What happened
Appian (APPN +0.66%) stock soared 51.4% in August, according to data from S&P Global Market Intelligence. Shares of the low-code software development platform provider have gained 114% in 2019 through Sept. 3, making it one of this year's best-performing software-as-a-service (SaaS) stocks.
The S&P 500, including dividends, fell 1.6% last month and has returned 17.5% so far this year.
Image source: Getty Images.
So what
We can attribute Appian stock's robust August performance largely to the company's Aug. 8 release of second-quarter results that pleased investors. Shares popped 19% the next day and tacked on about 38% in the six-day period following the release.
The recent earnings release likely brought Appian to the attention of new investors, as the Virginia-based company only went public two years ago.
In the second quarter, Appian's total revenue grew 12% year over year to $66.9 million, led by subscription revenue's 41% jump to $38 million. Professional revenue, which comprises the bulk of the remaining revenue, only grew 3%, but this lower-margin revenue is "lumpy" from quarter to quarter. GAAP (generally accepted accounting principles) net loss was $9.4 million, or $0.15 per share, compared with a net loss of $11 million, or $0.18 per share, in the year-ago period. Adjusted for one-time items, the net loss contracted to $6.6 million, or $0.10 per share, from $8.8 million, or $0.14 per share, in the second quarter of last year.
Wall Street was expecting Appian to post an adjusted loss of $0.17 per share on revenue of $63.5 million, so the company comfortably beat the consensus estimates for both the top and bottom lines.
Now what
For the third quarter, Appian guided for total revenue of $65 million to $65.5 million, representing growth of 18% to 19% year over year. Furthermore, it expects subscription revenue to come in between $38.8 million and $39 million, or grow about 32% to 33%. The company forecasts an adjusted net loss per share of $0.16 to $0.15.
Management also raised its full-year 2019 revenue projection and slightly lowered its bottom-line outlook. It now expects:
- Revenue of $260.5 million to $262.5 million, or growth of 15% to 16% year over year. Its previous guidance was for revenue between $255 million and $258 million.
- An adjusted loss per share between $0.55 and $0.51, which compares with an adjusted loss per share of $0.54 in 2018. Its previous outlook was for an adjusted loss per share of $0.55 to $0.50.
