APPIAN CORP 10-Q

Item 1. FINANCIAL STATEMENTS APPIAN CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data) As of September 30, 2025 December 31, 2024 (unaudited) Assets Current assets Cash and cash equivalents $ 125,249 $ 118,552 Short-term investments and marketable securities 66,312 41,308 Accounts receivable, net of allowance of $ 2,862 and $ 3,396 , respectively 172,615 195,069 Deferred commissions, current 34,131 36,630 Prepaid expenses and other current assets 41,104 43,984 Total current assets 439,411 435,543 Property and equipment, net of accumulated depreciation of $ 38,789 and $ 32,142 , respectively 33,168 37,109 Goodwill 28,833 25,555 Intangible assets, net of accumulated amortization of $ 6,985 and $ 5,341 , respectively 1,567 2,240 Right-of-use assets for operating leases 29,110 31,081 Deferred commissions, net of current portion 59,395 60,540 Deferred tax assets 5,144 4,129 Other assets 15,107 24,842 Total assets $ 611,735 $ 621,039 Liabilities and Stockholders’ Deficit Current liabilities Accounts payable $ 8,605 $ 4,322 Accrued expenses 20,082 11,388 Accrued compensation and related benefits 38,677 34,223 Deferred revenue 275,449 281,760 Debt 12,098 9,598 Operating lease liabilities 13,110 12,378 Other current liabilities 2,105 1,087 Total current liabilities 370,126 354,756 Long-term debt 233,627 240,826 Non-current operating lease liabilities 47,769 52,189 Deferred revenue, non-current 8,322 5,477 Other non-current liabilities 435 431 Total liabilities 660,279 653,679 Stockholders’ deficit Class A common stock—par value $ 0.0001 ; 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 4 4 Class B common stock—par value $ 0.0001 ; 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 3 3 Treasury stock at cost, 639,751 shares as of September 30, 2025 ( 20,000 ) — Additional paid-in capital 612,488 591,281 Accumulated other comprehensive loss ( 35,221 ) ( 11,774 ) Accumulated deficit ( 605,818 ) ( 612,154 ) Total stockholders’ deficit ( 48,544 ) ( 32,640 ) Total liabilities and stockholders’ deficit $ 611,735 $ 621,039 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue Subscriptions $ 147,188 $ 123,121 $ 414,197 $ 353,789 Professional services 39,816 30,931 109,873 96,548 Total revenue 187,004 154,052 524,070 450,337 Cost of revenue Subscriptions 17,762 14,082 49,810 39,614 Professional services 27,531 23,002 78,322 74,880 Total cost of revenue 45,293 37,084 128,132 114,494 Gross profit 141,711 116,968 395,938 335,843 Operating expenses Sales and marketing 51,918 50,865 166,929 175,613 Research and development 40,263 38,572 120,127 117,789 General and administrative 36,416 34,688 107,586 108,327 Total operating expenses 128,597 124,125 394,642 401,729 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 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 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 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. 4 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited, 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 ) Comprehensive income (loss), net of income taxes Foreign currency translation adjustments ( 91 ) ( 11,139 ) ( 23,448 ) 607 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 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (unaudited, in thousands, except share data) Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock Total Stockholders' Deficit Common Stock Shares Amount Balance, December 31, 2024 74,028,786 $ 7 $ 591,281 $ ( 11,774 ) $ ( 612,154 ) $ — $ ( 32,640 ) Net loss — — — — ( 1,177 ) — ( 1,177 ) Issuance of common stock to directors 4,735 — — — — — — Vesting of restricted stock units 167,726 — ( 3,199 ) — — — ( 3,199 ) Exercise of stock options 18,953 — 190 — — — 190 Stock-based compensation expense — — 8,814 — — — 8,814 Other comprehensive loss — — — ( 3,733 ) — — ( 3,733 ) Balance, March 31, 2025 74,220,200 $ 7 $ 597,086 $ ( 15,507 ) $ ( 613,331 ) $ — $ ( 31,745 ) Net loss — — — — ( 312 ) — ( 312 ) Issuance of common stock to directors 5,686 — — — — — — Vesting of restricted stock units 77,082 — ( 1,269 ) — — — ( 1,269 ) Exercise of stock options 30,880 — 314 — — — 314 Repurchase of common stock ( 313,160 ) — — — — ( 10,000 ) ( 10,000 ) Stock-based compensation expense — — 8,953 — — — 8,953 Other comprehensive loss — — — ( 19,682 ) — — ( 19,682 ) 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 ) 6 Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock Total Stockholders' Equity (Deficit) Common Stock Shares Amount Balance, December 31, 2023 73,366,766 $ 7 $ 595,781 $ ( 23,555 ) $ ( 519,892 ) $ — $ 52,341 Net loss — — — — ( 32,923 ) — ( 32,923 ) Issuance of common stock to directors 4,974 — — — — — — Vesting of restricted stock units 141,563 — ( 2,862 ) — — — ( 2,862 ) Exercise of stock options 43,460 — 345 — — — 345 Repurchase of common stock ( 1,320,531 ) — — — — ( 50,019 ) ( 50,019 ) Stock-based compensation expense — — 10,606 — — — 10,606 Other comprehensive income — — — 12,847 — — 12,847 Balance, March 31, 2024 72,236,232 $ 7 $ 603,870 $ ( 10,708 ) $ ( 552,815 ) $ ( 50,019 ) $ ( 9,665 ) Net loss — — — — ( 43,592 ) — ( 43,592 ) Issuance of common stock to directors 4,692 — ( 178 ) — — 178 — Vesting of restricted stock units 77,116 — ( 4,279 ) — — 2,919 ( 1,360 ) Exercise of stock options 25,037 — ( 785 ) — — 948 163 Stock-based compensation expense — — 9,900 — — — 9,900 Other comprehensive loss — — ( 1,104 ) — — ( 1,104 ) Balance, June 30, 2024 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. 