0001441683-24-000070 | 10-Q | XBRL Viewer

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2024

Accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Hosting costs	$	3,585	$	2,973
Legal costs	283		103
Marketing and tradeshow expenses	842		685
Third party license fees	677		678
Contract labor costs	966		600
Reimbursable employee expenses	1,071		880
Taxes payable	1,766		1,261
Audit and tax expenses	1,568		1,499
Capital expenditures	182		644
Other accrued expenses	2,857		1,723
Total	$	13,797	$	11,046

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

4. Leases

As of June 30, 2024, our lease portfolio consists entirely of operating leases 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 six months ended June 30, 2024 and 2023 (in thousands, exclusive of sublease income):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	2,410	$	2,145	$	4,821	$	4,291
Short-term lease cost	433		423		765		788
Variable lease cost	1,335		959		2,648		1,985
Total	$	4,178	$	3,527	$	8,234	$	7,064

Sublease income totaled $0.3 million and $0.6 million for the three and six months ended June 30, 2024, respectively. Sublease income totaled $0.3 million and $0.7 million for the three and six months ended June 30, 2023, respectively.

Lease Impairment Charges

In connection with the headcount reductions approved in June 2024, and our continued efforts to streamline operations and maximize efficiencies, we have initiated supplemental actions to reduce the footprint of our leased office spaces. Pursuant to these initiatives, we have amended and extended the terms of our existing sublease agreement and are seeking a sublease for an additional floor within our corporate headquarters facility. During the three months ended June 30, 2024, we recorded non-cash lease impairment charges of $5.5 million within general and administrative expenses in our consolidated statements of operations related to the two ROU assets. The non-cash lease impairment charges represent the amount that the carrying value of the two asset groups exceeded their estimated fair values. The asset groups represented two separate floors within our corporate headquarters facility. The fair values of the two asset groups were measured using discounted cash flow models based on market rents and sublease incomes projected over the remaining lease terms.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of June 30, 2024 and December 31, 2023 is presented in the following table (in thousands, except for lease term and discount rate):


	As of
	June 30, 2024			December 31, 2023
Right-of-use assets for operating leases	$	32,848		$	39,975

Operating lease liabilities, current	$	12,323		$	11,698
Operating lease liabilities, net of current portion	55,796			59,067
Total operating lease liabilities	$	68,119		$	70,765

Weighted average remaining lease term (in years)	6.9			7.4

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the three and six months ended June 30, 2024 and 2023 is shown below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating cash outflows for operating leases	$	3,130	$	988	$	5,773	$	2,120

Amortization of operating lease right-of-use assets	815		591		1,598		1,243
Interest expense on operating lease liabilities	1,595		1,552		3,224		3,047

There were no TIA reimbursements for the three and six months ended June 30, 2024, while TIA reimbursements totaled $0.9 million and $1.5 million for the three and six months ended June 30, 2023, respectively.

A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2024 is shown below (in thousands):


	Operating Leases
2024 (excluding the six months ended June 30, 2024)	$	6,376
2025	12,958
2026	13,307
2027	13,559
2028	12,460

Thereafter	34,840
Total lease payments	93,500
Less: imputed interest	(25,381)
Total	$	68,119

Investments and Fair Value Measurements - Components of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Cash and cash equivalents, Cost Basis	$ 120,787	$ 149,351	$ 171,530	$ 148,132
Total Investments, Cost Basis	149,140	159,009
Short-term investments and marketable securities, Unrealized Gains (Losses)	(8)	(5)
Short-term investments and marketable securities, Fair Value	28,345	9,653
Total investments, Fair Value	149,132	159,004
U.S. Treasury bonds
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Fair Value	14,657	4,828
U.S. Treasury bonds \| Level 1
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Cost Basis	14,660	4,830
Short-term investments and marketable securities, Unrealized Gains (Losses)	(3)	(2)
Short-term investments and marketable securities, Fair Value	14,657	4,828
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Fair Value	2,890
Commercial paper \| Level 2
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Cost Basis	2,893
Short-term investments and marketable securities, Unrealized Gains (Losses)	(3)
Short-term investments and marketable securities, Fair Value	2,890
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Fair Value	10,798
Corporate bonds \| Level 2
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Cost Basis	10,800
Short-term investments and marketable securities, Unrealized Gains (Losses)	(2)
Short-term investments and marketable securities, Fair Value	10,798
Agency bonds
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Fair Value		4,825
Agency bonds \| Level 2
Debt Securities, Available-for-sale [Line Items]
Short-term investments and marketable securities, Cost Basis		4,828
Short-term investments and marketable securities, Unrealized Gains (Losses)		(3)
Short-term investments and marketable securities, Fair Value		4,825
Cash
Debt Securities, Available-for-sale [Line Items]
Cash and cash equivalents, Cost Basis	66,506	93,029
Cash \| Level 1
Debt Securities, Available-for-sale [Line Items]
Cash and cash equivalents, Cost Basis	66,506	93,029
Cash and cash equivalents, Fair Value	66,506	93,029
Money market fund
Debt Securities, Available-for-sale [Line Items]
Cash and cash equivalents, Cost Basis	54,281	56,322
Money market fund \| Level 1
Debt Securities, Available-for-sale [Line Items]
Cash and cash equivalents, Cost Basis	54,281	56,322
Cash and cash equivalents, Fair Value	$ 54,281	$ 56,322

Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2024	Jul. 29, 2024
Document and Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
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	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		41,153,021
Class B Common Stock
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		31,195,739

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating cash outflows for operating leases	$ 3,130	$ 988	$ 5,773	$ 2,120
Amortization of operating lease right-of-use assets	815	591	1,598	1,243
Interest expense on operating lease liabilities	$ 1,595	$ 1,552	$ 3,224	$ 3,047

Segment and Geographic Information - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 31.8	$ 34.0
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 12.1	$ 12.6

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Right-of-use assets for operating leases	$ 32,848	$ 39,975
Operating lease liabilities, current	12,323	11,698
Operating lease liabilities, net of current portion	55,796	59,067
Total operating lease liabilities	$ 68,119	$ 70,765
Weighted average remaining lease term (in years)	6 years 10 months 24 days	7 years 4 months 24 days
Weighted average discount rate	9.40%	9.40%

Property and Equipment, net

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, net

6. Property and Equipment, net

Property and equipment, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Leasehold improvements	$	54,298	$	53,313
Office furniture and fixtures	4,460		3,825
Computer software and hardware	10,397		10,491
Internally developed software	504		—
Equipment	193		194
Property and equipment, gross	69,852		67,823
Less: accumulated depreciation	(29,011)		(25,141)
Property and equipment, net	$	40,841	$	42,682

Depreciation expense totaled $2.2 million and $4.2 million for the three and six months ended June 30, 2024, respectively. Depreciation expense totaled $2.0 million and $4.0 million for the three and six months ended June 30, 2023, respectively. We disposed of $0.3 million worth of fully depreciated equipment during the three and six months ended June 30, 2024, respectively. We had no disposals or retirements during the three months ended June 30, 2023 and disposed of $1.4 million worth of fully depreciated property and equipment during the six months ended June 30, 2023.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
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 consolidated financial statements. For the three and six months ended June 30, 2024, the actual effective tax rates were 0.4% and 0.8%, respectively. For the three and six months ended June 30, 2023, the actual effective tax rates were (2.0)% and (2.5)%, respectively. As of June 30, 2024, our net unrecognized tax benefits totaled $6.5 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 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 2023 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 consolidated financial statements.

- Definition

The entire disclosure for income tax.

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+ Details

Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

3. Revenue

Revenue Recognition

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

The following table summarizes revenue recorded during the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cloud subscriptions	$	88,428	$	74,442	$	175,031	$	144,134
Term license subscriptions	17,227		12,999		40,998		36,150
Maintenance and support	7,319		6,353		14,639		12,467
Total subscriptions	112,974		93,794		230,668		192,751
Professional services	33,476		33,921		65,617		70,199
Total revenue	$	146,450	$	127,715	$	296,285	$	262,950

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 subscriptions revenue is derived from customers with on-premises installations of our platform. The majority of our term license 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 most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis. We also sell advisory services on a subscription basis to support customers or partners with their development and deployment. 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 other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. Revenue from subscription-based consulting contracts is recognized ratably over the contract period. 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 six months ended June 30, 2024 and 2023 was immaterial. 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

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.

The following table sets forth our contract asset and contract liability balances (in thousands):


	As of
	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Contract assets, current*	$	8,865	$	12,052	$	11,870	$	12,540
Contract assets, non-current*	1,072		915		1,069		1,720
Total contract assets	$	9,937	$	12,967	$	12,939	$	14,260

Deferred revenue, current	$	218,233	$	235,992	$	192,164	$	194,768
Deferred revenue, non-current	4,695		4,700		3,734		5,556
Total contract liabilities	$	222,928	$	240,692	$	195,898	$	200,324

* Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $166.6 million and $141.3 million for the six months ended June 30, 2024 and 2023, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2024, we had an aggregate transaction price of $469.4 million allocated to unsatisfied performance obligations. We expect to recognize $300.3 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter.

- Definition

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

+ References

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+ Details

Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

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
	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Cash and cash equivalents	$	120,787	$	149,351	$	171,530	$	148,132
Restricted cash, current	—		—		2,272		2,249

Total cash, cash equivalents, and restricted cash	$	120,787	$	149,351	$	173,802	$	150,381

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
	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Cash and cash equivalents	$	120,787	$	149,351	$	171,530	$	148,132
Restricted cash, current	—		—		2,272		2,249

Total cash, cash equivalents, and restricted cash	$	120,787	$	149,351	$	173,802	$	150,381

Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 9,900	$ 11,148	$ 20,506	$ 22,204
Cost of revenue \| Subscriptions
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	217	230	430	502
Cost of revenue \| Professional services
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,461	1,472	3,039	3,063
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,997	2,772	4,524	5,217
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	2,919	2,910	5,920	6,536
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,306	$ 3,764	$ 6,593	$ 6,886

Leases - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Additional Information (Details) $ in Thousands	Jun. 30, 2024 USD ($) rOUAsset floor	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)
Leases [Abstract]
Renewal term	10 years		10 years
Sublease income	$ 300	$ 300	$ 600	$ 700
ROU asset impairment	$ 5,500		5,462	0
Number of ROU assets \| rOUAsset	2
Number of floors represented by each asset group within headquarters \| floor	2
Reimbursements received for tenant improvements	$ 0	$ 900	$ 0	$ 1,500

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (43,592)	$ (42,355)	$ (76,515)	$ (79,184)
Comprehensive loss, net of income taxes
Foreign currency translation adjustments	(1,097)	(3,127)	11,746	(3,873)
Unrealized (losses) gains on available-for-sale securities	(7)	(45)	(3)	1
Other comprehensive loss, net of income taxes	$ (44,696)	$ (45,527)	$ (64,772)	$ (83,056)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- 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 (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Revenue by Geography

The following table summarizes revenue by geography for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Domestic	$	90,534	$	78,694	$	184,647	$	168,699
International	55,916		49,021		111,638		94,251
Total	$	146,450	$	127,715	$	296,285	$	262,950

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating lease cost	$ 2,410	$ 2,145	$ 4,821	$ 4,291
Short-term lease cost	433	423	765	788
Variable lease cost	1,335	959	2,648	1,985
Total	$ 4,178	$ 3,527	$ 8,234	$ 7,064

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 69,852	$ 67,823
Less: accumulated depreciation	(29,011)	(25,141)
Property and equipment, net	40,841	42,682
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	54,298	53,313
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,460	3,825
Computer software and hardware
Property, Plant and Equipment [Line Items]
Property and equipment, gross	10,397	10,491
Internally developed software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	504	0
Equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 193	$ 194

Organization and Description of Business	6 Months Ended
Organization and Description of Business	Jun. 30, 2024
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 United States and internationally, including Australia, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

Stock-Based Compensation - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 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	$ 38.0
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	$ 8.4
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)	1 year 8 months 12 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

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+ Details

Basic and Diluted Loss per Share

6 Months Ended

Jun. 30, 2024

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.

