APPN

Investing.com -- Citi sees further upside in Appian (NASDAQ:APPN) and Pegasystems Inc (NASDAQ:PEGA), citing improving demand for software that automates business processes and incorporates artificial intelligence. Still guessing which stocks will beat the market? Our AI portfolio updates monthly and is outperforming the S&P 500 by 118%. See this month's list » The bank favours Appian for its stronger execution, accelerating cloud growth and improving federal demand, while viewing Pegasystems as an undervalued longer-term opportunity despite near-term sales execution concerns. Citi maintains a "buy" rating on Pegasystems, seeing potential upside after a difficult period for sales growth. It cut its price target to $52 from $55 to reflect weaker near-term visibility. At $34.91 on October 12, the shares implied about 49% upside to the new target. The key question is whether slower annual contract value (ACV) growth, which measures new and expanded customer contracts, reflects delayed deals and sales-process changes or a more lasting slowdown. ACV growth eased to 8% year on year in the second quarter from 11% in the first, prompting management to lower its full-year growth target to about 10% from an initial 15%. Unsure what to buy ahead of earnings? Our AI's recent pre-earnings calls delivered gains of +77% to +118% after results dropped. See this month's earnings picks » Citi believes investors are underestimating Pega Blueprint, its AI-powered application-design and workflow-automation tool. Internal testing cited by the bank showed it could produce a demonstration application in 45 hours, compared with more than 2,000 hours using traditional development methods. Pegasystems reports third-quarter results on October 20 after the market close. Investors will look for signs that delayed deals are converting into contracts, alongside updates on the year-end pipeline, cash flow and AI-related products. Appian is Citi's preferred pick, citing stronger execution, accelerating cloud growth and improving government demand. The bank maintains a Buy rating and $40 price target, against a share price of $38.93 on October 12. Shares have risen 28% since the close following second-quarter results, outperforming the IGV software index's 12% gain. They are up 10% year to date, versus 5% for the index, but Citi believes investors still underestimate the durability of cloud growth and the potential to monetise AI products. Second-quarter cloud revenue growth accelerated to 22% year on year, while remaining performance obligations due within 12 months rose 23%. Federal demand is another catalyst, with Citi finding Appian and related partners secured a record $60 million in third-quarter awards, up from $49 million a year earlier. Investors will watch whether cloud growth stays above 20% and whether higher sales and marketing spending delivers sustained growth. Appian reports third-quarter results on October 29, according to FactSet data cited by Citi. Original Article Citi spots AI upside in two software stocks despite earnings and execution risks Indonesia stocks suffer biggest daily slump since 1998 as MSCI weighs downgrade Tesla unveils new Roadster with flight capabilities; set for production in 2028

Appian’s second quarter results were driven by strong demand for its low-code automation platform, with management attributing the growth to accelerated adoption of its AI capabilities across enterprise and public sector customers. CEO Matthew Calkins emphasized that AI is now a central component of customer deployments, noting, “Customers' Appian AI usage is 20x greater than last Q2, and 85% of our Q2 new logos bought our AI.” The company’s success was broad-based across regions and industries, reflecting growing recognition of the need for reliable, enterprise-grade AI infrastructure—especially among highly regulated organizations such as insurers, banks, and government agencies. Is now the time to buy APPN? Find out in our full research report (it’s free). Revenue: $203.3 million vs analyst estimates of $193.3 million (19.1% year-on-year growth, 5.1% beat) Adjusted EPS: $0.13 vs analyst estimates of $0 (significant beat) Adjusted EBITDA: $16.16 million vs analyst estimates of $7.25 million (7.9% margin, significant beat) The company lifted its revenue guidance for the full year to $849 million at the midpoint from $825 million, a 2.9% increase Management raised its full-year Adjusted EPS guidance to $1.08 at the midpoint, a 8.5% increase EBITDA guidance for the full year is $107 million at the midpoint, above analyst estimates of $101.5 million Operating Margin: -2.7%, up from -6.4% in the same quarter last year Net Revenue Retention Rate: 115% Billings: $197.4 million at quarter end, up 7.4% year on year Market Capitalization: $2.49 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Devin Au (KeyBanc Capital Markets) asked which verticals drove the strongest cloud subscription growth. CEO Matthew Calkins emphasized broad-based strength, stating, “We showed good outcomes and above expectations in every major region.” Patrick McIlwee (William Blair) inquired about potential deceleration in bookings growth and AI’s impact on deal flow. Calkins reiterated that AI is an “accelerant” for Appian, while CFO Serge Tanjga noted that foreign exchange has shifted to a headwind. Steven Enders (Citi) asked about the size and quality of the new business pipeline and how investments in sales capacity align with future opportunity. Calkins cited an “unusually strong” pipeline and confidence in continued win rates. Sanjit Singh (Morgan Stanley) probed why Appian has avoided the budget scrutiny and token spend hesitation seen by competitors. Calkins explained that Appian’s AI orchestration layer is increasingly viewed as essential, while Tanjga credited the company’s early and consistent messaging on AI. Raimo Lenschow (Barclays) asked about learnings from competitors in the public sector and the practical timeline for legacy app modernization. Calkins and Tanjga acknowledged the opportunity is still in early stages but represents a “multi-year journey” with significant growth potential. In future quarters, the StockStory team will closely watch (1) the pace at which AI-enabled features drive incremental enterprise adoption and usage, (2) the conversion of legacy modernization opportunities into large, multi-year contracts, and (3) the impact of accelerated sales hiring on pipeline conversion and revenue growth. Progress in monetizing advanced AI tiers and maintaining margin expansion will also be key signposts. Appian currently trades at $33.88, up from $29.96 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Investor Relations - Brian Denyeau Chairman and Chief Executive Officer - Matthew Calkins Chief Financial Officer - Srdjan Tanjga Operator: Good morning, and thank you for standing by. Welcome to the Appian Second Quarter 2026 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 first speaker today, Brian Denyeau. Please go ahead. Brian Denyeau: Great. Good morning, and thank you for joining us. Today, we'll review Appian's Second Quarter 2026 Financial Results. With me are Matt Calkins, Chairman and Chief Executive Officer; and Serge Tanjga, Chief Financial Officer. After prepared remarks, we'll open the call for questions. During this call, we may make statements related to our business that are considered forward-looking. These include comments related to our financial results, trends and guidance for the third quarter and full year 2026, the benefits of our platform, industry and market trends, our go-to-market and growth strategy, our market opportunity and ability to expand our leadership position, our ability to maintain and upsell existing customers and our ability to acquire new customers. These statements reflect our views only as of today and don't represent our views as of any subsequent date. We won't update these statements as a result of new information unless required by law. Actual results may differ materially from expectations due to the risks and uncertainties described in our SEC filings. Additionally, non-GAAP financial measures will be discussed on this conference call. Reconciliations of GAAP to non-GAAP financial measures are provided in our earnings release. With that, I'd like to turn the call over to our CEO, Matt Calkins. Matt? Matthew Calkins: Thanks, Brian. In the second quarter of 2026, Appian's cloud subscriptions revenue grew 23% to $131.7 million. Subscriptions revenue grew 19% to $157.7 million. Total revenue grew 19% to $203.3 million. Adjusted EBITDA was $16.2 million. For the second consecutive quarter, constant currency cloud revenue accelerated and grew over 20%. Our weighted Rule of 40 was 36, and our go-to-market efficiency metric posted its 12th straight quarter of improvement. We're increasing full-year guidance. We now expect our cloud business to grow 20% for the year, and we're raising EBITDA margin by 2 percentage points to 13%. Those who've heard our earnings calls or our Investor Day last quarter know what's going on here. For others, I'll offer a brief explanation. Appian is part of the AI stack. Before you can deploy AI in enterprise applications, you need certain supporting functionality. Some call it a harness, a control plane or an orchestration layer. Appian provides it. Let's quickly review what that supporting functionality is. First, you need a deterministic layer since AI is probabilistic. This makes AI reliable enough to run in critical applications. Our process technology fits this need. Second, you need to access information from across the enterprise quickly and securely. Agents need broad access so they can roam for data. Our Data Fabric serves this purpose. Third, you need governance to track AI's actions and outcomes for transparency and for continuous