# APPIAN CORP (APPN)

Informational only - not investment advice.

CIK: 0001441683
SIC: 7372 Services-Prepackaged Software
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/)
Latest 10-K filed: 2026-02-19
SEC page: https://www.sec.gov/edgar/browse/?CIK=1441683
Filing source: https://www.sec.gov/Archives/edgar/data/1441683/000144168326000013/appn-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 726937000 | USD | 2025 | 2026-02-19 |
| Net income | 1233000 | USD | 2025 | 2026-02-19 |
| Assets | 691395000 | USD | 2025 | 2026-02-19 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001441683.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 132,923,000 | 176,737,000 | 226,743,000 | 260,352,000 | 304,573,000 | 369,259,000 | 467,991,000 | 545,363,000 | 617,022,000 | 726,937,000 |
| Net income | -12,461,000 | -31,007,000 | -49,451,000 | -50,714,000 | -33,477,000 | -88,641,000 | -150,920,000 | -111,441,000 | -92,262,000 | 1,233,000 |
| Operating income | -11,370,000 | -31,811,000 | -46,719,000 | -50,468,000 | -37,902,000 | -83,907,000 | -145,010,000 | -107,973,000 | -60,853,000 | 609,000 |
| Gross profit | 82,800,000 | 112,140,000 | 141,818,000 | 166,511,000 | 215,807,000 | 265,166,000 | 334,685,000 | 385,021,000 | 448,782,000 | 527,338,000 |
| Diluted EPS |  |  |  | -0.77 | -0.48 | -1.25 | -2.08 | -1.52 | -1.26 | 0.02 |
| Operating cash flow | -7,756,000 | -9,128,000 | -31,321,000 | -8,926,000 | -7,620,000 | -53,918,000 | -106,551,000 | -110,442,000 | 6,878,000 | 62,874,000 |
| Capital expenditures | 984,000 | 433,000 | 7,014,000 | 32,421,000 | 1,251,000 | 6,058,000 | 9,095,000 | 9,637,000 | 3,798,000 | 3,318,000 |
| Share buybacks |  |  |  |  |  |  | 0.00 | 0.00 | 50,019,000 | 20,000,000 |
| Assets | 102,738,000 | 161,052,000 | 233,180,000 | 371,485,000 | 512,521,000 | 504,519,000 | 594,214,000 | 627,503,000 | 621,039,000 | 691,395,000 |
| Liabilities | 110,815,000 | 115,528,000 | 159,988,000 | 166,248,000 | 215,916,000 | 270,602,000 | 448,514,000 | 575,162,000 | 653,679,000 | 738,388,000 |
| Stockholders' equity | -63,492,000 | 45,524,000 | 73,192,000 | 205,237,000 | 296,605,000 | 233,917,000 | 145,700,000 | 52,341,000 | -32,640,000 | -46,993,000 |
| Cash and cash equivalents | 31,143,000 | 73,758,000 | 94,930,000 | 159,755,000 | 112,462,000 | 100,796,000 | 148,132,000 | 149,351,000 | 118,552,000 | 135,810,000 |
| Free cash flow | -8,740,000 | -9,561,000 | -38,335,000 | -41,347,000 | -8,871,000 | -59,976,000 | -115,646,000 | -120,079,000 | 3,080,000 | 59,556,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -9.37% | -17.54% | -21.81% | -19.48% | -10.99% | -24.01% | -32.25% | -20.43% | -14.95% | 0.17% |
| Operating margin | -8.55% | -18.00% | -20.60% | -19.38% | -12.44% | -22.72% | -30.99% | -19.80% | -9.86% | 0.08% |
| Return on assets | -12.13% | -19.25% | -21.21% | -13.65% | -6.53% | -17.57% | -25.40% | -17.76% | -14.86% | 0.18% |
| Current ratio | 1.16 | 1.53 | 1.63 | 2.47 | 2.34 | 1.57 | 1.56 | 1.12 | 1.23 | 1.15 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001441683.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -0.68 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | -0.61 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.51 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | -36,829,000 |  | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 127,715,000 |  | -0.58 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | -42,355,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 137,094,000 |  | -0.30 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 145,319,000 | -10,006,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 149,835,000 | -32,923,000 | -0.45 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | -32,923,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 146,450,000 |  | -0.60 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | -43,592,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 154,052,000 |  | -0.03 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 166,685,000 | -13,647,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 166,426,000 | -1,177,000 | -0.02 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | -1,177,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 170,640,000 |  | 0.00 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | -312,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 187,004,000 |  | 0.10 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 202,867,000 | -5,103,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 202,180,000 | -1,525,000 | -0.02 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1441683/000144168326000032/appn-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-07
Report date: 2026-03-31

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and the related notes and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on February 19, 2026.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would,” or the negative or plural of these words or similar expressions or variations, including statements regarding our expectations regarding customer renewals and our future financial and operating performance, expansion of the usage of partners to perform professional services, the increase of our subscriptions revenue as a percentage of total revenue, the fluctuation of gross margin on a quarterly basis, our future capital requirements, and our ability to meet our financial covenants under our Credit Agreement. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein and those discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on February 19, 2026 and in our other filings with the SEC. Forward-looking statements should not be relied on as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

Appian provides process automation technology. For over 25 years, our highly reliable and scalable platform has been leveraged by large enterprises and governments. Combining leading edge process orchestration and intelligence, we provide everything an organization needs to design, automate, and optimize critical processes, facilitating continuous adaptation in changing environments.

Appian provides capabilities to tackle any process challenge. These capabilities are unified and scalable, meeting enterprise demands and easy to change as requirements evolve.

•Comprehensive Automation Platform. The Appian platform provides a complete set of features and tools, allowing our customers to apply the right tool to each step of their process. Our capabilities include business rules engines, pre-built connections, Application Program Interface (API) integrations, intelligent document processing (IDP), robotic process automation (RPA), and artificial intelligence (AI).

•Unified Data Fabric. Appian’s patented data fabric is an integrated layer that unifies data across the enterprise without requiring companies to migrate their data, eliminating the need for additional systems and tools and accelerating time to insight. Our data fabric allows every worker, system, and agent to have the context it needs to act with confidence.

•Enterprise-Grade Controls. Appian delivers best-in-class security, auditability, and enterprise guardrails to support even the most mission critical workloads and most sensitive and confidential data. In addition, Appian provides process mining functionality that allows organizations to identify bottlenecks and compliance risks.

