In the nearly 18 months since Appian (NASDAQ:APPN) went public, the cloud-based, software-as-a-service (SaaS) company has had a remarkable run. Demand for the company's wares pushed its stock as high as 147% before it lost much of those gains during the recent market correction. The stock is now up about 41% since inception.

Software developers continue to be in short supply, resulting in strong demand for Appian's low-code software-development platform. In a world that's increasingly mobile first, the company allows those with limited (or no) coding experience to develop software systems and apps quickly and easily -- and without expert knowledge.

Investors are hoping Appian can return to its high-flying ways when it reports the financial results of its third quarter after the market close on Thursday, Nov. 1. Let's look back at the company's recent quarter and see if it provides any insight into what Appian's earnings might hold.

A man and woman working on a computer designing a smartphone app.

Image source: Getty Images.

Another better-than-expected quarter

For the second quarter, Appian reported revenue of $59.9 million, an increase of 39% year over year, exceeding analyst expectations and the high end of management's guidance. The company's adjusted net loss of $8.8 million was double the $4.4 million loss in the prior-year quarter, resulting in an adjusted loss per share of $0.14, which also came in above expectations.

Appian saw strong growth across its portfolio of products and services. Subscriptions, software, and support revenue of $33 million jumped 50% year over year; this total included $4.5 million in perpetual software revenue. Professional services revenue also was solid at $26.8 million, up 27% compared to the prior-year quarter.

Subscription revenue of $27 million climbed 36% year over year, while the company's subscription revenue retention rate was 119%. Recurring revenue is the lifeblood of any subscription-based business, so watch for continued improvement in this important metric.

The company could boast of several significant business highlights, including being named a Visionary by Gartner in its 2018 Magic Quadrant for Enterprise High-Productivity Application Platform as a Service. This is a ringing endorsement of the strength of the company's development platform and the value it brings to its users.

What the future could hold

Based on the overall strength of its second quarter, Appian raised its full-year revenue guidance by 5.4%. The company now expects revenue of $214.5 million and subscription revenue of $110.7 -- both numbers are drawn from the midpoint of their respective guidance ranges.

For the third quarter, Appian forecasts total revenue in a range of $49.6 million to $49.8 million, which would represent year-over-year growth of between 11% and 12%. The company expects subscription revenue to fall in a range of $27.7 million to $27.9 million, representing year-over-year growth of between 34% and 35%. Appian is anticipating an adjusted operating loss of between $11.2 million and $10.2 million, and an adjusted loss per share of between $0.19 and $0.17.

While seasoned investors place limited emphasis on what Wall Street analysts are thinking, knowing their estimates can provide insight into the expectations of the broader market. Analysts' consensus estimates are calling for revenue of $49.78 million -- at the high end of management's forecast -- and an adjusted loss per share of $0.18, at the midpoint of Appian's guidance.

Investors with an appropriate time horizon should continue to focus on the long runway ahead for Appian, and not the short-term, dramatic stock moves that might otherwise instill fear. Watch for more when the company reports earnings on Nov. 1.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.