improvement. Fourth, you need to save tokens by allocating work to the right workers. You've got multiple AI models of different costs plus digital workers and people. AI is expensive, and nobody wants to be locked in. So a layer that allocates work is essential. AI in the enterprise needs support. I've just listed 4 key things it needs. There is growing awareness of these needs. In this emerging space, Appian's capabilities are being validated by our customers. Customers' Appian AI usage is 20x greater than last Q2. And 85% of our Q2 new logos bought our AI. Appian's approach to AI is distinct and appeals to the high end of the market. Our customers are big organizations in highly regulated industries. Appian is used by 2/3 of the world's largest pharmas, insurers and non-Chinese banks, plus 20 major governments. The U.S. government is our single largest customer. These organizations cannot afford to make mistakes. They're not willing to throw AI at mission-critical applications and see what happens. They need a reliable framework for AI, and Appian provides it. We are all about reliability and security and safety. Next, I'll share a few examples of the value Appian customers are achieving with our AI. First, a leading health insurance provider manages client services and enrollment on our platform. Before Appian, the insurer's template-based document processing system was unable to handle a diverse range of documents. This quarter, it deployed DocCenter, Appian's AI-powered document intake solution to interpret over 100,000 medical records annually. The organization expects to save more than $10 million in operational costs over the next 3 years. Next, a top global asset management firm runs dozens of Appian applications, saving hundreds of thousands of labor hours annually. This quarter, it deployed our AI into its existing Appian client services and onboarding processes to optimize them further. Our AI automatically classifies and extracts data from millions of customer forms per month, processing 90% automatically and routing the rest for human review. With this deployment, they expect to save additional tens of millions of dollars annually. Finally, a top global bank and long-time customer runs more than 100 mission-critical Appian applications. In Q2, it signed a 7-figure net new software deal for additional licenses and to access our latest AI features. The bank intends to build a host of new apps, starting in its retail and commercial business. It will deploy DocCenter to process customer-facing documents for onboarding new customers, Know Your Customer checks and closing accounts. It will use our AI-assisted application development features to create new apps at scale. Appian is an essential part of the bank's plan to use AI to generate over EUR 1 billion of business value by 2028. Appian is seeing a rising tide of legacy modernization requests. AI has ignited demand in this market for 2 reasons. First, AI-driven application development is faster and more efficient than old ways of modernizing. Second, AI can exploit vulnerabilities in legacy systems, making them a liability. Every application built on Appian automatically inherits the latest features and best-in-class security of our platform. I'll share 2 stories from Q2 that highlight our customers' growing appetite to modernize. First, a European rail operator signed a 7-figure Appian software deal to modernize core operations, starts by unifying its claims process, including injury, baggage loss and trip cancellations. Before Appian, workers swiveled between decades old systems to process each claim. Now Appian will deliver a modern system to reduce processing times by 75%. The customer expects to save millions of dollars in labor costs. Second, a collection of U.S. federal law enforcement agencies aims to reduce transnational crime. Its legacy custom-coded applications are difficult to maintain and can't handle increased workloads. This quarter, it signed a 7-figure Appian software deal to replace 10 outdated systems to ingest and advance classified cases. In closing, Appian is accelerating due to our position in the AI stack. We help large organizations make AI reliable enough to use in mission-critical applications. When AI is involved, we are more likely to win new logos, and we enjoy stronger revenue growth rates. With that, I'll hand the call to Serge. Srdjan Tanjga: Thanks, Matt. I'll begin with a detailed review of our second quarter results and then finish with our outlook for the third quarter and full fiscal year 2026. Starting with Q2 results. We had a very strong quarter of new business driven by continued AI traction. We saw strength across all major regions and industry verticals. Appian exceeded the guidance ranges we provided on our key metrics of cloud revenue, total revenue and adjusted EBITDA. Cloud subscription revenue was $131.7 million, an increase of 23% year-over-year. On a constant currency basis, cloud subscription revenue increased 22% year-over-year, our strongest performance in over 2 years. Total subscription revenue was $157.7 million, an increase of 19% year-over-year. On a constant currency basis, total subscription revenue grew 18% year-over-year. Professional services revenue was $45.6 million, up 20% compared to the second quarter of 2025. Total revenue was $203.3 million, an increase of 19% year-over-year. On a constant currency basis, total revenue grew 18% year-over-year. Our cloud net ARR expansion was 115% in Q2 compared to 113% a year ago and 115% in the prior quarter. As a reminder, we present net ARR expansion on a constant currency basis. Now let's turn to profitability. I'll be discussing our results on a non-GAAP basis unless otherwise noted. Gross margin was 72%, flat year-over-year and down from 74% in the prior quarter. Our subscription gross margin was 84% compared to 85% in the year ago period and down from 86% in the prior quarter. Professional services gross margin was 31% compared to 29% in the year ago period and in the prior quarter. Total operating expenses were $133.1 million, up from $117.9 million in the year ago period. Adjusted EBITDA was $16.2 million, ahead of our guidance range of between $5 million and $8 million and compared to adjusted EBITDA of $8.1 million in the year ago period. This outperformance relative to our guide was driven by greater-than-expected revenue and timing of certain expenses. Net income was $9.2 million or $0.13 per diluted share compared to net income of $0.3 million or breakeven for the second quarter of 2025. This is based on 73.3 million diluted shares outstanding for the second quarter of 2026 and 74.6 million diluted shares outstanding for the second quarter of 2025. Our stock-based compensation expense was $10.6 million in Q2 of 2026 or $0.14 per diluted share. In the second quarter, we purchased approximately 1.8 million shares for $43.9 million, bringing our total buyback to $65.7 million under our current $100 million authorization. Turning to our balance sheet. As of June 30, 2026, cash and cash equivalents and investments were $167.9 million compared to $187.2 million at the end of last year. For the second quarter, cash provided by operations was $12.1 million compared to cash used by operations of $1.9 million for the same period last year. Today, we are also announcing that we have refinanced our credit facility on more favorable terms, reflecting our significantly improved profitability. As a result, our interest expense will be lower by approximately $4 million annually. Turning to guidance. Starting with the third quarter of 2026, cloud subscription revenue is expected to be between $133 million and $135 million, representing year-over-year growth of 18% at the midpoint of the range. Total revenue is expected to be between $214 million and $218 million, representing year-over-year growth of 16% at the midpoint. Adjusted EBITDA for the third quarter of 2026 is expected to be between $30 million and $33 million. Non-GAAP earnings per share is expected to be between $0.31 and $0.35. This assumes 72.6 million fully diluted weighted average shares outstanding. For the full year 2026, our cloud subscription revenue is expected to be between $525 million and $529 million, representing year-over-year growth of 20% at the midpoint of the range. Total revenue is expected to be between $845 million and $853 million, representing year-over-year growth of 17% at the midpoint. Adjusted EBITDA is expected to range between $104 million and $110 million for an approximately 13% margin and 39% year-over-year growth at the midpoint. Non-GAAP earnings per share is expected to be between $1.04 and $1.12 or approximately 77% growth at the midpoint. This assumes 73.2 million fully diluted weighted average shares outstanding. Our guidance assumes the following: First, we anticipate our non-cloud subscription revenue to grow in the low double digits in Q3 and low to mid-single digits for the full year. Second, we expect professional services revenue to grow in the mid-teens in Q3 and in high teens for the full year, driven by strength in the U.S. public sector. Third, net interest income and interest expense will be approximately $3 million in Q3 and $10 million for the full year 2026. Fourth, our guidance assumes FX rates as of early August. Due to the recent strengthening of the U.S. dollar, we now expect FX to represent a modest headwind to our reported revenue growth in the back half of the year. Finally, we are now forecasting approximately 2 percentage points of EBITDA margin improvement in 2026 as we continue to balance investing for growth and expanding margin. In closing, we see our strong Q2 results and increased guidance as continued validation of our AI value proposition. We are excited about the opportunity ahead, and we'll continue to invest responsibly to