations. Deferred revenue is then recognized as the revenue recognition criteria are met. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. For the three months ended March 31, 2023, we recognized $85.4 million of revenue that was included in the deferred revenue balance as of December 31, 2022.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2023, we had an aggregate transaction price of $366.1 million allocated to unsatisfied performance obligations. We expect to recognize $237.7 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 10
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (a)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Commitments and Contingencies (Details) - USD ($)			3 Months Ended
Commitments and Contingencies (Details) - USD ($)	Sep. 15, 2022	May 10, 2022	Mar. 31, 2023	Mar. 31, 2022	Jul. 31, 2021
Loss Contingencies [Line Items]
Purchase obligation					$ 131,000,000
Purchase obligation, year two					25,000,000
Purchase obligation, year three					28,000,000
Purchase obligation, year four					28,000,000
Purchase obligation, year five					$ 28,000,000
Payments for purchase obligation			$ 9,400,000	$ 7,800,000
Pegasystems Litigation \| Misappropriation of Trade Secrets
Loss Contingencies [Line Items]
Damages awarded		$ 2,036,000,000.000
Pegasystems Litigation \| Violation of Virginia Computer Crimes Act
Loss Contingencies [Line Items]
Damages awarded		$ 1
Pegasystems Litigation \| Attorney's Fees Associated
Loss Contingencies [Line Items]
Damages awarded	$ 23,600,000
Pegasystems Litigation \| Statutory Post Judgement Interest On Judgmental
Loss Contingencies [Line Items]
Damages awarded	$ 122,000,000
Interest on damages awarded (as a percentage)	6.00%
Youyong Zou Litigation
Loss Contingencies [Line Items]
Amount awarded in settlement	$ 5,000,000

Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 11,056	$ 6,943
Subscriptions
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	272	179
Professional services
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,591	1,057
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	2,445	1,788
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	3,626	2,314
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,122	$ 1,605

Leases - Additional Information (Details)	Mar. 31, 2023
Leases [Abstract]
Renewal term (in years)	10 years

Investments and Fair Value Measurements - Components of Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Cost Basis	$ 149,860	$ 87,354
Unrealized Gains (Losses)	24	(22)
Market Value	149,884	87,332
Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	94,081	39,469
Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	55,803	47,863
Level 1 \| Money market fund
Debt Securities, Available-for-sale [Line Items]
Cost Basis	94,081	39,469
Unrealized Gains (Losses)	0	0
Market Value	94,081	39,469
Level 1 \| Money market fund \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	94,081	39,469
Level 1 \| Money market fund \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	0	0
Level 1 \| U.S. Treasury bonds
Debt Securities, Available-for-sale [Line Items]
Cost Basis	12,149	9,396
Unrealized Gains (Losses)	25	(13)
Market Value	12,174	9,383
Level 1 \| U.S. Treasury bonds \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	0	0
Level 1 \| U.S. Treasury bonds \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	12,174	9,383
Level 2 \| Commercial paper
Debt Securities, Available-for-sale [Line Items]
Cost Basis	38,708	26,704
Unrealized Gains (Losses)	0	0
Market Value	38,708	26,704
Level 2 \| Commercial paper \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	0	0
Level 2 \| Commercial paper \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	38,708	26,704
Level 2 \| Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Cost Basis	2,490	9,353
Unrealized Gains (Losses)	(1)	(12)
Market Value	2,489	9,341
Level 2 \| Corporate bonds \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	0	0
Level 2 \| Corporate bonds \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	2,489	9,341
Level 2 \| Agency bonds
Debt Securities, Available-for-sale [Line Items]
Cost Basis	2,432	2,432
Unrealized Gains (Losses)	0	3
Market Value	2,432	2,435
Level 2 \| Agency bonds \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	0	0
Level 2 \| Agency bonds \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	$ 2,432	$ 2,435

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2023	May 05, 2023
Document and Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-38098
Entity Registrant Name	APPIAN CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1956084
Entity Address, Address Line One	7950 Jones Branch Drive
Entity Address, City or Town	McLean
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22102
City Area Code	(703)
Local Phone Number	442-8844
Title of 12(b) Security	Class A Common Stock
Trading Symbol	APPN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001441683
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		41,663,928
Class B Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		31,297,596

