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spk01: Greetings and welcome to Appian Corporation third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Scott Walker, Director of IR. Thank you. You may begin.
spk05: Thank you, Operator. Good afternoon, and thank you for joining us today to review Appian's third quarter financial results. With me on the call today are Matt Calkins, Chairman and Chief Executive Officer, and Mark Lynch, Chief Financial Officer. After prepared remarks, we will open up the call to a question and answer session. During this call, we may make statements related to our business that are forward-looking statements under federal security laws and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial results, trends in guidance for the fourth quarter and full year 2020, the impact of COVID-19 on our business and on the global economy, the benefits of our platform, industry, and market trends, our go-to-market and growth strategy, our market opportunity and ability to expand our leadership position, our ability to maintain and upsell existing customers, and our ability to acquire new customers. The words anticipate, continue, estimate, expect, intend, will, and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our Q3 2020 Thank You filing, our 2019 10-K filing, and our other periodic filings with the SEC. These documents and the earnings call presentation are available in the Investors section of our website at www.appian.com. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release in the Investor Relations portion of our website at for reconciliation of these measures to their most directly comparable GAAP financial measures. With that, I'd like to turn the call over to our CEO, Matt Hawkins. Matt?
spk08: Thank you, Scott, and thank you all for joining us today. In the third quarter of 2020, Appian's cloud subscription revenue grew 40% year-over-year to $34.3 million, and our adjusted EBITDA was a loss of $2.4 million. Total revenue grew 17% year-over-year to $77.3 million. Our cloud subscription revenue retention was 115% as of September 30, 2020. These results exceeded our guidance. We also set an all-time high for gross profit margin of 73%, exceeding our previous record by 299 basis points. Appian is the leader in digital transformation. which we address with low-code and automation technology. The demand for these technologies is growing and has been accelerated by the pandemic. Appian stands to benefit from the newfound urgency around agility and digital transformation for a few reasons. First, we believe that Appian is the leading pure-play low-code vendor. We were the first to the public market. We also have the most experience and the highest revenue of these vendors. Furthermore, we own lowcode.com, so we must be the leader. Being ahead in low code means our platform can create powerful applications, and it can do so quickly. We use that advantage to differentiate against our competition. The Appian guarantee, for example, is our promise that a customer's first application will be finished in just eight weeks. Second, Appian combines low code with automation. Automation means using a workflow to coordinate people, bots, and AI to get a job done together. These worker types complement each other. They're better together. More broadly, automation means using a workflow to unify dispersed assets, and there's never been more dispersion of assets than there is today. People are all working from different locations. Data is scattered across the enterprise, and there are now different worker types like AI and RPA bots. Companies need a strong process layer to bring all these assets together. Low-code and automation are in a single platform makes a powerful combination. The final reason is workflow itself. Appian has been a leader in workflow for more than a decade. Workflow makes our low-code application development faster, more repeatable, and easier to change. Also, workflow makes our automation more intuitive, more inclusive, and more scalable. I expect strong workflow or process management, if you prefer, will be a primary differentiated feature in both of our core markets, low-code and automation, in 2021. And Appian is well-positioned to benefit from that trend. Appian's leadership is reflected in the leadership of our customers. Global organizations depend on our technology, including nine. of the top ten life sciences firms, six of the top ten asset managers, five of the top ten banks, and more than 100 government groups. These leading organizations rely on Appian for some of their most important applications. A recent example from Q3 involves a major digital marketing services provider. This firm purchased Appian software to re-engineer its operations and automate 30 business processes. The first project automates the creation of client performance reports with our native automation features. It uses Appian artificial intelligence to ingest documents and Appian RPA bots to gather public data to generate performance reports for the firm's employees to validate before sharing with clients. We won this deal because we provide a one-stop shop for their automation needs and we will reduce their operating costs by 50%. Appian is the only open automation platform. We don't require our customers to use Appian bots and Appian AI exclusively. In fact, we encourage customers to bring their favorite best-of-breed RPA and AI technologies into the Appian environment to suit the history