What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 169 added, 128 removed, 526 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except par value and share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets

32 unchanged sentences

Class A common stock—par value $ 0.0001 ;

500,000,000 shares authorized as of June 30, 2025 and December 31, 2024 and 43,245,763 and 42,938,701 shares issued as of June 30, 2025 and December 31, 2024, respectively

500,000,000 shares authorized as of September 30, 2025 and December 31, 2024 and 43,369,326 and 42,938,701 shares issued as of September 30, 2025 and December 31, 2024, respectively

Class B common stock—par value $ 0.0001 ;

100,000,000 shares authorized as of June 30, 2025 and December 31, 2024 and 31,088,085 and 31,090,085 shares issued as of June 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 313,160 shares as of June 30, 2025

100,000,000 shares authorized as of September 30, 2025 and December 31, 2024 and 31,088,085 and 31,090,085 shares issued as of September 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 639,751 shares as of September 30, 2025

Additional paid-in capital 612,488 591,281

7 unchanged sentences

(unaudited, in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

12 unchanged sentences

Total operating expenses 128,597 124,125 394,642 401,729

Operating loss ( 10,984 ) ( 39,194 ) ( 11,818 ) ( 58,729 )

Other non-operating (income) expense

Other (income) expense, net ( 17,564 ) ( 1,545 ) ( 23,280 ) 6,662

Operating income (loss) 13,114 ( 7,157 ) 1,296 ( 65,886 )

Other non-operating expense (income)

Other income, net ( 1,398 ) ( 12,544 ) ( 24,678 ) ( 5,882 )

Interest expense 5,311 6,168 15,948 17,921

Total other non-operating (income) expense ( 12,245 ) 4,562 ( 12,643 ) 18,415

Total other non-operating expense (income) 3,913 ( 6,376 ) ( 8,730 ) 12,039

Income (loss) before income taxes

9,201 ( 781 ) 10,026 ( 77,925 )

Income tax expense (benefit) 1,573 ( 164 ) 2,314 ( 629 )

Net loss $ ( 312 ) $ ( 43,592 ) $ ( 1,489 ) $ ( 76,515 )

Net loss per share:

Basic and diluted $ ( 0.00 ) $ ( 0.60 ) $ ( 0.02 ) $ ( 1.05 )

Income tax expense 1,376 1,319 3,690 690

Net income (loss) $ 7,825 $ ( 2,100 ) $ 6,336 $ ( 78,615 )

Earnings (loss) per share:

Basic $ 0.11 $ ( 0.03 ) $ 0.09 $ ( 1.08 )

Diluted $ 0.10 $ ( 0.03 ) $ 0.08 $ ( 1.08 )

Weighted average common shares outstanding:

Basic and diluted 74,202 72,300 74,148 72,800

Basic 74,008 72,396 74,101 72,664

Diluted 74,575 72,396 74,554 72,664

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

APPIAN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net loss $ ( 312 ) $ ( 43,592 ) $ ( 1,489 ) $ ( 76,515 )

Comprehensive loss, net of income taxes

Net income (loss) $ 7,825 $ ( 2,100 ) $ 6,336 $ ( 78,615 )

Comprehensive income (loss), net of income taxes

Foreign currency translation adjustments ( 91 ) ( 11,139 ) ( 23,448 ) 607

Unrealized loss on available-for-sale securities

Unrealized gain on available-for-sale securities 59 142 1 139

Other comprehensive income (loss), net of income taxes

$ 7,793 $ ( 13,097 ) $ ( 17,111 ) $ ( 77,869 )

Other comprehensive loss, net of income taxes $ ( 19,994 ) $ ( 44,696 ) $ ( 24,904 ) $ ( 64,772 )

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

23 unchanged sentences

Balance, June 30, 2025 74,020,688 $ 7 $ 605,084 $ ( 35,189 ) $ ( 613,643 ) $ ( 10,000 ) $ ( 53,741 )

