APPN - Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the Appian First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Reagan Redman, Investor Relations. Please go ahead.

Reagan Redman

operator. you, Thank thank and joining us. Good you morning, for quarter we results. review first will Appian's XXXX financial Today, are Calkins, me Matheos, With Matt Chief and Executive Financial Mark Officer; Officer. Chairman and Chief questions.During Litigation related to of safe business we the will laws After federal forward-looking harbor Reform the our XXXX. we pursuant and prepared statements call provisions are that remarks, made for Act make of may this under open Securities securities are Private call, the to trends comments to and opportunity the and for of upsell market related quarter to leadership customers full include our our and and our results, and financial These new expand and our second existing and guidance position, our industry acquire market growth to strategy, go-to-market the customers. ability year our benefits maintain ability ability trends, XXXX, our platform, to The expressions continue, similar reflect similar today. as intend, are statements will of of intended our future words and or estimate, forward-looking statements expectations.These only indications identify anticipate, expect, views to They as do of not date. reflect any subsequent our views are of actual a uncertainties from materially and variety expectations. risks to to differ cause results could that They subject

Matt this on financial reconciliation to the like to GAAP Calkins. CEO, Refer be turn XX-K, a I'd QX and tables of with For earnings call. directly the will Investors SEC. and website.Additionally, measures affect these XXXX our our XX-Q call non-GAAP of a material other XXXX actual These discussion to conference to results, release that, risks Matt? over are other our to periodic that our available measures for discussed on their our financial factors measures.With the filing comparable refer important the filings documents could the in most our section of

Matthew Calkins

of XXXX, $XXX.X Total year-over-year revenue XX% subscription the to In million. Subscriptions grew year-over-year grew Appian's XX% cloud to revenue million. Reagan. XX% $XXX.X grew Thanks, million. first to $XX.X revenue quarter

in held they've attendance our was show cross-functional Attendees reduced people of retention of times series The Many other had time would million.Two to this We had annual using TELUS revenue call heard we the onboarding siloed Navy risk success subscription XX% Novartis planning were expects how rate year has a Appian We loss of systems reduce cycles there. a a and a user required. discussing heard March on the than customers XXX% and $X.X platform. over to $XX major manage million. of app the app customers into with EBITDA up weeks our Adjusted of have before. prospects was how XX% conference. misallocation This XX% ago, integrated more approval from featured an cloud as single Our planning a by by assessment to developed fraction Appian. in employee and technologies saved XX.

Axiom others.Aside U.S. was them feature our Space, Merck, of I'll Army, heard the about there. of my AI, We part favorite the from new Rowe were announcements. but all start from among Price also customers, speakers T. the show Not

every company and in We're year, looking ways AI. X edge complementary is comes unique Big from budgets specifically in Our data. areas. later. strength validate a will technology, for to leader all come processes This AI

We're AI to XX-day metrics of of into For our controlled workers, data sources place them. ability we've to advantage information with a important AI fixed the without is World.Our Appian can perfect fabric AI, structure, connects main in in inform We and measure of the having in price offering, we announced that Appian's move the using data so process data. a has now, right need our an today other we security start that show ready-built There process a If observance improvement a privacy, set only A they goal, are proof dropping enterprise. efficiency, ROI. to the the with implications a important digital is and framework the and auditability, offer whom pointed to created. quick process launched strong bits set human activity AI ROI for from AI. by cost fabric, clearance confident what that data through AI to most across data more. collaborate pertinent sending towards filter

to could We of AWS. company acquired we already, ago. Our AI what provide to call Because it. mining of for as X our mining. it actionable. Because Toward was enterprise to AI, led volume process at Appian data Appian saw XXXX, together did working powerful This mining be opportunity connection industry mining process we features, ago collaboration years a our make cool, AWS revolution is into easy. we between purpose, the weeks we leader, great an powerful anticipated. will be a work can we amount XX Appian we had make long-standing I together it are a transactions World, and last few And in them. of because process on we strategic ever run That's critical agreement missing and time capabilities, day. mining but about future could since incredible Process the per we process we create was partnership XX real-time. process billion delivered month use both our long the an a announcement cloud goal and we announced this intensify a easy.When been our and We've

