Delaware | 001-38098 | 54-1956084 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
11955 Democracy Drive, Suite 1700, Reston, Virginia | 20190 | |
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
Press release dated August 2, 2018. |
Appian Corporation | |||
Date: August 2, 2018 | By: | /s/ Mark Lynch | |
Mark Lynch | |||
Chief Financial Officer |
• | Revenue: Subscription revenue was $27.0 million for the second quarter of 2018, up 36% compared to the second quarter of 2017. Total subscriptions, software and support revenue increased 50% year-over-year to $33.0 million for the second quarter of 2018, inclusive of $4.5 million in perpetual software revenue. Professional services revenue was $26.8 million for the second quarter of 2018, an increase of 27% year-over-year. Total revenue was $59.9 million for the second quarter of 2018, up 39% compared to the second quarter of 2017. Subscription revenue retention rate was 119% as of June 30, 2018. |
• | Operating loss and non-GAAP operating loss: GAAP operating loss was $(8.3) million for the second quarter of 2018, compared to $(14.8) million for the second quarter of 2017. Non-GAAP operating loss was $(6.1) million for the second quarter of 2018, compared to $(5.5) million for the second quarter of 2017. |
• | Net loss and non-GAAP net loss: GAAP net loss was $(11.0) million for the second quarter of 2018, compared to $(14.5) million for the second quarter of 2017. GAAP net loss per share attributable to common stockholders was $(0.18) for the second quarter of 2018 based on 61.4 million weighted-average shares outstanding, compared to $(0.34) for the second quarter of 2017 based on 42.8 million weighted-average shares outstanding. Non-GAAP net loss was $(8.8) million for the second quarter of 2018, compared to $(4.4) million for the second quarter of 2017. Non-GAAP net loss per share was $(0.14) for the second quarter of 2018, based on 61.4 million basic and diluted shares outstanding, compared to $(0.08) for the second quarter of 2017, based on 55.0 million basic and diluted shares outstanding. |
• | Balance sheet and cash flows: As of June 30 2018, Appian had cash and cash equivalents of $50.4 million. Cash used in operating activities was $(9.8) million for the three months ended June 30, 2018, compared with cash used in operating activities of $(9.5) million for the three months ended June 30, 2017. |
• | David Mitchell will become Senior Vice President of Sales effective January 1, 2019. Edward Hughes will remain at Appian. He will transition to a new executive position and serve as an advisor to our sales leadership. Mr. Mitchell has 30 years of experience in the software industry including executive roles at webMethods and SoftwareAG. He has been |
• | Announced a new product for rapidly building unique contact center solutions that deliver unrivaled customer experiences. Appian Intelligent Contact Center™ Platform is a new cloud platform tailored to the unique needs of contact center teams. |
• | Released the latest version of Appian, the Digital Transformation Platform. The new release makes it easier than ever to rapidly build powerful software applications. |
• | Named a Visionary by Gartner in its 2018 Magic Quadrant for Enterprise High-Productivity Application Platform as a Service. The report evaluates vendors in the enterprise high-productivity application platform as a service (hpaPaaS) market and their product offerings. |
• | Earned the #1 position on The Washington Post’s “Top Workplaces 2018” list. |
• | Announced the launch of its new Singapore regional office directly supporting Appian’s current customers in South East Asia (ASEAN) and helping to meet the increasing demand for Appian’s solutions throughout the region. |
• | Bayer, a top five global pharmaceuticals company selected Appian to provide a new digital solution for pharmacovigilance reporting. |
• | HELLA, the lighting and electronics expert, is implementing Appian’s low-code business process management platform. HELLA chose Appian for its fast and easy implementation, greater flexibility, and faster roll-out of processes. In addition, its fully managed, EU-hosted Platform-as-a-Service (PaaS) significantly reduces system administration time and efforts. |
• | Announced an agreement with Addiko Bank, an international financial group headquartered in Vienna, Austria, to deploy two new digital banking application on Appian’s low-code application platform. The applications have reduced customer wait times by as much as 50% by cutting “time to yes” for simple loans down from one week to just three days. |
• | Third Quarter 2018 Guidance: |
• | Subscription revenue is expected to be in the range of $27.7 million and $27.9 million, representing year-over-year growth of between 34% and 35%. |
• | Total revenue is expected to be in the range of $49.6 million and $49.8 million, representing year-over-year growth of between 11% and 12%. |