maximize our long-term value. Now we'll turn the call over for questions. Operator? Operator: [Operator Instructions] Our first question comes from the line of Devin Au of KeyBanc Capital Markets. Devin Au: Yes. Maybe just to start, really strong results here with cloud subscription accelerating again and the full year guide going higher 20% plus. Would love to just hear what specific strength you saw in cloud subscription? What areas or verticals or products that you saw contributing greater strength than expected? And maybe just quickly comment on pub sector like that's going really well for you guys. Matthew Calkins: Yes, that's great. Well, it was. The pub sector was strong, but we had strength across the board. We showed good outcomes and above expectations in every major region. So I think this is more of an across-the-board win than a specific sector win. Devin Au: Got it. Okay. And then maybe just a quick follow-up on the EBITDA margin guide. Nice to see the guide going up, implying 2 points of expansion year-over-year. You're clearly executing very well here. Maybe the question here is why not reinvest a little bit more back into the business and expanding sales capacity a little bit more, just given the strong momentum you've seen? Srdjan Tanjga: Thanks for the question. Yes, in fact, we are investing in capacity, particularly on the sales side. And what we're also doing, and you see this in the back half of our guide, we decided to start hiring earlier for some of the roles that were originally planned for 2027, specifically to get people in the seats earlier and productive faster. But overall, look, I think that our job is to deliver consistent and durable growth as well as continued margin expansion. And we believe that, that is not just the right thing to do, but the responsible thing to do. So we'll continue doing both going forward. Operator: Our next question comes from the line of Pat McIlwee of William Blair. Patrick McIlwee: Great results this quarter. So great to see the momentum in cloud growth. Obviously, you raised your guidance nicely as well. But it looks like there was maybe a little bit of decel implied in the bookings growth. So I just wanted to ask, especially given what we've heard from some other software vendors in the market, what are you seeing in the market from a deal perspective? And has the AI-related noise in the end market had any impact as you speak with customers? Matthew Calkins: Yes. I realize that's been an issue in some recent calls. We have found AI to be an accelerant in our business. If AI is involved in a deal, it means that we're in a good position to win it and to grow it. We are moving faster when AI is a factor. So for us, it is an accelerant, not a decelerant. Srdjan Tanjga: And the only thing I would maybe add, Pat, is as you think about the guidance for the rest of the year, keep in mind that the FX has flipped from a tailwind to a headwind in the back half of the year. So as you think about constant currency, I think it tells you more of a stable picture. Patrick McIlwee: Okay. Great. And I think you launched the composer functionality late last year for GA. So I mean, I guess the question is, has that represented a material change for you all as you've gone to market this year? And with that, are you seeing customers bring modernization projects to Appian that historically they may not have? Or is the primary benefit so far reduced implementation and faster time to value? Matthew Calkins: Right. Okay. So I do think that this market, this modernization market that we have been present in for a decade is gaining momentum and becoming larger due to the factors I mentioned in the prepared remarks. So we are seeing more such opportunities. We are executing more such opportunities. I would not call that change, which is still preliminary, a material change. I think there's a lot yet to do in this space. And I think that as it becomes proven and as people are more motivated in the light of recent AI hacks, there's going to be more momentum to come. But at the moment, I don't consider it a material factor. But we do have a long-standing presence and success rate track record in that industry, and we stand to benefit as and if it grows. Operator: Our next question comes from the line of Steve Enders of Citi. Steven Enders: Maybe just to start on -- I guess I want to dig in a little bit on to just the pipeline opportunity and what you're seeing there for new opportunities coming through and emerging. Just what are you seeing there from either net new customer opportunities or the expansion path and with existing customers? And I guess on top of that, it seems like the pulling forward investments in sales capacity maybe is an indication of what you're seeing on the pipeline side. But yes, it would be great to kind of hear how you're thinking about the investments needed to execute on that as well. Matthew Calkins: Yes. I think it might be an indication of strong pipeline. It's unusually strong and also our confidence of being able to win in the current environment. Srdjan Tanjga: Yes. And the other thing that I would add, Steve, is that's absolutely part of the reason why we feel comfortable starting earlier some of the investments for 2027. It is both the pipeline. So we feel like we have stuff to give our new people to work on and our increased -- continued increases in confidence in our sales execution because it's been very strong. Patrick McIlwee: Okay. Great. That's good to hear. And then maybe just in terms of I guess, sales productivity rates, I mean, it looks like it's starting to I guess, seeing less expansion on the metrics coming through there. Is that a reflection of the incremental hiring that you have done starting to impact that? Or would you say the ramp rep productivity rates are those starting to maybe slow down a little bit just given the strong expansion over the past few years? Srdjan Tanjga: Yes. So rep productivity is very strong and continues to improve across all major theaters. As you think about the sales and marketing investment versus the new business, that's looking like it's going to be another quarter -- another year of improvement in 2026. We showed you that history in the Investor Day. And then as you think about the go-to-market efficiency that we report, that's versus total revenue. So yes, that's reflective of the fact that we're investing more into growth. But as you look underlying on our ability to invest for winning new business, it continues going up and to the right. Operator: Our next question comes from the line of Sanjit Singh of Morgan Stanley. Sanjit Singh: Congrats on the cloud acceleration once again this quarter. Matt, I think you kind of alluded to it before, but like your primary customer in the market talked about some headwinds from customers sort of getting more hesitant on their software budgets, given their token spend. Other players in software have also talked about that dynamic. Clearly, from the results you guys put up year-to-date, I would say, that doesn't seem to be a dynamic. And so I guess, in some sense, why you guys have been sort of able to avoid that budget scrutiny, if you will, and continue to put up these strong results? Matthew Calkins: Yes. You mean our primary competitor, not our primary customer, but I understood the question perfectly. And I think it just comes -- I mean, there's an elephant in the room, right? AI is affecting everybody's win rate, speed of closure, competitiveness. And I think it's going to help some and hurt some. And for us, it is clearly an accelerant, not a decelerant, as I was just mentioning. We are benefiting from AI. We're part of the AI stack. Srdjan Tanjga: Yes. And I think, Sanjit, that goes to the fact that we've been consistent and credible on our AI message, which is that AI needs process, that AI needs a framework. 12 or 18 months ago, that wasn't the consensus view. Now it increasingly is, but we've been kind of first to start explaining this and having this conversation with the customer, and that also helps when it comes time to shepherd deals across the finish line, and we've seen strong win rates. They're stronger when AI is a factor, and we've seen no change in our deal cycles. Sanjit Singh: Great. And then just one follow-up. I think, Matt, you mentioned that the strength was broad-based across industries. I mean you guys have always been strong in health care, financial services, other verticals. Have you seen any sort of broadening out of the demand outside of your core 3 or 4 verticals? Matthew Calkins: I would say that our top verticals, whether you call them 3 or 5, depends on whether insurance is part of FS or not and whether you bundle all health together. It's still the center of our business. We have not seen a sector diversification, but we have seen all of those industries grow and all geos grow, terrific on both sides of the Atlantic, public and private this quarter. Operator: Our next question comes from the line of Raimo Lenschow of Barclays. Raimo Lenschow: Congrats from me as well. I had 2 quick questions. First, on the -- if I look at the public sector U.S., there's like this you guys are very strong. And there's a company that's also doing a lot more custom projects for them that is also doing very well there. What's the learning for you, Matt, in terms of like how you interact with the government and do AI for them versus how others are doing it? And is there anything where you kind of would consider maybe change the approach there a little bit? And then the second question was on app modernization. That's obviously a very, very nice big opportunity. Where are we on that kind of practical part of that journey, AI can really help there, obviously, in the long run, but like are we there yet to kind of really see projects kicking off