Our more is information enterprise traversing to whole new Process allows product is user the data mining, It real-time, HQ, Appian's a actionable than but fabric. that. of navigate also called it's it process and

You can down to way drill all and the rows individual processes.

applications. and other.Process And the heartbeat your level statistics life medical one devices board be sciences the to can company to be used country room before the should changes and This multinational regulations. It's industry enterprise from disruptions with processes critical make sources of reviewed action. a your on you now here for of compliance data best products processes intelligently easy in one observe efficiency, improve your sells must tune process. pharmaceutical efficiencies to recommends you Every countries. even how detect you feedback.Let's to momentary across Process it glide customer the sold to of give pause can can take Each and over unique quick and locally. it all, what product HQ XXX HQ can of their You and end maybe has moment-to-moment discuss

mining was efforts between what industry, infrastructure and of I nice users Process hope discovered Our short. XX,XXX we've business prime Appian. platforms, EPEx, World, reimagine annually, week cycle to Appian the analyze synergies the has Magic process this a of Quadrant. our ways XX,XXX or save of customer to with Process data process is and on to in manages demand. announced process pleased prep a I'm The been volume with Without using receiving days expects company complexity the and review HQ Gartner's HQ. also leader months process it execution we done of mining, many for They of changes attention lot times. this from hundreds data.At analysts, process' implementing of and labor named It making optimization. feature, people and of these data The teams a scientists, see reduce the products Appian thousands scales validation on data candidate for process days.In our customers elastic

cases. professionals this for like ground traffic of synthesizer. a is the will Procurement use technology daily. future customers that the like is that users prepared extra the sets, usage lot get excitement to discuss This latter to management Appian of Appian natural built we a Others that about few aftermath public free the with our will suite complex and throughput not on a for further to search stake acquisition be weekly past public but with let's EPEx write now serious leadership process test AI, insights requests. ready, of World, of insurer increases in it top high-end best called government about procurement of with There's our an generator, concept time. processes to disaster. have major of AI maximum glean website It's engine the for will aligns my data monthly from will use our an need or millions offered XXXx. the spikes sector. in the This former.Now AI, also belief could launched when the being a cements rise, cannot the the already deals QX. backed EPEx notable procurements by of for filing predictable about effort use This so run Appian being of government from new is the exposure. a ProcureSight XXx a Some ProcureSight content but benefits data on about scalability.At guess enough choice complement platform. from

management a and annual customer. QX, manages our automate city U.S. budget modernize platform review the of process, city's of selected major new dollars a funding. its wants First, processes office these billions to In and became it to of budget

Before and with employees by approval them to times now XX%. receive reduce proposals Appian, the physical office manually, process expects

uses story a X a a additional set It about with of app of medical claims. to a manage to customer, software it its to second Appian European its millions employees automate top warranty and saves In year dollars this the manufacturer devices to is platform. and to automotive users. process finance the firm our additional millions for It of deal QX, extend next to [Technical Appian saved divisions. division. story and purchased purchased a Difficulty] of installation the In of It for finance chain global manage more supply leading process of use X-figure company. one with thousands with in is existing its final similar medical QX, global to software dollars more order devices warranty Next operations, projects.Today's automate XXs workflows every

processes and these ran an expensive homegrown customer system. the Appian, Before on unscalable

millions push its company dollars can this expected you recognize will continue streamline in process boundaries technological year.As AI of our from to services XXs from recent installation Appian will earlier see mining. the the fiscal announcements, revenue of industry and backed to processes than Now our

simplicity. both We circumstance. our in one This to will rapid and promises be technological feel customers, of that year change, well we equipped to deliver to thrive power and

I'll Mark of discussion Now to call our a financials. for the hand

Mark Matheos

Matt. high Cloud our and adjusted year-over-year XX% at Cloud Thanks, the and million, year EBITDA we'll provide came guidance. and the subscription then revenue, review in revenue ranges. quarter, and the $XX.X was for full guidance above I'll total of an XXXX. increase above the highlights for of end revenue or financial second quarter guidance

