What happened
In response to management announcing well-received first-quarter earnings and increasing full-year revenue guidance, shares of Appian (APPN 1.10%), 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.
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.