properly? Matthew Calkins: Okay. Great. We are benefiting from a change in the priorities of the U.S. government. It's more willing to see technology as an answer as a solution to problems. It's more focused on benefits other than mere efficiency out of technology. It's more willing to do business directly with a software vendor instead of through a prime. This is all beneficial to us. But as you point out, there's also another firm, maybe multiple firms who are pioneering a new business model, and those lessons are not lost on us. We see what they're doing, and we can play that game, too. And I think that we have drawn some inspiration and direction from seeing business plans that are succeeding in a big way in the federal space. You also talked about legacy modernization momentum. We're -- we do see more such business. We are well positioned for such business. I have great hopes for what this may become in years ahead. It is today still a minor factor. Srdjan Tanjga: And just Raimo, on that, that shouldn't be a surprise to you, as you know, this is a big step for enterprises to take. We're having initial conversations. We're doing first deployments, but the prize is large, exceptionally large, but it will be a multiyear journey and an additional driver of our growth, if you will. Operator: Our next question comes from the line of Lucky Schreiner of D.A. Davidson. Lucky Schreiner: Congrats on the results. Nice to hear the strong AI traction and enterprises becoming more AI ready. I wanted to ask on pricing. You guys have been thoughtful about how you price your AI capabilities. So maybe any update on the customers' reaction to your pricing methods? And any early reads on customers who have adopted the enterprise growth plan and have maybe reached the end of their pilots and how growth there has trended for them moving forward? Srdjan Tanjga: So I'll start with that. So let me take the enterprise growth part first. So we're continuing to see strong traction. It's a product or a pricing scheme best suited for our largest and most enthusiastic customer because it removes variables for adoption. So we've seen some big new deals this quarter, and we'll expect to see more from that. When it comes to AI, I think that the answer is the same as it has been generally, you've been hearing from us for the last couple of years, which is you need to start by selling value. And if you successfully sell value and convince customer and align with customer on what the value that you're delivering to them, and the pricing conversation is a relatively easy one. That's not to suggest that it's without any friction because, of course, everybody wants to pay less. But once you establish the pie, then the share of the pie is much more easier to have the conversation around. So we're early in terms of AI monetization. The first step in that monetization is, of course, getting more customers onto our AI-enabled tiers. We talked about having nearly 40% of our customers having some of our ARR on the advanced tiers and other AI tiers in Q1. And we mentioned this quarter that 85% of our new customers are buying at those levels, which is actually really encouraging and speaks to the fact that our AI message resonates even with customers who don't have a prior relationship with us. And then the next step we will be selling more of the ARR at the advanced tier. So obviously, ARR percentage tracks -- follows behind customer percentage, but it will move in the same direction. And then the next step is AI usage as customers exceed their AI usage allotments, then they will come and negotiate and buy more from us. We're starting to see that for the most successful AI use cases. And again, it comes down to value. And since they're seeing value, those conversations are going well. Lucky Schreiner: Great to hear. And then to follow up on application modernization opportunity. How were partner contributions in the quarter? You guys have increased your investments with partners. And wondering if you're seeing more opportunities for application modernization with new customers or existing customers? Any difference in demand there for application modernization? Matthew Calkins: Yes. Okay. I think it's easier with existing customers because there's a bond of trust, and this is a big leap. When you're going to modernize your enterprise, you're talking about dozens, maybe hundreds, even thousands of applications. It's got to be a vendor that you trust. We tend to build high-trust relationships with our customers. And so that's where we've seen the first blossoming of enterprise transformation work is where we've got that bridge already built. I do think, of course, everybody is thinking about vibe coding or natural language development and whether that could replace or create new applications. And though we've not spoken about it much today, I do think we've got a distinct approach to that market and a different insight. We believe that though many applications which are AI authored will be code applications, there is also going to be a substantial segment of this market where you use AI to build a platform application. And the reason is that you want it to be supported by a community, by a support line, by an organization you can have a commitment with, that's a necessary component of an important application. And so I don't believe that all natural language development will end up with a stack of code. Sometimes it will end up with a platform application, and we're well positioned to handle that demand. Operator: Our next question comes from the line of Derrick Wood of TD Cowen. Derrick Wood: Great. Matt, there's a lot more talk about sovereign AI and enterprises figuring out the best ways to protect their data IP. And this has also brought up a debate around using closed source versus open source or open weight models. So first, how do you play into that sovereign AI discussion? And then are you seeing enterprises wanting to adopt more open source models? And if so, how are you guys enabling that for end customers? Matthew Calkins: Yes, that's right. I think we've got a great play in the sovereign market because we allow our customers to operate our software on-premise, which puts us in a different category as some of our competitors who require the cloud. We've always offered that flexibility. We give the customer greater degrees of control. We are also agnostic about the layout of the customers' enterprise, whether that be the use of open source software or the location in which they place their data or a list of other things. We are an enabler for an open enterprise. And as such, customers with diverse or idiosyncratic enterprise requests and configurations are more likely to choose Appian, and we are more likely to be able to satisfy their needs. Srdjan Tanjga: And, Derrick, just to add specifically on various LLMs that customers can use, we allow considerable choice and not just on a workload level, but components on a workload level so that the customers can have great input in terms of what is done by latest models versus what perhaps can be handled by a less advanced model. And that can also, of course, also be changed over time. And we think that optionality is valuable today and will become more valuable as the market matures. Derrick Wood: Great. And Serge, one follow-up for you. I think last quarter, you talked about charging for API calls from third-party agents to tap into Data Fabric. Is this off the ground yet? And what's the initial feedback? I guess? And is third-party agent access something happening frequently yet? Or is this more about positioning longer term? Srdjan Tanjga: The feature is in the market. It's early days. And to your point, we think it will be popular for certain portions of the use of the market. I think it's incremental revenue for us. But -- and the early feedback on the feature is good, but it's a bit of a medium- to long-term play. Operator: Thank you. At this time, I am showing no further questions. Thank you for your participation in today's conference. This does conclude our program, and you may now disconnect. Before you buy stock in Appian, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Appian wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Appian. The Motley Fool has a disclosure policy. Appian (APPN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Its operating margin is a fraction of the market's while its net margin sits above the market's, which is where the earnings comparison stops being about the business. UiPath (PATH) stock has climbed 52.4% over the trailing three months against 4.6% for the S&P 500, and trades at about $15.30 a share. On earnings it looks unremarkable, at 24.4 times against 23.8 for the market. That is the least informative comparison here. Its Earnings Multiple Is Not Measuring Its Operations UiPath runs a 6.0% operating margin against 18.4% for the S&P 500, and yet reports a net margin of 19.6% against the market's 13.1%. Earnings that large do not come out of an operating line that thin: the gap opens up below the operating line, and that is why the earnings multiple looks ordinary. Priced on sales, the premium is plain at 4.8 times against 3.3 for the index, on $1.7 billion of revenue over the trailing twelve months. On operating cash flow the premium is narrower, at 20.8 times against 15.6 for the index. The Sales Premium Is A Bet On Process Orchestration What the company sells has changed. It grew up on deterministic robots that repeat one task the same way every time; what it leads with now is process orchestration, software that sequences agents, automations, systems and people through a whole workflow. Maestro Case, in public preview, pushes that into exception-heavy work with no fixed path, and its UiPath for coding agents product targets what management