and preferences of their existing enterprise. In this way, I see Appian as a best-of-breed enabler, a champion, for firms that want to choose their own favorite products instead of adopting a tech giant's full stack. A federal government agency and existing Appian customer exercised their right to choose best of breed this quarter. This is a good example. They purchased Appian licenses to coordinate IBM AI, Blue Prism, RPA bots, and their own employees with our workflows. Appian will orchestrate these workers to process 100,000 Freedom of Information Privacy Act document requests annually. AI will digitize forms. Bots will populate data into Appian, and caseworkers will review files before sending them to constituents. We won this deal because Appian's open platform allowed them to build this critical application with their preferred technologies. Appian partners had a strong quarter. Partners more than doubled their new logos. in the first nine months of 2020 compared to the same period last year. They influenced 77% of our new logos in Q3, higher than typical. They also helped us win most of our seven-figure deals. A partner led us to win a million-dollar expansion with the UK government department. This existing Appian customer built a mobile application for its employees to manage the transportation of thousands of prisoners every month and to conduct welfare and safety checks. With this quarter's purchase, they will expand the application to more users and more territory. We run this expansion because our app significantly reduces their operating expenses. Partners are winning deals by selling solutions they've pre-built on our platform. In fact, partners offer three times more Appian solutions now than they did in Q3 last year, for example. A Fortune 500 bank purchased KPMG's Libor solution built on Appian. They'll use the solution to transition off LIBOR by amending thousands of credit agreements and contracts. We won this deal because the solution can quickly process millions of pages with the highest degree of accuracy. We also continue to develop and launch our own solutions internally. This quarter, we released our first solution for U.S. government acquisitions. It's called Requirements Management, and it automates one of the first stages of the acquisition process. It reduces procurement lead times by enabling program and contracting teams to work together to define and manage purchasing requirements within a single application. Our solution codifies the experience we've accrued from over a decade of implementing acquisition projects on our platform. It received strong interest from agencies, winning two new logos in the quarter of launch. For example, a federal security agency covering counterintelligence and defense investigations purchased requirements management to become a new customer. Before Appian, the organization lacked a digitized tool to manage their procurement process. They'll use Appian to automate their process end-to-end from initial requirements gathering to final vendor evaluation and review. We won this deal because the agency needed our secure IO4 cloud offering, and we were strongly recommended by existing Department of Defense customers who use our platform for acquisition management. Overall, our federal business was a strong contributor. Federal software bookings doubled, and new logos increased by 33% compared to Q3 last year. Notably, a U.S. military branch and longtime customer, expanded its use of the Appian platform into new mission areas this quarter. It purchased millions of dollars in new licenses to manage its criminal, cyberterrorism, and counterintelligence cases. Appian will manage the process end-to-end from police investigation to final judiciary hearing in military court. Our platform will replace a decades-old incumbent system for thousands of users across its special investigations and legal operations groups. We beat the competition because our low-code platform met all of the customer's requirements during a two-day proof-of-concept while the competitor did not. The immune region performed well in the third quarter. Subscriptions revenue grew by 68%, and attendance at our annual Appian Europe conference doubled versus 2019. Inemia, a top five global oil and gas company, became a new Appian customer in Q3. It selected our platform to build two important applications. The first will automate the creation of new product records, and the second will digitize a portion of their customer onboarding process. Their first project will reduce processing times by 85% and will be delivered in just eight weeks with the Appian guarantee. We also expanded at a global European shipping and logistics company. the firm bought millions of dollars of additional licenses to replace its legacy shipping and logistics management system. Before Appian, the company's geographic entities were siloed by disjointed applications. The customer will use our platform to deploy a global application to manage their end-to-end shipping and logistics processes. We won this deal after demonstrating Appian's speed and flexibility with a custom demo completed in just five days. In 2020, demand for low-code and automation has never been stronger. Appian's unique combination of low-code automation backed by the power of workflow will give us an edge as more companies seek to quickly build and deploy critical business applications. Now, I'll turn the call over to Mark for a deeper discussion of our financials.
