Executive Summary

Q4 2024 delivered double-digit top-line growth and strong profitability: total revenue $166.7M (+15% YoY), adjusted EBITDA $21.2M (vs. $1.0M a year ago), and non-GAAP gross margin of 80% (best since IPO), driven by mix and operating efficiency .
Results exceeded Q4 guidance across revenue and profitability, aided by a higher-than-expected on-prem contribution (public sector), lower professional services mix, Q4 spend timing shifts, and more efficient marketing; GAAP EPS was pressured by $14.3M FX losses (non-forecast) .
Cloud subscription revenue grew 19% YoY to $98.9M; cloud NRR ended at 116% (down modestly vs. Q3’s 117%) as management continues to target 110–120% quarterly .
2025 outlook embeds mid-teens cloud growth and profitability: FY25 total revenue $680–$684M, cloud subs $419–$421M (+14% YoY), adjusted EBITDA $38–$42M, and non-GAAP EPS $0.17–$0.22; Q1 2025 guides to $162–$164M revenue and $8–$10M adjusted EBITDA, with Q2 expected to be an adjusted EBITDA loss due to seasonality and Appian World .

What Went Well and What Went Wrong

What Went Well
- Outperformed guidance: revenue ($166.7M vs. $163.5–$165.5M guided), adjusted EBITDA ($21.2M vs. $6–$8M guided) on better on-prem mix, leaner services, Q4 investment timing shifts, and marketing efficiency .
- Platform efficiency: non-GAAP gross margin reached 80% (best since IPO); subscription non-GAAP GM 90% and professional services non-GAAP GM 31%, reflecting mix and execution .
- Strategic positioning: Management reiterated “we bring AI to work” with process-centric AI/Agents and highlighted marquee public sector and enterprise use cases, supporting the thesis for durable, high-value deployments .
What Went Wrong
- GAAP EPS headwind from FX: $14.3M FX loss in Q4 vs. $11.1M FX gain in Q4’23; management does not forecast FX, and will remove FX from non-GAAP EPS in 2025 .
- Cloud NRR moderated to 116% (from 117% in Q3 and 119% a year ago), though within the target range of 110–120% .
- Mix optics: Cloud net-new ACV was ~65% (vs. 88% in Q3 and ~80% prior year), reflecting an anomalous on-prem mix skew in public sector; management expects the cloud/on‑prem ratio to revert to ~80/20 ahead .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($M)	$145.3	$154.1	$166.7
Subscriptions Revenue ($M)	$115.8	$123.1	$136.8
Cloud Subscription Revenue ($M)	—	$94.1	$98.9
Professional Services Revenue ($M)	$29.5	$30.9	$29.9
GAAP Operating Income (Loss) ($M)	$(16.8)	$(7.2)	$5.0
GAAP Net Loss ($M)	$(10.0)	$(2.1)	$(13.6)
GAAP EPS	$(0.14)	$(0.03)	$(0.18)
Non-GAAP Net Income (Loss) ($M)	$4.9	$11.4	$(0.2)
Non-GAAP EPS (Diluted)	$0.06	$0.15	$0.00
Adjusted EBITDA ($M)	$1.0	$10.8	$21.2

Note: The press release shows Q4 2024 non-GAAP net loss of $(0.2)M (breakeven per share), while the call remarks referenced ~$2.2M; we treat the press release tables as definitive .

Segment mix

Segment ($M)	Q4 2023	Q3 2024	Q4 2024
Cloud Subscription Revenue	—	$94.1	$98.9
Total Subscriptions Revenue	$115.8	$123.1	$136.8
Professional Services Revenue	$29.5	$30.9	$29.9
Total Revenue	$145.3	$154.1	$166.7

