Appian Corporation

Good day and thank you for standing by. Welcome to the Appian First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Regan Redman, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us. Today, we will review Appian's first quarter 2024 financial results. With me are Matt Calkins, Chairman and Chief Executive Officer, and Mark Mathias, Chief Financial Officer. After prepared remarks, we will open the call for questions. During this call, we may make statements related to our business that are forward-looking under federal securities laws and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include comments related to our financial results, trends and guidance for the second quarter and full year 2024, 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. They do not reflect our views as of any subsequent date. They 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, refer to our 2023 10-K, our Q1 2024 10-Q filing, and other periodic filings with the SEC. These documents are available on the Investors section of our website. Additionally, non-GAAP financial measures will be discussed on this conference call. refer to the tables in our earnings release for a 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?

Thanks, Regan. In the first quarter of 2024, Appian's cloud subscription revenue grew 24% year-over-year to $86.6 million. Subscription revenue grew 19% to $117.7 million. Total revenue grew 11% year over year to $149.8 million. Our cloud subscription revenue retention rate was 120% as of March 31st. Adjusted EBITDA was a loss of $1.3 million. Two weeks ago, we held our annual user conference. Many of the people on this call were there. We had 46% more customers and prospects in attendance than a year before. The show featured a series of major customers discussing the success they've had with our platform. Attendees heard how Novartis reduced risk assessment approval times by over 50% using Appian. The Navy developed an employee onboarding app in a fraction of the time other technologies would have required. We heard how TELUS integrated siloed systems into a single Appian app to manage cross-functional planning and expects to reduce planning cycles by 55% and save from misallocation up to $42 million. We also heard speakers from Merck, the U.S. Army, Axiom Space, T. Rowe Price, among others. Aside from the customers, my favorite part of the show was our new feature announcements. Not all of them were about AI, but I'll start there. Our unique edge in AI comes from strength in complementary technologies, specifically processes and data. We're a leader in all three areas. This year, every company is looking for ways to validate AI. Big budgets will come later. For now, they need quick proof of ROI. A process is the perfect place to start using AI. A process offers structure, a ready-built framework of activity pointed towards an important goal, a set of workers, human and digital, with whom to collaborate, and metrics that measure what improvement AI has created. We're so confident in our ability to show strong ROI by dropping AI into a process that we've launched a 30-day fixed price offering. We announced it at Appian World. Our other main advantage in AI is our controlled data. Appian's data fabric connects data sources without having to move them. We can inform AI with the right information from across the enterprise. If we filter that data set through the data fabric, sending only the most pertinent bits to AI, there are important implications for privacy, cost efficiency, auditability, security clearance observance, and more. Our goal is to make AI powerful and easy. For this purpose, we announced last month a strategic collaboration agreement between Appian and AWS. We've been working together for a long time, ever since Appian led our industry into the cloud about 15 years ago. We run an incredible amount of volume on AWS already, 16 billion transactions per day. This announcement will intensify our longstanding partnership as we work together to make enterprise use of AI both powerful and easy. When we acquired a process mining company in 2021, we did it because we saw an opportunity to create what I call the future of process mining. Process mining was cool, but it was missing a few critical features, and we could provide them. Because we were a process leader, our process mining could be actionable. Because we had great data connection capabilities, our process mining could be real-time. That's the revolution we anticipated. And two weeks ago at Appian World, we delivered it. Our new product is called Process HQ, and it is real-time, actionable process mining. But it's also more than that. It allows a user to navigate the whole enterprise of information traversing Appian's data fabric. You can drill all the way down to individual rows and processes. You can glide across data sources from one end of the enterprise to the other. Process HQ can give you the heartbeat of your processes and boardroom level statistics on your efficiency. You can detect even momentary disruptions and efficiencies and take quick action. And maybe best of all, it intelligently recommends what changes you should make to the process. It's now easy to observe and tune your processes with moment-to-moment feedback. Let's pause here to discuss how a multinational life sciences company used Process HQ to improve one of their critical applications. This customer sells medical devices and pharmaceutical products in over 100 countries. Every country has unique industry regulations. Each product must be reviewed for compliance before it can be sold locally. Our customer manages the review of hundreds of thousands of products on Appian. The process's complexity and data volume make it a prime candidate for optimization. Without months of data prep or teams of data scientists, business users analyzed the process using Process HQ. They discovered many ways to reduce cycle times. The company is implementing these changes and expects to save 40,000 labored days annually. 40,000 days. In a nice validation of our efforts to reimagine this industry, Appian was named a leader this week in Gartner's Process Mining Platform's Magic Quadrant. I'm pleased with the attention Process HQ has been receiving from customers and analysts, and I hope a lot of people see what we've done with the synergies between process mining, process, and data. At Appian World, we also announced our Elastic Process Execution feature, EPICS for short. It scales infrastructure on demand. Some of our customers have predictable usage spikes, like a weekly or monthly filing time. Others cannot guess when the traffic will rise but need to be ready, like an insurer being prepared for the aftermath of a natural disaster. EPICS increases throughput by 10 to 100 times. This is on top of a process engine that could already run millions of complex processes daily. This is a stake in the ground that Appian is serious about being the best choice for high-end use cases. EPICS further cements our leadership in scalability. At Appian World, we also launched an AI-backed website called Procure Site with technology built on the Appian platform. Procurement professionals will use it to search major public data sets, glean insights from past government procurements, and write new procurement requests. It's offered for free for now to test the concept with maximum exposure. This effort aligns with my belief about the future of this sector. There's a lot of public excitement about AI the content generator, but not enough about AI the data synthesizer. ProcureSight will complement our government acquisition management suite so that users of the latter will get extra benefits from use of the former. Now let's discuss a few notable deals from Q1. First, a major U.S. city wants to modernize its budget review process. The city's Office of Management and Budget manages billions of dollars of annual funding In Q1, it selected our platform to automate these processes and became a new customer. Before, employees received physical proposals and processed them manually. Now, with Appian, the office expects to reduce approval times by 50%. Next is a story about a leading European automotive manufacturer and existing customer. Thousands of its employees use Appian to manage supply chain operations, finance, and warranty claims. It saves tens of millions of dollars every year with our platform. In Q1, it purchased a seven-figure software deal to automate more warranty and finance workflows to extend its app to additional users. It saved millions of dollars more with this next set of projects. Today's final stories with a top global medical devices company. It uses Appian to manage the order to installation process for medical devices in one of its three global divisions. In Q1, the firm purchased additional software to automate a similar process for a second division. Before Appian, the customer ran these processes on an expensive and unscalable homegrown system. Now the company will streamline its installation processes and recognize tens of millions of revenue dollars earlier than expected this fiscal year. As you can see from our recent announcements, Appian will continue to push the technological boundaries in our industry from AI-backed services to process mining. We will deliver to our customers both power and simplicity. This year promises to be one of rapid technological change, and we feel well equipped to thrive in that circumstance. Now I'll hand the call to Mark for discussion of our financials.