Appian reported QQ3 2024 revenue of $154.1 million, up 12.37% year over year and 5.19% quarter over quarter, driven by continued demand for its low-code automation platform across multiple industries. Gross profit reached $116.97 million with a gross margin of 75.93%, signaling strong product economics on a per-dollar basis. However, the quarter featured a continued Earnings cadence where operating income was negative (-$7.16 million) and net income also negative (-$2.10 million), resulting in an EPS of -$0.029. EBITDA stood at $9.95 million, implying some operating leverage beneath the surface but insufficient to offset high operating expenses in the near term. The expense mix remains heavily weighted toward operating investments: Research and Development $38.57 million, Selling and Administrative expenses (SG&A + SG&A-like) $85.55 million, culminating in total operating expenses of $124.13 million, which compressed margins despite top-line growth.
Quarterly performance snapshot (USD, IFRS/GAAP-like presentation as provided):
- Revenue: 154.052 million; YoY +12.37%; QoQ +5.19%
- Gross Profit: 116.968 million; Gross Margin 75.93% (0.7593)
- Operating Income: (7.157) million; Operating Margin (4.65%)
- EBITDA: 7.949 million; EBITDA Margin 5.16%
- Net Income: (2.10) million; Net Margin (1.36%)
- EPS: (0.029) per diluted share
- Weighted Avg Shares Out: 72.396 million
- Cash from Operations: (8.244) million; Capex: (0.355) million; Free Cash Flow: (8.600) million
- Cash and Investments: End of Period 99.193 million; Total Cash + Short-term Investments 139.991 million
- Total Assets: 549.913 million; Total Liabilities: 599.714 million; Stockholders’ Equity: (49.801) million
- Debt Metrics: Total Debt 319.563 million; Net Debt 220.370 million; Deferred Revenue 224.199 million
- Liquidity Ratios: Current Ratio 1.09; Quick Ratio 1.09; Cash Ratio 0.33
- Operating Metrics: DSO 87.93 days; Revenue per Share, Cash per Share, and other leverage ratios indicate mixed operating leverage with heavy intangible and deferred revenue components
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
154.05M
12.37%
5.19%
Gross Profit
116.97M
15.78%
11.36%
Operating Income
-7.16M
52.97%
77.87%
Net Income
-2.10M
90.56%
95.18%
EPS
-0.03
90.33%
95.17%
Key Financial Ratios
currentRatio
1.09
grossProfitMargin
73.8%
operatingProfitMargin
-3.15%
netProfitMargin
-1.36%
returnOnAssets
-0.38%
returnOnEquity
4.22%
debtEquityRatio
-6.42
operatingCashFlowPerShare
$-0.11
freeCashFlowPerShare
$-0.12
priceToBookRatio
-50.02
priceEarningsRatio
-296.57
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript highlights unavailable in the provided data. No earnings call transcript content or management quotes are included in the supplied source, so quotes and thematic quotes-by-theme cannot be generated. Note: If a transcript is provided, we will extract management perspectives on strategy, operations, and market conditions with direct quotes and attribution.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance is reported in the provided data. In the absence of management-provided targets, the outlook should be inferred from the quarter’s trajectory and industry context: (1) revenue growth remains positive but relies on ongoing subscription adoption and expansion in select verticals; (2) profitability hinges on achieving operating leverage via expense discipline and mix shifts toward higher-margin recurring revenue; (3) balance sheet risk is amplified by substantial debt and negative equity, which will require sustained cash flow generation or capital actions to improve leverage metrics. Investors should monitor: visibility into renewal/expansion in enterprise accounts, progression of deferred revenue declines or acceleration, GM/EBITDA margin trajectory, and any management color on cost control, headcount efficiency, and plan to deleverage.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HGM.L Focus
75.93%
-3.15%
4.22%
-296.57%
0HGC.L
41.00%
34.60%
-4.36%
-10.22%
SIS.L
43.80%
-26.80%
-13.80%
-1.31%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Appian is navigating a growth phase in a competitive low-code software market. The QQ3 2024 results show healthy top-line momentum but persistent near-term profitability challenges and a meaningful debt burden. The stock presents upside if management can demonstrate tangible operating leverage, improved free cash flow, and a deleveraging trajectory while continuing to expand ARR in enterprise verticals. However, the current valuation signals elevated expectations (price-to-sales around 16.2x and a high enterprise value multiple) relative to peers, underscoring the need for clear evidence of margin expansion and cash-flow resilience. Investors should demand visibility on: (1) sustained revenue growth with improving gross and operating margins; (2) a credible plan to reduce net debt and restore equity; (3) progress in turning deferred revenue into durable cash flows; and (4) management’s commentary on long-term strategy and path to profitability.
Key Investment Factors
Growth Potential
Long-term growth potential anchored in Appian’s low-code automation platform, targeting regulated industries (financial services, government, life sciences) and digital transformation initiatives. Potential upside from higher-value ARR, increased net revenue expansion (upsell/cross-sell) and scale of professional services optimization as adoption matures. Global expansion opportunities and strategic partnerships could broaden addressable market beyond current footprint.
Profitability Risk
Primary risks include negative near-term profitability and free cash flow impairment due to elevated operating expenses, a sizable debt burden and negative equity position, and reliance on large enterprise deals for sustained growth. Competitive intensity in the low-code/automation space, potential revisions in IT spend cycles, and longer-than-expected sales cycles could pressure revenue growth and operating leverage. Deferred revenue dependence increases revenue-recognition risk if bookings soften.
Financial Position
Liquidity is modestly robust with cash and short-term investments of ~$140 million, yet total debt (~$319.6 million) exceeds cash, yielding a net debt of ~$220.4 million. Negative stockholders’ equity (~$49.8 million) signals accumulated losses. The company carries a sizable deferred revenue balance (~$224.2 million), which can support revenue recognition in future periods but requires healthy renewal/consumption of contracts to translate into cash flow.
SWOT Analysis
Strengths
Healthy gross margin reported at approximately 75.9% supports scalable software economics.
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