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


	Three and Six Months Ended June 30,
	2024	2023
Stock options	2,530,468	2,625,286
Non-vested restricted stock units	1,189,539	1,125,505

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue
Total revenue	$ 146,450	$ 127,715	$ 296,285	$ 262,950
Cost of revenue
Total cost of revenue	39,413	36,845	77,410	72,938
Gross profit	107,037	90,870	218,875	190,012
Operating expenses
Sales and marketing	66,592	62,581	124,748	125,671
Research and development	39,446	39,743	79,217	81,367
General and administrative	40,193	29,208	73,639	58,902
Total operating expenses	146,231	131,532	277,604	265,940
Operating loss	(39,194)	(40,662)	(58,729)	(75,928)
Other non-operating expense
Other (income) expense, net	(1,545)	(3,886)	6,662	(6,576)
Interest expense	6,107	4,755	11,753	7,873
Total other non-operating expense	4,562	869	18,415	1,297
Loss before income taxes	(43,756)	(41,531)	(77,144)	(77,225)
Income tax (benefit) expense	(164)	824	(629)	1,959
Net loss	$ (43,592)	$ (42,355)	$ (76,515)	$ (79,184)
Net loss per share:
Basic (in usd per share)	$ (0.60)	$ (0.58)	$ (1.05)	$ (1.09)
Diluted (in usd per share)	$ (0.60)	$ (0.58)	$ (1.05)	$ (1.09)
Weighted average common shares outstanding:
Basic (in shares)	72,300	73,041	72,800	72,956
Diluted (in shares)	72,300	73,041	72,800	72,956
Subscriptions
Revenue
Total revenue	$ 112,974	$ 93,794	$ 230,668	$ 192,751
Cost of revenue
Total cost of revenue	13,262	10,779	25,532	21,227
Professional services
Revenue
Total revenue	33,476	33,921	65,617	70,199
Cost of revenue
Total cost of revenue	$ 26,151	$ 26,066	$ 51,878	$ 51,711

Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 120,787	$ 149,351	$ 171,530	$ 148,132
Restricted cash, current	0	0	2,272	2,249
Total cash, cash equivalents, and restricted cash	$ 120,787	$ 149,351	$ 173,802	$ 150,381

Accrued Expenses

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Hosting costs	$	3,585	$	2,973
Legal costs	283		103
Marketing and tradeshow expenses	842		685
Third party license fees	677		678
Contract labor costs	966		600
Reimbursable employee expenses	1,071		880
Taxes payable	1,766		1,261
Audit and tax expenses	1,568		1,499
Capital expenditures	182		644
Other accrued expenses	2,857		1,723
Total	$	13,797	$	11,046

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Compensation expense related to stock-based awards is accounted for using 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 option grant (the “2022 CEO option grant”) is our only outstanding 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 June 30, 2024, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $8.4 million and will be recognized over a weighted average period of 1.7 years. Total unrecognized compensation cost related to unvested RSUs was approximately $38.0 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 six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue
Subscriptions	$	217	$	230	$	430	$	502
Professional services	1,461		1,472		3,039		3,063
Operating expenses
Sales and marketing	1,997		2,772		4,524		5,217
Research and development	2,919		2,910		5,920		6,536
General and administrative	3,306		3,764		6,593		6,886
Total stock-based compensation expense	$	9,900	$	11,148	$	20,506	$	22,204

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

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 six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue
Subscriptions	$	217	$	230	$	430	$	502
Professional services	1,461		1,472		3,039		3,063
Operating expenses
Sales and marketing	1,997		2,772		4,524		5,217
Research and development	2,919		2,910		5,920		6,536
General and administrative	3,306		3,764		6,593		6,886
Total stock-based compensation expense	$	9,900	$	11,148	$	20,506	$	22,204

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Components of Lease Expense

The following table sets forth the components of lease expense for the three and six months ended June 30, 2024 and 2023 (in thousands, exclusive of sublease income):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	2,410	$	2,145	$	4,821	$	4,291
Short-term lease cost	433		423		765		788
Variable lease cost	1,335		959		2,648		1,985
Total	$	4,178	$	3,527	$	8,234	$	7,064

Schedule of Supplemental Balance Sheet Information


	As of
	June 30, 2024			December 31, 2023
Right-of-use assets for operating leases	$	32,848		$	39,975

Operating lease liabilities, current	$	12,323		$	11,698
Operating lease liabilities, net of current portion	55,796			59,067
Total operating lease liabilities	$	68,119		$	70,765

Weighted average remaining lease term (in years)	6.9			7.4

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 six months ended June 30, 2024 and 2023 is shown below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating cash outflows for operating leases	$	3,130	$	988	$	5,773	$	2,120

Amortization of operating lease right-of-use assets	815		591		1,598		1,243
Interest expense on operating lease liabilities	1,595		1,552		3,224		3,047

Schedule of Maturities of Operating Lease Liabilities

A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2024 is shown below (in thousands):


	Operating Leases
2024 (excluding the six months ended June 30, 2024)	$	6,376
2025	12,958
2026	13,307
2027	13,559
2028	12,460

Thereafter	34,840
Total lease payments	93,500
Less: imputed interest	(25,381)
Total	$	68,119

Debt - Outstanding Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Line of Credit Facility [Line Items]
Less: Debt issuance costs	$ (1,339)	$ (1,224)
Total debt, net of debt issuance costs	253,973	206,589
Debt, current	8,348	66,368
Long-term debt	245,625	140,221
Line of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Long-term debt	62,000	62,000
Secured Debt \| Secured Term Loan Facility
Line of Credit Facility [Line Items]
Long-term debt	$ 193,312	$ 145,813

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Operating Leases
2024 (excluding the six months ended June 30, 2024)	$ 6,376
2025	12,958
2026	13,307
2027	13,559
2028	12,460
Thereafter	34,840
Total lease payments	93,500
Less: imputed interest	(25,381)
Total	$ 68,119	$ 70,765

Revenue - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue recognized	$ 166.6	$ 141.3
Performance obligations	469.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 300.3
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