•Interactive Design. Our visual design tools allow business users, technical experts, and implementation specialists to collaborate on the automation, improvement, and streamlining of existing processes, assisted by AI. This iterative process continues after the initial implementation, allowing our customers to seamlessly evolve and optimize their processes over time.

25

•Implementation Excellence. Appian has an elite team of implementation and process specialists with a 25-year track record of partnering with our customers to ensure the success of their applications.

Advances in AI offer the promise of unprecedented innovation in business productivity. Despite this potential, currently most business implementations of AI fail, and the technology is frequently sidelined as an assistant rather than integrated as a digital worker within core business operations. This presents a unique opportunity for Appian, since we provide the process framework that organizations need to drive value from AI investments.

We believe in order to fully realize the value of AI, organizations need to embed AI capabilities directly into workflows. To be effective, AI requires strict controls and defined guardrails that eliminate errors and hallucinations, ensuring AI activities are guided by organizational policies and regulations. As a leader in process automation, we provide the tools and guardrails necessary for AI to deliver repeatable and scalable business value.

The impact of AI also depends on data. Without proprietary data, AI lacks the internal context necessary to help solve specific business problems. Most enterprises today struggle to provide AI with relevant data across systems while still ensuring privacy and maintaining access privileges. Our data fabric is designed to provide the data AI needs, grant secure and performant access to information from across the enterprise, and obviate the need for complex and slow data migrations.

We generate the majority of our revenue from sales of subscriptions, which include (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) other subscriptions, which include self-managed licenses bundled with maintenance and support. Our subscription contracts are priced based primarily on the number of users who access and utilize the applications built on our platform, non-user-based single application licenses, or consumption-based pricing. Our subscription contract terms generally vary from one to three years with most providing for payment in advance on an annual, quarterly, or monthly basis.

We have invested in our professional services organization to help ensure customers are able to build and deploy applications on our platform. We also have several strategic partnerships, including with Accenture, Capgemini, Deloitte, Indra Group, KPMG, and PwC, which allow them to refer customers to us in order to purchase software subscriptions. Our partners then provide professional services directly to the customers using our software. Additionally, they often go to market with their own pre-built solutions using our platform, delivering software license revenue to us. We intend to continue to invest in both our professional services group and strategic partnerships to drive increased adoption of our platform. We believe our investment in professional services, including strategic partners building their practices around Appian, will drive increased adoption of our platform.

Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts at organizations with over 2,000 employees and $2.0 billion in annual revenue. For the three months ended March 31, 2026 and 2025, revenue generated from U.S. federal government agencies was 25.8% and 23.9% of total revenue, respectively. No single end-customer accounted for more than 10% of our total revenue in the three months ended March 31, 2026 or 2025.

We offer our platform globally. Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. In the three months ended March 31, 2026 and 2025, 37.6% and 36.2%, respectively, of our total revenue was generated from customers outside of the United States. As of March 31, 2026, we operated in 16 countries. We believe we have a significant opportunity to continue to grow our international footprint, and we are investing in new geographies, including through investment in direct and indirect sales channels, professional services, and customer support and implementation partners.

Our business model focuses on maximizing the lifetime value of customer relationships, which is a function of the duration of a customer’s deployment of our platform as well as the price and number of subscriptions of our platform that a customer purchases. We incur significant customer acquisition costs, including expenses associated with hiring new sales representatives, who can take anywhere from six months to a year to become productive

26

given the length of our sales cycle, and marketing costs which, with the exception of certain types of sales commissions, are expensed as incurred.

At the same time, we believe the costs we incur to retain customers and drive additional purchases of software are lower than our customer acquisition costs on a relative basis. Over time, we expect a large portion of our customers to renew their subscriptions and purchase additional subscriptions as they continue to build more applications and add more users to our platform.

Key Factors Affecting Our Performance

The following are several key factors that affect our performance:

•Market Adoption of Our Platform - Our ability to grow our customer base and drive market adoption of our platform is affected by the pace at which organizations automate processes. We expect our revenue growth will be primarily driven by the pace of adoption and penetration of our platform. We offer a leading process automation platform and intend to continue to invest to expand our customer base. The degree to which prospective customers recognize the need for our software platform and its ability to enable their organizations to automate processes, and subsequently allocate budget dollars to purchase our software, will drive our ability to acquire new customers and increase sales to existing customers, which, in turn, will affect our future financial performance.

•Growth of Our Customer Base - We believe we have a substantial opportunity to grow our customer base. We have invested, and intend to continue to invest, in our sales team in order to drive sales to new customers. We continue to make investments to enhance the expertise of our sales and marketing organization within our key industry verticals of financial services, government, life sciences, insurance, and manufacturing. In addition, we have established relationships with strategic partners who work with organizations undergoing process automations. Our ability to continue to grow our customer base is dependent, in part, upon our ability to differentiate ourselves within the increasingly competitive markets in which we participate.

•Further Penetration of Existing Customers - Our sales team seeks to generate additional revenue from existing customers by adding new users or application licenses. In addition, we encourage our customers to upgrade to higher service tiers in order to take advantage of incremental functionality. We offer three service tiers ranging from a standard package with entry level features to our premium offering that includes

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those under “Risk Factors” included in Part I, Item 1A or in other parts of this Annual Report on Form 10-K.

Overview

Appian provides process automation technology. For over 25 years, our highly reliable and scalable platform has been leveraged by large enterprises and governments. Combining leading edge process orchestration, automation, and intelligence, we provide everything an organization needs to design, automate, and optimize critical processes, facilitating continuous adaptation in changing environments.

We have generated the majority of our revenue from sales of subscriptions, which include (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) license subscriptions, and (3) maintenance and support for license subscriptions. Our subscription contracts are priced based on the number of users who access and utilize the applications built on our platform, non-user-based single application licenses, or consumption-based pricing. Our subscription contract terms generally vary from one to three years with most providing for payment in advance on an annual, quarterly, or monthly basis.

