Today, Appian Corporation has released its 10-K report, leading to a 12.7% movement in the company's shares, which are now trading at $37.61. Appian provides a low-code process automation platform, offering workflow, artificial intelligence, robotic process automation, data fabric, and process mining. The company generates the majority of its revenue from sales of subscriptions, with a focus on financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation industries. As of December 31, 2023, Appian had approximately 1,000 customers, with 35.8% of its total revenue generated from customers outside of the United States.
In 2023, Appian reported revenue of $545.4 million, a significant increase from $468.0 million in 2022 and $369.3 million in 2021. Cloud subscriptions revenue also showed strong growth, reaching $304.5 million in 2023, up from $236.9 million in 2022 and $179.4 million in 2021. However, the company incurred net losses of $111.4 million in 2023, compared to $150.9 million in 2022 and $88.6 million in 2021. Appian also used cash in operations of $110.4 million in 2023, $106.6 million in 2022, and $53.9 million in 2021.
Appian's business model focuses on maximizing the lifetime value of customer relationships, with an average cloud subscription gross revenue renewal rate of 98% over the last three fiscal years. The company also emphasizes market adoption of its platform, growth of its customer base, further penetration of existing customers, and the mix of subscriptions and professional services revenue as key factors affecting its performance.
For more information, read the company's full 10-K submission here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (k) | $226,743 | $260,352 | $304,573 | $369,259 | $467,991 | $525,830 |
| Gross Margins | 63% | 64% | 71% | 72% | 72% | 73% |
| Net Margins | -22% | -19% | -11% | -24% | -32% | -26% |
| Net Income (k) | -$49,451 | -$50,714 | -$33,477 | -$88,641 | -$150,920 | -$135,851 |
| Net Interest Expense (k) | -$198 | -$367 | -$478 | -$372 | -$1,673 | -$14,240 |
| Depreciation & Amort. (k) | $2,021 | $4,742 | $5,851 | $5,743 | $7,297 | $9,011 |
| Diluted Shares (k) | 60,741 | 65,479 | 69,051 | 71,036 | 72,455 | 73,178 |
| Earnings Per Share | -$0.81 | -$0.77 | -$0.48 | -$1.25 | -$2.08 | -$1.86 |
| Avg. Price | $30.54 | $39.57 | $65.55 | $120.47 | $53.41 | $37.2028 |
| P/E Ratio | -38.17 | -51.39 | -136.56 | -96.38 | -25.68 | -20.0 |
| Free Cash Flow (k) | -$38,335 | -$41,347 | -$8,871 | -$59,976 | -$115,646 | -$126,303 |
| Current Ratio | 1.63 | 2.47 | 2.34 | 1.57 | 1.56 | 1.19 |
The stock is likely overvalued at a price of $37.61 per share due to its negative PEG ratio, declining earnings per share, and negative trailing twelve month P/E ratio.
In terms of growth factors, the company's revenues are rapidly growing at a rate of 16.6%. However, Appian's capital expenditures are decreasing at a rate of -10.2%, and its 73% gross margins are comparable to the 70.92% industry average. Additionally, the company's earnings per share have declined over the last 6 years, with an annualized growth rate of -14.9%.
Regarding value factors, Appian's total liabilities of $528.94 million far exceed its current assets of $385.37 million, leading to a net current asset level of $-143.56 million. The company exhibits a poor record of retained earnings with a value of $-509.89 million and has a Long Term Debt/Equity ratio of 3.05, suggesting high debt levels. Moreover, the firm has consistently negative free cash flows, with a compounded average growth rate over the last 5 years of -26.0%.
This analysis is not personalized financial advice and should be considered as part of a larger, comprehensive research effort.
