Shares of Appian (APPN +1.51%) were taking a dive today after the low-code cloud software company reported first-quarter results that matched analyst expectations on the top line but came up short on the bottom line.
Appian also cut its bottom-line forecast for the year.
As a result, the stock was down 19.1% as of 11:43 a.m. ET.
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Appian is growing, but not fast enough
Appian had already given investors preliminary results at its Investor Day conference in April, so the first-quarter numbers weren't a big surprise.
Revenue in the quarter rose 11% to $149.8 million, slightly ahead of the consensus at $149.5 million. Revenue from its cloud subscriptions, the category that Appian prioritizes, rose 24% to $86.6 million, indicating solid growth in its core business.
Revenue from professional services, which it has been outsourcing to strategic partners, declined in the quarter by 11% to $32.1 million.
On the bottom line, the company narrowed its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $1.3 million, which was an improvement from a loss of $15.8 million.
It also reported an adjusted loss per share of $0.24, which was an improvement from a loss of $0.27 in the quarter a year ago but worse than the consensus at $0.16.
Appian continues in AI tools like Process HQ, its process mining technology, and data fabric, but those new products have yet to move the needle for the business.
NASDAQ: APPN
Key Data Points
What's next for Appian?
Investors were disappointed with the second-quarter guidance and lower bottom-line forecast for the full year.
The company noted that the second quarter is its seasonally weakest and forecast revenue growth of 10%-13% to $140 million-$144 million, which was below the consensus at $145.3 million.
It also dialed down its full-year forecast of a per-share loss of $0.79-$0.85, which was below the consensus at $0.68.
While CEO Matt Calkins believes the company is going through a foundational building period as it invests in new AI products and implements a new advanced pricing tier, it's understandable why the cloud software stock is down based on the forecast.
