0001441683-23-000093 | 10-Q | XBRL Viewer

Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

3. Revenue

Revenue Recognition

The following table summarizes revenue recorded during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cloud subscriptions	$	77,247	$	60,621	$	221,381	$	171,083
Term license subscriptions	20,026		19,773		56,176		58,543
Maintenance and support	6,530		6,126		18,997		17,282
Total subscriptions	103,803		86,520		296,554		246,908
Professional services	33,291		31,356		103,490		95,297
Total revenue	$	137,094	$	117,876	$	400,044	$	342,205

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 and nine months ended September 30, 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

2023 and December 31, 2022, contract assets of $12.1 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 nine months ended September 30, 2023, we recognized $177.9 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 September 30, 2023, we had an aggregate transaction price of $391.9 million allocated to unsatisfied performance obligations. We expect to recognize $262.4 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.

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+ Details

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment and Geographic Information (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) segment	Sep. 30, 2022 USD ($)
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	$ 137,094	$ 117,876	$ 400,044	$ 342,205
Domestic
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	88,743	81,004	257,442	228,610
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 48,351	$ 36,872	$ 142,602	$ 113,595

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (excluding the nine months ended September 30, 2023)	$ 363
2024	1,451
2025	1,154
2026	743
2027	91
Thereafter	290
Intangible assets, net	$ 4,092	$ 5,251

Revenue - Revenue by Services (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 137,094	$ 117,876	$ 400,044	$ 342,205
Subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	103,803	86,520	296,554	246,908
Cloud subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	77,247	60,621	221,381	171,083
Term license subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	20,026	19,773	56,176	58,543
Maintenance and support
Disaggregation of Revenue [Line Items]
Total revenue	6,530	6,126	18,997	17,282
Professional services
Disaggregation of Revenue [Line Items]
Total revenue	$ 33,291	$ 31,356	$ 103,490	$ 95,297

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

The following table details the changes in goodwill during the nine months ended September 30, 2023 and fiscal year ended 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	(358)
Balance as of September 30, 2023	$	25,991

Intangible assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Developed technology	$	6,799	$	6,893
Customer relationships - Process mining and RPA	911		1,073

Intangible assets, gross	7,710		7,966
Less: accumulated amortization	(3,618)		(2,715)
Intangible assets, net	$	4,092	$	5,251

Intangible amortization expense was $0.4 million and $1.1 million for the three and nine months ended September 30, 2023, respectively. Intangible amortization expense was $0.4 million and $1.1 million for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, the weighted average remaining amortization periods for developed technology, process mining customer relationships, and RPA customer relationships were approximately 2.7 years, 7.9 years, and 6.3 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of September 30, 2023 (in thousands):


	Projected Amortization
2023 (excluding the nine months ended September 30, 2023)	$	363
2024	1,451
2025	1,154
2026	743
2027	91

Thereafter	290
Total projected amortization expense	$	4,092

Basic and Diluted Loss per Share (Details) - shares	3 Months Ended		9 Months Ended
Basic and Diluted Loss per Share (Details) - shares	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	2,611,247	2,733,884	2,611,247	2,733,884
Non-vested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	1,133,039	1,419,174	1,133,039	1,419,174

Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Accounting Policies

2. Accounting Policies

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 unaudited 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.

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 established against deferred tax assets, the amortization of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance (see Note 12), 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.

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

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.

Concentration of Credit and Customer Risk

Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, accounts receivable, and our short- and long-term investments. Deposits held with banks may exceed the amount of insurance provided on such deposits; however, we believe the financial institutions holding our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances.

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 21.1% and 20.6% of our revenue for the three and nine months ended September 30, 2023, respectively, of which the top three U.S. federal government agencies generated 4.6% and 4.3% of our revenue for the three and nine months ended September 30, 2023, respectively. Additionally, 35.3% and 35.6% of our revenue during the three and nine months ended September 30, 2023, respectively, was generated from international customers. Revenue generated from government agencies represented 21.2% and 19.2% of our revenue for the three and nine months ended September 30, 2022, respectively, of which the top three U.S. federal government agencies generated 5.5% and 4.8% of our revenue for the three and nine months ended September 30, 2022, respectively. Additionally, 31.3% and 33.2% of our revenue during the three and nine months ended September 30, 2022, respectively, was generated from international customers. No single end-customer accounted for more than 10% of our total revenue in the three and nine months ended September 30, 2023 or 2022.

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 on August 11, 2023.

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
	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Cash and cash equivalents	$	130,761	$	148,132	$	51,802	$	100,796
Restricted cash, current	—		2,249		2,053		791
Restricted cash, net of current portion	—		—		—		2,373
Total cash, cash equivalents, and restricted cash	$	130,761	$	150,381	$	53,855	$	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 $2.3 million and $2.1 million as of September 30, 2023 and December 31, 2022, respectively.

Deferred Commissions

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 an existing customer 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. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. 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. We also capitalize the incremental payroll taxes 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 commissions is recorded to sales and marketing expense in our consolidated statements of operations. Total commission expense was $11.3 million and $33.5 million for the three and nine months ended September 30, 2023, respectively. Total commission expense was $9.5 million and $26.5 million for the three and nine months ended September 30, 2022, respectively.