• | Non-GAAP operating loss is expected to be in the range of $(11.2) million and $(10.2) million. |
• | Non-GAAP net loss per share is expected to be in the range of $(0.19) and $(0.17). This assumes 61.8 million weighted average common shares outstanding. |
• | Full Year 2018 Guidance: |
• | Subscription revenue is now expected to be in the range of $110.5 million and $110.9 million, representing year-over-year growth of 34%. |
• | Total revenue is now expected to be in the range of $213.8 million and $215.3 million, representing year-over-year growth of between 21% and 22%. |
• | Non-GAAP operating loss is now expected to be in the range of $(36.4) million and $(34.4) million. |
• | Non-GAAP net loss per share is now expected to be in the range of $(0.63) and $(0.60). This assumes 61.6 million non-GAAP weighted average common shares outstanding. |
As of June 30, 2018 | As of December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 50,363 | $ | 73,758 | |||
Accounts receivable, net of allowance of $400 | 64,916 | 55,315 | |||||
Deferred commissions, current | 10,890 | 9,117 | |||||
Prepaid expenses and other current assets | 6,374 | 7,032 | |||||
Total current assets | 132,543 | 145,222 | |||||
Property and equipment, net | 3,208 | 2,663 | |||||
Deferred commissions, net of current portion | 13,665 | 12,376 | |||||
Deferred tax assets | 245 | 281 | |||||
Other assets | 599 | 510 | |||||
Total assets | $ | 150,260 | $ | 161,052 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 8,888 | $ | 5,226 | |||
Accrued expenses | 6,468 | 6,467 | |||||
Accrued compensation and related benefits | 13,644 | 12,075 | |||||
Deferred revenue, current | 72,901 | 70,165 | |||||
Other current liabilities | 1,541 | 1,182 | |||||
Total current liabilities | 103,442 | 95,115 | |||||
Deferred tax liabilities | 11 | 87 | |||||
Deferred revenue, net of current portion | 14,514 | 18,922 | |||||
Other long-term liabilities | 234 | 1,404 | |||||
Total liabilities | 118,201 | 115,528 | |||||
Stockholders’ equity | |||||||
Class A common stock—par value $0.0001; 500,000,000 shares authorized and 18,891,315 shares issued and outstanding as of June 30, 2018; 500,000,000 shares authorized and 13,030,081 shares issued and outstanding as of December 31, 2017 | 2 | 1 | |||||
Class B common stock—par value $0.0001; 100,000,000 shares authorized and 42,318,846 shares issued and outstanding as of June 30, 2018; 100,000,000 shares authorized, 47,569,796 shares issued and outstanding as of December 31, 2017 | 4 | 5 | |||||
Additional paid-in capital | 147,786 | 141,268 | |||||
Accumulated other comprehensive income | 976 | 439 | |||||
Accumulated deficit | (116,709 | ) | (96,189 | ) | |||
Total stockholders’ equity | 32,059 | 45,524 | |||||
Total liabilities and stockholders’ equity | $ | 150,260 | $ | 161,052 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue: | |||||||||||||||
Subscriptions, software and support | $ | 33,047 | $ | 22,012 | $ | 59,999 | $ | 43,456 | |||||||
Professional services | 26,836 | 21,186 | 51,580 | 38,071 | |||||||||||
Total revenue | 59,883 | 43,198 | 111,579 | 81,527 | |||||||||||
Cost of revenue: | |||||||||||||||
Subscriptions, software and support | 2,824 | 2,488 | 5,452 | 4,550 | |||||||||||
Professional services | 18,750 | 14,149 | 37,171 | 24,777 | |||||||||||
Total cost of revenue | 21,574 | 16,637 | 42,623 | 29,327 | |||||||||||
Gross profit | 38,309 | 26,561 | 68,956 | 52,200 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 27,384 | 22,775 | 50,348 | 39,778 | |||||||||||
Research and development | 10,785 | 9,971 | 20,655 | 17,271 | |||||||||||
General and administrative | 8,425 | 8,635 | 16,485 | 13,484 | |||||||||||
Total operating expenses | 46,594 | 41,381 | 87,488 | 70,533 | |||||||||||
Operating loss | (8,285 | ) | (14,820 | ) | (18,532 | ) | (18,333 | ) | |||||||
Other expense (income): | |||||||||||||||
Other expense (income), net | 2,593 | (734 | ) | 1,675 | (1,233 | ) | |||||||||
Interest expense | 54 | 197 | 67 | 453 | |||||||||||
Total other expense (income) | 2,647 | (537 | ) | 1,742 | (780 | ) | |||||||||
Net loss before income taxes | (10,932 | ) | (14,283 | ) | (20,274 | ) | (17,553 | ) | |||||||
Income tax expense | 35 | 176 | 246 | 301 | |||||||||||
Net loss | (10,967 | ) | (14,459 | ) | (20,520 | ) | (17,854 | ) | |||||||
Accretion of dividends on convertible preferred stock | — | 143 | — | 357 | |||||||||||
Net loss attributable to common stockholders | $ | (10,967 | ) | $ | (14,602 | ) | $ | (20,520 | ) | $ | (18,211 | ) | |||
Net loss per share attributable to common stockholders: | |||||||||||||||
Basic and diluted | $ | (0.18 | ) | $ | (0.34 | ) | $ | (0.34 | ) | $ | (0.47 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 61,401,466 | 42,800,875 | 61,127,516 | 38,561,349 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cost of revenue | |||||||||||||||
Subscriptions, software and support | $ | 107 | $ | 404 | $ | 217 | $ | 404 | |||||||
