Low code software development platform provider Appian (Nasdaq: APPN) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 10.8% year on year to $149.8 million. On the other hand, next quarter's revenue guidance of $142 million was less impressive, coming in 2.7% below analysts' estimates. It made a non-GAAP loss of $0.24 per share, improving from its loss of $0.27 per share in the same quarter last year.

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“Appian continues to push technological boundaries in our industry, from AI-backed services to process mining. Organizations globally are recognizing the power and simplicity of the Appian Platform,” said Matt Calkins, CEO & Founder.

Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.

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Sales Growth

As you can see below, Appian's revenue growth has been strong over the last three years, growing from $88.86 million in Q1 2021 to $149.8 million this quarter.

This quarter, Appian's quarterly revenue was once again up 10.8% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $4.52 million in Q1 compared to $8.23 million in Q4 CY2023. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.

Next quarter's guidance suggests that Appian is expecting revenue to grow 11.2% year on year to $142 million, slowing down from the 16% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 13.7% over the next 12 months before the earnings results announcement.

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Product Success

One of the best parts about the software-as-a-service business model (and a reason why SaaS companies trade at such high valuation multiples) is that customers typically spend more on a company's products and services over time.

Appian's net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 120% in Q1. This means that even if Appian didn't win any new customers over the last 12 months, it would've grown its revenue by 20%.

Trending up over the last year, Appian has a good net retention rate, proving that customers are satisfied with its software and getting more value from it over time, which is always great to see.

Key Takeaways from Appian's Q1 Results

While revenue beat slightly, billings (often analyzed in addition to revenue because it's cash in the door rather than recognized revenue dictated by accounting rules) missed Wall Street's estimates. Also, revenue guidance for next quarter missed analysts' expectations while full year revenue guidance was roughly in line. Overall, this was a mixed quarter for Appian. The company is down 7.3% on the results and currently trades at $34.03 per share.

Appian may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.