says nearly every customer conversation surfaces: an automation backlog growing faster than customers can build and maintain. Revenue has grown at an average annual rate of 15.1% over the last three years against 5.9% for the S&P 500. Growth alongside margins earned in the operation is one of the things the Trefis High Quality Portfolio insists on in its holdings, and it is the second half of that pairing that is still missing here. Its Recurring Base Is Compounding Slower Than Its Revenue The counter is in the recurring line. Annual recurring revenue reached $1.901 billion in fiscal Q1 2027, up 12% year over year, while reported revenue grew 17.3%, and ARR rather than the reported line is the rate a subscription platform actually compounds at. Management's answer is that on a trailing twelve-month basis revenue growth is 15% against ARR's 12%. Asked to size the ARR coming from the AI products the case rests on, management said only that it would disclose product ARR periodically. The downside record is part of the counter: the stock fell 75% during the 2022 inflation shock against a 24% drop for the S&P 500, and remains about 65% below its pre-crisis high. What The September Report Has To Show UiPath reports fiscal Q2 2027 results on September 3. Two lines matter most: whether ARR growth closes on revenue growth, and whether GAAP operating income builds on the $28 million posted in fiscal Q1 2027, up from a $16 million operating loss a year earlier. Get both and the premium becomes a claim about the operation rather than the platform story. Miss both, with the operating margin still near 6.0%, and the multiple that made the stock look market-priced goes on measuring something other than the business. Rather than judge that on a single number, a scorecard that grades a company across five factors keeps the whole picture in front of you. One Contested Platform Bet Is A Narrow Way To Own Software Deciding on PATH means picking a side in an argument a single quarter's results will not close. The Trefis High Quality Portfolio takes the other route, holding a group of quality businesses rather than resolving a single company's debate. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

Interested in Appian Corporation? Here are five stocks we like better. Appian exceeded Q2 guidance and raised its 2026 outlook. Cloud subscription revenue increased 23% year over year to $131.7 million, total revenue rose 19% to $203.3 million, and adjusted EBITDA doubled to $16.2 million. AI adoption is accelerating across enterprise customers. Customer AI usage increased 20-fold year over year, and 85% of new customer logos purchased AI offerings, supporting deployments in healthcare, finance, banking and government. Management cited strong demand for modernization and public-sector solutions. Appian is expanding sales capacity as customers replace legacy systems, while its full-year forecast calls for 20% cloud subscription growth and $104 million to $110 million in adjusted EBITDA. Is Appian The AI Play Investors Have Completely Missed? Appian (NASDAQ:APPN) reported second-quarter 2026 results that exceeded its guidance, with cloud subscription revenue rising 23% year over year to $131.7 million and total revenue increasing 19% to $203.3 million. The company raised its full-year outlook, citing continued traction for its artificial intelligence capabilities, broad-based regional demand and stronger profitability. Chairman and Chief Executive Officer Matt Calkins said Appian’s constant-currency cloud revenue accelerated for a second consecutive quarter, growing more than 20%. He said customer AI usage was 20 times greater than in the prior-year second quarter, while 85% of new customer logos in the quarter purchased Appian’s AI offerings. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Beyond the Magnificent 7: Tech’s Rising Stars “AI in the enterprise needs support,” Calkins said, describing Appian’s role as a layer that provides process management, data access, governance and workload allocation across AI models, digital workers and human employees. He said the company’s focus on reliability, security and safety has particular appeal among large organizations in regulated industries. Calkins highlighted several customer deployments during the quarter. A health insurer deployed Appian’s DocCenter document-intake offering to interpret more than 100,000 medical records annually and expects to save more than $10 million in operating costs over three years, according to the company. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High UiPath: Has the Bar Been Set Too Low for This AI Robotic Leader? A global asset manager expanded its use of Appian AI in client-services and onboarding processes. The platform is classifying and extracting data from millions of customer forms per month, automatically processing 90% and routing the remainder for human review. The customer expects the deployment to generate additional annual savings in the tens of millions of dollars, Calkins said. Appian also signed a seven-figure net-new software agreement with a longtime global banking customer for additional licenses and access to AI features. The bank plans to use DocCenter for customer onboarding, know-your-customer checks and account closures, while using Appian’s AI-assisted development tools to create new applications. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The company said AI is also contributing to rising interest in legacy application modernization. Calkins said AI-assisted application development can make modernization faster, while security vulnerabilities in older systems have made modernization more urgent for some organizations. During the quarter, a European rail operator signed a seven-figure software deal to modernize claims operations. Appian said the project is intended to reduce claims-processing times by 75% and generate millions of dollars in labor-cost savings. Separately, a group of U.S. federal law-enforcement agencies signed a seven-figure deal to replace 10 legacy systems used to ingest and advance classified cases. Chief Financial Officer Serge Tanjga said cloud subscription revenue grew 22% on a constant-currency basis, representing Appian’s strongest such performance in more than two years. Total subscription revenue increased 19% to $157.7 million, while professional-services revenue rose 20% to $45.6 million. Non-GAAP gross margin was 72%, compared with 72% a year earlier. Subscription gross margin was 84%, down from 85% in the prior-year quarter. Professional-services gross margin improved to 31% from 29% a year earlier. Adjusted EBITDA was $16.2 million, compared with $8.1 million in the second quarter of 2025 and above Appian’s prior guidance of $5 million to $8 million. Net income was $9.2 million, or $0.13 per diluted share, compared with net income of $0.3 million, or breakeven per share, a year earlier. Tanjga attributed the adjusted EBITDA outperformance to better-than-expected revenue and the timing of certain expenses. Cloud net annual recurring revenue expansion was 115%, compared with 113% in the prior-year period and equal to the previous quarter. Appian repurchased approximately 1.8 million shares for $43.9 million during the quarter, bringing total repurchases under its current $100 million authorization to $65.7 million. Cash, cash equivalents and investments stood at $167.9 million as of June 30, down from $187.2 million at year-end. Cash provided by operations was $12.1 million, compared with cash used in operations of $1.9 million a year earlier. The company also refinanced its credit facility on what Tanjga described as more favorable terms. Appian expects the refinancing to lower annual interest expense by about $4 million. For the third quarter, Appian expects cloud subscription revenue of $133 million to $135 million, representing 18% year-over-year growth at the midpoint. It forecast total revenue of $214 million to $218 million, adjusted EBITDA of $30 million to $33 million, and non-GAAP earnings per share of $0.31 to $0.35. For full-year 2026, Appian raised its cloud subscription revenue outlook to $525 million to $529 million, representing 20% growth at the midpoint. The company expects total revenue of $845 million to $853 million, or 17% growth at the midpoint, and adjusted EBITDA of $104 million to $110 million, implying an approximately 13% margin. Tanjga said the outlook assumes low-double-digit growth in non-cloud subscription revenue during the third quarter, high-teens professional-services revenue growth for the full year, and a modest foreign-exchange headwind to reported revenue growth in the second half as the U.S. dollar has strengthened. During the question-and-answer session, executives said strength was broad-based across major regions and industry verticals, including public-sector demand. Calkins said the U.S. government has become more willing to view technology as a solution to operational challenges and to work directly with software vendors rather than solely through prime contractors. Management said Appian is investing in sales capacity and has moved forward certain hiring plans initially expected for 2027, citing pipeline strength and confidence in sales execution. Tanjga said sales productivity remains strong across major regions. Calkins said legacy modernization remains a relatively small contributor today but could become a larger multiyear opportunity. He added that modernization projects may be easier to begin with existing customers, where Appian has established trust and a history of deployment. On AI infrastructure, Calkins said Appian can support customers seeking greater data control because its software can be operated on premises and because the company is flexible regarding customers’ choice of models, data locations and open-source