Q2 2026 Appian Corp Earnings Call Transcript
Key Points
- Cloud subscription revenue grew 23% year-over-year to $131.7 million, with constant currency growth accelerating to 22%, the strongest performance in over two years.
- Adjusted EBITDA of $16.2 million significantly exceeded guidance of $5-$8 million, and full-year EBITDA margin guidance was raised by 2 percentage points to 13%.
- AI traction is strong: customer AI usage is 20 times higher than last year, and 85% of new logos in Q2 purchased AI capabilities.
- Go-to-market efficiency improved for the 12th consecutive quarter, and the weighted Rule of 40 reached 36, indicating balanced growth and profitability.
- The company refinanced its credit facility on more favorable terms, reducing annual interest expense by approximately $4 million.
- Strong demand across all major regions and verticals, including notable wins in the US public sector and with large financial institutions.
- Full-year cloud revenue guidance was raised to 20% growth, reflecting confidence in sustained momentum.
- Third-quarter cloud revenue guidance implies a slight deceleration to 18% growth at the midpoint, down from 23% in Q2.
- FX turned from a tailwind to a headwind in the back half of 2026 due to a stronger US dollar, which will modestly pressure reported revenue growth.
- Gross margin declined sequentially to 72% from 74%, and subscription gross margin fell to 84% from 86% in the prior quarter.
- The company is pulling forward hiring for 2027 sales roles, which could pressure near-term margins and sales productivity metrics.
- Legacy modernization opportunities are still a minor factor in the business, with the full potential expected to take multiple years to materialize.
- AI monetization is still early, with only about 40% of customers on advanced AI tiers, and usage-based revenue is just beginning to emerge.
- Cash and investments decreased to $167.9 million from $187.2 million at the end of last year, partly due to share buybacks.
Good morning and thank you for standing by. Welcome to the Appian second quarter 2026 conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Denyeau. Please go ahead.
Great. Good morning, and thank you for joining us. Today, we'll review Appian's second quarter 2026 financial results. With me are Matt Calkins, Chairman and Chief Executive Officer; and Serge Tanjga, Chief Financial Officer. After prepared remarks, we'll open the call for questions. During this call, we may make statements related to our business that are considered forward-looking.
These include comments related to our financial results, trends and guidance for the third quarter and full year 2026, 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
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