We have invested in our professional services organization to help ensure customers are able to build and deploy applications on our platform. We also have several strategic partnerships, including with Accenture, Capgemini, Deloitte, Indra Group, KPMG, and PwC, which allow them to refer customers to us in order to purchase software subscriptions. Our partners then provide professional services directly to the customers using our software. Additionally, they often go to market with their own pre-built solutions using our platform, delivering software license revenue to us. We intend to continue to invest in both our professional services group and strategic partnerships to drive increased adoption of our platform. We believe our investment in professional services, including strategic partners building their practices around Appian, will drive increased adoption of our platform.

Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts to organizations with over 2,000 employees and $2.0 billion in annual revenue. Revenue from U.S. federal government agencies represented 25.3%, 23.9%, and 21.3% of our total revenue in 2025, 2024, and 2023, respectively. No

single end-customer accounted for more than 10% of our total revenue in 2025, 2024, and 2023.

We offer our platform globally. Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. In 2025, 2024, and 2023, 37.6%, 36.6%, and 35.8%, respectively, of our total revenue was generated from customers outside of the United States. As of December 31, 2025, we operated in 16 countries. We believe we have a significant opportunity to continue to grow our international footprint, and we are investing in new geographies, including through investment in direct and indirect sales channels, professional services, and customer support and implementation partners.

We have experienced strong revenue growth, with revenue of $726.9 million, $617.0 million, and $545.4 million in 2025, 2024, and 2023, respectively. Our subscriptions revenue was $576.5 million, $490.6 million, and $412.3 million in 2025, 2024, and 2023, respectively, and includes sales of our cloud subscriptions, license subscriptions, and maintenance and support. Our cloud subscriptions revenue was $437.4 million, $368.0 million, and $304.5 million in 2025, 2024, and 2023, respectively.

We have invested in developing our platform, expanding our sales and marketing and research and development capabilities, and providing general and administrative resources to support our growth. In 2025, we

46

recorded net income of $1.2 million while in 2024 and 2023, we incurred net losses of $92.3 million and $111.4 million, respectively. Furthermore, in 2025 and 2024, cash provided by operations was $62.9 million and $6.9 million, respectively, while cash used by operations totaled $110.4 million in 2023. We intend to continue to invest in our business to take advantage of our market opportunity.

Our Business Model

Our business model focuses on maximizing the lifetime value of customer relationships, which is a function of the duration of a customer’s deployment of our platform as well as the price and number of subscriptions of our platform a customer purchases. We incur significant customer acquisition costs, including expenses associated with hiring new sales representatives, who can take anywhere from six months to a year to become productive given the length of our sales cycle, sales commissions, and marketing costs, all of which, with the exception of certain types of sales commissions, are expensed as incurred.

At the same time, we believe the costs we incur to retain customers and drive additional purchases of software are lower than our customer acquisition costs on a relative basis. Over time, we expect a large portion of our customers to renew their subscriptions and purchase additional subscriptions as they continue to build more applications and add more users to our platform.

Key Factors Affecting Our Performance

The following are several key factors that affect our performance:

•Market Adoption of Our Platform - Our ability to grow our customer base and drive market adoption of our platform is affected by the pace at which organizations automate processes. We expect our revenue growth will be primarily driven by the pace of adoption and penetration of our platform. We offer a leading process automation platform and intend to continue to invest to expand our customer base. The degree to which prospective customers recognize the need for our software platform and its ability to enable their organizations to automate processes, and subsequently allocate budget dollars to purchase our software, will drive our ability to acquire new customers and increase sales to existing customers, which, in turn, will affect our future financial performance.

•Growth of Our Customer Base - We believe we have a substantial opportunity to grow our customer base. We have invested, and intend to continue to invest, in our sales team in order to drive sales to new customers. We continue to make investments to enhance the expertise of our sales and marketing organization within our key industry verticals of financial services, government, life sciences, insurance, and manufacturing. In 2025, we generated approximately 80% of our subscriptions revenue from customers in these verticals. In addition, we have established relationships with strategic partners who work with organizations undergoing process automations. Our ability to continue to grow our customer base is dependent, in part, upon our ability to differentiate ourselves within the increasingly competitive markets in which we participate.

•Further Penetration of Existing Customers - Our sales team seeks to generate additional revenue from existing customers by adding new users or application licenses. In addition, we encourage our customers to upgrade to higher service tiers in order to take advantage of incremental functionality. We offer three service tiers ranging from a standard package with entry level features to our premium offering that includes access to features such as process mining and full AI integration. Many of our customers begin by building a single application and then grow to build dozens of applications on our platform. Generally, the development of new applications on our platform results in the expansion of our user base within an organization and a corresponding increase in revenue. As a result of this “land and expand” strategy, we have generated significant additional revenue from our customer base. Our ability to increase sales to existing customers will depend on a number of factors, including the size of our sales and professional services teams, customers’ level of satisfaction with our platform and professional services, pricing, economic conditions, and our customers’ overall spending levels.

•Investments in Growth - We have made, and plan to continue to make, investments for long-term growth, including investing in our platform and infrastructure to continuously maximize their power and

47

speed, meet the evolving needs of our customers, and take advantage of our market opportunity. In addition, we may pursue strategic acquisitions that enhance our product offerings. We also intend to continue to invest in sales and marketing as we further expand our sales teams, increase our marketing activities, and grow our international operations.

Seasonality

We have historically experienced seasonality in terms of when we enter into agreements with customers. We typically enter into a significantly higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the fourth quarter. The increase in customer agreements for the fourth quarter is attributable to large enterprise account-buying patterns typical in the software industry. Furthermore, we usually enter into a significant portion of agreements with customers during the last month of each quarter and often the last two weeks of each quarter. However, we recognize the majority of our subscriptions revenue ratably over the terms of our subscription agreements. As a result, a substantial portion of the subscriptions revenue we report in each period will be derived from the recognition of deferred revenue relating to agreements entered into during previous periods. Consequently, an increase or decline in new sales or renewals in any one period may not be immediately reflected in our revenue results for that period. Such changes, however, will affect our revenue in future periods. Accordingly, the effect of significant downturns in sales, the market acceptance of our platform, or potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods.

While we will continue to recognize the majority of our subscriptions revenue ratably over the terms of our subscription agreements, we may experience greater variability and reduced comparability of our quarterly revenue and results with respect to the timing and nature of our license subscription agreements due to the upfront revenue recognition. See Note 3 to the consolidated financial statements for further details on our revenue recognition policies.

Key Metrics

We monitor the following metrics to help us measure and evaluate the effectiveness of our operations. All dollar amounts are presented in thousands.