7 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from 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 Depreciation expense and amortization of intangible assets 7,429 7,503 Lease impairment charges 779 5,462 Bad debt expense 692 619 Amortization of debt issuance costs 450 439 Benefit for deferred income taxes ( 648 ) ( 1,281 ) Foreign currency transaction (gains) losses, net ( 20,864 ) 2,895 Changes in assets and liabilities Accounts receivable 29,655 30,859 Prepaid expenses and other assets 13,279 12,279 Deferred commissions 3,644 4,665 Accounts payable and accrued expenses 12,871 1,495 Accrued compensation and related benefits ( 1,043 ) ( 6,975 ) Other current and non-current liabilities ( 1,707 ) 535 Deferred revenue ( 17,545 ) ( 15,096 ) 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 Proceeds from maturities of investments 34,278 11,631 Purchases of investments ( 59,281 ) ( 42,638 ) Purchases of property and equipment ( 2,451 ) ( 3,287 ) Net cash used by investing activities ( 27,454 ) ( 34,294 ) Cash flows from financing activities Proceeds from borrowings — 50,000 Payments for debt issuance costs — ( 463 ) Debt repayments ( 5,000 ) ( 3,750 ) 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 ) Proceeds from exercise of common stock options 752 619 Net cash used by financing activities ( 30,138 ) ( 8,496 ) Effect of foreign exchange rate changes on cash and cash equivalents 2,552 ( 375 ) Net increase (decrease) in cash and cash equivalents 6,697 ( 50,158 ) Cash and cash equivalents at beginning of period 118,552 149,351 Cash and cash equivalents at end of period $ 125,249 $ 99,193 Supplemental disclosure of cash flow information Cash paid for interest $ 10,023 $ 17,193 Cash paid for income taxes $ 3,391 $ 1,925 Supplemental disclosure of non-cash investing and financing activities Accrued capital expenditures $ 41 $ 109 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 APPIAN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Organization and Description of Business 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. We believe processes define each organization. Processes are how they operate, deliver value, and interact with their customers. Appian has both the platform and the expertise to enable enterprise transformation. We are headquartered in McLean, Virginia and operate both in the United States and internationally, including Australia, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. 2. Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and 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”) for interim financial reporting. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ deficit, and cash flows. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on February 19, 2025. 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, but are not limited to, revenue recognition, income taxes and the related valuation allowance established against deferred tax assets, the amortization period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance policy (as discussed in Note 12), and stock-based compensation. Revenue Recognition Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams. 9 Concentration of Credit and Customer Risk Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, accounts receivable, and our short-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. 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, 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, 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 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 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 We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team and the associated incremental payroll taxes. 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 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. 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. 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. Amortization associated with deferred commissions is recorded to sales and marketing expense in our consolidated statements of operations. 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. 10 Property and Equipment Property and equipment are stated at cost less accumulated depreciation. 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 estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years for office furniture and fixtures. Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term. Treasury Stock We account for treasury stock under the cost method. We reissue treasury stock to satisfy employee stock option exercises and the vesting of restricted stock units as well as for issuances of common stock to our Board of Directors. Because we are in an accumulated deficit position, all reissuances of treasury stock were recorded as a decrease to additional-paid-in-capital in our consolidated balance sheets. Recent Accounting Pronouncements Adopted We have not adopted any new accounting guidance in 2025 that has had a material impact on our consolidated financial statements or disclosures. Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740): 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 net income tax payments. 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. Early adoption is permitted. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures of certain categories of expenses such as employee compensation, depreciation, and intangible asset amortization that are components of existing expense captions presented on the face of the income statement. The new guidance will be effective beginning with our annual reporting for fiscal year 2027 and for interim period reporting beginning in fiscal year 2028. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. 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. 11 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. 3. Revenue Revenue Recognition We generate subscriptions revenue primarily through the sale of cloud 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 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 Cloud subscriptions $ 113,596 $ 94,075 $ 320,337 $ 269,106 Term license subscriptions 24,812 21,265 69,429 62,263 Maintenance and support 8,780 7,781 24,431 22,420 Total subscriptions 147,188 123,121 414,197 353,789 Professional services 39,816 30,931 109,873 96,548 Total revenue $ 187,004 $ 154,052 $ 524,070 $ 450,337 Performance Obligations and Timing of Revenue Recognition 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 cloud subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) cloud 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. 12 Cloud Subscriptions We generate cloud-based subscriptions 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 subscriptions revenue is derived from customers with on-premises installations of our platform. The majority of our term license contracts are 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. If a cloud-based subscription includes the right for the customer to take possession of the license, the revenue is treated as a term 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 most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis. We also sell advisory services on a subscription basis to support customers or partners with their development and deployment. Consulting services contracts are 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 other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. Revenue from subscription-based consulting contracts is recognized ratably over the contract period. 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. 13 Significant Judgments and Estimates Determining the Transaction Price The transaction price is the total amount of consideration we expect to receive in exchange for the service offerings in a contract and may include both fixed and variable components. 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 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; 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. Cloud subscriptions - Given the highly variable selling price of our cloud subscriptions, we establish the SSP of our cloud subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating the SSP of our cloud 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 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 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 the 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. 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 non-current. 14 The following table sets forth our contract asset and contract liability balances (in thousands): As of September 30, 2025 December 31, 2024 September 30, 2024 December 31, 2023 Contract assets, current * $ 10,646 $ 12,933 $ 10,292 $ 12,052 Contract assets, non-current * 300 643 733 915 Total contract assets $ 10,946 $ 13,576 $ 11,025 $ 12,967 Deferred revenue, current $ 275,449 $ 281,760 $ 224,199 $ 235,992 Deferred revenue, non-current 8,322 5,477 3,370 4,700 Total contract liabilities $ 283,771 $ 287,237 $ 227,569 $ 240,692 * 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 $ 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 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. 4. Leases 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. Lease Costs Expense for operating leases is recognized on a straight-line basis over the lease term as an operating 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, utilities, and service charges, are not included in right-of-use (“ROU”) assets for operating leases or operating lease liabilities but rather are expensed as incurred and recorded as variable lease expense. 