XXX% from retention quarter. XXX% and a ago Our up as cloud XX, of subscription prior the year XXX% in March XXXX, revenue rate was

year-over-year. XX% the on We to prior was our was year-over-year. software continue XXX% services bookings for increase in total year's new XXX% quarterly revenue Professional a Approximately net compared subscription was the retention to in $XXX.X target XX% basis. revenue million, subscriptions down to an first a the of rate million, cloud XX% $XX.X quarter revenue XX% of of cloud quarter.Total

As timing we've fluctuate professional services to the due of mentioned large previously, can revenue from quarter-to-quarter projects.

to leverage drive enable to We continue to success. customer services and professional partners

revenue of and long our range. to XX% of a compared revenue strategy, total was we XX% expect revenue.Total to with However, the XX% continue in of at year-over-year top to prior decline professional percentage in was $XXX.X and the total term, of services million, increase our XX% subscriptions revenue period quarter. an revenue the guidance Consistent as year-ago

services metrics. period. We a movements to to was non-GAAP year-ago quarter the quarter. the compared total to benefit period for with was foreign in gross XX% to basis.Now margin XX% XX%, revenue in the our prior this in X% prior on profit gross and of profitability gross consistent exchange the operations in year-ago year-ago XX% XX% revenue turn of a continue the provided constant I'll Subscriptions and XX% prior the quarter. compared global was Note see our non-GAAP currency XX% to the margin period to contributing period compared margin XX% international Professional to demand our compared platform in X% Non-GAAP in with quarter. and XX% XX% that year-ago

services our and to We of platform. non-billable of in the most increase technology areas continue our to help achieve our organization invest adoption from our customers

million had XXXX of and when first and the between approximately the expect year-ago $X the low gross EBITDA loss quarter, and compared As we period. significantly to in compared million, for range million $X.X exchange foreign a loss year losses to in from result, In million to better ahead in the of year-ago non-GAAP previously $X.X million were and down to adjusted communicated, of expenses million XX% $XXX.X exchange beyond.Total first services an $XX.X the well ago. million the margin guidance non-GAAP quarter EBITDA million loss operating foreign same of of we $XXX.X period. a a $XX.X period professional quarter, gains $X Adjusted our X% decline was in

of our $XX.X for or per rates. outstanding we $X.XX net Therefore, forecast first movements the based and to compared million million was loss per million considered to in XX.X XXXX. for first or This FX the quarter shares first in diluted on loss guidance.Non-GAAP share they aren't the non-GAAP $XX.X don't of Just of is note, diluted million XX.X quarter diluted net share XXXX. XXXX for outstanding quarter of shares $X.XX

our first XXXX noted net $XX.X was exchange was a quarter non-GAAP balance As to loss guidance.Turning by in loss share, original our not impacted of or foreign per above, losses included in $X.XX million sheet. which

of with our significant investments This and million, XXXX. XX, business. were is million As equivalents cash March of $XX.X as XX, equivalents invest of compared of cash in to providing us $XXX.X $XXX and increase December XXXX, and and an as cash cash liquidity run million

first used in year. versus $XX.X of million the period cash the operations quarter, by $XX.X same cash provided million operations in For was last

was provided the reflect strong collections by quarter our journey the on cash Our and operations cash by bolstered towards profitability. milestone in

value also prospects of see a of increase XXXX, total the the to share X.XX million as in million as company. this deliver quarter the an We program revenue a year-ago growth period. of We from repurchase QX, bullish buyback first $XXX.X XX% during We're our bought an of of was $XX on deferred we long-term which back avenue shareholders.Finally, to shares. total million completed

contracts. invoiced of of whether customers of subscriptions seasonality revenue obligations. performance in are although is duration includes upfront customer indicator we by the revenue deferred of As business of on-prem guidance based revenue, customer is latter historically of and billed subscription to regardless a deploys on-prem.Our continue can subscription to revenue, approached and or our reminder, the cloud with that Appian of which quarter all timing true software annual on basis, quarterly guidance large second are remaining momentum an is The have license Consequently, line we've support scale Cloud, private majority we cloud their believe business the metrics invoicing, the the represented monthly. a customers the The revenue fluctuate better on billings or than or XXXX setting. how our

be reminder, due a tends to weakest strongest. to be QX As seasonality, QX our tends to our quarter, while