Cloud Subscriptions Revenue

Year Ended December 31,

2025

2024

2023

Cloud subscriptions revenue

$

437,361 

$

368,030 

$

304,481 

Cloud subscriptions revenue includes cloud subscriptions bundled with maintenance and support and hosting services. In 2025, 2024, and 2023, 75.9%, 75.0%, and 73.8%, respectively, of subscriptions revenue was cloud subscriptions revenue. Our cloud subscriptions revenue for any customer is primarily determined by the number of users who access and utilize the applications built on our platform or by the number of application licenses purchased, as well as the price paid. We believe increasing cloud subscriptions revenue is an indicator of the demand for our platform, the pace at which the market for our solutions is growing, the productivity of our sales team and strategic relationships in growing our customer base, and our ability to further penetrate our existing customer base.

Cloud Net Annualized Recurring Revenue (“ARR”) Expansion

Year Ended December 31,

2025

2024

2023

Cloud net ARR expansion

114 

%

113 

%

116 

%

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Commencing in 2025, we are replacing our previously reported cloud subscriptions revenue retention rate with a new key metric called cloud net ARR expansion. We believe cloud net ARR expansion provides better real-time insight into the growth of our existing customer base and is more indicative of our success in the renewal and expansion of cloud subscription agreements with existing customers.

To calculate this metric, we define ARR on a customer level as monthly recurring cloud subscriptions revenue multiplied by 12. We then compare the period-end ARR of the previous year’s customer cohort to their ARR at the end of the current period. The cloud net ARR expansion represents the ratio between these two periods. Note for purposes of the calculation, a customer is defined pursuant to our updated methodology, and the calculation is performed on a constant currency basis.

Key Components of Results of Operations

Revenue

We generate revenue primarily through sales of subscriptions to our platform as well as professional services. We typically sell our software on a per-user basis or through non-user-based single application licenses. We generally bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, we have had customers pay their entire contract value up front.

Our revenue is comprised of the following:

Subscriptions

Subscriptions revenue is primarily derived from cloud subscriptions bundled with maintenance and support and hosting services, license subscriptions, and maintenance and support for license subscriptions. Our maintenance and support agreements provide customers with the right to unspecified software upgrades, maintenance releases and patches released during the term of the maintenance and support agreement on a when-and-if-available basis, and rights to technical support. License subscriptions are offered when the customer prefers to self-manage the deployment of our platform within their own infrastructure. When our platform is delivered as a cloud subscription, we manage operational needs in third-party hosted data centers.

Professional Services

Our professional services revenue is comprised of fees for consulting services, including application development, deployment assistance, and training related to our platform.

Cost of Revenue

Subscriptions

Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations, customer support and information security teams, amortization of acquired technology, and allocated overhead costs. We expect cost of revenue to continue to increase in absolute dollars for the foreseeable future as our customer base grows.

Professional Services

Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, third-party contractor costs, allocated overhead costs, and the costs of billable expenses such as travel and lodging. The unpredictability of the timing of providing services related to significant professional services agreements sold on a standalone basis may cause significant fluctuations in our cost of professional services which, in turn, may impact our financial results.

49

Gross Profit and Gross Margin

Gross profit and gross margin (defined as gross profit as a percentage of total revenue), have been, and will continue to be, affected by various factors, including the mix of cloud subscriptions and license subscriptions, the mix of total subscriptions revenue and professional services revenue, subscription pricing, the costs associated with third-party hosting providers, and the extent to which we expand or reduce our professional services to support future changes in our growth. Our gross margin may fluctuate from period to period based on the aforementioned factors.

Subscriptions Gross Margin

Subscriptions gross margin is primarily affected by the growth in our subscriptions revenue as compared to the growth in, and timing of, costs to support such revenue. We expect to continue to invest in customer support and cloud operations to support growth in our business, and the timing of those investments is expected to cause subscriptions gross margin to fluctuate on a quarterly basis.

Professional Services Gross Margin

Professional services gross margin is affected by the growth in our professional services revenue as compared to the growth in, and timing of, the costs of our professional services organization as we continue to invest in the growth of our business as well as by consultant utilization rates. Professional services gross margin is also impacted by the amount of services performed by subcontractors and partners as opposed to internal resources. The professional services margins are subject to fluctuation based on the factors discussed above.

Operating Expenses

Operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel-related costs such as salaries, bonuses, commissions, payroll tax payments, and stock-based compensation expense are the most significant components of each of these expense categories. Other components of each category include professional fees for third-party services such as legal, software development resources, contractors, and cloud computing services. In addition, operating expenses include allocated overhead costs, which are primarily comprised of facility costs such as rent, employee medical benefits, employee relations expense, and information technology costs.

In general, our operating expenses are expected to continue to increase in absolute dollars as we invest resources in enhancing our product and growing our business, although such growth is expected to be at a more measured rate than prior years.

Sales and Marketing Expense

Sales and marketing expense primarily includes personnel costs, including salaries, bonuses, commissions, stock-based compensation, and other personnel costs related to sales teams. Additional major expenses in this category include travel and entertainment, marketing activities and promotional events, subcontracting fees, and allocated overhead costs. We are focused on increasing the efficiency of our sales force and marketing activities by enhancing account targeting, messaging, field sales operations, and sales training in order to accelerate the adoption of our platform.

We expect sales and marketing expense to increase in absolute dollars as we continue to invest in acquiring new customers, further expand usage of our platform within our existing customer base, and broaden our efforts to build on our brand reputation as well as increase market awareness of our platform.

Research and Development Expense

50

Research and development expense consists primarily of personnel costs for our employees who develop and enhance our platform, including salaries, bonuses, stock-based compensation, and other personnel costs. Also included are non-personnel costs such as subcontracting, consulting, professional fees to third party development resources, cloud computing and software expenses, and allocated overhead costs.

Our research and development efforts are focused on enhancing the capabilities, speed, and power of our software platform. In 2022, we opened a new product development center in India. Although we expect research and development expense to continue to increase in absolute dollars, as such costs are critical to maintain and improve the quality of applications and our competitive position, we believe our product development center will result in cost savings over time.