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 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 Operating lease cost $ 3,407 $ 2,356 $ 8,415 $ 7,177 Short-term lease cost 259 481 791 1,246 Variable lease cost 1,300 1,324 3,916 3,972 Total $ 4,966 $ 4,161 $ 13,122 $ 12,395 15 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 During the second quarter of 2024, we initiated actions to reduce the footprint of our leased office spaces. 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. The asset groups represented two separate floors within our corporate headquarters facility. 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 September 30, 2025 and December 31, 2024 is presented in the following table (in thousands, except for lease term and discount rate): As of September 30, 2025 December 31, 2024 Right-of-use assets for operating leases $ 29,110 $ 31,081 Operating lease liabilities, current $ 13,110 $ 12,378 Operating lease liabilities, net of current portion 47,769 52,189 Total operating lease liabilities $ 60,879 $ 64,567 Weighted average remaining lease term (in years) 5.7 6.5 Weighted average discount rate 9.4 % 9.4 % 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 Operating cash outflows for operating leases $ 3,328 $ 3,190 $ 9,769 $ 8,963 Amortization of operating lease right-of-use assets 969 777 2,826 2,375 Interest expense on operating lease liabilities 1,440 1,579 4,389 4,803 16 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 nine months ended September 30, 2025) $ 3,421 2026 13,806 2027 13,994 2028 12,873 2029 12,412 Thereafter 22,908 Total lease payments 79,414 Less: imputed interest ( 18,535 ) Total $ 60,879 5. Goodwill and Intangible Assets 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 Balance as of December 31, 2023 $ 27,106 Foreign currency translation adjustments ( 1,551 ) Balance as of December 31, 2024 25,555 Foreign currency translation adjustments 3,278 Balance as of September 30, 2025 $ 28,833 Intangible assets, net consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands): As of September 30, 2025 December 31, 2024 Developed technology $ 7,542 $ 6,685 Customer relationships 1,010 896 Intangible assets, gross 8,552 7,581 Less: accumulated amortization ( 6,985 ) ( 5,341 ) Intangible assets, net $ 1,567 $ 2,240 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. 17 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 nine months ended September 30, 2025) $ 320 2026 824 2027 101 2028 101 2029 101 Thereafter 120 Total projected amortization expense $ 1,567 6. Property and Equipment, net Property and equipment, net consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands): As of September 30, 2025 December 31, 2024 Leasehold improvements $ 55,449 $ 54,088 Office furniture and fixtures 4,621 4,445 Computer software and hardware 9,878 9,363 Internally developed software 1,341 545 Equipment 210 191 Work in process 458 619 Property and equipment, gross 71,957 69,251 Less: accumulated depreciation ( 38,789 ) ( 32,142 ) Property and equipment, net $ 33,168 $ 37,109 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. 18 7. Accrued Expenses Accrued expenses consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands): As of September 30, 2025 December 31, 2024 Interest $ 5,058 $ — Hosting costs and license fees 5,847 3,715 Contract labor costs 2,685 1,043 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 Taxes payable 523 1,285 Capital expenditures — 66 Other accrued expenses 1,342 664 Total $ 20,082 $ 11,388 8. Debt Senior Secured Credit Facilities Credit Agreement We have a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) which provides for a five-year term loan facility in an aggregate principal amount of $ 200.0 million and, in addition, up to $ 100.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $ 20.0 million and a swingline sub-facility in the aggregate availability amount of $ 10.0 million (as a sublimit of the revolving loan facility). The Credit Agreement matures on November 3, 2027. We have been using the proceeds to fund the growth of our business and support our working capital requirements. Under the agreement, we may elect whether amounts drawn bear interest on the outstanding principal amount at a rate per annum equal to either (a) the higher of the Prime rate or the Federal Funds Effective rate (“Base Rate”) plus 0.5 % or (b) the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”). An additional interest rate margin is added to the elected interest rates. During the first three years of the Credit Agreement, the additional interest rate margin ranges from 1.5 % to 2.5 % in the case of Base Rate advances or from 2.5 % to 3.5 % in the case of Term SOFR advances, depending on our debt to recurring revenue leverage ratio (as defined in the