Professional services | 203 | 984 | 423 | 984 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 538 | 2,423 | 1,045 | 2,423 | |||||||||||
Research and development | 342 | 2,202 | 733 | 2,202 | |||||||||||
General and administrative | 1,016 | 3,332 | 2,028 | 3,332 | |||||||||||
Total stock-based compensation expense | $ | 2,206 | $ | 9,345 | $ | 4,446 | $ | 9,345 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (20,520 | ) | $ | (17,854 | ) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 951 | 443 | |||||
Deferred income taxes | 77 | — | |||||
Stock-based compensation | 4,446 | 9,345 | |||||
Fair value adjustment for warrant liability | — | 341 | |||||
Loss on extinguishment of debt | — | 384 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (9,095 | ) | (1,248 | ) | |||
Prepaid expenses and other assets | (311 | ) | (2,362 | ) | |||
Deferred commissions | (3,062 | ) | (933 | ) | |||
Accounts payable and accrued expenses | 3,480 | 5,296 | |||||
Accrued compensation and related benefits | 1,995 | (687 | ) | ||||
Other current liabilities | 951 | (186 | ) | ||||
Deferred revenue | (1,368 | ) | 1,728 | ||||
Other long-term liabilities | (1,160 | ) | (17 | ) | |||
Net cash (used in) provided by operating activities | (23,616 | ) | (5,750 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (1,593 | ) | (205 | ) | |||
Net cash used in investing activities | (1,593 | ) | (205 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriting discounts | — | 80,213 | |||||
Payment of deferred initial public offering costs | — | (1,081 | ) | ||||
Payment of dividend to Series A preferred stockholders | — | (7,565 | ) | ||||
Proceeds from exercise of common stock options | 2,072 | 452 | |||||
Proceeds from issuance of long-term debt, net of debt issuance costs | — | 19,616 | |||||
Repayment of long-term debt | — | (40,000 | ) | ||||
Net cash provided by financing activities | 2,072 | 51,635 | |||||
Effect of foreign exchange rate changes on cash and cash equivalents | (258 | ) | 831 | ||||
Net (decrease) increase in cash and cash equivalents | (23,395 | ) | 46,511 | ||||
Cash and cash equivalents, beginning of period | 73,758 | 31,143 | |||||
Cash and cash equivalents, end of period | $ | 50,363 | $ | 77,654 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 21 | $ | 506 | |||
Cash paid for income taxes | $ | 175 | $ | 228 | |||
Supplemental disclosure of non-cash financing activities: | |||||||
Conversion of convertible preferred stock to common stock | $ | — | $ | 48,207 | |||
Conversion of convertible preferred stock warrant to common stock warrant | $ | — | $ | 1,191 | |||
Accretion of dividends on convertible preferred stock | $ | — | $ | 357 | |||
Deferred offering costs included in accounts payable and accrued expenses | $ | — | $ | 1,343 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Reconciliation of non-GAAP operating loss: | |||||||||||||||
GAAP operating loss | $ | (8,285 | ) | $ | (14,820 | ) | $ | (18,532 | ) | $ | (18,333 | ) | |||
Add back: | |||||||||||||||
Stock-based compensation expense | 2,206 | 9,345 | 4,446 | 9,345 | |||||||||||
Non-GAAP operating loss | $ | (6,079 | ) | $ | (5,475 | ) | $ | (14,086 | ) | $ | (8,988 | ) | |||
Reconciliation of non-GAAP net loss: | |||||||||||||||
GAAP net loss | $ | (10,967 | ) | $ | (14,459 | ) | $ | (20,520 | ) | $ | (17,854 | ) | |||
Add back: | |||||||||||||||
Stock-based compensation expense | 2,206 | 9,345 | 4,446 | 9,345 | |||||||||||
Change in fair value of warrant liability | — | 341 | — | 341 | |||||||||||
Loss on extinguishment of debt | — | 384 | — | 384 | |||||||||||
Non-GAAP net loss | $ | (8,761 | ) | $ | (4,389 | ) | $ | (16,074 | ) | $ | (7,784 | ) | |||
Non-GAAP earnings per share: | |||||||||||||||
Non-GAAP net loss | $ | (8,761 | ) | $ | (4,389 | ) | $ | (16,074 | ) | $ | (7,784 | ) | |||
Non-GAAP weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 61,401,466 | 54,976,178 | 61,127,516 | 53,714,039 | |||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.14 | ) | |||
Reconciliation of non-GAAP net loss per share, basic and diluted: | |||||||||||||||
GAAP net loss per share attributable to common stockholders, basic and diluted | $ | (0.18 | ) | $ | (0.34 | ) | $ | (0.34 | ) | $ | (0.47 | ) | |||
Add back: | |||||||||||||||
Non-GAAP adjustments to net loss per share | 0.04 | 0.26 | 0.08 | 0.33 | |||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.14 | ) | |||
Reconciliation of non-GAAP weighted average shares outstanding, basic and diluted: | |||||||||||||||
GAAP weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 61,401,466 | 42,800,875 | 61,127,516 | 38,561,349 | |||||||||||
Add back: | |||||||||||||||
Additional weighted average shares giving effect to conversion of preferred stock at the beginning of the period | — | 12,175,303 | — | 15,152,690 | |||||||||||
Non-GAAP weighted average shares used to compute net loss per share, basic and diluted | 61,401,466 | 54,976,178 | 61,127,516 | 53,714,039 |