software. Tanjga said a feature that enables charges for API calls from third-party agents accessing Appian Data Fabric is available, though it remains an early-stage, medium- to long-term revenue opportunity. Appian Corporation is a global technology company specializing in low-code automation platforms designed to streamline business processes. Founded in 1999 by Matt Calkins, the company provides an integrated suite of tools that enables organizations to build enterprise applications and workflows rapidly with minimal hand coding. The platform combines process management, robotic process automation (RPA), artificial intelligence (AI) capabilities and data integration into a single environment, allowing businesses to accelerate digital transformation initiatives. The core offering, the Appian Low-Code Platform, empowers users—ranging from professional developers to business analysts—to visually model, design and deploy applications that can automate complex operations, orchestrate tasks across systems, and deliver real-time analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Appian Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Cloud subscription revenue accelerated to 23% growth, driven by Appian's role as the 'control plane' or orchestration layer necessary for reliable enterprise AI deployment. Management attributes success to providing a deterministic process layer that makes probabilistic AI reliable enough for mission-critical applications in highly regulated industries. The Data Fabric and governance capabilities are serving as essential infrastructure for AI agents to securely access enterprise-wide data with full transparency. AI is acting as a primary accelerant for new business, with 85% of Q2 new logos purchasing AI-enabled tiers and usage increasing 20x year-over-year. A rising tide of legacy modernization is being fueled by AI's ability to both speed up development and exploit vulnerabilities in outdated custom-coded systems. Strategic positioning at the high end of the market is validated by 7-figure deals with global banks, insurers, and government agencies requiring high-security frameworks. Go-to-market efficiency improved for the 12th consecutive quarter, reflecting disciplined execution and a credible value proposition that resonates with new and existing clients. Full-year 2026 guidance was raised to 20% cloud growth and a 13% EBITDA margin, reflecting increased confidence in AI-driven demand and operational efficiency. Management is pulling forward 2027 sales hiring into the back half of 2026 to capitalize on an unusually strong pipeline and increase productive capacity for next year. The guidance framework assumes a shift in FX from a tailwind to a modest headwind in the second half of the year, impacting reported growth rates. Professional services revenue is projected to grow in the high teens for the full year, primarily supported by sustained strength in the U.S. public sector. Future monetization is expected to follow a three-step sequence: migration to AI-enabled tiers, increased ARR at advanced levels, and eventually usage-based overages. Refinanced the credit facility on more favorable terms due to improved profitability, which is expected to reduce annual interest expense by approximately $4 million. Executed $43.9 million in share repurchases during Q2, with approximately $34.3 million remaining under the current $100 million authorization. The U.S. government remains the company's single largest customer, benefiting from a strategic shift toward direct software vendor engagement over traditional prime contractors. Maintained a weighted Rule of 40 score of 36, balancing high-growth cloud subscriptions with significant margin expansion. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated that unlike some competitors, Appian sees AI as an accelerant that improves win rates and speed of closure rather than a budget headwind. They emphasized that being 'first to explain' the need for an AI process framework has maintained stable deal cycles despite broader market volatility. Rep productivity continues to improve across all major theaters; The decision to hire early is an investment in capacity intended to address an unusually strong pipeline and ensure new hires become productive faster. The company aims to balance durable growth with responsible margin expansion, even while increasing sales and marketing spend. Appian differentiates itself by allowing on-premise deployment, which appeals to the sovereign AI market and customers requiring total data control. The platform remains model-agnostic, allowing customers to switch between open-source and closed-source LLMs at a workload or component level. The feature allowing third-party agents to tap into the Data Fabric via API is now live, though management views this as a medium-to-long-term revenue driver. Initial feedback is positive, but it is currently considered an incremental rather than material contributor to near-term results.

This article first appeared on GuruFocus. Cloud Subscription Revenue: $131.7 million, up 23% year-over-year (22% on a constant currency basis). Total Subscription Revenue: $157.7 million, up 19% year-over-year (18% on a constant currency basis). Professional Services Revenue: $45.6 million, up 20% year-over-year. Total Revenue: $203.3 million, up 19% year-over-year (18% on a constant currency basis). Gross Margin: 72%, flat year-over-year. Subscription Gross Margin: 84%, down from 85% in the year-ago period. Professional Services Gross Margin: 31%, up from 29% in the year-ago period. Adjusted EBITDA: $16.2 million, ahead of guidance, compared to $8.1 million in the year-ago period. Net Income: $9.2 million, or $0.13 per diluted share, compared to $0.3 million in Q2 2025. Cash Provided by Operations: $12.1 million, compared to cash used of $1.9 million in the year-ago period. Cloud Net ARR Expansion: 115% in Q2, compared to 113% a year ago. Warning! GuruFocus has detected 4 Warning Sign with GOLF. Is APPN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cloud subscription revenue grew 23% year-over-year to $131.7 million, with constant currency growth accelerating to 22%, the strongest performance in over two years. Adjusted EBITDA of $16.2 million significantly exceeded guidance of $5-$8 million, and full-year EBITDA margin guidance was raised by 2 percentage points to 13%. AI traction is strong: customer AI usage is 20 times higher than last year, and 85% of new logos in Q2 purchased AI capabilities. Go-to-market efficiency improved for the 12th consecutive quarter, and the weighted Rule of 40 reached 36, indicating balanced growth and profitability. The company refinanced its credit facility on more favorable terms, reducing annual interest expense by approximately $4 million. Strong demand across all major regions and verticals, including notable wins in the US public sector and with large financial institutions. Full-year cloud revenue guidance was raised to 20% growth, reflecting confidence in sustained momentum. Third-quarter cloud revenue guidance implies a slight deceleration to 18% growth at the midpoint, down from 23% in Q2. FX turned from a tailwind to a headwind in the back half of 2026 due to a stronger US dollar, which will modestly pressure reported revenue growth. Gross margin declined sequentially to 72% from 74%, and subscription gross margin fell to 84% from 86% in the prior quarter. The company is pulling forward hiring for 2027 sales roles, which could pressure near-term margins and sales productivity metrics. Legacy modernization opportunities are still a minor factor in the business, with the full potential expected to take multiple years to materialize. AI monetization is still early, with only about 40% of customers on advanced AI tiers, and usage-based revenue is just beginning to emerge. Cash and investments decreased to $167.9 million from $187.2 million at the end of last year, partly due to share buybacks. Q: Can you elaborate on the specific strengths driving the cloud subscription acceleration and the decision to raise full-year guidance?A: Matt Calkins (CEO) attributed the strong performance to broad-based strength across all major regions and verticals, rather than a single sector. Serge Tanjga (CFO) added that the company is investing in sales capacity, pulling forward some 2027 hires to capitalize on an unusually strong pipeline and high confidence in sales execution, while balancing this with continued margin expansion. Q: Given the strong results, why not reinvest more aggressively into the business instead of raising the EBITDA margin guidance?A: Serge Tanjga (CFO) explained that the company is indeed investing in capacity, particularly on the sales side, by starting to hire earlier for roles planned for 2027. He emphasized that the goal is to deliver consistent, durable growth alongside margin expansion, which they believe is the responsible approach for long-term value creation. Q: How is the AI-related market noise impacting deal flow, and is AI acting as an accelerant or a decelerant for Appian?A: Matt Calkins (CEO) stated that AI is clearly an accelerant for Appian, not a decelerant. When AI is involved in a deal, Appian is in a strong position to win and grow it. Serge Tanjga (CFO) added that Appian's consistent and credible message that "AI needs a framework" has helped improve win rates, which are stronger when AI is a factor, with no change in deal cycles. Q: Has the launch of the Composer functionality led to a material change in the modernization market, and are customers bringing projects to Appian that they historically wouldn't have?A: Matt Calkins (CEO) noted that the modernization market is gaining momentum and becoming larger, but he does not yet consider the change "material." He sees a lot of potential for future growth as the market