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:


						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.

Severance Costs

During the first and second quarter of 2023, we incurred severance costs related to involuntary reductions in our workforce designed to right-size our employee base and improve operations. No such similar actions occurred during the three months ended September 30, 2023. Severance costs in the first and second quarter totaled $6.3 million. The majority of the costs incurred will be paid to the impacted employees by December 31, 2023.

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.

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Renewal term	10 years		10 years
Sublease income	$ 0.3		$ 1.0
Reimbursements received for tenant improvements	$ 1.0	$ 0.0	$ 2.6	$ 2.0

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, 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	(116,503)
Ending balance (in shares) at Sep. 30, 2022		72,540,895
Ending balance at Sep. 30, 2022	172,942	$ 7	549,760	(2,790)	(374,035)
Beginning balance (in shares) at Mar. 31, 2022		72,327,360
Beginning balance at Mar. 31, 2022	242,756	$ 7	528,475	(5,041)	(280,685)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(49,354)				(49,354)
Issuance of common stock to directors (in shares)		2,565
Vesting of restricted stock units (in shares)		52,634
Exercise of stock options (in shares)		61,955
Exercise of stock options	626		626
Stock-based compensation expense	9,148		9,148
Other comprehensive income (loss)	1,884			1,884
Ending balance (in shares) at Jun. 30, 2022		72,444,514
Ending balance at Jun. 30, 2022	205,060	$ 7	538,249	(3,157)	(330,039)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(43,996)				(43,996)
Issuance of common stock to directors (in shares)		4,613
Vesting of restricted stock units (in shares)		67,164
Exercise of stock options (in shares)		24,604
Exercise of stock options	175		175
Stock-based compensation expense	11,336		11,336
Other comprehensive income (loss)	367			367
Ending balance (in shares) at Sep. 30, 2022		72,540,895
Ending balance at Sep. 30, 2022	172,942	$ 7	549,760	(2,790)	(374,035)
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)
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	(101,435)
Ending balance (in shares) at Sep. 30, 2023		73,224,030
Ending balance at Sep. 30, 2023	68,101	$ 7	588,029	(10,049)	(509,886)
Beginning balance (in shares) at Mar. 31, 2023		72,955,379
Beginning balance at Mar. 31, 2023	116,399	$ 7	569,618	(7,946)	(445,280)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(42,355)				(42,355)
Issuance of common stock to directors (in shares)		4,928
Vesting of restricted stock units (in shares)		99,836
Vesting of restricted stock units	(1,816)		(1,816)
Exercise of stock options (in shares)		53,190
Exercise of stock options	428		428
Stock-based compensation expense	11,148		11,148
Other comprehensive income (loss)	(3,172)			(3,172)
Ending balance (in shares) at Jun. 30, 2023		73,113,333
Ending balance at Jun. 30, 2023	80,632	$ 7	579,378	(11,118)	(487,635)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(22,251)				(22,251)
Issuance of common stock to directors (in shares)		3,936
Vesting of restricted stock units (in shares)		92,722
Vesting of restricted stock units	(2,465)		(2,465)
Exercise of stock options (in shares)		14,039
Exercise of stock options	105		105
Stock-based compensation expense	11,011		11,011
Other comprehensive income (loss)	1,069			1,069
Ending balance (in shares) at Sep. 30, 2023		73,224,030
Ending balance at Sep. 30, 2023	$ 68,101	$ 7	$ 588,029	$ (10,049)	$ (509,886)

Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 11,011	$ 11,336	$ 33,215	$ 27,427
Cost of revenue \| Subscriptions
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	211	284	713	712
Cost of revenue \| Professional services
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,535	1,401	4,598	3,788
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	3,245	2,667	8,462	6,721
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	2,930	3,454	9,466	8,831
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,090	$ 3,530	$ 9,976	$ 7,375

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

4. Leases

As of September 30, 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. We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands, exclusive of sublease income):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	2,359	$	1,708	$	6,650	$	4,968
Short-term lease cost	350		170		1,138		334
Variable lease cost	1,311		952		3,296		2,878
Total	$	4,020	$	2,830	$	11,084	$	8,180

Sublease income totaled $0.3 million and $1.0 million for the three and nine months ended September 30, 2023, respectively.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of September 30, 2023 and December 31, 2022 is presented in the following table (in thousands, except for lease term and discount rate):


	September 30, 2023			December 31, 2022
Right-of-use assets for operating leases	$	40,501		$	37,248

Operating lease liabilities, current	$	11,003		$	8,681
Operating lease liabilities, net of current portion	60,339			57,225
Total operating lease liabilities	$	71,342		$	65,906

Weighted average remaining lease term (in years)	7.7			8.4

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the three and nine months ended September 30, 2023 and 2022 is shown below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating cash outflows for operating leases	$	2,223	$	2,099	$	6,374	$	6,258

Amortization of operating lease right-of-use assets	693		364		1,936		995
Interest expense on operating lease liabilities	1,667		1,332		4,714		3,957

For the three and nine months ended September 30, 2023, TIA reimbursements totaled $1.0 million and $2.6 million, respectively. There were no TIA reimbursements for the three months ended September 30, 2022, while TIA reimbursements totaled $2.0 million for the nine months ended September 30, 2022.

