What Happened:

Shares of low code software development platform provider Appian (Nasdaq: APPN) fell 23.1% in the morning session after the company reported first-quarter results with revenue guidance for the next quarter, missing analysts' expectations, while full-year revenue guidance was roughly in line. 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. Overall, this was a weaker quarter for Appian.

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What is the market telling us:

Appian's shares are very volatile and over the last year have had 22 moves greater than 5%. But moves this big are very rare even for Appian and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 3 months ago, when the stock gained 15% on the news that the company reported fourth-quarter results with revenue outperforming Wall Street's estimates along with solid revenue retention. Gross margin also improved, and cash burn reduced from previous quarters. Notably, the company called out two key milestones during the quarter: Full-year revenue exceeded half a billion dollars, and it recorded the highest quarterly gross margin in its public history. Moving on, guidance for the next quarter and the full year were relatively in line with expectations, with full-year adjusted EBITDA guidance better than Wall Street estimates, suggesting better profitability. Zooming out, this was a solid quarter, showing that the company is staying on track.

Appian is down 15.4% since the beginning of the year, and at $29.74 per share it is trading 44.8% below its 52-week high of $53.90 from June 2023. Investors who bought $1,000 worth of Appian's shares 5 years ago would now be looking at an investment worth $822.83.

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