General and Administrative Expense

General and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, and other personnel costs for our administrative, legal, human resources, finance, and accounting teams as well as our senior executives. Additional expenses included in this category are non-personnel costs such as travel-related expenses, information security costs related to the protection of our internal systems, contracting and professional fees for such services as audits, taxation, and legal, insurance and other corporate expenses, including allocated overhead costs, and bad debt expenses.

Other Non-Operating (Income) Expense

Other (Income) Expense, Net

Other (income) expense, net, consists primarily of gains and losses related to changes in foreign currency exchange rates, interest income on our cash and cash equivalents and investments, and other sources of income or expense not related to our core business operations.

Interest Expense

Interest expense consists primarily of interest on our debt, amortization of deferred financing fees, unused credit facility fees, and commitment fees on our letters of credit.

51

Results of Operations

The following table sets forth our consolidated statements of operations (in thousands):

Year Ended December 31,

2025

2024

2023

Revenue

Subscriptions

$

576,462 

$

490,568 

$

412,337 

Professional services

150,475 

126,454 

133,026 

Total revenue

726,937 

617,022 

545,363 

Cost of revenue

Subscriptions

83,988 

65,680 

54,900 

Professional services

115,611 

102,560 

105,442 

Total cost of revenue(1)

199,599 

168,240 

160,342 

Gross profit

527,338 

448,782 

385,021 

Operating expenses

Sales and marketing

241,186 

238,454 

249,968 

Research and development

172,188 

163,400 

160,420 

General and administrative

113,355 

107,781 

82,606 

Total operating expenses (1)

526,729 

509,635 

492,994 

Operating income (loss)

609 

(60,853)

(107,973)

Other non-operating (income) expense

Other (income) expense, net

(26,685)

6,773 

(17,603)

Interest expense

20,850 

23,582 

17,862 

Total other non-operating (income) expense

(5,835)

30,355 

259 

Income (loss) before income taxes

6,444 

(91,208)

(108,232)

Income tax expense

5,211 

1,054 

3,209 

Net income (loss)

$

1,233 

$

(92,262)

$

(111,441)

(1) Certain prior period operating expenses have been reclassified to conform to the current period presentation. These changes have been reflected in the table above as well as within our results from operation discussion below. For further information, refer to Note 2 of our consolidated financial statements.

52

The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue:

Year Ended December 31,

2025

2024

2023

Revenue

Subscriptions

79.3 

%

79.5 

%

75.6 

%

Professional services

20.7 

20.5 

24.4 

Total revenue

100.0 

100.0 

100.0 

Cost of revenue

Subscriptions

11.6 

10.6 

10.1 

Professional services

15.9 

16.6 

19.3 

Total cost of revenue*

27.5 

27.3 

29.4 

Gross profit

72.5 

72.7 

70.6 

Operating expenses

Sales and marketing

33.2 

38.6 

45.8 

Research and development

23.7 

26.5 

29.4 

General and administrative

15.6 

17.5 

15.1 

Total operating expenses*

72.5 

82.6 

90.4 

Operating income (loss)

— 

(9.9)

(19.8)

Other non-operating (income) expense

Other (income) expense, net

(3.7)

1.1 

(3.2)

Interest expense

2.9 

3.8 

3.3 

Total other non-operating (income) expense

(0.8)

4.9 

0.1 

Income (loss) before income taxes*

0.9 

(14.8)

(19.9)

Income tax expense

0.7 

0.2 

0.6 

Net income (loss)

0.2 

%

(15.0)

%

(20.5)

%

* Totals may not foot due to rounding.

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Revenue

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Revenue:

Subscriptions

$

576,462 

$

490,568 

$

85,894 

17.5%

Professional services

150,475 

126,454 

24,021 

19.0%

Total revenue

$

726,937 

$

617,022 

$

109,915 

17.8%

Total revenue increased $109.9 million, or 17.8%, in 2025 compared to 2024 due to an increase in our subscriptions revenue of $85.9 million and a $24.0 million increase in our professional services revenue. The increase in subscriptions revenue was driven by a $69.3 million increase in cloud subscriptions revenue, a $13.7 million increase in license subscriptions revenue, and a $2.9 million increase in maintenance and support revenue. With respect to new versus existing customers, $77.0 million of the increase in subscriptions revenue was derived from expanded deployments and corresponding sales of additional subscriptions to existing customers while $8.9 million was driven from sales of subscriptions to new customers. The increase in professional services revenue was

53

due to a $12.9 million increase in revenue from existing customers and an $11.1 million increase in sales to new customers.

Cost of Revenue

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Cost of revenue:

Subscriptions

$

83,988 

$

65,680 

$

18,308 

27.9%

Professional services

115,611 

102,560 

13,051 

12.7%

Total cost of revenue

$

199,599 

$

168,240 

$

31,359 

18.6%

Gross profit:

Subscriptions

492,474 

424,888 

Professional services

34,864 

23,894 

Total gross profit

527,338 

448,782 

Subscriptions gross margin

85.4 

%

86.6 

%

Professional services gross margin

23.2 

%

18.9 

%

Total gross margin

72.5 

%

72.7 

%

Cost of revenue increased $31.4 million, or 18.6%, in 2025 compared to 2024, primarily due to a $13.0 million increase in hosting costs, an $8.3 million increase in contractor costs, and a $7.1 million increase in professional services and product support personnel costs. Hosting costs increased due to an increase in sales of our cloud offering during 2025. Contractor costs increased in 2025 compared to 2024 due to an increase in the usage of subcontractors for professional service engagements. Professional services and product support personnel costs increased due to an 11.5% increase in headcount and a $5.0 million increase in bonus expense from December 31, 2024 to December 31, 2025, both of which were partially offset by a $1.1 million decrease in severance costs.

Sales and Marketing Expense

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Sales and marketing

$

241,186 

$

238,454 

$

2,732 

1.1%

% of revenue

33.2 

%

38.6 

%

Sales and marketing expense increased $2.7 million, or 1.1%, in 2025 compared to 2024, primarily due to a $2.8 million increase in marketing costs, a $1.9 million increase in sales and marketing personnel costs, and a $1.7 million increase in travel and entertainment expenses. These increases were partially offset by a $1.7 million decrease in cloud computing costs. Marketing costs increased due to higher spending on marketing materials and advertising, both of which were partially offset by lower spending on marketing events. Although sales and marketing headcount was flat, personnel costs increased due to a $4.0 million increase in sales commissions and a $2.4 million increase in bonus expense. Travel and entertainment expenses increased due to increases in airfare and lodging associated with a higher number of in-person events and engagements relative to the prior year.