A summary of our future minimum lease commitments under non-cancellable operating leases as of September 30, 2023 is shown below (in thousands):


	Operating Leases
2023 (excluding the nine months ended September 30, 2023)	$	3,223
2024	13,269
2025	12,924
2026	13,245
2027	13,501

Thereafter	47,285
Total lease payments	103,447
Less: imputed interest	(32,105)
Total	$	71,342

Property and Equipment, net

9 Months Ended

Sep. 30, 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 September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Leasehold improvements	$	51,190	$	45,959
Office furniture and fixtures	3,804		3,476
Computer hardware	9,410		9,689
Computer software	820		1,353
Equipment	192		242
Property and equipment, gross	65,416		60,719
Less: accumulated depreciation	(22,972)		(18,864)
Property and equipment, net	$	42,444	$	41,855

Depreciation expense totaled $2.0 million and $5.9 million for the three and nine months ended September 30, 2023, respectively. Depreciation expense totaled $1.4 million and $4.2 million for the three and nine months ended September 30, 2022, respectively. We had no disposals or retirements during the three months ended September 30, 2023 and disposed of $1.4 million worth of fully depreciated property and equipment during the nine months ended September 30, 2023. There were no disposals or retirements during the three and nine months ended September 30, 2022.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Allowance for doubtful accounts	$ 2,268	$ 2,125
Accumulated depreciation	22,972	18,864
Finite-lived intangible assets, accumulated amortization	$ 3,618	$ 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)	41,726,634	41,320,091
Common stock, shares outstanding (in shares)	41,726,634	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)	31,497,396	31,497,796
Common stock, shares outstanding (in shares)	31,497,396	31,497,796

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of revenue
Subscriptions	$	211	$	284	$	713	$	712
Professional services	1,535		1,401		4,598		3,788
Operating expenses
Sales and marketing	3,245		2,667		8,462		6,721
Research and development	2,930		3,454		9,466		8,831
General and administrative	3,090		3,530		9,976		7,375
Total stock-based compensation expense	$	11,011	$	11,336	$	33,215	$	27,427

Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Components of Investments

The components of our investments as of September 30, 2023 are as follows (in thousands):


	As of September 30, 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	$	21,034	$	—	$	21,034	$	21,034	$	—
U.S. Treasury bonds	Level 1	17,002		(10)		16,992		—		16,992
Commercial paper	Level 2	12,042		—		12,042		—		12,042

Agency bonds	Level 2	9,694		(2)		9,692		—		9,692
Total investments		$	59,772	$	(12)	$	59,760	$	21,034	$	38,726

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 September 30, 2023, by contractual maturity, are as follows (in thousands):


	As of September 30, 2023
	Cost Basis		Fair Value
Due in one year or less	$	59,772	$	59,760

Total investments	$	59,772	$	59,760

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 50
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-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (101,435)	$ (116,503)
Adjustments to reconcile net loss to net cash used by operating activities
Stock-based compensation	33,215	27,427
Depreciation expense and amortization of intangible assets	7,046	5,332
Bad debt expense	690	561
Amortization of debt issuance costs	342	0
Deferred income taxes	(808)	(1,549)
Changes in assets and liabilities
Accounts receivable	30,665	(9,114)
Prepaid expenses and other assets	(61,555)	(6,723)
Deferred commissions	(56)	(5,715)
Accounts payable and accrued expenses	(657)	(3,654)
Accrued compensation and related benefits	(6,671)	1,634
Other current and non-current liabilities	(2,026)	(383)
Deferred revenue	(3,186)	15,414
Operating lease assets and liabilities	2,238	(685)
Net cash used by operating activities	(102,198)	(93,958)
Cash flows from investing activities
Purchases of investments	(53,443)	(31,214)
Proceeds from investments	62,590	57,417
Purchases of property and equipment	(8,278)	(5,861)
Net cash provided by investing activities	869	20,342
Cash flows from financing activities
Proceeds from borrowings	92,000	0
Debt repayments	(2,625)	0
Payments for debt issuance costs	(411)	0
Payments for employee taxes related to the net share settlement of equity awards	(7,240)	0
Proceeds from exercise of common stock options	664	25,205
Net cash provided by financing activities	82,388	25,205
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(679)	(1,694)
Net decrease in cash, cash equivalents, and restricted cash	(19,620)	(50,105)
Cash, cash equivalents, and restricted cash at beginning of period	150,381	103,960
Cash, cash equivalents, and restricted cash at end of period	130,761	53,855
Supplemental disclosure of cash flow information
Cash paid for interest	11,960	243
Cash paid for income taxes	2,944	749
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures	$ 27	$ 317