Net income — — — — 7,825 — 7,825

Issuance of common stock to directors 6,276 — — — — — —

Vesting of restricted stock units 92,669 — ( 1,422 ) — — — ( 1,422 )

Exercise of stock options 24,618 — 248 — — — 248

Repurchase of common stock ( 326,591 ) — — — — ( 10,000 ) ( 10,000 )

Stock-based compensation expense — — 8,578 — — — 8,578

Other comprehensive loss — — — ( 32 ) — — ( 32 )

Balance, September 30, 2025

73,817,660 $ 7 $ 612,488 $ ( 35,221 ) $ ( 605,818 ) $ ( 20,000 ) $ ( 48,544 )

21 unchanged sentences

72,343,077 $ 7 $ 608,528 $ ( 11,812 ) $ ( 596,407 ) $ ( 45,974 ) $ ( 45,658 )

Net loss — — — — ( 2,100 ) — ( 2,100 )

Issuance of common stock to directors 5,060 — ( 192 ) — — 192 —

Vesting of restricted stock units 69,362 — ( 3,289 ) — — 2,627 ( 662 )

Exercise of stock options 12,126 — ( 348 ) — — 459 111

Stock-based compensation expense — — 9,505 — — — 9,505

Other comprehensive loss — — — ( 10,997 ) — — ( 10,997 )

Balance, September 30, 2024

72,429,625 $ 7 $ 614,204 $ ( 22,809 ) $ ( 598,507 ) $ ( 42,696 ) $ ( 49,801 )

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

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

Net loss $ ( 1,489 ) $ ( 76,515 )

Adjustments to reconcile net loss to net cash provided by operating activities

Net income (loss) $ 6,336 $ ( 78,615 )

Adjustments to reconcile net income (loss) to net cash provided by (used by) operating activities

Stock-based compensation 30,992 30,011

13 unchanged sentences

Deferred revenue ( 17,545 ) ( 15,096 )

Operating lease assets and liabilities ( 1,671 ) ( 954 )

Net cash provided by operating activities

Operating lease assets and liabilities, net

( 2,583 ) ( 1,788 )

Net cash provided by (used by) operating activities

61,737 ( 6,993 )

Cash flows from investing activities

8 unchanged sentences

Debt repayments ( 5,000 ) ( 3,750 )

Repurchase of common stock ( 10,000 ) ( 50,019 )

Repurchases of common stock

( 20,000 ) ( 50,019 )

Payments for employee taxes related to the net share settlement of equity awards ( 5,890 ) ( 4,883 )

3 unchanged sentences

Effect of foreign exchange rate changes on cash and cash equivalents 2,552 ( 375 )

Net decrease in cash and cash equivalents ( 6,345 ) ( 28,564 )

Net increase (decrease) in cash and cash equivalents 6,697 ( 50,158 )

Cash and cash equivalents at beginning of period

10 unchanged sentences

Organization and Description of Business

Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) is “The Process Company”.

We deliver a software platform that helps organizations run better processes that reduce costs, improve customer experiences, and gain a strategic edge.

Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) delivers a software platform that helps organizations run better processes that reduce costs, improve customer experiences, and gain a strategic edge.

Committed to client success, we serve many of the world’s largest companies across various industries.

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With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss.

For the three and six months ended June 30, 2025, revenue generated from government agencies represented 34.1 % and 33.8 % of total revenue, of which revenue from U.S.

For the three and nine months ended September 30, 2025, revenue generated from government agencies represented 32.4 % and 33.3 % of total revenue, of which revenue from U.S.

federal government agencies was 25.0 % and 24.9 % of total revenue, respectively.

Additionally, 38.4 % and 37.3 % of our revenue during the three and six months ended June 30, 2025, respectively, was generated from international customers.

For the three and six months ended June 30, 2024, revenue generated from government agencies represented 31.4 % and 30.4 % of total revenue, of which revenue from U.S.