KPIs and operating metrics

KPI	Q2 2024	Q3 2024	Q4 2024
Cloud Subscriptions Revenue Retention Rate	118%	117%	116%
Non-GAAP Gross Margin (%)	75%	77%	80%
Subscriptions Non-GAAP GM (%)	89%	89%	90%
Professional Services Non-GAAP GM (%)	30%	30%	31%
Cloud Net-New ACV Mix (% of net new software bookings)	—	~88%	~65%
International Rev Mix (% of total)	38%	36%	35%
Cash From Operations (Quarter, $M)	$(17.6)	$(8.2)	$13.9

Non-GAAP adjustments

Non-GAAP excludes stock-based comp, litigation expense (Pegasystems), JPI amortization, severance, and lease impairments. Q4 adjustments included $9.0M SBC, $1.16M litigation, $3.15M JPI amortization, and lease-related charges; reconciliations provided in the release .
FX losses of $14.3M affected GAAP and non-GAAP net loss in Q4; management does not forecast FX and will remove FX from non-GAAP EPS starting in 2025 .

Guidance Changes

Metric	Period	Previous Guidance	Current/Actual	Change
Cloud Subscription Revenue	Q4 2024	$95.0–$97.0M	$98.9M	Beat high end
Total Revenue	Q4 2024	$163.5–$165.5M	$166.7M	Beat high end
Adjusted EBITDA	Q4 2024	$6–$8M	$21.2M	Above
Non-GAAP EPS	Q4 2024	$(0.03) to $0.00	$0.00	At high end

New 2025 outlook

Metric	Period	Previous Guidance	Current Guidance	Change
Cloud Subscription Revenue	Q1 2025	N/A	$97–$99M (+12–14% YoY)	New
Total Revenue	Q1 2025	N/A	$162–$164M (+8–9% YoY)	New
Adjusted EBITDA	Q1 2025	N/A	$8–$10M	New
Non-GAAP EPS	Q1 2025	N/A	$0.02–$0.05 (74.7M shares)	New
Cloud Subscription Revenue	FY 2025	N/A	$419–$421M (+14% YoY)	New
Total Revenue	FY 2025	N/A	$680–$684M (+10% YoY)	New
Adjusted EBITDA	FY 2025	N/A	$38–$42M	New
Non-GAAP EPS	FY 2025	N/A	$0.17–$0.22 (75.1M shares)	New

Management noted Q2 2025 adjusted EBITDA expected to be a loss due to on‑prem seasonality and Appian World .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
AI/Agentic AI strategy	Emphasized native AI with RAG via Data Fabric; AI usage doubled QoQ	Framed process as the “home” for AI; highlighted wins and efficiency focus	“We bring AI to work”; six reasons AI is better in process; multiple case studies	Strengthening, consistent messaging
Data Fabric	Key differentiator enabling private AI/RAG; monetized via Advanced tier	Clear differentiation vs. competitors’ “fabric”; central to AI value	“Universal connector” to distributed data; advantage in regulated settings	Increasing emphasis
Public sector / GAM	GAM bookings more than doubled H1; multiple 7-figure wins	All 15 U.S. cabinet agencies customers; new GAM wins	Public sector on-prem skew boosted Q4; cautious outlook amid uncertainty	Positive demand, mix volatility
Pricing/Monetization	Introduced tiered pricing; seeding AI usage to drive Advanced tier	Advanced tier as default for new customers; working to upgrade base	Agents priced by usage (currently subsidized); opportunity to upsell installed base	Progressing to usage-based AI
Go-to-market focus	Cost/structure actions; upmarket/solutions focus; workforce reduction	Raised FY24 adj. EBITDA; CRO transition; larger deal focus	“Back to basics”; incentives tilted to larger deals; strong SKO	Execution discipline improving
Mix and margins	Guided services GM down LT; Q2 non-GAAP GM 75%	Non-GAAP GM 77%; subscriptions 89%, services 30%	Non-GAAP GM 80%; subs 90%, services 31%	Improving margins
FX impact	Minor loss (~$0.2M)	FX gain ~$9.2M boosted results	$14.3M FX loss weighed on GAAP/non-GAAP; to be excluded from 2025 non-GAAP EPS	Volatile FX; policy change in 2025

Management Commentary

“In 2024, Appian demonstrated its ability to grow with increasing efficiency. We specialize in creating value with AI, by deploying it in a process. While others bring work to AI, we bring AI to work.” — Matt Calkins, CEO .
“Our non-GAAP gross margin was 80% in Q4, our best performance since the IPO.” — Matt Calkins .
“Reasons for outperformance relative to our guide included greater‑than‑expected high‑margin on‑prem revenue… lower‑than‑expected low‑margin professional services revenue… some Q4 investments shifted into Q1… marketing spend was more efficient.” — Mark Lynch, Interim CFO .
“You price [AI] agents by usage… we’re going to subsidize use of agents for the time being.” — Matt Calkins .
“The 65% cloud, 35% on‑prem was an anomaly. We expect [to] go back to ~80% cloud and 20% on‑prem next year.” — Mark Lynch .

Q&A Highlights

Public sector/on‑prem mix: Management flagged an anomalous on‑prem skew in Q4 (public sector) and expects mix to normalize to ~80/20 cloud/on‑prem in 2025; cautious stance given federal budget uncertainty .
AI/Agents pricing: Agents priced by usage; near-term subsidization to drive adoption and demonstrate value; broader pricing/upsell path via Advanced tier .
Retention and renewals: Cloud NRR at 116% (target 110–120%) with a 99% gross renewal rate cited as “best-in-class” .
Data Fabric differentiation: Emphasized broad, performant connectivity across enterprise systems as key to private AI/RAG and regulated industry adoption .
2025 seasonality: Expect Q2 adjusted EBITDA loss due to on‑prem seasonality and Appian World timing; FY guide embeds this .

Estimates Context

We attempted to pull Wall Street consensus from S&P Global for APPN; data was unavailable due to provider request limits at this time. As a result, we cannot present vs-consensus comparisons for Q4 2024 or the 2025 outlook. We instead benchmarked results vs. company guidance, which APPN exceeded on revenue and adjusted EBITDA in Q4 2024 .
If desired, we can refresh consensus once S&P Global data access resets.

Key Takeaways for Investors

Execution beat: Q4 revenue and profitability exceeded guidance, with non-GAAP GM reaching 80% and adjusted EBITDA scaling to $21.2M; operating discipline is translating into margin traction .
Mix watch: On‑prem skew boosted profitability in Q4 but pressured cloud net-new mix (65% vs. 88% in Q3); management expects normalization to ~80/20 in 2025 — a potential modest headwind to gross margin tailwinds if mix reverts .
AI/process differentiation: The “AI in process” narrative, Data Fabric-led RAG, and usage-priced agents (subsidized now) underpin a credible path to monetization via Advanced tier upsell; track AI usage, Advanced-tier adoption, and agent pricing ramps .
Public sector catalyst vs. budget risk: Federal momentum (GAM) remains strong but budget/process uncertainty tempers near-term visibility; mix outcomes can swing quarterly KPIs (cloud ACV, services, on‑prem) .
2025 setup: Guides mid-teens cloud growth and higher profitability, but flags Q2 adjusted EBITDA loss due to seasonality; Appian World (late April) is a visibility and pipeline catalyst .
FX volatility: Large FX swings have materially impacted GAAP/non-GAAP results; removing FX from non-GAAP EPS beginning in 2025 should improve the clarity of underlying trends .
Monitor KPIs: Cloud NRR trajectory (target 110–120%), services mix/margins, international mix, deferred revenue growth, and cash from operations (positive in Q4) for sustainability into 2025 .

Supporting Press Releases (Q4 Context)

Appian Named a Leader in Everest Group’s Process Orchestration PEAK Matrix 2024 (recognition supports competitive positioning) .
Platform Release with Autoscale and AI enhancements (scale to 6M processes/hour; FedRAMP AI features) .
Q3 2024 earnings (for trend analysis) .
Q2 2024 earnings (for trend analysis) .

APPIAN CORP (APPN)·Q4 2024 Earnings Summary