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 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 and nine months ended September 30, 2023, the actual effective tax rates were (0.8)% and (2.2)%, respectively. For the three and nine months ended September 30, 2022, the actual effective tax rates were (0.6)% and 0.8%, respectively. The tax benefit recognized in the nine months ended September 30, 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 our German subsidiaries. As of September 30, 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 on 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
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
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+ Details

Basic and Diluted Loss per Share (Tables)

9 Months Ended

Sep. 30, 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:


	Three and Nine Months Ended September 30,
	2023	2022
Stock options	2,611,247	2,733,884
Non-vested restricted stock units	1,133,039	1,419,174

Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Aug. 11, 2023	Dec. 31, 2022	Sep. 28, 2022
Summary Of Significant Accounting Policies [Line Items]
Percentage of restricted cash balance (as a percent)						75.00%		25.00%
Allowance for doubtful accounts	$ 2,268			$ 2,268			$ 2,125
Capitalized contract cost, amortization period (in years)	5 years			5 years
Commission expense	$ 11,300	$ 9,500		$ 33,500	$ 26,500
Severance costs			$ 6,300
Sales Revenue, Net \| Customer Concentration Risk \| Government Agencies
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	21.10%	21.20%		20.60%	19.20%
Sales Revenue, Net \| Customer Concentration Risk \| Federal Government Agencies
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	4.60%	5.50%		4.30%	4.80%
Sales Revenue, Net \| Customer Concentration Risk \| Foreign Customers
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	35.30%	31.30%		35.60%	33.20%

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2023	Oct. 30, 2023
Document and Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 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	Q3
Amendment Flag	false
Class A Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		41,730,705
Class B Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		31,497,396

Accounting Policies (Tables)

9 Months Ended

Sep. 30, 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
	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Cash and cash equivalents	$	130,761	$	148,132	$	51,802	$	100,796
Restricted cash, current	—		2,249		2,053		791
Restricted cash, net of current portion	—		—		—		2,373
Total cash, cash equivalents, and restricted cash	$	130,761	$	150,381	$	53,855	$	103,960

Schedule of 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
	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Cash and cash equivalents	$	130,761	$	148,132	$	51,802	$	100,796
Restricted cash, current	—		2,249		2,053		791
Restricted cash, net of current portion	—		—		—		2,373
Total cash, cash equivalents, and restricted cash	$	130,761	$	150,381	$	53,855	$	103,960

Schedule of Property and Equipment

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


						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.

Property and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Leasehold improvements	$	51,190	$	45,959
Office furniture and fixtures	3,804		3,476
Computer hardware	9,410		9,689
Computer software	820		1,353
Equipment	192		242
Property and equipment, gross	65,416		60,719
Less: accumulated depreciation	(22,972)		(18,864)
Property and equipment, net	$	42,444	$	41,855

Revenue - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract assets balances	$ 12.1	$ 14.3
Revenue recognized	177.9
Performance obligations	391.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 262.4
Revenue, remaining performance obligation, period (in months)	12 months
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Cloud subscriptions contract term	1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Cloud subscriptions contract term	3 years

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This 2022 CEO option grant is our only stock-based award that vests based on the achievement of market conditions.

For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation and expense is 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 of our stock-based awards as they occur rather than estimating expected forfeitures. As of September 30, 2023, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $12.2 million and will be recognized over a weighted average period of 2.4 years. Total unrecognized compensation cost related to unvested RSUs was approximately $45.9 million, which will be recognized over a weighted average period of 1.4 years.

The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of revenue
Subscriptions	$	211	$	284	$	713	$	712
Professional services	1,535		1,401		4,598		3,788
Operating expenses
Sales and marketing	3,245		2,667		8,462		6,721
Research and development	2,930		3,454		9,466		8,831
General and administrative	3,090		3,530		9,976		7,375
Total stock-based compensation expense	$	11,011	$	11,336	$	33,215	$	27,427

Investments and Fair Value Measurements - Amortized Cost Basis and Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Cost Basis
Due in one year or less	$ 59,772
Cost Basis	59,772	$ 87,354
Fair Value
Due in one year or less	59,760
Market Value	$ 59,760	$ 87,332

Commitments, Contingencies and Other Matters	9 Months Ended
Commitments, Contingencies and Other Matters	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments, Contingencies and Other Matters	12. Commitments, Contingencies, and Other Matters Minimum Purchase Commitments We have 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 started July 2021 and is now in its third year as of September 30, 2023, 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 and nine months ended September 30, 2023 totaled $9.3 million and $27.8 million, respectively. Spending under this agreement for the three and nine months ended September 30, 2022 totaled $9.0 million and $24.8 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 exact 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. Judgment Preservation Insurance On September 1, 2023, we entered into a Judgment Preservation Insurance (“JPI”) policy in connection with our $2.036 billion judgment against Pegasystems. The total cost of the policy was $57.3 million comprised of the premium, a one-time broker fee, and Virginia lines tax, and provides up to $500.0 million of coverage. Total cost of the policy was capitalized and will be amortized on a straight-line basis over the estimated length of the appeals process. As of September 30, 2023, we estimate the length of the appeals process solely for amortization purposes to be approximately three years. Amortization expense associated with judgment preservation insurance premium is recorded to general and administrative expenses in our consolidated statements of operations. Judgment preservation insurance amortization expense was $1.5 million for the three and nine months ended September 30, 2023. As of September 30, 2023, $18.1 million is classified as ‘Prepaid expenses and other current assets’ and $37.7 million is classified as 'Other assets’ on our consolidated balance sheet. 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 (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Revenue By Geography

The following table summarizes revenue by geography for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Domestic	$	88,743	$	81,004	$	257,442	$	228,610
International	48,351		36,872		142,602		113,595
Total	$	137,094	$	117,876	$	400,044	$	342,205

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Expense

The following table sets forth the components of lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands, exclusive of sublease income):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	2,359	$	1,708	$	6,650	$	4,968
Short-term lease cost	350		170		1,138		334
Variable lease cost	1,311		952		3,296		2,878
Total	$	4,020	$	2,830	$	11,084	$	8,180

Schedule of Supplemental Balance Sheet Information


	September 30, 2023			December 31, 2022
Right-of-use assets for operating leases	$	40,501		$	37,248

Operating lease liabilities, current	$	11,003		$	8,681
Operating lease liabilities, net of current portion	60,339			57,225
Total operating lease liabilities	$	71,342		$	65,906

Weighted average remaining lease term (in years)	7.7			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 and nine months ended September 30, 2023 and 2022 is shown below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating cash outflows for operating leases	$	2,223	$	2,099	$	6,374	$	6,258

Amortization of operating lease right-of-use assets	693		364		1,936		995
Interest expense on operating lease liabilities	1,667		1,332		4,714		3,957

Schedule of Maturities of Operating Lease Liabilities

A summary of our future minimum lease commitments under non-cancellable operating leases as of September 30, 2023 is shown below (in thousands):


	Operating Leases
2023 (excluding the nine months ended September 30, 2023)	$	3,223
2024	13,269
2025	12,924
2026	13,245
2027	13,501

Thereafter	47,285
Total lease payments	103,447
Less: imputed interest	(32,105)
Total	$	71,342

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table details the changes in goodwill during the nine months ended September 30, 2023 and fiscal year ended 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	(358)
Balance as of September 30, 2023	$	25,991

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Developed technology	$	6,799	$	6,893
Customer relationships - Process mining and RPA	911		1,073

Intangible assets, gross	7,710		7,966
Less: accumulated amortization	(3,618)		(2,715)
Intangible assets, net	$	4,092	$	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 September 30, 2023 (in thousands):


	Projected Amortization
2023 (excluding the nine months ended September 30, 2023)	$	363
2024	1,451
2025	1,154
2026	743
2027	91

Thereafter	290
Total projected amortization expense	$	4,092

- Definition

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

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+ Details

Debt

9 Months Ended

Sep. 30, 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 $150.0 million and, in addition, up to $75.0 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). The Credit Agreement matures on November 3, 2027. We will use the proceeds from the $150.0 million term loan and access to the revolving credit facility 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, 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
	September 30, 2023		December 31, 2022
Borrowings under revolving credit facility expiring November 3, 2027	$	62,000	$	—
Secured term loan facility	146,750		119,375
Less: Debt issuance costs	(1,303)		(1,256)
Total debt, net of debt issuance costs	$	207,447	$	118,119

Debt, current	$	65,431	$	2,740
Long-term debt	142,016		115,379
Total debt	$	207,447	$	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 September 30, 2023, we had $62.0 million outstanding under our $75.0 million revolving credit facility, and we had outstanding letters of credit totaling $11.9 million in connection with securing our leased office space.

- 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.

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+ Details

Organization and Description of Business	9 Months Ended
Organization and Description of Business	Sep. 30, 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 AI Process 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, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

Debt - Additional Information (Details) - USD ($)	9 Months Ended
Debt - Additional Information (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Outstanding letters of credit	$ 11,900,000
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
Secured Debt \| Term Loan Facility
Line of Credit Facility [Line Items]
Debt term	5 years
Aggregate principal amount	$ 150,000,000
Proceeds from long term debt	$ 150,000,000
Secured Debt \| Term Loan Facility \| Base Rate
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	0.50%
Line of Credit \| Base Rate \| Minimum
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	1.50%
Line of Credit \| Base Rate \| Minimum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	0.50%
Line of Credit \| Base Rate \| Maximum
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	2.50%
Line of Credit \| Base Rate \| Maximum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	2.50%
Line of Credit \| SOFR \| Minimum
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	2.50%
Line of Credit \| SOFR \| Minimum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	1.50%
Line of Credit \| SOFR \| Maximum
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	3.50%
Line of Credit \| SOFR \| Maximum \| EBITDA
Line of Credit Facility [Line Items]
Interest rate margin (as a percent)	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

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
2023 (excluding the nine months ended September 30, 2023)	$ 3,223
2024	13,269
2025	12,924
2026	13,245
2027	13,501
Thereafter	47,285
Total lease payments	103,447
Less: imputed interest	(32,105)
Total	$ 71,342	$ 65,906