matures, and Appian's long-standing presence and track record in that space position it well to benefit. Q: Can you provide an update on customer reactions to Appian's AI pricing methods and the traction of the enterprise growth plan?A: Serge Tanjga (CFO) said the enterprise growth plan is seeing strong traction, particularly with large customers. On AI pricing, he emphasized that the focus is on selling value first; once value is established, pricing conversations become easier. He noted that 85% of new customers are buying AI-enabled tiers, and the next step is to increase the percentage of ARR on those tiers and monetize AI usage as customers exceed their allotments. Q: How is Appian positioned in the sovereign AI discussion, and are enterprises adopting more open-source models?A: Matt Calkins (CEO) highlighted Appian's on-premise deployment option as a key differentiator, giving customers greater control and flexibility. This makes Appian an enabler for an "open enterprise," which appeals to customers with diverse or idiosyncratic requirements. Serge Tanjga (CFO) added that Appian allows considerable choice in LLMs, even at the component level, providing valuable optionality for customers. Q: Is the feature to charge for API calls from third-party agents to access Data Fabric off the ground, and what is the initial feedback?A: Serge Tanjga (CFO) confirmed the feature is in the market but is still in early days. He views it as incremental revenue and a medium- to long-term play, with good initial feedback but not yet a frequent occurrence. Q: What are the learnings from other companies' success in the US public sector, and is there a change in approach for Appian?A: Matt Calkins (CEO) acknowledged that Appian is benefiting from a shift in US government priorities, which are more open to technology solutions and direct vendor relationships. He noted that Appian is drawing inspiration from other firms' successful business models in the federal space and is capable of playing that game as well. Q: Are you seeing a broadening of demand outside of Appian's core verticals like healthcare and financial services?A: Matt Calkins (CEO) stated that the top verticals remain the center of the business, but all of those industries and all geographies grew strongly in the quarter. He did not see a sector diversification but noted strength across both public and private sectors on both sides of the Atlantic. Q: How are partner contributions in the quarter, and are you seeing more application modernization opportunities with new or existing customers?A: Matt Calkins (CEO) said it is easier to win modernization deals with existing customers due to established trust, which is crucial for large-scale transformation projects. He also discussed Appian's distinct approach to AI-authored applications, believing that a substantial segment will be built on platforms like Appian rather than pure code, to ensure support and commitment for important applications. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Cloud subscriptions revenue increased 23% year-over-year to $131.7 million MCLEAN, Va., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Appian (Nasdaq: APPN) today announced financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights: Revenue: Cloud subscriptions revenue was $131.7 million, up 23% compared to the second quarter of 2025. Total subscriptions revenue increased 19% year-over-year to $157.7 million. Professional services revenue was $45.6 million, an increase of 20% compared to the second quarter of 2025. Total revenue was $203.3 million, up 19% compared to the second quarter of 2025. Cloud net annualized recurring revenue (“ARR”) expansion was 115% as of June 30, 2026. Operating loss and non-GAAP operating income: GAAP operating loss was $(5.4) million, compared to GAAP operating loss of $(11.0) million for the second quarter of 2025. Non-GAAP operating income was $13.6 million, compared to non-GAAP operating income of $5.6 million for the second quarter of 2025. Net loss and non-GAAP net income: GAAP net loss was $(11.8) million, compared to $(0.3) million for the second quarter of 2025. GAAP net loss per share was $(0.16) for the second quarter of 2026, compared to breakeven for the second quarter of 2025. Non-GAAP net income was $9.2 million, compared to $0.3 million for the second quarter of 2025. Non-GAAP net income per share was $0.13, compared to breakeven for the second quarter of 2025. Adjusted EBITDA: Adjusted EBITDA was $16.2 million, compared to adjusted EBITDA of $8.1 million for the second quarter of 2025. Cash flows: Net cash provided by operating activities was $12.1 million for the three months ended June 30, 2026 compared to $(1.9) million of net cash used by operating activities for the same period in 2025. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Financial Outlook: As of August 6, 2026, guidance for 2026 is as follows: Third Quarter 2026 Guidance: Full Year 2026 Guidance: Conference Call Details: Appian will host a conference call today, August 6, 2026, at 8:30 a.m. ET to discuss Appian's financial results for the second quarter ended June 30, 2026 and business outlook. To access the call, navigate to the following link(1). Once registered, participants can dial in using their phone with a dial in and PIN, or they can choose the Call Me option for instant dial to their phone. The live webcast of the conference call can also be accessed on the Investor Relations page of our website at https://investors.appian.com. About Appian Appian provides process automation technology. We automate complex processes in large enterprises and governments. Our platform is known for its unique reliability and scale. We’ve been automating processes for 25 years and understand enterprise operations like no one else. For more information, visit appian.com. [Nasdaq: APPN] Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Appian provides investors with certain non-GAAP financial performance measures. Appian uses these non-GAAP financial performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Appian’s management believes these non-GAAP financial measures provide meaningful supplemental information regarding Appian’s performance by excluding certain expenses that may not be indicative of our recurring core business operating results. Appian believes both management and investors benefit from referring to these non-GAAP financial measures in assessing Appian’s performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to historical performance as well as comparisons to competitors’ operating results. Appian believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by institutional investors and the analyst community to help them analyze the health of Appian’s business. The non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP total operating expense, non-GAAP non-operating (expense) income, non-GAAP income tax expense, non-GAAP net income, and non-GAAP net income per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, unrealized foreign exchange rate gains and losses, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgment preservation insurance policy, or JPI Amortization, and lease impairments and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance. Appian also discusses adjusted EBITDA, a non-GAAP financial performance measure it believes offers a useful view of the overall operation of its businesses. Appian defines adjusted EBITDA as net loss before (1) other expense (income), net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, and (8) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net loss. Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete depiction of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net loss as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to the financial information prepared and presented in accordance with GAAP, and Appian’s non-GAAP measures may be different from non-GAAP measures used by other companies. For more information on these non-GAAP financial measures, see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release. Appian provides guidance ranges for non-GAAP net income per share and adjusted EBITDA; however, we are not able to reconcile these amounts to their comparable GAAP financial measures without unreasonable efforts because certain information necessary to calculate such measures on a GAAP basis is unavailable, subject to high variability, dependent on future events outside of our control, and cannot be predicted. In addition, Appian believes such reconciliations could imply a degree of precision that might be confusing or misleading to investors. The actual effect of the reconciling items that Appian may exclude from these non-GAAP expense numbers, when determined, may be significant to the calculation of the comparable GAAP measures. Forward-Looking Statements This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical facts, including statements regarding Appian’s future financial and business performance for the third quarter and full year 2026, future investment by Appian in its go-to-market initiatives, increased demand for the Appian Platform, market opportunity and plans and objectives for future operations, including Appian’s ability to drive continued subscriptions revenue and total revenue growth, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” and similar expressions are intended to identify forward-looking statements. Appian has based these forward-looking statements on its current expectations and projections about future events and financial trends that Appian believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including the risks and uncertainties associated with Appian’s market opportunity and the expansion of its core software markets in general, the opportunity and disruptive impact of AI, the effects of increased competition, as well as innovations by new and existing competitors in its market, Appian’s ability to effectively manage or sustain its growth and to maintain profitability, Appian’s ability to maintain, or strengthen awareness of, its brand, risks and uncertainties associated with the composition and concentration of Appian’s customer base and their demand for its platform and satisfaction with the services provided by Appian, Appian’s ability to operate in compliance with applicable laws and regulations, Appian’s strategic relationships with third parties, and additional risks and uncertainties set forth in the “Risk Factors” section of Appian’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Moreover, Appian operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Appian’s management to predict all risks, nor can Appian assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Appian may make. In light of these risks, uncertainties, and assumptions, Appian cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Appian is under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. Investor [email protected] Media [email protected] (a) Accounts for the impact of 0.4 million shares of dilutive securities. (a) Accounts for the impact of 0.5 million shares of dilutive securities.