54

Research and Development Expense

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Research and development

$

172,188 

$

163,400 

$

8,788 

5.4%

% of revenue

23.7 

%

26.5 

%

Research and development expense increased $8.8 million, or 5.4%, in 2025 compared to 2024, primarily due to a $5.7 million increase in personnel costs and a $1.3 million increase in cloud computing costs. Although research and development headcount was relatively flat from December 31, 2024 to December 31, 2025, personnel costs increased due to a $4.8 million increase in bonus expense and a $0.3 million increase in stock compensation expense.

General and Administrative Expense

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

General and administrative expense

$

113,355 

$

107,781 

$

5,574 

5.2%

% of revenue

15.6 

%

17.5 

%

General and administrative expense increased $5.6 million, or 5.2%, in 2025 compared to 2024, primarily due to a $5.6 million increase in professional fees and a $5.0 million increase in general and administrative personnel costs. These increases were partially offset by a $3.7 million decrease in insurance expense and a $3.5 million decrease in rent expense. The increase in professional fees was the result of a net $5.8 million increase in legal fees associated with our litigation against Pegasystems. Personnel costs increased largely due to an 11.0% increase in general and administrative headcount from December 31, 2024 to December 31, 2025, a $1.8 million increase in bonus expense, and a $2.3 million increase in stock compensation expense. Insurance expense decreased due to a $3.3 million decline in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period. Rent expense decreased due to $5.5 million of lease impairment charges in 2024 as compared to $0.8 million of lease impairment charges in 2025.

Other (Income) Expense, Net

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Other (income) expense, net

$

(26,685)

$

6,773 

$

(33,458)

***

% of revenue

(3.7)

%

1.1 

%

*** Indicates a percentage change that is not meaningful

Other income, net was $26.7 million in 2025 compared to other expense, net of $6.8 million in 2024. There were $19.8 million in foreign exchange gains in 2025 compared to $16.8 million in foreign exchange losses in 2024. This increase was partially offset by a $3.2 million decrease in other income related to a non-recurring local government incentive payment and short-swing profit disgorgement payments to us from a public stockholder of our Class A common stock that were both recognized in the prior year.

55

Interest Expense

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Interest expense

$

20,850 

$

23,582 

$

(2,732)

(11.6)%

% of revenue

2.9 

%

3.8 

%

Interest expense decreased $2.7 million in 2025 as compared to the corresponding period in 2024, primarily due to a lower effective interest rate and lower outstanding principal compared to the prior year period.

Income Tax Expense

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Income tax expense

$

5,211 

$

1,054 

$

4,157 

***

% of revenue

0.7 

%

0.2 

%

Income tax expense increased by $4.2 million in 2025 as compared to the corresponding period in 2024. This change was primarily driven by increased pre-tax book income in certain international subsidiaries in 2025. The change in pre-tax book income was primarily attributable to increases in unrealized foreign exchange gains.

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

For a discussion and analysis of changes in financial condition and results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025.

Backlog

Backlog represents non-cancellable future amounts to be recognized under cloud and license subscription agreements and is representative of our remaining performance obligations. As of December 31, 2025 and 2024, we had backlog of $661.8 million and $546.0 million, respectively. Approximately 33% of our backlog as of December 31, 2025 is not expected to be recognized in 2026. Additionally, we expect backlog to continue to increase in absolute dollars as we continue to increase the number of cloud agreements we enter into. However, the amount of backlog relative to the total value of our contracts can change from quarter to quarter and year to year for several reasons, including the specific timing and duration of cloud and license subscription agreements with large customers, the specific timing of customer renewals, changes in customer financial circumstances, and foreign currency fluctuations. Additionally, we often sign multiple-year subscription agreements, and backlog may vary based on changes in the average non-cancellable term of our cloud and license subscription agreements.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we provide investors with certain non-GAAP financial performance measures. We use these non-GAAP financial performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our recurring core business operating results. We believe both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to historical performance as well as comparisons to competitors’ operating results. We believe these non-GAAP financial

56

measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by institutional investors and the analyst community to help them analyze the health of our business.

Our non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP total operating expense, non-GAAP operating income (loss), non-GAAP income tax expense, non-GAAP net income (loss), and non-GAAP net income (loss) per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, unrealized foreign exchange rate gains and losses, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgment preservation insurance policy, or JPI Amortization, severance costs related to involuntary reductions in our workforce, or Severance Costs, lease impairments and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges, and a short-swing profit disgorgement paid to us by an investor, or Short-Swing Profit Payment. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

We also discuss adjusted EBITDA, a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business. We define adjusted EBITDA as net income (loss) before (1) other (income) expense, net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, (8) Severance Costs, and (9) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net income (loss). Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete depiction of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net income (loss) as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

57

The following tables reconcile our non-GAAP measures to their nearest comparable GAAP measures (in thousands, except per share data):

GAAP Measure

Stock-Based Compensation

Litigation Expense

JPI Amortization

Lease Impairment and Lease-Related Charges

Unrealized Foreign Exchange Rate Gains and Losses

Non-GAAP Measure

Year Ended December 31, 2025

Subscriptions cost of revenue

$

83,988 

$

(1,810)

$

— 

$

— 

$

— 

$

— 

$

82,178 

Professional services cost of revenue

115,611 

(5,787)

— 

— 

— 

— 

109,824 

Total cost of revenue

199,599 

(7,597)

— 

— 

— 

— 

192,002 

Sales and marketing expense

241,186 

(8,434)

— 

— 

— 

— 

232,752 

Research and development expense

172,188 

(12,407)

— 

— 

— 

— 

159,781 

General and administrative expense

113,355 

(13,102)

(10,407)

(12,508)

(2,032)

— 

75,306 

Total operating expense

526,729 

(33,943)

(10,407)

(12,508)

(2,032)

— 

467,839 

Operating income

609 

41,540 

10,407 

12,508 

2,032 

— 

67,096 

Non-operating (income) expense

(5,835)

— 

— 

— 

— 

21,939 

16,104 

Income tax impact of above items

5,211 

1,308 

— 

— 

— 

(1,114)

5,405 

Net income (loss)

1,233 

40,232 

10,407 

12,508 

2,032 

(20,825)

45,587 

Net income (loss) per share, basic

$

0.02 

$

0.54 

$

0.14 

$

0.17 

$

0.03 

$

(0.28)

$

0.62 

Net income (loss) per share, diluted(a),(b)

$

0.02 

$

0.54 

$

0.14 

$

0.17 

$

0.03 

$

(0.28)

$

0.61 

(a) Accounts for the impact of 0.6 million shares of dilutive securities.

(b) Per share amounts do not foot due to rounding.

GAAP Measure

Stock-Based Compensation

Litigation Expense

JPI Amortization

Severance Costs

Lease Impairment and Lease-Related Charges

Short-Swing Profit Payment

Unrealized Foreign Exchange Rate Gains and Losses

Non-GAAP Measure

Year Ended December 31, 2024

Subscriptions cost of revenue

$

65,680 

$

(1,638)

$

— 

$

— 

$

— 

$

— 

$

— 

$

— 

$

64,042 

Professional services cost of revenue

102,560 

(5,925)

— 

— 

(1,398)

— 

— 

— 

95,237 

Total cost of revenue

168,240 

(7,563)

— 

— 

(1,398)

— 

— 

— 

159,279 

Sales and marketing expense

238,454 

(8,526)

— 

— 

(3,937)

— 

— 

— 

225,991 

Research and development expense

163,400 

(12,077)

— 

— 

(5)

— 

— 

— 

151,318 

General and administrative expense

107,781 

(10,879)

(4,602)

(15,795)

(194)

(6,104)

— 

— 

70,207 

Total operating expense

509,635 

(31,482)

(4,602)

(15,795)

(4,136)

(6,104)

— 

— 

447,516 

Operating (loss) income

(60,853)

39,045 

4,602 

15,795 

5,534 

6,104 

— 

— 

10,227 

Non-operating expense (income)

30,355 

— 

— 

— 

— 

1,799 

(16,697)

15,457 

Income tax impact of above items

1,054 

1,499 

— 

— 

1,096 

— 

— 

479 

4,128 

Net (loss) income

(92,262)

37,546 

4,602 

15,795 

4,438 

6,104 

(1,799)

16,218 

(9,358)

Net (loss) income per share, basic and diluted

$

(1.26)

$

0.51 

$

0.06 

$

0.22 

$

0.06 

$

0.08 

$

(0.02)

$

0.22 

$

(0.13)

58

GAAP Measure

Stock-Based Compensation

Litigation Expense

JPI Amortization

Severance Costs

Unrealized Foreign Exchange Rate Gains and Losses

Non-GAAP Measure

Year Ended December 31, 2023

Subscriptions cost of revenue

$

54,900 

$

(1,690)

$

— 

$

— 

$

(30)

$

— 

$

53,180 

Professional services cost of revenue

105,442 

(6,354)

— 

— 

(158)

— 

98,930 

Total cost of revenue

160,342 

(8,044)

— 

— 

(188)

— 

152,110 

Sales and marketing expense

249,968 

(11,247)

— 

— 

(4,737)

— 

233,984 

Research and development expense

160,420 

(12,864)

— 

— 

(1,022)

— 

146,534 

General and administrative expense

82,606 

(11,232)

2,064 

(6,038)

(352)

— 

67,048 

Total operating expense

492,994 

(35,343)

2,064 

(6,038)

(6,111)

— 

447,566 

Operating (loss) income

(107,973)

43,387 

(2,064)

6,038 

6,299 

— 

(54,313)

Non-operating expense (income)

259 

— 

— 

— 

— 

12,267 

12,526 

Income tax impact of above items

3,209 

1,302 

— 

— 

139 

(812)

3,838 

Net (loss) income

(111,441)

42,085 

(2,064)

6,038 

6,160 

(11,455)

(70,677)

Net (loss) income per share, basic and diluted

$

(1.52)

$

0.58 

$

(0.03)

$

0.08 

$

0.08 

$

(0.16)

$

(0.97)

The following table reconciles GAAP net income (loss) to adjusted EBITDA for the years ended December 31, 2025, 2024, and 2023 (in thousands):

Year Ended December 31,

2025

2024

2023

GAAP net income (loss)

$

1,233 

$

(92,262)

$

(111,441)

Other (income) expense, net

(26,685)

6,773 

(17,603)

Interest expense

20,850 

23,582 

17,862 

Income tax expense

5,211 

1,054 

3,209 

Depreciation expense and amortization of intangible assets

9,706 

10,030 

9,473 

Stock-based compensation expense

41,540 

39,045 

43,387 

Litigation Expense

10,407 

4,602 

(2,064)

JPI Amortization

12,508 

15,795 

6,038 

Severance Costs

— 

5,534 

6,299 

Lease Impairment and Lease-Related Charges

2,032 

6,104 

— 

Adjusted EBITDA

$

76,802 

$

20,257 

$

(44,840)

Liquidity and Capital Resources

The following table presents selected financial information and statistics pertaining to liquidity and capital resources as of December 31, 2025 and 2024 (in thousands):

As of December 31,

2025

2024

Cash and cash equivalents

$

135,810 

$

118,552 

Short-term investments and marketable securities

51,415 

41,308 

Property and equipment, net

32,087 

37,109 

Working capital

67,317 

80,787 

59

We believe our existing cash and cash equivalents and short-term investments and marketable securities, together with any positive cash flows from operations and available borrowings under our revolving credit facility, will be sufficient to support working capital and capital expenditure requirements for at least the next twelve months.

Sources of Funds

We have historically financed our operations in large part with equity financing arrangements. Our last public offering was completed in June 2020. Through these public offerings, we received net proceeds of $344.8 million.

To further help strengthen our financial position and support our growth initiatives, in November 2022 we entered into a Senior Secured Credit Facilities Credit Agreement, or the Credit Agreement, which, as amended to date, provides for a five-year term loan facility in an aggregate principal amount of $200.0 million and, in addition, up to $100.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $20.0 million and a swingline sub-facility in the aggregate availability amount of $10.0 million (as a sublimit of the revolving loan facility).

The Credit Agreement matures on November 3, 2027. We have been using the proceeds to fund the growth of our business and support our working capital requirements. We are currently in compliance with all covenants, had used borrowing capacity of $62.0 million under our $100.0 million revolving credit facility, and had outstanding letters of credit totaling $14.7 million in connection with securing our leased office space.

We expect future sources of funds to consist primarily of cash generated from sales of subscriptions and the related professional services. We may also elect to raise additional sources of funding through entering into new debt financing arrangements or conducting additional public offerings. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, particularly internationally, the introduction of new and enhanced products and functions as well as platform enhancements and professional services offerings, and the level of market acceptance of our product.

Uses of Funds

Our current principal uses of cash are funding operations and other working capital requirements. Historically, we have also utilized cash to pay for the acquisition of businesses that were complementary to ours, and we may pursue similar opportunities in the future. Over the past several years, revenue has increased significantly from year to year and, as a result, cash flows from customer collections have also grown. However, as we continue to invest in growing our business, operating expenses have also increased.

In 2023, we entered into a Judgment Preservation Insurance policy in connection with our $2.036 billion judgment against Pegasystems. See Note 13 to the consolidated financial statements for additional details. The total cost of the policy was $57.3 million, which we paid with cash on hand.

Over the past two years, we have also initiated several share repurchase programs as follows:

•In February 2024, our Board of Directors authorized a share repurchase program, under which we repurchased approximately 1.3 million shares of our common stock for approximately $50.0 million during the first quarter of 2024.

•In May 2025, our Board of Directors authorized a second program to repurchase up to $10.0 million of our common stock from May 2025 to December 2025. In the second quarter of 2025, we repurchased 0.3 million shares of our common stock for approximately $10.0 million.

•In August 2025, our Board of Directors authorized a third program to repurchase up to $10.0 million of our common stock from August 2025 to August 2027. In the third quarter of 2025, we repurchased 0.3 million shares of our common stock for approximately $10.0 million.

60

•In February 2026, our Board of Directors authorized a program to repurchase up to $50.0 million of our common stock from February 2026 through February 2028.

Outside of the above items and cash used by operations, other uses of cash in 2025 to date have included capital expenditures related to the expansion of new leased facilities and principal repayments of our term loan debt.

Furthermore, we have a non-cancellable cloud hosting arrangement with Amazon Web Services that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $220.0 million over five years. The agreement, which was originated in July 2021 and amended in October 2024, currently contains minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending under this agreement for the years ended December 31, 2025, 2024, and 2023 totaled $53.3 million, $41.2 million, and $36.6 million, respectively. We expect to meet our minimum annual spending requirement during the term of the arrangement.

Historical Cash Flows

Year Ended December 31,

2025

2024

$ Change

% Change

(dollars in thousands)

Beginning cash and cash equivalents

$

118,552 

$

149,351 

$

(30,799)

(20.6)

%

Operating activities:

Net income (loss)

1,233 

(92,262)

93,495 

***

Stock-based compensation and other non-cash adjustments

31,776 

72,732 

(40,956)

(56.3)

Changes in working capital

29,865 

26,408 

3,457 

13.1

Net cash provided by operating activities

62,874 

6,878 

55,996 

***

Investing activities:

Net cash used by investing activities

(12,826)

(35,390)

22,564 

(63.8)

Financing activities:

Net cash used by financing activities

(36,278)

(258)

(36,020)

***

Effect of exchange rates

3,488 

(2,029)

5,517 

***

Net increase (decrease) in cash and cash equivalents

17,258 

(30,799)

48,057 

***

Ending cash and cash equivalents

$

135,810 

$

118,552 

$

17,258 

14.6 

%

*** Indicates a percentage that is not meaningful.

Operating Activities

Net cash provided by operating activities was $62.9 million for 2025 as compared to $6.9 million for 2024. The increase in net cash provided by operating activities was primarily driven by increased cash collections stemming from strong contract bookings in fourth quarter of 2024 and throughout 2025, as well as our continuing cost management activities.

61

Investing Activities

Net cash used by investing activities was $12.8 million for 2025 as compared to $35.4 million in net cash used by investing activities for 2024. This change was primarily driven by an increase of $32.5 million in proceeds from the maturity of investments, partially offset by a $10.4 million increase in purchases of short-term investments.

Financing Activities

Net cash used by financing activities was $36.3 million for 2025 as compared to $0.3 million in net cash used by financing activities for 2024. The increase in net cash used by financing activities was primarily due to a $50.0 million decrease in proceeds from borrowings and a $13.3 million decrease in proceeds received from the exercise of stock options which were partially offset by a $30.0 million decrease in repurchases of common stock, and a $3.8 million increase in debt repayments.

For a discussion and analysis of net cash used by or provided by operating, investing, and financing activities for the year ended December 31, 2023, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025.

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

We believe the following accounting estimates embedded in our revenue recognition involve judgment and complexity. Accordingly, we believe the estimates included in our revenue recognition accounting are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. This commentary should be read in conjunction with our consolidated financial statements and the remainder of this Form 10-K.

Revenue Recognition

We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services, license subscriptions, and maintenance and support for license subscriptions. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance and training related to our platform. Significant judgments and estimates inherent in our revenue recognition are as follows:

Determining the Transaction Price

The transaction price, or the amount of consideration we expect to be entitled to receive in exchange for transferring services to our customers, includes both fixed and variable components. The variable components of our contracts, which have been nominal to date, include performance penalties, extended payment terms or implied price concessions, and warranty refunds. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur and is subject to subsequent true-up adjustments, although such true-up adjustments are not expected to be material.

Allocating the Transaction Price Based on Standalone Selling Prices

We allocate the transaction price to each performance obligation in a contract based on its relative standalone selling price, or SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows:

62

1.Cloud subscriptions - Given the highly variable selling price of our cloud subscriptions and the related maintenance and support, we establish the SSP of our cloud subscriptions using a residual approach after first determining the SSP of consulting and training services.

2.License subscriptions - Given the highly variable selling price of our license subscriptions, we have established the SSP of license subscriptions using a residual approach after first determining the SSP of the related maintenance and support. Maintenance and support for license subscriptions is sold on a standalone basis with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee, resulting in a defined economic relationship existing between the license and maintenance and support.

3.Maintenance and support - We establish the SSP of maintenance and support for license subscriptions as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses.

4.Consulting services and training services - The SSP of consulting services and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold.

Recent Accounting Pronouncements

See Note 2 of our consolidated financial statements for information related to recently issued accounting standards.