spk07: Mark. Thanks, Matt. I'll review the financial highlights of the quarter, and then we'll provide details on our Q4 and full-year 2020 guides. Collage subscription revenue for the third quarter was $34.3 million, an increase of 40% year-over-year and above the top end of our guidance. Our total subscriptions revenue was $50.8 million, an increase of 34% year-over-year. Subscriptions revenue was 66% of total revenue in the third quarter, an increase from 57% over the prior year period. Professional services revenue was $26.5 million, down 6% from $28.4 million in the prior year period, and up from $25.4 in the prior quarter. Partners continue to be a larger part of our ecosystem and are increasingly helping us sell more software. All our services engagements, both cloud and on-prem, continue to be performed remotely. Total revenue in the third quarter was $77.3 million, an increase of 17% year-over-year and also above our guidance rate. Our cloud subscription revenue retention rate as of September 30th was 115%, within the 110% to 120% range that we target on a quarterly basis. We remain pleased with our customers' standard use of our platform. Our international operations contributed 32% of total revenue for Q3, compared with 31% in the prior year period, demonstrating the balance of our businesses both domestically and internationally. Our cloud bookings were 79% of total software ACV bookings for the first nine months of 2020, consistent with the first nine months of 2019. Now I'll turn to our profitability metrics. For the third quarter, our non-GAAP gross profit margin was 73%, an increase of 9% compared to the same period last year. Subscriptions non-GAAP gross profit margin was 90% in the third quarter, compared to 89% in the third quarter of 2019. Our non-GAAP professional services gross profit margin was 40% in the third quarter, compared to 32% in the third quarter of 2019. The services gross profit margin was positively impacted by a reduction in services performed by subcontractors and decreased travel and entertainment costs. While we are proud of our 40% non-GAAP professional services margins, prospectively, I would expect our margins to be closer to 30%. Total nine GAAP operating expenses were $60.3 million, an increase of 17% from $51.7 million in the year-ago period. Impacts from COVID-19 have naturally decreased certain expenses like travel and entertainment and office-related expenses. However, we continue to aggressively hire mid-level software engineers and quota-carrying sales reps. Adjusted EBITDA loss was $2.4 million in the third quarter ahead of the guidance and compared to an adjusted EBITDA loss of $7.8 million In the third quarter, we had approximately $3.3 million of foreign exchange gains compared to $2.4 million of FX losses in Q3 2019. Our guidance does not consider any additional potential impact of financial and other income and expenses associated with foreign exchange gains or losses as we don't estimate movements in foreign currency exchange rates. Non-GAAP net loss was $34,000. for the third quarter of 2020 or breakeven per basic and diluted share compared to non-GAAP net loss of $11.5 million or a loss of 18 cents per basic and diluted share for the third quarter of 2019. This is based on 69.9 million diluted shares outstanding for the third quarter of 2020 and 65.5 million basic and diluted shares outstanding for the third quarter of 2019. 2012 balance sheet. As of September 30, 2020, we had cash and cash equivalents $251.1 million, compared with $256.1 million as of June 30, 2020. For the third quarter, cash use and operations was $6.5 million. For the nine months ended September 30, 2020, cash use and operations was $13.5 million. For the nine months ended September 30, 2019, cash use and operations was $2.9 million, which also included the reimbursement of $17 million in tenant improvement allowances. Excluding that, Our cash used in operations was $19.9 million last year. Total deferred revenue was $101.3 million for the third quarter. With respect to our billing terms, the majority of our customers are invoiced on an annual upfront basis, but we also have large customers that are billed quarterly or monthly. Due to the variability of our billing terms, changes in our deferred revenue are generally not indicative of the momentum in our business. Now through the guidance for the full year 2020, Carb prescription revenue is expected to be in the range of $127.3 million and $127.8 million, representing your beer growth of 34%. Total revenue is expected to be in the range of $296 to $297 million. Adjusted EBITDA loss is expected to be in the range of $24 million and $23 million. Non-GAAP net loss per share is expected to be between $0.42 and $0.40. This assumes 69.1 million basic and diluted common shares outstanding. For the fourth quarter of 2020, card subscription revenue is expected to be in the range of $35 and $35.5 million, representing year-over-year growth of between 33% and 35%. Total revenue is expected to be in the range of $73 million and $74 million. Adjusted EBITDA loss is expected to be in the range of $11 million and $10 million. Non-GAAP net loss per share is expected to be between 18% and 16%. This assumes 70.5 million basic and diluted common shares outstanding. With that, let's turn it over to questions.
spk01: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation signal will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Sanjit Singh with Morgan Stanley. You may proceed with your question.
