Appian Corporation (APPN) | Investment Case

1. Company Snapshot

1.a. Company Description

Appian Corporation provides low-code automation platform in the United States and internationally.The company's platform automates the creation of forms, workflows, data structures, reports, user interfaces, and other software elements that are needed to be manually coded.The company also offers professional and customer support services.

It serves to financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation industries.The company was incorporated in 1999 and is headquartered in McLean, Virginia.

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1.b. Last Insights on APPN

Appian Corporation's recent performance was driven by strong Q3 results, with accelerated growth and improved profitability. The company's cloud subscriptions revenue increased 21% year-over-year to $113.6 million, and total revenue rose 21% to $187.0 million. Its practical AI platform in enterprise technology has garnered attention, with over a quarter of customers using Appian AI. Appian was named a Leader in Digital Process Automation Software by Forrester. Its expanding EBITDA margins and undervaluation versus peers, trading at 4.5x EV/FY25 revenue, have sparked investor enthusiasm.

1.c. Company Highlights

Last Price	40.96
Change Percentage	3.99%
Open	39.37
Previous Close	39.39
Market Cap ( Millions)	3034
Volume	940490
Year High	46.06
Year Low	24
M A 50	34.65
M A 200	31.33

FCF Yield	2.39%
Dividend Yield	0.00%
ROE	17.55%
Debt / Equity	-606.68%
Net Debt / EBIDTA	692.23%
Price To Book	-62.45
Price Earnings Ratio	-414.63
Price To FCF	41.76
Price To sales	4.39
EV / EBITDA	131.0

2. Appian's Q3 Earnings: A Strong Upswing in Cloud Revenue and Profitability

Appian's Q3 financial performance was robust, with total revenue reaching $183.4 million, representing a 14% year-over-year growth. Cloud subscription revenue, a key driver of the company's growth, increased by 18% to $108.4 million. The company's adjusted EBITDA margin expanded to 9.5%, resulting in an adjusted EBITDA of $17.4 million. Non-GAAP earnings per share (EPS) came in at $0.32, significantly beating analyst estimates of $0.05. The strong EPS was driven by the company's continued focus on operational efficiency and cost management.

Publication Date: Nov -14

                                    📋 Highlights
                                    Federal Sector Growth::
                                                50% increase in new $1M+ software deals QoQ in Q3.
Cloud ACV Bookings::
                                                90% of total net new software bookings in Q3 driven by international operations.
Go-to-Market Efficiency::
                                                Productivity ratio rose to 3.5, ninth consecutive quarterly improvement.
Rule of 40 Score::
                                                Improved to 39 from 31, reflecting strong cloud revenue growth vs. EBITDA margins.
International Expansion::
                                                40% mix uptick in international business, implying ~30% growth trajectory.

                                

Revenue Growth and Mix

The company's revenue growth was driven by strength across multiple industries, including government, finance, healthcare, life sciences, and technology. The federal sector performed particularly well, with over 50% more new 7-figure software deals compared to last Q3. Cloud subscription revenue growth remained stable in the mid-to-high teens on a constant currency basis for four quarters in a row, demonstrating the company's ability to sustain growth momentum.

Profitability and Cash Flow

Appian's profitability improved significantly in Q3, driven by a reduction in accounts receivable and a decrease in accounts payable. Cash provided by operations was $18.7 million, a nice surprise driven by one-time payments from customers and improved operating efficiency. The company's go-to-market productivity ratio rose to 3.5, marking the ninth consecutive quarterly increase, demonstrating the company's ability to generate more value from its sales and marketing dollars.

Guidance and Outlook

Appian increased its guidance for cloud subscription revenue and total revenue for the full year 2025. Cloud subscription revenue is expected to be between $435 million and $437 million, representing year-over-year growth of between 18% and 19%. Total revenue is expected to be between $711 million and $715 million, representing year-over-year growth of 15% to 16%. Analysts estimate next year's revenue growth at 11.5%, indicating a continued growth trajectory.

Valuation

Appian's current valuation metrics indicate a premium valuation. The company's P/S Ratio is 4.62, and EV/EBITDA is 137.33, suggesting that the market is pricing in significant growth expectations. The company's ROE is 17.55%, indicating a relatively strong return on equity. However, the Net Debt / EBITDA ratio is 6.92, indicating a relatively high debt burden.

3. NewsRoom

Appian Corporation to Present at the Barclays 23rd Annual Global Technology Conference

Dec -04

Source: globenewswire.com

Appian Names 2025 Public Sector Partner Award Winners

Nov -20

Source: prnewswire.com

Appian AI Transforms Clinical Workflows for Global Public Health Agencies

Nov -20

Source: prnewswire.com

Is Appian The AI Play Investors Have Completely Missed?