Debt - Additional Information (Details) - USD ($)	6 Months Ended
Debt - Additional Information (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Line of Credit Facility [Line Items]
Outstanding letters of credit	$ 14,500,000
Letter of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	20,000,000.0
Swingline Sub-facility \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000.0
Secured Debt \| Term Loan Facility
Line of Credit Facility [Line Items]
Debt term	5 years
Aggregate principal amount	$ 200,000,000.0
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	$ 100,000,000.0
Long-term debt	$ 62,000,000	$ 62,000,000

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table details the changes in goodwill during the six months ended June 30, 2024 and fiscal year ended December 31, 2023 (in thousands):


	Carrying Amount
Balance as of December 31, 2022	$	26,349

Foreign currency translation adjustments	757
Balance as of December 31, 2023	27,106

Foreign currency translation adjustments	(801)
Balance as of June 30, 2024	$	26,305

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Developed technology	$	6,881	$	7,091
Customer relationships	922		950

Intangible assets, gross	7,803		8,041
Less: accumulated amortization	(4,763)		(4,152)
Intangible assets, net	$	3,040	$	3,889

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 June 30, 2024 (in thousands):


	Projected Amortization
2024 (excluding the six months ended June 30, 2024)	$	734
2025	1,168
2026	752
2027	92
2028	92

Thereafter	202
Total projected amortization expense	$	3,040

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
-Section 55
-Paragraph 24
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-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

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+ Details

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2.2	$ 2.0	$ 4.2	$ 4.0
Disposal of property plant and equipment	$ 0.3	$ 0.0	$ 0.3	$ 1.4

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Long-term Debt

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


	As of
	June 30, 2024		December 31, 2023
Borrowings under revolving credit facility	$	62,000	$	62,000
Secured term loan facility	193,312		145,813
Less: Debt issuance costs (1)	(1,339)		(1,224)
Total debt, net of debt issuance costs	$	253,973	$	206,589

Debt, current	$	8,348	$	66,368
Long-term debt	245,625		140,221
Total debt	$	253,973	$	206,589

(1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement.

- 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://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Components of Investments

The components of our investments as of June 30, 2024 are as follows (in thousands):


	As of June 30, 2024
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Fair Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Cash	Level 1	$	66,506	$	—	$	66,506	$	66,506	$	—
Money market fund	Level 1	54,281		—		54,281		54,281		—
U.S. Treasury bonds	Level 1	14,660		(3)		14,657		—		14,657
Commercial paper	Level 2	2,893		(3)		2,890		—		2,890
Corporate bonds	Level 2	10,800		(2)		10,798		—		10,798
Total investments		$	149,140	$	(8)	$	149,132	$	120,787	$	28,345

At December 31, 2023, our investments consisted of the following (in thousands):


	As of December 31, 2023
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Fair Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Cash	Level 1	$	93,029	$	—	$	93,029	$	93,029	$	—
Money market fund	Level 1	56,322		—		56,322		56,322		—
U.S. Treasury bonds	Level 1	4,830		(2)		4,828		—		4,828


Agency bonds	Level 2	4,828		(3)		4,825		—		4,825
Total investments		$	159,009	$	(5)	$	159,004	$	149,351	$	9,653

- 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
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

+ Details

Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, net

Property and equipment, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Leasehold improvements	$	54,298	$	53,313
Office furniture and fixtures	4,460		3,825
Computer software and hardware	10,397		10,491
Internally developed software	504		—
Equipment	193		194
Property and equipment, gross	69,852		67,823
Less: accumulated depreciation	(29,011)		(25,141)
Property and equipment, net	$	40,841	$	42,682

Accounting Policies (Policies)	6 Months Ended
Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and 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’ (deficit) equity, and cash flows. All intercompany accounts and transactions have been eliminated in consolidation. 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 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, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024.
Use of Estimates	Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these 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 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 period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance policy (as discussed in Note 12), lease impairments, and stock-based compensation.
Concentration of Credit and Customer Risk	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-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.
Cash, Cash Equivalents, and Restricted Cash	Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consisted of cash designated to settle an escrow liability stemming from a holdback agreement related to our acquisition of Lana Labs GmbH. We paid the remaining amount owed on August 11, 2023.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts Accounts receivable and unbilled revenue 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	Deferred Commissions We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team and the associated incremental payroll taxes. 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. 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.
Property and Equipment	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 estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years for office furniture and fixtures. Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.
Severance Costs	Severance Costs In June 2024, we approved a reduction of the Company’s workforce by approximately 150 full-time employees, intended to align sales and marketing teams with our go-to-market strategy and improve profitability. We incurred severance costs related to the involuntary reductions in our workforce. Costs related to benefits provided in accordance with mutually understood and ongoing agreements are recognized when an obligation has been incurred, it is probable the benefits will be paid, and the amount to be paid can be reasonably estimated.
Treasury Stock	Treasury Stock We account for treasury stock under the cost method. During the three and six months ended June 30, 2024, we have reissued treasury stock to satisfy employee stock option exercises and vesting of restricted stock units. Because we are in an accumulated deficit position, all reissuances of treasury stock have been recorded as a decrease to additional-paid-in-capital in our consolidated balance sheets.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Adopted We have not adopted any new accounting guidance in 2024 that has had a material impact on our consolidated financial statements or disclosures. Not Yet Adopted In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures, which enhances the disclosure requirements for operating segments in our annual and interim consolidated financial statements. The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis. Early adoption is permitted. The new ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires public companies to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This guidance also applies to public entities that have only one segment. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740): Improvement to Income Tax Disclosures, which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports if they are reasonably likely to have a material impact on the Company’s business. For large accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. We are currently evaluating the impact these rules will have on our financial statements and related disclosures and will monitor the litigation progress for possible impacts on the disclosure requirements under the rules.
Revenue Recognition	Revenue Recognition We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform. Performance Obligations and Timing of Revenue Recognition We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis or through non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front. Cloud Subscriptions We generate cloud-based subscriptions revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one to three years in length. We bill customers and collect payment for subscriptions to our platform in advance, and they are non-cancellable. Term License Subscriptions Our term license subscriptions revenue is derived from customers with on-premises installations of our platform. The majority of our term license 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 most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis. We also sell advisory services on a subscription basis to support customers or partners with their development and deployment. 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 other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. Revenue from subscription-based consulting contracts is recognized ratably over the contract period. 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 six months ended June 30, 2024 and 2023 was immaterial. 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 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.
Lease Costs	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.
Stock-Based Compensation Expense	Compensation expense related to stock-based awards is accounted for using 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 option grant (the “2022 CEO option grant”) is our only outstanding 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	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 June 30, 2024 and December 31, 2023. 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	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, have been recorded in ‘Accumulated other comprehensive income (loss)’ in our consolidated balance sheets.

