The global lockdown conditions have accelerated digital transformation journeys for organizations. Reston, Virginia-based Appian (NASDAQ: APPN) is among the leading players in the industry who is leveraging these conditions to drive growth.
For the first quarter of the year, Appian saw revenues grow 31% over the year to $78.9 million, significantly ahead of the market’s forecast of $70.5 million. Net loss narrowed by 30% to $11.7 million. On an adjusted basis, net loss was $8.2 million, or $0.12 per share, compared with a loss of $8 million reported a year ago. The market was looking for a loss of a $0.21 per share for the quarter.
By segment, Cloud subscription revenues grew 33% to $28.4 million. Total subscriptions revenue, which includes SaaS subscriptions, on-premises term license subscriptions, and maintenance and support, increased 46% to $50.4 million. Professional services revenue grew from $25.7 million last year to $28.4 million. Cloud subscription revenue retention rate was 115% at the end of the quarter.
Appian expects to end the second quarter with revenues of $60-$61 million with an adjusted loss of $0.26-$0.23 per share. Given the current macro-economic conditions, the company did not provide an outlook for the year. The quarter’s outlook was significantly worse than the market’s expectations. The Street was looking for revenues of $71.97 million for the quarter with a loss of $0.16 per share.
Appian’s RPA Moves
During the last few months, Appian has made significant progress within the Robotic Process Automation (RPA) segment. Earlier this year, it had announced the acquisition of Novayre Solutions, developer of the Jidoka RPA platform. Jidoka is among the highest rated RPA software among peers according to Gartner. The acquisition of the RPA offering was aimed at developing Appian into a one-stop shop for automation. As part of the integration, Appian planned to unify low-code development and RPA in a comprehensive automation platform to allow humans, bots, and artificial intelligence to be able to work together successfully.
Appian leveraged the acquisition to release Appian RPA, which augments its low-code automation platform with the ability to govern cloud-native Appian software robots in a unified automation stack. Appian RPA delivers full stack automation while ensuring governance to centrally manage robotic workforces and deploy bots to deliver increased performance. It allows Bot developers to leverage Java Integrated Development Environment (IDE) to build sophisticated robots and to incorporate AI powered by Google into their bots.
Terms of the acquisition were not disclosed. Spain-based Novayre was a privately held organization prior to the acquisition. It did not disclose its financial performance or funding details. According to a Forrester report, the global RPA market is expected to grow to $12 billion by 2023. Most companies are still in early stages of RPA adoption. Appian is targeting this market for its growth.
Besides acquisitions, Appian has also been expanding its partnership roster to drive growth. Recently it entered into a strategic agreement with Deloitte to modernize mission systems for government and commercial clients. It also extended its tie-up with Google to enhance the Appian AI offering. The expanded relationship will allow Appian to include out-of-the-box AI capabilities that have been pre-configured for Intelligent Document Processing.
Appian’s stock is currently trading at $51.83 with a market cap of $3.6 billion. It had touched a 52-week high of $64.72 in May and a 52-week low of $29.07 in March this year.
This segment is a part in the series : Cloud Stocks