Appian Corporation revenue growth accelerated from 14.8% in 2019 to 17.0% in 2020
02/18/2021 • About Appian Corporation (
$APPN) • By InTwits
Appian Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Appian Corporation is a fast growth stock: 2020 revenue growth was 17.0%, 5 year revenue CAGR was 22.3% at 2020 ROIC -10.7%
- The company operates at negative EBITDA Margin: -8.3%
- Appian Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 2.6% while average EBITDA Margin was -13.4% for the sames years
- Appian Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $1m in 2020, $32m in 2019, $7m in 2018, $0m in 2017, $1m in 2016
- The company has unprofitable business model: ROIC is -10.7%
- It operates with high leverage: Net Debt/EBITDA is 8.0x while industry average is -1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 17.0%. Revenue growth showed acceleration in 20Q4 - it increased 19.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020. During 2016-2020 EBITDA Margin bottomed in 2018 at -19.7% and was growing since that time.
Gross Margin increased on 6.9 pp from 64.0% to 70.9% in 2020. SG&A as a % of Revenue decreased slightly on 0.81 pp from 61.0% to 60.2% in 2020. During the last 5 years SG&A as a % of Revenue topped in 2018 at 63.4% and was declining since that time.
Net Income margin increased on 8.5 pp from -19.5% to -11.0% in 2020. During the last 5 years Net Income margin bottomed in 2018 at -21.8% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Appian Corporation's CAPEX/Revenue was 0.41% in 2020. Appian Corporation showed almost no change in CAPEX/Revenue from 2017 to 2020. Average CAPEX/Revenue for the last three years was 5.3%.
Return on investment
The company operates at negative ROIC (-10.7%) and ROE (-13.3%). ROIC jumped on 16.9 pp from -27.6% to -10.7% in 2020. ROE jumped on 23.1 pp from -36.4% to -13.3% in 2020. During the last 5 years ROIC bottomed in 2017 at -110% and was growing since that time.
Leverage (Debt)
Debt level is 8.0x Net Debt / EBITDA and Debt / EBITDA. Debt surged on 11.6% while cash dropped on 29.6%.
Appian Corporation has no short term refinancing risk: cash is higher than short term debt (1,624.5%).
Management team
The company's CEO is Matthew W Calkins "Matt". Matthew W Calkins "Matt" has 21 years tenure with the company. Appian Corporation's CFO is Mark S Lynch. Mark S Lynch has 12 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
Appian Corporation ($APPN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 132.9 | 176.7 | 226.7 | 260.4 | 304.6 | 17.0% |
| Gross Profit | 82.8 | 112.1 | 141.8 | 166.5 | 215.8 | 29.6% |
| SG&A | 71.2 | 109.1 | 143.8 | 158.9 | 183.5 | 15.4% |
| EBITDA | -10.6 | -30.9 | -44.7 | -36.0 | -25.4 | |
| EBIT | -11.4 | -31.8 | -46.7 | | | |
| Interest expence | | 0.5 | 0.2 | | | |
| Tax | -1.7 | 0.8 | 0.2 | | | |
| Net Income | -12.5 | -31.0 | -49.5 | -50.7 | -33.5 | |
| Stock Based Compensation | | 13.0 | 16.1 | | | |
Balance Sheet
|
|---|
| Cash | 31.1 | 73.8 | 94.9 | 159.8 | 112.5 | -29.6% |
| Accounts Receivable | 46.8 | 55.3 | 79.4 | | | |
| Accounts Payable | 5.1 | 5.2 | 9.2 | | | |
| Short Term Debt | 6.1 | 0.0 | 0.0 | 5.3 | 6.9 | 31.0% |
| Long Term Debt | 13.9 | 0.0 | 0.0 | 46.8 | 51.2 | 9.4% |
Cash flow
|
|---|
| Capex | 1.0 | 0.4 | 7.0 | 32.4 | 1.3 | -96.1% |
Ratios
|
|---|
| Revenue growth | 19.5% | 33.0% | 28.3% | 14.8% | 17.0% | |
| EBITDA growth | 160.0% | 191.6% | 44.5% | -19.5% | -29.4% | |
|
|---|
| Gross Margin | 62.3% | 63.5% | 62.5% | 64.0% | 70.9% | 6.9% |
| EBITDA Margin | -8.0% | -17.5% | -19.7% | -13.8% | -8.3% | 5.5% |
| EBIT Margin | -8.6% | -18.0% | -20.6% | | |
| SG&A, % of revenue | 53.5% | 61.7% | 63.4% | 61.0% | 60.2% | -0.8% |
| SBC, % of revenue | | 7.3% | 7.1% | | |
| Net Income Margin | -9.4% | -17.5% | -21.8% | -19.5% | -11.0% | 8.5% |
| CAPEX, % of revenue | 0.7% | 0.2% | 3.1% | 12.5% | 0.4% | -12.0% |
|
|---|
| ROIC | -82.2% | -109.6% | -78.4% | -27.6% | -10.7% | 16.9% |
| ROE | | | -83.3% | -36.4% | -13.3% | 23.1% |
People
|
|---|
| Insider ownership | 4.1% | 4.1% | 4.1% | | | |
| Employees | | 859 | 2,000 | | | |
| Revenue/Employee, th. $ | | 206 | 113 | | | |
Appian Corporation ($APPN) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 79 | 67 | 77 | 82 | | 30.8% | 2.3% | 16.9% | 19.0% |
| EBITDA | -5 | -9 | -4 | -6 | | - | - | - | - |
| Net Income | -12 | -12 | -4 | -6 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 149 | 256 | 251 | 112 | | 98.0% | 215.8% | 51.7% | -29.6% |
| Short Term Debt | 5 | 7 | 8 | 7 | | - | 171.5% | 187.8% | 31.0% |
| Long Term Debt | 47 | 46 | 53 | 51 | | - | 147.0% | 186.6% | 9.4% |
Ratios
|
|---|
| Gross Margin | 69.4% | 68.3% | 72.1% | 73.1% | | 9.3% | 3.6% | 8.3% | 6.3% |
| EBITDA Margin | -6.2% | -13.5% | -5.6% | -7.0% | | 17.9% | -0.2% | 11.0% | 9.9% |
| Net Income Margin | -14.8% | -17.7% | -4.7% | -7.8% | | 10.4% | -2.3% | 17.5% | 7.9% |
Peers in Systems Software
Below we provide Appian Corporation benchmarking against other companies in Systems Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | - | 56.5% | 51.3% | 59.2% | 42.4% |
| ServiceNow, Inc. ($NOW) | - | 38.0% | 36.0% | 32.6% | 30.6% |
| SailPoint Technologies Holdings, Inc. ($SAIL) | - | 40.5% | 33.8% | 15.9% | 26.6% |
| Rapid7, Inc. ($RPD) | - | 27.6% | 21.5% | 33.9% | 25.9% |
| Tenable Holdings, Inc. ($TENB) | - | 50.9% | 42.4% | 32.6% | 24.2% |
| |
|---|
| Median (23 companies) | 12.9% | 14.0% | 19.0% | 19.4% | 12.9% |
|---|
| Appian Corporation ($APPN) | - | 33.0% | 28.3% | 14.8% | 17.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 88.5% | 88.6% | 89.6% | 89.5% | 89.4% |
| Progress Software Corporation ($PRGS) | 83.8% | 82.6% | 83.1% | 81.8% | 86.0% |
| Varonis Systems, Inc. ($VRNS) | 90.5% | 90.4% | 89.8% | 86.2% | 84.9% |
| Vmware, Inc. ($VMW) | 85.2% | - | 85.5% | 83.9% | 83.4% |
| Tenable Holdings, Inc. ($TENB) | 88.6% | 86.4% | 83.9% | 82.8% | 82.4% |
| |
|---|
| Median (23 companies) | 73.6% | 74.1% | 75.0% | 76.6% | 77.8% |
|---|
| Appian Corporation ($APPN) | 62.3% | 63.5% | 62.5% | 64.0% | 70.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 49.8% | 50.7% | 48.8% | 46.0% | 45.1% |
| Qualys, Inc. ($QLYS) | 23.8% | 25.1% | 28.4% | 36.5% | 40.3% |
| SolarWinds Corporation ($SWI) | -8.0% | 44.0% | 44.8% | 44.7% | 39.8% |
| Progress Software Corporation ($PRGS) | 2.4% | 28.6% | 32.9% | 23.4% | 34.4% |
| Fortinet, Inc. ($FTNT) | 7.2% | 11.1% | 15.9% | 19.8% | 23.9% |
| |
|---|
| Median (23 companies) | -9.8% | -3.6% | -3.9% | 0.2% | 3.0% |
|---|
| Appian Corporation ($APPN) | -8.0% | -17.5% | -19.7% | -13.8% | -8.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | 7.8% | 6.5% | 8.0% | 9.5% | 12.0% |
| ServiceNow, Inc. ($NOW) | 7.6% | 7.8% | 8.6% | 7.7% | 9.3% |
| Qualys, Inc. ($QLYS) | 11.7% | 16.4% | 8.2% | 8.6% | 8.3% |
| Zuora, Inc. ($ZUO) | 3.4% | 3.3% | 2.8% | 5.7% | 7.8% |
| Proofpoint, Inc. ($PFPT) | 9.2% | 9.0% | 4.1% | 4.0% | 6.9% |
| |
|---|
| Median (23 companies) | 2.1% | 2.4% | 2.5% | 3.4% | 3.4% |
|---|
| Appian Corporation ($APPN) | 0.7% | 0.2% | 3.1% | 12.5% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Fortinet, Inc. ($FTNT) | 5.3% | 15.0% | 28.0% | 29.0% | 46.3% |
| Check Point Software Technologies Ltd. ($CHKP) | 24.7% | 26.8% | 25.5% | 24.2% | 25.6% |
| Qualys, Inc. ($QLYS) | 13.7% | 12.3% | 14.3% | 18.7% | 22.0% |
| Vmware, Inc. ($VMW) | 15.9% | - | - | 18.1% | 19.6% |
| Progress Software Corporation ($PRGS) | -4.9% | 13.5% | 18.5% | 7.6% | 16.0% |
| |
|---|
| Median (23 companies) | 0.0% | -2.7% | -0.9% | -6.3% | -6.4% |
|---|
| Appian Corporation ($APPN) | -82.2% | -109.6% | -78.4% | -27.6% | -10.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SolarWinds Corporation ($SWI) | - | 6.2x | 4.1x | 4.4x | 4.1x |
| Proofpoint, Inc. ($PFPT) | - | - | - | -27.4x | 2.5x |
| Progress Software Corporation ($PRGS) | -7.5x | -0.1x | 0.1x | 1.5x | 2.1x |
| Vmware, Inc. ($VMW) | -0.7x | - | -0.8x | 0.3x | 1.5x |
| CyberArk Software Ltd. ($CYBR) | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x |
| |
|---|
| Median (12 companies) | -1.2x | -0.6x | -0.4x | -0.3x | 0.4x |
|---|