Revenue (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Services

The following table summarizes revenue recorded during the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cloud subscriptions	$	88,428	$	74,442	$	175,031	$	144,134
Term license subscriptions	17,227		12,999		40,998		36,150
Maintenance and support	7,319		6,353		14,639		12,467
Total subscriptions	112,974		93,794		230,668		192,751
Professional services	33,476		33,921		65,617		70,199
Total revenue	$	146,450	$	127,715	$	296,285	$	262,950

Schedule of Contract Asset and Contract Liability

The following table sets forth our contract asset and contract liability balances (in thousands):


	As of
	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Contract assets, current*	$	8,865	$	12,052	$	11,870	$	12,540
Contract assets, non-current*	1,072		915		1,069		1,720
Total contract assets	$	9,937	$	12,967	$	12,939	$	14,260

Deferred revenue, current	$	218,233	$	235,992	$	192,164	$	194,768
Deferred revenue, non-current	4,695		4,700		3,734		5,556
Total contract liabilities	$	222,928	$	240,692	$	195,898	$	200,324

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Treasury Stock
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	(79,184)
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)
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)
Beginning balance (in shares) at Dec. 31, 2023		73,366,766
Beginning balance at Dec. 31, 2023	52,341	$ 7	595,781	(23,555)	(519,892)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(32,923)				(32,923)
Issuance of common stock to directors (in shares)		4,974
Vesting of restricted stock units (in shares)		141,563
Vesting of restricted stock units	(2,862)		(2,862)
Exercise of stock options (in shares)		43,460
Exercise of stock options	345		345
Repurchase of common stock (in shares)		(1,320,531)
Repurchase of common stock	(50,019)					(50,019)
Stock-based compensation expense	10,606		10,606
Other comprehensive income (loss)	12,847			12,847
Ending balance (in shares) at Mar. 31, 2024		72,236,232
Ending balance at Mar. 31, 2024	(9,665)	$ 7	603,870	(10,708)	(552,815)	(50,019)
Beginning balance (in shares) at Dec. 31, 2023		73,366,766
Beginning balance at Dec. 31, 2023	52,341	$ 7	595,781	(23,555)	(519,892)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (76,515)
Ending balance (in shares) at Jun. 30, 2024	72,300,000	72,343,077
Ending balance at Jun. 30, 2024	$ (45,658)	$ 7	608,528	(11,812)	(596,407)	(45,974)
Beginning balance (in shares) at Mar. 31, 2024		72,236,232
Beginning balance at Mar. 31, 2024	(9,665)	$ 7	603,870	(10,708)	(552,815)	(50,019)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(43,592)				(43,592)
Issuance of common stock to directors (in shares)		4,692
Issuance of common stock to directors	0		(178)			178
Vesting of restricted stock units (in shares)		77,116
Vesting of restricted stock units	(1,360)		(4,279)			2,919
Exercise of stock options (in shares)		25,037
Exercise of stock options	163		(785)			948
Stock-based compensation expense	9,900		9,900
Other comprehensive income (loss)	$ (1,104)			(1,104)
Ending balance (in shares) at Jun. 30, 2024	72,300,000	72,343,077
Ending balance at Jun. 30, 2024	$ (45,658)	$ 7	$ 608,528	$ (11,812)	$ (596,407)	$ (45,974)

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Allowance for doubtful accounts	$ 2,652	$ 2,606
Accumulated depreciation	29,011	25,141
Finite-lived intangible assets, accumulated amortization	$ 4,763	$ 4,152
Treasury stock, shares (in shares)	1,213,686
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)	42,359,967	42,169,970
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)	31,196,796	31,196,796

Commitments, Contingencies, and Other Matters	6 Months Ended
Commitments, Contingencies, and Other Matters	Jun. 30, 2024
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 June 30, 2024, contains minimum spending requirements of $28.0 million in each of the third, fourth, and fifth years. Spending under this agreement for the three and six months ended June 30, 2024 totaled $10.7 million and $21.0 million, respectively. Spending under this agreement for the three and six months ended June 30, 2023 totaled $9.1 million and $18.5 million, respectively. The timing of payments under the agreement may vary. 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 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 to the Court of Appeals of Virginia. On July 30, 2024, the Court of Appeals of Virginia issued a decision reversing the judgment against Pegasystems and remanding for a new trial. The decision rejected Pegasystems’ argument that Appian had not presented evidence that trade secrets were misappropriated, but reversed the judgment on the basis of evidentiary and damages rulings made by the trial court. On the same day, Appian announced its intention to appeal that decision to the Supreme Court of Virginia and seek to reinstate the full judgment against Pegasystems. A petition to the Supreme Court is expected to be filed by August 29, 2024. After that, the timeline to hear the petition will be in the control of the Supreme Court. We cannot predict the outcome of any appeals or the exact time it will take to resolve them. 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 and is comprised of the premium, a one-time broker fee, and Virginia lines tax. The policy provides up to $500.0 million of coverage. The total cost of the policy was capitalized and is being amortized on a straight-line basis over the estimated length of the appeals process. As of June 30, 2024, we estimated the length of the appeals process (solely for amortization purposes) to be approximately three years. This estimate is updated each reporting period. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $4.5 million and $9.0 million for the three and six months ended June 30, 2024. As of June 30, 2024, $18.1 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $24.2 million is classified as 'Other assets’ on our consolidated balance sheets. We are currently evaluating the impact, if any, that the decision from the Court of Appeals of Virginia will have on our estimated length of the appeals process. 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. Share Repurchase Program In February 2024, our Board of Directors authorized a program to repurchase up to $50.0 million of our common stock from March 2024 to February 2026. In March 2024, we repurchased 1.3 million shares under this program at an average share price of $37.86, totaling an aggregate cost of $50.0 million. As of June 30, 2024, shareholders’ equity included 72.3 million shares outstanding, net of 1.2 million shares of common stock held in treasury.