representing cloud XX%. previously cloud revenue representing to XXXX, outstanding. our and Total reaffirming assumes million the $XX growth quarter.For be XX%. This the guidance. revenue is between $XX XX.X average year XX% million. is first between we the second and expected diluted share to is are For million reduction year-over-year XX% between $X.XX XXXX, revenue be the announced loss XXXX includes EBITDA second million net and $XX quarter repurchase of the $XXX shares loss our growth expected common during to per expected be be is and of expected $X.XX. This Non-GAAP year-over-year from count revenue and full to quarter subscription weighted and for share of and between million share total $XX the Adjusted million, of between million, $XXX of

expect cost adjusted structure, We million optimize efficiencies We between to are profitability. range path midpoint.We $XX.X guidance. for and our improvement are in be This an to opportunities seeing million look the or EBITDA XX% improving costs guidance our and continue full previous the are $XX.X year $X.X EBITDA the our pleased of to adjusted we from for with the towards year we'll is XXXX. million full on now loss

from year the X First, is our new $X.XX loss can repurchase assumes guidance in share of share net a by quarter.Our non-GAAP XXXX full of revenue to share disclosed, the year the the range previously includes large guidance $X.XX. to count reduction the first services as during be updated X following: or per full This Our our range variability transactions. swung

QX expect be full services periods. flat the we revenue the For year, and professional comparison to over

growth mid-single-digit periods. that to by consistent will grow prior revenue on-premise license with and Second, will track a is rate seasonality

seasonality million to year million $X Fifth, capital in expenditures cost QX XXXX. XXXX. business quarter's $X $XX and other the in our Third, the EBITDA and Fourth, $XX million $XX for bigger in be loss. our will is million to expense user World. expected than expected the second quarter adjusted million conference, income and full total be are and $X between to the global be due adjusted the our Appian This between for loss QX year running of and are EBITDA first and interest million between full

Finally, our Appian growth our drive be April cost to to in continue to we and an time XX, it's of profitability. guidance XXXX.In as assumes structure invest conclusion, part exciting FX as rates optimize of

well are of for ahead positioned us. capitalize the our the we'll world-class that, opportunities Operator? to to on line questions. We demonstrate value with open the and continue And platform of

Operator

question first with comes Enders from Our Steve Instructions] [Operator Citi.

Steven Enders

just comment what maybe little guess, Okay. environment. getting better. update Investor macro I Great. you I maybe maybe bit at the to the a a think made deal be, I you're And you there the out guess hearing that Day in start, like hear I'd an was felt on

So be and you're environment bit kind I guess get of and little it that exactly would deal on viewing shifted a how how has today? that clarity evolved to good

Matthew Calkins

Yes.

Okay.

is U.S. around There's I a international almost which customers. see budgets with the isn't AI it's workable. some regards I our going amongst us, but affairs, the it's where around perfect. definitely effect is consternation AI, macro don't whether government, think that going, macro to around And inflation big for around

energy and not this So there's items. curiosity, that's not something that but with we're big from line working drawing

Steven Enders

maybe feedback the they're you thinking AI of helpful and get packaging Okay. I there. they're adoption update heard guess there. announced And some the from just I think products there. the new And about and pricing also on the then that how on about on the on thinking customers changes That's how an and investments, conference were

from a get bit to good little customer So clarity on feedback side. more the

Matthew Calkins

Yes.

that we they conference the I all, the up. lull Very went with pleased COVID, we've energy. attendance my say a good, with before enthusiasm, When they the right? I prospects opinion, of in This, was me conferences love energy. conference. had the let best through lost remote, First went COVID. love of the a bit was since showing

both the welcomed. that in serve have pricing think approach, which to raise I our been and changes prices our broadly simplify

the to willingness isn't didn't features ago. a what I this X think appreciation Why any complaints. get And for the announced new Instead, value in we weeks was there's free? see have I we've that. that there just simplicity, price And be now we used had created. the software. ways we've different get I not It drawing pushback on And don't got it's one, any friction. to additional so to many

simplifying the it's fact, process. and In accelerating

Operator

comes with question William next Our from Jake Blair. Roberge

Jacob Roberge

just the guidance Mark, you softer. bit a cloud half better But from understand revenue quarter. start acceleration. I back help solid off, at guess sequential we to can then looks was But of implies It points to it few QX, QX a when us look increase a the guidance? the

you acceleration, just you products guide? could walk have the some it whether new building in increases packaging or that the of that blocks pricing give model you confidence some for that in of us So the that increases, through be the