Additionally, 39.7 % and 38.2 % of our revenue during the three and nine months ended September 30, 2025, respectively, was generated from international customers.

For the three and nine months ended September 30, 2024, revenue generated from government agencies represented 31.0 % and 30.6 % of total revenue, of which revenue from U.S.

federal government agencies was 23.2 % and 22.5 % of total revenue, respectively.

Additionally, 38.2 % and 37.7 % of our revenue during the three and six months ended June 30, 2024, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three and six months ended June 30, 2025 or 2024.

As of June 30, 2025 and December 31, 2024, we had one reseller whose accounts receivable balance comprised 15.2 % and 17.5 % of total accounts receivable, respectively.

Additionally, 36.3 % and 37.2 % of our revenue during the three and nine months ended September 30, 2024, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three and nine months ended September 30, 2025 or 2024.

As of September 30, 2025 and December 31, 2024, we had one reseller whose accounts receivable balance comprised 17.3 % and 17.5 % of total accounts receivable, respectively.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents.

Allowance for Doubtful Accounts

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

Allowance for Expected Credit Losses

Accounts receivable and unbilled revenue are stated at realizable value, net of an allowance for expected credit losses.

The allowance 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, current economic trends, and reasonable economic forecasts that affect collectability.

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.

The allowance for doubtful accounts totaled $ 2.7 million and $ 3.4 million as of June 30, 2025 and December 31, 2024, respectively.

If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for expected credit losses would be required and would increase bad debt expense.

The allowance for doubtful accounts totaled $ 2.9 million and $ 3.4 million as of September 30, 2025 and December 31, 2024, respectively.

Deferred Commissions

1 unchanged sentence

These costs are recorded as deferred commissions in the consolidated balance sheets.

Costs to obtain a subscriptions contract for a new customer or upsell an existing subscriptions customer 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.

Costs to obtain a subscriptions contract for a new customer or upsell an existing customer’s subscriptions 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.

Commissions paid relating to contract renewals are deferred and amortized over the related renewal period.

3 unchanged sentences

Amortization associated with deferred commissions is recorded to sales and marketing expense in our consolidated statements of operations.

Total commission expense was $ 12.8 million and $ 25.0 million for the three and six months ended June 30, 2025, respectively.

Total commission expense was $ 11.5 million and $ 22.9 million for the three and six months ended June 30, 2024, respectively.

Total commission expense was $ 13.2 million and $ 38.2 million for the three and nine months ended September 30, 2025, respectively.

Total commission expense was $ 12.6 million and $ 35.5 million for the three and nine months ended September 30, 2024, respectively.

Property and Equipment

13 unchanged sentences

Improvement to Income Tax Disclosures, which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively.

6 unchanged sentences

We are currently evaluating the impact this standard will have on our financial statement presentation and disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing entities to assume the conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets.

The new guidance will be effective for our annual and interim period reporting beginning in fiscal year 2026 on a prospective basis.

Early adoption is permitted.

We are currently evaluating the impact this standard will have on our financial statement presentation and disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40), which, among other changes, replaces the stage-based capitalization model with a principles-based model clarifying capitalization is to begin when (i) management has authorized and committed to funding a software project and (ii) it is probable the project will be completed and the software will be used to perform the function intended.

The new guidance will be effective for our annual and interim period reporting beginning in fiscal year 2028 and can be applied prospectively, retrospectively, or via a modified transition approach.

Early adoption is permitted.

We are currently evaluating the impact this standard will have on our financial statement presentation and disclosures.

Revenue Recognition

1 unchanged sentence

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 recorded during the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes revenue recorded during the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

49 unchanged sentences

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 three and six months ended June 30, 2025 and 2024 was immaterial.

The amount of variable consideration excluded from the transaction price for the three and nine months ended September 30, 2025 and 2024 was immaterial.

Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices;

20 unchanged sentences

The following table sets forth our contract asset and contract liability balances (in thousands):

June 30, 2025 December 31, 2024 June 30, 2024 December 31, 2023

September 30, 2025 December 31, 2024 September 30, 2024 December 31, 2023

Contract assets, current *

7 unchanged sentences

* Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 202.8 million and $ 166.6 million for the six months ended June 30, 2025 and 2024, respectively.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 263.0 million and $ 213.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2025, we had an aggregate transaction price of $ 553.2 million allocated to unsatisfied performance obligations.

As of September 30, 2025, we had an aggregate transaction price of $ 577.2 million allocated to unsatisfied performance obligations.

We expect to recognize $ 382.2 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter.

As of June 30, 2025, our lease portfolio consists entirely of operating leases for corporate offices.

As of September 30, 2025, our lease portfolio consists entirely of operating leases for corporate offices.

Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

3 unchanged sentences

We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three and six months ended June 30, 2025 and 2024 (in thousands, exclusive of sublease income):

Three Months Ended June 30, Six Months Ended June 30,

The following table sets forth the components of lease expense for the three and nine months ended September 30, 2025 and 2024 (in thousands, exclusive of sublease income):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

3 unchanged sentences

Total $ 4,966 $ 4,161 $ 13,122 $ 12,395

Sublease income totaled $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2025, respectively.

Sublease income totaled $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2024, respectively.

Sublease income totaled $ 0.3 million and $ 1.0 million for each of the three and nine months ended September 30, 2025 and 2024.

Lease Impairment Charges

There were no lease impairment charges during the three and six months ended June 30, 2025.

During the second quarter of 2024, we initiated actions to reduce the footprint of our leased office spaces.

During the three months ended June 30, 2024, we recorded non-cash lease impairment charges of $ 5.5 million within general and administrative expenses in our consolidated statements of operations related to the two ROU assets.

During the three months ended September 30, 2024, we recorded non-cash lease impairment charges of $ 5.5 million within general and administrative expenses in our consolidated statements of operations related to the two ROU assets.

The non-cash lease impairment charges represent the amount the carrying value of the two asset groups exceeded their estimated fair values.

1 unchanged sentence

The fair values of the two asset groups were measured using discounted cash flow models based on market rents and sublease incomes projected over the remaining lease terms.

During the third quarter of 2025, we recognized an incremental $ 0.8 million lease impairment charge related to one of the floors within our corporate headquarters that we ceased use of during the second quarter of 2024.

The impairment charge represents the amount the carrying value of the underlying asset exceeded its estimated fair value, which was determined by utilizing a discounted cash flow approach that incorporated lower than previously expected sublease income assumptions based on current market conditions.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of June 30, 2025 and December 31, 2024 is presented in the following table (in thousands, except for lease term and discount rate):

June 30, 2025 December 31, 2024

Supplemental balance sheet information related to operating leases as of September 30, 2025 and December 31, 2024 is presented in the following table (in thousands, except for lease term and discount rate):

September 30, 2025 December 31, 2024

Right-of-use assets for operating leases $ 29,110 $ 31,081

4 unchanged sentences

Weighted average discount rate 9.4 % 9.4 %

Supplemental cash flow and expense information related to operating leases for the three and six months ended June 30, 2025 and 2024 is shown below (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Supplemental cash flow and expense information related to operating leases for the three and nine months ended September 30, 2025 and 2024 is shown below (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

2 unchanged sentences

Interest expense on operating lease liabilities 1,440 1,579 4,389 4,803

There were no TIA reimbursements for the three and six months ended June 30, 2025 or 2024.

