Appian Corporation

Appian Shareholders,

I remember the first time Appian did $1 million of business in a single quarter. We were a bootstrapped 
startup running out of my basement and crossing the million-dollar threshold felt great. It was a validation, 
but more importantly a promise of future potential. We’d found our feet and now we had time to grow. I had 
a glimpse of the same feeling when we finished last year with our first quarter above $100 million.

It seemed a good time to bring our investors up to date on the inner workings of the business. We opened the 
vault and presented a trove of data about our operations and usage. We showed our acceleration in critical 
revenue metrics. We were proud to note that in 2021 our customers ran 4.5 billion workflows and logged into 
our system 64 million times (a growth of 81% and 45% over the previous year, respectively).

Technology businesses spend their first years developing one feature and hoping that feature will prove 
valuable enough to build a market. If they’re successful, then someday the market will be mature enough for 
the buyers to redefine it. When buyers take over, they prioritize the ends over the means, the effects over the 
features, and unity over the fragmentation that promoted experimentation and innovation. Buyers don’t ask 
‘What does it do?’, they ask ‘What is it for?’.

In this way, our maturing industry is being redefined by our buyers. No longer can software companies 
compete as silo-champions, whether in workflow, RPA, or process mining. Buyers expect a unified answer 
to a pressing problem: keeping up with change.

The pandemic taught businesses the value of agility. Organizations that could rapidly create new processes 
fared better than those that could not. Buyers need software that makes change as easy as possible.

Appian responded by assembling a united suite of functionality that I call a ‘change engine’. We added 
automation (including RPA) and process mining to our core workflow functionality. For each of these 
components, we maintained Appian’s commitment to high performance, low-code ease-of-use, and 
tight integration. Now our customers can discover, design, and automate their processes, all in the 
same environment.

We’ve set a new standard for how easy it can be to create and change processes. This innovation will 
deliver benefits to all parties involved in low-code: customers will achieve greater agility, developers greater 
productivity, and non-developers greater empowerment. We are all developers, in that we all create 
instructions and cooperate with machines, and Appian continues to make development more accessible 
to nontechnical employees.

The end of the pandemic won’t return us to old patterns but open a new set of challenges for buyers and 
vendors alike. Digital coordination is more essential than ever, to unite our dispersed employees and 
customers. There is less distinction now between employees and members of a corporate ecosystem 
(like partners and customers). Most of all, change will continue, and the ability to adapt to change will 
be as important as it has ever been. Appian’s ‘change engine’ will serve a vital role in keeping organizations 
cohesive and modern.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K

(Mark One)

☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934

For the fiscal year ended December 31, 2021 
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 
OF 1934

For the transition period from          to         
Commission File Number: 001-38098 

APPIAN CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of incorporation or organization)

54-1956084
(I.R.S. Employer Identification No.)

7950 Jones Branch Drive
McLean, VA
(Address of principal executive offices)

22102
(Zip Code)

Registrant’s telephone number, including area code: (703) 442-8844

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Class A Common Stock

Trading symbol
APPN

Name of each exchange on which registered 
The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 

Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 

Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to 
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

                                                                                                                                    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be 
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such 
shorter period that the registrant was required to submit such files). Yes ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 
smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” 
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☒
☐

Accelerated filer
Smaller reporting company
Emerging growth company

☐
☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition 

period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the 
Exchange Act.  ☐   

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the 

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 

  ☐    No  ☒

As of June 30, 2021, the aggregate market value of the registrant’s voting Class A common stock and Class B common 
stock held by non-affiliates of the registrant was $3,295.8 million and $280.2 million, respectively, based on a closing price of 
$137.75 per share of the registrant’s Class A common stock as reported on The Nasdaq Global Market on June 30, 2021. For 
purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. 
Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are, in fact, 
affiliates of the registrant. 

As of February 14, 2022, there were 40,735,605 shares of the registrant’s Class A common stock and 31,497,796 shares of 

the registrant’s Class B common stock, each with a par value of $0.0001 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for its 2022 Annual Meeting of Stockholders to be filed with the 

Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year 
covered by this Annual Report on Form 10-K are incorporated by reference in Part III, Items 10-14 of this Annual Report on 
Form 10-K.

 
TABLE OF CONTENTS

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity 
Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers, and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accounting Fees and Services 

Exhibits, Financial Statement Schedules
Form 10-K Summary

PART I.
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

PART II.
Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.

PART III.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

PART IV.
Item 15.
Item 16.

Page

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44
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45

46

48
49
69
71
107
108
109
109

110
110
110
110
110

111
113

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Forward-Looking Statements

PART I

This Annual Report on Form 10-K, including the sections entitled “Business,” “Risk Factors,” and “Management's 
Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that involve 
known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or 
achievements to be materially different from the information expressed or implied by these forward-looking statements. 
Statements that are not purely historical are 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. In some cases, forward-looking statements can be identified by the words “anticipate,” “believe,” “continue,” 
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” 
“should,” “will,” or “would,” or the negative of these terms, or other comparable terminology intended to identify statements 
about the future. These forward-looking statements include, but are not limited to, statements concerning the following: 

•

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•

•

•

•

•

•

•

•

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•

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•

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•

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Our market opportunity and the expansion of our core software markets in general;

The effects of increased competition as well as innovations by new and existing competitors in our market;

Our ability to adapt to technological change and effectively enhance, innovate, and scale our platform and professional 
services;

Our ability to effectively manage or sustain our growth and to achieve profitability;

Potential acquisitions and integration of complementary businesses and technologies; 

Our ability to maintain, or strengthen awareness of, our brand; 

Perceived or actual problems with the integrity, reliability, quality, or compatibility of our platform, including 
unscheduled downtime or outages; 

The anticipated expansion of the usage of partners to perform professional services;

Uncertain impacts the COVID-19 pandemic, including the emergence of new variant strains of COVID-19, may have 
on our business, financial condition, results of operations, and changes in the overall level of spending and volatility in 
the global economy; 

Future revenue, hiring plans, expenses, capital expenditures, capital requirements, and stock performance; 

Our ability to attract and retain qualified employees and key personnel and further expand our overall headcount; 

The expected benefits to our clients and potential clients of our product and service offerings;

The timing of revenue recognition under license and cloud arrangements; 

Our expectation that subscriptions revenue as a percentage of total revenue will continue to increase; 

Our backlog of license, maintenance, cloud, and services agreements and the timing of future cash receipts from 
committed license and cloud arrangements; 

Our expectation that cost of revenue, sales and marketing expenses, research and development expenses, and general 
and administrative expenses will continue to increase in absolute dollar values;

The fluctuation of subscriptions gross margin and professional services gross margin over time;

Our expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements;

Our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our 
business both in the United States and internationally; 

Our ability to maintain, protect, and enhance our intellectual property; and 

Costs associated with defending intellectual property infringement and other claims. 

4

These statements represent the beliefs and assumptions of our management based on information currently available to us. 

Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results 
and the timing of certain events to differ materially from future results expressed or implied by such forward-looking 
statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the 
section titled “Risk Factors” included under Part I, Item 1A. 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 that occur after the date of this report.

Risk Factors Summary

The risk factors summarized below could materially harm our business, operating results, and/or financial condition, impair 
our future prospects, and/or cause the price of our common stock to decline. These risks are discussed more fully in the section 
titled “Risk Factors”. Material risks that may affect our business, financial condition, results of operations, and trading price of 
our Class A common stock include, but are not necessarily limited to, the following:

•

•

Our recent growth may not be indicative of our future growth and, if we continue to grow, we may not be able to 
manage our growth effectively.

If we are unable to sustain our revenue growth rate, we may not achieve or maintain profitability in the future.

• We may not be able to scale our business quickly enough to meet our customers’ growing needs, and if we are not able 

to grow efficiently, our operating results could be harmed.

• We are dependent on a single product, and the lack of continued market acceptance of our platform could cause our 

operating results to suffer.

• Market adoption of low-code platforms to drive digital transformation is new and unproven and may not grow as we 

expect, which may harm our business and prospects.

• We currently face significant competition.

•

If our security measures are actually or perceived to have been breached or unauthorized access to our platform or 
customer data is otherwise obtained, our platform may be perceived as not being secure, customers may reduce the use 
of or stop using our platform, and we may incur significant liabilities.

• We derive a material portion of our revenue from a limited number of customers, and the loss of one or more of these 

customers could adversely impact our business, results of operations, and financial condition.

• We rely on the performance of highly skilled personnel, including senior management and our engineering, 

professional services, sales, and technology professionals.

•

If we do not continue to innovate and provide a platform that is useful to our customers, we may not remain 
competitive, and our revenue and operating results could suffer.

• We are substantially dependent upon customer renewals, the addition of new customers, and the continued growth of 

our subscriptions revenue.

•

Because we generally recognize revenue from cloud subscriptions ratably over the term of the subscription agreement, 
near term changes in sales may not be reflected immediately in our operating results.

• We rely upon Amazon Web Services, or AWS, to operate our cloud offering; any disruption of or interference with 

our use of AWS would adversely affect our business, results of operations, and financial condition.

• We employ third-party licensed software for use in or with our software, and the inability to maintain these licenses or 
errors in the software we license could result in increased costs or reduced service levels, which would adversely affect 
our business.

•

•

If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use 
in their businesses, our revenue will decline.

Because our software could be used to collect and store personal information, domestic and international privacy 
concerns could result in additional costs and liabilities to us or inhibit sales of our software.

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•

If our platform fails to function in a manner that allows our customers to operate in compliance with regulations and/or 
industry standards, our revenue and operating results could be harmed.

• We are subject to anti-corruption laws with respect to our domestic and international operations.

• We are subject to governmental export and import controls and economic and trade sanctions that could impair our 
ability to conduct business in international markets and subject us to liability if we are not in compliance with 
applicable laws and regulations.

•

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•

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•

•

•

•

Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business 
and operating results.

Portions of our platform utilize open source software, and any failure to comply with the terms of one or more of these 
open source licenses could negatively affect our business.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations 
could be adversely affected.

Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.

The dual class structure of our common stock and the existing ownership of capital stock by Matthew Calkins, our 
founder and Chief Executive Officer, has the effect of concentrating voting control with Mr. Calkins for the 
foreseeable future, which will limit your ability to influence corporate matters.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more 
difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price 
of our Class A common stock.

The effects of national and global epidemics, including the ongoing COVID-19 pandemic, could have an adverse 
impact on our business, operations, and the markets and communities in which we operate.

Our stock price may be volatile, and you may lose some or all of your investment.

6

Item 1. Business.

Overview

Appian Corporation (together with its subsidiaries, “Appian,” “the Company,” “we,” or “our”) provides a low-code 
platform that accelerates the creation of high-impact business applications and workflows, enabling our customers to automate 
the most important aspects of their business. Global organizations use our applications to improve customer experience, achieve 
operational excellence, and simplify global risk management and compliance. 

The Appian Low-Code Platform unifies the key capabilities needed by enterprises to build mission-critical business 
applications: process mining, workflow, and automation. With our platform, organizations can rapidly and easily discover, 
design, and automate powerful, enterprise-grade workflows and custom applications through our intuitive, visual interface with 
little or no coding required. Our customers have used workflows and applications built on our platform to launch new business 
lines, automate vital employee workflows, manage complex trading platforms, accelerate drug development, and build global 
procurement systems. With our platform, decision makers can reimagine their products, services, processes, and customer 
interactions by removing much of the complexity and many of the challenges associated with traditional approaches to software 
development. 

Organizations across all industries are digitally transforming by leveraging software to automate and optimize mission 

critical operations, enhance customer experiences, and drive competitive differentiation. Historically, organizations have 
principally relied on off-the-shelf packaged software and custom software solutions to operationalize and automate their 
businesses. Packaged software often fails to address unique use cases or to enable differentiation. It also requires organizations 
to adapt their business (processes, systems of record, etc.) to the software package, as opposed to adapting the software to their 
unique business needs. While traditional custom software solutions can be differentiated and tailored to meet strategic 
objectives, development requires a long, iterative, and cumbersome process, as well as costly integration that relies on scarce 
developer talent. 

We enable organizations to differentiate themselves from their competition through software-enabled digital 

transformation. Our low-code platform employs an intuitive, visual interface and pre-built development modules that reduce the 
time required to build powerful and unique applications. Our platform automates the creation of forms, workflows, data 
structures, reports, user interfaces, and other software elements that would otherwise need to be manually coded. This 
functionality greatly reduces the iterative development process, allowing for real-time optimization and ultimately shortening 
the time it takes to design, build, and deploy applications. Our customers take advantage of our process mining, industry-
leading workflow engine, dynamic case management, and complete automation capabilities, which include our rules engine, 
native Robotic Process Automation, or RPA, native Intelligent Document Processing, or IDP, artificial intelligence, or AI, and 
Smart Services. Our customers can leverage these technologies to apply the right automation approach for their specific use 
case.

We believe our unified low-code platform is a differentiator in the marketplace. We strive to deeply integrate our 
capabilities so that they are all interoperable and low-code. The result is a unified platform that makes it easier and faster to 
address complex use cases, particularly those that involve multiple departments within an organization. Process mining enables 
customers to discover processes and identify those that can be optimized. We expect this to expand customers’ use of our 
platform as they look to build, automate, and optimize such processes. We expect this new capability will allow us to upsell 
existing customers and accelerate deals. 

Our go-to-market strategy consists of both direct sales and sales through strategic partners. We sell our software almost 
exclusively through subscriptions and intend to grow our revenue both by adding new customers and increasing the number of 
users at existing customers that use our applications or increasing the number of applications developed on our platform. 
Strategic partners work with organizations undergoing digital transformations projects and, when these partners recognize an 
opportunity for our platform, they often introduce us to potential customers. 

Many of our customers begin by building a single application and grow to build dozens of applications on our platform, 
which implicitly reduces the per-user cost of each application. Generally, the development of new applications results in the 
expansion of our user base within an organization and a corresponding increase in revenue to us because we charge subscription 
fees on a per-user basis or through non-user based single application licenses. Every additional application an organization 

7

creates on our platform increases the value of our platform for that organization because it further integrates people, processes, 
and data across the organization and facilitates knowledge sharing. At the same time, our industry-leading Customer Success 
organization enables our customers to more easily build and deploy applications on our platform to achieve their digital 
transformation goals. 

We have experienced strong revenue growth, with revenue of $369.3 million, $304.6 million, and $260.4 million in 2021, 
2020, and 2019, respectively. Our subscriptions revenue was $263.7 million, $198.7 million, and $151.3 million in 2021, 2020, 
and 2019, respectively, and includes sales of our software-as-a-service, or SaaS, subscriptions, on-premises term license 
subscriptions, and maintenance and support. SaaS subscription revenue, which is also referred to as cloud subscription revenue, 
was $179.4 million, $129.2 million, and $95.0 million in 2021, 2020, and 2019, respectively, representing year-over-year 
growth rates of 39% from 2020 to 2021 and 36% from 2019 to 2020. Our professional services revenue, which is generated by 
our Customer Success organization, was $105.5 million, $105.9 million, and $109.1 million in 2021, 2020, and 2019, 
respectively. Over time, as the need for implementation services associated with user deployments decreases and the number of 
end users increases, we expect subscriptions revenue as a percentage of total revenue will continue to increase. Further, as the 
usage of partners expands, we expect the proportion of our total revenue from subscriptions to increase over time. 

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. We intend to continue to invest in our 
business to take advantage of our market opportunity. As a result, we incurred net losses of $88.6 million, $33.5 million, and 
$50.7 million in 2021, 2020, and 2019, respectively. We also used cash in operations of $53.9 million, $7.6 million, and $8.9 
million in 2021, 2020, and 2019, respectively.

Recent Developments

COVID-19

Beginning in late 2019 and continuing into 2022, the outbreak of the novel coronavirus disease, or COVID-19, has resulted 
in the declaration of a global pandemic and adversely affected economic activity across virtually all sectors and industries on a 
local, national, and global scale. The impact of the COVID-19 pandemic on the economy and our business continues to be a 
dynamic situation. 

Operationally, we remain focused on supporting our customers, employees, and communities during this time. We have 
responded quickly to adopt a virtual corporate strategy consisting of enabling most of our employees to work productively from 
home while continuing to guard the health and safety of our teams, support our customers, and mitigate risk. In the third quarter 
of 2021, we announced an option allowing for our employees to return to offices in select jurisdictions if they elect to do so. We 
remain focused on ensuring continuity for our customers, and we continue to conduct business as usual, with necessary or 
advisable modifications to employee travel, employee work locations, and marketing events. Refer to Part II, Item 7, 
“Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-
K for further discussion regarding the impact of the COVID-19 pandemic on our fiscal year 2021 financial results.

Through December 31, 2021, we have not seen a meaningful adverse impact to our financial position, results of operations, 

and cash flows and liquidity as a result of COVID-19. While the verticals from which we have historically generated the 
majority of our revenue have been less impacted by COVID-19 to date, there may be impacts to our financial condition and 
results of operations in 2022 and beyond as a result of reduced demand for our products and services and longer sales cycles. 
The ultimate impact of COVID-19 on our business is not estimable at this time and will be largely dependent upon a number of 
factors outside of our control including the extent and duration of the outbreak as well as any mitigating actions which may be 
undertaken by global governments and the general public.

Benefits of Our Platform 

We enable organizations to stay ahead of change. We accelerate customers’ businesses by discovering, designing, and 
automating the workflows and processes to help them most differentiate their products and services from their competition. The 
combination of workflow, automation, and process mining in a unified platform enables us to take customers from insight to 
action quickly and efficiently. Our platform has always delivered speed and agility, and our words are backed by our 
commitments. The Appian Guarantee delivers a customer’s first application project in 8 weeks with a flat service fee, and the 

8

Low-code Promise states customers can build apps at least 10x faster, reduce costs by 50%, and gain superior functionality as 
compared to traditional development. The result empowers organizations to stay ahead of change, outpace their competition, 
and drive meaningful digital transformation. 

Key benefits of our platform include: 

•

•

•

•

•

•

Powerful applications to solve critical and complex challenges. At the core of our platform is an advanced engine that 
enables the modeling, modification, and management of complex processes and business rules. Our heritage as a 
business process management, or BPM, company provides us with this differentiated understanding of complex 
processes, and we have incorporated that expertise into our platform to enable the development of powerful 
applications. Organizations have used our platform to launch new business lines, build large procurement systems, 
manage retail store layouts, conduct predictive maintenance on field equipment, optimize supply chain logistics, and 
manage trading platforms, among a range of other use cases. 

Rapid and simple innovation through our powerful platform. Our platform employs a low-code, intuitive, visual 
interface and pre-built development modules that reduce the time required to build powerful and unique applications. 
Our platform automates the creation of forms, workflows, data structures, reports, user interfaces, and other software 
elements that would otherwise need to be manually coded or configured. This functionality greatly reduces the 
iterative development process, allowing for real-time optimization and ultimately shortening the time it takes to design, 
build, and deploy applications. In turn, organizations can better leverage scarce and costly developer talent to 
accomplish more digital transformation objectives. 

Build once, deploy everywhere. Our patented SAIL technology allows developers to build an application once and use 
it everywhere with the consistency of experience and optimal performance levels that users expect. Applications 
developed on our platform can be immediately and natively deployed across a full range of mobile and desktop 
devices with no additional cost or customization, including desktop web browsers, tablets, and mobile phones. We also 
enable organizations to easily modify and enhance applications and automatically disseminate these updates across 
device types to ensure all users benefit from the most up-to-date functionality.

Integrated process mining. Other low-code platforms do not offer process mining integrated into their platform but 
rather provide a standalone acquired product or have process mining available through a partnership as a standalone 
tool. Integrating it into our platform alongside workflow and automation delivers significant additional value by 
reducing the number of steps and time from insight to action. It can be applied to discover processes as well as to 
optimize existing ones.

Automate with one platform. Our complete automation capabilities allow companies to combine people, systems, and 
data in a seamless workflow to quickly deliver meaningful business impact. Our automation capabilities are not limited 
to one technology but to a set of unified, native technologies enabling customers to use the right one(s) for the job. Our 
low-code RPA automates the routine tasks across legacy and modern systems, increasing efficiency and providing 
even more value to the customer. Smart Services also automate common business activities, such as sending e-mail 
and generating documents. They are also drag-and-drop, more resilient than RPA, and do not require dedicated 
hardware. AI boosts business outcomes by making the applications intelligent, including intelligent document 
processing. Business rules allow for complex decision logic to free up people for other activities. 

Seamless integration with existing systems and data. In contrast to typical enterprise software, our platform does not 
require data to reside within it in order to enable robust data analysis or cross-department and cross-application insight. 
Customers can access and orchestrate data from internal and external sources without needing to migrate data. This 
reduces data migration complexity and time to value. Our platform seamlessly integrates with many of the most 
popular enterprise software applications and data repositories and can be used within many legacy environments. For 
example, organizations frequently use our platform to extend the life and enhance the functionality of legacy systems 
of record, such as those used for enterprise resource planning, human capital management, and customer relationship 
management, by building new applications that enhance the functionality of those systems and by leveraging the data 
within those systems to further optimize and automate operations. We also integrate data without coding; however, 
since accessing data is only as good as the associated performance, we take the extra step of automatically 
performance-tuning data, saving time and resources.

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•

•

•

•

•

Deployment flexibility to serve customer needs. Our platform can be accessed from Appian Cloud or self-managed in 
any cloud or on-premises. Our flexible deployment model also preserves a seamless path to future cloud deployments 
for organizations initially choosing on-premises for their most sensitive workloads. 

Industry-leading security. Our platform is designed to meet the highest demands of our U.S. federal government and 
large enterprise customers. Therefore, it holds some of the highest security certifications available. Our platform was 
one of the first to achieve Federal Risk and Authorization Management Program, or FedRAMP, compliance. Further, 
we were among the first RPA vendors to have its RPA cloud components FedRAMP certified. Finally, our low-code 
platform is one of the first to receive a Provisional Authorization at Impact Level 5, allowing our Department of 
Defense customers to build, deploy, and manage complex workflows with the security they need. Our platform is also 
certified under the Payment Card Industry Data Security Standard, or PCI DSS, and meets all requirements under the 
HITRUST Common Security Framework, or CSF. To protect personal health information, our platform is U.S. Health 
Insurance Portability and Accountability Act, or HIPAA, compliant and enables General Data Protection Regulation, 
or GDPR, compliance. Our controls are documented through our SOC 2 Type II report and ISO 27001/27017/27018 
certifications, in which independent audit firms provide detailed reviews of Appian Cloud’s security, availability, and 
confidentiality controls. We also possess both a SOC 1 Type II report and a SOC 3 report, as well as regional 
certifications including UK G-Cloud, UK Cyber Essentials, and Spain’s Esquema Nacional de Seguridad (ENS). 

Governance capabilities. We deliver the guardrails that CIOs of enterprise organizations need to have full visibility 
and control over their systems. Our strong governance capabilities enable us to excel in regulated markets such as 
financial services, public sector, and life sciences.

Open platform giving customers choice. We respect the technology decisions organizations have made and empower 
them to leverage their existing investments with us. For example, customers can leverage Appian RPA or orchestrate 
any third-party bot from a major RPA vendor within our platform. Working with the customer’s current information 
systems allows our customers to obtain value from their initial Appian deployments quickly before migrating 
additional workloads to our platform over time. 

Access to Appian’s market. We host a robust AppMarket that partners and customers use and contribute to, enabling 
everyone to accelerate their application development. Organizations can select from hundreds of secure plug-ins, 
utilities, and more.

Our approach to digital transformation goes beyond simply enabling organizations to build custom applications fast. We 

empower decision makers to reimagine their products, services, processes, and customer interactions with software by 
removing much of the complexity and many of the challenges associated with traditional approaches to software development. 
Because we make application development easy, organizations can build specific and competitively differentiated functionality 
into applications to deliver enhanced user experiences and streamlined business operations. 

Our Growth Strategy 

Key elements of our growth strategy include: 

•

•

Expand our customer base. We continue to grow our customer base in a variety of industries, including financial 
services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and 
transportation. We believe the market for our low-code platform is still in its early stages, and we have a significant 
opportunity to add additional large enterprise and government customers globally. We offer the Appian Community 
Edition, which is a free trial platform with guided learning for our prospects and customers to quickly access the 
Appian low-code platform for up to 25 users. Once prospects or customers decide to move forward from trial to 
transaction, they can transfer from Appian Community Edition over to a production environment with a seamless 
export, making it easy to do business and transact with Appian.

Grow through our differentiated land and expand model. Many of our customers begin by building a single 
application and grow to build dozens of applications on our platform, which implicitly reduces the per-user cost of 
each application. Generally, the development of new applications results in the expansion of our user base within an 
organization and a corresponding increase in revenue to us because we usually charge subscription fees on a per-user 
basis or through non-user based single application licenses. Every additional application an organization creates on our 
platform increases the value of our platform for that organization because it further integrates people, process, and data 
across the organization and facilitates knowledge sharing. Applications built on our platform may be used only on our 

10

•

•

•

•

•

platform while customers have active subscriptions, creating a substantial incentive for customers to avoid the 
difficulties and costs associated with moving to a different software platform. 

Grow revenue from key industry verticals. While our platform is industry-agnostic, we have made, and plan to 
continue to make, investments to enhance the expertise of our sales and marketing organization within our key 
industry verticals of financial services, government, and life sciences. In 2021, we generated over 71% of our 
subscriptions revenue from customers in these verticals. We believe focusing on the digital transformation needs of 
organizations within these industry verticals can help drive adoption of our platform. 

Continue to innovate and enhance our platform. We have made, and will continue to make, investments in research 
and development to strengthen our platform and expand the number of features available to our customers. We offer 
multiple upgrades each year that allow our customers to benefit from ongoing innovation. As we continue to increase 
the functionality of our platform and further reduce the amount of developer skill required to build robust applications 
on our platform, we believe we have the potential to expand the use of our platform. 

Offer industry solutions to accelerate customer usage. Our platform enables our customers to build applications 
quickly. To give our customers an even faster start, we and our partners offer pre-built solutions in our key industries. 
Every Appian solution is built on our platform so they are fully standardized, upgradeable, and compatible. 

Expand our international footprint. Our platform is designed to be natively multilingual to facilitate collaboration and 
address challenges in multinational organizations. In 2021, approximately 34% of our total revenue was generated 
from customers outside of the United States. As of December 31, 2021, we operated in 13 countries and believe we 
have a significant opportunity to continue to grow our international footprint. We are investing in new geographies, 
including through investment in direct and indirect sales channels, professional services and customer support, and 
implementation partners. 

Grow our partner base. We have several strategic partnerships including with KPMG, Accenture, PwC, Infosys, 
Wipro, and Deloitte. These partners work with organizations undergoing digital transformation projects and, when 
these partners recognize an opportunity for our platform, they often introduce us to potential customers. Additionally, 
they also leverage pre-built solutions using our platform, delivering us software license revenue. We intend to further 
grow our base of partners to provide broader customer coverage and solution delivery capabilities. 

Industry and Market Data

Information contained in this Annual Report on Form 10-K concerning our industry and the market in which we operate, 

including our general expectations and market position, market opportunity, and market size is based on information from 
various sources, including independent industry publications by Forrester Research Inc., or Forrester, Gartner, Inc., or Gartner, 
and International Data Corporation, or IDC. In presenting this information, we have also made assumptions based on such data 
and other similar sources, and based on our knowledge of, and our experience to date in, the markets for our services. This 
information involves a number of assumptions and limitations, and we caution readers not to give undue weight to such 
estimates. Although we have not independently verified the accuracy or completeness of any third-party information, we 
believe the market position, market opportunity, and market size information included in this Annual Report on Form 10-K is 
reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, 
including those described in the “Risk Factors” section. These and other factors could cause results to differ materially from 
those expressed in the estimates made by the independent parties and by us. 

The Gartner content described herein (the “Gartner Content”) represent(s) research opinion or viewpoints published, as part of a 
syndicated subscription service, by Gartner, and are not representations of fact. Gartner Content speaks as of its original 
publication date (and not as of the date of this 10-K), and the opinions expressed in the Gartner Content are subject to change 
without notice. Gartner and Magic Quadrant are registered trademarks and service marks of Gartner, Inc. and/or its affiliates 
and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its 
research publications and does not advise technology users to select only those vendors with the highest ratings or other 
designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be 
construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including 
any warranties of merchantability or fitness for a particular purpose. 

Our Opportunity

11

We believe we have a significant market opportunity in helping organizations accelerate their digital transformation by 

leveraging our low-code platform. We believe our platform addresses several key core software markets, as follows: 

•

•

•

•

•

Low-Code. According to Gartner, spending on low-code development technologies (excluding RPA) is expected to 
grow from $9.6 billion in 2020 to $24.7 billion by 2025, at a CAGR of 21%.1

Intelligent Process Automation. According to IDC, the market for worldwide IPA software is forecasted to grow from 
$16.9 billion in 2020 to $42.4 billion by 2025, at a CAGR of 20%. The market for worldwide IPA software (excluding 
RPA and Process Mining) is forecasted to grow from $15.0 billion in 2020 to $31.6 billion by 2025, at a CAGR of 
16%.2

Artificial Intelligence Software. According to a report by Forrester, the Global AI Software market (excluding AI 
maker platforms) is forecasted to grow from $12.5 billion in 2020 to $23.3 billion by 2025, at a CAGR of 13%.3

Robotic Process Automation. According to IDC, the market for RPA (Cloud) is expected to grow from $57 million in 
2020 to $3.2 billion by 2025, at a CAGR of 123%.4

Process Mining. According to Gartner, the market for Process Mining is expected to grow from $550 million in 2020 
to $2.3 billion by 2025, at a CAGR of 33%.5

Taken together, the market opportunity of these current core software markets represents a combined $37.7 billion in 

2020 and is expected to grow to $85 billion by 2025, at a CAGR of 18%. 

•

•

Traditional custom enterprise software market. In addition to our current core software markets, we believe our 
platform better addresses certain needs of enterprise companies that have historically used manually-developed custom 
software. According to Gartner, the worldwide enterprise application software market (in constant currency terms) will 
grow from $273.4 billion in 2021 to $424.0 billion by 2025, at a CAGR of 11.6%.6

Our internal estimate. Based on approximately 195,000 global companies and government institutions in relevant 
industries and revenue-based size segments as well as our industry- and size-specific average annual recurring revenue 
for customers as of December 31, 2021, we internally estimate our market opportunity to have been approximately 
$49.3 billion in 2021. We determined relevant global companies and government institutions by industry and size by 
referencing certain independent industry data from S&P Global Market Intelligence. We calculated industry- and size-
specific average annual recurring revenue as of December 31, 2021 by adding the aggregate annual recurring revenue 
from all existing customers within each industry and size segment and dividing the total by the number of our existing 
customers in each industry and size segment.

1 Gartner, Forecast Analysis: Low-Code Deployment Technologies, 22 January 2022
2 Worldwide Intelligent Process Automation Software Forecast, 2021-2025, Maureen Fleming, July 2021
3 The AI Software Market Will Grow to $37 Billion Globally by 2025, Forrester, December 10, 2020
4 Worldwide Intelligent Process Automation Software Forecast, 2021-2025, Maureen Fleming, July 2021
5 Gartner, Forecast Analysis: Process Mining, Worldwide, 26 October 2021
6 Gartner, Forecast: Enterprise Application Software, Worldwide, 2019-2025, 4Q21 Update, 21 December 2021

12

Our Low-code Platform

With our low-code platform, organizations can rapidly and easily discover, design, and automate powerful, enterprise-
grade applications through our intuitive, visual interface, with little or no coding required. We also enable organizations to 
easily modify and enhance applications and automatically disseminate these updates across device types to ensure all users 
benefit from the most up-to-date functionality. Through the speed and power of our platform, organizations can make their 
digital transformations happen more effectively and efficiently than could be achieved through building an application with 
standard programming languages. 

We believe the key elements of our technology infrastructure are as follows: 

Unified Offering 

Our heritage as a BPM company provides us with a differentiated understanding and ability to discover, design, and 
automate complex processes. We have incorporated that expertise into our platform to enable the development of powerful 
business software. 

Workflow

At the core of our platform is an advanced engine that enables the modeling, modification, and management of complex 
processes. Appian combines people, technologies, and data into a single workflow to maximize resources and improve business 
results. Workflow can include any worker (people or digital workers) or any resource (data and system). Workflow serves as 
the bridge between process mining and automation, and we believe starting with it at the core gives us an immediate 
competitive advantage.

Automation

Our complete automation capabilities allow companies to combine people, systems, and data in a seamless workflow to 

quickly deliver meaningful business impact. Our automation capabilities are not limited to one technology but to a set of 
unified, native technologies enabling customers to use the right one for the job. 

•

•

Robotic Process Automation. Appian includes native software robots which can be used to execute simple repetitive 
tasks, reducing the human burden of that work. These robots facilitate integration with legacy systems that do not offer 
modern APIs. 

Intelligent Document Processing. Appian includes native IDP, which automatically extracts structured and 
unstructured data from digital forms such as invoices and classifies it using AI. The out-of-the-box application does 
not require the use of time consuming templates and continuously improves accuracy with AI that learns from human 
corrections.

13

•

•

•

Artificial Intelligence. Appian includes a range of native and third party AI capabilities. These capabilities include 
native intelligent document processing as well as sentiment analysis, translation, and document and image analysis. 
Appian also allows customers to integrate with their preferred AI provider using our zero-code connectors. 

Case Management. Appian dynamic case management enables automation of many of the most common patterns of 
collaborative human work such as service management, incident management, and investigations. 

Business Rules. Appian includes a declarative environment for defining and executing business logic or rules. These 
rules can be highly complex and applied within the Appian platform to many use cases, ranging from automated 
decision making to user experience personalization. 

Process Mining

Appian Process Mining discovers how to reduce costs, increase efficiency, and optimize processes. Appian removes the 
single largest friction point in process mining, enabling customers to spend more time improving and automating workflows. 
Appian Process Mining features a no-code module that simplifies the preparation and transformation of enterprise data. Pre-
built process packages with mapping and dashboards also accelerate process mining time-to-value. 

Appian combines the power of process mining, workflow, and automation into a unified, low-code platform. Our platform 

has the complete automation capabilities to fuel enterprise-wide workflows and the ability to scale with an organization's 
growth through performance, governance, and security. Our complete automation offering is core to unlocking business results 
for organizations by bringing people, technologies, and data into a single workflow along with the development speed to keep 
organizations agile. 

Web-Based Development Environment 

The Appian design interface is a model-driven, web-based development environment for application creation, testing, 
deployment, and performance optimization. Appian design is a shared repository of all Appian components (interfaces, process 
models, APIs, new component builders, and user collaboration modules) and serves as an administration utility for managing 
people, processes, and data. 

The Appian design repository incorporates design and DevOps best practices and years of lessons learned from digital 
transformation initiatives. Common development operations tasks require just a few clicks and can be automated for hands-off 
deployment. Dramatic improvements in developer productivity can be achieved through user-friendly capabilities such as fast 
impact analysis of all changes, auto-updating applications and components when data types change, and live views of interfaces 
under development. 

Our platform guides developers through the necessary steps to create the foundation elements of reusable interfaces, 
records, and business processes, while providing all the power developers need to design, build, and implement enterprise 
systems at scale. 

Our Patented SAIL Technology 

SAIL is our patented technology that allows developers to create dynamic and responsive web and native-mobile user 
interfaces through a “build once, deploy everywhere” architecture. SAIL interfaces only need to be created once, and SAIL 
automatically assembles customer applications for optimal viewing on each device type, including desktop web browsers, 
tablets, and mobile phones, as well as each device operating system, including iOS and different permutations of Android. 
SAIL leverages native functionality inherent across a myriad of devices and operating systems to ensure the consistency of 
experience and optimal performance levels users expect. Updates to applications developed with SAIL are automatically 
disseminated across device types to ensure all users benefit from the most up-to-date functionality. This approach enables 
enterprise mobility without the extensive time and resources other development approaches require. 

We believe SAIL provides a significant advantage over other platforms that both require extensive customization for 
various devices at the time of the creation of the new applications and on an on-going basis as mobile device manufacturers 
continue to update their software and capabilities. 

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User Interfaces for All

Our platform allows our customers to easily build the user experiences they need to serve their employees and customers 

best, including:

•

Unified employee interface. Our end user interfaces enable users to discover data, collaborate with other end users, 
and participate in process actions. The end user experience begins with a news feed that allows end users to monitor 
key events from processes, systems, and other end users, providing a unified view of all applications and activity in 
one place. End users can collaborate with others, obtain status updates, send direct and secure messages, and create 
social tasks for other end users. Our activity stream is designed to be intuitive for end users familiar with popular 
consumer social interfaces, allowing them to instantly track important events and occurrences and collaborate with 
little to no training. We also enforce company security policies, so end users can confidently collaborate without fear 
of compromising regulatory compliance. Our end user interfaces solve the problem of information silos, allowing 
organizations to respond to constituent feedback in real time by uniting the right team with the right information. 

At the same time, our platform provides transparency, visibility, and control across all of our applications through a 
dynamic and powerfully flexible tasking environment. We provide detailed tracking of all human process tasks on our 
platform, including when tasks have been assigned, addressed, and completed by any user. Business Activity 
Monitoring reports display real-time enterprise performance, bottleneck detection, and process optimization while 
scaling to millions of tasks. 

•

Customer experience. Appian Portals securely connects external users to apps without authentication. It allows users 
to quickly build public websites connected to their apps using low-code in a way that is easy to scale and manage.

• Mobile. Automatic mobile experiences, including dynamic offline capabilities, enable workers to continue using their 

mobile applications even when offline.

Low-Code Data 

Appian Low-Code Data is an advanced data management technology that allows end users to discover and unite enterprise 

data into a single searchable environment, providing a comprehensive view of an organization’s data. In contrast to typical 
enterprise software, our platform does not require data to reside within it in order to enable robust data analysis and cross-
department and cross-application insight. Using standard database software and service connection frameworks, including 
APIs, our platform seamlessly integrates with many of the most popular enterprise software applications and data repositories 
and can be used within many legacy environments. Users simply need to assign a name to a given topic and decide which 
existing data sources within the enterprise they want to capture. Appian Low-Code Data gives users an immediate snapshot of 
all centralized data relating to common business activities such as customer, product, employee, or service requests. Appian 
also allows organizations to analyze the end-to-end journeys of any given person, entity, or asset. Once the connections are 
established, users may navigate, analyze, collaborate, and take action on data from our intuitive dashboards and interactive 
reports. 

Technology 

We designed our platform to support large global enterprises and government organizations at scale, in the cloud or self-
hosted. We design, deploy, and manage our platform with the goal of it being a “joy to use” for both developers and users of 
applications. 

Our customers build powerful and unique applications using our proprietary and patented SAIL technology, which we also 
use ourselves to develop features of our platform. We also employ cutting-edge React technology for building web and mobile 
user interfaces. We use third-party proprietary database and database language technology licensed from Kx Systems, Inc., or 
Kx, to power the high-performance in-memory database of our platform. Under our agreement with Kx, we are permitted to 
distribute Kx’s software as a component part of our software platform as well as to host Kx’s software on behalf of our 
customers through our cloud offering. Our agreement requires Kx to provide maintenance directly to us on the software we 
license as long as it provides maintenance to any other customers. We pay a variable license fee based on the number of 
applications built by our customers, subject to an overall cap on payment. We have paid Kx the overall license fee cap in each 
of the last five years. We may maintain the contract as long as we pay maintenance fees. Kx may terminate the agreement if we 
materially breach the agreement, become insolvent, make an assignment for the benefit of creditors, or if a bankruptcy 

15

proceeding is initiated against us. Unless we fail to pay amounts due under the contract or violate certain of Kx’s intellectual 
property rights, Kx may not terminate the agreement until either it has successfully litigated a breach action or six months, 
whichever is earlier. 

Our cloud offering is hosted by Amazon Web Services, or AWS, and is available in 62 availability zones in 21 geographic 

regions. Our software is also able to run in the Microsoft Azure cloud and the Google Cloud Platform. Our enablement of the 
Microsoft Azure cloud and the Google Cloud Platform is consistent with our principle of platform neutrality. 

We have also implemented a wide set of technical, physical, and personnel-based security controls designed to protect 

against the compromise of confidential data belonging to both our customers and us.

Customer Success

Since inception, we have invested in our Customer Success organization to help ensure customers are able to deploy and 
adopt our platform. We believe our investment in customer success, as well as efforts by partners to build their practices around 
Appian, will drive increased adoption of our platform. 

Our focus on customer success creates happy customers. Appian was named a Customers’ Choice in the 2021 Gartner Peer 
InsightsTM ‘Voice of the Customer’: Enterprise Low-Code Application Platforms. The report recognizes vendors that are highly 
rated by their customers through Gartner Peer Insights verified reviews. Appian was the sole Customers’ Choice for the Global 
Enterprise ($10B+), Large Enterprise ($1-10B), North America, and Finance categories.

When we first acquire a new customer, our professional services experts or our partners’ professional services experts start 

the implementation process. Specialists facilitate deployment of our platform, and training personnel provide comprehensive 
support throughout the implementation process. Customers have access to our Appian Academy, which trains analysts and 
developers of different skill sets on our platform. We also provide instructor-led courses globally, delivered either virtually or 
in-person. 

Once our customers have deployed and implemented our platform, our Appian Architects review our customers’ programs 

and applications to find potential issues and provide recommendations on best practices. Our professional services teams also 
assist customers by building applications on our platform for them. 

Over time, we expect professional services revenue as a percentage of total revenue to continue to decline as we 

increasingly rely on strategic partners to help our customers deploy our software. 

Customer Support

Our customer support personnel are trained engineers and designers who can work with customers on the front lines to 

address support issues. We provide e-mail and phone support via teams in the United States, the United Kingdom, and 
Australia. Developers can also find answers to their questions on the Appian Community, a community site that provides online 
customer support, real-time collaboration and networking, a growing knowledge base of answers for common questions, and 
live product webinars and training. The Appian Community also includes documentation, methodologies, and reusable 
components for our platform. We have consistently been able to achieve at least a 98% customer satisfaction rating for our 
customer support organization, based on our surveys.

Our Customers 

 Our customers operate in a variety of industries, including financial services, government, life sciences, insurance, 
manufacturing, energy, healthcare, telecommunications, and transportation. As of December 31, 2021, we had 816 customers, 
of which 635 customers were commercial and 181 customers were government or non-commercial entities. Generally, our sales 
team targets its efforts to organizations with over 2,000 employees and $2 billion in annual revenue. Our number of customers 
paying us in excess of $1 million of annual recurring revenue has grown from 55 at the end of 2020 to 75 at the end of 2021. As 
of December 31, 2021, 25% of our commercial customers were Global 2000 organizations, and 68 of our customers were 
Fortune 500 companies. No single end-customer accounted for more than 10% of our total revenue in 2021, 2020, or 2019.

16

Human Capital Resources and Management

Employees, Culture, and Labor Relations

Our distinct culture of innovation is an important contributor to our success as a company. We promote an inclusive 

environment where our employees can thrive every day and contribute their unique, diverse perspectives to help create 
transformative solutions for our customers. Our culture was purposefully cultivated by our four founders, who are still heavily 
involved in operating our business, including recruiting, interviewing, and educating new employees at Appian. Led by Matt 
Calkins, one of our founders and our Chief Executive Officer, we have grown our business organically by employing a unified 
team to maximize the cohesion and simplicity of our platform and our company.

As of December 31, 2021, we had a total global workforce of 1,798 full-time employees, 1,334 of which were based in the 
United States. None of our U.S. employees are covered by collective bargaining agreements. We believe our employee relations 
are good, and we have not experienced any work stoppages. Additionally, we are subject to, and comply with, local labor law 
requirements in all countries in which we operate.

Talent Acquisition and Development

We have a robust talent acquisition program to attract, recruit, and retain new talent. We utilize an extensive campus 
recruiting program, provide for an employee referral program, offer opportunities for internal transfers, and offer competitive 
compensation and benefits programs. We also provide a variety of resources to help our employees grow in their current roles 
and build new skills, including access to Appian University, a system that houses Appian’s in-house learning and development 
solutions.

Inclusion and Diversity

We believe employee diversity and an inclusive environment are paramount to our continued success, as our individual 

styles of communication, management, and problem-solving enable us to learn from one another and discover creative 
solutions. We sponsor a number of affinity groups, initiated by employees, that aim to build stronger internal and external 
networks and partnerships, create a positive lasting impact through social and educational outreach and other activities, and 
create development opportunities for future leaders.

Our Competition

Our main competitors fall into three categories: (1) providers of custom software and customer software solutions that 
address, or are developed to address, some of the use cases that can be addressed by applications developed on our platform; (2) 
providers of low-code development platforms, such as Microsoft, Salesforce.com, ServiceNow, OutSystems, and Mendix; and 
(3) providers of one or more automation technologies, including business process management, case management, process 
mining, and robotic process automation. Such providers include Pegasystems, Celonis, UiPath, IBM, ServiceNow, Microsoft, 
SAP, Bizagi, Oracle, and Nintex. 

As our market grows, we expect it will attract more highly specialized vendors as well as larger vendors that may continue 

to acquire or bundle their products more effectively. The principal competitive factors in our market include: 

•

•

•

•

•

•

•

•

Platform features, reliability, performance, and effectiveness; 

Ease of use and speed; 

Platform extensibility and ability to integrate with other technology infrastructures;

Deployment flexibility; 

Robustness of professional services and customer support; 

Price and total cost of ownership; 

Strength of platform security and adherence to industry standards and certifications; 

Strength of sales and marketing efforts; and 

17

•

Brand awareness and reputation. 

We believe we generally compete favorably with our peer group with respect to the features, security, and performance of 

our platform, the ease of integration of our applications, and the relatively low total cost of ownership of our applications. 
However, many of our competitors have substantially greater financial, technical, and other resources, greater name 
recognition, larger sales and marketing budgets, broader distribution, more diversified product lines, and larger and more 
mature intellectual property portfolios. 

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, and often the last two weeks, of each quarter. However, we recognize the majority of our 
subscriptions revenue ratably over the terms of our subscriptions agreements, which are generally one to three years in length. 
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, a decline in new sales or renewals 
in any one period may not be immediately reflected in our revenue results for that period. However, this decline will negatively 
affect our revenue in future periods. Accordingly, the effect of significant downturns in sales, market acceptance of our 
platform, and 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 due to the 
upfront revenue recognition associated with our term license subscription agreements.

Sales and Marketing 

Sales 

Our sales organization is responsible for account acquisition and overall market development, which includes managing 

relationships with our customers. We also sell our software through our strategic partners. While our platform is industry-
agnostic, we have recently made, and plan to continue to make, investments to enhance the expertise of our sales organization 
within our core industry verticals of financial services, government, and life sciences. We expect to continue to grow our sales 
headcount in all of our principal markets and expand our presence into countries where we currently do not have a direct sales 
presence. We also intend to further grow our base of partners to provide broader customer coverage and solution delivery 
capabilities.

Marketing 

Our marketing efforts focus on building our brand reputation and increasing market awareness of our platform. Marketing 

activities include sponsorship of, and attendance at, trade shows and conferences, our annual Appian World event, social media, 
advertising and other digital programs, management of our corporate website and partner portal, press outreach, and customer 
relations. In response to the COVID-19 pandemic, we reduced the number of in-person marketing events, including shifting 
Appian World to virtual-only in 2020 and 2021.

Partner Strategy 

We have a strong and growing ecosystem of partners that helps accelerate our customers’ digital transformation initiatives 

and deliver customer value at scale. Our workflow, broader automation, and discovery capabilities paired with our partners’ 
industry and functional domain experience help companies digitally transform their business. Partners also help us to offer 
industry-focused solutions as we help companies drive new approaches in engaging their end users and employees. 

18

 
We have many strategic partnerships around the world including with companies such as KPMG, Accenture, PwC, Infosys, 

Wipro, and Deloitte. These partners refer software subscription customers to us and generally perform professional services 
with respect to any new service contracts they originate, increasing our subscriptions revenue without any change to our 
professional services revenue. As we expand the network of strategic partners, we expect professional services revenue to 
decline as a percentage of total revenue over time since our strategic partners may perform professional services associated with 
software subscriptions we sell.

We are also growing our network of regional and channel partners to further expand our business into traditional and new 

markets. These partners provide delivery services, sales and marketing capabilities, and contract fulfillment. 

Intellectual Property 

Our success depends in part upon our ability to protect our core technology and intellectual property. We rely on patents, 

trademarks, copyrights, trade secret laws, confidentiality procedures, and employee disclosure and invention assignment 
agreements to protect our intellectual property rights.

As of December 31, 2021, we had six granted patents, two allowed patents, and four patents pending related to our 

platform and its technology. None of our issued patents expire before 2034. We cannot provide complete assurance that any of 
our patent applications will result in the issuance of a patent or that the examination process will not require us to narrow our 
claims. Any patents we may be issued may be contested, circumvented, found unenforceable, or invalidated, and we may not be 
able to prevent third parties from infringing them. We also license software from third parties for integration into our products, 
including open source software and other software available on commercially reasonable terms. We control access to and use of 
our proprietary software and other confidential information through the use of internal and external controls, including 
contractual protections with employees, contractors, end customers, and partners, and our software is protected by U.S. and 
international copyright and trade secret laws.

Facilities

As of December 31, 2021, we leased our headquarters office in McLean, Virginia and offices in six cities outside the 
United States. In addition to our leased offices, we occupied three flexible workspaces outside of the United States. In 2021, as 
part of our response to the COVID-19 pandemic, we reduced the number of offices we occupied as we shifted to largely remote 
work. Our use of flexible workspaces is dependent upon our current business needs. We believe our facilities are adequate to 
meet our ongoing needs, including substantial rights to expand within certain properties we lease. If we require additional space 
in the future, we believe we will be able to obtain additional facilities on commercially reasonable terms. 

Corporate Information

Our Class A common stock is listed on the Nasdaq Global Market under the symbol “APPN”.

Our current principal executive offices are located at 7950 Jones Branch Drive, McLean, Virginia 22102, and our telephone 

number is (703) 442-8844.

“Appian”, the Appian logo, and other trademarks or service marks of Appian Corporation appearing in this Annual Report 

on Form 10-K are the property of Appian Corporation. This Annual Report on Form 10-K contains additional trade names, 
trademarks, and service marks of others, which are the property of their respective owners. Solely for convenience, trademarks 
and trade names referred to in this Annual Report on Form 10-K exclude the ® or TM symbols.

Available Information

Our website address is www.appian.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current 
Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are made 
available free of charge on or through our website at investors.appian.com as soon as reasonably practicable after such reports 
are filed with, or furnished to, the United States Securities and Exchange Commission, or SEC. The information contained on, 
or that can be accessed through, our website is not incorporated by reference into this Annual Report on Form 10-K or in any 

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other report or document we file with the SEC, and any references to our website are intended to be inactive textual references 
only.

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Item 1A. Risk Factors.

Our operations and financial results are subject to various risks and uncertainties including those described below. You 
should consider carefully the risks and uncertainties described below, in addition to other information contained in this Annual 
Report on Form 10-K, including our consolidated financial statements and related notes. The risks and uncertainties described 
below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are 
not material, may also become important factors that adversely affect our business. If any of the following risks or others not 
specified below materialize, our business, financial condition, and results of operations could be materially and adversely 
affected, and the trading price of our Class A common stock could decline.

Risks Related to Our Business and Industry

Our recent growth may not be indicative of our future growth and, if we continue to grow, we may not be able to 

manage our growth effectively.

We continue to experience rapid growth in our headcount and operations. We have also significantly increased the size of 

our customer base over the last several years. We anticipate we will continue to significantly expand our operations and 
headcount in the near term. Our growth has placed, and any future growth will place, a significant strain on our management, 
administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage this growth 
effectively. To manage the expected growth of our operations and personnel, we will need to continue to improve our 
operational, financial, and management controls and our reporting systems and procedures. Failure to effectively manage our 
growth could result in difficulty or delays in deploying our platform to customers, declines in quality or customer satisfaction, 
increases in costs, difficulties in introducing new features, or other operational difficulties. Any of these difficulties could 
adversely impact our business performance and results of operations.

If we are unable to sustain our revenue growth rate, we may not achieve or maintain profitability in the future.

We have experienced revenue growth with revenue of $369.3 million, $304.6 million, and $260.4 million in 2021, 2020, 

and 2019, respectively. Although we have experienced rapid revenue growth historically, we may not continue to grow as 
rapidly in the future, and our revenue growth rates may decline. Any success we may experience in the future will depend in 
large part on our ability to, among other things:

• Maintain and expand our customer base;

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•

•

Increase revenue from existing customers through increased or broader use of our platform within their organizations;

Further penetrate the existing industry verticals we serve and expand into other industry verticals; and

Continue to successfully expand our business domestically and internationally.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult 

to achieve and maintain profitability. Our revenue for any prior quarterly or annual periods should not be relied upon as any 
indication of our future revenue or revenue growth.

We may not be able to scale our business quickly enough to meet our customers’ growing needs, and if we are not able 

to grow efficiently, our operating results could be harmed.

As usage of our platform grows and as customers use our platform for more advanced and more frequent projects, we may 

need to devote additional resources to improving our software architecture, integrating with third-party systems, and 
maintaining infrastructure performance. In addition, we will need to appropriately scale our internal business operations as well 
as grow our partner services systems, including our Customer Success organization and operations, to serve our growing 
customer base, particularly as our customer base expands over time. Any failure of or delay in these efforts could cause 
impaired system performance and reduced customer satisfaction. These issues could reduce the attractiveness of our platform to 
customers, resulting in decreased sales to new customers, lower renewal rates by existing customers, the issuance of service 
credits, or requested refunds, any of which could hurt our revenue growth and our reputation. Even if we are able to upgrade 
our systems and expand our staff, any such expansion will be expensive and complex, requiring management time and 
attention. We could also face inefficiencies or operational failures as a result of our efforts to scale our infrastructure. Moreover, 

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there are inherent risks associated with upgrading, improving, and expanding our information technology systems. We cannot 
be sure the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely 
basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.

We are dependent on a single product, and the lack of continued market acceptance of our platform could cause our 

operating results to suffer.

Sales of our software platform account for substantially all of our subscriptions revenue and are the source of substantially 
all of our professional services revenue. We expect we will be substantially dependent on our platform to generate revenue for 
the foreseeable future. As a result, our operating results or revenue growth rates could suffer due to:

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Any decline or lower than expected growth in demand for our platform;

The failure of our platform to achieve continued market acceptance;

The market for low-code solutions not continuing to grow or growing more slowly than we expect;

The introduction of products and technologies that serve as a replacement or substitute for, or represent an 
improvement over, our platform;

Technological innovations or new standards that our platform does not address;

Sensitivity to current or future prices offered by us or competing solutions; 

The inability to further penetrate our existing industry verticals or expand our customer base; and

Our inability to release enhanced versions of our platform on a timely basis.

Our sales cycle is long and unpredictable, particularly with respect to large customers, and our sales efforts require 

considerable time and expense, all of which may cause our operating results to fluctuate.

Our operating results may fluctuate, in part, because of the resource-intensive nature of our sales efforts, the length and 
variability of the sales cycle of our platform, and the difficulty we face in adjusting our short-term operating expenses. Our 
operating results depend in part on sales to large customers and promotion of increasing usage by those large customers. The 
length of our sales cycle, from initial evaluation to delivery of and payment for our software, varies substantially from customer 
to customer, and it is difficult to predict if or when we will make a sale to a potential customer. We may spend substantial time, 
effort, and money on our sales and marketing efforts without any assurance our efforts will result in revenue. As a result of 
these factors, we may face greater costs, longer sales cycles, and less predictability in the future. In the past, certain individual 
sales have occurred in periods later than we expected or have not occurred at all. The loss or delay of one or more large 
transactions in a quarter could impact our operating results for that quarter and any future quarters in which such revenue 
otherwise would have been recognized because a substantial portion of our expenses are relatively fixed in the short-term. As a 
result of these factors, it is difficult for us to forecast our revenue accurately in any quarter, and our quarterly results may 
fluctuate substantially. 

Market adoption of low-code platforms to drive digital transformation is new and unproven and may not grow as we 

expect, which may harm our business and prospects.

We believe our future success will depend in large part on growth in the demand for low-code platforms to drive software-

enabled digital transformation. It is difficult to predict customer demand for our platform, renewal rates, the rate at which 
existing customers expand their subscriptions, the size and growth rate of the market for our platform, the entry of competitive 
products, or the success of existing competitive products. The utilization of low-code software to drive digital transformation is 
still relatively new. Any expansion in our addressable market depends on a number of factors, including businesses continuing 
to desire to differentiate themselves through software-enabled digital transformation, increasing their reliance on low-
code solutions, changes in the competitive landscape, technological changes, budgetary constraints of our customers, and 
changes in economic conditions. If our platform does not achieve widespread adoption or there is a reduction in demand 
for low-code solutions caused by these factors, it could result in reduced customer purchases, reduced renewal rates, and 
decreased revenue, any of which will adversely affect our business, operating results, and financial condition.

We currently face significant competition.

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The markets for low-code platforms, business process management, case management software, and custom software are 
highly competitive, rapidly evolving, and have relatively low barriers to entry. The principal competitive factors in our market 
include the following: platform features, reliability, performance, and effectiveness; ease of use and speed; platform 
extensibility and ability to integrate with other technology infrastructures; deployment flexibility; robustness of professional 
services and customer support; price and total cost of ownership; strength of platform security and adherence to industry 
standards and certifications; strength of sales and marketing efforts; and brand awareness and reputation. If we fail to compete 
effectively with respect to any of these competitive factors, we may fail to attract new customers or lose or fail to renew 
existing customers, which would cause our operating results to suffer.

Our  main  competitors  fall  into  three  categories:  (1)  providers  of  custom  software  and  customer  software  solutions  that 
address, or are developed to address, some of the use cases that can be addressed by applications developed on our platform; (2) 
providers of low-code development platforms such as Microsoft, Salesforce.com, ServiceNow, OutSystems, and Mendix; and 
(3)  providers  of  one  or  more  automation  technologies,  including  BPM,  case  management,  process  mining,  and  RPA.  Such 
providers include Pegasystems, Celonis, UiPath, IBM, ServiceNow, Microsoft, SAP, Bizagi, Oracle, and Nintex.

Some of our actual and potential competitors have advantages over us such as longer operating histories, more established 
relationships with current or potential customers and commercial partners, significantly greater financial, technical, marketing, 
or other resources, stronger brand recognition, larger intellectual property portfolios, and broader global distribution and 
presence. Such competitors may make their solutions available at a low cost or no cost basis in order to enhance their overall 
relationships with current or potential customers. Our competitors may also be able to respond more quickly and effectively 
than we can to new or changing opportunities, technologies, standards, or customer requirements. With the introduction of new 
technologies and new market entrants, we expect competition to intensify in the future. In addition, some of our larger 
competitors have substantially broader offerings and can bundle competing products with other software offerings. As a result, 
customers may choose a bundled offering from our competitors, even if individual products have more limited functionality 
than our platform. These larger competitors are also often in a better position to withstand any significant reduction in capital 
spending and will therefore not be as susceptible to economic downturns.

If our security measures are actually or perceived to have been breached or unauthorized access to our platform or 
customer data is otherwise obtained, our platform may be perceived as not being secure, customers may reduce the use of or 
stop using our platform, and we may incur significant liabilities.

Our platform, which can be deployed in the cloud or on-premises, allows for the storage and transmission of our 
customers’ proprietary or confidential information, which may include trade secrets, personally identifiable information, 
personal health information, and payment card information. Any actual or perceived unauthorized access to, or security 
incidents affecting, our platform or the information stored on or transmitted by our platform, including through unauthorized 
and/or malicious activity by one of our employees, could result in the loss of information, litigation, regulatory investigations, 
penalties, indemnity obligations and other costs, expenses, and liability, which could exceed our existing insurance coverage 
and could result in a substantial financial loss. While we have security measures in place designed to protect customer 
information and prevent data loss and other security breaches, there can be no assurance these measures will be effective in 
protecting against malicious unauthorized access to our platform or our customers’ information. Similarly, if cyber incidents 
such as phishing attacks, viruses, denial of service attacks, supply chain attacks, malware installation, ransomware attacks, 
server malfunction, software or hardware failures, loss of data or other computer assets, adware, or other similar issues impair 
the integrity or availability of our systems by affecting our data or reducing access to or shutting down one or more of our 
computing systems or our IT network, we may be subject to negative treatment by our customers, our business partners, the 
press, and the public at large. Further, while security tested and techniques are in place and tested by third parties, because the 
techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they 
are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. 
Additionally, we may be subject to attacks on our networks or systems or attempts to gain unauthorized access to our 
proprietary or confidential information or other data we or our vendors maintain such as data about our employees. Such attacks 
and other breaches of security may occur as a result of malicious attacks, human error, social engineering, or other causes. Any 
actual or perceived breach of our security measures or failure to adequately protect our customers’ or our confidential or 
proprietary information could negatively affect our ability to attract new customers, cause existing customers to elect to not 
renew their subscriptions to our software, or result in reputational damage, any of which could adversely affect our operating 
results.

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Further, security compromises experienced by our customers with respect to data hosted on our platform, even if caused by 

the customer’s own misuse or negligence, may lead to public disclosures, which could harm our reputation, erode customer 
confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, or cause 
existing customers to elect not to renew their subscriptions with us. We may be subjected to indemnity demands, regulatory 
proceedings, audits, penalties, or litigation based on our customers’ misuse of our platform with respect to such sensitive 
information and defending against such litigation and otherwise addressing such matters may be expensive, cause distraction, 
and may result in us incurring liability, all of which may affect our operating results.

While we maintain general liability insurance coverage and coverage for errors or omissions, we cannot provide assurance 

that such coverage will be adequate or otherwise protect us from liabilities or damages with respect to claims alleging 
compromises of personal data or that such coverage will continue to be available on acceptable terms or at all.

We derive a material portion of our revenue from a limited number of customers, and the loss of one or more of these 

customers could adversely impact our business, results of operations, and financial condition.

Our customer base is concentrated. For example, during the years ended December 31, 2021, 2020, and 2019, revenue 

from U.S. federal government agencies represented 19.6%, 18.1%, and 17.1% of our total revenue, respectively, and the top 
three U.S. federal government customers generated 5.6%, 6.6%, and 7.4% of our total revenue for the years ended 
December 31, 2021, 2020, and 2019, respectively. Further, nearly 10% of our subscription customers spent more than $1 
million on our software in 2021. If we were to lose one or more of our significant customers, our revenue may significantly 
decline. In addition, revenue from significant customers may vary from period to period depending on the timing of renewing 
existing agreements or entering into new agreements. The loss of one or more of our significant customers could adversely 
affect our business, results of operations, and financial condition.

A portion of our revenue is generated from subscriptions sold to governmental entities and heavily regulated 

organizations, which are subject to a number of challenges and risks.

A significant portion of our revenue is generated from subscriptions sold to governmental entities, both in the United States 

and internationally. Additionally, many of our current and prospective customers such as those in the financial services, 
insurance, life sciences, and healthcare industries are highly regulated and may be required to comply with more stringent 
regulations in connection with subscribing to and implementing our platform. Selling subscriptions to these entities can be 
highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance 
we will successfully complete a sale. In addition, if our software does not meet the standards of new or existing regulations, we 
may be in breach of our contracts with our customers, allowing them to terminate their agreements.

Governmental demand and payment for our platform may also be impacted by public sector budgetary cycles and funding 
authorizations, with funding reductions or delays adversely affecting public sector demand for our platform. Governmental and 
highly regulated entities impose compliance requirements that are complicated, make pricing readily available subject 
continued business to unpredictable competitive processes, or are otherwise time-consuming and expensive to satisfy. In the 
United States, applicable federal contracting regulations change frequently, and the President may issue executive orders 
requiring federal contractors to adhere to new compliance requirements after a contract is signed. If we undertake to meet 
special standards or requirements and do not meet them, we could be subject to significant liability from our customers or 
regulators. Even if we do meet these special standards or requirements, the additional costs associated with providing our 
platform to government and highly regulated customers could harm our operating results. Moreover, changes in the underlying 
statutory and regulatory conditions that affect these types of customers could harm our ability to efficiently provide them access 
to our platform and to grow or maintain our customer base. In addition, engaging in sales activities to foreign governments 
introduces additional compliance risks specific to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other 
similar statutory requirements prohibiting bribery and corruption in the jurisdictions in which we operate.

We have experienced losses in the past, and we may not achieve or sustain profitability in the future.

We generated net losses of $88.6 million, $33.5 million, and $50.7 million in 2021, 2020, and 2019, respectively. As of 

December 31, 2021, we had an accumulated deficit of $257.5 million. We will need to generate and sustain increased revenue 
levels in future periods in order to achieve or sustain profitability in the future. We also expect our costs to increase in future 

24

periods, which could negatively affect our future operating results if our revenue does not increase commensurately. For 
example, we intend to continue to expend significant funds to expand our sales and marketing operations, develop and enhance 
our platform, meet the increased compliance requirements associated with our operation as a public company, and expand into 
new markets. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our 
revenue enough to offset our higher operating expenses. We may incur significant losses in the future for a number of reasons, 
including the other risks described in this Annual Report on Form 10-K, and unforeseen expenses, difficulties, complications 
and delays, and other unknown events. If we are unable to achieve and sustain profitability, our stock price may significantly 
decrease.

Our future quarterly results of operations may fluctuate significantly due to a wide range of factors, which makes our 

future results difficult to predict.

Our revenue and results of operations have historically varied from period to period, and we expect they will continue to do 

so as a result of a number of factors, many of which are outside of our control, including:

•

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•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

The level of demand for our platform and our professional services;

The rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers;

Large customers failing to renew their subscriptions;

The size, timing, and terms of our subscription agreements with existing and new customers, including revenue 
recognition issues raised by multiple element arrangements;

Variations in the revenue mix of our professional services and growth rates of our cloud subscription and professional 
services offerings, including the timing of subscriptions and sales offerings that include an on-premises software 
element for which the revenue allocated to that deliverable is recognized upfront;

The timing and growth of our business, in particular through our hiring of new employees and international expansion;

The timing of our adoption of new or revised accounting pronouncements applicable to public companies and the 
impact on our results of operations;

The introduction of new products and product enhancements by existing competitors or new entrants into our market 
and changes in pricing for solutions offered by us or our competitors;

Network outages, security breaches, technical difficulties, or interruptions with our platform;

Changes in the growth rate of the markets in which we compete;

The mix of subscriptions to our platform and professional services sold during a period;

Customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our 
competitors or otherwise;

Changes in customers’ budgets;

Seasonal variations related to sales and marketing and other activities such as expenses related to our customers;

Our ability to increase, retain, and incentivize the strategic partners that market and sell our platform;

Our ability to control costs, including our operating expenses;

Our ability to hire, train, and maintain our direct sales team;

Unforeseen litigation and intellectual property infringement;

Any changes in accounting principles generally accepted in the United States, or GAAP; 

Fluctuations in our effective tax rate; and

General economic and political conditions, both domestically and internationally, as well as economic conditions 
specifically affecting industries in which our customers operate.

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Any one of these or other factors discussed elsewhere in this Annual Report on Form 10-K or the cumulative effect of 
some of these factors may result in fluctuations in our revenue and operating results, meaning quarter-to-quarter comparisons of 
our revenue, results of operations, and cash flows may not necessarily be indicative of our future performance, may cause us to 
miss our guidance or analyst expectations, and may cause our stock price to decline.

In addition, 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 and, to a lesser extent, the second 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, and often the last two weeks, of 
each quarter. This seasonality is reflected to a much lesser extent, and sometimes is not immediately apparent, in revenue due to 
the fact we recognize cloud subscription revenue over the term of the subscription agreement, which is generally one to three 
years. We expect seasonality will continue to affect our operating results in the future and may reduce our ability to predict cash 
flow and optimize the timing of our operating expenses.

We may fail to meet our publicly announced guidance or other expectations about our business and future operating 

results, which could cause our stock price to decline.

We have provided and may continue to provide guidance about our business, future operating results, and other business 

metrics. In developing this guidance, our management must make certain assumptions and judgments about our future 
performance. Some of those key assumptions relate to the impact of the COVID-19 pandemic and the associated economic 
uncertainty on our business and the timing and scope of economic recovery globally, which are inherently difficult to predict. 
Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a 
consensus about our future performance. Our business results may vary significantly from such guidance or that consensus due 
to a number of factors, many of which are outside of our control, including due to the global economic uncertainty and financial 
market conditions caused by the COVID-19 pandemic, which could adversely affect our operations and operating results. 
Furthermore, if our publicly announced guidance of future operating results fails to meet our previously announced guidance or 
the expectations of securities analysts, investors, or other interested parties, the price of our common stock would decline.

If we are unable to successfully transition to new leadership in key departments, our results could suffer.

Appian has undergone change in departments directly responsible for substantially all of Appian's revenue. While Appian 

believes its new leaders in these departments are highly qualified and will perform well in their roles, there can be no 
assurances the transition to new leadership will be executed without any disruption or effect on performance. New leadership 
requires time to become familiar with Appian's product offerings and its customer base, and such transition could lead to 
delayed implementation of strategies, revision of key practices and policies, re-training of personnel, and other disruptions.

While we will make efforts to mitigate such risk through extensive collaboration at the executive level, the effects of this 
transition could have an impact on our ability to sustain our growth in revenue or our ability to retain existing talent within the 
organization.

We rely on the performance of highly skilled personnel, including senior management and our engineering, 
professional services, sales, and technology professionals; if we are unable to retain or motivate key personnel or hire, 
retain, and motivate qualified personnel, our business would be harmed.

We believe our success has depended, and continues to depend, on the efforts and talents of our senior management team, 

particularly Matthew Calkins, our founder and Chief Executive Officer, and our highly skilled team members, including our 
sales personnel, professional services personnel, cloud engineering and support personnel, and software engineers. We do not 
maintain key man insurance on any of our executive officers or key employees. From time to time, there may be changes in our 
senior management team resulting from the termination or departure of our executive officers and key employees. Our senior 
management and key employees are employed on an at-will basis, which means they could terminate their employment with us 
at any time. On December 1, 2021, Mark Lynch, our Chief Financial Officer, notified us he plans to retire after he has 
successfully transitioned his responsibilities to his successor. We are in the process of identifying Mr. Lynch’s successor. 

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Many of our executive officers and key employees receive equity compensation as a significant portion of their overall 

compensation package. A substantial decrease in the market price of our Class A common stock would effectively reduce the 
compensation of such persons and could increase the risk they depart from our company. The loss of any of our senior 
management or key employees, particularly Mr. Calkins, could adversely affect our ability to build on the efforts they have 
undertaken and to execute our business plan, and we may not be able to find adequate replacements. We cannot ensure we will 
be able to retain the services of any members of our senior management or other key employees.

Our ability to successfully pursue our growth strategy also depends on our ability to attract, motivate, and retain our 

personnel. Competition for well-qualified employees in all aspects of our business, including sales personnel, professional 
services personnel, cloud engineering and support personnel, and software engineers, is intense. There is currently additional 
volatility in the job market known as the “great resignation,” with a record number of employees choosing alternative career 
paths or companies, or leaving the job market altogether. Our continued ability to compete effectively depends on our ability to 
attract new employees and to retain and motivate existing employees. Further, a small portion of our employees are immigrants 
to the United States or foreign nationals holding visas. If immigration to the United States is further restricted by the federal 
government, we might lose existing employees who are unable to remain in the United States and our pool of qualified 
applicants might also be diminished, thereby hampering our recruiting efforts. If we do not succeed in attracting well-qualified 
employees or retaining and motivating existing employees, our business would be adversely affected.

If we do not continue to innovate and provide a platform that is useful to our customers, we may not remain competitive, 

and our revenue and operating results could suffer.

Our success depends on continued innovation to provide features that make our platform useful for our customers, our 

ability to persuade existing customers to expand their use of our platform to additional use cases and additional applications, 
and to purchase additional software licenses to our platform. We must continue to invest significant resources in research and 
development in order to continually improve the speed and power of our platform. We may introduce significant changes to our 
platform or develop and introduce new and unproven products, including using technologies with which we have little or no 
prior development or operating experience. If we are unable to continue offering innovative solutions or if new or enhanced 
solutions fail to engage our customers, we may be unable to attract additional customers or retain our current customers, which 
may adversely affect our business, operating results, and financial condition.

We may need to reduce or change our pricing model to remain competitive.

We generally sell our software on a per-user basis or through non-user based single application licenses. We have changed 
and expect we will continue to need to change our pricing model from time to time. As competitors introduce new products that 
compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers based on our 
historical pricing. We also must determine the appropriate price to enable us to compete effectively internationally. 
Moreover, mid- to large-size enterprises may demand substantial price discounts as part of the negotiation of sales contracts. As 
a result, we may be required or choose to reduce our prices or change our pricing model, which could adversely affect our 
business, operating results, and financial condition.

Our business could be adversely affected if our customers are not satisfied with the deployment services provided by us 

or our partners.

The success of our business depends on our customers’ satisfaction with our platform, the support we provide for our 

platform, and the professional services we provide to help our customers deploy our platform. Professional services may be 
performed by our own staff, by a third party, or by a combination of the two. Our strategy is to work with third parties to 
increase the breadth, capability, and depth of capacity for delivery of these services to our customers, and third parties provide a 
significant portion of our deployment services. If a customer is not satisfied with the quality of work performed by us or a third 
party or with the type of applications delivered, we could incur additional costs to address the deficiency, which would diminish 
the profitability of the customer relationship. Further, a customer’s dissatisfaction with our services could impair our ability to 
expand the number of licenses to our software purchased by that customer or adversely affect the customer’s renewal of 
existing licenses. In addition, negative publicity related to our customer relationships, regardless of accuracy, may further 
damage our business by affecting our ability to compete for new business with actual and prospective customers.

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We are substantially dependent upon customer renewals, the addition of new customers, and the continued growth of 

our subscriptions revenue.

We derive, and expect to increasingly derive in the future, a substantial portion of our revenue from the sale of software 

subscriptions. For 2021, 2020, and 2019, approximately 71.4%, 65.2%, and 58.1%, respectively, of our total revenue was 
subscriptions revenue. The market for our platform is still evolving, and competitive dynamics may cause pricing levels to 
change as the market matures and as existing and new market participants introduce new types of solutions and different 
approaches to enable customers to address their needs. As a result, we may be forced to reduce the prices we charge for 
software and may be required to offer terms less favorable to us for new and renewing agreements.

In order for us to improve our operating results, it is important our customers renew their subscriptions with us when their 
initial term expires, as well as purchase additional subscriptions from us. In general, our customers have no renewal obligation 
after their initial term expires, and we cannot provide assurance we will be able to renew subscriptions with any of our 
customers at the same or higher contract value.

Further, while we offer access to our platform primarily through multi-year subscription agreements, some agreements may 

have shorter durations. Additionally, some of our contracts limit the amount we can increase prices from period to period or 
include pricing guarantees. If our customers do not renew their agreements, terminate their agreements, renew their agreements 
on terms less favorable to us, or fail to purchase additional software subscriptions, our revenue may decline and our operating 
results would likely be harmed as a result.

Because we generally recognize revenue from cloud subscriptions ratably over the term of the subscription agreement, 

near term changes in sales may not be reflected immediately in our operating results.

We offer our solution primarily through multi-year cloud subscription agreements and generally recognize revenue ratably 
over the related subscription period. As a result, much of the revenue we report in each quarter is derived from the recognition 
of previously unbilled or deferred contract value relating to agreements entered into during prior periods. Accordingly, a 
decline in new or renewal subscription agreements in any quarter is not likely to be reflected immediately in our revenue results 
for that quarter. Such declines, however, would negatively affect our revenue, and to a lesser extent, deferred revenue balance 
in future periods, and the effect of significant downturns in sales and market acceptance of our platform and potential changes 
in our rate of renewals may not be fully reflected in our results of operations until future periods. 

If we are not able to maintain and enhance our brand, our business and operating results may be adversely affected.

We believe developing and maintaining widespread awareness of our brand in a cost-effective manner is critical to 
achieving widespread acceptance of our platform and attracting new customers. Brand promotion activities may not generate 
customer awareness or increase revenue and, even if they do, any increase in revenue may not offset the expenses we incur in 
building our brand. If we fail to successfully promote and maintain our brand or incur substantial expenses, we may fail to 
attract or retain customers necessary to realize a sufficient return on our brand-building efforts or to achieve the widespread 
brand awareness critical for broad customer adoption of our platform.

If our platform fails to perform properly or there are defects or disruptions in the rollout of our platform updates or 

enhancements, our reputation could be adversely affected, our market share could decline, and we could be subject to 
liability claims.

Our platform is inherently complex and may contain material defects or errors. Any defects in functionality, security, or 

other conditions that cause interruptions in the availability of our platform could result in:

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Loss or delayed market acceptance and sales;

Breach of warranty claims;

Sales credits or refunds for prepaid amounts related to unused subscription services;

Loss of customers;

Diversion of development and support resources; and/or

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•

Injury to our reputation.

The costs incurred in correcting any material defects or errors might be substantial and could adversely affect our operating 

results.

Our customer agreements often provide service level commitments on a monthly basis. If we are unable to meet the stated 
service level commitments or suffer extended periods of unavailability for our platform, we may be contractually obligated to 
provide these customers with service credits or refunds for prepaid amounts, or we could face contract terminations. Our 
revenue could be significantly affected if we suffer unscheduled downtime that exceeds the allowed downtimes under our 
agreements with our customers.

Because of the large amount of data we collect and manage, it is possible hardware failures or errors in our systems could 

result in data loss or corruption or cause the information we collect to be incomplete or contain inaccuracies our customers 
regard as significant. Furthermore, the availability or performance of our platform could be adversely affected by a number of 
factors, including customers’ inability to access the internet, our customers’ increased usage of our cloud offering, the failure of 
our network or software systems, security breaches, or variability in user traffic for our services. For example, our cloud 
offering customers access our platform through their internet service providers. If a customer's service provider fails to provide 
sufficient capacity to support our platform or otherwise experiences service outages, such failure could interrupt our customers’ 
access to our platform, adversely affect their perception of our platform’s reliability, and reduce our revenue. In addition to 
potential liability, if we experience interruptions in the availability of our cloud offering, our reputation could be adversely 
affected, and we could lose customers.

We also provide frequent incremental releases of software updates and functional enhancements to our platform. Despite 
extensive pre-release testing, such new versions occasionally contain undetected errors when first introduced or released. We 
have, from time to time, found errors in our software, and new errors in our existing software may be detected in the future. 
Since our customers use our software for important aspects of their business, any errors, defects, disruptions in our platform, or 
other performance problems with our solution could hurt our reputation and may damage our customers’ businesses. If that 
occurs, our customers may delay or withhold payment to us, elect not to renew, or make service credit claims, warranty claims, 
or other claims against us, and we could lose future sales. The occurrence of any of these events could result in an increase in 
our bad debt expense, an increase in collection cycles for accounts receivable, decreased future revenue and earnings, require us 
to increase our warranty provisions, or incur the risk or expense of litigation.

We rely upon AWS to operate our cloud offering; any disruption of or interference with our use of AWS would 

adversely affect our business, results of operations, and financial condition.

We outsource substantially all of the infrastructure relating to our cloud offering to AWS, which hosts our platform on our 

customers’ behalf. Customers of our cloud offering need to be able to access our platform at any time, without interruption or 
degradation of performance, and we provide them with service level commitments with respect to uptime. AWS runs its own 
platform we access, and we are, therefore, vulnerable to service interruptions at AWS. We may experience interruptions, delays, 
and outages in service and availability from time to time as a result of problems with our AWS provided infrastructure, which 
could render our cloud offering inaccessible to customers. Additionally, AWS has suffered outages at specific customer 
locations in the past, rendering the customer unable to access our offering for periods of time. Lack of availability of our AWS 
infrastructure could be due to a number of potential causes including technical failures, natural disasters, fraud, or security 
attacks we cannot predict or prevent. Such outages could lead to the triggering of our service level agreements and the issuance 
of credits to our cloud offering customers, which may impact our operating results.

In addition, if the security of the AWS infrastructure is compromised or believed to have been compromised, our business, 

results of operations, and financial condition could be adversely affected. It is possible our customers and potential customers 
would hold us accountable for any breach of security affecting the AWS infrastructure, and we may incur significant liability 
from those customers and from third parties with respect to any breach affecting AWS systems. Because our agreement with 
AWS limits AWS’s liability for damages, we may not be able to recover a material portion of our liabilities to our customers 
and third parties from AWS. Customers and potential customers may refuse to do business with us because of the perceived or 
actual failure of our cloud offering as hosted by AWS, and our operating results could be harmed.

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Our agreement with AWS allows AWS to terminate the agreement by providing two years' prior written notice and may 
allow AWS to terminate in case of a breach of contract if such breach is uncured for 30 days or to terminate upon thirty days' 
advance written notice if AWS’s further provision of services to us becomes impractical for legal or regulatory reasons. 
Although we expect we could receive similar services from other third parties if any of our arrangements with AWS are 
terminated, we could experience interruptions on our platform and in our ability to make our platform available to customers, as 
well as delays and additional expenses in arranging alternative cloud infrastructure services.

Our growth depends in part on the success of our strategic relationships with third parties.

In order to grow our business, we anticipate we will continue to depend on relationships with strategic partners to provide 

broader customer coverage and solution delivery capabilities. Identifying partners, and negotiating and documenting 
relationships with them, requires significant time and resources. Our agreements with our strategic partners are non-
exclusive and do not prohibit them from working with our competitors or offering competing solutions. Our competitors may 
be effective in providing incentives to third parties to favor their products or services or to prevent or reduce subscriptions to 
our services. If our partners choose to place greater emphasis on products of their own or those offered by our competitors or do 
not effectively market and sell our platform, our ability to grow our business and sell software and professional services may be 
adversely affected. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our 
current and potential customers, as our partners may no longer facilitate the adoption of our platform by potential customers.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the 
marketplace or to grow our revenue could be impaired and our operating results may suffer. Even if we are successful, we 
cannot assure you these relationships will result in increased customer usage of our platform or increased revenue.

Because our long-term growth strategy involves further expansion of our sales to customers outside the United States, 

our business will be susceptible to risks associated with international operations.

A component of our growth strategy involves the further expansion of our operations and customer base internationally. In 
2021, 2020, and 2019, revenue generated from customers outside the United States was 34.0%, 33.8%, and 32.3%, respectively, 
of our total revenue. We currently operate in Canada, Switzerland, the United Kingdom, France, Germany, the Netherlands, 
Italy, Australia, Spain, Singapore, Sweden, and Japan. In the future, we may expand to other international locations. Our current 
international operations and future initiatives will involve a variety of risks, including:

•

•

Changes in a specific country’s or region’s political or economic conditions;

Unexpected changes in regulatory requirements, taxes, or trade laws;

• More stringent regulations relating to data security and the unauthorized use of, or access to, commercial and personal 

information, particularly in the European Union;

•

•

•

•

•

•

•

Differing labor regulations, especially in the European Union, where labor laws are generally more advantageous to 
employees as compared to the United States, including deemed hourly wage and overtime regulations in these 
locations;

Challenges inherent in efficiently managing an increased number of employees over large geographic distances, 
including the need to implement appropriate systems, policies, benefits, and compliance programs;

Difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, 
alternative dispute systems, and regulatory systems;

Increased travel, real estate, infrastructure, and legal compliance costs associated with international operations;

Currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of 
entering into hedging transactions if we choose to do so in the future;

Limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our 
operations in other countries;

Laws and business practices favoring local competitors or general preferences for local vendors;

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•

•

•

•

Limited or insufficient levels of protection of our corporate proprietary information and assets, including intellectual 
property and customer information and records;

Political instability or terrorist activities;

Exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt 
Practices Act and similar laws and regulations in other jurisdictions; and

Adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

Our limited experience in operating our business internationally increases the risk any potential future expansion efforts we 
may undertake will not be successful. If we invest substantial time and resources to expand our international operations and are 
unable to do so successfully and in a timely manner, our business and operating results will suffer.

We may require additional capital to support business growth, and this capital might not be available on acceptable 

terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to 
business challenges, including the need to develop new features or enhance our platform, improve our operating infrastructure, 
or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to 
secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our 
existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, 
and privileges superior to those of holders of our Class A common stock. Our loan and security agreement with Silicon Valley 
Bank for our current revolving line of credit includes restrictive covenants relating to our capital raising activities and other 
financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business 
opportunities, including potential acquisitions, and any debt financing we secure in the future could include similar restrictive 
covenants. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain 
adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business 
growth and to respond to business challenges could be significantly impaired, and our business may be adversely affected.

We may not achieve market acceptance of our pre-built solutions, which may adversely impact our financial results.

We have begun the process of developing and releasing pre-built solutions on our software platform in order to maximize 

the value of our platform to our customers and to reduce the sales cycles associated with software sales to new and existing 
customers. Each solution requires an investment in development, marketing, sales, support, finance, and legal resources to bring 
the solution to market. Although we make efforts to identify the solutions that will receive favorable market acceptance, there 
can be no guarantee any solution will become the source of material revenue, and the investment in the solution may not 
produce a positive return. If unsuccessful, such solutions may adversely impact our financial results to the extent our expenses 
increase without any increase in sales or to the extent that attempted sales of such solutions reduce sales of our existing 
platform.

If currency exchange rates fluctuate substantially in the future, our financial results, which are reported in U.S. dollars, 

could be adversely affected.

Generally, contracts executed by our foreign operations are denominated in the currency of that country or region and a 
portion of our revenue is therefore subject to foreign currency risks. As we continue to expand our international operations, we 
become more exposed to the effects of fluctuations in currency exchange rates. A strengthening of the U.S. dollar could reduce 
the dollar value of revenue generated by our customers outside of the United States, adversely affecting our business operations 
and financial results. We incur expenses for employee compensation and other operating expenses at our non-U.S. locations in 
the local currency, and fluctuations in the exchange rates between the U.S. dollar and other currencies could result in the dollar 
equivalent of such expenses being higher. This could have a negative impact on our reported operating results. To date, we have 
not engaged in any hedging strategies, and any such strategies such as forward contracts, options, and foreign exchange swaps 
related to transaction exposures we may implement to mitigate this risk may not eliminate our exposure to foreign exchange 
fluctuations.

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We employ third-party licensed software for use in or with our software, and the inability to maintain these licenses or 
errors in the software we license could result in increased costs or reduced service levels, which would adversely affect our 
business.

Our software incorporates certain third-party software obtained under licenses from other companies, including database 
software from Kx. We anticipate we will continue to rely on such third-party software and development tools from third parties 
in the future. Although we believe there are commercially reasonable alternatives to the third-party software we currently 
license, including open source software, this may not always be the case, or it may be difficult or costly to migrate to other 
third-party software. Our use of additional or alternative third-party software would require us to enter into license agreements 
with third parties. In addition, integration of the third-party software used in our software with new third-party software may 
require significant work and require substantial investment of our time and resources. Also, any undetected errors or defects in 
third-party software could prevent the deployment or impair the functionality of our software, delay new updates or 
enhancements to our platform, or result in a failure of our platform, injuring our reputation.

If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use in 

their businesses, our revenue will decline.

The functionality and attractiveness of our platform depends, in part, on our ability to integrate our platform with third-
party applications and platforms, including customer relationship management, human resources information, accounting, and 
enterprise resource planning systems our customers use and from which they obtain data. Third-party providers of applications 
and APIs may change the features of their applications and platforms, restrict our access to their applications and platforms, or 
alter the terms governing use of their applications and APIs and access to those applications and platforms in an adverse 
manner. Such changes could functionally limit or terminate our ability to use these third-party applications and platforms in 
conjunction with our platform, which could negatively impact our offerings and harm our business. If we fail to integrate our 
software with new third-party applications and platforms our customers use, we may not be able to offer the functionality our 
customers need, which would negatively impact our ability to generate revenue and adversely impact our business.

Catastrophic events may disrupt our business.

Our corporate headquarters are located in northern Virginia. The area around Washington, D.C. could be subjected to 

domestic or foreign terrorist attacks. Additionally, we rely on our network and third-party infrastructure and enterprise 
applications, internal technology systems, and our website for our development, marketing, operational support, hosted 
services, and sales activities. In the event of a major hurricane, earthquake, or catastrophic event such as fire, power loss, 
telecommunications failure, cyberattack, outbreak of regional or global pandemic diseases, war, or terrorist attack, we may be 
unable to continue our operations and may endure system interruptions, reputational harm, delays in our software development, 
lengthy interruptions in our services, breaches of data security, and loss of critical data, all of which could have an adverse 
effect on our future operating results. For example, the ongoing coronavirus outbreak at the beginning of 2020 has resulted in 
increased travel restrictions and extended shutdown of certain businesses in the region. At this point, the extent to which the 
coronavirus may impact our operating results is uncertain.

Adverse economic conditions may negatively impact our business. 

Our business depends on the overall demand for enterprise software and on the economic health of our current and 

prospective customers. The economies of countries in Europe have been experiencing weakness associated with high sovereign 
debt levels, weakness in the banking sector, and uncertainties surrounding the future of the Euro zone and the United 
Kingdom's relationship with the European Union. We have operations in the United Kingdom and in Europe and current and 
potential new customers in Europe. If economic conditions in Europe and other key markets for our platform continue to remain 
uncertain or deteriorate further, many customers may delay or reduce their information technology spending. This could result 
in reductions in sales of our platform, a decrease in our renewal rate, longer sales cycles, reductions in subscription duration and 
value, slower adoption of new technologies, and increased price competition. Any of these events would likely have an adverse 
effect on our business, operating results, and financial position.

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Future acquisitions could disrupt our business and adversely affect our business operations and financial results.

We may choose to expand by acquiring businesses or technologies. For instance, in August 2021, we acquired Lana Labs 
GmbH, or Lana Labs, a developer of process mining software, which we are continuing to integrate along with their personnel. 
Our ability as an organization to successfully acquire and integrate technologies or businesses is unproven. Acquisitions involve 
many risks, including the following:

•

An acquisition may negatively affect our financial results because it may require us to incur charges or assume 
substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may 
expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not 
generate sufficient financial return to offset additional costs and expenses related to the acquisition;

• We may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, 

personnel, or operations of any company we acquire, particularly if key personnel of the acquired company decide not 
to work for us;

•

•

An acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our 
management;

An acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to 
customer uncertainty about continuity and effectiveness of service from either company;

• We may encounter difficulties in successfully selling, or may be unable to successfully sell, any acquired solutions;

•

•

•

An acquisition may involve the entry into geographic or business markets in which we have little or no prior 
experience or where competitors have stronger market positions;

Our use of cash to pay for an acquisition would limit other potential uses for our cash; and

If we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our 
business as well as financial maintenance covenants.

The occurrence of any of these risks could have a material adverse effect on our business operations and financial results. 

In addition, we may only be able to conduct limited due diligence on an acquired company’s operations. Following an 
acquisition, we may be subject to unforeseen liabilities arising from an acquired company’s past or present operations, and 
these liabilities may be greater than the warranty and indemnity limitations we negotiate. Any unforeseen liability greater than 
these warranty and indemnity limitations could have a negative impact on our financial condition.

Risks Related to Regulatory Compliance and Governmental Matters

Failure to comply with governmental laws and regulations could harm our business.

Our business is subject to regulation by various federal, state, local, and foreign governments. In certain jurisdictions, these 

regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable regulations or 
requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of 
profits, fines, damages, civil and criminal penalties, injunctions, or other collateral consequences. If any governmental sanctions 
are imposed or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial 
condition could be materially adversely affected. In addition, responding to any action will likely result in a significant 
diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions 
could harm our business, reputation, results of operations, and financial condition.

Because our software could be used to collect and store personal information, domestic and international privacy and 

security concerns could result in additional costs and liabilities to us or inhibit sales of our software and subject us to 
complex and evolving federal, state, and foreign laws and regulations regarding privacy, data protection, and other related 
matters.

Personal privacy has become a significant issue in the United States and in many other countries where we offer our 
software for sale. The regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain 

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for the foreseeable future. Many federal, state, and foreign government bodies and agencies have adopted or are considering 
adopting laws and regulations regarding the collection, use, storage, and disclosure of personal information and breach 
notification procedures. Interpretation of these laws, rules, and regulations and their application to our software and 
professional services in the United States and foreign jurisdictions is ongoing and cannot be fully determined at this time.

In the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, 

the Electronic Communications Privacy Act, Computer Fraud and Abuse Act, the Health Insurance Portability and 
Accountability Act of 1996, the Gramm Leach Bliley Act, the California Consumer Privacy Act, or the CCPA, and other state 
laws relating to privacy and data security. The CCPA, which became effective on January 1, 2020, drastically changes the 
ability for individuals to control the use of their personal data. It contains detailed requirements regarding collecting and 
processing personal information, imposes certain limitations on how such information may be used, and provides rights to 
consumers that have never before been available, all of which may be imposed on us by our customers. This could increase our 
costs of doing business. Further, the California Privacy Rights Act, or CPRA, once it becomes effective, will significantly 
modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information. The CPRA 
also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. New 
legislation proposed or enacted in various other states will continue to shape the data privacy environment nationally. For 
example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which 
differ from the CPRA and become effective in 2023. Some of these state laws may be more stringent or broader in scope, or 
offer greater individual rights, with respect to confidential, sensitive, and personal information than federal, international, or 
other state laws, and such laws may differ from each other, which may complicate compliance efforts.

Internationally, the European Union adopted a comprehensive general data protection regulation, or the GDPR, which 
contains numerous requirements and changes related to rights of data subjects in their personal data, including more robust 
obligations on data processors and heavier documentation requirements for data protection compliance programs by companies. 
In addition, absent appropriate safeguards or other circumstances, the EU GDPR generally restricts the transfer of personal data 
to countries outside of the European Economic Area, or EEA, such as the United States, which the European Commission does 
not consider to provide an adequate level of data privacy and security. The European Commission released a set of “Standard 
Contractual Clauses” in June 2021 that are designed to be a valid mechanism by which entities can transfer personal data out of 
the EEA to jurisdictions that the European Commission has not found to provide an adequate level of protection. Currently, 
these new Standard Contractual Clauses are a valid mechanism to transfer personal data outside of the EEA. The new Standard 
Contractual Clauses, however, require parties that rely upon that legal mechanism to comply with additional obligations, such 
as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-
issue personal data. Moreover, due to potential legal challenges, there exists some uncertainty regarding whether the new 
Standard Contractual Clauses will remain a valid mechanism for transfers of personal data out of the EEA.

Virtually every jurisdiction in which we operate has established its own data security and privacy legal framework with 
which we or our customers must comply. Since we are agnostic as to the data uploaded into our cloud offering by our cloud 
offering customers or processed by our platform in on-premises deployments, we may be hosting or otherwise processing 
substantial amounts of individually identifiable health information and other types of personally identifiable information. The 
effects of any of this legislation could be potentially far-reaching and may require us to modify our data management practices 
and to incur substantial expense in an effort to comply.

In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory 
standards that may apply to us. Because the interpretation and application of privacy and data protection laws are still uncertain, 
it is possible these laws and other actual or alleged legal obligations such as contractual or self-regulatory obligations may be 
interpreted and applied in a manner inconsistent with our existing data management practices or the features of our platform. If 
so, in addition to the possibility of fines, lawsuits, and other claims, we could be required to fundamentally change our business 
activities and practices or modify our software, which could have an adverse effect on our business. Any inability to adequately 
address privacy or cybersecurity concerns, even if unfounded, or comply with applicable privacy or data protection laws, 
regulations, and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely 
affect our business.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies applicable to 

the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our platform. Privacy 

34

concerns, whether valid or not valid, may inhibit market adoption of our platform, particularly in certain industries and foreign 
countries.

If our platform fails to function in a manner that allows our customers to operate in compliance with regulations and/or 

industry standards, our revenue and operating results could be harmed.

Certain of our customers use our platform to create applications that ensure secure communications given the nature of the 

content being distributed and associated applicable regulatory requirements. Governmental and other customers may also 
require our platform to comply with certain privacy, security, and other certifications and standards. Our cloud platform holds 
various security certifications from government agencies and industry organizations, including the Federal Risk and 
Authorization Management Program, or FedRAMP, compliance and HITRUST certification. It also meets the ISO 27001, 
Payment Card Industry Data Security Standard, or PCI DSS, and the various United States Health Insurance Portability and 
Accountability Act, or HIPAA, standards. Governments and industry organizations may also adopt new laws, regulations, or 
requirements or make changes to existing laws or regulations that could impact the demand for, or value of, our applications 
such as the European Banking Authority's regulations updated in September 2019 and the CCPA that took effect January 1, 
2020. If we fail to maintain our current security certifications and/or to continue to meet security standards, or if we are unable 
to adapt our platform to changing legal and regulatory standards or other requirements in a timely manner, our customers may 
lose confidence in our platform, and our business could be negatively impacted.

Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the 

demand for our platform and could have a negative impact on our business.

The future success of our business, and particularly our cloud offering, depends upon the continued use of the internet as a 

primary medium for commerce, communication, and business applications. Federal, state, or foreign government bodies or 
agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet as a 
commercial medium. Changes in these laws or regulations could require us to modify our platform in order to comply with 
these changes. In addition, government agencies or private organizations may begin to impose taxes, fees, or other charges for 
accessing the internet or commerce conducted via the internet. These laws or charges could limit the growth of internet-related 
commerce or communications generally, resulting in reductions in the demand for internet-based solutions such as ours.

In addition, the use of the internet as a business tool could be adversely affected due to delays in the development or 
adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease of use, 
accessibility, and quality of service. The performance of the internet and its acceptance as a business tool have been adversely 
affected by viruses, worms, and similar malicious programs, along with distributed denial of service, or DDoS, and similar 
attacks. As a result, the internet has experienced a variety of outages and other delays as a result of such damage to or attacks on 
portions of its infrastructure. If the use of the internet is adversely affected by these issues, demand for our platform could 
suffer.

We are subject to anti-corruption laws with respect to our domestic and international operations, and non-

compliance with such laws can subject us to criminal and/or civil liability and materially harm our business.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery 
statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the United Kingdom Bribery Act 2010, and other anti-corruption laws 
in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit our company from 
authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private 
sector. We use third-party law firms, accountants, and other representatives for regulatory compliance, sales, and other purposes 
in several countries. We can be held liable for the corrupt or other illegal activities of these third-party representatives, our 
employees, contractors, and other agents, even if we do not explicitly authorize such activities. In addition, although we have 
implemented policies and procedures to ensure compliance with anti-corruption laws, there can be no assurance all of our 
employees, representatives, contractors, or agents will comply with these laws at all times. 

Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, 
prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or 
injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, 
adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or 

35

other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of 
operations, and financial condition could be materially harmed. In addition, responding to any action will likely result in a 
materially significant diversion of management’s attention and resources and significant defense costs and other professional 
fees. Enforcement actions and sanctions could further harm our business, results of operations, and financial condition. 
Moreover, as an issuer of securities, we also are subject to the accounting and internal controls provisions of the FCPA. These 
provisions require us to maintain accurate books and records and a system of internal controls sufficient to detect and prevent 
corrupt conduct. Failure to abide by these provisions may have an adverse effect on our business, operations, or financial 
condition.

We are subject to governmental export and import controls and economic and trade sanctions that could impair our 
ability to conduct business in international markets and subject us to liability if we are not in compliance with applicable 
laws and regulations.

The United States and other countries maintain and administer export and import laws and regulations, including various 
economic and trade sanctions including those administered by the Office of Foreign Assets Control, or OFAC, which apply to 
our business. We are required to comply with these laws and regulations. If we fail to comply with such laws and regulations, 
we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export 
or import privileges, fines which may be imposed on us and responsible employees or managers, and, in extreme cases, the 
incarceration of responsible employees or managers.

Changes in our platform, or changes in applicable export or import laws and regulations, may create delays in the 

introduction and sale of our platform in international markets or, in some cases, prevent the export or import of our platform to 
certain countries, governments, or persons altogether. Any change in export or import laws and regulations or economic or 
trade sanctions, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, 
persons, or technologies targeted by such laws and regulations could also result in decreased use of our platform or in our 
decreased ability to export or sell our platform to existing or potential customers. Any decreased use of our services or 
limitation on our ability to export or sell our services would likely adversely affect our business, financial condition, and results 
of operations.

We incorporate encryption technology into certain of our products. Encryption products may be exported outside of the 

United States only with the required export authorization, including by license, license exception, or other appropriate 
government authorization. Obtaining the necessary export license or other authorization for a particular sale may be time-
consuming and may result in the delay or loss of sales opportunities. In addition, various countries regulate the import of certain 
encryption technology, including import permitting and licensing requirements, and have enacted laws that could limit our 
ability to distribute our products or could limit our customers’ ability to implement our products in those countries. Although 
we take precautions to prevent our products from being provided in violation of such laws, our products may have been in the 
past, and could in the future, be provided inadvertently in violation of such laws, despite the precautions we take. Governmental 
regulation of encryption technology and regulation of imports or exports, or our failure to obtain required import or export 
approval for our products, could harm our international sales and adversely affect our revenue.

Moreover, U.S. export control laws and economic sanctions programs prohibit the provision of services to countries, 
governments, and persons subject to U.S. economic embargoes and trade sanctions. Even though we take precautions to prevent 
our platform from being used by U.S. sanctions targets, our platform could be used by a sanctioned person or in an embargoed 
country despite such precautions. Any such shipment could have negative consequences, including government investigations, 
penalties, and reputational harm.

Risks Related to Our Intellectual Property

Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business 

and operating results.

Our success and ability to compete depend in part on our ability to protect our proprietary technology and intellectual 

property. To safeguard these rights, we rely on a combination of patent, trademark, copyright, and trade secret laws and 
contractual protections in the United States and other jurisdictions, all of which provide only limited protection and may not 
now or in the future provide us with a competitive advantage.

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As of December 31, 2021, we had six issued patents, two allowed patents, and four pending patent applications related to 

our platform and its technology. We have registered the “Appian” name and logo in the United States and certain other 
countries. We have registrations and/or pending applications for additional marks in the United States. We cannot provide 
assurance that any current or future applications for registrations for patent or trademark applications will result in the grant of 
any valid, enforceable intellectual property rights. Further, we cannot provide assurance that any granted patent or trademark 
will provide the protection we seek, will be valid if challenged, or will be sufficiently broad in actions against alleged 
infringers. Moreover, any of our granted intellectual property rights may be rendered invalid by future changes in the law, 
defects in our prosecution processes, or preexisting technology, rights, or marks. 

In order to protect our unpatented proprietary technologies and processes, we rely on trade secret laws and confidentiality 

and invention assignment agreements with our employees, consultants, strategic partners, vendors, and others. Despite our 
efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, copy, 
reverse engineer, or otherwise obtain and use them. In addition, others may independently discover our trade secrets, in which 
case we would not be able to assert trade secret rights or develop similar technologies and processes. Further, the contractual 
provisions we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property 
rights and may not provide an adequate remedy in the event of any such unauthorized use or disclosure. 

Policing unauthorized use of our technologies, trade secrets, and intellectual property is difficult, expensive, and time-
consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in 
the United States and where mechanisms for enforcement of intellectual property rights may be weak. To the extent we expand 
our activities outside of the United States, our exposure to unauthorized copying and use of our platform and proprietary 
information may increase. We may be unable to determine the extent of any unauthorized use or infringement of our platform, 
technologies, or intellectual property rights.

There can be no assurance the steps we take will be adequate to protect our proprietary technology and intellectual 
property, that others will not develop or patent similar or superior technologies, products or services, or that our trademarks, 
patents, and other intellectual property will not be challenged, invalidated, or circumvented by others. Furthermore, effective 
trademark, patent, copyright, and trade secret protection may not be available in every country in which our software is 
available or where we have employees or independent contractors. 

In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect 

these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and 
distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our 
efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the 
validity and enforceability of our intellectual property rights. Our failure to secure, protect, and enforce our intellectual property 
rights could seriously adversely affect our brand and impact our business.

We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could 

require us to pay significant damages, and could limit our ability to use certain technologies.

Companies in the software and technology industries, including some of our current and potential competitors, own 

significant numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations 
of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to 
dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought 
against them. The litigation may involve patent holding companies or other adverse patent owners that have no relevant product 
revenue and against which our patents may therefore provide little or no deterrence. In the past, we have been subject to 
allegations of patent infringement that were unsuccessful, and we may in the future be subject to claims we have 
misappropriated, misused, or infringed other parties’ intellectual property rights, and, to the extent we gain greater market 
visibility or face increasing competition, we face a higher risk of being the subject of intellectual property infringement claims, 
which is not uncommon with respect to enterprise software companies. We also generally grant our customers ownership of any 
custom applications we develop for them, subject to our continued ownership of our pre-existing intellectual property rights 
and, in the past, a customer for whom we have developed custom applications has incorrectly alleged applications we have 
independently developed infringed the customer’s intellectual property rights. In addition, we have in the past, and may in the 
future, be subject to claims that our employees, contractors, or we ourselves have inadvertently or otherwise used or disclosed 

37

trade secrets or other proprietary information of our competitors or other parties. To the extent intellectual property claims are 
made against our customers based on their usage of our technology, we have certain obligations to indemnify and defend such 
customers from those claims. The term of our contractual indemnity provisions often survives termination or expiration of the 
applicable agreement. Large indemnity payments, defense costs, or damage claims from contractual breach could harm our 
business, results of operations, and financial condition.

There may be third-party intellectual property rights, including issued or pending patents that cover significant aspects of 
our technologies or business methods. Any intellectual property claims, with or without merit, could be very time-consuming, 
expensive to settle or litigate, divert our management’s attention and other resources, and result in adverse publicity. These 
claims could also subject us to making substantial payments for legal fees, settlement payments, and other costs or damages, 
potentially including treble damages if we are found to have willfully infringed patents or copyrights. These claims could also 
result in our having to stop making, selling, offering for sale, or using technology found to be in violation of a third party’s 
rights. We might be required to seek a license for the third-party intellectual property rights, which may not be available on 
reasonable terms or at all. Moreover, to the extent we only have a license to any intellectual property used in our platform, there 
may be no guarantee of continued access to such intellectual property, including on reasonable terms. As a result, we may be 
required to develop alternative non-infringing technology, which could require significant effort and expense. If a third party is 
able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or 
develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software or cease 
business activities covered by such intellectual property and may be unable to compete effectively. Any of these results would 
adversely affect our business, results of operations, financial condition, and cash flows.

Portions of our platform utilize open source software, and any failure to comply with the terms of one or more of these 

open source licenses could negatively affect our business.

Our software contains software licensed to us by third parties under so-called “open source” licenses, including the GNU 

Lesser General Public License, the BSD License, and others. From time to time, there have been claims against companies that 
distribute or use open source software in their products and services, asserting such open source software infringes the 
claimants’ intellectual property rights. We could be subject to suits by parties claiming what we believe to be licensed open 
source software infringes their intellectual property rights. Use and distribution of open source software may entail greater risks 
than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual 
protections regarding infringement claims or the quality of the code. In addition, certain open source licenses require source 
code for software programs subject to the license be made available to the public and that any modifications or derivative works 
to such open source software continue to be licensed under the same terms.

Although we monitor our use of open source software in an effort both to comply with the terms of the applicable open 
source licenses and to avoid subjecting our software to conditions we do not intend, the terms of many open source licenses 
have not been interpreted by U.S. courts, and there is a risk these licenses could be construed in a way that could impose 
unanticipated conditions or restrictions on our ability to commercialize our platform. By the terms of certain open source 
licenses, we could be required to release the source code of our software and to make our software available under open source 
licenses, if we combine or distribute our software with open source software in a certain manner. In the event portions of our 
software are determined to be subject to an open source license, we could be required to publicly release the affected portions of 
our source code, re-engineer all, or a portion of, that software or otherwise be limited in the licensing of our software, each of 
which could reduce or eliminate the value of our platform. Many of the risks associated with usage of open source software 
cannot be eliminated and could negatively affect our business, results of operations, and financial condition.

Risks Related to Tax and Accounting Matters

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations 

could be adversely affected.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates 
and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our 
estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, as 
provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this 
Annual Report on Form 10-K. The results of these estimates form the basis for making judgments about the carrying values of 

38

assets, liabilities, and equity as well as the amount of revenue and expenses. Significant assumptions and estimates used in 
preparing our consolidated financial statements include those related to revenue recognition, income taxes and the related 
valuation allowance, stock-based compensation, impairment of goodwill and long-lived assets, and business combinations. Our 
results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our 
assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, 
resulting in a decline in the trading price of our Class A common stock.

Our operating results may be negatively affected by additional tax liabilities.

We currently collect and remit sales and use, value added, and other transaction taxes in certain of the jurisdictions where 
we do business based on our assessment of whether tax is owed by us in such jurisdictions. However, in some jurisdictions in 
which we do business, we do not believe we owe such taxes, and therefore we currently do not collect and remit such taxes or 
record contingent tax liabilities in those jurisdictions. Further, due to uncertainty in the application and interpretation of 
applicable tax laws in various jurisdictions, we may be exposed to sales and use, value added, or other transaction tax liability. 
A successful assertion that we are required to pay additional taxes in connection with sales of our platform, or the imposition of 
new laws or regulations requiring the payment of additional taxes, would create increased costs and administrative burdens for 
us. If we are subject to additional taxes and determine to offset such increased costs by collecting and remitting sales taxes from 
our customers, or otherwise passing those costs through to our customers, companies may be discouraged from using our 
platform. Any increased tax burden may decrease our ability or willingness to compete in relatively burdensome tax 
jurisdictions, result in substantial tax liabilities related to past sales, or otherwise harm our business and operating results.

In addition, as a multinational organization, we may be subject to taxation in several jurisdictions around the world with 
increasingly complex tax laws and the amount of taxes we pay in these jurisdictions could increase substantially as a result of 
changes in the applicable tax principles, including increased tax rates, new tax laws, or revised interpretations of existing tax 
laws and precedents. Furthermore, the authorities in these jurisdictions could review our tax returns and impose additional tax, 
interest, and penalties, and the authorities could claim various withholding requirements apply to us or our subsidiaries or assert 
benefits of tax treaties are not available to us or our subsidiaries, any of which could have a material impact on us and the 
results of our operations.

Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2021, we had gross U.S. federal and state net operating loss carryforwards, or NOLs, of $239.9 million 

and $249.8 million, respectively, available to offset future taxable income. NOLs generated in tax years ended on or prior to 
December 31, 2017 will substantially expire by 2037 if unused. As a result of certain provisions in the Tax Cuts and Jobs Act of 
2017, or the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, federal NOLs 
generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but, in the case of tax years 
beginning after 2020, may only be used to offset 80% of our taxable income annually. Under the provisions of the Internal 
Revenue Code of 1986, as amended, or the Internal Revenue Code, substantial changes in our ownership may limit the amount 
of pre-change NOLs that can be utilized annually in the future to offset taxable income. Section 382 of the Internal Revenue 
Code imposes limitations on a company’s ability to use NOLs if a company experiences a more-than-50-percent ownership 
change over a three-year testing period. Based upon our analysis as of December 31, 2021, we have determined we do not 
expect these limitations to impair our ability to use our NOLs prior to expiration. However, if changes in our ownership occur 
in the future, our ability to use our NOLs may be further limited. For these reasons, we may not be able to utilize a material 
portion of the NOLs, even if we achieve profitability.

As of December 31, 2021, we also had gross foreign NOLs of $126.6 million, primarily at our Swiss subsidiary, Appian 
Software International. These NOLs will begin to expire in 2022 to 2029, if unused. If we are limited in our ability to use our 
NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs. 
This could adversely affect our operating results and the market price of our Class A common stock.

Forecasting our estimated annual effective tax rate for financial accounting purposes is complex and subject to 

uncertainty, and there may be material differences between our forecasted and actual tax rates.

Forecasts of our income tax position and effective tax rate for financial accounting purposes are complex and subject to 
uncertainty because our income tax position for each year combines the effects of a mix of profits earned and losses incurred by 

39

us in various tax jurisdictions with a broad range of income tax rates, as well as changes in the valuation of deferred tax assets 
and liabilities, the impact of various accounting rules and changes to these rules and tax laws, the results of examinations by 
various tax authorities, and the impact of any acquisition, business combination, or other reorganization or financing 
transaction. To forecast our global tax rate, we estimate our pre-tax profits and losses by jurisdiction and forecast our tax 
expense by jurisdiction. If the mix of profits and losses, our ability to use tax credits, or effective tax rates by jurisdiction is 
different than those estimated, our actual tax rate could be materially different than forecasted, which could have a material 
impact on our results of business, financial condition, and results of operations.

We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any 
failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as 
a result, the value of our Class A common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, to furnish a report by management on, 

among other things, the effectiveness of our internal control over financial reporting on an annual basis. This assessment 
includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. 

During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our 
internal control over financial reporting, we will be unable to assert our internal control over financial reporting is effective. 
While we have established certain procedures and controls over our financial reporting processes, we cannot provide assurance 
these efforts will prevent restatements of our financial statements in the future. Our independent registered public accounting 
firm is also required, pursuant to Section 404, to attest to, and report on, management's assessment of our internal control over 
financial reporting, which report is included elsewhere in this Annual Report on Form 10-K. This assessment is required to 
include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. For 
future reporting periods, our independent registered public accounting firm may issue a report that is adverse in the event it is 
not satisfied with the level at which our controls are documented, designed, or operating. We may not be able to remediate any 
future material weaknesses or to complete our evaluation, testing, and any required remediation in a timely fashion.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our 

financial condition or results of operations. If we are unable to conclude our internal control over financial reporting is 
effective, or if our independent registered public accounting firm determines we have a material weakness or significant 
deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness 
of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or 
investigations by the Nasdaq Stock Market, the SEC, or other regulatory authorities. Failure to remedy any material weakness 
in our internal control over financial reporting, or to implement or maintain other effective control systems required of public 
companies, could also restrict our future access to the capital markets.

Risks Related to Our Class A Common Stock

The dual class structure of our common stock and the existing ownership of capital stock by Matthew Calkins, our 
founder and Chief Executive Officer, has the effect of concentrating voting control with Mr. Calkins for the foreseeable 
future, which will limit your ability to influence corporate matters.

Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. Given the 
greater number of votes per share attributed to our Class B common stock, our Class B stockholders collectively beneficially 
owned shares representing approximately 89% of the voting power of our outstanding capital stock as of December 31, 2021. 
Further, Mr. Calkins, our founder and Chief Executive Officer, together with his affiliates, collectively beneficially owned 
shares representing approximately 77% of the voting power of our outstanding capital stock as of December 31, 2021. 
Consequently, Mr. Calkins, together with his affiliates, is able to control a majority of the voting power even if their stock 
holdings represent as few as approximately 25% of the outstanding number of shares of our common stock. This concentrated 
control will limit your ability to influence corporate matters for the foreseeable future. For example, Mr. Calkins will be able to 
control elections of directors, amendments of our certificate of incorporation or bylaws, increases to the number of shares 
available for issuance under our equity incentive plans or adoption of new equity incentive plans, and approval of any merger or 
sale of assets for the foreseeable future. This concentrated control could also discourage a potential investor from acquiring our 
Class A common stock due to the limited voting power of such stock relative to the Class B common stock and might harm the 
market price of our Class A common stock. In addition, Mr. Calkins has the ability to control the management and major 

40

strategic investments of our company as a result of his position as our Chief Executive Officer and his ability to control the 
election or replacement of our directors. As a board member and officer, Mr. Calkins owes a fiduciary duty to our stockholders 
and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. However, as a 
stockholder, even a controlling stockholder, Mr. Calkins is entitled to vote his shares, and shares over which he has voting 
control, in his own interests, which may not always be in the interests of our stockholders generally.

Future transfers by Mr. Calkins and other holders of Class B common stock will generally result in those shares converting 
on a 1:1 basis to Class A common stock, which will have the effect, over time, of increasing the relative voting power of those 
holders of Class B common stock who retain their shares in the long-term.

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your 

investment will depend on appreciation in the price of our Class A common stock.

We have never declared or paid any cash dividends on our common stock, and we do not intend to pay any cash dividends 
in the foreseeable future. Although we paid a cash dividend in connection with the conversion of our Series A preferred stock to 
Class B common stock immediately prior to the closing of the IPO, which was agreed to at the time of the original issuance of 
the Series A preferred stock, we anticipate we will retain all of our future earnings for use in the development of our business 
and for general corporate purposes. Additionally, our ability to pay dividends on our common stock is limited by restrictions 
under the terms of our loan and security agreement with Silicon Valley Bank. Any determination to pay dividends in the future 
will be at the discretion of our Board of Directors. Accordingly, investors must rely on sales of their Class A common stock 
after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more 
difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our 
Class A common stock.

In addition to the effects of our dual class structure, provisions in our amended and restated certificate of incorporation and 
amended and restated bylaws may have the effect of delaying or preventing a change in control or changes in our management. 
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that may frustrate or 
prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for 
stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our 
management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the 
Delaware General Corporation Law, which generally prohibit a Delaware corporation from engaging in any of a broad range of 
business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder 
became an “interested” stockholder. Any of the foregoing provisions could limit the price investors might be willing to pay in 
the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing 
the likelihood a stockholder would receive a premium for its shares of our Class A common stock in an acquisition.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the 
exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to 
obtain a favorable judicial forum for disputes with us and limit the market price of our Class A common stock.

Pursuant to our amended and restated certificate of incorporation, unless we consent in writing to the selection of an 
alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative 
action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our 
directors, officers, or other employees to us or our stockholders, (3) any action asserting a claim arising pursuant to any 
provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and 
restated bylaws, or (4) any action asserting a claim governed by the internal affairs doctrine. Our amended and restated 
certificate of incorporation also provides the federal district courts of the United States of America will be the exclusive forum 
for resolving any complaint asserting a cause of action arising under the Securities Act. Our amended and restated certificate of 
incorporation further provides any person or entity purchasing or otherwise acquiring any interest in shares of our Class A 
common stock is deemed to have notice of and consented to the foregoing provisions. The forum selection clause in our 
amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for 
disputes with us and limit the market price of our Class A common stock.

41

GENERAL RISK FACTORS

The effects of national and global epidemics, including the ongoing COVID-19 pandemic, could have an adverse impact 

on our business, operations, and the markets and communities in which we operate.

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. Our business and 

operations could be adversely affected by national and global epidemics, including the ongoing COVID-19 pandemic, including 
the emergence of new variant strains, impacting the markets and communities in which we operate.

In response to the COVID-19 pandemic, many state, local, and foreign governments have put in place, and others in the 
future may put in place, quarantines, executive orders, shelter-in-place orders, and similar government orders and restrictions in 
order to control the spread of the disease. Such orders or restrictions, or the perception that such orders or restrictions could 
occur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, and travel 
restrictions, among other effects that could negatively impact productivity and disrupt our operations. For example, we have 
implemented a flexible work-from-home policy for employees, and we may take further actions that alter our operations as may 
be required by federal, state, or local authorities or which we determine are in the best interests of our employees and 
stockholders.

In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in 

particular may be difficult to assess or predict, the pandemic has resulted in, and may continue to result in, significant 
disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our 
liquidity. The COVID-19 pandemic also could reduce the demand for our customers’ products and services, which could 
negatively impact our customers’ willingness to renew or enter into contracts with us or our ability to collect accounts 
receivable on a timely basis, which, if significant, could materially and adversely affect our business, results of operations, and 
financial condition.

The global pandemic of COVID-19 continues to rapidly evolve, and we will continue to monitor the COVID-19 situation 

closely. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. 
We do not yet know the full extent of potential delays or impacts on our business, operations, or the global economy as a whole, 
which makes our future results difficult to predict. In addition, to the extent the ongoing COVID-19 pandemic adversely affects 
our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties 
described herein.

Unfavorable conditions in the global economy or the vertical markets we serve could limit our ability to grow our 

business and negatively affect our operating results.

General worldwide economic conditions have experienced significant instability due to the global economic uncertainty 
and financial market conditions caused by the COVID-19 pandemic. These conditions make it extremely difficult for customers 
and us to accurately forecast and plan future business activities and could cause customers to reduce or delay their software 
spending. For example, we believe there could be some short-term impact from the COVID-19 pandemic on spending by our 
customers. At this time, the potential impact on customer spend from the COVID-19 pandemic is difficult to predict and, 
therefore, it is not possible to fully determine the impact on our future results. Historically, economic downturns have resulted 
in overall reductions in software spending. If macroeconomic conditions deteriorate or are characterized by uncertainty or 
volatility, customers may curtail or freeze spending on software in general and for software such as ours specifically, which 
could have an adverse impact on our business, financial condition, and operating results.

We have historically generated a majority of our revenue from customers in the financial services, government, and life 
sciences verticals. While these verticals have not been affected as severely by weak economic conditions caused by COVID-19 
as the retail, hospitality, and entertainment industries, we cannot provide assurance these verticals will not suffer more severe 
losses in the future. Furthermore, we cannot predict the timing, strength, or duration of any economic slowdown or recovery. In 
addition, even if the overall economy is robust, we cannot provide assurance the market for services such as ours will 
experience growth or that we will experience growth.

Our stock price may be volatile, and you may lose some or all of your investment.

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The market price of our Class A common stock may be highly volatile and may fluctuate substantially as a result of a 
variety of factors. Since shares of our Class A common stock were sold in our initial public offering, or IPO, in May 2017 at a 
price of $12.00 per share, our stock price has ranged from an intraday low of $14.60 to an intraday high of $260.00 through 
February 14, 2022. Factors that may affect the market price of our Class A common stock and our ability to raise capital 
through the sale of additional equity securities include:

•

•

•

•

•

•

•

•

•

•

•

•

•

Actual or anticipated fluctuations in our financial condition and operating results;

Variance in our financial performance from expectations of securities analysts;

Changes in the prices of subscriptions to our platform;

Changes in our projected operating and financial results;

Changes in laws or regulations applicable to our platform;

Announcements by us or our competitors of significant business developments, acquisitions, or new offerings;

Our involvement in any litigation;

Our sale of our Class A common stock or other securities in the future;

Changes in senior management or key personnel;

The trading volume of our Class A common stock;

Trading activity by one or both large stockholders who together owned approximately 29% of our publicly traded 
Class A common stock as of December 31, 2021;

Changes in the anticipated future size and growth rate of our market; and

General economic, regulatory, and market conditions.

The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the 
market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the 
operating performance of those companies. Broad market and industry fluctuations, as well as general economic, political, 
regulatory, and market conditions, may negatively impact the market price of our Class A common stock. In the past, 
companies that have experienced volatility in the market price of their securities have been subject to securities class action 
litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our 
management’s attention.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports 

about our business, our stock price and trading volume could decline.

The trading market for our Class A common stock depends, in part, on the research and reports securities or industry 
analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to 
meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, 
our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish 
reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

43

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

As of December 31, 2021, our corporate headquarters occupies approximately 240,000 square feet in McLean, Virginia 

under an operating lease that expires in October 2031. We also lease space in the United Kingdom, Italy, Australia, and Spain 
under operating lease agreements with various expiration dates through 2026. In addition, we utilize flexible work spaces 
depending on the occupancy needs in each of the countries we operate in. We believe our facilities are suitable and adequate to 
meet our needs.

Item 3. Legal Proceedings.

Pegasystems Litigation

On May 29, 2020, we filed a civil complaint against Pegasystems, Inc. (“Pegasystems”), and Youyong Zou, a Virginia 
resident, in the Circuit Court for Fairfax County, Virginia, alleging claims for trade secret misappropriation, violation of the 
Virginia Computer Crimes Act (“VCCA”), tortious interference, and statutory business and common law conspiracy. Appian 
Corp. v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). As alleged in our complaint, the claims arose out 
of the efforts by Pegasystems to obtain and use our trade secrets through Zou, who worked on a federal program as an 
employee at Serco, Inc. (“Serco”), and had access to our software and documentation exclusively to work on Serco projects 
involving the federal government, as well as through Pegasystems’ own employees representing themselves as potential 
customers or Appian partners rather than Pegasystems employees. The conspiracy claims were dismissed on January 13, 2022.

After fact discovery closed in early 2022, on January 31, 2022, the court held a seven-day plea in bar jury trial on 

Pegasystems’ affirmative defense that we did not file our trade secret and VCCA claims within the relevant statute of limitation 
periods. At the conclusion of trial, the court ruled that, based on the evidence presented, there was no jury question and granted 
our motion to strike Pegasystems’ plea in bar as to our trade secret misappropriation claim. The court granted Pegaystems’ plea 
in bar only with respect to conduct relevant to the VCCA claim that occurred prior to May 29, 2015. As a result of the judge’s 
order, we may proceed to a jury trial on the merits of our claims of trade secret misappropriation, violations of the VCCA after 
May 29, 2015, and tortious interference. The jury trial on our claims is set to commence on March 21, 2022. If Pegasystems is 
found liable on any of our claims, we may be entitled to an award of damages. Presently, we are seeking damages for unjust 
enrichment from Pegasystems over the period of 2012 through 2021, plus attorney’s fees, interest, and other forms of monetary 
relief for Pegasystems’ conduct. Litigation by its nature is highly uncertain, and we cannot predict the outcome of the trial. We 
believe we have a substantial chance of prevailing at trial and, if we did so, we could obtain a substantial award of damages 
from the jury, although a jury has a high degree of discretion to award an amount it deems just and appropriate. Any judgment 
in our favor would be subject to appeal, and therefore the timing and actual recovery of a damages award is subject to further 
uncertainty.

Separately, on July 3, 2019, Pegasystems filed a claim against us and BPM.com, Inc., a market analyst company, in U.S. 

District Court for the District of Massachusetts alleging, among other things, that we had engaged in false advertising by re-
publishing a study by BPM.com comparing us favorably to Pegasystems and by failing to disclose we commissioned the study. 
Pegasystems Inc. v. Appian Corp. & Business Process Management Inc., No. 1:19-cv-11461 (D. Mass). We have responded to 
Pegasystems’ complaint denying Pegasystems’ allegations and making certain affirmative defenses. We believe Pegasystems’ 
claims are without merit, and we are engaged in vigorously defending against them. Our motion to dismiss Pegasystems’ 
complaint was granted in part and denied in part on December 19, 2019. We have also filed counterclaims against Pegasystems 
for false advertising, alleging numerous marketing and advertising materials used by Pegasystems, including that a report 
purportedly authored by Jim Sinur, a former industry analyst, were false and/or misleading and, in the case of the Sinur report, 
Pegasystems failed to disclose that it had commissioned the report. We also made a claim for defamation against Pegasystems 
based on public statements by Pegasystems’ executives. Pegasystems’ motions to dismiss our counterclaims have been denied, 
except with respect to one marketing document.

At this point, no trial date has been scheduled in the Massachusetts case, expert discovery is ongoing, and the parties have 
not yet filed their motions for summary judgment. Pegasystems is seeking damages in the form of disgorgement of our profits 

44

related to the use of the BPM.com report. We do not believe we obtained any profits as a result of the BPM.com report. On our 
false advertising and defamation claims, we are seeking damages for both our own lost profits and disgorgement of 
Pegasystems’ profits as measures of damages. Our claims for damages in this case exceed those of Pegasystems. Given the case 
is still in its preliminary stages and the inherent uncertainty of litigation, we are unable to assess the likelihood we will succeed 
in defending against Pegasystems’ claims or prevailing on our own counterclaims or, further, the amount of damages either 
party might obtain if it receives a judgment in its favor. If we prevail on our counterclaims, and Pegasystems does not prevail 
on its claims, or we receive an award of damages in excess of the amount awarded to Pegasystems, Pegasystems could be liable 
to us for damages. Similarly, if Pegasystems prevails on its claims, and we do not prevail on our counterclaims, or we do not 
receive a substantial award of damages for our own counterclaims, we could be liable for damages to Pegasystems. Because the 
Massachusetts case is in an earlier stage, the Virginia case is likely to reach final judgment before the Massachusetts case.

Other Matters

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of 

our business. Other than as disclosed elsewhere in this Annual Report, we are not presently a party to any legal proceedings 
that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, 
operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us 
because of defense and settlement costs, diversion of management time and resources, and other factors.

Item 4. Mine Safety Disclosures.

Not applicable.

45

PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity 
Securities.

Market Information

Our Class A common stock is listed on the Nasdaq Global Market under the symbol “APPN”. Our Class B common stock 

is not listed or traded on any stock exchange.

As of February 14, 2022, there were 17 holders of record of our Class A common stock and 35 holders of record of our 
Class B common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on 
behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Dividends

We have never declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on 
our common stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of 
our Board of Directors, subject to applicable laws, and will depend on then existing conditions, including our financial 
condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our Board of 
Directors may deem relevant.

46

Stock Performance Graph

This section is not deemed “filed” with the SEC and shall not be deemed incorporated by reference into any of our other 

filings under the Exchange Act or the Securities Act, irrespective of any general incorporation language in any such filing.

The following graph shows a comparison from May 25, 2017 (the date our Class A common stock commenced trading on 
the Nasdaq Global Market) through December 31, 2021, of the cumulative total return for an investment of $100 in our Class A 
common stock, the Nasdaq Global Market Composite Index, and the Nasdaq Computer Index. Data for the Nasdaq Global 
Market Composite Index and the Nasdaq Computer Index assume reinvestment of any dividends. The comparisons in the graph 
below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common 
stock.

COMPARISON OF CUMULATIVE TOTAL RETURN
Among Appian Corporation, the Nasdaq Global Market Composite Index, and the Nasdaq Computer Index

May 25, 2017

June 30, 
2017

December 
31, 2017

June 30, 
2018

December 
31, 2018

June 30, 
2019

December 
31, 2019

June 30, 
2020

December 
31, 2020

June 30, 
2021

December 
31, 2021

Appian Corporation

Nasdaq Global Market Composite

Nasdaq Computer

$ 

$ 

$ 

100.00 

100.00 

100.00 

$ 

$ 

$ 

120.92 

105.12 

96.18 

$ 

$ 

$ 

209.73 

117.68 

113.49 

$ 

$ 

$ 

240.91 

137.10 

124.53 

$ 

$ 

$ 

177.95 

110.09 

109.31 

$ 

$ 

$ 

240.31 

145.34 

134.76 

$ 

$ 

$ 

254.56 

151.77 

164.33 

$ 

$ 

$ 

341.44 

167.07 

193.05 

$ 

$ 

$ 

1,079.88 

250.25 

246.46 

$ 

$ 

$ 

917.72 

261.10 

290.25 

$ 

$ 

$ 

434.44 

212.30 

339.76 

Recent Sales of Unregistered Securities

Not applicable.

Use of Proceeds from Public Offering of Common Stock

Not applicable.

47

Appian CorporationNasdaq Global Market CompositeNasdaq Computer5/176/1712/176/1812/186/1912/196/2012/206/2112/21$—$250.00$500.00$750.00$1,000.00$1,250.00Purchase of Equity Securities by the Issuer and Affiliated Purchases

Period

Total number of 
shares 
purchased(1)

Average price 
paid per share

Total number of 
shares 
purchased as 
part of publicly 
announced plan

Maximum 
number of 
shares that may 
yet be 
purchased under 
the plan (2)

October 1 to October 31, 2021

November 1 to November 30, 2021

December 1 to December 31, 2021

3,234  $ 

4,943  $ 

5,423  $ 

89.55 

96.85 

68.59 

3,234 

4,943 

5,423 

996,766 

991,823 

986,400 

986,400 
Total
(1) Shares purchased represent shares purchased on the open market pursuant to the Appian Corporation Employee Stock Purchase Plan (“ESPP”), which was 
approved by the Company’s stockholders on June 11, 2021. Shares purchased under the ESPP are deposited into the participants’ accounts.
(2) Because the number of shares that may be purchased under the ESPP depends on each employee’s voluntary election to participate and contribution elections 
and on the fair market value of our Class A Common Stock at various future dates, the actual number of shares that may be purchased under the plan cannot be 
determined in advance. We have filed a registration statement on S-8 that covers 1,000,000 shares.

13,600  $ 

13,600 

83.85 

Item 6. [Reserved]

48

 
 
 
 
 
 
 
 
 
 
 
 
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

We provide a low-code platform that accelerates the creation of high-impact business applications and workflows, enabling 

our customers to automate the most important aspects of their business. Global organizations use our applications to improve 
customer experience, achieve operational excellence, and simplify global risk management and compliance. 

With our platform, organizations can rapidly and easily discover, design, and automate powerful, enterprise-grade 

workflows and custom applications through our intuitive, visual interface with little or no coding required. Our customers have 
used workflows and applications built on our platform to launch new business lines, automate vital employee workflows, 
manage complex trading platforms, accelerate drug development, and build global procurement systems. With our platform, 
decision makers can reimagine their products, services, processes, and customer interactions by removing much of the 
complexity and many of the challenges associated with traditional approaches to software development.

We have generated the majority of our revenue from sales of subscriptions, which include (1) SaaS subscriptions bundled 
with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. 
Our subscription fees are based primarily on the number of users who access and utilize the applications built on our platform 
or, alternatively, non-user based single application licenses. Our customer contract terms generally vary from one to three years 
with most providing for payment in advance on an annual, quarterly, or monthly basis. Due to the variability of our billing 
terms and the episodic nature of our customers purchasing additional subscriptions, we do not believe changes in our deferred 
revenue in a given period are directly correlated with our revenue growth.

Since inception, we have invested in our Customer Success organization to help ensure customers are able to build and 
deploy applications on our platform. We have several strategic partnerships, including with KPMG, Accenture, PwC, Infosys, 
Wipro, and Deloitte, for them to refer customers to us in order to purchase subscriptions and then to provide professional 
services directly to the customers using our platform. We intend to further grow our base of strategic partners to provide 
broader customer coverage and solution delivery capabilities. In addition, over time we expect professional services revenue as 
a percentage of total revenue to decline as we increasingly rely on strategic partners to help our customers deploy our 
software. We believe our investment in professional services, including strategic partners building their practices around 
Appian, will drive increased adoption of our platform.

As of December 31, 2021, we had 816 customers in a variety of industries, of which 635 customers were commercial and 

181 customers were government or non-commercial entities. Our customers 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 billion in annual revenue. As of December 31, 
2021, 25% of our commercial customers were Global 2000 organizations, and 68 of our customers were Fortune 500 
companies. Revenue from government agencies represented 19.6%, 18.1%, and 17.1% of our total revenue in 2021, 2020, and 
2019, respectively. No single end-customer accounted for more than 10% of our total revenue in 2021, 2020, and 2019.

Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. 

We offer our platform globally. In 2021, 2020, and 2019, 34.0%, 33.8%, and 32.3%, respectively, of our total revenue was 
generated from customers outside of the United States. As of December 31, 2021, we operated in 13 countries. We believe we 
have a significant opportunity to grow our international footprint. 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 $369.3 million, $304.6 million, and $260.4 million in 2021, 
2020, and 2019, respectively. Our subscriptions revenue was $263.7 million, $198.7 million, and $151.3 million in 2021, 2020, 

49

and 2019, respectively, and includes sales of our SaaS subscriptions, on-premises term license subscriptions, and maintenance 
and support. Our cloud subscription revenue was $179.4 million, $129.2 million, and $95.0 million in 2021, 2020, and 2019, 
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. We intend to continue to invest in our 
business to take advantage of our market opportunity. As a result, we incurred net losses of $88.6 million, $33.5 million, and 
$50.7 million in 2021, 2020, and 2019, respectively. We also used cash in operations of $53.9 million, $7.6 million, and $8.9 
million in 2021, 2020, and 2019, respectively.

Recent Developments 

COVID-19

Beginning in late 2019 and continuing into 2022, the outbreak of the novel coronavirus disease, or COVID-19, has resulted 
in the declaration of a global pandemic and adversely affected economic activity across virtually all sectors and industries on a 
local, national, and global scale. The impact of COVID-19, including the emergence of new variant strains of COVID-19, on 
the economy and our business continues to be a fluid situation. 

Operationally, we remain focused on supporting our customers, employees, and communities during this time. At the 
outset of the pandemic, we responded quickly to adopt a virtual corporate strategy consisting of enabling most of our employees 
to work productively from home while continuing to guard the health and safety of our teams, support our customers, and 
mitigate risk. In the third quarter of 2021, we announced an option allowing for our employees to return to offices in select 
jurisdictions if they elect to do so. We remain focused on ensuring continuity for our customers and we continue to conduct 
business as usual, with necessary or advisable modifications to employee travel, employee work locations, and marketing 
events.

Through December 31, 2021, we have not seen a meaningful adverse impact to our financial position, results of operations, 

and cash flows and liquidity as a result of COVID-19. While the verticals from which we have historically generated the 
majority of our revenue have been less impacted by COVID-19 to date, there may be impacts to our financial condition and 
results of operations in 2022 as a result of reduced demand for our products and services and longer sales cycles. The ultimate 
impact of COVID-19 and any variant strains thereof on our business is not estimable at this time and will be largely dependent 
upon a number of factors outside of our control including the extent and duration of the outbreak as well as any mitigating 
actions which may be undertaken by global governments and the general public.

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 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 given the length of our sales cycle, and marketing 
costs, all of which, with the exception 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. Over the last three completed fiscal years, we had an average cloud subscription renewal rate of 98%. We calculate 
our cloud subscription renewal rate by dividing (i) the cloud subscription revenue from renewing cloud customers in the current 
12-month period that were cloud customers during the entirety of the prior 12-month period, giving effect to price increases but 
excluding additional cloud subscription for additional users, or upsells, by (ii) our cloud subscription revenue from all cloud 
customers in the corresponding prior 12-month period that were cloud customers during the entirety of such prior 12-month 
period. For example, to obtain our cloud subscription renewal rate for the 12-month period ended December 31, 2021, we 
identified the amount of cloud subscription revenue in 2021 from cloud customers that were our cloud customers for all of 2020 
and subtracted the amount of upsells to such cloud customers and new users from those cloud customers in 2021. We then 
divided the balance of 2021 cloud subscription revenue from such cloud customers by all cloud subscription revenue generated 

50

in 2020 from cloud customers that were cloud customers for the entirety of 2020. With respect to the average for our last three 
completed fiscal years, we calculated the average of the three applicable 12-month periods. We also expect the proportion of 
annual revenue from existing customers to grow relative to annual revenue from new customers. We believe this mix shift over 
time will have a positive impact on our operating margins, as we expect the percentage of revenue spent on sales and marketing 
to decline.

We measure the effectiveness of our business model by comparing the lifetime value of our customer relationships to our 

customer acquisition costs. On a rolling 12 month basis, we estimate that for each of the past five fiscal years, the average 
lifetime value of a customer has exceeded 7x the associated average cost of acquiring them, including the year ended 
December 31, 2021.

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 digitally transform. We expect our revenue growth will be primarily driven 
by the pace of adoption and penetration of our platform. We offer a leading custom software platform and intend to 
continue to invest to expand our customer base. The degree to which prospective customers recognize the need 
for low-code software that enables organizations to digitally transform, 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 define a 
customer as an entity with an active subscription or maintenance and support contract or a legacy perpetual license as 
of the specified measurement date. Furthermore, we define a new customer as an entity that has entered into its first 
active subscription or maintenance and support contract within one calendar year of the specified measurement date 
while existing customers are defined as entities that have maintained an active subscription or maintenance and 
support contract for at least one calendar year from the specified measurement date. Legacy customers from entities 
acquired in business combinations are not counted as new customers until they enter into a new active subscription or 
maintenance and support contract with us subsequent to the completion of the business combination. Additionally, to 
the extent we contract with one or more entities under common control, we count those entities as separate customers. 

We have aggressively 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, and life sciences. In addition, we have established 
relationships with strategic partners who work with organizations undergoing digital transformations. We had a total 
customer count of 816, 693, and 533 as of December 31, 2021, 2020, and 2019, respectively. Our number of customers 
with active software subscription agreements was 783, 654, and 487 as of December 31, 2021, 2020, and 2019, 
respectively. As of December 31, 2021, 25% of our commercial customers were Global 2000 organizations, and 68 of 
our customers were Fortune 500 companies. 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 to our platform. 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 to us because 
we charge subscription fees on a per-user basis or through non-user based single application licenses. 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. We have also re-focused some of our professional 
services personnel to become customer success managers. Their role is to ensure the customer realizes value from our 
platform and support strategic partners and the “land and expand” strategy versus delivering billable hours.

51

• Mix of Subscriptions and Professional Services Revenue. We believe our professional services have driven customer 

success and facilitated the adoption of our platform by customers. During the initial period of deployment by a 
customer, we generally provide a greater amount of support in building applications and training than later in the 
deployment, with a typical engagement extending from two to six months. At the same time, many of our customers 
have historically purchased subscriptions only for a limited set of their total potential end users. As a result of these 
factors, the proportion of total revenue for a customer associated with professional services is relatively high during 
the initial deployment period. Over time, as the need for professional services associated with user deployments 
decreases and the number of end users increases, we expect subscriptions revenue as a percentage of total revenue to 
increase. In addition, we continue to grow our base of strategic partners to provide broader customer coverage and 
solution delivery capabilities. These partners perform professional services with respect to any new service contracts 
they originate. As the usage of partners expands, we expect the proportion of our total revenue from subscriptions to 
increase over time relative to professional services. In 2021, 2020, and 2019, 71.4%, 65.2%, and 58.1% of our 
revenue, respectively, was derived from sales of subscriptions, while the remaining 28.6%, 34.8%, and 41.9%, 
respectively, was derived from the sale of professional services.

•

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 speed, meet the evolving needs 
of our customers, and take advantage of our market opportunity. In addition, we continue to 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. 

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 Subscription Revenue

Cloud subscription revenue

Year Ended December 31,

2021

2020

2019

$ 

179,415  $ 

129,219  $ 

95,028 

Cloud subscription revenue includes SaaS subscriptions bundled with maintenance and support and hosting services. In 
2021, 2020, and 2019, 68.0%, 65.0%, and 62.8%, respectively, of subscriptions revenue was cloud subscription revenue. As we 
generally sell our SaaS subscriptions on a per-user basis or through non-user based single application licenses, our cloud 
subscription 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 
subscription 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.

52

Cloud Subscription Revenue Retention Rate

Cloud subscription revenue retention rate

As of December 31,

2021

2020

2019

 116 %

 119 %

 115 %

A key factor to our success is the renewal and expansion of subscription agreements with our existing customers. We 
calculate this metric over a set of customers who have been with us for at least one full year. To calculate our cloud subscription 
revenue retention rate for a particular trailing 12-month period, we first establish the recurring cloud subscription revenue for 
the previous trailing 12-month period. This effectively represents recurring dollars we should expect in the current trailing 12-
month period from the cohort of customers from the previous trailing 12-month period without any expansion or contraction. 
We subsequently measure the recurring cloud subscription revenue in the current trailing 12-month period from the cohort of 
customers from the previous trailing 12-month period. Cloud subscription revenue retention rate is then calculated by dividing 
the aggregate recurring cloud subscription revenue in the current trailing 12-month period by the previous trailing 12-month 
period. This calculation includes the impact on our revenue from customer non-renewals, pricing changes, and growth in the 
number of users on our platform. Our cloud subscription revenue retention rate can fluctuate from period to period due to large 
customer contracts in any given period. 

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 measures, including non-GAAP operating loss, non-GAAP net loss, non-
GAAP net loss per share, non-GAAP weighted average shares outstanding, and adjusted EBITDA, which we collectively refer 
to as non-GAAP financial measures. We define non-GAAP operating loss as operating loss before stock-based compensation 
expense and certain litigation-related expenses. We define non-GAAP net loss as net loss before stock-based compensation 
expense, certain litigation-related expenses, and gains or losses on disposals of property and equipment. In periods we report 
non-GAAP net income, we calculate non-GAAP weighted average shares outstanding as GAAP weighted average shares 
outstanding adjusted for the effect of potentially dilutive securities that would otherwise be antidilutive under GAAP. We 
define adjusted EBITDA as net loss before (1) other expense (income), net, (2) interest expense, (3) income tax expense, (4) 
depreciation and amortization expense, (5) stock-based compensation expense, and (6) certain litigation-related expenses.

We exclude stock-based compensation expense because of varying available valuation methodologies, subjective 

assumptions, and the variety of equity instruments that can impact our non-cash expense. We exclude certain litigation-related 
expenses consisting of professional fees and other costs incurred in connection with two separate lawsuits, one involving 
reciprocal false advertising and related claims with a competitor and one involving an effort to enforce our intellectual property, 
because we believe such costs are outside of our ordinary course of business. We exclude gains or losses on disposals of 
property and equipment as these transactions are unrelated to current operations nor predictive of future results. We believe 
providing non-GAAP financial measures excluding the aforementioned items provides investors and management with greater 
visibility into the underlying performance of our business operations, aids to provide supplemental information and comparable 
financial results from period to period, and may also provide comparison with the results of other companies in our industry.

The presentation of 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. We use non-GAAP financial measures 
as a means to evaluate period-to-period comparisons. We also believe our non-GAAP financial measures provide useful 
information about our operating results, enhance the overall understanding of past financial performance and future prospects, 
and allow for greater transparency with respect to metrics used by our management in its financial and operational decision 
making. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures are 
included below for review. Reliance should not be placed on any single financial measure to evaluate our business.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other 
companies in our industry as other companies in our industry may calculate non-GAAP financial results differently, particularly 
with respect to non-recurring, unusual items. Non-GAAP financial measures do not have uniform definitions, and our 
definitions will likely differ from the definitions used by other companies, including peer companies. In addition, non-
GAAP financial measures exclude expenses that may have a material impact upon our reported financial results. Further, stock-

53

based compensation expense will continue to be a significant recurring expense in our business and an important part of the 
compensation provided to our employees for the foreseeable future.

The table below reconciles GAAP operating loss to non-GAAP operating loss for the years ended December 31, 2021, 

2020, and 2019 (in thousands):

GAAP operating loss

Add back:

Stock-based compensation expense

Litigation expenses

Non-GAAP operating loss

Year Ended December 31,

2021

2020

2019

$ 

(83,907)  $ 

(37,902)  $ 

(50,468) 

23,844 

16,400 

15,279 

— 

16,443 

— 

$ 

(43,663)  $ 

(22,623)  $ 

(34,025) 

The following table reconciles GAAP net loss to non-GAAP net loss for the years ended December 31, 2021, 2020, and 

2019 (in thousands):

GAAP net loss

Add back:

Stock-based compensation expense

Litigation expenses

Loss on disposal of property and equipment

Non-GAAP net loss

Year Ended December 31,

2021

2020

2019

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

23,844 

16,400 

79 

15,279 

16,443 

— 

22 

— 

146 

$ 

(48,318)  $ 

(18,176)  $ 

(34,125) 

The following table sets forth non-GAAP net loss per share for the years ended December 31, 2021, 2020, and 2019 (in 

thousands except share and per share data):

Non-GAAP net loss

Non-GAAP weighted average shares used to compute net loss per share, basic and 
diluted 

Non-GAAP net loss per share, basic and diluted

Year Ended December 31,

2021

2020

2019

(48,318)  $ 

(18,176)  $ 

(34,125) 

71,036,490 

69,050,565 

65,479,327 

(0.68)  $ 

(0.26)  $ 

(0.52) 

$ 

$ 

GAAP basic and diluted weighted average shares outstanding were equal to non-GAAP basic and diluted weighted average 

shares outstanding for each of the years ended December 31, 2021, 2020, and 2019.

The following table reconciles GAAP net loss per share to non-GAAP net loss per share for the years ended December 31, 

2021, 2020, and 2019:

GAAP net loss per share, basic and diluted 

Add back:

Non-GAAP adjustments to net loss per share

Non-GAAP net loss per share, basic and diluted

Year Ended December 31,

2021

2020

2019

(1.25)  $ 

(0.48)  $ 

(0.77) 

0.57 

0.22 

(0.68)  $ 

(0.26)  $ 

0.25 

(0.52) 

$ 

$ 

54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table reconciles GAAP net loss to adjusted EBITDA for the years ended December 31, 2021, 2020, and 

2019 (in thousands):

GAAP net loss

Other expense (income), net

Interest expense

Income tax expense

Depreciation and amortization

Stock-based compensation expense

Litigation expenses

Adjusted EBITDA

Key Components of Results of Operations

Revenue

Year Ended December 31,

2021

2020

2019

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

3,584 

372 

778 

5,743 

23,844 

16,400 

(5,786)   

478 

883 

5,851 

15,279 

— 

(941) 

367 

820 

4,742 

16,443 

— 

$ 

(37,920)  $ 

(16,772)  $ 

(29,283) 

We generate revenue primarily through sales of subscriptions to our platform as well as professional services. We generally 

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:

•

•

SaaS subscriptions bundled with maintenance and support and hosting services; and

On-premises term license subscriptions bundled with maintenance and support.

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. On-premises term 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 SaaS subscription, we manage 
their 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. Over time, as the need for professional services associated with user 
deployments decreases and the number of end users increases, we expect professional services revenue as a percentage of total 
revenue to decrease. Additionally, professional services revenue may be negatively impacted if there is a decline in our 
procurement of new customers as a result of the COVID-19 pandemic.

We have several strategic partnerships, including with KPMG, Accenture, PwC, Infosys, Wipro, and Deloitte. These 
partners refer software subscription customers to us and generally perform professional services with respect to any new service 
contracts they originate, increasing our subscriptions revenue without any change to our professional services revenue. Our 
agreements with our strategic partners have indefinite terms and may be terminated for convenience by either party. We intend 
to further grow our base of strategic partners to provide broader customer coverage and solution delivery capabilities. As we 
expand the network of strategic partners, we expect professional services revenue to decline as a percentage of total revenue 

55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
over time since our strategic partners may perform professional services associated with software subscriptions we sell. 
Professional services revenue may also decline in absolute dollars if we increasingly rely on our network to procure new 
customers.

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 and customer support 
teams, and allocated facility costs and overhead. 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 facility costs and overhead, and the costs of billable expenses such as travel and lodging. The unpredictability of the 
timing of entering into 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 quarterly financial results and allocated facility 
costs and overhead.

Gross Margin

Gross profit and gross margin, or gross profit as a percentage of total revenue, have been, and will continue to be, affected 

by various factors, including the mix of SaaS subscriptions and on-premises term license subscriptions, the mix of total 
subscriptions revenue and professional services revenue, subscription pricing, the costs associated with third-party hosting 
facilities, and the extent to which we expand our professional services to support future growth. Our gross margin may fluctuate 
from period to period based on the above 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 SaaS 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 cost of our Customer Success organization as we continue to invest in the growth of our business. 
Professional services gross margin is also impacted by the amount of services performed by subcontractors and partners as 
opposed to internal resources. Beginning in 2020, we lowered our usage of subcontractors, and the COVID-19 pandemic 
resulted in fewer in-person professional services engagements and deployments, both of which reduced certain classes of 
expenses and improved professional services margins. In 2021, these margins began to normalize but remain subject to 
fluctuation based on the factors discussed above and uncertainties related to the COVID-19 pandemic outside of our control. 

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 contract labor, legal, development resources, and consulting as well as 
allocated facility and overhead, which can include, among other types of costs, travel and entertainment expenditures, human 

56

resources costs such as placement fees, referral bonuses, training costs, and employee relations spending, office-related 
expenditures, and information technology costs for such items as infrastructure, software, and cloud computing services.

In general, our operating expenses are expected to continue to increase in absolute dollars as we invest resources in 
growing our various teams. We grew from 1,460 employees at December 31, 2020 to 1,798 employees at December 31, 2021, 
and we expect to continue to hire new employees in order to support our anticipated revenue growth. 

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 facility costs and overhead.

The number of employees in sales and marketing functions grew from 445 at December 31, 2020 to 552 at December 31, 
2021. In order to continue to grow our business, geographical footprint, and brand awareness, we expect to continue investing 
resources in sales and marketing by increasing the number of sales and account management teams. As a result, we expect sales 
and marketing expense to increase in absolute dollars as we continue to invest to acquire new customers and further expand 
usage of our platform within our existing customer base.

Research and Development Expense

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, and professional fees to third party development resources, allocated facility costs, and 
overhead.

Our research and development efforts are focused on enhancing the speed and power of our software platform. The number 

of employees in research and development functions grew from 381 at December 31, 2020 to 488 at December 31, 2021. 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.

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, information technology, human resources, finance and 
accounting employees, as well as our executives. Additional expenses included in this category are non-personnel costs such as 
travel-related expenses, contracting and professional fees for such services as audits, taxation, and legal, insurance and other 
corporate expenses, allocated facility costs and overhead, bad debt expenses, and depreciation and amortization costs.

The number of employees in general and administrative functions grew from 206 at December 31, 2020 to 224 at 

December 31, 2021. We expect our general and administrative expense to increase in absolute dollars as we continue to support 
our growth.

Other Expense (Income)

Other Expense (Income), Net

Other expense (income), net, net consists primarily of unrealized and realized gains and losses related to changes in foreign 

currency exchange rates, interest income on our cash and cash equivalents and investments, gains or losses on the disposal of 
property and equipment, 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, unused credit facility fees, and commitment fees on our letters of 

credit.

57

Results of Operations

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

Consolidated Statements of Operations Data:

Revenue

Subscriptions

Professional services

Total revenue

Cost of revenue

Subscriptions

Professional services

Total cost of revenue

Gross profit

Operating expenses

Sales and marketing

Research and development

General and administrative

Total operating expenses

Operating loss

Other expense (income)

Other expense (income), net

Interest expense

Total other expense (income)

Loss before income taxes

Income tax expense

Net loss

(1) Stock-based compensation as a component of these line items is as follows:

Cost of revenue

Subscriptions

Professional services

Operating expenses

Sales and marketing

Research and development

General and administrative

Year Ended December 31, 

2021

2020

2019

$ 

263,738  $ 

198,710  $ 

105,521 

369,259 

27,330 

76,763 

104,093 

265,166 

167,852 

97,517 

83,704 

349,073 

(83,907)   

3,584 

372 

3,956 

(87,863)   

778 

105,863 

304,573 

20,826 

67,940 

88,766 

215,807 

130,316 

70,241 

53,152 

253,709 

(37,902) 

(5,786) 

478 

(5,308) 

(32,594) 

883 

151,299 

109,053 

260,352 

17,098 

76,743 

93,841 

166,511 

117,440 

58,043 

41,496 

216,979 

(50,468) 

(941) 

367 

(574) 

(49,894) 

820 

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

Year Ended December 31,

2021

2020

2019

(in thousands)

$ 

1,199  $ 

3,131 

943  $ 

1,477 

5,426 

5,224 

8,864 

2,821 

2,718 

7,320 

647 

2,748 

4,742 

3,480 

4,826 

Total stock-based compensation expense

$ 

23,844  $ 

15,279  $ 

16,443 

58

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

Consolidated Statements of Operations Data:

Revenue

Subscriptions

Professional services

Total revenue

Cost of revenue

Subscriptions

Professional services

Total cost of revenue

Gross profit

Operating expenses

Sales and marketing

Research and development

General and administrative

Total operating expenses

Operating loss

Other expense (income)

Other expense (income), net

Interest expense

Total other expense (income)

Loss before income taxes

Income tax expense

Net loss

Year Ended December 31,

2021

2020

2019

 71.4 %

 65.2 %

 58.1 %

 28.6 

 100.0 

 7.4 

 20.8 

 28.2 

 71.8 

 45.5 

 26.4 

 22.7 

 94.6 

 34.8 

 100.0 

 6.8 

 22.3 

 29.1 

 70.9 

 42.8 

 23.1 

 17.5 

 83.4 

 41.9 

 100.0 

 6.6 

 29.5 

 36.1 

 63.9 

 45.1 

 22.3 

 15.9 

 83.3 

 (22.8) 

 (12.5) 

 (19.4) 

 1.0 

 0.1 

 1.1 

 (23.9) 

 0.2 

 (24.1) %

 (1.9) 

 0.2 

 (1.7) 

 (10.8) 

 0.3 

 (11.1) %

 (0.4) 

 0.1 

 (0.3) 

 (19.1) 

 0.3 

 (19.4) %

Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020

Revenue

Revenue:

Subscriptions

Professional services

Total revenue

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

$ 

263,738  $ 

105,521 

369,259  $ 

198,710 

105,863 

304,573 

32.7%

(0.3)%

21.2%

Total revenue increased $64.7 million, or 21.2%, in 2021 compared to 2020 due to an increase in our subscriptions revenue 

of $65.0 million, which was partially offset by a decrease in our professional services revenue of $0.3 million. The increase in 
subscriptions revenue was driven largely by a $50.2 million increase in cloud subscription revenue, an $11.8 million increase in 
on-premises software revenue, and a $3.0 million increase in maintenance and support revenue. With respect to new versus 
existing customers, $48.1 million of the increase in subscriptions revenue stemmed from expanded deployments and 
corresponding sales of additional subscriptions to existing customers while $16.6 million stemmed from sales of subscriptions 
to new customers. The remainder of the increase is attributable to revenue recognized from Lana Labs GmbH, or Lana Labs, 
subsequent to the acquisition. The decrease in professional services revenue was due primarily to a $19.7 million decrease in 

59

 
 
revenue from existing customers which was largely offset by $19.3 million in sales to new customers. Further impacting the 
decrease in professional services revenue were increased contributions of partners performing professional services on our 
behalf in 2021 as compared to 2020, which has resulted in increases to our subscriptions revenue without any change to our 
professional services revenue.

Cost of Revenue

Cost of revenue:

Subscriptions

Professional services

Total cost of revenue

Subscriptions gross margin

Professional services gross margin

Total gross margin

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

$ 

27,330 

76,763 

104,093 

$ 

$ 

20,826 

67,940 

88,766 

31.2%

13.0%

17.3%

 89.6 %

 27.3 %

 71.8 %

 89.5 %

 35.8 %

 70.9 %

Cost of revenue increased $15.3 million, or 17.3%, in 2021 compared to 2020, primarily due to a $15.2 million increase in 

professional services and product support personnel costs, a $4.4 million increase in other cost of revenue, and a $1.5 million 
increase in facility and overhead costs. These increases were partially offset by a $4.8 million decrease in contractor costs and a 
$1.0 million decrease in billable expenses. Personnel costs increased due to an increase in professional services and product 
support personnel headcount of 24.8% from December 31, 2020 to December 31, 2021, coupled with a $1.9 million increase in 
stock-based compensation. The increase in other cost of revenue was due to increased hosting costs as sales of our cloud 
offering grew in 2021, while the increase in facility and overhead costs was due largely to an increase in certain allocated costs 
tied to our growth such as spending for offices, human resources costs, and information technology expenses. Contractor costs 
decreased in 2021 compared to 2020 due to a decrease in the usage of subcontractors for professional service engagements, 
which is in line with our strategic shift towards increasing professional services headcounts and utilizing more internal 
resources to complete engagements. Billable expenses decreased primarily as a result of lower travel and entertainment costs 
pursuant to a shift to remote work that began in the second quarter of 2020 and continued into 2021.

Subscriptions gross margin slightly increased to 89.6% in 2021 compared to 89.5% in 2020 due to an increase in 

subscriptions revenue in 2021, which was largely offset by increased hosting costs as sales of our cloud offering increased and 
became a larger proportion of our overall subscriptions revenue. Professional services gross margin decreased to 27.3% in 2021 
compared to 35.8% in 2020 due to higher personnel costs in 2021 as well as a decrease in professional services revenue. 
Additionally, fewer in-person professional services engagements and deployments in 2020 led to temporarily improved margins 
in the prior year. These impacts were partially offset by a decrease in the usage of subcontractors for professional services 
engagements. Given the higher percentage of subscriptions revenue for the comparable periods and the aforementioned decline 
in professional services revenue, gross margin rose to 71.8% in 2021 as compared to 70.9% in 2020.

Sales and Marketing Expense

Sales and marketing

% of revenue

Year Ended December 31, 

% Change

2021

2020

(dollars in thousands)

$ 

167,852 

$ 

130,316 

28.8%

 45.5 %

 42.8 %

Sales and marketing expense increased $37.5 million, or 28.8%, in 2021 compared to 2020, primarily due to a $28.8 
million increase in sales and marketing personnel costs, a $5.1 million increase in marketing costs, a $3.0 million increase in 
facility and overhead costs, and a $0.6 million increase in professional fees. Personnel costs increased due to an increase in 

60

 
 
 
 
sales and marketing personnel headcount of 24.0% from December 31, 2020 to December 31, 2021, increased sales 
commissions driven by our subscriptions revenue growth, and a $2.6 million increase in stock-based compensation expense. 
Marketing costs increased due to an increase in the number of marketing events held during 2021 as compared to 2020 as well 
as increased spending on marketing materials, slightly offset by a decrease in advertising expense. Facility and overhead costs 
increased due to higher allocated costs tied to our growth, such as information technology spending and human resources costs. 
Professional fees increased due to higher fees paid to third-party marketing consultants pursuant to new marketing campaigns 
and initiatives.

Research and Development Expense

Research and development

% of revenue

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

97,517 

$ 

70,241 

38.8%

 26.4 %

 23.1 %

Research and development expense increased $27.3 million, or 38.8%, in 2021 compared to 2020, primarily due to a 
$22.9 million increase in research and development personnel costs, a $3.2 million increase in facility and overhead costs, and a 
$1.1 million increase in professional fees. Personnel costs increased due to an increase in research and development personnel 
headcount of 28.1% from December 31, 2020 to December 31, 2021, coupled with a $2.5 million increase in stock-based 
compensation expense. Facility and overhead costs increased due largely to higher allocated costs tied to our growth, such as 
information technology spending, human resources costs, and office spending. Professional fees increased due to an increase in 
consulting services fees stemming from higher usage of external resources to assist in our platform development efforts.

General and Administrative Expense

General and administrative expense

% of revenue

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

83,704 

$ 

53,152 

57.5%

 22.7 %

 17.5 %

General and administrative expense increased $30.6 million, or 57.5%, in 2021 compared to 2020, primarily due to a $15.8 
million increase in professional fees, an $11.7 million increase in general and administrative personnel costs, and a $2.4 million 
increase in facility and overhead costs. Professional fees increased due largely to higher legal fees. Personnel costs increased 
due to the acceleration of $3.3 million in stock-based compensation expense stemming from the vesting of the 2019 CEO grant, 
coupled with an increase in general and administrative personnel headcount of 8.7% from December 31, 2020 to December 31, 
2021. Facility and overhead costs increased primarily due to higher allocated costs tied to our growth, such as information 
technology spending, human resources costs, and office spending as well as higher withholding taxes at certain of our foreign 
subsidiaries.

Other Expense (Income), Net

Other expense (income), net

% of revenue

*** - Indicates a percentage that is not meaningful

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

3,584 

$ 

(5,786) 

***

 1.0 %

 (1.9) %

61

Other expense was $3.6 million in 2021 compared to other income of $5.8 million in 2020. This change was primarily due 

to $3.7 million in foreign exchange losses in 2021 compared to $4.3 million in foreign exchange gains in 2020. Additionally, 
we recognized $1.0 million in other income in 2020 due to a payment received from a state government as a result of our 
achievement of certain job creation and capital investment goals. 

Interest Expense 

Interest expense

% of revenue

Year Ended December 31,

% Change

2021

2020

(dollars in thousands)

$ 

372 

$ 

 0.1 %

478 

 0.2 %

(22.2)%

Interest expense decreased by a nominal amount in 2021 compared to the same period in 2020, primarily due to lower 

commitment fees on the letter of credit outstanding.

Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

For a discussion and analysis of changes in financial condition and results of operations for the year ended December 31, 

2020 as compared to the year ended December 31, 2019, refer to our Annual Report on Form 10-K for the fiscal year ended 
December 31, 2020, filed with the SEC on February 18, 2021. 

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. However, we recognize the majority of our subscriptions revenue ratably 
over the terms of our subscriptions agreements, which are generally one to three years in length. 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, a decline in new sales or renewals in any one period may not 
be immediately reflected in our revenue results for that period. Such a decline, however, will negatively affect our revenue in 
future periods. Accordingly, the effect of significant downturns in sales and market acceptance of our platform and 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 term license subscription agreements due to the upfront revenue recognition.

Backlog

Backlog represents non-cancellable future amounts to be recognized under SaaS and term license subscription agreements 
and is representative of our remaining performance obligations. As of December 31, 2021 and 2020, we had backlog of $285.5 
million and $206.2 million, respectively. Approximately 34% of our backlog as of December 31, 2021 is not expected to be 
recognized in 2022. 

We expect backlog to continue to increase in absolute dollars as we continue to increase the number of SaaS 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 SaaS and term license subscription 
agreements with large customers, the specific timing of customer renewals, changes in customer financial circumstances, and 
foreign currency fluctuations. 

62

We often sign multiple-year SaaS subscription agreements. Backlog may vary based on changes in the average non-
cancellable term of SaaS and term license subscription agreements. The change in backlog resulting from changes in the 
average non-cancellable term of SaaS and term license subscription agreements may not be an indicator of the likelihood of 
renewal or expected future revenue. Accordingly, we believe fluctuations in backlog may not be a reliable indicator of future 
revenue, and we do not utilize backlog as a key management metric internally.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of and for the years ended December 31, 2021, 

2020, and 2019 (in thousands):

Cash and cash equivalents

Short-term investments and marketable securities

Property and equipment, net

Long-term investments

Working capital*

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

* Exclusive of the current portion of restricted cash

As of December 31,

2021

2020

2019

$ 

100,796  $ 

112,462  $ 

159,755 

55,179 

36,913 

12,044 

121,752 

109,826 

35,404 

36,120 

209,532 

— 

39,554 

— 

165,381 

Year Ended December 31,

2021

2020

2019

$ 

(53,918)  $ 

(7,620)  $ 

41,936 

2,786 

(153,357) 

110,468 

(8,926) 

(32,421) 

105,549 

As of December 31, 2021, we had $100.8 million of cash and cash equivalents and $55.2 million of short-term investments 

and marketable securities. 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 line of credit, will be 
sufficient to support working capital and capital expenditure requirements for at least the next 12 months. 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 draws on our existing line of credit, 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, the level of market acceptance of our applications, spending we 
may incur on our headquarters, and the global economic uncertainty and financial market conditions caused by the COVID-19 
pandemic and its impact on our business. 

In the event additional financing is required from outside sources, we may be unable to raise the funds on acceptable terms, 
if at all. To the extent existing cash and cash equivalents, short-term investments, and cash from operations are not sufficient to 
fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-
linked, or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness may have 
rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional 
equity financing may be dilutive to our existing stockholders. We recently have, and in the future may enter into, investments 
in, or acquisitions of, complementary businesses, products, or technologies, which could also require us to seek additional 
equity financing, incur indebtedness, or use cash resources. We have no present binding agreements or commitments to enter 
into any such acquisitions. If we are unable to raise additional capital when desired, our business, operating results, and 
financial condition could be adversely affected.

63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sources of Funds

We have financed our operations in large part with equity and debt financing arrangements, specifically proceeds raised 

from our initial public offering in 2017 and subsequent underwritten public offerings as summarized in the table below (in 
thousands except share and per share information):

May 2017 initial public offering

August 2018 public offering

September 2019 public offering

June 2020 public offering

Total

*

 Net of underwriting discounts and commissions and offering expenses

Shares Sold by 
Us

Price per Share Proceeds to Us*
77,789 

12.00  $ 

7,187,500 $ 

1,675,000  

1,825,000  

1,931,206  

12,618,706 

35.15 

55.70 

56.50 

57,829

101,303

107,914

$ 

344,835 

 We also have the ability to draw upon a $20.0 million revolving line of credit with a lender with an original maturity date 
of November 2022. In December 2021, we executed the first loan modification agreement which extended the revolving line of 
credit's maturity date to November 2025 and amended certain borrowing terms and financial covenants. Under the amended 
agreement, we may elect whether amounts drawn on the revolving line of credit bear interest on the outstanding principal 
amount at a rate per annum equal to either a) the Prime rate plus an additional interest rate margin or b) secured overnight 
financing rate (“SOFR”) plus an additional interest rate margin that is determined by the availability of the borrowings under 
the revolving line of credit. The additional interest rate margin will range from 0.75% to 1.25% in the case of Prime rate 
advances and from 1.75% to 2.25% in the case of SOFR rate advances. The revolving line of credit contains an unused facility 
fee up to 0.20% of the average unused portion of the revolving line of credit, which is payable quarterly. The agreement 
contains certain customary affirmative and negative covenants and requires us to maintain (i) an adjusted quick ratio of at least 
1.35 to 1.00 subject to a net cash threshold as set forth in the agreement and (ii) minimum adjusted EBITDA, in the amounts 
and for the periods set forth in the agreement. Any amounts borrowed under the credit facility are collateralized by substantially 
all of our assets. We were in compliance with all covenants as of December 31, 2021. As of December 31, 2021, we had no 
outstanding borrowings under this revolving line of credit, and we had outstanding letters of credit totaling $11.2 million in 
connection with securing our leased office space.

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 entities we believe to be complementary to our business, 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 increased. However, operating expenses have also increased as we have 
invested in growing our business. Outside of cash used to fund operations, our uses of cash in 2021 included the acquisition of 
Lana Labs, purchases of investments, and capital expenditures. Cash uses in 2020 included the acquisition of Novayre Solutions 
SL, or Novayre, and modest capital expenditures.

With respect to future uses of funds, we expect to incur annual royalty fees of $0.3 million for the foreseeable future related 

to a non-cancellable agreement for the use of technology that is integral in the development of our software. Additionally, we 
expect to incur capital expenditures in relation to the expanded occupancy of our headquarters, although such expenditures do 
not represent capital commitments. Furthermore, we are contractually obligated to make cash payments on our various 
operating leases through October 2031. As of December 31, 2021, the amount of funds we expect to utilize over this time 
period for our lease commitments is approximately $92.9 million.

In 2021, we executed a non-cancellable cloud hosting arrangement with Amazon Web Services, or AWS, that contains 
provisions for minimum purchase commitments. Purchase commitments under the agreement total $131.0 million over five 
years, including $22.0 million in the first year, $25.0 million in the second year, and $28.0 million in each of the third, fourth, 
and fifth years. The timing of payments under the agreement may vary, and the total amount of payments may exceed the 

64

 
minimum depending on the volume of services utilized. Spending under this agreement for the year ended December 31, 2021 
totaled $11.8 million.

Furthermore, we have other non-cancellable agreements for subscription software products that contain provisions 

stipulating minimum purchase commitments. However, the annual purchase commitments under these contracts are, 
individually and in the aggregate, immaterial to our consolidated statements of operations.

Historical Cash Flows

Operating Activities

For the year ended December 31, 2021, net cash used in operating activities of $53.9 million consisted of a net loss of 

$88.6 million, offset by $29.6 million in adjustments for non-cash items and $5.1 million of cash provided by changes in 
working capital. Adjustments for non-cash items consisted primarily of stock-based compensation of $23.8 million, 
depreciation and amortization expense of $5.7 million, bad debt expense of $0.4 million, and losses on the disposal of property 
and equipment of $0.1 million. These adjustments were partially offset by deferred income tax adjustments of $0.5 million. The 
increase in cash, cash equivalents, and restricted cash resulting from changes in working capital primarily consisted of a $33.4 
million increase in deferred revenue as a result of increased subscription sales, a $12.6 million increase in accrued 
compensation and related benefits as a result of the timing around and increase in employee benefit accruals for such costs as 
commissions and bonuses stemming from increased headcounts, an $11.5 million increase in accounts payable and accrued 
expenses due to larger accruals related to legal costs, AWS hosting costs, and marketing costs as well as timing differences 
between billings and payments, a $2.1 million decrease in prepaid expenses and other assets primarily due to the timing of 
payments, and a $1.5 million net decrease in right-of-use lease assets. These increases to working capital were offset by a $33.9 
million increase in accounts receivable stemming from increased sales and the timing of billings and collections in the fourth 
quarter, a $21.6 million increase in deferred commissions due to increased sales activity combined with the timing of order 
completions, and a $0.4 million decrease in other current and non-current liabilities. 

For the year ended December 31, 2020, net cash used in operating activities of $7.6 million consisted of a net loss of $33.5 

million, offset by $22.0 million in adjustments for non-cash items and $3.9 million of cash provided by changes in working 
capital. Adjustments for non-cash items consisted primarily of stock-based compensation of $15.3 million, depreciation and 
amortization expense of $5.9 million, and bad debt expense of $1.0 million, offset by a provision for deferred income taxes of 
$0.2 million. The increase in cash and cash equivalents resulting from changes in working capital primarily consisted of a $27.6 
million increase in deferred revenue as a result of increased subscription sales, an $11.8 million increase in accrued 
compensation and related benefits as a result of higher employee benefit accruals such as vacation and bonuses, a $3.7 million 
increase in other liabilities due to the deferral of social security tax payments pursuant to the provisions of the CARES Act and 
a contract liability arising from a three year deal that included a termination for convenience clause, a $3.7 million decrease in 
prepaid expenses and other assets attributable to timing, and a $3.4 million increase in operating lease liabilities as a result of 
recognizing a new right-of-use liability related to the expanded occupancy of our headquarters building. The increase to 
working capital was partially offset by a $33.6 million increase in accounts receivable stemming from increased sales as well as 
the timing of billings and collections, an $8.6 million increase in deferred commissions due to increased sales activity, and a 
$4.2 million decrease in accounts payable and accrued expenses due to the timing of payments.

Investing Activities

For the year ended December 31, 2021, net cash provided by investing activities was $41.9 million, which was primarily 
the result of $120.6 million in proceeds from investments, partially offset by $41.9 million in purchases of investments, $30.7 
million in payments, net of cash acquired, related to the acquisition of Lana Labs, and $6.1 million in purchases of property and 
equipment stemming from spending related to the expanded occupancy of our headquarters. 

For the year ended December 31, 2020, net cash used in investing activities was $153.4 million which was primarily the 

result of $146.0 million in purchases of investments and $6.1 million in payments, net of cash acquired, related to the 
acquisition of Novayre. In addition there were approximately $1.3 million in purchases of property and equipment.

65

Financing Activities

For the year ended December 31, 2021, net cash provided by financing activities was $2.8 million, consisting entirely of 

proceeds received from stock option exercises. 

For the year ended December 31, 2020, net cash provided by financing activities was $110.5 million, consisting of $108.3 
million in proceeds from our underwritten public offering, net of underwriting discounts and commissions, and $6.4 million in 
proceeds received from stock option exercises. These increases were offset by principal payments on finance lease obligations 
of $3.8 million and payment of public offering costs of $0.3 million.

For a discussion and analysis of net cash used in or provided by operating, investing, and financing activities for the year 
ended December 31, 2019, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with 
the SEC on February 18, 2021. 

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 involve a high degree of judgment and complexity. Accordingly, these are 
the estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition 
and results of our operations. See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on 
Form 10-K for a description of our other significant accounting policies and estimates. 

Revenue Recognition 

We generate subscriptions revenue primarily through the sale of SaaS subscriptions bundled with maintenance and support 

and hosting services and term license subscriptions bundled with maintenance and support. 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. If necessary, we estimate these components using the expected value method, which estimates variable consideration 
as the sum of probability-weighted amounts in a range of possible consideration amounts. We believe this method is the most 
appropriate to utilize because our variable components could vary by contract, leading to multiple potential outcomes. 

Our variable consideration estimates are subject to subsequent true-up adjustments which may result in changes to 
transaction prices, but such true-up adjustments are not expected to be material. Variable consideration is also included in the 
transaction price only to the extent it is probable a significant reversal will not occur. Factors considered when determining to 
incorporate variable consideration in the transaction price include, but are not limited to, whether the variable consideration is 
highly susceptible to factors outside of the company's influence, the length of time the uncertainty surrounding reversal is 
expected to last, our experience levels with similar types of contracts, our historical practices for similar contracts in similar 
circumstances, and the number and range of possible consideration amounts. The amount of variable consideration excluded 
from the transaction price for the years ended December 31, 2021, 2020, and 2019 was insignificant.

Allocating the Transaction Price Based on Standalone Selling Prices

66

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:

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

2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have 

established the SSP of term license subscriptions using a residual approach after first determining the SSP of 
maintenance and support. Maintenance and support 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 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. 

Stock-Based Compensation 

We measure and recognize compensation expense for all instrument types, including stock options, awards with market 
conditions, and restricted stock units, or RSUs, based on the estimated fair value of the award on the grant date. The methods 
for determining fair value vary by instrument type. 

Options

For the vast majority of our stock options, we estimate fair value using the Black-Scholes Option Pricing Model. For the 

option to purchase 700,000 shares of our Class A common stock granted to our Chief Executive Officer in May 2019, we 
estimated fair value using a Monte Carlo simulation because the award contains a market condition. Both valuation methods 
require the use of subjective assumptions, including but not limited to, the following: 

1. The expected term of the option - The expected term represents the period of time the stock options are expected to be 
outstanding. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise 
estimate the expected term of the stock options, we use the simplified method to estimate the expected term. Under the 
simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the 
end of the contractual term.

2. Current trading price - The current price of our stock is based on the closing market price of our Class A common 

stock as quoted on the Nasdaq Global Market on the date of grant. 

3. The expected stock price volatility - Expected volatility is based on the historical volatilities of our publicly traded 
stock as well as the publicly traded stock of comparable companies within our industry over the estimated expected 
term of the stock options. Expected volatility is sensitive to market- and company-specific conditions which may cause 
our stock price or the stock prices of our peers to fluctuate. Furthermore, expected volatility can be impacted by the 
companies we select as peers for inclusion in the analysis.

4. Expected dividend yield - We assume no dividend yield because dividends on our common stock are not expected to 

be paid in the near future, which is consistent with our history of not paying dividends on our common stock.

5. The risk-free interest rate - We utilize the yields of U.S. government securities, typically U.S. Treasury bonds, that 

have maturities commensurate with the expected term of the options.

RSUs

The fair value of RSUs is based on the closing market price of our Class A common stock as quoted on the Nasdaq Global 

Market on the date of grant. 

67

We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective 

basis. As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, 
which could materially impact our future stock-based compensation expense. 

Income Taxes

We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in 

which those temporary differences are expected to be reversed. We establish a valuation allowance against our deferred tax 
assets to the extent it is more likely than not that some or all of the deferred tax assets will not be realized. This requires us to 
make judgments and estimates regarding future reversals of existing taxable temporary differences, future taxable income, and 
the impact of tax planning strategies. 

Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax 

benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the 
taxing authority. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be 
realized upon settlement with the taxing authority. This determination involves significant judgment in estimating the impact of 
uncertainties in the application of GAAP and complex tax laws.

We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the 
actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns 
when identified. The amount of income taxes paid is subject to examination by U.S. federal, state, and foreign tax authorities. 
The estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts, and 
circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate 
in the period in which we make that determination. 

Business Combinations

We account for business combinations using the acquisition method of accounting as of the business combination date. 

Under this method, we allocate the fair value of purchase consideration to identifiable tangible and intangible assets acquired 
and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase 
consideration over the fair values of these identifiable assets and liabilities is allocated to goodwill. Determining the fair value 
of assets acquired and liabilities assumed requires us to use significant estimates and assumptions that may vary between 
transactions. Examples include, but are not limited to:

•

•

•

•

•

•

•

•

Selection of valuation methodologies;

Estimated fair values of intangible assets and liabilities; 

Estimated fair values of contractual obligations assumed from the acquiree under existing contractual obligations at the 
date of acquisition;

Estimated fair value of pre-acquisition contingent considerations;

Future expected cash flows from subscription and support contracts, professional services contracts, other customer 
contracts and acquired developed technologies and patents;

Discount rates;

Fair value of any assumed equity awards; and

Estimated fair value of any trade names and non-compete agreements.

While we use our best estimates and assumptions to determine the fair values of assets acquired and liabilities assumed at 

the date of acquisition, our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the 
measurement period, which can be up to one year from the acquisition date, these estimates may be refined, as necessary, and 
we may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with the 
corresponding offset to goodwill. Upon the conclusion of the measurement period or the final determination of the fair value of 
assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated 
statements of operations.

68

Impairment of Goodwill and Long-Lived Assets

We review goodwill, long-lived assets, and certain intangible assets for impairment at least annually and whenever events 

or changes in circumstances indicate the carrying value of an asset may not be recoverable.

Goodwill

With respect to our goodwill impairment assessment, we first perform a qualitative assessment, which requires us to 
consider events or circumstances including but not limited to, macroeconomic conditions, industry and market considerations, 
cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in 
customers, litigation, changes in the composition or carrying amount of a reporting unit’s net assets, and changes in our stock 
price. 

The events and factors listed above are examples and not all-inclusive. None of these events or circumstances by 

themselves would indicate it is more likely than not that goodwill associated with a reporting unit is impaired. As part of our 
analysis, we also weigh any positive or mitigating factors identified and holistically evaluate all events since the most recent 
quantitative impairment test to determine whether it is more likely than not the goodwill associated with the reporting unit is 
impaired. If, after assessing the totality of events or circumstances, we determine it is more likely than not the fair value of a 
reporting unit is greater than the carrying amount, then the quantitative goodwill impairment test is not performed. 

Because we operate under one reporting unit, the fair value of our reporting unit is based on our enterprise value. 
Additionally, because our enterprise value is significantly in excess of carrying value, any sensitivity in the underlying 
assumptions and estimates is not likely to trigger an impairment. No indicators of goodwill impairment were identified for the 
years ended December 31, 2021 and 2020.

Long-Lived Assets

Our long-lived assets, excluding goodwill, consist of property, leasehold improvements, hardware, software, equipment, 
and intangible assets. Such assets are reviewed for impairment at least annually or more frequently whenever events or changes 
in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by 
a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review 
indicates the carrying amount of our long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair 
value. There were no indicators of impairment of our long-lived assets noted for the years ended December 31, 2021, 2020, and 
2019.

Recent Accounting Pronouncements

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may 
impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily 
the result of fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

We had cash and cash equivalents of $100.8 million as of December 31, 2021, which consisted of investments in a money 
market fund, cash in readily available checking accounts, and overnight repurchase investments. These securities, which are not 
dependent on interest rate fluctuations that may cause principal amounts to fluctuate, are held for reinvestment and working 
capital purchases or, in the case of restricted cash, to settle an escrow liability established pursuant to a business combination.

In addition, as of December 31, 2021, we held $67.2 million of fixed income securities such as U.S. treasury bonds, 
commercial paper, corporate bonds, and asset-backed securities. These securities are subject to market risk due to fluctuations 

69

 
in interest rates, which may affect our interest income and the fair value of our investments. We classify investments as 
available-for-sale, including those with stated maturities beyond 12 months. As such, no gains or losses due to changes in 
interest rates are recognized in our consolidated statements of operations unless such securities are sold prior to maturity or due 
to expected credit losses. A hypothetical 100 basis point change in interest rates would not have had a material effect on the fair 
market value of our investment portfolio as of December 31, 2021. To date, fluctuations in interest income have also not been 
significant. Our investments are made for the purpose of preserving capital, fulfilling liquidity needs, and maximizing total 
return. We do not enter into investments for trading or speculative purposes.

At December 31, 2021, we had no outstanding borrowings.

Inflation Risk

We do not believe inflation has had a material effect on our business, financial condition, or results of operations. If our 
costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price 
increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar. Due to our international operations, we have foreign currency risks related to 
revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the British pound sterling, Euro, 
Australian dollar, and Swiss franc. Our sales contracts are primarily denominated in the local currency of the customer making 
the purchase. In addition, portions of operating expenses are incurred outside the United States and are denominated in foreign 
currencies. Decreases in the relative value of the U.S. dollar to other currencies may negatively affect revenue and other 
operating results as expressed in U.S. dollars. We do not believe an immediate 10% increase or decrease in the relative value of 
the U.S. dollar to other currencies would have a material effect on operating results.

We have experienced, and will continue to experience, fluctuations in net loss as a result of transaction gains or losses 
related to remeasuring certain current asset and current liability balances denominated in currencies other than the functional 
currency of the entities in which they are recorded. We have not engaged in the hedging of foreign currency transactions to 
date, although we may choose to do so in the future.

70

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm - Opinion on Consolidated Financial Statements (BDO 
USA, LLP; McLean, Virginia; PCAOB ID #243)

Report of Independent Registered Public Accounting Firm - Opinion on Internal Controls over Financial Reporting

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Stockholders' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Page

72

74

75

77

78

79

79

81

71

Report of Independent Registered Public Accounting Firm 

The Board of Directors and Shareholders 
Appian Corporation
McLean, Virginia

Opinion on the Consolidated Financial Statements 

We have audited the accompanying consolidated balance sheets of Appian Corporation (the “Company”) as of December 31, 
2021 and 2020, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and 
cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as 
the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material 
respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash 
flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally 
accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(“PCAOB”), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in 
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway 
Commission (“COSO”) and our report dated February 17, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express 
an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered 
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities 
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, 
whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, 
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a 
test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included 
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall 
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter 

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial 
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or 
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or 
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated 
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate 
opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition for Multiple Performance Obligations 

As discussed in Note 3 to the consolidated financial statements, certain of the Company's revenue contracts contain multiple 
performance obligations that might include Software as a Service (“SaaS”) subscriptions, term license subscriptions, 
maintenance and support and professional services. The Company accounts for individual products and services separately if 
they are capable of being distinct and are distinct within the context of the contract. In such cases, the transaction price is 
allocated to the distinct performance obligations based on their relative standalone selling price or residual approach and 
revenue is recognized when control of the distinct performance obligation is transferred.

72

We identified the identification of distinct performance obligations and the determination of standalone selling prices as a 
critical audit matter. Auditing these elements of revenue recognition was especially challenging due to the significant judgment 
involved in assessing the completeness of the distinct performance obligations in arrangements containing multiple 
performance obligations. In addition, the evaluation of the reasonableness of the range of prices used to establish the standalone 
selling price for maintenance and support and professional services was complex, which directly affects the amount of SaaS and 
term license subscriptions revenue recognized using the residual approach. 

The primary procedures we performed to address this critical audit matter included: 

•

•

•

Testing the design and operating effectiveness of internal controls over the Company's revenue recognition process 
including controls over: (i) the identification of distinct performance obligations, and (ii) the determination of 
standalone selling prices for the distinct performance obligations. 

Testing a sample of revenue contracts and underlying order documents to evaluate management’s identification of 
distinct performance obligations. 

Evaluating the reasonableness of management’s analysis supporting the standalone selling prices by tracing, on a 
sample basis, revenue transactions to the underlying source documents and recalculating the mathematical accuracy of 
the analysis.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2013.

McLean, Virginia
February 17, 2022

73

Report of Independent Registered Public Accounting Firm 

The Board of Directors and Shareholders 
Appian Corporation
McLean, Virginia

Opinion on Internal Control over Financial Reporting

We have audited Appian Corporation’s (the “Company’s”) internal control over financial reporting as of December 31, 2021, 
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material 
respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated 
statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the three years in the 
period ended December 31, 2021, and the related notes and our report dated February 17, 2022 expressed an unqualified 
opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, 
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the 
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the 
PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the 
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those 
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control 
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal 
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and 
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures 
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

As indicated in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting, management’s 
assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal 
controls of Lana Labs GmbH (“Lana Labs”), which was acquired on August 11, 2021, and which is included in the 
consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statement of operations, 
comprehensive loss, changes in stockholders’ equity, and cash flows for the year then ended. Lana Labs constituted 6% of total 
assets as of December 31, 2021, and 0.1% of revenues for the year then ended. Management did not assess the effectiveness of 
internal control over financial reporting of Lana Labs because of the timing of the acquisition which was completed on 
August 11, 2021. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the 
internal control over financial reporting of Lana Labs.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles. 

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance 
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; 
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in 
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made 

74

only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance 
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have 
a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

/s/ BDO USA, LLP

McLean, Virginia 
February 17, 2022

75

APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

As of December 31,

2021

2020

Assets

Current assets

Cash and cash equivalents

Short-term investments and marketable securities

Accounts receivable, net of allowance of $1,400 as of each of December 31, 2021 and December 31, 2020

Deferred commissions, current

Prepaid expenses and other current assets

Restricted cash, current

Total current assets

Property and equipment, net

Long-term investments

Goodwill

Intangible assets, net of accumulated amortization of $1,260 and $429 as of December 31, 2021 and December 31, 
2020, respectively

Operating right-of-use assets

Deferred commissions, net of current portion

Deferred tax assets

Restricted cash, net of current portion

Other assets

Total assets

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

Accrued expenses

Accrued compensation and related benefits

Deferred revenue, current

Operating lease liabilities, current

Other current liabilities

Total current liabilities

Operating lease liabilities, net of current portion

Deferred revenue, net of current portion

Deferred tax liabilities

Other non-current liabilities

Total liabilities

Commitments and contingent liabilities (see Note 4 and Note 14)

Stockholders’ equity

Class A common stock—par value $0.0001; 500,000,000 shares authorized and 39,964,298 shares issued and 
outstanding as of December 31, 2021; 500,000,000 shares authorized and 38,971,324 shares issued and outstanding 
as of December 31, 2020

Class B common stock—par value $0.0001; 100,000,000 shares authorized and 31,497,796 shares issued and 
outstanding as of December 31, 2021; 100,000,000 shares authorized and 31,707,866 shares issued and outstanding 
as of December 31, 2020

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

$ 

100,796  $ 

55,179 

130,049 

24,668 

26,781 

791 

338,264 

36,913 

12,044 

27,795 

7,144 

27,897 

49,017 

1,025 

2,373 

2,047 

$ 

$ 

504,519  $ 

5,766  $ 

15,483 

35,126 

150,169 

8,110 

1,067 

215,721 

48,784 

2,430 

209 

3,458 

270,602 

4 

3 

497,128 

(5,687) 

(257,531) 

233,917 

$ 

504,519  $ 

112,462 

109,826 

97,278 

17,899 

27,955 

— 

365,420 

35,404 

36,120 

4,862 

1,744 

30,659 

34,198 

489 

— 

3,625 

512,521 

2,967 

5,821 

22,981 

116,256 

6,923 

940 

155,888 

51,194 

3,886 

70 

4,878 

215,916 

4 

3 

470,498 

(5,010) 

(168,890) 

296,605 

512,521 

The accompanying notes are an integral part of these consolidated financial statements.

76

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

Year Ended December 31,

2021

2020

2019

$ 

263,738  $ 

198,710  $ 

Revenue

Subscriptions

Professional services

Total revenue

Cost of revenue

Subscriptions

Professional services

Total cost of revenue

Gross profit

Operating expenses

Sales and marketing

Research and development

General and administrative

Total operating expenses

Operating loss

Other expense (income)

Other expense (income), net

Interest expense

Total other expense (income)

Loss before income taxes

Income tax expense

Net loss

Net loss per share:

Basic and diluted

Weighted average common shares outstanding:

Basic and diluted

215,807 

166,511 

105,521 

369,259 

27,330 

76,763 

104,093 

265,166 

167,852 

97,517 

83,704 

349,073 

105,863 

304,573 

20,826 

67,940 

88,766 

130,316 

70,241 

53,152 

253,709 

(83,907)   

(37,902)   

3,584 

372 

3,956 

(87,863)   

778 

(5,786)   

478 

(5,308)   

(32,594)   

883 

151,299 

109,053 

260,352 

17,098 

76,743 

93,841 

117,440 

58,043 

41,496 

216,979 

(50,468) 

(941) 

367 

(574) 

(49,894) 

820 

$ 

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

(1.25)  $ 

(0.48)  $ 

(0.77) 

71,036,490 

69,050,565 

65,479,327 

The accompanying notes are an integral part of these consolidated financial statements.

77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)

Net loss

Comprehensive loss, net of income taxes

Foreign currency translation adjustment

Unrealized losses on available-for-sale securities

Year Ended December 31,

2021

2020

2019

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

(677)   

— 

(4,703)   

(22)   

(827) 

— 

Total other comprehensive loss, net of income taxes

$ 

(89,318)  $ 

(38,202)  $ 

(51,541) 

 The accompanying notes are an integral part of these consolidated financial statements.

78

 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except share data)

Balance December 31, 2018

  63,916,437  $ 

6  $  218,284  $ 

542  $ 

(145,640)  $ 

73,192 

Common Stock

Shares

Amount

Additional 
Paid-In 
Capital

Accumulated 
Other 
Comprehensive 
Income (Loss)

Accumulated 
Deficit

Total 
Stockholders' 
Equity

Cumulative-effect adjustment for the 
adoption of ASC 606

Net loss

Issuance of common stock from public 
offering, net of issuance costs

Issuance of common stock to directors

Vesting of restricted stock units

Exercise of stock options

Stock-based compensation expense

Other comprehensive loss

— 

— 

  1,825,000 

10,654 

521,460 

  1,194,471 

— 

— 

Balance December 31, 2019

  67,468,022 

Net loss

Issuance of common stock from public 
offering, net of issuance costs

Issuance of common stock to directors

Vesting of restricted stock units

Exercise of stock options

Stock-based compensation expense

Other comprehensive loss

— 

  1,931,206 

7,942 

270,609 

  1,001,411 

— 

— 

Balance December 31, 2020

  70,679,190 

Net loss

Issuance of common stock to directors

Vesting of restricted stock units

Exercise of stock options

Stock-based compensation expense

Other comprehensive loss

— 

4,950 

354,130 

423,824 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

6 

— 

1 

— 

— 

— 

— 

— 

7 

— 

— 

— 

— 

— 

— 

— 

— 

101,303 

— 

— 

4,899 

16,443 

— 

340,929 

— 

107,914 

— 

— 

6,376 

15,279 

— 

470,498 

— 

— 

— 

2,786 

23,844 

— 

— 

— 

— 

— 

— 

— 

— 

(827)   

(285)   

— 

— 

— 

— 

— 

— 

(4,725)   

60,941 

60,941 

(50,714)   

(50,714) 

— 

— 

— 

— 

— 

— 

101,303 

— 

— 

4,899 

16,443 

(827) 

(135,413)   

205,237 

(33,477)   

(33,477) 

— 

— 

— 

— 

— 

— 

107,915 

— 

— 

6,376 

15,279 

(4,725) 

(5,010)   

(168,890)   

296,605 

— 

— 

— 

— 

— 

(677)   

(88,641)   

(88,641) 

— 

— 

— 

— 

— 

— 

— 

2,786 

23,844 

(677) 

Balance December 31, 2021

  71,462,094  $ 

7  $  497,128  $ 

(5,687)  $ 

(257,531)  $ 

233,917 

The accompanying notes are an integral part of these consolidated financial statements.

79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Year Ended December 31,

2021

2020

2019

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

Depreciation and amortization

Bad debt expense

Loss on disposal of property and equipment

Change in fair value of available-for-sale securities

Deferred income taxes

Stock-based compensation
Changes in assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

Deferred commissions

Accounts payable and accrued expenses

Accrued compensation and related benefits

Other liabilities

Deferred revenue

Operating lease assets and liabilities

Net cash used in operating activities

Cash flows from investing activities:

Purchases of investments

Payments for acquisitions, net of cash acquired

Proceeds from investments

Purchases of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Principal payments on finance leases

Proceeds from public offerings, net of underwriting discounts

Payments of costs related to public offerings

Proceeds from exercise of common stock options
Net cash provided by financing activities

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted 
cash

Net (decrease) increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash at end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing information:

Accrued capital expenditures
Finance lease obligations to acquire new office furniture and fixtures and computer 
hardware

5,743 

410 

79 

— 

(498) 

23,844 

(33,904) 

2,094 

(21,588) 

11,467 

12,598 

(444) 

33,378 

1,544 

(53,918) 

(41,870) 

(30,729) 

120,593 

(6,058) 

41,936 

— 

— 

— 

2,786 
2,786 

694 

(8,502) 

112,462 

5,851 

984 

22 

22 

(184) 

15,279 

(33,559) 

3,740 

(8,575) 

(4,238) 

11,801 

3,681 

27,626 

3,407 

(7,620) 

(145,968) 

(6,138) 

— 

(1,251) 

(153,357) 

(3,822) 

108,260 

(346) 

6,376 
110,468 

3,216 

(47,293) 

159,755 

4,742 

99 

146 

— 

(334) 

16,443 

7,432 

8,972 

(9,319) 

(4,039) 

(3,072) 

1,318 

12,573 

6,827 

(8,926) 

— 

— 

— 

(32,421) 

(32,421) 

(653) 

101,653 

(350) 

4,899 
105,549 

623 

64,825 

94,930 

$ 

$ 

$ 

$ 

$ 

103,960  $ 

112,462  $ 

159,755 

323  $ 

1,505  $ 

165  $ 

1,182  $ 

379  $ 

—  $ 

—  $ 

—  $ 

331 

356 

— 

4,475 

The accompanying notes are an integral part of these consolidated financial statements.

80

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

1. Organization and Description of Business

Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) provides a low-code 
platform that accelerates the creation of high-impact business applications and workflows, enabling our customers to automate 
the most important aspects of their business. The Appian Low-Code Platform unifies the key capabilities needed to get work 
done faster: Process Mining + Workflow + Automation. Since 1999, industry leaders have trusted Appian and our open, 
enterprise-grade platform. Global organizations use our applications to improve customer experience, achieve operational 
excellence, and simplify global risk management and compliance. 

We were incorporated in the state of Delaware in August 1999. We are headquartered in McLean, Virginia and operate in 
Canada, Switzerland, the United Kingdom, France, Germany, the Netherlands, Italy, Australia, Spain, Singapore, Sweden, and 
Japan.

2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements and footnotes have been prepared in accordance with accounting 

principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board 
(“FASB”) Accounting Standards Codification (“ASC”).

We adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC

606”), the new revenue recognition guidance, on January 1, 2019 using the modified retrospective method. Under this method
of adoption, we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening
balance of accumulated deficit and applied the new standard only to contracts that were not completed prior to January 1, 2019.
For fiscal years 2018 and prior, revenue was recognized under ASC Topic 605, Revenue Recognition (“ASC 605”).

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and 

judgments that affect the amounts reported in these consolidated financial statements and accompanying notes. Although we 
believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results 
reported in future periods could differ from those estimates.

Significant estimates embedded in the consolidated financial statements include revenue recognition, income taxes and the 

related valuation allowance, the valuation of goodwill and intangible assets, leases, costs to obtain a contract with a customer, 
the valuation of financial instruments, and stock-based compensation.

The ongoing outbreak of the novel coronavirus disease (“COVID-19”) has resulted in the declaration of a global pandemic 

and introduced a level of disruption and uncertainty into the financial markets and global economy. While we continue to 
monitor the developments surrounding the pandemic, as of the date of issuance of these financial statements, we are not aware 
of any specific events or circumstances that would require us to update our estimates, assumptions, and judgments or revise the 
carrying value of our assets or liabilities. We cannot estimate the impacts COVID-19 may have on our business going forward 
as such impacts will be largely dependent upon a number of factors outside of our control including the extent and duration of 
the outbreak as well as any mitigating actions which may be undertaken by global governments and the general public.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All 

intercompany accounts and transactions have been eliminated in consolidation.

Public Offerings

81

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In June 2020, we completed an underwritten public offering of 2,500,000 shares of our Class A common stock, of which 
1,931,206 shares of Class A common stock were sold by us and 568,794 shares of Class A common stock were sold by existing 
stockholders. The underwriter purchased the shares from us and the selling stockholders at a price of $56.50 per share. Our net 
proceeds from the offering were $107.9 million, after deducting underwriting discounts and commissions and offering 
expenses. We did not receive any of the proceeds from the sale of shares by the selling stockholders.

In September 2019, we completed an underwritten public offering of 2,329,000 shares of our Class A common stock, of 

which 1,825,000 shares of Class A common stock were sold by us and 504,000 shares of Class A common stock were sold by 
existing stockholders. The underwriter purchased the shares from us and the selling stockholders at a price of $55.70 per 
share. Our net proceeds from the offering were $101.3 million, after deducting underwriting discounts and commissions and 
offering expenses. We did not receive any of the proceeds from the sale of shares by the selling stockholders.

Revenue Recognition

Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams.

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 such as payroll and benefits for our technology operations and customer support teams, 
and allocated facility costs and overhead. 

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 facility costs and overhead, and the costs of billable expenses such as travel and lodging. The unpredictability of the 
timing of entering into significant professional services agreements sold on a standalone basis may cause significant 
fluctuations in our quarterly financial results and allocated facility costs and overhead.

Concentration of Credit and Customer Risk

Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, 

restricted cash, accounts receivable, and our short- and long-term investments. Deposits held with banks may exceed the 
amount of insurance provided on such deposits; however, we believe the financial institutions holding our cash deposits are 
financially sound and, accordingly, minimal credit risk exists with respect to these balances.

With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. 
We believe no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. Revenue 
generated from government agencies represented 19.6%, 18.1%, and 17.1% of our revenue for the years ended December 31, 
2021, 2020, and 2019, respectively, of which the top three U.S. federal government agencies generated 5.6%, 6.6%, and 7.4% 
of our revenue for the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, 34.0%, 33.8%, and 32.3% 
of our revenue during the years ended December 31, 2021, 2020, and 2019, respectively, was generated from foreign 
customers. 

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of 
purchase, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consists of cash designated to 
settle an escrow liability stemming from a holdback agreement enacted pursuant to our acquisition of Lana Labs. The restriction 
on 25% of the balance will lapse on the later of either two months following the establishment of Lana Labs' annual financial 
statements for the year ended December 31, 2021 or October 31, 2022. The restrictions on the remaining 75% of the balance 
will lapse on August 11, 2023.

82

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated 

statements of cash flows (in thousands):

Cash and cash equivalents

Restricted cash, current

Restricted cash, non-current

Year Ended December 31,

2021

2020

2019

$ 

100,796  $ 

112,462  $ 

159,755 

791 

2,373 

— 

— 

— 

— 

Total cash, cash equivalents, and restricted cash

$ 

103,960  $ 

112,462  $ 

159,755 

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful 

accounts is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit 
losses on our receivables. We regularly review the composition of the accounts receivable aging, historical bad debts, changes 
in payment patterns, customer creditworthiness, and current economic trends. If the financial condition of our customers were 
to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be 
required and would increase bad debt expense. 

Activity in the allowance for doubtful accounts was as follows (in thousands):

Balance as of January 1

Additions

Less write-offs, net of recoveries

Balance as of December 31

Non-Trade Receivable

Year Ended December 31,

2021

2020

2019

$ 

$ 

1,400  $ 

410 

(410)   

600  $ 

984 

(184)   

1,400  $ 

1,400  $ 

600 

99 

(99) 

600 

We record non-trade receivables to reflect amounts due for activities other than sales of subscriptions to our platform and 
professional services. Our non-trade receivables relate largely to receivables resulting from the tenant improvement allowance 
granted to us for the build out of the fourth floor of our headquarters. The balance of the tenant improvement allowance 
receivable was $2.0 million as of December 31, 2021 and was classified within Prepaid expenses and other current assets in the 
accompanying consolidated balance sheets. We have received $0.9 million of the tenant improvement allowance as of 
December 31, 2021. 

Assets Recognized from the Costs to Obtain a Contract with a Customer

We capitalize costs of obtaining a contract with a customer, including sales commissions paid to our direct sales team, that 

are incremental costs to obtaining customer contracts. These costs are recorded as deferred commissions in the consolidated 
balance sheets. Costs to obtain a contract for a new customer or upsell are amortized over an estimated economic life of five 
years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determine 
the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, 
contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to 
determine whether events or changes in circumstances have occurred that could impact the estimated economic life. 
Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We also capitalize 
the incremental fringe benefits associated with commission expenses paid to our direct sales team. Costs to obtain a contract for 
professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements 
are one year or less.

83

 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amortization associated with deferred commission is recorded to sales and marketing costs in our consolidated statements 

of operations. The following table summarizes the activity of costs to obtain a contract with a customer for the years ended 
December 31, 2021, 2020, and 2019 (in thousands):

Balance as of January 1

Adoption of ASC 606

Additional contract costs deferred

Amortization of deferred contract costs

Balance as of December 31

Year Ended December 31,

2021

2020

2019

$ 

52,097  $ 

43,522  $ 

— 

51,283 

— 

31,898 

(29,695)   

(23,323)   

$ 

73,685  $ 

52,097  $ 

29,108 

5,094 

25,004 

(15,684) 

43,522 

Commission expense was $32.4 million, $23.3 million, and $15.7 million for the years ended December 31, 2021, 2020, 

and 2019, respectively.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using 

the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful 
life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or 
extend their useful lives are charged to expense as incurred.

The following table outlines the useful lives of our major asset categories:

Asset Category

Computer software

Computer hardware

Equipment

Office furniture and fixtures

Leasehold improvements

Useful Life (in 
years)

3

3

5

10

(a)

(a) - Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Business Combinations

We account for business combinations using the acquisition method of accounting as of the business combination date. 

Under this method, we allocate the fair value of purchase consideration to identifiable tangible and intangible assets acquired 
and liabilities assumed at their estimated fair values on the acquisition date. The excess of the consideration transferred over the 
fair value of the identifiable net assets acquired is recorded as goodwill and represents the future economic benefits expected to 
arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, non-
contractual relationships, and expected future synergies. Determining the fair value of assets acquired and liabilities assumed 
requires us to use significant judgments and estimates, including the selection of valuation methodologies, estimates of future 
revenue, costs, and cash flows, and discount rates.

During the measurement period, which can be up to one year from the acquisition date, these estimates may be refined, as 

necessary, and we may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, 
with the corresponding offset to goodwill. Upon the conclusion of the measurement period or the final determination of the fair 
value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our 
consolidated statements of operations. Acquisition related expenses and post-acquisition integration costs are recognized 
separately from the business combination and are expensed as incurred. Acquired property and equipment is depreciated on a 
straight-line basis over the assets' respective estimated remaining useful lives.

84

 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived Assets

Long-lived assets and certain intangible assets are reviewed for impairment at least annually or more frequently whenever 
events or changes in circumstances indicate the carrying amount of an asset may not be recoverable through undiscounted cash 
flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair 
value.

With respect to goodwill, we have the option to qualitatively assess whether it is more likely than not the fair value of a 
reporting unit is less than its carrying value. If we elect to perform a qualitative assessment and conclude it is more likely than 
not the fair value of the reporting unit is equal to or greater than its carrying value, no further assessment of that reporting unit’s 
goodwill is necessary; otherwise, goodwill must be tested for impairment. Absent a specifically identified triggering event, we 
historically perform our annual assessment on the first day of the fourth quarter.

 Because we operate under one reporting unit, the fair value of our reporting unit is based on our enterprise value. No 

indicators of impairment were identified for the years ended December 31, 2021, 2020, and 2019.

Investments and Fair Value of Financial Instruments

Refer to Note 17 for a detailed discussion on our policies specific to investments and determining fair value.

Stock-Based Compensation

We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the 

award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-
Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our 
common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based 
compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, 
stock-based compensation expense is recognized using the accelerated attribution method based on the probability of satisfying 
the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo 
simulation and recognized using the accelerated attribution method over the derived service period based on the expected 
market performance as of the grant date. We account for forfeitures as they occur rather than estimating expected forfeitures.

Leases

Refer to Note 4 for a detailed discussion on our policies specific to leasing arrangements. 

Basic and Diluted Loss per Common Share

We compute net loss per common share using the two-class method required for multiple classes of common stock and 
participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B 
common stock are substantially identical, other than voting and conversion rights. Accordingly, the Class A common stock and 
Class B common stock share equally in our net losses. 

Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common 

stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to 
common stockholders by the weighted-average number of shares of common stock outstanding during the period increased by 
common shares that could be issued upon the conversion or exercise of other outstanding securities to the extent those 
additional common shares would be dilutive. The dilutive effect of potentially dilutive securities is reflected in diluted net loss 
per share by application of the treasury stock method.

Due to net losses for the years ended December 31, 2021, 2020, and 2019, basic and diluted net loss per share were the 

same as the effect of potentially dilutive securities would have been antidilutive.

Income Taxes

85

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We use the asset and liability method of accounting for income taxes in which deferred tax assets and liabilities are 
recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying 
amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using 
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be 
reversed. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the 
period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of 
the deferred tax asset will not be realized. 

Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax 
benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing 
authority. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized 
upon settlement with the taxing authority. We recognize penalties and interest related to unrecognized tax benefits as income 
tax expense. 

We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the 
actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns 
when identified. The amount of income taxes paid is subject to examination by U.S. federal, state, and foreign tax authorities. 
The estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts, and 
circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate 
in the period in which we make that determination.

Segment Reporting

Operating segments are defined as components of an enterprise for which discrete financial information is available that is 

evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating 
financial performance. Our CODM is our Chief Executive Officer, who reviews financial information on a consolidated basis 
when deciding how to allocate resources and assess performance. Accordingly, we have determined we have one reportable 
segment and operating unit structure. 

Foreign Currency

Our operations located outside of the United States where the local currency is the functional currency are translated into 
U.S. dollars using the current rate method. Results of operations are translated at the average rate of exchange for the period. 
Assets and liabilities are translated at the closing rates on the balance sheet date. Gains and losses on translation of these 
accounts are accumulated and reported as a separate component of stockholders’ equity and other comprehensive income. 

Gains and losses on foreign currency transactions are recognized in the accompanying consolidated statements of 
operations as a component of Other expense (income), net. Transaction gains and losses from transactions denominated in 
foreign currencies resulted in net transaction losses of $3.7 million for the year ended December 31, 2021, net transaction gains 
of $4.3 million, and net transaction losses of $0.2 million for the years ended December 31, 2020 and 2019, respectively.

Research and Development

Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with 

product development. Our product utilizes a common codebase, whether accessed by customers via the cloud or via an on-
premises installation. Since our software is sold and licensed externally, we consider our software as external-use software for 
purposes of applying the capitalized software development guidance. Product development costs are expensed as incurred until 
technological feasibility has been established, which we define as the completion of all planning, designing, coding, and testing 
activities necessary to establish products that meet design specifications including functions, features, and technical 
performance requirements. We have determined technological feasibility for our software products is reached shortly before 
they are released for sale. Costs incurred after technological feasibility is established are not significant, and accordingly we 
expense all research and development costs when incurred. 

86

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Advertising Expenses

We expense advertising costs as they are incurred. Advertising expenses were $4.4 million, $6.0 million, and $4.1 million 

for the years ended December 31, 2021, 2020, and 2019, respectively.

Recent Accounting Pronouncements

Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income 
Taxes, which amends and aims to simplify accounting disclosure requirements regarding a number of topics including, but not 
limited to, intraperiod tax allocations, accounting for deferred taxes when there are changes in the consolidation of certain 
investments, tax basis step ups in an acquisition, and the application of effective rate changes during interim periods. This 
guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The 
adoption of the new guidance did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate 

Reform on Financial Reporting (Topic 848), which provides temporary optional expedients and exceptions to the GAAP 
guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market 
transition from LIBOR and other interbank offered rates to alternative reference rates such as the Secured Overnight Financing 
Rate (SOFR). This guidance is effective upon issuance and generally can be applied through the end of calendar year 2022. The 
adoption of the new guidance did not have a material impact on our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and 
Contract Liabilities from Contracts with Customers, which aims to improve the accounting for acquired revenue contracts with 
customers in a business combination. The ASU requires an entity to recognize and measure contract assets and contract 
liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for fiscal years beginning 
after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted including in interim periods. 
Refer to Note 5 for further details on the impact of adopting this new guidance. 

3. Revenue

Revenue Recognition 

We generate subscriptions revenue primarily through the sale of software-as-a-service (“SaaS”) subscriptions bundled with 
maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We 
generate professional services revenue from fees for our consulting services, including application development and 
deployment assistance as well as training related to our platform. 

The following table summarizes revenue from contracts with customers for the years ended December 31, 2021, 2020, and 

2019 (in thousands):

SaaS subscriptions

Term license subscriptions

Maintenance and support
Total subscriptions

Professional services
Total revenue

Performance Obligations and Timing of Revenue Recognition

87

Year Ended December 31,

2021

2020

2019

$ 

179,415  $ 

129,219  $ 

63,203 

21,120 

263,738 

105,521 

51,415 

18,076 

198,710 

105,863 

$ 

369,259  $ 

304,573  $ 

95,028 

40,428 

15,843 

151,299 

109,053 

260,352 

 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We primarily sell products and services that fall into the categories discussed below. Each category contains one or more 
performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service 
on its own or together with readily available resources, including those purchased separately from us) and distinct within the 
context  of  the  contract  (i.e.,  separately  identified  from  other  promises  in  the  contract)  or  (2)  a  series  of  distinct  products  or 
services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are 
delivered at a point in time while our SaaS subscriptions, maintenance and support, and professional services are delivered over 
time.

Subscriptions Revenue 

Subscriptions  revenue  is  primarily  related  to  (1)  SaaS  subscriptions  bundled  with  maintenance  and  support  and  hosting 
services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a 
per-user basis or through non-user based single application licenses. We bill customers and collect payment for subscriptions to 
our  platform  in  advance  on  an  annual,  quarterly,  or  monthly  basis.  In  certain  instances,  our  customers  have  paid  their  entire 
contract up front. 

SaaS Subscriptions 

We generate cloud-based subscription revenue primarily from the sales of subscriptions to access our cloud offering, 

together with related support services to our customers. We perform all required maintenance and support for our cloud 
offering. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to 
the customer. Our cloud-based subscription contracts generally have a term of one to three years in length. We bill customers 
and collect payment for subscriptions to our platform in advance, and they are non-cancellable.

Term License Subscriptions 

Our term license subscription revenue is derived from customers with on-premises installations of our platform pursuant to 

contracts that were historically one to three years in length. The majority of recent contracts have been one year in length. 
Although term license subscriptions are sold with maintenance and support, the software is fully functional at the beginning of 
the subscription and is considered a distinct performance obligation. On rare occasions, a cloud-based subscription may include 
the right for the customer to take possession of the license and as such, the revenue is treated as a license. Revenue from term 
license subscriptions is recognized when control of the software license has transferred to the customer, which is the later of 
delivery or commencement of the contract term. 

Maintenance and Support

Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which 
are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same 
and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the 
contract period, which is the period over which the customer has continuous access to maintenance and support.

Professional Services Revenue

Our  professional  services  revenue  is  comprised  of  fees  for  consulting  services,  including  application  development  and 
deployment  assistance  as  well  as  training  services  related  to  our  platform.  Our  professional  services  are  considered  distinct 
performance obligations when sold standalone or with other products.

Consulting Services

We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are 
not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone 
basis and either (1) under a fixed-fee arrangement or (2) on a time and materials basis. Consulting contracts are each considered 
separate performance obligations because they do not integrate with each other or with other products and services to deliver a 
combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other 
products and services, and do not affect the customer's ability to use the other consulting offerings or other products and 

88

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

services. Revenue under consulting contracts is recognized over time as services are delivered. For time and materials-based 
consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount 
corresponds directly to the value of our service to date.

Training Services

We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are 

redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered.

Significant Judgments and Estimates

Determining the Transaction Price

The transaction price includes both fixed and variable consideration. Variable consideration is included in the transaction 
price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the 
transaction price for the years ended December 31, 2021, 2020, and 2019 was insignificant. Our estimates of variable 
consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such 
true-up adjustments are not expected to be material.

Allocating the Transaction Price Based on Standalone Selling Prices (“SSP”)

We allocate the transaction price to each performance obligation in a contract based on its relative 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:

1. SaaS subscriptions - Given the highly variable selling price of our SaaS subscriptions, we establish the SSP of our 

SaaS subscriptions using a residual approach after first determining the SSP of consulting and training services. We have 
concluded the residual approach to estimating SSP of our SaaS subscriptions is an appropriate allocation of the transaction 
price.

2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have 
established SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and 
support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software 
licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and 
maintenance and support, we have concluded the residual approach to estimating SSP of term license subscriptions is an 
appropriate allocation of the transaction price.

3. Maintenance and support - We establish the SSP of maintenance and support 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 and training services - The SSP of consulting and training services is established based on the observable 

pricing of standalone sales within each geographic region where the services are sold. 

Contract Balances

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related 
to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the 
amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable 
when the right to invoice becomes unconditional. As of December 31, 2021 and 2020, contract assets of $14.0 million and 
$20.1 million, respectively, are included in the Prepaid expenses and other current assets and Other assets line items in our 
consolidated balance sheets.

Contract liabilities consist of deferred revenue and include payments received in advance of the satisfaction of performance 

obligations. Deferred revenue is then recognized as the revenue recognition criteria are met. Deferred revenue that will be 
recognized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as 

89

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

non-current. For the year ended December 31, 2021, we recognized $114.2 million of revenue that was included in the deferred 
revenue balance as of December 31, 2020.

Transaction Price Allocated to the Remaining Performance Obligations

As of December 31, 2021, we had an aggregate transaction price of $285.5 million allocated to unsatisfied performance 

obligations. We expect to recognize $189.6 million of this balance as revenue over the next 12 months with the remaining 
amount recognized thereafter.

4. Leases

As of December 31, 2021, we have operating leases for corporate offices. Our operating leases have remaining lease terms 

of roughly two years to 10 years, some of which include options to extend the leases for up to an additional 10 years.

Right-of-Use (“ROU”) Assets and Lease Liabilities

At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts 
and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized 
on the balance sheet as ROU assets, lease liabilities, and, if applicable, long-term lease liabilities. ROU assets represent our 
right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising 
from the lease. We have elected not to recognize on our consolidated balance sheets leases with a term of one year or less. For 
contracts with lease and non-lease components, we have elected not to allocate the contract consideration but rather to account 
for the lease and non-lease components as a single lease component.

Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the 

expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we use the 
incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The 
determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would 
have to pay for a collateralized loan with the same term and payments as the lease. We consider various factors, including our 
level of collateralization, estimated credit rating, and the currency in which the lease is denominated. Operating lease ROU 
assets also include any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or 
terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability 
when it is reasonably certain we will exercise that option while an option to terminate is considered unless it is reasonably 
certain we will not exercise the option. For certain equipment leases, we apply a portfolio approach to effectively account for 
the operating lease ROU assets and liabilities. 

Headquarters Lease

In April 2018, we entered into a lease agreement with respect to 176,222 square feet of office space in McLean, Virginia 
for a new corporate headquarters. The initial term of the lease was 150 months. We took initial possession of the first phase of 
the new headquarters in October 2018 and began to recognize rent expense as of that date. In February 2019, we took 
possession of an additional 28,805 square feet of adjacent office space. 

In January 2020, we entered into an amendment which adjusted the original terms of the headquarters lease. Under this 

amendment, we exercised an option to expand occupancy, adding 34,158 square feet of office space. Occupancy of the added 
space commenced on October 14, 2020. The amendment is considered a modification to the original lease and is accounted for 
as a separate contract because it represents a new ROU asset and the lease costs on the new space are charged at prevailing 
market rates. Effective July 1, 2020, we took possession of the space, began to recognize rent expense, and recorded a 
$7.9 million ROU asset and lease liability on our consolidated balance sheets.

In November 2021, we entered into a third amendment to our headquarters lease, in which we exercised an option to 

expand occupancy into two adjacent office spaces of 32,883 and 25,925 square feet, with occupancy to commence on 
September 1, 2022 and May 1, 2023, respectively. Concurrent with the amendment, we also entered into a sublease agreement 
in which we agreed to sublease 32,883 square feet of space effective September 1, 2022. The sublease terminates on August 31, 
2025 but may be extended one additional year at the sublessee’s option. The amendment is considered a modification to the 

90

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

original lease and each space is accounted for as a separate contract because it represents a new ROU asset and the lease costs 
charged on the new spaces are at prevailing market rates. As of December 31, 2021, we have not taken possession of either 
space nor met the criteria for the leases and sublease to be considered commenced. Accordingly, we have not reported an ROU 
asset or liability on our consolidated balance sheets nor have recorded expense or sublease income on our consolidated 
statements of operations in relation to the additional spaces.

Paydown of Finance Leases

In October 2020, we paid the full $2.7 million principal balances outstanding under our finance leases pursuant to an option 

permitting us to pay such balances in full at any time. As of the date of the paydown, the titles to the assets were transferred to 
us, the associated lease liabilities were retired, the carrying values of the purchased assets were adjusted, and the assets were 
reclassified from finance leases to property and equipment, net on the consolidated balance sheets.

Lease Costs

Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the 
expense for finance leases is recognized as depreciation expense and interest expense. We have lease agreements which require 
payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease 
component. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as maintenance 
costs based on future obligations, are not included in ROU assets or lease liabilities but rather are expensed as incurred and 
recorded as variable lease expense.

The following table sets forth the components of lease expense for the years ended December 31, 2021 and 2020 (in 

thousands):

Operating lease costs

Finance lease costs:

Amortization of right-of-use assets

Interest on lease liabilities

Short-term lease costs

Variable lease costs

Total

Year Ended December 31,

2021

2020

$ 

6,619  $ 

6,649 

— 

— 

149 

2,713 

1,242 

150 

565 

281 

$ 

9,481  $ 

8,887 

91

 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of December 31, 2021 and December 31, 2020 was 

as follows (in thousands, except for lease term and discount rate):

Operating right-of-use assets

Operating lease liabilities, current

Operating lease liabilities, net of current portion

Total operating lease liabilities

Weighted average remaining lease term (in years)

Weighted average discount rate

$ 

$ 

$ 

As of December 31,

2021

2020

27,897 

$ 

30,659 

8,110 

$ 

48,784 

56,894 

$ 

6,923 

51,194 

58,117 

9.5

10.6

 9.5 %

 9.6 %

For the years ended December 31, 2021 and 2020, amortization of operating ROU assets totaled $1.4 million and 
$1.6 million, respectively. For the years ended December 31, 2021 and 2020, interest expense on operating ROU liabilities 
totaled $5.3 million and $1.9 million, respectively. 

Supplemental cash flow information related to leases for the years ended December 31, 2021 and 2020 was as follows (in 

thousands):

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows for operating leases

Operating cash outflows for finance leases

Financing cash outflows for finance leases

ROU assets obtained in exchange for lease obligations:

Operating leases

Finance leases

Year Ended December 31,

2021

2020

2019

$ 

7,732  $ 

3,407  $ 

— 

— 

— 

— 

150 

3,822 

— 

— 

6,413 

108 

653 

523 

4,475 

A summary of our future minimum lease commitments under non-cancellable leases as of December 31, 2021 is as follows 

(in thousands): 

2022

2023

2024

2025

2026

Thereafter

Total lease payments

Less: imputed interest

Total

Operating 
Leases

$ 

$ 

8,451 

8,309 

8,632 

9,329 

9,366 

48,775 

92,862 

(35,968) 

56,894 

92

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Business Combinations

Lana Labs

In August 2021, we acquired 100% of the outstanding common stock of Lana Labs, a developer of process mining 

software, for approximately $30.7 million, net of cash acquired and debt. The acquisition was made due to the attractive nature 
of the product offerings of Lana Labs and in furtherance of our objective to enhance our platform. The transaction was financed 
through available cash on hand.

The allocation of the purchase price is preliminary pending the finalization of the fair value of the acquired net assets, 
liabilities assumed, deferred income taxes, and any assumed income and non-income based tax liabilities. As of the acquisition 
date, the purchase price was assigned to the acquired assets and assumed liabilities as follows (in thousands):

Cash acquired

Other current assets

Property and equipment

Developed technology

Customer relationships

Goodwill

Other non-current assets

Total assets acquired

Current liabilities

Non-current liabilities

Total liabilities assumed

Net assets acquired

$ 

256 

106 

59 

5,974 

750 

24,521 

27 

31,693 

638 

38 

676 

$ 

31,017 

There were no changes to our reportable segments as a result of the acquisition. From the acquisition date to December 31, 
2021, Lana Labs' revenue was $0.3 million and net loss before taxes was $2.6 million. Acquisition costs incurred in relation to 
the transaction were immaterial. We do not expect the purchase price allocated to goodwill and intangible assets to be 
deductible for tax purposes. 

Measurement period adjustments recognized in the year ended December 31, 2021 included a $0.8 million adjustment to 

developed technology and goodwill related to an update to the discount rate utilized in our valuation of intangibles, a 
$0.1 million deferred tax adjustment, and an immaterial adjustment to working capital. Additionally, as a result of our early 
adoption of ASU 2021-08, deferred revenue as of the acquisition date increased by $0.3 million, $0.1 million of which was 
recognized as revenue through December 31, 2021. 

Novayre Solutions SL

In January 2020, we acquired 100% of the outstanding common stock of Novayre Solutions SL (“Novayre”), a developer 

of a robotic process automation platform, for approximately $6.9 million. The acquisition was made due to the attractive nature 
of the product offerings of Novayre and in furtherance of our objective to enhance our platform. The transaction was financed 
through available cash on hand.

93

 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The allocation of the purchase price was based upon estimated fair values of the assets acquired and liabilities assumed. As 
of the acquisition date, the purchase price was assigned to the acquired assets and assumed liabilities as follows (in thousands):

Cash acquired

Other current assets

Property and equipment

Developed technology

Customer relationships

Goodwill

Other non-current assets

Total assets acquired

Current liabilities

Non-current liabilities

Total liabilities assumed

Net assets acquired

$ 

731 

213 

22 

1,537 

406 

4,348 

10 

7,267 

14 

344 

358 

$ 

6,909 

There were no changes to our reportable segments as a result of the acquisition. Additionally, acquisition costs incurred in 
relation to the transaction were immaterial. We do not expect the purchase price allocated to goodwill and intangible assets to 
be deductible for tax purposes.

6. Goodwill and Intangible Assets

Goodwill was comprised of the following as of December 31, 2021 and 2020 (in thousands):

Balance as of December 31, 2019

Goodwill acquired

Foreign currency translation adjustments

Balance as of December 31, 2020

Goodwill acquired

Foreign currency translation adjustments

Balance as of December 31, 2021

Carrying 
Amount

$ 

$ 

$ 

— 

4,348 

514 

4,862 

24,521 

(1,588) 

27,795 

Intangible assets, net consisted of the following as of December 31, 2021 and 2020 (in thousands):

Developed technology

Customer relationships - Non-Robotic Process Automation (“RPA”)

Customer relationships - RPA

Intangible assets, gross

Less: accumulated amortization

Intangible assets, net

As of December 31,

2021

2020

$ 

7,271  $ 

872 

261 

8,404 

(1,260)   

7,144  $ 

$ 

1,719 

172 

282 

2,173 

(429) 

1,744 

Intangible amortization expense was $0.8 million and $0.4 million for the years ended December 31, 2021 and 2020, 
respectively. As of December 31, 2021, the weighted average remaining amortization periods for developed technology, non-
RPA customer relationships, and RPA customer relationships were approximately 4.4 years, 9.0 years, and 8.0 years, 
respectively.

94

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The projected annual amortization expense related to amortizable intangible assets as of December 31, 2021 is as follows 

(in thousands):

Year Ended December 31,

2022

2023

2024

2025

2026

Thereafter

Total projected amortization expense

7. Property and Equipment, net

$ 

$ 

1,604 

1,552 

1,552 

1,234 

794 

408 

7,144 

Property and equipment, net consisted of the following as of December 31, 2021 and 2020 (in thousands):

Leasehold improvements

Office furniture and fixtures

Computer hardware

Computer software

Equipment

Property and equipment, gross

Less: accumulated depreciation

Property and equipment, net

As of December 31,

2021

2020

$ 

41,005  $ 

36,263 

2,536 

6,001 

1,353 

124 

51,019 

(14,106)   

$ 

36,913  $ 

2,521 

4,535 

1,352 

49 

44,720 

(9,316) 

35,404 

Depreciation expense totaled $4.9 million, $5.4 million, and $4.7 million for the years ended December 31, 2021, 2020, 
and 2019, respectively. During the year ended December 31, 2021, we retired $0.1 million of leasehold improvements, and $0.1 
million losses on disposal were recorded. During the year ended December 31, 2020, we retired $1.3 million of leasehold 
improvements, $0.2 million of computer hardware, and $0.1 million of office furniture and fixtures, and nominal losses on 
disposal were recorded.

95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Accrued Expenses

Accrued expenses consisted of the following as of December 31, 2021 and 2020 (in thousands):

Accrued hosting costs

Accrued labor costs

Accrued marketing and tradeshow expenses

Accrued audit and tax expenses

Accrued taxes payable

Accrued legal costs

Accrued reimbursable employee expenses

Accrued third party license fees

Accrued capital expenditures

Other accrued expenses

Total

9. Debt

Line of Credit

As of December 31,

2021

2020

$ 

1,995  $ 

1,229 

891 

1,167 

439 

550 

5,511 

870 

1,066 

379 

2,615 

$ 

15,483  $ 

908 

596 

370 

— 

760 

231 

570 

— 

1,157 

5,821 

In November 2017, we entered into a $20.0 million revolving line of credit with a lender with an original maturity date of 

November 2022. In December 2021, we executed the first loan modification agreement which extended the revolving line of 
credit's maturity date to November 2025 and amended certain borrowing terms and financial covenants. Under the amended 
agreement, we may elect whether amounts drawn on the revolving line of credit bear interest on the outstanding principal 
amount at a rate per annum equal to either a) the Prime rate plus an additional interest rate margin or b) the secured overnight 
financing rate (“SOFR”) plus an additional interest rate margin that is determined by the availability of the borrowings under 
the revolving line of credit. The additional interest rate margin will range from 0.75% to 1.25% in the case of Prime rate 
advances and from 1.75% to 2.25% in the case of SOFR rate advances. The revolving line of credit contains an unused facility 
fee up to 0.20% of the average unused portion of the revolving line of credit, which is payable quarterly. The agreement 
contains certain customary affirmative and negative covenants and requires us to maintain (i) an adjusted quick ratio of at least 
1.35 to 1.00 subject to a net cash threshold as set forth in the agreement and (ii) minimum adjusted EBITDA, in the amounts 
and for the periods set forth in the agreement. Any amounts borrowed under the credit facility are collateralized by substantially 
all of our assets. We were in compliance with all covenants as of December 31, 2021. As of December 31, 2021, we had no 
outstanding borrowings under this revolving line of credit, and we had outstanding letters of credit totaling $11.2 million in 
connection with securing our leased office space. 

10. Income Taxes

For the years ended December 31, 2021, 2020, and 2019, our loss before income taxes was comprised of the following (in 

thousands): 

Domestic

Foreign

Total

Year Ended December 31,

2021

2020

2019

$ 

$ 

(48,743)  $ 

(25,463)  $ 

(39,120) 

(7,131) 

(87,863)  $ 

(32,594)  $ 

(32,091) 

(17,803) 

(49,894) 

For the years ended December 31, 2021, 2020, and 2019, our income tax expense (benefit) was comprised of the following 

(in thousands):

96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Current:

Federal

State

Foreign

Total current expense

Deferred:

Federal

State

Foreign

Total deferred benefit

Total income tax expense

Year Ended December 31,

2021

2020

2019

$ 

15  $ 

11  $ 

79 

1,156 

1,250 

— 

— 

(472) 

(472) 

79 

977 

1,067 

— 

— 

(184) 

(184) 

$ 

778  $ 

883  $ 

3 

60 

1,091 

1,154 

— 

— 

(334) 

(334) 

820 

For the years ended December 31, 2021, 2020, and 2019, the provision for income taxes differs from the amount computed 

by applying the federal statutory income tax rates to our loss before the provision (benefit) for income taxes as follows: 

U.S. federal statutory tax rate

State tax expense

Foreign rate differential

Nondeductible expenses

Foreign tax expense

Equity compensation

Tax credits

Unrecognized tax benefits

Change in tax rate

Other

Deferred adjustments

Change in valuation allowance

Total

Year Ended December 31,

2021

2020

2019

 21.0 %

 21.0 %

 21.0 %

 4.7 

 (4.1) 

 (0.5) 

 (0.2) 

 7.0 

 5.0 

 (0.9) 

 (1.2) 

 (0.1) 

 0.9 

 18.2 

 (3.6) 

 (0.6) 

 — 

 46.2 

 12.0 

 (2.2) 

 — 

 (1.1) 

 (1.7) 

 7.1 

 (5.1) 

 (0.7) 

 — 

 12.0 

 6.5 

 (1.1) 

 — 

 (0.8) 

 (1.6) 

 (32.5) 

 (0.9) %

 (90.9) 

 (2.7) %

 (38.9) 

 (1.6) %

The effective tax rate of (0.9)% in 2021 includes $28.5 million of tax expense attributable to the change in the valuation 
allowance in the United States, Switzerland, and Germany (Lana Labs GmbH), partially offset by $10.5 million of favorable 
excess tax benefits for equity compensation and research credits. 

97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amount of the 

assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2021 
and 2020, significant components of our deferred tax assets and liabilities were as follows (in thousands): 

Deferred tax assets:

Net operating losses

Tax credits

Deferred revenue

Equity compensation

Lease liabilities

Accrued compensation

Bad debt

Other accrued expense

Other

Gross deferred tax assets

Less: Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Prepaid expenses

Right-of-use assets

Unbilled receivables

Depreciation

Intangible

Other

Total deferred tax liabilities

Net deferred tax asset

As of December 31,

2021

2020

$ 

81,499  $ 

15,510 

466 

4,917 

15,089 

3,390 

373 

1,452 

301 

122,997 

(94,399) 

28,598 

59,417 

11,922 

824 

3,090 

15,768 

339 

383 

— 

1,234 

92,977 

(65,914) 

27,063 

(12,576) 

(11,082) 

(7,361) 

(1,248) 

(3,892) 

(2,102) 

(603) 

(8,270) 

(2,559) 

(4,221) 

— 

(512) 

(27,782) 

(26,644) 

$ 

816  $ 

419 

As of December 31, 2021 and 2020, we had $239.9 million and $183.9 million of gross net operating loss (“NOL”) 
carryforwards for U.S. federal tax purposes, respectively. U.S. federal NOL carryforwards in the amount of $24.4 million, 
gross, generated prior to 2018 will expire, if unused, in 2037. Under the Tax Cuts and Jobs Act of 2017 (the “TCJA”), as 
modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), federal NOL carryforwards 
generated in tax years beginning after December 31, 2017 may be carried forward indefinitely. As of December 31, 2021, we 
had $215.5 million of gross NOL carryforwards generated after 2017 for U.S. federal tax purposes, which may be used to offset 
80% of our taxable income annually.

Section 382 of the Internal Revenue Code limits the utilization of NOL carryforwards when ownership changes occur, as 

defined by that section. A number of states have similar state laws that limit utilization of state NOL carryforwards when 
ownership changes occur. We have performed an analysis of our Section 382 ownership changes and have determined all U.S. 
federal and state NOL carryforwards are available for use as of December 31, 2021. 

As of December 31, 2021 and 2020, we had $13.7 million and $10.5 million, respectively, of U.S. federal tax credit 

carryforwards which will expire, if unused, between 2031 and 2041.

As of December 31, 2021 and 2020, we had U.S. gross state NOL carryforwards of $249.8 million and $177.2 million, 
respectively. We had tax effected state NOL carryforwards of $14.1 million and $11.2 million as of December 31, 2021 and 
2020, respectively. The rules regarding carryforwards vary from state to state, and the ability to utilize NOLs varies based on 
timing and amount. The majority of state NOL carryforwards generated prior to 2018 will expire, if unused, in 2037. Due to the 
TCJA, certain state NOL carryforwards generated after 2017 have an indefinite carryforward period.

98

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2021 and 2020, we had foreign gross NOL carryforwards of $126.6 million and $78.6 million, 
respectively, primarily attributable to our subsidiary in Switzerland. Those NOL carryforwards will begin to expire, if unused, 
between 2022 to 2029. 

The net change in the total valuation allowance during the year ended December 31, 2021 was $28.5 million, primarily 
driven by the valuation allowance recorded against the United States, Switzerland, and Germany (Lana Labs GmbH) deferred 
tax assets. 

As of December 31, 2021, we continued to maintain a full valuation allowance against U.S. deferred tax assets based on 
our cumulative operating results as of December 31, 2021, three-year cumulative loss, and assessment of our expected future 
results of operations. We have evaluated all evidence, both positive and negative, in assessing the likelihood of realizability, 
and we determined the negative evidence outweighed the positive evidence.

As of December 31, 2021, we have a valuation allowance of $14.8 million against foreign deferred tax assets, primarily for 

deferred tax assets at our subsidiary in Switzerland and Germany. Based on our cumulative operating results as of 
December 31, 2021 and assessment of our expected future results of operations, we determined it was not more likely than not 
that we would be able to realize the deferred tax assets prior to expiration. 

We plan to distribute previously undistributed earnings of our foreign subsidiaries back to the United States in future years. 

Upon repatriation of those earnings, if any, we may be subject to taxes, including withholding taxes, net of any applicable 
foreign tax credits. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable.

As of December 31, 2021 and 2020, we had unrecognized tax benefits of $3.1 million and $2.3 million, respectively, none 

of which would affect our effective tax rate if recognized due to the valuation allowance. The following table summarizes the 
activity related to our unrecognized tax benefit from January 1, 2019 to December 31, 2021 (in thousands): 

Balance as of December 31, 2018

Additions for tax positions in current years 

Additions for tax positions in prior years 

Reductions due to lapse in statutes of limitations 

Settlements 

Balance as of December 31, 2019

Additions for tax positions in current years 

Additions for tax positions in prior years 

Reductions due to lapse in statutes of limitations 

Settlements 

Balance as of December 31, 2020

Additions for tax positions in current years 

Additions for tax positions in prior years 

Reductions due to lapse in statutes of limitations 

Settlements 

Balance as of December 31, 2021

$ 

1,039 

536 

— 

— 

— 

1,575 

702 

— 

— 

— 

2,277 

812 

— 

— 

— 

$ 

3,089 

We recognize interest and penalties related to uncertain tax positions in income tax expense. During the years ended 
December 31, 2021, 2020, and 2019, we recognized nominal amounts in interest. The cumulative balance of interest and 
penalties as of December 31, 2021 and 2020 were not meaningful.

We anticipate total unrecognized tax benefits will not decrease over the next year. 

99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Due to the NOL 

carryforward, tax years 2016 through 2021 remain open to examination by the major taxing jurisdictions to which we are 
subject. There are no open examinations that would have a meaningful impact to our consolidated financial statements.

11. Stock-Based Compensation

Equity Incentive Plans

In May 2017, our Board of Directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan (the “2017 
Plan”), which became effective as of the date of the final prospectus for our initial public offering. The 2017 Plan provides for 
the grant of incentive stock options to employees and for the grant of nonstatutory stock options, restricted stock awards, RSUs, 
stock appreciation rights, performance-based stock awards, and other forms of equity compensation to employees, including 
officers, non-employee directors, and consultants. We initially reserved 6,421,442 shares of Class A common stock for issuance 
under the 2017 Plan, which included 421,442 shares that remained available for issuance under our 2007 Stock Option Plan (the 
“2007 Plan”) at the time the 2017 Plan became effective. The number of shares reserved under the 2017 Plan increases for any 
shares subject to outstanding awards originally granted under the 2007 Plan that expire or are forfeited prior to exercise. As a 
result of the adoption of the 2017 Plan, no further grants may be made under the 2007 Plan. As of December 31, 2021, there 
were 7,178,269 shares of Class A common stock reserved for issuance under the 2017 Plan, of which 3,920,861 were available 
to be issued.

Stock Options

We estimate the fair value of stock options containing only a service condition using the Black-Scholes option pricing 
model, which requires the use of subjective assumptions, including the expected term of the option, the current price of the 
underlying stock, the expected stock price volatility, expected dividend yield, and the risk-free interest rate for the expected 
term of the option. The expected term represents the period of time the stock options are expected to be outstanding. Due to the 
lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of 
the stock options, we use the simplified method to estimate the expected term for our stock options. Under the simplified 
method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual 
term. Expected volatility is based on historical volatilities for our common stock and the publicly traded stock of comparable 
companies over the estimated expected term of the stock options. We assume no dividend yield because dividends are not 
expected to be paid in the near future, which is consistent with our history of not paying dividends.

In May 2019, our Board of Directors granted a stock option to purchase 700,000 shares of our Class A common stock to 
our Chief Executive Officer (the “2019 CEO Grant”) under the 2017 Plan with an exercise price of $33.98 per share. The 2019 
CEO Grant is eligible to vest based on the achievement of a stock price appreciation target of our Class A common stock. 
Specifically, the 2019 CEO Grant vests when shares of our Class A common stock close at or above $84.63 per share for a 
period equal to or greater than 90 consecutive calendar days or upon the occurrence of a change in control in which the value of 
our Class A common stock is equal to or greater than $84.63 per share within five years of the grant date. The fair value of the 
2019 CEO Grant was determined using a Monte Carlo simulation. The fair value of the award at the grant date was $9.5 million 
and is amortized over the derived service period of 2.6 years. Effective February 2021, the 2019 CEO Grant has satisfied all of 
the conditions required to be considered fully vested. As a result, we accelerated the recognition of approximately $3.3 million 
in stock-based compensation expense during the year ended December 31, 2021.

The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years 

ended December 31, 2021, 2020, and 2019:

Risk-free interest rate

Expected term (in years)

Expected volatility

Expected dividend yield

* Not applicable because no stock options were granted during the period.

100

Year Ended December 31,

2021
*

*

*

*

2020
*

*

*

*

2019
2.1%

2.6
55.0%

—%

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes stock option activity for the years ended December 31, 2021, 2020, and 2019:

Outstanding at December 31, 2018

Granted

Exercised

Forfeited

Outstanding at December 31, 2019

Granted

Exercised

Expired

Forfeited

Outstanding at December 31, 2020

Granted

Exercised

Expired

Forfeited

Outstanding at December 31, 2021

Number of 
Shares

Weighted 
Average 
Exercise Price

5,021,068  $ 

700,000 

(1,194,471)   

(67,986)   

4,458,611 

— 

(1,001,411)   

(1,380)   

(56,580)   

3,399,240 

— 

(423,824)   

(4,100)   

(17,960)   

2,953,356  $ 

7.30 

33.98 

4.11 

10.17 

12.30 

— 

6.39 

11.82 

11.33 

14.06 

— 

6.55 

10.54 

11.78 

15.16 

Weighted 
Average 
Remaining 
Contractual 
Term (Years)

Aggregate 
Intrinsic Value 
(in thousands)

6.4 $ 

97,440 

44,081 

5.8  

115,501 

81,181 

4.9  

503,174 

43,525 

4.0 $ 

147,812 

Exercisable at December 31, 2021

2,777,396  $ 

15.37 

3.9 $ 

138,434 

There were no stock options granted during the years ended December 31, 2021 and 2020. The weighted average grant date 
fair value of stock options granted during the year ended December 31, 2019 was $13.57 per share. The total fair value of stock 
options that vested during the years ended December 31, 2021, 2020, and 2019 was $10.8 million, $2.8 million, and $2.0 
million, respectively. As of December 31, 2021, the total compensation cost related to unvested stock options not yet 
recognized was $0.1 million, which will be recognized over a weighted average period of 0.4 years.

101

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

The following table summarizes RSU activity for the years ended December 31, 2021, 2020, and 2019:

Non-vested and outstanding at December 31, 2018

Granted

Vested

Forfeited

Non-vested and outstanding at December 31, 2019

Granted

Vested

Forfeited

Non-vested and outstanding at December 31, 2020

Granted

Vested

Forfeited

Non-vested and outstanding at December 31, 2021

Number of 
Shares

Weighted 
Average Grant 
Date Fair 
Value

1,175,049  $ 

436,912 

(521,460)   

(67,666)   

1,022,835 

589,692 

(270,609)   

(176,915)   

1,165,003 

488,462 

(354,130)   

(89,806)   

1,209,529  $ 

26.04 

40.70 

27.81 

26.38 

31.39 

60.47 

31.29 

32.01 

46.04 

108.98 

43.39 

62.72 

70.99 

As of December 31, 2021, total unrecognized compensation cost related to unvested RSUs was approximately 

$76.2 million, which will be recognized over a weighted average period of 2.1 years.

In November 2018, our co-founders were granted 255,930 RSUs under the 2017 Plan at a fair value of $30.06 per share. 

The awards were approved by the Board of Directors. The value of these awards at the grant date was $7.7 million and was 
amortized over the vesting periods. The RSUs vested during the year ended December 31, 2020.

Stock-Based Compensation Expense

The following table summarizes the components of our stock-based compensation expense by instrument type for the years 

ended December 31, 2021, 2020, and 2019 (in thousands):

RSUs

Stock options

Common stock awards to Board of Directors

Total stock-based compensation expense

Year Ended December 31,

2021

2020

2019

$ 

$ 

19,382  $ 

10,745  $ 

3,839 

623 

4,164 

370 

23,844  $ 

15,279  $ 

12,667 

3,408 

368 

16,443 

102

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-based compensation expense for RSUs, stock options, and issuances of common stock to the Board of Directors is 
included in the following line items in the accompanying consolidated statements of operations for the years ended December 
31, 2021, 2020, and 2019 (in thousands):

Cost of revenue

Subscriptions

Professional services

Operating expenses

Sales and marketing

Research and development

General and administrative

Year Ended December 31,

2021

2020

2019

$ 

1,199  $ 

943  $ 

3,131 

1,477 

5,426 

5,224 

8,864 

2,821 

2,718 

7,320 

647 

2,748 

4,742 

3,480 

4,826 

Total stock-based compensation expense

$ 

23,844  $ 

15,279  $ 

16,443 

12. Stockholders' Equity

As of December 31, 2021, we had authorized 500,000,000 shares of Class A common stock and 100,000,000 shares of 
Class B common stock, each with a par value of $0.0001 per share, of which 39,964,298 shares of Class A common stock and 
31,497,796 shares of Class B common stock were issued and outstanding. The rights of the holders of Class A common stock 
and Class B common stock are identical, except with respect to voting and conversion rights. The holders of Class A common 
stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share on all 
matters subject to stockholder vote. The holders of Class B common stock also have approval rights for certain corporate 
actions. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its 
holder and will be automatically converted upon transfer thereof, subject to certain exceptions. In addition, upon the date on 
which the outstanding shares of Class B common stock represent less than 10% of the aggregate voting power of our capital 
stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock.

13. Basic and Diluted Loss per Common Share

The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 

2021, 2020, and 2019 (in thousands, except share and per share data):

Numerator:

Net loss

Denominator:

Year Ended December 31,

2021

2020

2019

$ 

(88,641)  $ 

(33,477)  $ 

(50,714) 

Weighted average common shares outstanding, basic and diluted

71,036,490 

69,050,565 

65,479,327 

Net loss per share, basic and diluted

$ 

(1.25)  $ 

(0.48)  $ 

(0.77) 

The following outstanding securities, prior to the use of the treasury stock method or the if-converted method, have been 
excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they 
would have been antidilutive:

Stock options

Non-vested restricted stock units

Year Ended December 31,

2021

2020

2019

2,953,356 

1,209,529 

3,399,240 

1,165,003 

4,458,611 

1,022,835 

103

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Commitments and Contingencies

Contractual Warranty and Indemnification Obligations

We provide limited product warranties. Historically, any payments made under these provisions have been immaterial. We 

also agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to 
indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party, 
generally our customers, in connection with certain intellectual property infringement claims by any third party arising from the 
use of our products or services in accordance with the agreement. The term of our contractual indemnity provisions often 
survives termination or expiration of the applicable agreement. We carry insurance that covers certain third-party claims 
relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these 
indemnification provisions.

Minimum Purchase Commitments

In July 2021, we executed a non-cancellable cloud hosting arrangement with Amazon Web Services (“AWS”) that contains 
provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $131.0 million 
over five years, including $22.0 million in the first year, $25.0 million in the second year, and $28.0 million in each of the third, 
fourth, and fifth years. The timing of payments under the agreement may vary, and the total amount of payments may exceed 
the minimum depending on the volume of services utilized. Spending under this agreement for the year ended December 31, 
2021 totaled $11.8 million.

Exclusive of the AWS contract, we have other non-cancellable agreements for subscription software products that contain 
provisions stipulating minimum purchase commitments. However, the annual purchase commitments under these contracts are, 
individually and in the aggregate, immaterial to our consolidated statements of operations.

Letters of Credit

At each of December 31, 2021 and 2020, we had outstanding letters of credit totaling $11.2 million in connection with 

securing our leased office space. All letters of credit are secured by our borrowing arrangement as described in Note 9.

Legal

From time to time, we are subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of 

business. There are no issues or resolutions of any matters expected to have a material adverse impact on our consolidated 
financial statements. 

Other Commitments

We also have entered into a non-cancellable agreement for the use of technology that is integral in the development of our 

software and pay annual royalty fees of $0.3 million.

15. Segment and Geographic Information

We consider operating segments to be components of our business in which separate financial information is available and 

evaluated regularly by our Chief Operating Decision Maker (“CODM”). Our CODM, who is our Chief Executive Officer, 
reviews financial information on a consolidated basis when deciding how to allocate resources and assessing performance. 
Accordingly, we have determined we have a single reporting segment and operating unit structure. 

104

APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes revenue by geography for the years ended December 31, 2021, 2020, and 2019 (in 

thousands):

Domestic

International

Total

Year Ended December 31,

2021

2020

2019

$ 

$ 

243,562  $ 

201,483  $ 

125,697 

103,090 

369,259  $ 

304,573  $ 

176,187 

84,165 

260,352 

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of 

the customer. There were no individual foreign countries from which more than 10% of our total revenue was attributable for 
the year ended December 31, 2021. Revenue from customers attributed to the United Kingdom were 12.5% and 12.2% of our 
total revenue for the year ended December 31, 2020 and 2019, respectively. Substantially all of our long-lived assets were held 
in the United States as of December 31, 2021 and 2020.

16. Retirement Plans

We have a defined contribution 401(k) retirement and savings plan (the “Plan”) to provide retirement benefits for all 
eligible employees. With limited exceptions, all employees over the age of 21 on the first day of the month immediately 
following the month of hiring are eligible to participate in the Plan. The Plan excludes United States expatriate employees, 
employees who are residents of Puerto Rico, and employees covered by another country’s pension retirement plan who are 
receiving employer contributions in that plan. The Plan allows eligible employees to make salary-deferred contributions up to 
75% of their pre-tax annual compensation, as defined in the Plan, as long as the total contributed does not exceed the annual 
maximum allowable amount under the Internal Revenue Code. The Company makes a semi-monthly matching contribution of 
100% of the employee's contribution for that pay period, up to a maximum of 4% of the employee's eligible gross compensation 
for that pay period. Company contributions vest ratably based on years of service over a four year period, beginning with the 
completion of the first year of service. For the years ended December 31, 2021, 2020, and 2019, we incurred $8.7 million, 
$6.8 million, and $5.5 million, respectively, in contribution expense related to employer matching contributions. 

We are obligated to make plan contributions for the employees of certain of our wholly-owned foreign subsidiaries. For the 

years ended December 31, 2021, 2020, and 2019, we incurred $2.4 million, $1.7 million, and $1.5 million, respectively, in 
contribution expense related to our foreign subsidiaries. 

17. Investments and Fair Value Measurements

Fair Value Measurements

We  use  a  three-tier  fair  value  hierarchy  to  classify  and  disclose  all  assets  and  liabilities  measured  at  fair  value  on  a 
recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their 
initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable 
inputs when determining fair value. The three tiers are defined as follows:

•

•

•

Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own 
assumptions.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input 
that  is  significant  to  the  fair  value  measurement.  Valuation  techniques  maximize  the  use  of  relevant  observable  inputs  and 
minimize  the  use  of  unobservable  inputs.  There  were  no  instruments  measured  at  fair  value  on  a  recurring  basis  using 
significant unobservable inputs during the years ended December 31, 2021 and 2020.

105

 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The valuation techniques that may be used to measure fair value are as follows: 

• Market approach - Uses prices and other relevant information generated by market transactions involving identical or 

comparable assets or liabilities; 

•

•

Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current 
market expectations about those future amounts; and

Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., 
replacement cost).

The  carrying  amounts  of  our  cash  and  cash  equivalents,  accounts  receivable,  accounts  payable,  and  accrued  expenses 
approximate  fair  value  as  of  December  31,  2021  and  December  31,  2020  because  of  the  relatively  short  duration  of  these 
instruments.

Investments

Our investment portfolio consists largely of debt investments classified as available-for-sale. Changes in the fair value of 
available-for-sale securities, excluding other-than-temporary impairments, are recorded in other comprehensive income (loss). 
Our investments as of December 31, 2021 and 2020 are as follows (in thousands): 

Fair Value Measurement

Balance Sheet Classification

As of December 31, 2021

Fair Value 
Level

Cost Basis

Unrealized 
Gains 
(Losses)

Market 
Value

Cash and 
Cash 
Equivalents

Short-term 
Investments 
and 
Marketable 
Securities

Long-term 
Investments

Money market fund

U.S. Treasury bonds

Commercial paper

Corporate bonds

Asset-backed securities

Total investments

Level 1

Level 1

Level 2

Level 2

Level 2

$ 

38,301  $ 

—  $ 

38,301  $ 

38,301  $ 

—  $ 

8,171 

23,312 

20,107 

15,655 

— 

— 

(14) 

(8) 

8,171 

23,312 

20,093 

15,647 

— 

— 

— 

— 

8,171 

23,312 

8,049 

15,647 

— 

— 

— 

12,044 

— 

$ 

105,546  $ 

(22)  $ 

105,524  $ 

38,301  $ 

55,179  $ 

12,044 

As of December 31, 2020

Fair Value Measurement

Balance Sheet Classification

Fair Value 
Level

Cost Basis

Unrealized 
Gains 
(Losses)

Market 
Value

Cash and 
Cash 
Equivalents

Short-Term 
Investments 
and 
Marketable 
Securities

Long-Term 
Investments

Money market fund

U.S. Treasury bonds

Commercial paper

Corporate bonds

Asset-backed securities

Total investments

Level 1

Level 1

Level 2

Level 2

Level 2

$ 

27,150  $ 

—  $ 

27,150  $ 

27,150  $ 

—  $ 

24,445 

76,905 

34,738 

26,373 

(3) 

— 

(11) 

(8) 

24,442 

76,905 

34,727 

26,365 

— 

16,493 

— 

— 

16,273 

60,412 

27,542 

5,599 

$ 

189,611  $ 

(22)  $ 

189,589  $ 

43,643  $ 

109,826  $ 

— 

8,169 

— 

7,185 

20,766 

36,120 

There were no Level 3 assets held at any point during the year ended December 31, 2021 and 2020. Additionally, there 

were no transfers between Levels 1 and 2 during the year ended December 31, 2021 and 2020.

106

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost basis and fair value of debt securities at December 31, 2021 and 2020, by contractual maturity, are as 

follows (in thousands):

Due in one year or less

Due after one year through five years

Total investments

Due in one year or less

Due after one year through five years

Total investments

As of December 31, 2021

Cost Basis

Fair Value

93,497  $ 

12,049 

93,480 

12,044 

105,546  $ 

105,524 

As of December 31, 2020

Cost Basis

Fair Value

153,483  $ 

36,128 

189,611  $ 

153,469 

36,120 

189,589 

$ 

$ 

$ 

$ 

Actual maturities may differ from the contractual maturities in the table above because borrowers have the right to call or 

prepay certain obligations.

18. Subsequent Events

In January 2022, our Chief Executive Officer exercised the 2019 CEO Grant of stock options as described in Note 11. 

Pursuant to this exercise, we received cash proceeds from the exercise of common stock options totaling $23.8 million.

107

 
 
 
 
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange 
Act that are designed to ensure information required to be disclosed by a company in the reports it files or submits under the 
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. 
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required 
to be disclosed by a company in the reports it files or submits under the Exchange Act is accumulated and communicated to its 
management, including its principal executive and principal financial officers, as appropriate to allow timely decisions 
regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the 
effectiveness of our disclosure controls and procedures as of December 31, 2021. Based on the evaluation of our disclosure 
controls and procedures as of December 31, 2021, our Chief Executive Officer and Chief Financial Officer concluded, as of 
such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such 

term is defined in Rules 13a-15(f) and 15(d)-15(f) of the Exchange Act. Our management assessed the effectiveness of our 
internal control over financial reporting as of December 31, 2021 based on the criteria set forth by the Committee of Sponsoring 
Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on this 
assessment, management concluded that, as of December 31, 2021, our internal control over financial reporting was effective.

Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not 
include the internal controls of Lana Labs GmbH, which was acquired in August 2021. We began consolidating the results of 
Lana Labs in the 2021 consolidated financial statements of Appian Corporation in connection with the acquisition, which 
represented approximately 6.0% of total assets as of December 31, 2021 and 0.1% of total revenue for the year ended 
December 31, 2021. Due to the timing of this acquisition and as permitted by SEC guidance, management excluded Lana Labs 
from its December 31, 2021 assessment of internal control over financial reporting.

The Annual Report on Form 10-K includes an attestation report of our independent registered public accounting firm 

regarding internal control over financial reporting, which appears in Part II, Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 

2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes our disclosure controls and 

procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their 
objectives and are effective at the reasonable assurance level. However, our management does not expect our disclosure 
controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no 
matter how well conceived and operated, can provide only reasonable, not absolute, assurance the objectives of the control 
system are met. Further, the design of a control system must reflect the fact there are resource constraints, and the benefits of 
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of 
controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent 
limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a 

108

simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two 
or more people, or by management override of the controls. The design of any system of controls also is based in part upon 
certain assumptions about the likelihood of future events, and there can be no assurance any design will succeed in achieving its 
stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions 
or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective 
control system, misstatements due to error or fraud may occur and not be detected.

Item 9B. Other Information.

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

109

Item 10. Directors, Executive Officers and Corporate Governance.

Part III

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of 

Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021.

We have adopted a Code of Conduct, applicable to all of our employees, executive officers, and directors. The Code of 
Conduct is available on our website at www.appian.com. We expect any amendments to the Code of Conduct or any waivers of 
its requirement will be disclosed on our website (www.appian.com) as required by applicable law or the listing standards of the 
Nasdaq Stock Market. The information contained on, or that can be accessed through, our website is not incorporated by 
reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to 
our website are intended to be inactive textual references only.

Item 11. Executive Compensation.

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of 

Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of 

Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.

Item 13. Certain Relationships and Related Transactions and Director Independence.

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of 

Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.

Item 14. Principal Accounting Fees and Services.

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of 

Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2021.

110

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this Annual Report on Form 10-K:

Part IV

(1) Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm are shown in the 

Index to Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

(2) All financial statement schedules are omitted because they are not applicable or the required information is shown in 

the financial statements or notes thereto.

(3) Exhibits are incorporated herein by reference or are filed with this Annual Report on Form 10-K as indicated below.

(b) Exhibits

Exhibit No. Description
3.1

Amended and Restated Certificate of 
Incorporation of Appian Corporation.

Amended and Restated Bylaws of Appian 
Corporation.

Form of Class A common stock certificate of 
Appian Corporation.

3.2

4.1

4.2

Reference
Previously filed as Exhibit 3.2 to Amendment No. 3 to the Company’s 
Registration Statement on Form S-1 (File No. 333-217510), filed with the 
Securities and Exchange Commission on May 12, 2017, and incorporated 
herein by reference.

Previously filed as Exhibit 3.4 to Amendment No. 2 to the Company’s 
Registration Statement on Form S-1 (File No. 333-217510), filed with the 
Securities and Exchange Commission on May 10, 2017, and incorporated 
herein by reference.

Previously filed as Exhibit 4.1 to Amendment No. 3 to the Registrant’s 
Registration Statement on Form S-1 (File No. 333-217510), filed with the 
Securities and Exchange Commission on May 12, 2017, and incorporated 
herein by reference.

Amended and Restated Investors' Rights 
Agreement by and among Appian 
Corporation and certain of its stockholders, 
dated February 21, 2014.

Previously filed as Exhibit 4.2 to the Company’s Registration Statement on 
Form S-1 (File No. 333-217510), filed with the Securities and Exchange 
Commission on April 27, 2017, and incorporated herein by reference.

4.3

Description of Securities.

Filed herewith.

10.1

10.2

10.3

10.4

10.5

2007 Stock Option Plan and Form of Option 
Agreement and Exercise Notice thereunder, 
as amended to date.+

Previously filed as Exhibit 10.1 to the Company’s Registration Statement on 
Form S-1 (File No. 333-217510), filed with the Securities and Exchange 
Commission on April 27, 2017, and incorporated herein by reference.

2017 Equity Incentive Plan and Forms of 
Stock Option Agreement, Notice of Exercise 
and Stock Option Grant Notice thereunder.+

Previously filed as Exhibit 10.2 to Amendment No. 2 to the Company’s 
Registration Statement on Form S-1 (File No. 333-217510), filed with the 
Securities and Exchange Commission on May 10, 2017, and incorporated 
herein by reference.

Non-Employee Director Compensation Plan, 
as amended December 16, 2020.+

Previously filed as Exhibit 10.3 to the Company’s Annual Report on 10-K 
(File No. 001-38098), filed with the Securities and Exchange Commission on 
February 18, 2021, and incorporated herein by reference.

Form of Indemnification Agreement by and 
between Appian Corporation and each of its 
directors and executive officers.+

Previously filed as Exhibit 10.4 to Amendment No. 2 to the Company’s 
Registration Statement on Form S-1 (File No. 333-217510), filed with the 
Securities and Exchange Commission on May 10, 2017, and incorporated 
herein by reference.

Employment Agreement, dated as of 
September 7, 2012, by and between Appian 
Corporation and Matthew Calkins.+

Previously filed as Exhibit 10.5 to the Company’s Registration Statement on 
Form S-1 (File No. 333-217510), filed with the Securities and Exchange 
Commission on April 27, 2017, and incorporated herein by reference.

111

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

Form of Amended and Restated Employment 
Agreement, dated as of April 27, 2017, by 
and between Appian Corporation and each of 
Mark Lynch and Chris Winters.+

Senior Executive Cash Incentive Bonus Plan.
+

Previously filed as Exhibit 10.7 to the Company’s Registration Statement on 
Form S-1 (File No. 333-217510), filed with the Securities and Exchange 
Commission on April 27, 2017, and incorporated herein by reference.

Previously filed as Exhibit 10.11 to the Company’s Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 23, 2018, and incorporated herein by reference.

Forms of Restricted Stock Unit Grant Notices 
and Restricted Stock Unit Award Agreements 
under 2017 Equity Incentive Plan.+

Previously filed as Exhibit 10.12 to the Company’s Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 23, 2018, and incorporated herein by reference.

Forms of Restricted Stock Award Grant 
Notice and Restricted Stock Award 
Agreement under 2017 Equity Incentive Plan.
+

Previously filed as Exhibit 10.13 to the Company’s Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 23, 2018, and incorporated herein by reference.

2017 Equity Incentive Plan French 
Qualifying Sub-Plan, with Forms of 
Restricted Stock Unit Grant Notice and 
Restricted Stock Unit Award Agreement 
thereunder.+

2017 Equity Incentive Plan CSOP Sub-Plan 
for UK Eligible Employees, with Forms of 
CSOP Stock Option Grant Notice and CSOP 
Option Agreement thereunder.+

Previously filed as Exhibit 10.14 to the Company’s Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 23, 2018, and incorporated herein by reference.

Previously filed as Exhibit 10.15 to the Company’s Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 23, 2018, and incorporated herein by reference.

Deed of Lease, dated April 17, 2018, between 
Appian Corporation and Tamares 7950 
Owner LLC.

Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-
K (File No. 001-38098), filed with the Securities and Exchange Commission 
on April 23, 2018, and incorporated herein by reference.

First Amendment to Deed of Lease, dated 
December 23, 2019, between Appian 
Corporation and Tamares 7950 Owner LLC.

Previously filed as Exhibit 10.15 to the Company's Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 20, 2020, and incorporated herein by reference.

Second Amendment to Deed of Lease, 
effective as of January 1, 2020, between 
Appian Corporation and Tamares 7950 
Owner LLC.

Software Enterprise OEM License 
Agreement, dated as of June 15, 2016, by and 
between Appian Corporation and Kx 
Systems, Inc.†

Addendum No. 1 to Software Enterprise 
OEM License Agreement, dated as of August 
20, 2019, by and between Appian 
Corporation and Kx Systems, Inc.

Third Amended and Restated Loan and 
Security Agreement, dated as of November 1, 
2017, by and between Appian Corporation 
and Silicon Valley Bank.†

Previously filed as Exhibit 10.16 to the Company's Annual Report on Form 
10-K (File No. 001-38098), filed with the Securities and Exchange 
Commission on February 20, 2020, and incorporated herein by reference.

Previously filed as Exhibit 10.11 to the Company’s Registration Statement 
on Form S-1 (File No. 333-217510), filed with the Securities and Exchange 
Commission on April 27, 2017, and incorporated herein by reference.

Previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 
10-Q (File No. 001-38098) filed with the Securities and Exchange 
Commission on October 31, 2019, and incorporated herein by reference.

Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-
K (File No. 001-38098), filed with the Securities and Exchange Commission 
on November 2, 2017, and incorporated herein by reference.

Employment Agreement, dated as of 
September 7, 2012, by and between Appian 
Corporation and Robert Kramer.+

Previously filed as Exhibit 10.2 to the Company's Quarterly Report on Form 
10-Q (File No. 001-38098) filed with the Securities and Exchange 
Commission on May 7, 2020, and incorporated herein by reference.

Employment Agreement, dated as of May 6, 
2020, by and between Appian Corporation 
and Eric Cross.+

Previously filed as Exhibit 10.2 to the Company's Quarterly Report on Form 
10-Q (File No. 001-38098) filed with the Securities and Exchange 
Commission on August 6, 2020, and incorporated herein by reference.

Appian Corporation Employee Stock 
Purchase Plan.+

Previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 
10-Q (File No. 001-38098) filed with the Securities and Exchange 
Commission on August 5, 2021, and incorporated herein by reference.

Third Amendment to Deed of Lease, dated as 
of November 30, 2021, between Appian 
Corporation and Tamares 7950 Owner LLC.

Filed herewith.

112

10.22

10.23

10.24

21.1

23.1

24.1

31.1

31.2

32.1

Agreement of Sublease, dated as of 
November 30, 2021, between Appian 
Corporation and Octagon, Inc.

Filed herewith.

Agreement on the Sale and Transfer of Shares 
dated as of August 4, 2021, by and among 
Appian Europe Ltd., and each of the Sellers 
and Managers identified therein.

Previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 
10-Q (File No. 001-38098) filed with the Securities and Exchange 
Commission on November 4, 2021, and incorporated herein by reference.

First Loan Modification Agreement, dated as 
of December 30, 2021, by and between 
Appian Corporation and Silicon Valley Bank.

Filed herewith.

Subsidiaries of Appian Corporation.

Filed herewith.

Consent of BDO USA, LLP, independent 
registered public accounting firm.

Filed herewith.

Power of Attorney. Reference is made to the 
signature page hereto.

Filed herewith.

Certification of Principal Executive Officer 
Pursuant to Rules 13a-14(a) and 15d-14(a) 
under the Securities Exchange Act of 1934, as 
Adopted Pursuant to Section 302 of the 
Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer 
Pursuant to Rules 13a-14(a) and 15d-14(a) 
under the Securities Exchange Act of 1934, as 
Adopted Pursuant to Section 302 of the 
Sarbanes-Oxley Act of 2002.

Certifications of Principal Executive Officer 
and Principal Financial Officer Pursuant to 18 
U.S.C. Section 1350, as Adopted Pursuant to 
Section 906 of the Sarbanes-Oxley Act of 
2002.*

Filed herewith.

Filed herewith.

Filed herewith.

101.INS

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

104

XBRL Instance Document - The instance 
document does not appear in the interactive 
data file because its XBRL tags are embedded 
within the inline XBRL document.

Attached.

Inline XBRL Taxonomy Extension Schema 
Document

Attached.

Inline XBRL Taxonomy Extension 
Calculation Linkbase Document

Attached.

Inline XBRL Taxonomy Extension Definition 
Linkbase Document

Attached.

Inline XBRL Taxonomy Extension Label 
Linkbase Document

Inline XBRL Taxonomy Extension 
Presentation Linkbase Document

Attached.

Attached.

Cover page interactive data file (formatted as 
Inline XBRL and contained in Exhibit 101)

Attached.

Indicates management contract or compensatory plan.
Confidential treatment has been granted as to certain portions of this exhibit. These portions have been omitted and filed separately with the 

+ 
†  
Securities and Exchange Commission.
*  
liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities 
Exchange Act of 1934, as amended.

This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the 

Item 16. Form 10-K Summary.

Not applicable.

113

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed 

on its behalf by the undersigned thereunto duly authorized.

SIGNATURE

February 17, 2022

By:

/s/ Matthew Calkins

APPIAN CORPORATION

Name: Matthew Calkins
Title: Chief Executive Officer 
and Chairman of the Board 
(Principal Executive Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and 
appoints Matthew Calkins, Mark Lynch, and Christopher Winters, and each of them acting individually, as his or her true and 
lawful attorneys-in-fact and agents, with full power of each to act alone, with full powers of substitution and resubstitution, for 
him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual 
Report  on  Form  10-K  with  all  exhibits  thereto  and  all  documents  in  connection  therewith,  with  the  Securities  and  Exchange 
Commission, granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power and authority to do 
and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and 
purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or 
his, her or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the dates indicated. 

Signature

/s/ Matthew Calkins
Matthew Calkins

/s/ Mark Lynch
Mark Lynch

/s/ Mark Matheos
Mark Matheos

/s/ Robert C. Kramer
Robert C. Kramer

/s/ A.G.W. “Jack” Biddle, III
A.G.W. "Jack" Biddle, III

/s/ Prashanth “PV” Boccassam
Prashanth “PV” Boccassam

/s/ Michael G. Devine
Michael G. Devine

/s/ Barbara “Bobbie” Kilberg
Barbara “Bobbie” Kilberg

/s/ Michael J. Mulligan
Michael J. Mulligan

Title
Chief Executive Officer and
Chairman of the Board 
(Principal Executive Officer)

Chief Financial Officer
(Principal Financial Officer)

Chief Accounting Officer
(Principal Accounting Officer)

Date

February 17, 2022

February 17, 2022

February 17, 2022

General Manager and Director

February 17, 2022

February 17, 2022

February 17, 2022

February 17, 2022

February 17, 2022

February 17, 2022

Director

Director

Director

Director

Director

114