Mark Matheos

Jake. Sure,

traction that right? do question, kind lot we being price happened to a and background, increases And full in weakest. the got think I right what more mostly why think perspective, is we and [indiscernible] business. those and quarter and lowest our reaffirmed about our seasonality, for guide. in that's billings have analysis. terms we QX I it's it's expect seasonality year bookings recovery, also and is from the our in a just tend that, So QX the you've of really the us but That in things like revenue of the right

Jacob Roberge

the few a can data vendors And helpful. just the uptake new space about months. the your over past you've we've competitive heard fabric you seen solutions positioning from solution. Very And perspective, fabric other Okay. their launch talk then with few own a in just

just how us also few walk over you your quarters? could going monetization been past of And So the has path then through the the differentiation product?

Matthew Calkins

completely products Those Yes. are Thanks asking. different. for

own first data that and Our convoluted between liable competitors to our offer are internal I'm each is integrate every just a the is data that these products data so connect in data data, isn't place, whereas to their the architecture other built their own meant reach sources compatibility is source, natural their fabric enterprise fabric across to own products talking because there about. to

their own fabric their products. is So data integrate to

semantic expansive. treat is ours same they can the merely them of Ours is layer And a like and is are were common not sources integrated through like that the does all all there addressable language, that not, objects nomenclature. but these a data you other thing it so through objects, local creates

are ever different.As and borrowed to as a I entirely best reach fabric. an product, except differentiator joke such data a even rough differentiated almost it's very that us. different the we're quite feature a high. as terminology. for like that a But out joke. they future to the fabric fabric uptake adopted it's uptake, our a it's customers what here powerful the connect got, with very The that important company. enterprise is that greater launched, around of one That's fabric features we've data do of So we It's in it I share mean deeply data their for a data the we've having more launched guide. products anticipate

Operator

question Derrick TD Our Cowen. comes with next from Wood

Andrew Sherman

Mark, of year Derrick. how is guide. made you impacting deals after And for on a a QX comment start anything QX bookings X the a the perspective? any questions slowness Was ago QX? did Andrew And to It's there slip bookings bit from strong about the into linearity? maybe

Mark Matheos

the have right? it's so our that abnormal think for not XXXX, do abnormal far We seasonal us, Yes, effect the in certainly and more typical have seen a we've phenomena QX bookings, industry. and it's to to I much And think weaker ubiquitous nothing had we software that But this that's in than that almost of is I QX. it's is which kind there. year,

Andrew Sherman

year? Would potentially pricing sales a to then accelerate accelerating Good. things. expect Matt, Okay. And new potentially you about this comment cycles the of made that model you

Matthew Calkins

be pricing that I spend I for price Look, scalability, the engineers. absolutely new to from the actually mind make discussions roll our away don't I in engineers. plan. shift mind in the want time. that to that about when want out price. want basis have have also I we'll want I features customers I Appian be our the talk the reliability, different, and where I the And to feature to things that's with

will that So hopeful direction. it us table. I anything reduce cycles, it on think can't guide and I the am productive I sales to will do pro-Appian that help the but put conversation in more a

Andrew Sherman

Yes, that's great. One Matt. you, last one for

the of partners a leads flow have seems reduced quality quantity, Has lot improved on partners? focus it quality with kind and You from like. over number the that of pipeline the of

Matthew Calkins

early days I'd we're shift. this say that on

We have a few partners. emphasized

absolutely right. You're

I think a Right we going to than healthy in now, more the little past we're be from bit the for partners. getting that's did business.

pipeline, the this So see prioritization. on is our yes, to on But internal if to can things decision. already right, And making drop, the think partners it our all other we're indicator total is I early of take analysis. But have even we're making that like it's say right, of all right that probably more I you added confidence decision first ramifications sum, based the based looks right the up. the that up, addition long-term still we ones I

one just we've the choice. is this So made smaller the confirmations right that of

Operator

comes Our Kevin next from Goldman Kumar question with Sachs.

