Appian(APPN) - 2024 Q4 - Annual Report

Customer Growth - As of December 31, 2024, the company had over 1,000 customers, with the number of customers paying over $1 million in annual recurring revenue increasing from 110 in 2023 to 126 in 2024[32] Financial Position - The company held cash and cash equivalents of$118.6 million and $41.3 million in fixed income securities as of December 31, 2024, which are subject to market risk due to interest rate fluctuations[286][287] - As of December 31, 2024, the company had outstanding debt of$250.4 million, with a hypothetical increase of one percentage point in interest rates potentially increasing annual interest expense by approximately $2.5 million[288] - A hypothetical 100 basis point change in interest rates would not have had a material effect on the fair market value of the company's investment portfolio as of December 31, 2024[287] Revenue Composition - The company expects subscriptions revenue as a percentage of total revenue to continue increasing, while professional services revenue as a percentage of total revenue is expected to decrease[43] Intellectual Property - The company has 21 granted patents and 20 pending patents related to its platform and technology, with none expiring before 2034[36] Competitive Position - The company competes favorably in terms of platform features, security, performance, and total cost of ownership, as validated by Gartner ranking it 1 for Complex Internal Applications in 2024[34] - The company has experienced significant competition and must continue to innovate to maintain its market position[46] Market Opportunities - The company anticipates that the market opportunity will expand, particularly with the competitive impact of AI and the need for technological adaptation[43] Cloud Dependency - The company relies on Amazon Web Services (AWS) for its cloud offering, and any disruption could adversely affect its business[47] Shareholder Structure - The company has a dual-class stock structure, concentrating voting control with its founder, which may limit the influence of other shareholders[46] Inflation and Currency Risks - The company is exposed to inflation risks, particularly in personnel costs and third-party services, which may adversely affect gross profit margins if inflation pressures increase[290] - The company's reporting currency is the U.S. dollar, and a 10% change in foreign currency exchange rates could impact total revenue by approximately 4% and operating loss by approximately 8%[291] - The company has not engaged in hedging foreign currency transactions to date, although it may consider this in the future[292]