(b) Accounts for the impact of 0.4 million shares of dilutive securities.(c) Per share amounts do not foot due to rounding. _________________________1 https://register-conf.media-server.com/register/BI28813a37ca7a432497f0bb1cdcef1e12

Interested in Appian Corporation? Here are five stocks we like better. Appian exceeded Q2 guidance: Cloud subscription revenue rose 21% to $106.9 million, total revenue increased 17% to $170.6 million, and adjusted EBITDA reached $8.1 million. Net income improved to $0.3 million from an $18.2 million loss a year earlier. AI and enterprise demand strengthened growth: Appian said AI-enabled deals command a 25% price premium, with most seven-figure software transactions including AI features. Momentum also continued in application modernization and federal contracts. The company raised its 2025 outlook: Appian now expects cloud subscription revenue of $429 million to $433 million, total revenue of $695 million to $703 million, and adjusted EBITDA of $49 million to $55 million. Is Appian The AI Play Investors Have Completely Missed? Appian (NASDAQ:APPN) reported second-quarter 2025 results that exceeded its guidance for cloud subscription revenue, total revenue and adjusted EBITDA, citing momentum in larger enterprise transactions, AI-related demand and growth in its federal business. Cloud subscription revenue rose 21% year over year to $106.9 million, while total subscription revenue increased 17% to $132.7 million. Total revenue also grew 17% to $170.6 million, or 14% on a constant-currency basis. Adjusted EBITDA was positive $8.1 million, compared with the company’s prior guidance range of a $5 million to $2 million loss and a $10.5 million loss a year earlier. → 3 Drone Stocks That Should Soar After the Summer Slump Beyond the Magnificent 7: Tech’s Rising Stars Net income was $0.3 million, or breakeven per diluted share, compared with a net loss of $18.2 million, or $0.25 per share, in the second quarter of 2024. Cash equivalents and investments totaled $184.8 million at quarter-end, up from $159.9 million at the end of 2024. Cash used in operations narrowed to $1.9 million from $17.6 million a year earlier. Chairman and CEO Matt Calkins said AI is contributing to Appian’s financial results, pipeline and customer value proposition. He said the company applies a 25% upcharge for AI and that most of its seven-figure software deals signed during the quarter included AI-inclusive license tiers. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth UiPath: Has the Bar Been Set Too Low for This AI Robotic Leader? “We’re getting higher prices because of AI,” Calkins said. “We’re in new deals because of AI and even new industries.” The company highlighted an international grocery retailer that deployed Appian AI within an existing field-dispatch application. Calkins said drivers can now upload paperwork related to shipment problems, while Appian AI reconciles the information automatically rather than requiring back-office workers to manually record and correct discrepancies. → Jersey Mike's Serves Fresh Gains After IPO Stumble Appian also cited a global asset manager that signed a seven-figure deal to upgrade licenses and deploy AI features for client investment operations. The company said AI agents will help classify forms and extract data for account openings, closings and changes. During the question-and-answer session, Calkins argued that Appian’s platform provides enterprise capabilities beyond what AI alone can create, including security, scalability, reliability, mobile functionality and high-availability features. CFO Serge Tanjga characterized AI as an “engine” that requires the surrounding application framework and controls supplied by the platform. Calkins said Appian sees application modernization as an expanding opportunity as AI lowers the cost of extracting and translating legacy applications. He said the market includes both an extraction component that is likely more services-intensive and an application-instantiation component that is likely more software-intensive. Appian cited several customer examples tied to modernization. A Spanish bank became a new customer in the quarter after purchasing thousands of software licenses to move back-office workflows from legacy systems to Appian. The company expects the bank to run core processes 30% faster and save millions of dollars annually. A U.S. health insurer also signed a seven-figure expansion deal to deploy Appian more broadly, beginning with Medicare and Medicaid enrollment, as part of a company initiative to consolidate technology and save $1 billion. In the public sector, Calkins said Appian’s federal business outgrew its global business in cloud revenue, new bookings and software pipeline during the first half of 2025. A U.S. agency supporting national healthcare selected Appian as the backbone for virtual care operations in a seven-figure software deal. According to Appian, the agency expects to save $38 million annually through the deployment. Calkins continued to describe the federal outlook as “cautiously optimistic” amid volatility related to DOGE and other factors. He said government interest in buying software directly from providers rather than through intermediaries, along with increased emphasis on efficiency, could be favorable for Appian. Appian’s non-GAAP gross margin was 75%, unchanged from a year earlier and down from 78% in the first quarter. Subscription gross margin was 87%, compared with 89% in both the prior-year period and preceding quarter. Professional services gross margin improved to 33% from 30% a year earlier. Total operating expenses were $122.7 million, essentially flat from $123.2 million a year ago. Tanjga said the EBITDA outperformance reflected higher-than-expected revenue as well as the timing of certain expenses that are now expected in the second half. Those expenses were primarily marketing and consulting costs rather than headcount, he said. Cloud subscription revenue retention was 111% as of June 30, down from 118% a year earlier and 112% in the prior quarter. Tanjga attributed the decline largely to the continuing effect of a small number of prior downsells in the backward-looking measure. He also said a greater portion of first-half new business came from new customers, which Appian views as evidence of its ability to win large, strategic deals with new clients. The company’s go-to-market productivity ratio reached 3.3, its eighth consecutive sequential quarterly increase, according to Calkins. Tanjga said Appian has reduced investment in lower-productivity areas and is seeking further gains through better execution, larger deals, leadership changes and targeted investments. For the third quarter, Appian expects cloud subscription revenue of $109 million to $111 million, representing growth of 16% to 18%, and total revenue of $172 million to $176 million, representing growth of 12% to 14%. The company forecast adjusted EBITDA of $9 million to $12 million and non-GAAP earnings per share of $0.03 to $0.07. Appian raised its full-year 2025 outlook. It now expects: Cloud subscription revenue of $429 million to $433 million, up 17% to 18% year over year. Total revenue of $695 million to $703 million, up 13% to 14% year over year. Adjusted EBITDA of $49 million to $55 million. Non-GAAP earnings per share of $0.28 to $0.36. Tanjga said the higher outlook reflected fundamental business strength, with foreign exchange providing a marginal benefit. Appian also announced that David Crozier joined the company in July as chief marketing officer. Appian Corporation is a global technology company specializing in low-code automation platforms designed to streamline business processes. Founded in 1999 by Matt Calkins, the company provides an integrated suite of tools that enables organizations to build enterprise applications and workflows rapidly with minimal hand coding. The platform combines process management, robotic process automation (RPA), artificial intelligence (AI) capabilities and data integration into a single environment, allowing businesses to accelerate digital transformation initiatives. The core offering, the Appian Low-Code Platform, empowers users—ranging from professional developers to business analysts—to visually model, design and deploy applications that can automate complex operations, orchestrate tasks across systems, and deliver real-time analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Appian Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.