Kevin Kumar

up been picking That's of last to couple revenue quarters. wanted retention. I the about net ask

whether large you've go-to-market Just there and focus maybe been trends that of curious customers you're changes expansion the impacting seeing making and the the changes that some of some on kind pricing are kind your of of motion? to

Matthew Calkins

in between is the encouraged year, just now those, Yes. XXX would We early put It's and this them making out, made, net top of the But rate a net going our just but net revenue that talk customers in which we got trailing over a time indicator. positive, just I to focus believe the And revenue X we take the about you I is. Honestly, year help. retention that happened, is We're where of pointed at range of slowly kind see like Well, think it have revenue it's I XXX, the first our Qs rate. to to course had a on to metric made they into If a love in of say moves retention for more and that have the should I any attention filter I X. on of the of that changes that all, preference. I that's think to top large us. I'm the too we've the see by kind to opportunities, boost to run, have or be a long these we X. right? X long partners, even this our top changes, on But impact always or will going it's retention do asking it not or if think

Kevin Kumar

maybe response what's ProcureSight a talk a but That's then early, that for initial opportunity expands there? been helpful. and Appian? you about bit And It's probably how federal still bit the can the

Matthew Calkins

talk this been I've for itching about quarters. to

it. I'll for bringing to happy thank address be up. So you it

of very we've leadership really a know, acquisitions entire data past, data taps history AI-backed procurement once including suite, users interlocking in procurements As service buyer. the process It and past reinforces is of wide capitalizes solutions, sets are of a of the standard all offering which called been cover sets, government. established emerging or The into offering in Those very the at can it. deep, and that pleased popular. of for acquisition the government by and U.S. series management a that the or got we've itself in an that that the market different be That's you this on service, public an serial It's you very established give of the sector as past. sequentially. adopted new something singly awards the solicitations solutions a number

extraordinary So it accelerator. This procurements. your person we're to for working a into happened AI be use Appian, the in and going I it get help procurement And they're professional procurement of before not the to charge, of they right? already professional, without out substitute recommend got wouldn't also with for procurement framework to give expert world using will then but which the professional, that a then in they've a if far new the an the This AI-based procurement. more does advice is to you on and is write what's results confidence ProcureSight. got efficient allow they've

got So for excited for it hopes I've about one. high while. this we've a been

Operator

question next Our Instructions] comes [Operator Markets. Tom from KeyBanc Capital Blakey with

Thomas Blakey

in dovetailing my come it one for And a guess price I well, follow-up. just wondering, a looking on just in half, for assumptions the new a of of each lift, And expected XX% made I of the there, little prior number Mark? bookings Is as customers? larger have Andrew's think, the sounds were Is XQ upon with is is work? high. just pricing couple on sounded a out then second question the of Or this this renewal of set does for processes? kind the maybe bookings bookings. new riding a contract kind acceleration soft. And I the But Just what questions,

Matthew Calkins

then and first [ the part take neck You the I'll... ] That's right. of

Mark Matheos

Yes.

have for us. I last really did So guidance not an didn't weakness should, is February. that Tom, One thing seasonality. story we FX our which Again, mention, it's abnormal in I it's an since

year. backlog we for a million have did so dollars the leave few And our

despite full there's that. impact like able was And the an toll anything that. in our so that year But and pattern and any it assumptions year we're cloud reaffirm on for than this full year, or as nothing guide took to that's that, But we've year QX our bookings about our guidance well. other a different absorbed

Matthew Calkins

to new all our of about that higher and talk is and our in in tier the XX%. advanced all going higher pricing I'm tier the Great. we at just This World, system announced new the the they're features tier. Appian

like customers this, have we lot momentum. So of a

to it's best order it's to buy Management a these have customers think that feature going whether had XX% to Case more. we've in understand or And in long use time. they're HQ Process drop I probably higher the the tiers features, or

renewal up our come to likely negotiations. is this that think in I

when But should a at trying once. we're and XX% talk not at So It the It's mandatory to going increase. renew lure higher customers discuss renewing, we're rate. it's about not to optional, is why to all with for. I has customers large impact consumer But this. think which than I Appian is new a don't these rapid that surplus, up say more expect features. a get they from pay our that them they do

by any some they're of so good take that the soon because And pay [indiscernible] considered creating mandatory, will new of a features, rate, plan back I can such hope we which Appian for with sort here. features. That's be customer higher