Debt

6 Months Ended

Jun. 30, 2024

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 $200.0 million and, in addition, up to $100.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $20.0 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 have been using the proceeds to fund the 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 rate (“Base Rate”) plus 0.5% 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 1.5% to 2.5% in the case of Base Rate advances or from 2.5% to 3.5% 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, guarantees, 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
	June 30, 2024		December 31, 2023
Borrowings under revolving credit facility	$	62,000	$	62,000
Secured term loan facility	193,312		145,813
Less: Debt issuance costs (1)	(1,339)		(1,224)
Total debt, net of debt issuance costs	$	253,973	$	206,589

Debt, current	$	8,348	$	66,368
Long-term debt	245,625		140,221
Total debt	$	253,973	$	206,589

(1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement.

We were in compliance with all covenants contained in the Credit Agreement. As of June 30, 2024, we had $62.0 million outstanding under our $100.0 million revolving credit facility, and we had outstanding letters of credit totaling $14.5 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Subparagraph (a)
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-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SX 210.4-08(c))
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 120,787	$ 149,351
Short-term investments and marketable securities	28,345	9,653
Accounts receivable, net of allowances of $2,652 and $2,606, respectively	131,693	171,561
Deferred commissions, current	34,899	34,261
Prepaid expenses and other current assets	48,261	49,529
Total current assets	363,985	414,355
Property and equipment, net of accumulated depreciation of $29,011 and $25,141, respectively	40,841	42,682
Goodwill	26,305	27,106
Intangible assets, net of accumulated amortization of $4,763 and $4,152, respectively	3,040	3,889
Right-of-use assets for operating leases	32,848	39,975
Deferred commissions, net of current portion	56,231	59,764
Deferred tax assets	4,368	3,453
Other assets	26,963	36,279
Total assets	554,581	627,503
Current liabilities
Accounts payable	5,739	6,174
Accrued expenses	13,797	11,046
Accrued compensation and related benefits	33,843	38,003
Deferred revenue	218,233	235,992
Debt	8,348	66,368
Operating lease liabilities	12,323	11,698
Other current liabilities	1,405	1,891
Total current liabilities	293,688	371,172
Long-term debt	245,625	140,221
Non-current operating lease liabilities	55,796	59,067
Deferred revenue, non-current	4,695	4,700
Deferred tax liabilities	0	2
Other non-current liabilities	435	0
Total liabilities	600,239	575,162
Stockholders’ (deficit) equity
Additional paid-in capital	608,528	595,781
Accumulated other comprehensive loss	(11,812)	(23,555)
Accumulated deficit	(596,407)	(519,892)
Treasury stock at cost, 1,213,686 shares as of June 30, 2024	(45,974)	0
Total stockholders’ (deficit) equity	(45,658)	52,341
Total liabilities and stockholders’ (deficit) equity	554,581	627,503
Class A Common Stock
Stockholders’ (deficit) equity
Common stock	4	4
Class B Common Stock
Stockholders’ (deficit) equity
Common stock	$ 3	$ 3

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Hosting costs	$ 3,585	$ 2,973
Legal costs	283	103
Marketing and tradeshow expenses	842	685
Third party license fees	677	678
Contract labor costs	966	600
Reimbursable employee expenses	1,071	880
Taxes payable	1,766	1,261
Audit and tax expenses	1,568	1,499
Capital expenditures	182	644
Other accrued expenses	2,857	1,723
Total	$ 13,797	$ 11,046

Basic and Diluted Loss per Share (Details) - shares	3 Months Ended		6 Months Ended
Basic and Diluted Loss per Share (Details) - shares	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	2,530,468	2,625,286	2,530,468	2,625,286
Non-vested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding (in shares)	1,189,539	1,125,505	1,189,539	1,125,505

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 0.4	$ 0.4	$ 0.7	$ 0.7
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	2 years		2 years
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	6 years 9 months 18 days		6 years 9 months 18 days

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2024

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 six months ended June 30, 2024 and fiscal year ended December 31, 2023 (in thousands):


	Carrying Amount
Balance as of December 31, 2022	$	26,349

Foreign currency translation adjustments	757
Balance as of December 31, 2023	27,106

Foreign currency translation adjustments	(801)
Balance as of June 30, 2024	$	26,305

Intangible assets, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):


	As of
	June 30, 2024		December 31, 2023
Developed technology	$	6,881	$	7,091
Customer relationships	922		950

Intangible assets, gross	7,803		8,041
Less: accumulated amortization	(4,763)		(4,152)
Intangible assets, net	$	3,040	$	3,889

Intangible amortization expense was $0.4 million and $0.7 million for the three and six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 2.0 years and 6.8 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of June 30, 2024 (in thousands):


	Projected Amortization
2024 (excluding the six months ended June 30, 2024)	$	734
2025	1,168
2026	752
2027	92
2028	92

Thereafter	202
Total projected amortization expense	$	3,040

Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Accounting Policies

2. Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and 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’ (deficit) equity, and cash flows. All intercompany accounts and transactions have been eliminated in consolidation.

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 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, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024.

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these 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 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 period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance policy (as discussed in Note 12), lease impairments, and stock-based compensation.

Revenue Recognition

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

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-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 22.6% and 22.1% of our revenue for the three and six months ended June 30, 2024, respectively. Additionally, 38.2% and 37.7% of our revenue during the three and six months ended June 30, 2024, respectively, was generated from international customers. Revenue generated from government agencies represented 20.1% and 20.3% of our revenue for the three and six months ended June 30, 2023, respectively. Additionally, 38.4% and 35.8% of our revenue during the three and six months ended June 30, 2023, respectively, was generated from international customers. No single end-customer accounted for more than 10% of our total revenue in the three and six months ended June 30, 2024, or 2023. As of June 30, 2024, we had one customer whose balance comprised 15% of total accounts receivable.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consisted of cash designated to settle an escrow liability stemming from a holdback agreement related to our acquisition of Lana Labs GmbH. We paid the remaining amount owed 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
	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Cash and cash equivalents	$	120,787	$	149,351	$	171,530	$	148,132
Restricted cash, current	—		—		2,272		2,249

Total cash, cash equivalents, and restricted cash	$	120,787	$	149,351	$	173,802	$	150,381

Allowance for Doubtful Accounts

Accounts receivable and unbilled revenue 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 $2.7 million and $2.6 million as of June 30, 2024 and December 31, 2023, respectively.