spk06: Thank you for taking the questions, and congrats on a really outstanding set of Q3 results. Matt, maybe just to sort of frame out what you saw in the quarter, It's not often that we see this magnitude of acceleration on the staff side, given it's sort of ratable. So if you could sort of parse out what were the sort of key contributors in the core that allowed you to sort of beat your guidance on the cloud subscription revenue side so materially. It sounds like government was very strong, but what did you see sort of on the non-government businesses as well coming into the quarter? Yeah. Yeah.
spk08: Well, what I saw was the number of factors hitting their stride. I love this question because it allows me to say that I'm pleased with the way we're executing in several areas. I love the way that our long attention and cultivation of partners is bearing fruit. I think that's a really big step forward for this business. I'm pleased with the development that we've done in Europe, And this has not been an easy year to sell in Europe, and still we're turning out good results, getting good enthusiasm. I feel great about that. It was a challenge to be relevant through 2020. Not only was it hard to do services or to grab new leads, but it was hard to be on people's radar because they had other things they were urgently caring about, and we succeeded in being relevant and getting that attention. I feel good about what we did in the federal government. I think it was obviously a very sharp improvement over what we did a year ago. So we've elevated our profile there. We've delivered some notable successes. In fact, I even tried to allude to it in my prepared remarks, talk about how one of those successes of our selections was directly derived from experience that we'd had before with another DOD customer who recommended us for an acquisition purpose. it's kind of a reputation kind of flywheel. We feel like we're building on our success to gain more. Actually, I feel that way in federal and in partners as well. So what we're seeing here is a number of factors coming online, and each one of them is a function of a lot of work that's gone into it, a lot of buildup, a lot of investment, and also a lot of echoes of success that we've already had. That's what it takes to get a partner momentum going like we have or a federal momentum. I think that what you're really seeing is a lagging signal of a lot of success that's happened over the past, a lot of investment that's happened over the past, and it's good to see it coming online.
spk07: I think to add on to that, from a financial perspective, we had a lot more in-quarter subprevention than we normally do. So we closed deals earlier in the quarter. We have the benefit of that. from the subs revenue be recognized within the quarter. That was also a dynamic that occurred.
spk06: That's very helpful context, Mark. My follow-up question for you, Matt, there's two sort of words in your script that sort of caught my ears that are maybe a little bit different than what we've been hearing for the past couple years. I think workflow was a key theme of your script, and then I also heard you talk about automation, which to my mind means sort of low code plus the RPA value proposition. It seems like it drove a couple of wins. So related to that, workflow is something I think you guys have always sort of done. What's, in terms of the messaging to your customers, what is there to say in terms of your emphasis on driving on your workflow capabilities? And then on the RPA side, Is there sort of any change that you're seeing in your own, as customers look to Appian for RPA, get those elements versus looking to like a third-party solution?
spk08: Yeah, on the RPA side, it is our strategy to remain extremely open because we feel this market needs a best-of-breed facilitator. And so that's our strategy, and so that's the totality of my response with regards to RPA. With regards to workflow, we have long been in this business. You could say almost 20 years, actually, not 10 years, like I said in my remarks, been in workflow. But we haven't generally used that term. I believe, in general, that a tech company should use the simplest term possible, and especially at the moment a market is widening. When you get more participants, those participants expect to be addressed in terminology they can understand. Workflow is an easily understandable word that suggests the technology is approachable. That's where I'm going with the use of that word. I think also it's fallen back into some favor where for a time workflow suggested triviality. I believe it no longer does that. And it is a good description of what it is that we're doing. We're creating process flows in order to – to specify the way an application will behave. So workflow is a very apt description, and it's also an approachable term, and it speaks to the middle of the market, and I think it's no longer in disfavor. So for all those reasons, I like the word, just like I like low code. I prefer low code, and we latched onto that early because it is so intuitive. It's simple. It's made of understandable words. I like simple terminology, and I think that as a tech company, we should be at pains to find it.
spk06: Absolutely understood. Congrats on the quarter. Thank you.
spk01: Our next question comes from the line of Mohit Gogia with Barclays. You may proceed with your question.
spk03: Hey, guys. Thanks for taking my question. I look for my congrats on a really solid quarter here as well. One question for Matt that I'll follow up for Mark. So, Matt, I know it's too early to guide for next year, so I'm not going to go into the numbers. But from your perspective, from a high level, if you look to next year, what are some of your priorities and some of the investment areas that you think you will sort of like be keeping a T9 on for next year? We recognize that obviously this year there were some cost savings because of lower T&E, right? So assuming that we can go back into the investment mode next year, like what are some of the areas if you can talk about that qualitatively? And then I have a follow-up question for Mark.
spk08: Yeah, I believe we're going to be in investment mode next year, but I didn't mean to slow down much this year either. When we got savings, you mentioned the T&E savings, that was incidental and not part of the plan. We mean to hire across the board. We are particularly focused on engineering and sales, but really across the board. We're growing. We need more capacity. We're developing in our new office space. in Seville that we got as a result of an acquisition in the first quarter. We're growing at all of our major offices. We are absolutely planning to aggressively continue our growth path.
spk03: Understood. And Mark, from a financial perspective, I was wondering if the last couple of quarters things have improved in terms of visibility, right? So if I look at your prior guidance before all of us sort of like started working from home and COVID sort of like made things optically less visible. I'm wondering if you're getting that visibility back because it seems like on a cloud subscription revenue, you are ahead of your prior guidance at the start of the year and total revenue already there you were planning to be at the beginning of the year, realizing the conservatism back then. Just curious as to how the visibility is trending. Thank you guys.
spk07: I mean, going into the pandemic, all bets were off, right? And I think every company realized that. So I feel that right now we hit a very solid quarter, as you can see, and the pipeline looks really strong. So we've got pretty good visibility, and you guys know how we guide. We generally can serve in our guides. And so right now we feel pretty good about that line of business. You know, PS is a little bit different because we've got a lot more partner involvement, and there's headwinds with that as well as headwinds from COVID. But from the software perspective, we've got pretty decent visibility.
spk03: Thanks, guys. That's it for this morning.
spk01: Our next question comes from the line of Bob and Suri with William Blair. You may proceed with your question.
spk10: Thank you. Thanks for taking my question. And let me make it overall, Mike, congrats. Really, really nice job there. I see the acceleration. I see that partner channel. I think, Matt, you and I have been talking about it for a while now. I actually start to deliver. So that's really cool. I guess I want to talk a little bit about new customers because they are a big part of the story. You've got really healthy sort of growth of the existing customers, but you've got this idea to capture new customers, especially with some of the new products you've created. I'd love to understand how you think you're tracking relative to expectations on the new customer ads and the partners starting to contribute to that or the partners sort of, or is it mostly still direct through you? How should we think about the new customers, additions and re-expectations, and kind of what's driving that partner versus your direct sales force?
spk08: We're trying to align ever more with partners as a part of our standard operating procedure. So when we approach a new logo, we would like to do it arm-in-arm with a partner. We'd like to have a partner at our side influencing the sale all the way through, and if they didn't find us, we might have to find them. order to do that and and so it's going to be hard to separate where the new logos come from because of this doctrine that we are pursuing right now I relative to my expectations on acquiring new logos we are doing well I'm I'm pleased with with a process and I'm particularly pleased given the set of conditions we ran into during the course of 2020 that would have you would have been expected to diminish our ability to make connections with new customers. And so especially under those conditions, when we had to scramble to create new solutions to get their attention and to be pertinent to the problem they were facing, the extreme problems they were facing, I think that we've adjusted well, and I'm pleased with the progress.
spk10: I just want to touch on competitive environment a little bit. You know, you've got sort of traditional sort of legacy VPN players out there, Pega, et cetera. You're hearing some from newer players that were not necessarily in the low-code space. They developed applications for ITS management, IT service management, internal service now, for example, and other vendors about low-code. I'd love to understand how you're seeing that competitive landscape change. Has it changed given some of the noise these guys are making and who you're seeing in deals? Thanks.