A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2025 is shown below (in thousands):

A summary of our future minimum lease commitments under non-cancellable leases as of September 30, 2025 is shown below (in thousands):

Operating Leases

2025 (excluding the six months ended June 30, 2025)

2025 (excluding the nine months ended September 30, 2025)

Thereafter 22,908

3 unchanged sentences

Goodwill and Intangible Assets

The following table details the changes in goodwill during the six months ended June 30, 2025 and fiscal year ended December 31, 2024 (in thousands):

The following table details the changes in goodwill during the nine months ended September 30, 2025 and fiscal year ended December 31, 2024 (in thousands):

Carrying Amount

3 unchanged sentences

Foreign currency translation adjustments 3,278

Balance as of June 30, 2025

Intangible assets, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

Balance as of September 30, 2025

Intangible assets, net consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

Developed technology $ 7,542 $ 6,685

3 unchanged sentences

Intangible assets, net $ 1,567 $ 2,240

Intangible amortization expense was $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2025, respectively.

Intangible amortization expense was $ 0.4 million and $ 0.7 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 1.2 years and 5.8 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of June 30, 2025 (in thousands):

Intangible amortization expense was $ 0.3 million and $ 0.9 million for the three and nine months ended September 30, 2025, respectively.

Intangible amortization expense was $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2025, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 0.9 years and 5.6 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of September 30, 2025 (in thousands):

Projected Amortization

2025 (excluding the six months ended June 30, 2025)

2025 (excluding the nine months ended September 30, 2025)

Thereafter 120

1 unchanged sentence

Property and Equipment, net

Property and equipment, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

Property and equipment, net consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

Leasehold improvements $ 55,449 $ 54,088

7 unchanged sentences

Property and equipment, net $ 33,168 $ 37,109

Depreciation expense totaled $ 2.2 million and $ 4.4 million for the three and six months ended June 30, 2025, respectively.

Depreciation expense totaled $ 2.2 million and $ 4.2 million for the three and six months ended June 30, 2024, respectively.

We had no disposals or retirements during the three and six months ended June 30, 2025.

We disposed of $ 0.3 million worth of fully depreciated equipment during the three and six months ended June 30, 2024.

Depreciation expense totaled $ 2.1 million and $ 6.5 million for the three and nine months ended September 30, 2025, respectively.

Depreciation expense totaled $ 2.2 million and $ 6.4 million for the three and nine months ended September 30, 2024, respectively.

We had no disposals or retirements during the three and nine months ended September 30, 2025.

We disposed of $ 1.0 million and $ 1.3 million worth of fully depreciated equipment during the three and nine months ended September 30, 2024, respectively.

Accrued Expenses

Accrued expenses consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

Hosting costs $ 4,460 $ 3,047

Marketing and tradeshow expenses 1,830 1,728

Accrued expenses consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

Hosting costs and license fees 5,847 3,715

Contract labor costs 2,685 1,043

Reimbursable employee expenses 1,297 1,569

Audit and tax expenses 1,506 1,029

Reimbursable employee expenses 1,477 1,569

Marketing and tradeshow expenses 1,017 1,728

Legal costs 627 289

Third party license fees 961 668

Taxes payable 523 1,285

13 unchanged sentences

The following table summarizes outstanding debt balances (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Borrowings under revolving credit facility

8 unchanged sentences

(1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement.

As of June 30, 2025, we were in compliance with all covenants contained in the Credit Agreement.

As of September 30, 2025, we were in compliance with all covenants contained in the Credit Agreement.

In addition, we had $ 62.0 million outstanding under our $ 100.0 million revolving credit facility, and we had outstanding letters of credit totaling $ 14.7 million in connection with securing leased office spaces.

2 unchanged sentences

Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements.

For the three and six months ended June 30, 2025, the actual effective tax rates were 124.7 % and 280.5 %, respectively.

For the three and six months ended June 30, 2024, the actual effective tax rates were 0.4 % and 0.8 %, respectively.

For the three and nine months ended September 30, 2025, the actual effective tax rates were 15.0 % and 36.8 %, respectively.

For the three and nine months ended September 30, 2024, the actual effective tax rates were ( 168.9 )% and ( 0.9 )%, respectively.

The change in the effective tax rates for each period as compared to the same period in the prior year were primarily due to a near pre-tax break-even position in 2025.

As of June 30, 2025, our net unrecognized tax benefits totaled $ 7.8 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

As of September 30, 2025, our net unrecognized tax benefits totaled $ 7.8 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

The amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations or settlements of tax audits is not material to our consolidated financial statements.

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On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

We are currently evaluating the impact of the OBBBA to our consolidated financial statements;

however, we do not anticipate the provisions of OBBBA to materially impact our current year effective income tax rate.

We have analyzed the impact of the provisions of the OBBBA and determined there was no material impact to our consolidated financial statements in the three and nine months ended September 30, 2025 nor do we anticipate the provisions of OBBBA to materially impact our current year effective income tax rate.

Stock-Based Compensation

7 unchanged sentences

We account for forfeitures of our stock-based awards as they occur rather than estimating expected forfeitures.

As of June 30, 2025, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 3.4 million and will be recognized over a weighted average period of 0.8 years.

As of September 30, 2025, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 2.1 million and will be recognized over a weighted average period of 0.6 years.

Total unrecognized compensation cost related to unvested RSUs was approximately $ 47.7 million, which will be recognized over a weighted average period of 1.8 years.

2 unchanged sentences

The portion of the 2025 annual bonus to be paid in the form of RSUs is recorded as stock-based compensation expense while the related obligations are recorded as liabilities in the ‘Accrued compensation and related benefits’ line item on our consolidated balance sheets.

During the three and six months ended June 30, 2025, we recognized $ 1.7 million and $ 2.9 million of stock-based compensation related to this program, respectively.

The following table summarizes the components of our stock-based compensation expense for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

During the three and nine months ended September 30, 2025, we recognized $ 1.4 million and $ 4.3 million of stock-based compensation related to this program, respectively.

The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

Total stock-based compensation expense $ 10,260 $ 9,505 $ 30,992 $ 30,011

Basic and Diluted Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period.

Diluted loss per share is computed similar to basic, except the weighted average number of common shares outstanding is increased to include additional outstanding shares from the assumed exercise of stock options and vesting of RSUs, if dilutive.

The dilutive effect, if any, of convertible shares is

calculated using the treasury stock method.

As we reported net losses for all periods presented, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised.

The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been antidilutive to earnings per share:

Three and Six Months Ended June 30,

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period.

Diluted earnings (loss) per share is computed similar to basic, except the weighted average number of common shares outstanding is increased to include additional

outstanding shares from the assumed exercise of stock options and vesting of RSUs, if dilutive.

The dilutive effect, if any, of convertible shares is calculated using the treasury stock method.

The following table is a reconciliation of weighted average number of shares outstanding used to compute basic and diluted earnings (loss) per share (in thousands):

Three months ended September 30,

Nine months ended September 30,

2025 2024 2025 2024

Net income (loss) 7,825 ( 2,100 ) 6,336 ( 78,615 )

Weighted average number of shares outstanding - basic 74,008 72,396 74,101 72,664

Effect of dilutive securities

Stock options 181 — 197 —

Non-vested restricted stock units 1,401,959 1,189,539

Restricted stock units 380 — 254 —

Performance share units

Weighted average number of shares outstanding - diluted 74,575 72,396 74,554 72,664

Earnings (loss) per share - basic $ 0.11 $ ( 0.03 ) $ 0.09 $ ( 1.08 )

Earnings (loss) per share - diluted $ 0.10 $ ( 0.03 ) $ 0.08 $ ( 1.08 )

For the three and nine months ended September 30, 2025, approximately 929,000 and 1,161,000 outstanding common stock equivalents, respectively, were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

As we reported net losses for three and nine months ended September 30, 2024, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised.

Commitments, Contingencies, and Other Matters

3 unchanged sentences

The agreement, which originated in July 2021 and was amended in October 2024, currently contains minimum annual spending requirements of $ 44.0 million from November 2024 to October 2029.

Spending under this agreement for the three and six months ended June 30, 2025 totaled $ 12.9 million and $ 23.3 million, respectively.

Spending under this agreement for the three and six months ended June 30, 2024 totaled $ 10.7 million and $ 21.0 million, respectively.

Spending under this agreement for the three and nine months ended September 30, 2025 totaled $ 14.3 million and $ 37.6 million, respectively.

Spending under this agreement for the three and nine months ended September 30, 2024 totaled $ 10.8 million and $ 31.8 million, respectively.

The timing of payments under the agreement may vary, but we expect to meet our minimum annual spending requirement during the term of the arrangement.

11 unchanged sentences

All of these motions were denied, and final judgment was entered by the Court on September 15, 2022.

The final judgment reaffirmed the $ 2.036 billion in damages and also ordered Pegasystems to pay Appian $ 23.6 million in attorney's fees associated with the case as well as statutory post-judgment interest on the judgment at an annual rate of 6 %, or approximately $ 122.0 million per year.

The final judgment

reaffirmed the $ 2.036 billion in damages and also ordered Pegasystems to pay Appian $ 23.6 million in attorney's fees associated with the case as well as statutory post-judgment interest on the judgment at an annual rate of 6 %, or approximately $ 122.0 million per year.

Defendant Youyong Zou has satisfied the judgment of $ 5,000 (plus interest) against him in lieu of appealing that judgment.

5 unchanged sentences

On March 7, 2025, the Supreme Court of Virginia granted Appian’s petition and agreed to hear Appian’s appeal as well as Pegasystems’ cross-issues for appeal.

The timeline for hearing Appian’s appeal is solely in the control of the Supreme Court, and we cannot predict the outcome of any appeals or the exact time it will take to resolve them.

Appian’s argument on the appeal was heard on October 28, 2025.

The timeline for deciding Appian’s appeal is solely in the control of the Supreme Court, and we cannot predict the outcome of any appeals or the exact time it will take to resolve them.

Judgment Preservation Insurance

6 unchanged sentences

Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations.

JPI amortization expense was $ 3.1 million and $ 6.2 million for the three and six months ended June 30, 2025, respectively.

JPI amortization expense was $ 4.5 million and $ 9.0 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, $ 12.5 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 16.7 million is classified as 'Other assets’ on our consolidated balance sheets.

JPI amortization expense was $ 3.2 million and $ 9.4 million for the three and nine months ended September 30, 2025, respectively.

JPI amortization expense was $ 3.6 million and $ 12.6 million for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2025, $ 12.5 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 13.6 million is classified as 'Other assets’ on our consolidated balance sheets.

Other Legal Matters

5 unchanged sentences

In June 2025, we repurchased 0.3 million shares under this program at an average share price of $ 31.91 , totaling an aggregate cost of $ 10.0 million.

As of June 30, 2025, shareholders’ equity included 74.0 million shares outstanding, net of 0.3 million shares of common stock held in treasury.

In August 2025, our Board of Directors authorized a second program to repurchase up to an additional $ 10.0 million of our common stock from August 2025 to August 2027.

In September 2025, we repurchased 0.3 million shares under this program at an average share price of $ 30.60 , totaling an aggregate cost of $ 10.0 million.

As of September 30, 2025, shareholders’ equity included 73.8 million shares outstanding, net of 0.6 million shares of common stock held in treasury.

Segment and Geographic Information

4 unchanged sentences

Our reportable segment determination is based on our management and internal reporting structure, the nature of the subscriptions and services we offer, and the financial information evaluated regularly by our CODM.

The CODM uses operating loss and net loss reported on the consolidated statements of operations to assess performance for the segment and decide how to allocate resources.

The CODM uses operating income (loss) and net income (loss) reported on the consolidated statements of operations to assess performance for the segment and decide how to allocate resources.