Thomas Blakey

expect of follow-up a as surplus the just shifted incremental and And Matt. Or just a especially you that, have is this answer, you revenue it these great being surplus to wager higher would leading of these that if that fact given to you question consider the higher to tiers. all power tiers higher percentage a to terms some the that tier, tiers? higher to is take to move That's a of in those

Matthew Calkins

making want on the see we I I just a back want to where it. fight Yes. question. myself, to answer to more I just I'm with this love back prediction. this asked get dollars... hold I mean going but don't I and of and look,

Thomas Blakey

IT of surplus was push question kind saw plus continuing I low has as Where TCO commentary, follow-up I'm the could that you $X little save grow answer, customers' the with single-digit a a a digits I money, Matt, see coming? out ARR see considerable especially tiers the your if consideration to still context, Enders AI you maybe continues flattish bit. to Steve of the in double the over. company few to benefits, if sure of the it kind budgets. and coming, your to deals, budgets the to Appian and see been up we'll move of Appian's higher you million could budget budgets you flattened in kind do chart over budget and in Where environment. And do a and last years terms think of phenomenal other

could terms the answer you just points that of kind would If in helpful. an be of combine X

Matthew Calkins

Yes.

know volatility watching that I some there's some just chart is natural the I I it me for wouldn't people QX and do Let by closely. us. QX too say, think are watch quarter.

ticks absorbed $X get on accounts. too million the don't So in

belongs. is that say me However, real at right? this term the in player That's space high for us that market let long best-of-breed a end, where

all and larger feature And it strategically we deals on all focus reorganizing market and into the tags. is see elevated could in they understanding that, in so a place end. it's and priorities businesses elastic great focus to bigger new can where opportunities. the for us that that of show live have fits and at price EPEx way prices, recently, bunch the done and higher way and The larger on the and scale we're under the space, to sets right the belong. a in for we high you the features, What this we our market example, there's we've this more dropped It's feature. comfortably

Thomas Blakey

coalesce some to that. producing coalesce Makes in around and maybe future it Mark's around sense, could profits model the

Operator

[Operator Raimo from Instructions] with comes question Our next Lenschow Barclays.

Raimo Lenschow

and data think AI you platform the to about if come the have Matt, the data adoption, first. does

more world think on the you side. you should is earlier, going budgeting people mentioned is and about hence your the evolve that if and about data like there's the think that need be to first much AI move you talk will or here? not be data time the they actually be offering and up the bigger how So profit clean the Do Like could being? interesting for to don't

Matthew Calkins

AI I generally. data in underpursued think is conversation the

we society, don't a credit. enough As data give

As the data we're enough creates not for AI. credit value it broadly giving businesses, inside

you. take true personally. you that one further for point step me say, AI valuable truly is right? This it's when let Now and about will be

type Y, because just you way knew AI try the from to that a generic And AI the like an a about the a a when at be public the toy moves people to right? that's and with was they they in concerns, little this about back it there's to valuable prompting AI my level, AI owns, it's lot if you, themselves a concerns, businesses. And were true kind going to you hurdle with you. the AI, until then But to And would a of being were I you, me, little of priority it's real But knows would business novelty. jewels exposure public if for now business when explain into to crown basically if you. algorithm, the very it the around for business, or being there's They're what there's question would care a you recommend answer data as business. that the to of nothing you answer. right regulatory give X, When you the If a briefly, AI, themselves. AI right that bit of this get get knows the true toy that's interact the now fear system. When person, a interact and means it's because understanding tool, it it's with understands privacy a that also is

to to across that fabric we this business. real regulatory of to do you, about get question, of and concerns. you out in a question. allow any And have or share to you constitutes that you right the reply have I that case, as And to getting how share propose about can the an to slice and We're but select valuable question to critical tiny a right one answer your answer get data, how filter, order going That's figure that AI. only share value to business slice AI, answer that frontier AI answer our a the the triggering AI without have to in with privacy in one For serious us And going question. being information. make this, to that's mean is data going a we're civilization will to will how we that

long important to to data a out. since kind and proposal. to of do the a leader fabric. a around to Appian it, We in I'm we've AI. I between it huge That's little central want our positioned specific lay how is And in what I'd a it. a we're data I make you that of going sort asked has to just AI And data certain capability ability to do. for. to offer going to what our fabric strategically trying really fabric be going ourselves on about it's yet the proposal And have the with That's but a synergy between data I'm and AI. intention we're us one figured we're here, private personalization to of valuable got point, the proposal.So believer facilitate utterly