Credit Agreement). During the final two years of the Credit Agreement, the interest rate margin ranges from 0.5 % to 2.5 % in the case of Base Rate advances and from 1.5 % to 3.5 % in the case of Term SOFR advances, depending on our debt to consolidated adjusted EBITDA leverage ratio (as defined in the Credit Agreement). In addition, the Credit Agreement contains other customary representations, warranties, and covenants, including covenants by us limiting additional indebtedness, guarantees, liens, fundamental changes, mergers and consolidations, dispositions of assets, investments, paying dividends on capital stock or redeeming, repurchasing, or retiring capital stock, prepaying certain junior indebtedness and preferred stock, certain corporate changes, and transactions with affiliates. The Credit Agreement also provides for customary events of default, including but not limited to, non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy, and the occurrence of a material adverse effect on us. 19 The following table summarizes outstanding debt balances (in thousands): As of September 30, 2025 December 31, 2024 Borrowings under revolving credit facility $ 62,000 $ 62,000 Secured term loan facility 184,563 189,563 Less: Debt issuance costs (1) ( 838 ) ( 1,139 ) Total debt, net of debt issuance costs $ 245,725 $ 250,424 Debt, current $ 12,098 $ 9,598 Long-term debt 233,627 240,826 Total debt $ 245,725 $ 250,424 (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 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. 9. Income Taxes The provision for income taxes is based upon the estimated annual effective tax rates for the year applied to the current period income before tax plus the tax effect of any significant or unusual items, discrete events, or changes in tax law. Our operating subsidiaries are exposed to statutory effective tax rates ranging from zero to approximately 35 %. 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 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 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. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Due to our net operating loss carryforwards, the tax years 2016 through 2024 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 on our consolidated financial statements. 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 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. 20 10. Stock-Based Compensation Compensation expense related to stock-based awards is accounted for using 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. In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This option grant (the “2022 CEO option grant”) is our only outstanding stock-based award that vests based on the achievement of market conditions. For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation, and expense is 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 of our stock-based awards as they occur rather than estimating expected forfeitures. 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. In 2025, we changed our annual bonus program to provide eligible employees with the option to receive all or a portion of their earned annual bonuses for 2025, otherwise payable in cash, in the form of RSUs. The RSUs will be granted by our Board of Directors during the first quarter of 2026 and will be fully vested upon grant. 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 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 Cost of revenue Subscriptions $ 224 $ 211 $ 672 $ 641 Professional services 1,399 1,325 4,161 4,364 Operating expenses Sales and marketing 1,827 1,746 6,050 6,270 Research and development 2,915 2,939 9,139 8,859 General and administrative 3,895 3,284 10,970 9,877 Total stock-based compensation expense $ 10,260 $ 9,505 $ 30,992 $ 30,011 11. 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 21 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 — Restricted stock units 380 — 254 — Performance share units 6 — 2 — 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. 12. Commitments, Contingencies, and Other Matters Minimum Purchase Commitments We have 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 $ 220.0 million over five years . 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 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. 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 financial statements. 