Citi has raised its price target for Appian (APPN, Financial) to $41 from $40, maintaining a Buy rating on the stock. This adjustment follows Appian's stronger-than-expected first-quarter performance, which saw a 1.9% increase in top-line revenue and a $7.6 million EBITDA beat. These results have contributed to the company's enhanced full-year guidance. Management has highlighted that there have been no significant macroeconomic effects on their sales pipeline or cycles thus far, including a notably strong performance in federal business bookings.
Additionally, Citi observes positive early results in AI monetization, with the new Advanced tier generating $9 million in revenue for the quarter. Though still in the initial stages of upgrading the base, the progress is promising. The firm is optimistic about Appian's federal business outlook, advancements in AI revenue generation, and potential margin improvements.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Appian Corp (APPN, Financial) is $34.67 with a high estimate of $40.00 and a low estimate of $29.00. The average target implies an upside of 5.88% from the current price of $32.74. More detailed estimate data can be found on the Appian Corp (APPN) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Appian Corp's (APPN, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Appian Corp (APPN, Financial) in one year is $50.26, suggesting a upside of 53.51% from the current price of $32.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Appian Corp (APPN) Summary page.
APPN Key Business Developments
Release Date: May 08, 2025
- Cloud Subscription Revenue: $99.8 million, a 15% increase year over year.
- Total Subscription Revenue: $134.4 million, a 14% increase year over year.
- Total Revenue: $166.4 million, an 11% increase year over year.
- Cloud Subscription Revenue Retention Rate: 112% as of March 31, 2025.
- Adjusted EBITDA: $16.8 million, compared to $21.2 million in the prior quarter.
- Non-GAAP Gross Margin: 78%, compared to 76% in the year-ago period.
- Subscription Non-GAAP Gross Profit Margin: 89%, compared to 90% in the year-ago period.
- Professional Services Revenue: $32.1 million, flat growth compared to Q1 2024.
- Non-GAAP Net Income: $9.8 million or $0.13 per diluted share.
- Cash and Cash Equivalents: $199.7 million as of March 31, 2025.
- Cash Provided by Operations: $45 million, compared to $18.9 million in the same period last year.
- Total Deferred Revenue: $262.5 million, a 16% increase from the year-ago period.
- Federal Government Bookings Growth: 59% compared to the same period last year.
- Weighted Rule of 40 Score: 27 for the current quarter.
- Net New Bookings per Sales Rep: Increased more than 30% compared to the same period last year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Appian Corp (APPN, Financial) reported a 15% year-over-year growth in cloud subscription revenue, reaching $99.8 million.
- The company's total revenue grew 11% year-over-year to $166.4 million.
- Appian's adjusted EBITDA was $16.8 million, demonstrating strong earnings potential.
- 70% of Appian's cloud customers have adopted AI, with AI usage growing 7.9 times year-over-year.
- Appian's federal government bookings grew 59% compared to the same period last year, indicating strong performance in the public sector.
Negative Points
- Cloud subscription revenue retention rate decreased to 112% from 120% a year ago.
- Professional services revenue was flat compared to the first quarter of 2024, indicating potential challenges in this segment.
- The company anticipates a decrease in term license revenue by a low double-digit percentage year-over-year.
- Appian's guidance for Q2 2025 adjusted EBITDA is expected to be between a loss of $5 million and $2 million.
- There is macroeconomic uncertainty and potential changes within the federal government that could impact future performance.