Deferred Commissions

We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team and the associated incremental payroll taxes. 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. 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 $11.5 million and $22.9 million for the three and six months ended June 30, 2024, respectively. Total commission expense was $11.3 million and $22.3 million for the three and six months ended June 30, 2023, 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 estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years for office furniture and fixtures. Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Severance Costs

In June 2024, we approved a reduction of the Company’s workforce by approximately 150 full-time employees, intended to align sales and marketing teams with our go-to-market strategy and improve profitability. We incurred severance costs related to the involuntary reductions in our workforce. Costs related to benefits provided in accordance with mutually understood and ongoing agreements are recognized when an obligation has been incurred, it is probable the benefits will be paid, and the amount to be paid can be reasonably estimated. We incurred severance costs of $5.5 million during the three and six months ended June 30, 2024. The majority of the costs incurred are expected to be paid to the impacted employees by December 31, 2024.

In 2023, severance costs related to prior actions totaled $2.1 million and $6.3 million for the three and six months ended June 30, 2023, respectively.

Treasury Stock

We account for treasury stock under the cost method. During the three and six months ended June 30, 2024, we have reissued treasury stock to satisfy employee stock option exercises and vesting of restricted stock units. Because we are in an accumulated deficit position, all reissuances of treasury stock have been recorded as a decrease to additional-paid-in-capital in our consolidated balance sheets.

Recent Accounting Pronouncements

Adopted

We have not adopted any new accounting guidance in 2024 that has had a material impact on our consolidated financial statements or disclosures.

Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures, which enhances the disclosure requirements for operating segments in our annual and interim consolidated financial statements. The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis. Early adoption is permitted. The new ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires public companies to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This guidance also applies to public entities that have only one segment. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740): Improvement to Income Tax Disclosures, which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports if they are reasonably likely to have a material impact on the Company’s business. For large accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. We are currently evaluating the impact these rules will have on our financial statements and related disclosures and will monitor the litigation progress for possible impacts on the disclosure requirements under the rules.

Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2024

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 June 30, 2024 and December 31, 2023.

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 accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2024 and December 31, 2023 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, have been recorded in ‘Accumulated other comprehensive income (loss)’ in our consolidated balance sheets. The components of our investments as of June 30, 2024 are as follows (in thousands):


	As of June 30, 2024
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Fair Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Cash	Level 1	$	66,506	$	—	$	66,506	$	66,506	$	—
Money market fund	Level 1	54,281		—		54,281		54,281		—
U.S. Treasury bonds	Level 1	14,660		(3)		14,657		—		14,657
Commercial paper	Level 2	2,893		(3)		2,890		—		2,890
Corporate bonds	Level 2	10,800		(2)		10,798		—		10,798
Total investments		$	149,140	$	(8)	$	149,132	$	120,787	$	28,345

At December 31, 2023, our investments consisted of the following (in thousands):


	As of December 31, 2023
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Fair Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities
Cash	Level 1	$	93,029	$	—	$	93,029	$	93,029	$	—
Money market fund	Level 1	56,322		—		56,322		56,322		—
U.S. Treasury bonds	Level 1	4,830		(2)		4,828		—		4,828


Agency bonds	Level 2	4,828		(3)		4,825		—		4,825
Total investments		$	159,009	$	(5)	$	159,004	$	149,351	$	9,653

We did not hold any Level 3 assets at any point during the three and six months ended June 30, 2024. Additionally, there were no transfers between Levels 1 and 2 during the six months ended June 30, 2024. Interest income on our investments totaled $1.7 million and $3.6 million for the three and six months ended June 30, 2024, respectively. Interest income on our investments totaled $2.7 million and $4.7 million for the three and six months

ended June 30, 2023, respectively. Interest income is recorded within other operating (income) expense on our consolidated statements of operations.

The contractual maturities of our debt securities as of June 30, 2024 and December 31, 2023 were all one year or less. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Goodwill [Roll Forward]
Beginning balance	$ 27,106	$ 26,349
Foreign currency translation adjustments	(801)	757
Ending balance	$ 26,305	$ 27,106

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

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+ Details

Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024 (excluding the six months ended June 30, 2024)	$ 734
2025	1,168
2026	752
2027	92
2028	92
Thereafter	202
Intangible assets, net	$ 3,040	$ 3,889

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities
Net loss	$ (76,515)	$ (79,184)
Adjustments to reconcile net loss to net cash provided by (used by) operating activities
Stock-based compensation	20,506	22,204
Depreciation expense and amortization of intangible assets	4,941	4,705
Lease impairment charges	5,462	0
Bad debt expense	253	419
Amortization of debt issuance costs	290	223
Benefit for deferred income taxes	(982)	(518)
Foreign currency transaction losses, net	12,787	0
Changes in assets and liabilities
Accounts receivable	37,114	28,663
Prepaid expenses and other assets	10,524	(4,924)
Deferred commissions	2,897	123
Accounts payable and accrued expenses	2,882	719
Accrued compensation and related benefits	(3,808)	(6,240)
Other current and non-current liabilities	121	1,066
Deferred revenue	(14,267)	(6,574)
Operating lease assets and liabilities	(954)	2,116
Net cash provided by (used by) operating activities	1,251	(37,202)
Cash flows from investing activities
Proceeds from maturities of investments	9,657	35,876
Payments for investments	(28,354)	(53,443)
Purchases of property and equipment	(2,932)	(7,805)
Net cash used by investing activities	(21,629)	(25,372)
Cash flows from financing activities
Proceeds from borrowings	50,000	92,000
Payments for debt issuance costs	(463)	(411)
Debt repayments	(2,500)	(1,687)
Repurchase of common stock	(50,019)	0
Payments for employee taxes related to the net share settlement of equity awards	(4,221)	(4,775)
Proceeds from exercise of common stock options	508	559
Net cash (used by) provided by financing activities	(6,695)	85,686
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(1,491)	309
Net (decrease) increase in cash, cash equivalents, and restricted cash	(28,564)	23,421
Cash, cash equivalents, and restricted cash at beginning of period	149,351	150,381
Cash, cash equivalents, and restricted cash at end of period	120,787	173,802
Supplemental disclosure of cash flow information
Cash paid for interest	11,168	2,731
Cash paid for income taxes	1,436	1,472
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures	$ 182	$ 392

Basic and Diluted Loss per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Securities Excluded from Calculation of Weighted Average Common Shares


	Three and Six Months Ended June 30,
	2024	2023
Stock options	2,530,468	2,625,286
Non-vested restricted stock units	1,189,539	1,125,505

Investments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]
Investment income, interest	$ 1.7	$ 2.7	$ 3.6	$ 4.7

Segment and Geographic Information - Schedule of Revenue by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 146,450	$ 127,715	$ 296,285	$ 262,950
Domestic
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	90,534	78,694	184,647	168,699
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 55,916	$ 49,021	$ 111,638	$ 94,251

- Definition

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

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+ Details

Segment and Geographic Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment and Geographic Information

13. Segment and Geographic Information

The following table summarizes revenue by geography for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Domestic	$	90,534	$	78,694	$	184,647	$	168,699
International	55,916		49,021		111,638		94,251
Total	$	146,450	$	127,715	$	296,285	$	262,950

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. The value of our long-lived assets, which are comprised of property and equipment and intangible assets, held in the United States and internationally as of June 30, 2024 were $31.8 million and $12.1 million, respectively. As of December 31, 2023, our long-lived assets held in the United States and internationally were $34.0 million and $12.6 million, respectively.

- 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.

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+ Details

Commitments, Contingencies, and Other Matters (Details) - USD ($)				1 Months Ended		3 Months Ended			6 Months Ended
	Sep. 01, 2023	Sep. 15, 2022	May 10, 2022	Mar. 31, 2024	Jul. 31, 2021	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Feb. 29, 2024
Loss Contingencies [Line Items]
Purchase obligation					$ 131,000,000
Purchase commitment, period					5 years
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						$ 10,700,000		$ 9,100,000	$ 21,000,000	$ 18,500,000
Authorized to repurchase											$ 50,000,000.0
Number of shares repurchased (in shares)				1,300,000
Average share price (in usd per share)				$ 37.86
Repurchase of common stock				$ 50,000,000.0			$ 50,019,000
Common stock, shares outstanding (in shares)						72,300,000			72,300,000
Treasury stock, shares (in shares)						1,213,686			1,213,686
Pegasystems Litigation
Loss Contingencies [Line Items]
JPI cost	$ 57,300,000
JPI, threshold amount	$ 500,000,000.0
Appeal process, period						3 years			3 years
JPI expense						$ 4,500,000			$ 9,000,000
JPI current						18,100,000			18,100,000
JPI noncurrent						$ 24,200,000			$ 24,200,000
Pegasystems Litigation \| Misappropriation of Trade Secrets
Loss Contingencies [Line Items]
Amount awarded in settlement		$ 2,036,000,000.000	$ 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		$ 122,000,000.0
Interest on damages awarded (as a percentage)		6.00%
Youyong Zou Litigation
Loss Contingencies [Line Items]
Amount awarded in settlement		$ 5,000,000

Revenue - Schedule of Contract Asset and Contract Liability (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets, current	$ 8,865	$ 12,052	$ 11,870	$ 12,540
Contract assets, non-current	1,072	915	1,069	1,720
Total contract assets	9,937	12,967	12,939	14,260
Deferred revenue, current	218,233	235,992	192,164	194,768
Deferred revenue, non-current	4,695	4,700	3,734	5,556
Total contract liabilities	$ 222,928	$ 240,692	$ 195,898	$ 200,324

Revenue - Revenue by Services (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 146,450	$ 127,715	$ 296,285	$ 262,950
Subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	112,974	93,794	230,668	192,751
Cloud subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	88,428	74,442	175,031	144,134
Term license subscriptions
Disaggregation of Revenue [Line Items]
Total revenue	17,227	12,999	40,998	36,150
Maintenance and support
Disaggregation of Revenue [Line Items]
Total revenue	7,319	6,353	14,639	12,467
Professional services
Disaggregation of Revenue [Line Items]
Total revenue	$ 33,476	$ 33,921	$ 65,617	$ 70,199

- 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

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Taxes [Line Items]
Effective tax rate (as a percent)	0.40%	(2.00%)	0.80%	(2.50%)
Net unrecognized tax benefits which would impact effective tax rate if recognized	$ 6.5		$ 6.5
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 - Additional Information (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) employee	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Allowance for doubtful accounts	$ 2,652	$ 2,652		$ 2,652		$ 2,606
Capitalized contract cost, amortization period (in years)	5 years	5 years		5 years
Commission expense		$ 11,500	$ 11,300	$ 22,900	$ 22,300
Number of reduction in employees \| employee	150
Severance costs		$ 5,500	$ 2,100	$ 5,500	$ 6,300
Computer software and hardware
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years	3 years		3 years
Internally developed software
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years	3 years		3 years
Equipment
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	5 years	5 years		5 years
Office furniture and fixtures
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years	10 years		10 years
Sales Revenue, Net \| Customer Concentration Risk \| Government Agencies
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		22.60%	20.10%	22.10%	20.30%
Sales Revenue, Net \| Customer Concentration Risk \| International Customers
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		38.20%	38.40%	37.70%	35.80%
Accounts Receivable \| Customer Concentration Risk \| Customer One
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage				15.00%

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 7,803	$ 8,041
Less: accumulated amortization	(4,763)	(4,152)
Intangible assets, net	3,040	3,889
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,881	7,091
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 922	$ 950