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.
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.
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|
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)|
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.
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.