Raimo Lenschow

you. year? us make always the of like question is Like like, a kind follow-up, get little total little And Can valuable. No, bit year, the here a Yes, about So big you give that it's Yes. is And the that it's pushback? for the got the at can said always handholding fine. all most shape this then I of Mark, you where pipeline. look with sense really because more that's plan the [indiscernible], for obviously, you one you maybe you if bookings talk the bit

Mark Matheos

the mean I kind Yes. exact expected. pipeline has we of the behavior shown

we've been our weakest customers. And buying linearity for and quarters. QX that which is is as quarter, the the us, has change. no loaded typical for back-end of seasonal said there's our patterns So just years, was

FX piece departure full the is missing year. of is what cause other only backlog cloud of which revenue reiterate, the I'll the $X.X the did our about million which So piece, for

see, thing QX one that exception into versus abnormal. for caution in well. anyone rule It's more that's you read I to as would the really could us. So anything obviously, But the

Operator

Our next question with Steve from comes Enders Citi.

Steven Enders

in be I of maybe the embedded helpful. the guide I kind that guide guess impact I now what's And the now the want guess, clarify the I to was the what would for maybe year guess in also are the just kind framing for being XQ before the for guide embedded impact seeing? FX and year? you of

Mark Matheos

Sure. Yes.

certain that what And or pointing So to forecast however time, saw is we our put or QX the year set for subscription presented of yielded cloud out foreign European that X currency essentially guidance And revenue, that the exchange of right? have forecast in I'm you we we after since the rates FX. when passage don't want that revenue leave that amount in $X.X guidance that were the the in to February, of results million changes a point months, rates our it. backlog, weakened

million our guide, so year we've that And impact. $X.X absorbed full by maintaining right,

that the $X million. second Is quarter, impact was helpful? around For that

Steven Enders

Yes, that's clear.

by the saying have would raised the [indiscernible] to because constant $X.X basis, that you're So currency guide you're you but maintained. million if year, it's for FX that,

Mark Matheos

have for certainly I using would for just word quarter. of If then we the second the currency because would to full and use those year's constant the those but million year rates hesitate that $X the rates, prior million had Yes. $X.X rates, as increase use implies numbers, February.

Steven Enders

I No, appreciate the Perfect. there. clarification Okay.

Operator

Stanley. Instructions] from question Saavedra Morgan Oscar comes next with [Operator Our

Oscar Saavedra

a demand for see Saavedra quarters. and verticals uptick on I Singh. just healthcare. Oscar several It's retention being nice on net services, past core want that question environment to to financial ask Sanjit like the health like government your rate in the macro your of over and the

see in what uptick your seeing that you're that just the demand that others you software while to general and So seeing is environment view consistent allowing on deteriorate?

Matthew Calkins

are of I would Appian Yes, software. value that say getting a customers out lot of our

that benefit, investment. very being doing on delivering with all of technology outcomes these attendant the see reliable, innovation in we're their new features, You them satisfying can we're

XX%, think that, surveys. in well satisfaction retention that at and up us the for that give they also as support on shows turn and us. The is retention the I industry they revenue gross high

happening great. our loyal I experience say I but and customers are is can't will for speculate like sure So that that other on because enthusiastic make firms, what's we their

Oscar Saavedra

Got it.

So that? of environment, broader like just around demand just particular anything budget constraint terms or in still seeing you the any like are

Matthew Calkins

Not particular... No.

Oscar Saavedra

additional Okay. any more. like deals? one those driving on And details partnership what's AWS early your deals, driving just On

Matthew Calkins

that to announce. wanted part it that of announced We I

our other anything about don't get enthusiastic want long-standing we're into that more to with to than I relationship So AWS. say

Operator

further at showing call. [Operator this This today's no concludes participating. Instructions] questions Thank for conference I'm you time.

disconnect. now may You

Appian (APPN) 2 May 242024 Q1 Earnings call transcript