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 2,359	$ 1,708	$ 6,650	$ 4,968
Short-term lease cost	350	170	1,138	334
Variable lease cost	1,311	952	3,296	2,878
Total	$ 4,020	$ 2,830	$ 11,084	$ 8,180

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 65,416	$ 60,719
Less: accumulated depreciation	(22,972)	(18,864)
Property and equipment, net	42,444	41,855
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	51,190	45,959
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,804	3,476
Computer hardware
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,410	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	$ 192	$ 242

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2.0	$ 1.4	$ 5.9	$ 4.2
Disposal of property plant and equipment	$ 0.0	$ 0.0	$ 1.4	$ 0.0

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 130,761	$ 148,132
Short-term investments and marketable securities	38,726	47,863
Accounts receivable, net of allowance of $2,268 and $2,125, respectively	133,548	165,964
Deferred commissions, current	31,107	30,196
Prepaid expenses and other current assets	51,230	28,093
Restricted cash, current	0	2,249
Total current assets	385,372	422,497
Property and equipment, net of accumulated depreciation of $22,972 and $18,864, respectively	42,444	41,855
Goodwill	25,991	26,349
Intangible assets, net of accumulated amortization of $3,618 and $2,715, respectively	4,092	5,251
Right-of-use assets for operating leases	40,501	37,248
Deferred commissions, net of current portion	54,932	55,788
Deferred tax assets	2,688	1,940
Other assets	41,018	3,286
Total assets	597,038	594,214
Current liabilities
Accounts payable	5,956	7,997
Accrued expenses	11,275	12,227
Accrued compensation and related benefits	33,866	40,718
Deferred revenue	194,602	194,768
Debt	65,431	2,740
Operating lease liabilities	11,003	8,681
Other current liabilities	1,119	3,121
Total current liabilities	323,252	270,252
Long-term debt	142,016	115,379
Non-current operating lease liabilities	60,339	57,225
Deferred revenue	3,243	5,556
Deferred tax liabilities	87	102
Total liabilities	528,937	448,514
Stockholders’ equity
Additional paid-in capital	588,029	561,390
Accumulated other comprehensive loss	(10,049)	(7,246)
Accumulated deficit	(509,886)	(408,451)
Total stockholders’ equity	68,101	145,700
Total liabilities and stockholders’ equity	597,038	594,214
Class A Common Stock
Stockholders’ equity
Common stock	4	4
Class B Common Stock
Stockholders’ equity
Common stock	$ 3	$ 3

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating cash outflows for operating leases	$ 2,223	$ 2,099	$ 6,374	$ 6,258
Amortization of operating lease right-of-use assets	693	364	1,936	995
Interest expense on operating lease liabilities	$ 1,667	$ 1,332	$ 4,714	$ 3,957

Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments and Fair Value Measurements

14. Investments and Fair Value Measurements

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 September 30, 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).

The carrying amounts of our cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate fair value as of September 30, 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 September 30, 2023 are as follows (in thousands):


	As of September 30, 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	$	21,034	$	—	$	21,034	$	21,034	$	—
U.S. Treasury bonds	Level 1	17,002		(10)		16,992		—		16,992
Commercial paper	Level 2	12,042		—		12,042		—		12,042

Agency bonds	Level 2	9,694		(2)		9,692		—		9,692
Total investments		$	59,772	$	(12)	$	59,760	$	21,034	$	38,726

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 and nine months ended September 30, 2023 and 2022. Additionally, there were no transfers between Levels 1 and 2 during the nine months ended September 30, 2023 and 2022. Interest income on our investments totaled $2.4 million and $7.1 million for the three and nine months ended September 30, 2023, respectively. Interest income on our investments totaled $0.2 million and $0.5 million for the three and nine months ended September 30, 2022, respectively.

The amortized cost basis and fair value of debt securities as of September 30, 2023, by contractual maturity, are as follows (in thousands):


	As of September 30, 2023
	Cost Basis		Fair Value
Due in one year or less	$	59,772	$	59,760

Total investments	$	59,772	$	59,760

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (22,251)	$ (43,996)	$ (101,435)	$ (116,503)
Comprehensive loss, net of income taxes
Foreign currency translation adjustments	1,060	308	(2,813)	3,032
Unrealized gains (losses) on available-for-sale securities	9	59	10	(135)
Total other comprehensive loss, net of income taxes	$ (21,182)	$ (43,629)	$ (104,238)	$ (113,606)

- Definition

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

+ References

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+ Details

Segment and Geographic Information

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Domestic	$	88,743	$	81,004	$	257,442	$	228,610
International	48,351		36,872		142,602		113,595
Total	$	137,094	$	117,876	$	400,044	$	342,205

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. Substantially all of our long-lived assets were held in the United States as of September 30, 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
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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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 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Hosting costs	$ 3,344	$ 2,802
Legal costs	246	475
Marketing and tradeshow expenses	1,133	1,000
Third party license fees	957	1,223
Contract labor costs	953	1,465
Reimbursable employee expenses	848	1,004
Audit and tax expenses	949	911
Capital expenditures	27	744
Other accrued expenses	2,818	2,603
Total	$ 11,275	$ 12,227

Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Principles of Consolidation

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.