Nov -17

Source: marketbeat.com

Appian annuncia i vincitori dei Partner Award 2025 ad Appian Europe

Nov -14

Source: prnewswire.com

Appian Launches New AI Capabilities To Automate Complex Work & Accelerate App Modernization

Nov -12

Source: prnewswire.com

Appian präsentiert neue KI-Funktionen für App-Modernisierung und intelligente Prozessautomatisierung

Nov -12

Source: prnewswire.com

Appian Launches New AI Capabilities To Automate Complex Work & Accelerate App Modernisation

Nov -12

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (20.60%)

6. Segments

Cloud Subscriptions

Expected Growth: 23.1%

Appian Corporation's Cloud Subscriptions growth of 23.1% is driven by increasing demand for low-code automation, digital transformation, and cloud-based workflow management. Key drivers include expanding customer base, cross-selling, and upselling opportunities, as well as strategic partnerships and investments in emerging technologies such as AI and RPA.

Professional Services

Expected Growth: 14.07%

Appian Corporation's Professional Services segment growth of 14.07% is driven by increasing demand for digital transformation, adoption of low-code automation, and expansion of existing client relationships. Additionally, the company's investments in sales and marketing, as well as its strategic partnerships, have contributed to the growth.

Term License Subscriptions

Expected Growth: 24.67%

Appian Corporation's 24.67% growth in Term License Subscriptions is driven by increasing demand for low-code automation, digital transformation, and cloud adoption across industries. Strong sales execution, expanding partner ecosystem, and high customer retention rates also contribute to this growth.

Maintenance and Support

Expected Growth: 11.93%

Appian Corporation's Maintenance and Support growth of 11.93% is driven by increasing adoption of low-code automation, expanding customer base, and rising demand for digital transformation. Additionally, the company's focus on cloud-based solutions, strategic partnerships, and investments in customer success programs contribute to the growth.

7. Detailed Products

Appian Platform

A low-code development platform that enables organizations to build custom applications quickly and efficiently.

Appian RPA

A robotic process automation (RPA) tool that automates repetitive and mundane tasks.

Appian BPM

A business process management (BPM) tool that enables organizations to model, execute, and monitor business processes.

Appian Case Management

A case management tool that enables organizations to manage complex, dynamic, and unstructured processes.

Appian Integration

A integration platform that enables organizations to integrate with external systems and services.

Appian AI and Machine Learning

A artificial intelligence (AI) and machine learning (ML) platform that enables organizations to build intelligent applications.

8. Appian Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Appian Corporation's low-code platform and automation capabilities make it difficult for substitutes to emerge, but the presence of open-source alternatives and custom-built solutions poses some threat.

Bargaining Power Of Customers

Appian Corporation's customers are primarily large enterprises, which reduces their bargaining power. However, the company's reliance on a few large customers increases their bargaining power.

Bargaining Power Of Suppliers

Appian Corporation's suppliers are primarily technology and infrastructure providers, which are abundant and interchangeable, reducing their bargaining power.

Threat Of New Entrants

The low-code platform market is highly competitive, and new entrants would face significant barriers to entry, including the need for significant investments in research and development.

Intensity Of Rivalry

The low-code platform market is highly competitive, with several established players, including Salesforce, Pegasystems, and ServiceNow, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	84.12%
Debt Cost	6.25%
Equity Weight	15.88%
Equity Cost	11.25%
WACC	7.05%
Leverage	529.90%

11. Quality Control: Appian Corporation passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

i3 Verticals

A-Score: 5.1/10

Value: 3.6

Growth: 4.8

Quality: 7.8

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

Yext

A-Score: 4.3/10

Value: 2.4

Growth: 6.9

Quality: 5.9

Yield: 0.0

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

Zuora

A-Score: 4.2/10

Value: 5.2

Growth: 4.3

Quality: 3.9

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

Appian

A-Score: 4.2/10

Value: 4.9

Growth: 6.4

Quality: 5.4

Yield: 0.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

Synchronoss Technologies

A-Score: 3.3/10

Value: 8.4

Growth: 6.2

Quality: 3.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

AuthID

A-Score: 2.8/10

Value: 6.6

Growth: 4.7

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

19.91%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.05%

Appian Corporation - US03782L1017

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on APPN

1.c. Company Highlights

Cheaper

Average Growth

Stable Momentum

Earnings Miss

Weak Momentum

Earnings Beats

Revenues Beats

Lower Growth

Revenues Miss

Average Quality

Fairly Valued

Average Yield

Medium Volatility

2. Appian's Q3 Earnings: A Strong Upswing in Cloud Revenue and Profitability

Revenue Growth and Mix

Profitability and Cash Flow

Guidance and Outlook

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (20.60%)

6. Segments

Cloud Subscriptions

Expected Growth: 23.1%

Professional Services

Expected Growth: 14.07%

Term License Subscriptions

Expected Growth: 24.67%

Maintenance and Support

Expected Growth: 11.93%

7. Detailed Products

Appian Platform

Appian RPA

Appian BPM

Appian Case Management

Appian Integration

Appian AI and Machine Learning

8. Appian Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Appian Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.96$

Current Price

40.96$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA