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Appian (APPN) to Report Q1 Earnings: What's in the Cards?

Appian Corporation APPN is set to report first-quarter 2020 results on May 7.

For the quarter, the company projects total revenues between $71.0 million and $71.5 million, indicating year-over-year growth between 18% and 19%.

The Zacks Consensus Estimate for revenues is pegged at $70.5 million, indicating an increase of 18.3% from the year-ago quarter’s reported figure.

Moreover, Appian expects non-GAAP net loss in the range of 18-20 cents per share. The consensus mark for loss has increased 10.5% to 21 cents over the past 30 days.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 17.3%.

Let’s see how things have shaped up for this announcement.

Factors to Watch

Appian Corporation’s first-quarter 2020 results are expected to reflect consistent growth in subscription revenues. Cloud subscription revenues are projected in the range of $27.8 million and $28.1 million, indicating year-over-year growth between 31% and 32%.

Notably, as of Dec 31, the company’s subscription revenue retention remained strong at 116%.

Appian Corporation Price and EPS Surprise

Appian Corporation Price and EPS Surprise
Appian Corporation Price and EPS Surprise

Appian Corporation price-eps-surprise | Appian Corporation Quote

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Additionally, financial services remain Appian’s largest and one of the fastest growing industries. Increased adoption of the company’s solutions is likely to have driven subscription revenues in the first quarter as well.

Appian’s investment in new geographies, including through investment in direct and indirect sales channels, professional services and customer support and implementation partners drove top-line growth both domestically and internationally in the fourth quarter.

International operations contributed 32% of total revenues in the fourth quarter compared with 27% in the prior-year period.  This trend is likely to have continued, aiding the company’s expansion in international markets in the to-be-reported quarter.

In the first quarter, Appian unveiled the latest version of the Appian Low-code Automation Platform that employs intuitive, visual interface and pre-built development modules, which reduce the time required to build powerful and unique applications.

Steady demand for Appian’s low-code platform is expected to have contributed to the company’s top line in the soon to-be-reported quarter.

For instance, Celonis, the market leader in AI-enhanced Process Mining and Process Excellence software, selected Appian’s low-code platform to accelerate digital business process transformation and continuous process improvement for joint customers in the first quarter.

Moreover, Deloitte formed a strategic alliance with Appian to modernize its mission systems for government and commercial clients through Appian’s low-code development and intelligent automation, which ranges across several technologies including AI, robotic process automation (RPA) and robotic workforce management (RWM) among others.

These client wins are expected to have boosted the company’s top line in the first quarter. Notably, Appian generated revenues of $70.5 million in fourth-quarter 2019, up 17% from the year-ago quarter.

Moreover, Appian Guarantee program has been witnessing solid traction. The company expanded the program to other partners besides KPMG.

However, Appian has been facing stiff competition from other providers of low-code development platforms and from companies that provide business process management and case management software. The bottom-line is expected to reflect heightened competition.

Key Developments in Q1

Appian acquired Novayre Solutions SL, developer of the Jidoka RPA platform, which is currently the highest-rated RPA software on Gartner Peer Insights (>50 reviews). The acquisition makes Appian a one-stop shop for automation, with best-in-class solutions for workflow, AI, and RPA.

Additionally, Appian expanded technology partnership with Alphabet’s GOOGL Google Cloud in order to focus on intelligent document processing. The partnership enhanced the Appian AI offering, and offered customers AI capabilities pre-configured for Intelligent Document Processing (IDP) use cases.

Appian announced Appian RPA, augmenting Appian’s Low-code Automation Platform with the ability to govern cloud-native Appian software robots in a unified automation stack. Appian’s full-stack automation now combines AI, RPA, workflow, decision rules, and case management at the speed of low-code.

Notably, global Appian’s strategic partners including KPMG, Cognizant, Accenture Federal, Deloitte Spain, and Doble O Consulting are trained and certified on Appian RPA within their Appian practices.

Moreover, the company created a free COVID-19 Response Management application for enterprises and government agencies. The app establishes a central command center to safeguard the health and safety of employees and tracks health status, location, travel history and any COVID-19 incident details.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Appian Corporation has an Earnings ESP of -29.81% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.

DISH Network DISH has an Earnings ESP of +17.26% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here

Inphi Corporation IPHI has an Earnings ESP of +20.04% and is Zacks #2 Ranked. 

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