Cash, Cash Equivalents, and Restricted Cash

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.

Deferred Commissions

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

Property and Equipment

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


						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

Performance Obligations and Timing of Revenue Recognition

Subscriptions Revenue

Cloud Subscriptions

Term License Subscriptions

Maintenance and Support

Professional Services Revenue

Consulting Services

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.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.

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. In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This 2022 CEO option grant is our only stock-based award that vests based on the achievement of market conditions. For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation and expense is 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 of our stock-based awards as they occur rather than estimating expected forfeitures.

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).

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).

Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Outstanding Long-term Debt

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


	As of
	September 30, 2023		December 31, 2022
Borrowings under revolving credit facility expiring November 3, 2027	$	62,000	$	—
Secured term loan facility	146,750		119,375
Less: Debt issuance costs	(1,303)		(1,256)
Total debt, net of debt issuance costs	$	207,447	$	118,119

Debt, current	$	65,431	$	2,740
Long-term debt	142,016		115,379
Total debt	$	207,447	$	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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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+ Details

Investments and Fair Value Measurements - Components of Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Cost Basis	$ 59,772	$ 87,354
Unrealized Gains (Losses)	(12)	(22)
Market Value	59,760	87,332
Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	21,034	39,469
Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value	38,726	47,863
Level 1 \| Money market fund
Debt Securities, Available-for-sale [Line Items]
Cost Basis	21,034	39,469
Unrealized Gains (Losses)	0	0
Market Value	21,034	39,469
Level 1 \| Money market fund \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value	21,034	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	17,002	9,396
Unrealized Gains (Losses)	(10)	(13)
Market Value	16,992	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	16,992	9,383
Level 2 \| Commercial paper
Debt Securities, Available-for-sale [Line Items]
Cost Basis	12,042	26,704
Unrealized Gains (Losses)	0	0
Market Value	12,042	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	12,042	26,704
Level 2 \| Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Cost Basis		9,353
Unrealized Gains (Losses)		(12)
Market Value		9,341
Level 2 \| Corporate bonds \| Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Market Value		0
Level 2 \| Corporate bonds \| Short-term Investments and Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Market Value		9,341
Level 2 \| Agency bonds
Debt Securities, Available-for-sale [Line Items]
Cost Basis	9,694	2,432
Unrealized Gains (Losses)	(2)	3
Market Value	9,692	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	$ 9,692	$ 2,435

Commitments, Contingencies and Other Matters (Details) - USD ($)				3 Months Ended		9 Months Ended
	Sep. 01, 2023	Sep. 15, 2022	May 10, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 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				$ 9,300,000	$ 9,000,000	$ 27,800,000	$ 24,800,000
Pegasystems Litigation
Loss Contingencies [Line Items]
JPI, threshold amount	$ 500,000,000
JPI cost	$ 57,300,000
Appeal process, period				3 years		3 years
JPI expense				$ 1,500,000		$ 1,500,000
JPI current				18,100,000		18,100,000
JPI noncurrent				$ 37,700,000		$ 37,700,000
Pegasystems Litigation \| Misappropriation of Trade Secrets
Loss Contingencies [Line Items]
Amount awarded in settlement			$ 2,036,000,000.000
Pegasystems Litigation \| Violation of Virginia Computer Crimes Act
Loss Contingencies [Line Items]
Amount awarded in settlement			$ 1
Pegasystems Litigation \| Attorney's Fees Associated
Loss Contingencies [Line Items]
Amount awarded in settlement		$ 23,600,000
Pegasystems Litigation \| Statutory Post Judgement Interest On Judgmental
Loss Contingencies [Line Items]
Amount awarded in settlement		$ 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

Basic and Diluted Loss per Share

9 Months Ended

Sep. 30, 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 and Nine Months Ended September 30,
	2023	2022
Stock options	2,611,247	2,733,884
Non-vested restricted stock units	1,133,039	1,419,174

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

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


						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.

Property and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Leasehold improvements	$	51,190	$	45,959
Office furniture and fixtures	3,804		3,476
Computer hardware	9,410		9,689
Computer software	820		1,353
Equipment	192		242
Property and equipment, gross	65,416		60,719
Less: accumulated depreciation	(22,972)		(18,864)
Property and equipment, net	$	42,444	$	41,855

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 7,710	$ 7,966
Less: accumulated amortization	(3,618)	(2,715)
Intangible assets, net	4,092	5,251
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,799	6,893
Customer relationships - Process mining and RPA
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 911	$ 1,073

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Hosting costs	$	3,344	$	2,802
Legal costs	246		475
Marketing and tradeshow expenses	1,133		1,000
Third party license fees	957		1,223
Contract labor costs	953		1,465
Reimbursable employee expenses	848		1,004

Audit and tax expenses	949		911
Capital expenditures	27		744
Other accrued expenses	2,818		2,603
Total	$	11,275	$	12,227