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 65,005	$ 60,719
Less: accumulated depreciation	(19,128)	(18,864)
Property and equipment, net	45,877	41,855
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	50,973	45,959
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,698	3,476
Computer hardware
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,326	9,689
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	820	1,353
Equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 188	$ 242

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes The provision for income taxes is based upon the estimated annual effective tax rates for the year applied to the current period income before tax plus the tax effect of any significant or unusual items, discrete events, or changes in tax law. Our operating subsidiaries are exposed to statutory effective tax rates ranging from zero to approximately 35%. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the condensed consolidated financial statements. For the three months ended March 31, 2023 and 2022, the actual effective tax rates were (3.2)% and 6.4%, respectively. The tax benefit recognized in the three months ended March 31, 2022 was primarily driven by a discrete benefit of $1.1 million related to the release of a valuation allowance for Lana Labs GmbH as a result of post-acquisition tax planning and the merger of German subsidiaries. As of March 31, 2023, our net unrecognized tax benefits totaled $4.5 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance. The amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations or settlements of tax audits is not material to our condensed consolidated financial statements. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Due to our net operating loss carryforwards, the tax years 2016 through 2022 remain open to examination by the major taxing jurisdictions to which we are subject. There are no open examinations that would have a meaningful impact to our condensed consolidated financial statements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

As of March 31, 2023, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO Grant, was $14.7 million and will be recognized over a weighted average period of 2.9 years. Total unrecognized compensation cost related to unvested RSUs was approximately $55.2 million, which will be recognized over a weighted average period of 1.5 years.

The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Cost of revenue
Subscriptions	$	272	$	179
Professional services	1,591		1,057
Operating expenses
Sales and marketing	2,445		1,788
Research and development	3,626		2,314
General and administrative	3,122		1,605
Total stock-based compensation expense	$	11,056	$	6,943

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Allowance for doubtful accounts	$ 2,182	$ 2,125
Accumulated depreciation	19,128	18,864
Finite-lived intangible assets, accumulated amortization	$ 3,125	$ 2,715
Class A Common Stock
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	41,457,783	41,320,091
Common stock, shares outstanding (in shares)	41,457,783	41,320,091
Class B Common Stock
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	31,497,596	31,497,796
Common stock, shares outstanding (in shares)	31,497,596	31,497,796

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

Goodwill was comprised of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	Carrying Amount
Balance as of December 31, 2021	$	27,795

Foreign currency translation adjustments	(1,446)
Balance as of December 31, 2022	26,349

Foreign currency translation adjustments	362
Balance as of March 31, 2023	$	26,711

Intangible assets, net consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Developed technology	$	6,987	$	6,893
Customer relationships - Non-Robotic Process Automation (“RPA”)	838		827
Customer relationships - RPA	250		246
Intangible assets, gross	8,075		7,966
Less: accumulated amortization	(3,125)		(2,715)
Intangible assets, net	$	4,950	$	5,251

Intangible amortization expense was $0.4 million for each of the three months ended March 31, 2023 and 2022. As of March 31, 2023, the weighted average remaining amortization periods for developed technology, non-RPA customer relationships, and RPA customer relationships were approximately 3.2 years, 8.4 years, and 6.8 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of March 31, 2023:


	Projected Amortization
2023 (excluding the three months ended March 31, 2023)	$	1,118
2024	1,491
2025	1,186
2026	763
2027	94

Thereafter	298
Total projected amortization expense	$	4,950

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

8. Debt

Senior Secured Credit Facilities Credit Agreement

We have a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) which provides for a five-year term loan facility in an aggregate principal amount of $120.0 million and, in addition, up to $60.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $15.0 million and a swingline sub-facility in the aggregate availability amount of $10.0 million (as a sublimit of the revolving loan facility). On February 21, 2023, we executed the second amendment to the credit agreement which increased the aggregate principal amount of the term loan facility by $30.0 million and the limit of the revolving credit facility by $15.0 million. The Credit Agreement matures on November 3, 2027. We will use the proceeds from the $150.0 million term loan to fund the continued growth of our business and support our working capital requirements.

Under the agreement, we may elect whether amounts drawn bear interest on the outstanding principal amount at a rate per annum equal to either (a) the higher of the Prime rate or the Federal Funds Effective (“Base Rate”) rate plus 0.50% or (b) the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”). An additional interest rate margin is added to the elected interest rates. During the first three years of the Credit Agreement, the additional interest rate margin ranges from 1.50% to 2.50% in the case of Base Rate advances or from 2.50% to 3.50% in the case of Term SOFR advances, depending on our debt to recurring revenue leverage ratio (as defined in the Credit Agreement). During the final two years of the Credit Agreement, the interest rate margin ranges from 0.5% to 2.5% in the case of Base Rate advances and from 1.5% to 3.5% in the case of Term SOFR advances, depending on our debt to consolidated adjusted EBITDA leverage ratio (as defined in the Credit Agreement).

In addition, the Credit Agreement contains other customary representations, warranties and covenants, including covenants by us limiting additional indebtedness, guaranties, liens, fundamental changes, mergers and consolidations, dispositions of assets, investments, paying dividends on capital stock or redeeming, repurchasing or retiring capital stock, or prepaying certain junior indebtedness and preferred stock, certain corporate changes, and transactions with affiliates. The Credit Agreement also provides for customary events of default, including but not limited to, non-payment, breaches or defaults in the performance of covenants, insolvency, bankruptcy, and the occurrence of a material adverse effect on us.

The following table summarizes outstanding debt balances (in thousands):


	As of
	March 31, 2023		December 31, 2022
Borrowings under revolving credit facility expiring November 3, 2027	$	62,000	$	—
Secured term loan facility	148,625		119,375
Less: Debt issuance costs	(1,465)		(1,256)
Total debt, net of debt issuance costs	$	209,160	$	118,119

Debt, current	$	65,432	$	2,740
Long-term debt, net of current portion	143,728		115,379
Total debt	$	209,160	$	118,119

We were in compliance with all covenants contained in the Credit Agreement. We believe, based on our current financial forecasts and trends, that we will remain compliant with all covenants for the foreseeable future. As of March 31, 2023, we had $62.0 million outstanding under our $75.0 million revolving credit facility, and we had outstanding letters of credit totaling $12.0 million in connection with securing our leased office space.

As discussed in Note 2, in March 2023 SVB, the lead lender of our Credit Agreement, was placed into receivership by the FDIC and subsequently purchased by First Citizens. Under the purchase and assumption agreement, First Citizens assumed SVB’s obligations under our existing credit facility. None of the terms of our Credit Agreement were amended or otherwise impacted by First Citizen’s acquisition of SVB.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 8,075	$ 7,966
Less: accumulated amortization	(3,125)	(2,715)
Intangible assets, net	4,950	5,251
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,987	6,893
Customer relationships - Non-Robotic Process Automation (“RPA”)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	838	827
Customer relationships - RPA
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 250	$ 246

Debt - Additional Information (Details) - USD ($)		3 Months Ended
Debt - Additional Information (Details) - USD ($)	Nov. 03, 2022	Mar. 31, 2023	Feb. 21, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Outstanding letters of credit		$ 12,000,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		60,000,000
Line of Credit \| Base Rate \| Minimum
Line of Credit Facility [Line Items]
Interest rate margin	1.50%
Line of Credit \| Base Rate \| Minimum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin	0.50%
Line of Credit \| Base Rate \| Maximum
Line of Credit Facility [Line Items]
Interest rate margin	2.50%
Line of Credit \| Base Rate \| Maximum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin	2.50%
Line of Credit \| SOFR \| Minimum
Line of Credit Facility [Line Items]
Interest rate margin	2.50%
Line of Credit \| SOFR \| Minimum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin	1.50%
Line of Credit \| SOFR \| Maximum
Line of Credit Facility [Line Items]
Interest rate margin	3.50%
Line of Credit \| SOFR \| Maximum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin	3.50%
Line of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		75,000,000
Long-term debt		$ 62,000,000		$ 0
Term Loan Facility \| Secured Debt
Line of Credit Facility [Line Items]
Debt term		5 years
Aggregate principal amount		$ 120,000,000	$ 30,000,000
Proceeds from long term debt		150,000,000
Term Loan Facility \| Secured Debt \| Base Rate
Line of Credit Facility [Line Items]
Interest rate margin	0.50%
Revolving Credit Facility \| Line of Credit
Line of Credit Facility [Line Items]
Line of credit facility, additional borrowing capacity			$ 15,000,000
Letter of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		15,000,000
Swingline Sub-facility \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000

Revenue - Revenue by Services (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 135,235	$ 114,266
Subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	98,957	83,720
Cloud subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	69,692	53,379
Term license subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	23,151	24,707
Maintenance and support
Disaggregation of Revenue [Line Items]
Total revenue	6,114	5,634
Professional services
Disaggregation of Revenue [Line Items]
Total revenue	$ 36,278	$ 30,546

- Definition

+ References

+ Details

Basic and Diluted Loss per Share (Details) - shares	3 Months Ended
Basic and Diluted Loss per Share (Details) - shares	Mar. 31, 2023	Mar. 31, 2022
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	2,678,476	2,128,943
Non-vested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	1,190,286	1,340,037

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (36,829)	$ (23,154)
Adjustments to reconcile net loss to net cash used by operating activities
Stock-based compensation	11,056	6,943
Depreciation and amortization	2,342	1,773
Bad debt expense	120	(2)
Amortization of debt issuance costs	70	0
Deferred income taxes	357	(1,073)
Changes in assets and liabilities
Accounts receivable	17,609	8,416
Prepaid expenses and other assets	(8,803)	(3,579)
Deferred commissions	(314)	(1,383)
Accounts payable and accrued expenses	(1,878)	2,338
Accrued compensation and related benefits	(9,369)	(6,798)
Other current and non-current liabilities	1,582	129
Deferred revenue	(2,177)	(3,764)
Operating lease assets and liabilities	969	(450)
Net cash used by operating activities	(25,265)	(20,604)
Cash flows from investing activities
Purchases of investments	(24,184)	(16,240)
Proceeds from investments	16,289	21,729
Purchases of property and equipment	(4,421)	(3,390)
Net cash (used by) provided by investing activities	(12,316)	2,099
Cash flows from financing activities
Proceeds from borrowings	92,000	0
Debt repayments	(750)	0
Payments for debt issuance costs	(278)	0
Payments for employee taxes related to the net share settlement of equity awards	(2,959)	0
Proceeds from exercise of common stock options	131	24,404
Net cash provided by financing activities	88,144	24,404
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	15	40
Net increase in cash, cash equivalents, and restricted cash	50,578	5,939
Cash, cash equivalents, and restricted cash at beginning of period	150,381	103,960
Cash, cash equivalents, and restricted cash at end of period	200,959	109,899
Supplemental disclosure of cash flow information
Cash paid for interest	1,233	78
Cash paid for income taxes	284	197
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures	$ 2,233	$ 0

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
ROU assets for operating leases	$ 35,425	$ 37,248
Operating lease liabilities, current	8,980	8,681
Operating lease liabilities, net of current portion	56,073	57,225
Total operating lease liabilities	$ 65,053	$ 65,906
Weighted average remaining lease term (in years)	8 years 2 months 12 days	8 years 4 months 24 days
Weighted average discount rate	9.40%	9.40%

Accrued Expenses

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Hosting costs	$	3,393	$	2,802
Legal costs	1,682		475
Marketing and tradeshow expenses	836		1,000
Third party license fees	799		1,223
Contract labor costs	1,527		1,465
Reimbursable employee expenses	854		1,004

Audit and tax expenses	1,393		911
Capital expenditures	2,233		744
Other accrued expenses	2,656		2,603
Total	$	15,373	$	12,227

Debt - Outstanding Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Less: Debt issuance costs	$ (1,465)	$ (1,256)
Total debt, net of debt issuance costs	209,160	118,119
Debt, current	65,432	2,740
Long-term debt, net of current portion	143,728	115,379
Secured Debt \| Secured Term Loan Facility
Line of Credit Facility [Line Items]
Long-term debt	148,625	119,375
Revolving Credit Facility \| Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 62,000	$ 0

Property and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, net

Property and equipment, net consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Leasehold improvements	$	50,973	$	45,959
Office furniture and fixtures	3,698		3,476
Computer hardware	9,326		9,689
Computer software	820		1,353
Equipment	188		242
Property and equipment, gross	65,005		60,719
Less: accumulated depreciation	(19,128)		(18,864)
Property and equipment, net	$	45,877	$	41,855

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2.0	$ 1.4
Disposal of property plant and equipment	$ 1.4	$ 0.0

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease cost	$ 2,146	$ 1,634
Short-term lease cost	365	88
Variable lease cost	1,026	973
Total	$ 3,537	$ 2,695

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue
Total revenue	$ 135,235	$ 114,266
Cost of revenue
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)	(23,866)
Other non-operating expense
Other (income) expense, net	(2,690)	787
Interest expense	3,118	74
Total other non-operating expense	428	861
Loss before income taxes	(35,694)	(24,727)
Income tax expense (benefit)	1,135	(1,573)
Net loss	$ (36,829)	$ (23,154)
Net loss per share:
Basic (in usd per share)	$ (0.51)	$ (0.32)
Diluted (in usd per share)	$ (0.51)	$ (0.32)
Weighted average common shares outstanding:
Basic (in shares)	72,869	72,217
Diluted (in shares)	72,869	72,217
Subscriptions
Revenue
Total revenue	$ 98,957	$ 83,720
Cost of revenue
Total cost of revenue	10,448	8,206
Professional services
Revenue
Total revenue	36,278	30,546
Cost of revenue
Total cost of revenue	$ 25,645	$ 22,710

Stock-Based Compensation - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Non-vested restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to unvested restricted stock units	$ 55.2
Weighted average remaining vesting period (in years)	1 year 6 months
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost related to nonvested stock options not yet recognized	$ 14.7
Chief Executive Officer \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested stock option recognized over weighted average period (in years)	2 years 10 months 24 days

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Services

The following table summarizes revenue recorded during the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Cloud subscriptions	$	69,692	$	53,379
Term license subscriptions	23,151		24,707
Maintenance and support	6,114		5,634
Total subscriptions	98,957		83,720
Professional services	36,278		30,546
Total revenue	$	135,235	$	114,266

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Hosting costs	$ 3,393	$ 2,802
Legal costs	1,682	475
Marketing and tradeshow expenses	836	1,000
Third party license fees	799	1,223
Contract labor costs	1,527	1,465
Reimbursable employee expenses	854	1,004
Audit and tax expenses	1,393	911
Capital expenditures	2,233	744
Other accrued expenses	2,656	2,603
Total	$ 15,373	$ 12,227

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

4. Leases

As of March 31, 2023, our lease portfolio consists entirely of operating leases, most of which are for corporate offices. Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

Lease Costs

Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as maintenance costs, utilities, and service charges, are not included in right-of-use (“ROU”) assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense.

The following table sets forth the components of lease expense for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	2,146	$	1,634
Short-term lease cost	365		88
Variable lease cost	1,026		973
Total	$	3,537	$	2,695

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of March 31, 2023 and December 31, 2022 is presented in the following table (in thousands, except for lease term and discount rate):


	March 31, 2023			December 31, 2022
ROU assets for operating leases	$	35,425		$	37,248

Operating lease liabilities, current	$	8,980		$	8,681
Operating lease liabilities, net of current portion	56,073			57,225
Total operating lease liabilities	$	65,053		$	65,906

Weighted average remaining lease term (in years)	8.2			8.4

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the three months ended March 31, 2023 and 2022 is shown below (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating cash outflows for operating leases	$	1,132	$	2,085

Amortization of operating lease ROU assets	652		306
Interest expense on operating lease liabilities	1,495		1,321

A summary of our future minimum lease commitments under non-cancellable leases as of March 31, 2023 is shown below (in thousands):


	Operating Leases
2023 (excluding the three months ended March 31, 2023)	$	6,830
2024	10,927
2025	11,408
2026	11,664
2027	11,838

Thereafter	42,504
Total lease payments	95,171
Less: imputed interest	(30,118)
Total	$	65,053

Segment and Geographic Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment and Geographic Information

13. Segment and Geographic Information

We operate one operating and reportable segment, representing our consolidated business that helps organizations build applications and workflows rapidly with our low-code platform to maximize their resources and improve business results. Our reportable segment determination is based on our management and internal reporting structure, the nature of the subscriptions and services we offer, and the financial information that is evaluated regularly by our chief operation decision maker.

The following table summarizes revenue by geography for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Domestic	$	90,005	$	76,039
International	45,230		38,227
Total	$	135,235	$	114,266

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. There were no individual foreign countries from which more than 10% of our total revenue was attributable for the three months ended March 31, 2023 or 2022. Substantially all of our long-lived assets were held in the United States as of March 31, 2023 and December 31, 2022.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Investments and Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment income, interest	$ 2,100,000	$ 100,000
Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	$ 0	$ 0

Property and Equipment, net

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

6. Property and Equipment, net

Property and equipment, net consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	As of
	March 31, 2023		December 31, 2022
Leasehold improvements	$	50,973	$	45,959
Office furniture and fixtures	3,698		3,476
Computer hardware	9,326		9,689
Computer software	820		1,353
Equipment	188		242
Property and equipment, gross	65,005		60,719
Less: accumulated depreciation	(19,128)		(18,864)
Property and equipment, net	$	45,877	$	41,855

Depreciation expense totaled $2.0 million and $1.4 million for the three months ended March 31, 2023 and 2022, respectively. We disposed of or retired $1.4 million worth of fully depreciated property and equipment during the three months ended March 31, 2023. There were no disposals or retirements during the three months ended March 31, 2022.

Investments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Components of Investments

The components of our investments as of March 31, 2023 are as follows (in thousands):


	As of March 31, 2023
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Money market fund	Level 1	$	94,081	$	—	$	94,081	$	94,081	$	—
U.S. Treasury bonds	Level 1	12,149		25		12,174		—		12,174
Commercial paper	Level 2	38,708		—		38,708		—		38,708
Corporate bonds	Level 2	2,490		(1)		2,489		—		2,489
Agency bonds	Level 2	2,432		—		2,432		—		2,432
Total investments		$	149,860	$	24	$	149,884	$	94,081	$	55,803

At December 31, 2022, our investments consisted of the following (in thousands):


	As of December 31, 2022
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Money market fund	Level 1	$	39,469	$	—	$	39,469	$	39,469	$	—
U.S. Treasury bonds	Level 1	9,396		(13)		9,383		—		9,383
Commercial paper	Level 2	26,704		—		26,704		—		26,704
Corporate bonds	Level 2	9,353		(12)		9,341		—		9,341
Agency bonds	Level 2	2,432		3		2,435		—		2,435
Total investments		$	87,354	$	(22)	$	87,332	$	39,469	$	47,863

Schedule of Amortized Cost Basis and Fair Value of Debt Securities by Contractual Maturity

The amortized cost basis and fair value of debt securities as of March 31, 2023, by contractual maturity, are as follows (in thousands):


	As of March 31, 2023
	Cost Basis		Fair Value
Due in one year or less	$	149,860	$	149,884

Total investments	$	149,860	$	149,884

Organization and Description of Business	3 Months Ended
Organization and Description of Business	Mar. 31, 2023
Accounting Policies [Abstract]
Organization and Description of Business	1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) is a software company that automates business processes. The Appian Platform includes everything you need to design, automate, and optimize even the most complex processes from start to finish. The world's most innovative organizations trust Appian to improve their workflows, unify data, and optimize operations—resulting in better growth and superior customer experiences. We are headquartered in McLean, Virginia and operate both in the U.S. and internationally, including Australia, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

Segment and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Revenue By Geography

The following table summarizes revenue by geography for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Domestic	$	90,005	$	76,039
International	45,230		38,227
Total	$	135,235	$	114,266

Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments and Fair Value Measurements

14. Investments and Fair Value Measurements

Fair Value Measurements

•Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3. Unobservable inputs for which there is little or no market data and which require us to develop our own estimates and assumptions reflecting those that a market participant would use.

The valuation techniques that may be used to measure fair value are as follows:

•Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts; and

•Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost).

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of March 31, 2023 and December 31, 2022 because of the relatively short duration of these instruments. Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to the then market rates.

Investments

Our investment portfolio consists largely of debt investments classified as available-for-sale. Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, are recorded in Other comprehensive income (loss). The components of our investments as of March 31, 2023 are as follows (in thousands):


	As of March 31, 2023
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Money market fund	Level 1	$	94,081	$	—	$	94,081	$	94,081	$	—
U.S. Treasury bonds	Level 1	12,149		25		12,174		—		12,174
Commercial paper	Level 2	38,708		—		38,708		—		38,708
Corporate bonds	Level 2	2,490		(1)		2,489		—		2,489
Agency bonds	Level 2	2,432		—		2,432		—		2,432
Total investments		$	149,860	$	24	$	149,884	$	94,081	$	55,803

At December 31, 2022, our investments consisted of the following (in thousands):


	As of December 31, 2022
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Money market fund	Level 1	$	39,469	$	—	$	39,469	$	39,469	$	—
U.S. Treasury bonds	Level 1	9,396		(13)		9,383		—		9,383
Commercial paper	Level 2	26,704		—		26,704		—		26,704
Corporate bonds	Level 2	9,353		(12)		9,341		—		9,341
Agency bonds	Level 2	2,432		3		2,435		—		2,435
Total investments		$	87,354	$	(22)	$	87,332	$	39,469	$	47,863

There were no Level 3 assets held at any point during the three months ended March 31, 2023 and 2022. Additionally, there were no transfers between Levels 1 and 2 during the three months ended March 31, 2023 and 2022. Interest income on our investments totaled $2.1 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively.

The amortized cost basis and fair value of debt securities as of March 31, 2023, by contractual maturity, are as follows (in thousands):


	As of March 31, 2023
	Cost Basis		Fair Value
Due in one year or less	$	149,860	$	149,884

Total investments	$	149,860	$	149,884

Actual maturities may differ from the contractual maturities in the table above because borrowers have the right to call or prepay certain obligations.

Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Accounting Policies

2. Accounting Policies

Basis of Presentation

Use of Estimates

Principles of Consolidation

Revenue Recognition

Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams.

Cost of Revenue

Subscriptions

Professional Services

Concentration of Credit and Customer Risk

With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. Revenue generated from government agencies represented 20.5% and 18.1% of our revenue for the three months ended March 31, 2023 and 2022, respectively, of which the top three U.S. federal government agencies generated 4.2% and 4.6% of our revenue for the three months ended March 31, 2023 and 2022, respectively. Additionally, 33.4% and 33.5% of our revenue during the three months ended March 31, 2023 and 2022, respectively, was generated from foreign customers.

Cash, Cash Equivalents, and Restricted Cash

The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands):


	As of
	March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
Cash and cash equivalents	$	198,679	$	148,132	$	106,795	$	100,796
Restricted cash, current	2,280		2,249		776		791
Restricted cash, net of current portion	—		—		2,328		2,373
Total cash, cash equivalents, and restricted cash	$	200,959	$	150,381	$	109,899	$	103,960

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit losses on our receivables. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. The allowance for doubtful accounts totaled $2.2 million and $2.1 million as of March 31, 2023 and December 31, 2022, respectively.

Assets Recognized from the Costs to Obtain a Contract with a Customer

Amortization associated with deferred commission is recorded to sales and marketing expense in our consolidated statements of operations. Total commission expense was $11.0 million and $8.2 million for the three months ended March 31, 2023 and 2022, respectively.

Property and Equipment

The following table outlines the useful lives of our major asset categories:


Asset Category						Useful Life (in years)
Computer software						3
Computer hardware						3
Equipment						5
Office furniture and fixtures						10
Leasehold improvements						(a)

(a) Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Recent Accounting Pronouncements

Adopted

We did not adopt any new accounting guidance in 2023 that had a material impact on our condensed consolidated financial statements or disclosures.

Not Yet Adopted

There is no pending accounting guidance that we expect to have a material impact on our condensed consolidated financial statements or disclosures.

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022
Income Taxes [Line Items]
Effective tax rate	(3.20%)	6.40%
Discrete tax benefit related to release of valuation allowance	$ 1.1
Net unrecognized tax benefits which would impact effective tax rate if recognized	$ 4.5
Minimum \| Subsidiaries
Income Taxes [Line Items]
Effective tax rate	0.00%
Maximum \| Subsidiaries
Income Taxes [Line Items]
Effective tax rate	35.00%

Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (excluding the three months ended March 31, 2023)	$ 1,118
2024	1,491
2025	1,186
2026	763
2027	94
Thereafter	298
Intangible assets, net	$ 4,950	$ 5,251

Basic and Diluted Loss per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Basic and Diluted Loss per Share

11. Basic and Diluted Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share is computed similar to basic, except the weighted average number of common shares outstanding is increased to include additional outstanding shares from the assumed exercise of stock options and vesting of RSUs, if dilutive. The dilutive effect, if any, of convertible shares is calculated using the treasury stock method. As we reported net losses for all periods presented, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised.


	Three Months Ended March 31,
	2023	2022
Stock options	2,678,476	2,128,943
Non-vested restricted stock units	1,190,286	1,340,037

Accounting Policies - Property and Equipment, Useful Life (Details)	3 Months Ended
	Mar. 31, 2023
Computer software
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life (in years)	3 years
Computer hardware
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life (in years)	3 years
Equipment
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life (in years)	5 years
Office furniture and fixtures
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life (in years)	10 years

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Components of Lease Expense

The following table sets forth the components of lease expense for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	2,146	$	1,634
Short-term lease cost	365		88
Variable lease cost	1,026		973
Total	$	3,537	$	2,695

Schedule of Supplemental Balance Sheet Information


	March 31, 2023			December 31, 2022
ROU assets for operating leases	$	35,425		$	37,248

Operating lease liabilities, current	$	8,980		$	8,681
Operating lease liabilities, net of current portion	56,073			57,225
Total operating lease liabilities	$	65,053		$	65,906

Weighted average remaining lease term (in years)	8.2			8.4

Weighted average discount rate	9.4		%	9.4		%

Schedule of Supplemental Cash Flow Information

Supplemental cash flow and expense information related to operating leases for the three months ended March 31, 2023 and 2022 is shown below (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating cash outflows for operating leases	$	1,132	$	2,085

Amortization of operating lease ROU assets	652		306
Interest expense on operating lease liabilities	1,495		1,321

Schedule of Maturities of Operating Lease Liabilities

A summary of our future minimum lease commitments under non-cancellable leases as of March 31, 2023 is shown below (in thousands):


	Operating Leases
2023 (excluding the three months ended March 31, 2023)	$	6,830
2024	10,927
2025	11,408
2026	11,664
2027	11,838

Thereafter	42,504
Total lease payments	95,171
Less: imputed interest	(30,118)
Total	$	65,053

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Operating Leases
2023 (excluding the three months ended March 31, 2023)	$ 6,830
2024	10,927
2025	11,408
2026	11,664
2027	11,838
Thereafter	42,504
Total lease payments	95,171
Less: imputed interest	(30,118)
Total	$ 65,053	$ 65,906