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Why Appian Stock Is Surging Today

Brian Feroldi, The Motley Fool

What happened

In response to management announcing well-received first-quarter earnings and increasing full-year revenue guidance, shares of Appian (NASDAQ: APPN), a software-as-a-service company focused on low-code software, rose 17% as of 1:09 p.m. EDT on Friday.

So what

The headline numbers from Appian's second quarter looked good:

  • Subscription revenue grew 41% to $38 million during the period, which represents a sequential acceleration and easily beat guidance.
  • Total revenue grew 12% to $66.9 million. That also topped management's guidance range and was ahead of the $63.5 million that Wall Street was expecting.
  • The subscription revenue retention rate was 117%, up 100 basis points sequentially.
  • Non-GAAP (generally accepted accounting principles) net loss was $6.6 million, or $0.10 per share. That beat guidance and was well below the $0.17 adjusted loss per share that analysts were expecting.
Man typing on a laptop.

Image source: Getty Images.

Management also followed up the report with attractive third-quarter guidance:

Metric Q3 2019 Guidance Range Implied Change
Subscription revenue $38.8 million to $39 million 32% to 33%
Total revenue $65 million to $65.5 million 18% to 19%
Non-GAAP operating loss ($10 million) to ($9.5 million) N/A
Non-GAAP EPS ($0.16) to ($0.15) N/A

DATA SOURCE: APPIAN.

For perspective, Wall Street was expecting $64.4 million in total revenue and negative $0.11 in adjusted EPS.

Management also favorably changed its full-year guidance again:

Metric Updated Guidance Range
Previous Guidance Range
Subscription revenue $153 million to $154 million $150.5 million to $152 million
Total revenue $260.5 million to $262.5 million $255 million to $258 million
Non-GAAP operating loss ($35 million) to ($33 million) ($35.5 million) to ($32.5 million)
Non-GAAP EPS ($0.55) to ($0.51) ($0.55) to ($0.50)

DATA SOURCE: APPIAN.

Wall Street is currently modeling $256.9 million in total revenue and an adjusted net loss per share of $0.53 for the full year.

Traders cheered the better-than-expected quarterly results and guidance boost.

Now what

Appian's stock touched an all-time high today, which shows that Wall Street believes this company's future is looking very bright. That's music to this shareholder's ears, as I also believe the shift toward low-code software is still just getting started.


Brian Feroldi owns shares of Appian. The Motley Fool owns shares of and recommends Appian. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com