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Taxes [Line Items]
Effective tax rate (as a percent)	(0.80%)	(0.60%)	(2.20%)	0.80%
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		$ 4.5
Minimum \| Subsidiaries
Income Taxes [Line Items]
Effective tax rate (as a percent)			0.00%
Maximum \| Subsidiaries
Income Taxes [Line Items]
Effective tax rate (as a percent)			35.00%

Accounting Policies - Property and Equipment, Useful Life (Details)	Sep. 30, 2023
Computer software
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years
Computer hardware
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years
Equipment
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years
Office furniture and fixtures
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years

Investments and Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment income, interest	$ 2,400,000	$ 200,000	$ 7,100,000	$ 500,000
Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	$ 0	$ 0	$ 0	$ 0

Stock-Based Compensation - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 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	$ 45.9
Weighted average remaining vesting period	1 year 4 months 24 days
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost related to nonvested stock options not yet recognized	$ 12.2
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 4 months 24 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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+ Details

Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Goodwill [Roll Forward]
Beginning balance	$ 26,349	$ 27,795
Foreign currency translation adjustments	(358)	(1,446)
Ending balance	$ 25,991	$ 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

Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Services

The following table summarizes revenue recorded during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cloud subscriptions	$	77,247	$	60,621	$	221,381	$	171,083
Term license subscriptions	20,026		19,773		56,176		58,543
Maintenance and support	6,530		6,126		18,997		17,282
Total subscriptions	103,803		86,520		296,554		246,908
Professional services	33,291		31,356		103,490		95,297
Total revenue	$	137,094	$	117,876	$	400,044	$	342,205

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 0.4	$ 0.4	$ 1.1	$ 1.1
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	2 years 8 months 12 days		2 years 8 months 12 days
Process mining customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	7 years 10 months 24 days		7 years 10 months 24 days
RPA customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	6 years 3 months 18 days		6 years 3 months 18 days

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue
Total revenue	$ 137,094	$ 117,876	$ 400,044	$ 342,205
Cost of revenue
Total cost of revenue	36,069	33,760	109,007	98,076
Gross profit	101,025	84,116	291,037	244,129
Operating expenses
Sales and marketing	55,667	54,912	181,338	157,104
Research and development	37,135	37,623	118,502	101,401
General and administrative	23,440	29,357	82,342	90,014
Total operating expenses	116,242	121,892	382,182	348,519
Operating loss	(15,217)	(37,776)	(91,145)	(104,390)
Other non-operating expense
Other expense (income), net	1,939	5,876	(4,637)	12,815
Interest expense	4,917	89	12,790	222
Total other non-operating expense	6,856	5,965	8,153	13,037
Loss before income taxes	(22,073)	(43,741)	(99,298)	(117,427)
Income tax expense (benefit)	178	255	2,137	(924)
Net loss	$ (22,251)	$ (43,996)	$ (101,435)	$ (116,503)
Net loss per share:
Basic (in usd per share)	$ (0.30)	$ (0.61)	$ (1.39)	$ (1.61)
Diluted (in usd per share)	$ (0.30)	$ (0.61)	$ (1.39)	$ (1.61)
Weighted average common shares outstanding:
Basic (in shares)	73,178	72,503	73,032	72,372
Diluted (in shares)	73,178	72,503	73,032	72,372
Subscriptions
Revenue
Total revenue	$ 103,803	$ 86,520	$ 296,554	$ 246,908
Cost of revenue
Total cost of revenue	11,265	9,313	32,492	26,065
Professional services
Revenue
Total revenue	33,291	31,356	103,490	95,297
Cost of revenue
Total cost of revenue	$ 24,804	$ 24,447	$ 76,515	$ 72,011

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Right-of-use assets for operating leases	$ 40,501	$ 37,248
Operating lease liabilities, current	11,003	8,681
Operating lease liabilities, net of current portion	60,339	57,225
Total operating lease liabilities	$ 71,342	$ 65,906
Weighted average remaining lease term (in years)	7 years 8 months 12 days	8 years 4 months 24 days
Weighted average discount rate	9.40%	9.40%

Accrued Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of
	September 30, 2023		December 31, 2022
Hosting costs	$	3,344	$	2,802
Legal costs	246		475
Marketing and tradeshow expenses	1,133		1,000
Third party license fees	957		1,223
Contract labor costs	953		1,465
Reimbursable employee expenses	848		1,004

Audit and tax expenses	949		911
Capital expenditures	27		744
Other accrued expenses	2,818		2,603
Total	$	11,275	$	12,227

Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 130,761	$ 148,132	$ 51,802	$ 100,796
Restricted cash, current	0	2,249	2,053	791
Restricted cash, net of current portion	0	0	0	2,373
Total cash, cash equivalents, and restricted cash	$ 130,761	$ 150,381	$ 53,855	$ 103,960

Debt - Outstanding Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Less: Debt issuance costs	$ (1,303)	$ (1,256)
Total debt, net of debt issuance costs	207,447	118,119
Debt, current	65,431	2,740
Long-term debt	142,016	115,379
Line of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Long-term debt	62,000	0
Secured Debt \| Secured Term Loan Facility
Line of Credit Facility [Line Items]
Long-term debt	$ 146,750	$ 119,375