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. Appian Corp v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). On May 10, 2022, we announced the jury awarded us $ 2.036 billion in damages for misappropriation of our trade secrets and $ 1 in damages for violating the Virginia Computer Crimes Act. Pegasystems filed several post-trial motions seeking relief in the form of reducing the damages award or setting aside the jury’s verdict and either granting a new trial or entering judgment in Pegasystems’ favor. All of these motions were denied, and final judgment was entered by the Court on September 15, 2022. The final judgment 22 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. On September 15, 2022, Pegasystems filed a notice of appeal to the Court of Appeals of Virginia. On July 30, 2024, the Court of Appeals of Virginia issued a decision reversing the judgment against Pegasystems and remanding for a new trial. The decision rejected Pegasystems’ argument that Appian had not presented evidence that trade secrets were misappropriated but reversed the judgment on the basis of evidentiary and damages rulings made by the trial court. On August 29, 2024, Appian submitted a petition to the Supreme Court of Virginia seeking to reverse the Court of Appeals decision and reinstate the full judgment against Pegasystems. Pegasystems filed an opposition to the petition and cross-issues for appeal on October 21, 2024. 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. 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 On September 1, 2023, we entered into a Judgment Preservation Insurance (“JPI”) policy in connection with our $ 2.036 billion judgment against Pegasystems. The total cost of the policy was $ 57.3 million and is comprised of the premium, a one-time broker fee, and Virginia lines tax. The policy provides up to $ 500.0 million of coverage. The total cost of the policy was capitalized and is being amortized on a straight-line basis over the estimated length of the appeals process. We currently estimate the total length of the appeals process (solely for amortization purposes) to be approximately four years . This estimate is reviewed each reporting period. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $ 3.2 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 From time to time, we are subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of business. Other than as disclosed elsewhere in this Quarterly 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 resources, and other factors. Share Repurchase Program In May 2025, our Board of Directors authorized a program to repurchase up to $ 10.0 million of our common stock from May 2025 to December 2025. 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. 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. 23 13. Segment and Geographic Information 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. We have determined our CODM is our Chief Executive Officer. We have one operating and one reportable segment, representing our consolidated business that helps organizations design, automate, and optimize important business processes from start to finish. We generate revenue from customers primarily through the sale of cloud and term subscriptions bundled with maintenance and support as well as professional services revenue from fees for our consulting services and training related to our platform. 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 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 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 nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Domestic $ 112,743 $ 98,108 $ 324,129 $ 282,755 International 74,261 55,944 199,941 167,582 Total $ 187,004 $ 154,052 $ 524,070 $ 450,337 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 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. 14. Investments and Fair Value Measurements Fair Value Measurements U.S. GAAP establishes 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 24 • Level 3 - Unobservable inputs for which there is little or no market data and which require us to develop our own estimates and assumptions reflecting those that a market participant would use. 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 as of September 30, 2025 and December 31, 2024. 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 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. 25 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, have been recorded in ‘Accumulated other comprehensive loss’ in our consolidated balance sheets. 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 Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 118,977 $ — $ 118,977 $ 118,977 $ — Money market fund Level 1 6,272 — 6,272 6,272 — U.S. Treasury bonds Level 1 37,636 28 37,664 — 37,664 Commercial paper Level 2 7,994 7 8,001 — 8,001 Corporate bonds Level 2 20,623 24 20,647 — 20,647 Total investments $ 191,502 $ 59 $ 191,561 $ 125,249 $ 66,312 At December 31, 2024, our investments consisted of the following (in thousands): As of December 31, 2024 Fair Value Measurement Balance Sheet Classification Fair Value Level Cost Basis Unrealized Gains Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 106,338 $ — $ 106,338 $ 106,338 $ — Money market fund Level 1 12,214 — 12,214 12,214 — U.S. Treasury bonds Level 1 24,376 26 24,402 — 24,402 Commercial paper Level 2 2,974 3 2,977 — 2,977 Corporate bonds Level 2 13,900 29 13,929 — 13,929 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 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. 26