Appian (APPN) Q1 2025 earnings summary

Executive summary

• Cloud subscriptions revenue grew 15% year-over-year to $99.8 million, with total revenue up 11% to $166.4 million for Q1 2025.

• Adjusted EBITDA reached $16.8 million, a significant improvement from a loss of $1.3 million a year ago, marking the third consecutive quarter of positive adjusted EBITDA.

• Net loss narrowed to $1.2 million from $32.9 million year-over-year; non-GAAP net income reached $9.8 million, up from a $6.8 million loss.

• AI adoption accelerated, with 70% of cloud customers using AI and AI-inclusive tier revenue more than doubling sequentially to $9 million.

• Federal government bookings grew 59% year-over-year, and public sector revenue rose 21%, outpacing total company growth.

Financial highlights

• Cloud subscriptions revenue: $99.8 million (+15% YoY); total subscriptions revenue: $134.4 million (+14% YoY); professional services revenue flat at $32.1 million.

• Total revenue: $166.4 million (+11% YoY); non-GAAP gross margin: 78% (up from 76% YoY); subscriptions non-GAAP gross margin: 89%.

• Adjusted EBITDA: $16.8 million (vs. loss of $1.3 million YoY); non-GAAP net income: $9.8 million ($0.13/share); net loss per share was $0.02, compared to $0.45 in the prior year.

• Cash and investments: $199.7 million; cash from operations: $45 million (+138% YoY); cash and cash equivalents as of March 31, 2025, were $135.0 million.

• Deferred revenue: $262.5 million (+16% YoY); total debt was $248.0 million as of March 31, 2025.

Outlook and guidance

• Q2 2025 cloud subscriptions revenue expected between $101–$103 million (+14–16% YoY); total revenue $158–$162 million (+8–11% YoY); adjusted EBITDA expected between -$5 million and -$2 million.

• FY2025 cloud subscriptions revenue guidance raised to $419–$423 million (+14–15% YoY); total revenue $680–$688 million (+10–12% YoY); adjusted EBITDA expected between $40–$46 million; non-GAAP EPS $0.18–$0.26.

• Professional services revenue expected flat or up low single digits for FY2025; term license revenue to decline low double digits YoY.

• Management expects professional services revenue as a percentage of total revenue to decline over time as strategic partners take on more service delivery.

• Gross margin is expected to fluctuate quarterly, but professional services gross margin for the full year is projected to be consistent with 2024.