spk08: That's a great question. We do see some service now, some sales force. You're right, and then, of course, there's going to be some automation firms, and there's some specific low-code pure plays that we'll see sometimes as well. Our difference is a few-fold here. We have workflow, and many of the firms I mentioned do not. Many approaches to low-code are simply a toolbox for developers, and we're a draw-your-application environment, so that's going to give us one difference. Another is that we've been in this space a long time, longer than any of them, any of the Avengers I just mentioned anyway. And so we've thought about workflow and process and low-code for longer. So that's going to be an advantage. And then third advantage is we have this commitment to openness. We have a commitment to being a best-of-breed vehicle. And that is an attractive alternative. for organizations that seek the benefit that low-code has always traditionally brought, which is the freedom to pick the products you want, the strength in negotiations of knowing that every time you negotiate for the price of one product, you're not held hostage by every other product you're dependent on, I think that it's a very appealing proposition, low-code generally, as a philosophy. For an enterprise making purchases of software, I think low-code has a lot of compelling things to offer. And I believe many organizations would prefer to be a low-code style buyer than to adopt a stack top to bottom, which gives them rather less freedom and, on average, generally, lower quality software, because they probably wouldn't have picked every one of those elements in the software suite as their favorite product. There are some downsides to buying a full stack. There are some upsides to buying best of breed. And I believe that the market would benefit from an organization that focused on enabling best of breed. And that's another edge that we're going to have against our largest competitors who are tech giants and who will have a long stack and an agenda, essentially, of products. And many buyers may not want to get entangled in all that. Gotcha, gotcha, gotcha. Very helpful.
spk10: Thanks again.
spk01: Our next question comes from the line of Alec Kurtz with KBank. You may proceed with your question.
spk09: Thanks. I have a clarification on that last question, which was a good one, and then a separate question. So, Matt, you see a lot of larger software companies like ServiceNow offering low-code, and I think what you were I think what you were trying to say in your answer was, you know, being independent of the scaling of the licensing, right, is good because that ultimately will drive a better ROI than being, you know, buying low-code from your core vertical app. So is that how you see it playing out over time, that as people adopt low-code across the whole software universe, that kind of being a best-of-breed and separate from the licensing will be a big driver for you?
spk08: I think there are some classic reasons evident in this market that will favor a best-of-breed champion. I think that there's a customer desire to select or they have already selected a portfolio of separate options, which takes away some of the integration advantages of buying a cohesive suite. That's part of it. Secondly, I believe that features are still important in this market and will continue to be important, which is to say an organization that prioritizes this market, has a history in this market, has a reputation, has a laser focus on this market, is liable to be differentiated in the utility they can deliver over a company that does not have those priorities or that focus. So I think that this is a classic place for a best-of-breed champion to thrive. And so that's our direction.
spk09: Okay. And then just on the quarter, maybe you could rank what really drove the upside, whether it was, you know, partners, Europe, federal government, maybe some kind of one, two, and three would help us frame what happened here.
spk08: All right. Well, this is a – I can't pick, but I guess my very favorite would be partners. And I love the confluence that we're offering. By the way, we're bringing together important things that customers need. We're uniting disparate assets. We're uniting functionalities, low code, and automation. I think that The business is gelling in addition to having a few strong systems firing. It's tough to rank them. It really is. I mean, I could rank by dollar value, and then I could rank by visibility. Like, here's one. Solutions drove a lot of visibility for us. It's not really a dollar generator, but at this point, it's not really supposed to be a dollar generator. The purpose of solutions... in Qs 2 and 3, especially this year, was to keep us relevant, and they did. And so I could say solutions were a great thing about this business, though you wouldn't see much of it on the income statement, but they kept us in the game. They kept us front of mind. They showed that we had something to say, and they demonstrated our value proposition to people who wouldn't otherwise have known it. So solutions were a big win for us. Europe absolutely came through. I'm delighted with Federal and the momentum that has been shown in Federal. I've long felt that we were capable of big growth there. So that was a fulfillment of some expectation. Very pleased with it.
spk09: Go ahead. And just to clarify on the solution sale, is that something that you're driving with, you know, accelerators and the channel accelerators with your own reps? Is there something that you're doing differently now than you weren't doing, you know, a year ago?
spk08: Well, these things do need to mature over time. It's not just a product, it's a new business model for us. So we've had to teach ourselves and our partners some new tricks in order to get this to market. And that takes some working through. Partners are now offering a lot of solutions, and so a lot of our solution success is through our partners. They're not only providing a solution, they're providing a lead, they're selling a lead. That's a great new thing, and it is novel for us. Also, we have more solutions to fork. We launched one Q3. We launched the workforce safety in Q2. Each of those have had a neat little contribution to our momentum in the current quarter. So it's partly more product, it's partly better coordination, and it's getting our game plan together. Thank you.
spk01: Our next question comes from the line of Jack Andrews with Needham and Co. You may proceed with your question.
spk04: Well, thanks. Good afternoon and congratulations on the results. I just wanted to maybe follow up on the last question a little bit. I was wondering if you're seeing some sort of cultural change around low code. I mean, is some of these solutions like workforce safety and campus pass get in the hands of more decision makers across four organizations. Are people seeing, you know, basically what is the art of the possible? And is this really having potentially an impact on your business?
spk08: I do believe that low-code is becoming democratized. Truly, low-code is a big tent. It's a very big tent. And we occupy the high end of the low-code space. Which, by the way, to address a previous question, separates us somewhat from the primary hunting grounds of ServiceNow or Salesforce or even recent entrants into the space who are smaller. We are in a niche, right, in a space in this market where we are very strong, very strong. And then we can contest that. From that base, we can contest the big center of the market. But we have a base, right? And that's important to note. At the same time, low-code is democratizing. More people are being exposed to low-code this year, by far, than have ever been exposed to it before. And low-code is coming to mean a lot of things to a lot of different people. This is fine. I love the elevation of the terminology. And for some of those people who learn about low-code, Appian is going to be their best choice. So we continue to be more intuitive. empowering and appealing to the middle of the low-code market. And at the same time, the low-code market continues to grow, high, middle, and all over, everywhere it's growing. And I think that these trends all go well for us.
spk04: I appreciate that perspective. And just as a quick follow-up, are there any specific trends you can call out in terms of what's happening on the life sciences vertical in particular?
spk08: Well, life sciences continues to be one of our strongest verticals, as you know. Financial services, life sciences, those are our top two. I didn't count government. Government is about as big as life sciences for us. We are very well adopted. I think I mentioned in my prepared remarks that nine of the top ten largest life sciences companies are now Appian customers. What I didn't mention in those prepared remarks was that they're customers in a big way, like the average annual dollar commitment. across all those customers is multiple millions of dollars. So we're an organization that life sciences as an industry has come to really rely upon. And this is our goal in a lot of industries, and it's terrific to see it achieved here. And furthermore, we're very fortunate, of course, that our largest industries have been relatively immune to the effects of the downturn in 2020. The fact that Life Sciences has avoided that downturn, the fact that they have come to rely very much on Appian and are near ubiquity across the world's top firms means it's a really good picture for us.
spk10: Great. Thanks very much.
spk01: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. One moment while we pull for questions. Our next question comes from the line of Derek Wood with Cowan & Company. You may proceed with your question.
spk02: Thanks. Hey, it's Andrew on for Derek. Congrats on the quarter. For Matt, I wanted to ask about your sales rep hiring. How do you feel that's going? Do you think you have enough feet on the street heading into next year? And has work from home opened up that talent pool at all in any color on how sales rep productivity has trended?
spk08: Well, I feel solid about Bell's Rep productivity. As for the number of them, we want more. We keep wanting more. We're hiring more. We definitely need more next year, and we've got plans for it. But the ones we have, they're doing well.
spk02: Great. And on the international, you called out the strong immediate growth. Given some of the new lockdowns there, how should we think about that impact in Q4? And then on your conference there, you said attendance doubled. What have you seen there from a lead gen perspective?
spk08: First of all, you're right. We're going into the second lockdowns. Anything could happen. But I will say that we have been able to stay relevant. Through the first lockdown in Europe, in North America, we maintained a place in the customer's mind. And we had something they needed. We were able to adapt to the circumstance. We were able to deliver our services at a distance, have our meetings at a distance. We can adapt to situations like this. We've shown it, and I feel confident about that. Organizations see how important it is to be agile. And whether it's your second lockdown or your first lockdown, the message is the same. You've got to be able to change your business in the face of external shocks. You've got to be able to adapt. And the shock doesn't have to be a pandemic. It could be a new regulation. It could be a change in customer attitudes or desires. But you've got to be able to change. And we as an organization are going to enable that change. So the more people are reminded that change is essential, And the more they come to demand change in their software, the more it's going to direct their eyes toward technology like ours.
spk02: Great. Thank you.
spk01: Ladies and gentlemen, we have reached the end of today's question and answer session. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a great rest of your evening.
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