The stock market was having a generally negative morning on Wednesday, with all three major indexes firmly in the red as of 10 a.m. ET. However, low-code software company Appian (APPN 3.13%) was a big exception: Its shares were trading more than 16% higher.
As you might expect, since we're in the height of earnings season, Appian's latest quarterly results are fueling that upward move.
NASDAQ: APPN
Key Data Points
Strong earnings throughout the business
For starters, Appian beat fourth-quarter expectations on both the top and bottom lines. It achieved breakeven adjusted earnings, while experts were expecting a slight loss, and sales came in significantly ahead of the analysts' consensus. The company's 2025 guidance for adjusted EPS was greater than analysts had been looking for as well.
To list just a few of the other highlights from Appian's fourth quarter:
- Cloud subscription revenue grew 19% year-over-year, and it achieved a 116% cloud subscription revenue retention rate. Cloud subscriptions are the most profitable and fastest-growing part of Appian's business.
- Operating cash flow was about $14 million in the fourth quarter, compared to negative $8.2 million in the same period a year ago.
- The company ended 2024 with just under $160 million on its books. Now that it has achieved positive operating cash flow, investors seem far more comfortable with the company's balance sheet situation.
Not a perfect earnings report
To be fair, the news wasn't all great. Appian is expecting its cloud subscription revenue to grow by 14% in 2025, which would be a significant deceleration from its 21% growth rate for 2024. However, the real story here is about efficiency, and if Appian can grow at a double-digit percentage rate while expanding its margins, the company could still have a bright future.