In addition, the CODM reviews the expense categories presented on the consolidated statements of operations to manage the Company’s operations.

Operating loss and net loss are used to evaluate profitability trends in the business, and the CODM considers budget-to-actual variances for both profit measures when making decisions about allocating capital and resources.

Operating income (loss) and net income (loss) are used to evaluate profitability trends in the business, and the CODM considers budget-to-actual variances for both profit measures when making decisions about allocating capital and resources.

Significant segment expenses, which are the expenses included in operating income (loss) and net income (loss), as well as other segment items such as other income, net and income tax expense are included in the consolidated statements of operations.

Further, the measure of segment assets is total assets as reported on the consolidated balance sheets.

The following table summarizes revenue by geography for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes revenue by geography for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

3 unchanged sentences

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer.

The value of our long-lived assets, which are comprised of property and equipment, intangible assets with finite lives, and right-of-use assets, held in the United States and internationally as of June 30, 2025 were $ 52.4 million and $ 15.3 million, respectively.

The value of our long-lived assets, which are comprised of property and equipment, intangible assets with finite lives, and right-of-use assets, held in the United States and internationally as of September 30, 2025 were $ 50.2 million and $ 13.6 million, respectively.

As of December 31, 2024, our long-lived assets held in the United States and internationally were $ 55.9 million and $ 14.6 million, respectively.

9 unchanged sentences

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 as of June 30, 2025 and December 31, 2024.

There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of September 30, 2025 and December 31, 2024.

The valuation techniques that may be used to measure fair value are as follows:

2 unchanged sentences

• 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 accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2025 and December 31, 2024 because of the relatively short duration of these instruments.

The carrying amounts of our accounts receivable, accounts payable, and accrued expenses approximate fair value as of September 30, 2025 and December 31, 2024 because of the relatively short duration of these instruments.

Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to the then market rates.

1 unchanged sentence

Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, have been recorded in ‘Accumulated other comprehensive loss’ in our consolidated balance sheets.

The components of our cash, cash equivalents, and investments as of June 30, 2025 are as follows (in thousands):

As of June 30, 2025

The components of our cash, cash equivalents, and investments as of September 30, 2025 are as follows (in thousands):

As of September 30, 2025

Fair Value Measurement Balance Sheet Classification

Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value

Fair Value Level Cost Basis Unrealized Gains

Cash and Cash Equivalents Short-term Investments and Marketable Securities

10 unchanged sentences

Fair Value Measurement Balance Sheet Classification

Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value

Fair Value Level Cost Basis Unrealized Gains

Cash and Cash Equivalents Short-term Investments and Marketable Securities

5 unchanged sentences

Total investments $ 159,802 $ 58 $ 159,860 $ 118,552 $ 41,308

We did not hold any Level 3 assets at any point during the three and six months ended June 30, 2025.

Additionally, there were no transfers between Levels 1 and 2 during the six months ended June 30, 2025.

Interest income on our investments, which is recorded within ‘Other (income) expense, net’ on our consolidated statements of operations, totaled $ 2.0 million and $ 3.6 million for the three and six months ended June 30, 2025, respectively.

Interest income on our investments totaled $ 1.7 million and $ 3.6 million for the three and six months ended June 30, 2024, respectively.

The contractual maturities of our debt securities as of June 30, 2025 and December 31, 2024 were all one year or less.

We did not hold any Level 3 assets at any point during the three and nine months ended September 30, 2025.

Additionally, there were no transfers between Levels 1 and 2 during the nine months ended September 30, 2025.

Interest income on our investments, which is recorded within ‘Other income, net’ on our consolidated statements of operations, totaled $ 1.7 million and $ 5.3 million for the three and nine months ended September 30, 2025, respectively.

Interest income on our investments totaled $ 1.5 million and $ 5.2 million for the three and nine months ended September 30, 2024, respectively.

The contractual maturities of our debt securities as of September 30, 2025 and December 31, 2024 were all one year or less.

Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements