APPIAN CORP 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements: Page Report of Independent Registered Public Accounting Firm 66 Consolidated Balance Sheets 70 Consolidated Statements of Operations 71 Consolidated Statements of Comprehensive Loss 72 Consolidated Statements of Changes in Stockholders' Equity (Deficit) 73 Consolidated Statements of Cash Flows 74 Notes to Consolidated Financial Statements 75 65 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Appian Corporation McLean, Virginia Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Appian Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 19, 2026 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition for Multiple Performance Obligations 66 As discussed in Note 3 to the consolidated financial statements, certain of the Company's revenue contracts contain multiple performance obligations that might include cloud subscriptions, license subscriptions, maintenance and support and professional services. The Company accounts for individual products and services separately if they are capable of being distinct and are distinct within the context of the contract. In such cases, the transaction price is allocated to the distinct performance obligations based on their relative standalone selling price, which either is the observable price at which the Company sells the product or service separately, or estimated standalone selling price using a residual approach in the absence of observable pricing. Revenue is recognized when control of the distinct performance obligation is transferred. We identified the revenue recognition for certain revenue contracts as a critical audit matter due to the significant management judgment involved in the identification of distinct performance obligations and the allocation of the transaction price to each performance obligation based on its relative standalone selling price. Auditing these elements of revenue recognition involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters. The primary procedures we performed to address this critical audit matter included: • Testing the design and operating effectiveness of internal controls over the Company's revenue recognition process including controls over: (i) the identification of distinct performance obligations, and (ii) the allocation of the transaction price to each performance obligation based on its relative standalone selling price. • Testing a sample of revenue contracts to evaluate management’s identification of distinct performance obligations. • Testing a sample of revenue contracts to evaluate management’s allocation of the transaction price to each performance obligation based on its relative standalone selling price. /s/ BDO USA, P.C. We have served as the Company's auditor since 2013. McLean, Virginia February 19, 2026 67 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Appian Corporation McLean, Virginia Opinion on Internal Control over Financial Reporting We have audited Appian Corporation’s (the “Company’s”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 19, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that 68 controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ BDO USA, P.C. McLean, Virginia February 19, 2026 69 APPIAN CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) As of December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 135,810 $ 118,552 Short-term investments and marketable securities 51,415 41,308 Accounts receivable, net of allowance of $ 3,362 and $ 3,396 , respectively 255,063 195,069 Deferred commissions, current 35,166 36,630 Prepaid expenses and other current assets 41,970 43,984 Total current assets 519,424 435,543 Property and equipment, net of accumulated depreciation of $ 40,747 and $ 32,142 , respectively 32,087 37,109 Goodwill 28,811 25,555 Intangible assets, net of accumulated amortization of $ 7,301 and $ 5,341 , respectively 1,246 2,240 Right-of-use assets for operating leases 28,075 31,081 Deferred commissions, net of current portion 65,199 60,540 Deferred tax assets 4,850 4,129 Other assets 11,703 24,842 Total assets $ 691,395 $ 621,039 Liabilities and Stockholders’ Deficit Current liabilities Accounts payable $ 6,655 $ 4,322 Accrued expenses 18,483 11,388 Accrued compensation and related benefits 61,781 34,223 Deferred revenue 341,281 281,760 Debt 9,598 9,598 Operating lease liabilities 13,181 12,378 Other current liabilities 1,128 1,087 Total current liabilities 452,107 354,756 Long-term debt 231,228 240,826 Non-current operating lease liabilities 45,693 52,189 Deferred revenue, non-current 8,962 5,477 Other non-current liabilities 398 431 Total liabilities 738,388 653,679 Commitments and contingent liabilities (see Note 13) Stockholders’ deficit Class A common stock—par value $ 0.0001 ; 500,000,000 shares authorized as of December 31, 2025 and 2024 and 43,408,828 and 42,938,701 shares issued as of December 31, 2025 and 2024, respectively 4 4 Class B common stock—par value $ 0.0001 ; 100,000,000 shares authorized as of December 31, 2025 and 2024 and 31,088,085 and 31,090,085 shares issued as of December 31, 2025 and 2024, respectively 3 3 Treasury stock at cost, 542,288 shares as of December 31, 2025 ( 16,935 ) — Additional paid-in capital 617,318 591,281 Accumulated other comprehensive loss ( 36,462 ) ( 11,774 ) Accumulated deficit ( 610,921 ) ( 612,154 ) Total stockholders’ deficit ( 46,993 ) ( 32,640 ) Total liabilities and stockholders’ deficit $ 691,395 $ 621,039 The accompanying notes are an integral part of these consolidated financial statements. 70 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Year Ended December 31, 2025 2024 2023 Revenue Subscriptions $ 576,462 $ 490,568 $ 412,337 Professional services 150,475 126,454 133,026 Total revenue 726,937 617,022 545,363 Cost of revenue Subscriptions 83,988 65,680 54,900 Professional services 115,611 102,560 105,442 Total cost of revenue 199,599 168,240 160,342 Gross profit 527,338 448,782 385,021 Operating expenses Sales and marketing 241,186 238,454 249,968 Research and development 172,188 163,400 160,420 General and administrative 113,355 107,781 82,606 Total operating expenses 526,729 509,635 492,994 Operating income (loss) 609 ( 60,853 ) ( 107,973 ) Other non-operating (income) expense Other (income) expense, net ( 26,685 ) 6,773 ( 17,603 ) Interest expense 20,850 23,582 17,862 Total other non-operating (income) expense ( 5,835 ) 30,355 259 Income (loss) before income taxes 6,444 ( 91,208 ) ( 108,232 ) Income tax expense 5,211 1,054 3,209 Net income (loss) $ 1,233 $ ( 92,262 ) $ ( 111,441 ) Earnings (loss) per Class A and Class B share: Basic $ 0.02 $ ( 1.26 ) $ ( 1.52 ) Diluted $ 0.02 $ ( 1.26 ) $ ( 1.52 ) Weighted average common shares outstanding: Basic 74,049 72,988 73,102 Diluted 74,649 72,988 73,102 The accompanying notes are an integral part of these consolidated financial statements. 71 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Year Ended December 31, 2025 2024 2023 Net income (loss) $ 1,233 $ ( 92,262 ) $ ( 111,441 ) Comprehensive loss, net of income taxes Foreign currency translation adjustments ( 24,672 ) 11,718 ( 16,326 ) Unrealized (losses) gains on available-for-sale securities ( 16 ) 63 17 Other comprehensive loss, net of income taxes $ ( 23,455 ) $ ( 80,481 ) $ ( 127,750 ) The accompanying notes are an integral part of these consolidated financial statements. 72 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (in thousands, except share data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock Total Stockholders' Equity (Deficit) Shares Amount Balance December 31, 2022 72,817,887 $ 7 $ 561,390 $ ( 7,246 ) $ ( 408,451 ) $ — $ 145,700 Net loss — — — — ( 111,441 ) — ( 111,441 ) Issuance of common stock to directors 19,687 — — — — — — Vesting of restricted stock units 430,582 — ( 9,748 ) — — — ( 9,748 ) Exercise of stock options 98,610 — 752 — — — 752 Stock-based compensation expense — — 43,387 — — — 43,387 Other comprehensive loss — — — ( 16,309 ) — — ( 16,309 ) Balance December 31, 2023 73,366,766 7 595,781 ( 23,555 ) ( 519,892 ) — 52,341 Net loss — — — — ( 92,262 ) — ( 92,262 ) Issuance of common stock to directors 20,216 — ( 369 ) — — 369 — Vesting of restricted stock units 418,899 — ( 13,533 ) — — 5,546 ( 7,987 ) Exercise of stock options 1,543,436 — ( 29,643 ) — — 44,104 14,461 Repurchase of common stock ( 1,320,531 ) — — — — ( 50,019 ) ( 50,019 ) Stock-based compensation expense — — 39,045 — — — 39,045 Other comprehensive income — — — 11,781 — — 11,781 Balance December 31, 2024 74,028,786 7 591,281 ( 11,774 ) ( 612,154 ) — ( 32,640 ) Net income — — — — 1,233 — 1,233 Issuance of common stock to directors 22,829 — — — — — — Vesting of restricted stock units 434,940 — ( 10,441 ) — — 3,045 ( 7,396 ) Exercise of stock options 107,821 — 1,098 — — 20 1,118 Repurchase of common stock ( 639,751 ) — — — — ( 20,000 ) ( 20,000 ) Stock-based compensation expense — — 35,380 — — — 35,380 Other comprehensive loss — — — ( 24,688 ) — — ( 24,688 ) Balance December 31, 2025 73,954,625 $ 7 $ 617,318 $ ( 36,462 ) $ ( 610,921 ) $ ( 16,935 ) $ ( 46,993 ) The accompanying notes are an integral part of these consolidated financial statements. 73 APPIAN CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 1,233 $ ( 92,262 ) $ ( 111,441 ) Adjustments to reconcile net income (loss) to net cash provided by (used by) operating activities: Stock-based compensation 41,540 39,045 43,387 Depreciation expense and amortization of intangible assets 9,706 10,030 9,473 Lease impairment charges 779 5,462 — Bad debt expense 1,232 1,760 1,091 Amortization of debt issuance costs 600 589 444 Benefit for deferred income taxes ( 349 ) ( 899 ) ( 1,541 ) Foreign currency transaction losses (gains), net ( 21,732 ) 16,745 ( 12,263 ) Changes in assets and liabilities: Accounts receivable ( 51,673 ) ( 28,353 ) ( 1,868 ) Prepaid expenses and other assets 15,316 16,551 ( 54,753 ) Deferred commissions ( 3,195 ) ( 3,144 ) ( 8,043 ) Accounts payable and accrued expenses 9,269 ( 871 ) ( 1,394 ) Accrued compensation and related benefits 19,993 ( 2,947 ) ( 3,157 ) Other current and non-current liabilities ( 3,489 ) ( 1,478 ) ( 1,134 ) Deferred revenue 47,200 49,309 28,668 Operating lease assets and liabilities ( 3,556 ) ( 2,659 ) 2,089 Net cash provided by (used by) operating activities 62,874 6,878 ( 110,442 ) Cash flows from investing activities: Proceeds from maturities of investments 52,540 20,038 91,670 Purchases of investments ( 62,048 ) ( 51,630 ) ( 53,443 ) Purchases of property and equipment ( 3,318 ) ( 3,798 ) ( 9,637 ) Net cash (used by) provided by investing activities ( 12,826 ) ( 35,390 ) 28,590 Cash flows from financing activities: Proceeds from borrowings — 50,000 92,000 Payments for debt issuance costs — ( 463 ) ( 276 ) Debt repayments ( 10,000 ) ( 6,250 ) ( 3,563 ) Repurchase of common stock ( 20,000 ) ( 50,019 ) — Payments for employee taxes related to the net share settlement of equity awards ( 7,396 ) ( 7,987 ) ( 9,748 ) Proceeds from exercise of common stock options 1,118 14,461 752 Net cash (used by) provided by financing activities ( 36,278 ) ( 258 ) 79,165 Effect of foreign exchange rate changes on cash and cash equivalents 3,488 ( 2,029 ) 1,657 Net increase (decrease) in cash and cash equivalents 17,258 ( 30,799 ) ( 1,030 ) Cash and cash equivalents at beginning of period 118,552 149,351 150,381 Cash and cash equivalents at end of period $ 135,810 $ 118,552 $ 149,351 Supplemental cash flow information: Cash paid for interest $ 19,644 $ 22,574 $ 16,906 Cash paid for income taxes $ 5,120 $ 3,334 $ 3,999 Supplemental non-cash investing and financing information: Accrued capital expenditures $ 87 $ 155 $ 654 The accompanying notes are an integral part of these consolidated financial statements. 74 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) provides process automation technology. For over 25 years, our highly reliable and scalable platform has been leveraged by large enterprises and governments. Combining leading edge process orchestration and intelligence, we provide everything an organization needs to design, automate, and optimize critical processes, facilitating continuous adaptation in changing environments. We are headquartered in McLean, Virginia and operate 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 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”). All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications For the year ended December 31, 2025, the Company reclassified certain information technology, cybersecurity and facility operating expenses from general and administrative expenses to cost of revenue, research and development, and sales and marketing expense. Prior year amounts have been reclassified to conform to the current period presentation. The revised presentation did not result in any changes to previously reported revenues, operating income (loss), income (loss) before income taxes, net income (loss), or earnings (loss) per share. 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 13), 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. 75 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 short-term investments and marketable securities. 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. Revenue generated from U.S. federal government agencies was 25.3 %, 23.9 %, and 21.3 % of total revenue for the years ended December 31, 2025, 2024, and 2023, respectively. The top three U.S. federal government agencies generated 3.9 %, 4.0 %, and 4.2 % of our revenue for the years ended December 31, 2025, 2024, and 2023, respectively. Additionally, 37.6 %, 36.6 %, and 35.8 % of our revenue during the years ended December 31, 2025, 2024, and 2023, respectively, was generated from international customers. No single customer accounted for more than 10% of our total revenue during the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025 and 2024, we had one reseller whose accounts receivable balance comprised 13.4 % 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. Activity in the allowance for doubtful accounts was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Beginning balance $ 3,396 $ 2,606 $ 2,125 Additions: Charged to costs and expenses 1,232 1,760 1,091 Deductions: Write-offs, net of recoveries ( 1,266 ) ( 970 ) ( 610 ) Ending balance $ 3,362 $ 3,396 $ 2,606 76 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. The following table summarizes the activity of costs to obtain a contract with a customer for the years ended December 31, 2025, and 2024 (in thousands): Year Ended December 31, 2025 2024 Beginning balance $ 97,170 $ 94,025 Additional contract costs deferred 48,197 44,770 Amortization of deferred contract costs ( 45,002 ) ( 41,625 ) Ending balance $ 100,365 $ 97,170 Commission expense was $ 54.4 million, $ 50.4 million, and $ 46.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. 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. Impairment of Goodwill and Long-Lived Assets Long-lived tangible assets and intangible assets with definite useful lives are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable through undiscounted cash flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair value. Goodwill is accounted for at the segment level and allocated to, and tested for impairment at, a level referred to as the reporting unit. We have determined our one segment consists of a single reporting unit. We test for impairment annually on the first day of the fourth quarter or between annual tests if events or changes in circumstances indicate the fair value of our reporting unit may be below its carrying amount. We have the option to qualitatively assess whether it is more likely than not the fair value our reporting unit is less than its carrying value. If we elect to perform a qualitative assessment and conclude it is more likely than not the fair value of the reporting unit is equal to or greater than its carrying value, no further assessment of that reporting unit’s goodwill is necessary; otherwise, goodwill must be tested for impairment. 77 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS When performing the quantitative test, we determine the fair value of the reporting unit and compare it to the carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the reporting unit’s goodwill is impaired, and we must recognize an impairment loss for the difference between the carrying amount and the fair value of the reporting unit. We estimate the fair value of our reporting unit using a market-based valuation methodology, which is primarily based on our consolidated market capitalization. In 2025, our qualitative assessment concluded the fair value of our reporting unit is more likely than not higher than its carrying value. Therefore, we did not perform a quantitative assessment. No goodwill impairment was identified in the years ended December 31, 2025, 2024, and 2023. Stock-Based Compensation Compensation expense related to stock-based awards is calculated by determining the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. We account for forfeitures as they occur rather than estimating expected forfeitures. Leases We combine lease and non-lease components and account for them as a single lease component for our facility leases. The discount rates related to our lease liabilities are based on estimates of our incremental borrowing rate on a secured basis, as the discount rates implicit in our lease agreements cannot be readily determined. Basic and Diluted Income or Loss per Common Share We compute net income or loss per common share using the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting and conversion rights. Accordingly, the Class A common stock and Class B common stock share equally in our net income or losses. Basic net income or loss per common share is computed by dividing net income or loss by the weighted-average number of shares of common shares outstanding during the period. Diluted net income per common 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. For periods where we reported net losses all outstanding shares would be considered antidilutive if they were assumed to be vested or exercised. Income Taxes We use the asset and liability method of accounting for income taxes in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. 78 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing authority. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. We recognize penalties and interest related to unrecognized tax benefits as income tax expense. We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns when identified. The amount of income taxes paid is subject to examination by U.S. federal, state, and foreign tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts, and circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate in the period in which we make that determination. Foreign Currency Our operations located outside of the United States where the local currency is the functional currency are translated into U.S. dollars using the current rate method. Results of operations are translated at the average rate of exchange for the period. Assets and liabilities are translated at the closing rates on the balance sheet date. Gains and losses on translation of these accounts are accumulated and reported as a separate component of stockholders’ equity (deficit) and other comprehensive loss. Gains and losses on foreign currency transactions are recognized in the accompanying consolidated statements of operations as a component of ‘Other (income) expense, net’. Gains and losses from transactions denominated in foreign currencies resulted in net transaction gains of $ 19.8 million, net transaction losses of $ 16.8 million, and net transaction gains of $ 8.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. Research and Development Expenses Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with product development. Our product utilizes a common codebase, whether accessed by customers via the cloud or via an on-premises installation. Since our software is sold and licensed externally, we consider our software as external-use software for purposes of applying the capitalized software development guidance. Product development costs are expensed as incurred until technological feasibility has been established, which is defined as the completion of all planning, designing, coding, and testing activities necessary to establish products that meet design specifications including functions, features, and technical performance requirements. We have determined technological feasibility for our software products is reached shortly before they are released for sale. Costs incurred after technological feasibility is established are not significant, and accordingly we expense all research and development costs when incurred. Severance Costs Severance costs related to benefits provided in accordance with mutually understood and ongoing agreements are recognized when an obligation has been incurred, it is probable the benefits will be paid, and the amount to be paid can be reasonably estimated. No severance costs were incurred related to an involuntary reduction in our workforce for the year ended December 31, 2025. Severance costs totaled $ 5.5 million and $ 6.3 million for the years ended December 31, 2024 and 2023, respectively. Advertising Expenses We expense advertising costs as they are incurred. Advertising expenses were $ 4.4 million, $ 3.9 million, and $ 4.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. Treasury Stock 79 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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 total income tax payments, net of refunds received. The ASU only impacted our disclosures with no impact to our results of operations, cash flows, and financial condition. Refer to Note 9 for our disclosure. Not Yet Adopted 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 companies 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. 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. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 - Interim Reporting and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosure requirements, and establishes a principle under which we must disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact this standard will have on our financial statement presentation and disclosures. 80 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Revenue Revenue Recognition We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services, license subscriptions, and maintenance and support for license subscriptions. 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 years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Cloud subscriptions $ 437,361 $ 368,030 $ 304,481 License subscriptions 105,849 92,188 82,282 Maintenance and support 33,252 30,350 25,574 Total subscriptions 576,462 490,568 412,337 Professional services 150,475 126,454 133,026 Total revenue $ 726,937 $ 617,022 $ 545,363 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 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) license subscriptions, and (3) maintenance and support for license subscriptions. 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. 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, and the related revenue is reported as a component of cloud subscriptions revenue. Cloud subscriptions revenue is recognized on a ratable basis over the contract term beginning on the later of the date service is made available to the customer or the commencement of the contract term. 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. License Subscriptions Our license subscriptions revenue is derived from customers with on-premises installations of our platform and customers with legacy perpetual licenses. The majority of our license contracts are one year in length. Although 81 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 license. Revenue from 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 for license subscriptions include both technical support and when-and-if-available 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. 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 years ended December 31, 2025, 2024, and 2023 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. 82 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 and the related maintenance and support, we establish the SSP 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. License subscriptions - Given the highly variable selling price of our license subscriptions, we have established the SSP of license subscriptions using a residual approach after first determining the SSP of the related maintenance and support. Maintenance and support for license subscriptions 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 license subscriptions is an appropriate allocation of the transaction price. 3. Maintenance and support - We establish the SSP of maintenance and support for license subscriptions 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. The following table sets forth contract asset and contract liability balances as of December 31, 2025, 2024, and 2023 (in thousands): As of December 31, 2025 2024 2023 Contract assets, current * $ 10,877 $ 12,933 $ 12,052 Contract assets, non-current * 208 643 915 Total contract assets $ 11,085 $ 13,576 $ 12,967 Deferred revenue, current $ 341,281 $ 281,760 $ 235,992 Deferred revenue, non-current 8,962 5,477 4,700 Total contract liabilities $ 350,243 $ 287,237 $ 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. 83 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 281.7 million, $ 234.5 million, and $ 196.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2025, we had an aggregate transaction price of $ 661.8 million allocated to unsatisfied performance obligations. We expect to recognize $ 446.7 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter. 4. Leases As of December 31, 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. Right-of-Use (“ROU”) Assets and Lease Liabilities At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized on the consolidated balance sheets as ROU assets, lease liabilities, and long-term lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We have elected not to recognize on our consolidated balance sheets leases with a term of one year or less. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we estimate our incremental borrowing rate to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would have to pay for a collateralized loan with the same terms as the lease. We consider various factors, including our level of collateralization, estimated credit rating, and the currency in which the lease is denominated. Operating lease ROU assets also include any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. 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 ROU assets 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. 84 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table sets forth the components of lease expense for the years ended December 31, 2025, 2024, and 2023 (in thousands, exclusive of sublease income): Year Ended December 31, 2025 2024 2023 Operating lease cost $ 9,582 $ 9,519 $ 9,056 Short-term lease cost 994 1,513 1,444 Variable lease cost 5,968 5,238 4,230 Total $ 16,544 $ 16,270 $ 14,730 Sublease income totaled $ 1.2 million, $ 1.3 million, and $ 1.3 million for the years ended December 31, 2025, 2024, and 2023 respectively. Lease Impairment Charges In 2024, we initiated actions to reduce the footprint of our leased office spaces. For the year ended December 31, 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 two separate floors within our corporate headquarters facility. The non-cash lease impairment charges represented the amount the carrying value of the two asset groups exceeded their estimated fair values. 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 year ended December 31, 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 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. No impairment charges were incurred during the year ended December 31, 2023. Supplemental Lease Information Supplemental balance sheet information related to operating leases as of December 31, 2025 and 2024 is presented in the following table (in thousands, except for lease term and discount rate): As of December 31, 2025 2024 Right-of-use assets for operating leases $ 28,075 $ 31,081 Operating lease liabilities, current $ 13,181 $ 12,378 Operating lease liabilities, net of current portion 45,693 52,189 Total operating lease liabilities $ 58,874 $ 64,567 Weighted average remaining lease term (in years) 5.5 6.5 Weighted average discount rate 9.4 % 9.4 % 85 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Supplemental cash flow and expense information related to operating leases for the years ended December 31, 2025, 2024, and 2023 is shown below (in thousands): Year Ended December 31, 2025 2024 2023 Operating cash outflows for operating leases $ 13,167 $ 12,179 $ 8,865 Amortization of operating lease ROU assets 3,800 3,179 2,676 Interest expense on operating lease liabilities 5,782 6,340 6,380 No tenant improvement allowance reimbursements were received during the years ended December 31, 2025 and 2024. For the year ended December 31, 2023, TIA reimbursements totaled $ 2.6 million. A summary of our future minimum lease commitments under non-cancellable operating leases as of December 31, 2025 is shown below (in thousands): Year Ended December 31, 2026 $ 13,808 2027 13,996 2028 12,871 2029 12,411 2030 12,364 Thereafter 10,543 Total lease payments 75,993 Less: imputed interest ( 17,119 ) Total $ 58,874 5. Goodwill and Intangible Assets The following table details the changes in goodwill during the fiscal years ended December 31, 2025 and 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 3,256 Balance as of December 31, 2025 $ 28,811 86 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Intangible assets, net consisted of the following as of December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024 Developed technology $ 7,537 $ 6,685 Customer relationships 1,010 896 Intangible assets, gross 8,547 7,581 Less: accumulated amortization ( 7,301 ) ( 5,341 ) Intangible assets, net $ 1,246 $ 2,240 Intangible amortization expense was $ 1.2 million for the year ended December 31, 2025 and $ 1.5 million for each of the years ended December 31, 2024 and 2023. As of December 31, 2025, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 0.7 years and 5.3 years, respectively. The following table shows the projected annual amortization expense related to amortizable intangible assets as of December 31, 2025 (in thousands): Year Ended December 31, 2026 $ 823 2027 101 2028 101 2029 101 2030 74 Thereafter 46 Total projected amortization expense $ 1,246 6. Property and Equipment, net Property and equipment, net consisted of the following as of December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024 Leasehold improvements $ 55,465 $ 54,088 Office furniture and fixtures 4,616 4,445 Computer software and hardware 10,504 9,363 Internally developed software 1,341 545 Equipment 218 191 Work in process 690 619 Property and equipment, gross 72,834 69,251 Less: Accumulated depreciation ( 40,747 ) ( 32,142 ) Property and equipment, net $ 32,087 $ 37,109 Depreciation expense totaled $ 8.5 million, $ 8.5 million, and $ 8.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. We had no disposals or retirements during the year ended December 31, 2025. We disposed of $ 1.3 million and $ 1.4 million worth of fully depreciated property and equipment during the years ended December 31, 2024 and 2023, respectively. 87 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Accrued Expenses Accrued expenses consisted of the following as of December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024 Hosting costs and license fees $ 6,570 $ 3,715 Contract labor costs 2,600 1,043 Taxes payable 1,953 1,285 Audit and tax services 1,818 1,029 Legal costs 1,438 289 Reimbursable employee expenses 1,123 1,569 Marketing and tradeshow expenses 892 1,728 Capital expenditures — 66 Other accrued expenses 2,089 664 Total accrued expenses $ 18,483 $ 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 rate. 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. 88 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes outstanding debt balances as of December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024 Borrowings under revolving credit facility $ 62,000 $ 62,000 Secured term loan facility 179,563 189,563 Less: Debt issuance costs (1) ( 737 ) ( 1,139 ) Total debt, net of debt issuance costs $ 240,826 $ 250,424 Debt, current $ 9,598 $ 9,598 Long-term debt 231,228 240,826 Total debt $ 240,826 $ 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. The following table summarizes the annual maturities of the principal amount of total debt due as of December 31, 2025 (in thousands): Year Ended December 31, 2026 $ 10,000 2027 231,563 Total $ 241,563 As of December 31, 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 For the years ended December 31, 2025, 2024, and 2023, our income (loss) before income taxes was comprised of the following (in thousands): Year Ended December 31, 2025 2024 2023 Domestic $ ( 17,496 ) $ ( 55,183 ) $ ( 89,925 ) Foreign 23,940 ( 36,025 ) ( 18,307 ) Total $ 6,444 $ ( 91,208 ) $ ( 108,232 ) 89 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2025, 2024, and 2023, our income tax expense was comprised of the following (in thousands): Year Ended December 31, 2025 2024 2023 Current: Federal $ 22 $ ( 10 ) $ 34 State 171 149 223 Foreign 5,360 1,864 4,523 Total current expense 5,553 2,003 4,780 Deferred: Federal — — — State — — — Foreign ( 342 ) ( 949 ) ( 1,571 ) Total deferred benefit ( 342 ) ( 949 ) ( 1,571 ) Total income tax expense $ 5,211 $ 1,054 $ 3,209 For the year ended December 31, 2025, the provision for income taxes differs from the amount computed by applying the federal statutory income tax rates to our income before the provision for income taxes as follows: Year Ended December 31, 2025 Total % U.S. federal statutory tax rate $ 1,353 21.0 % State income taxes, net of federal income tax effect (1) 171 2.7 Foreign tax effects Switzerland Statutory income tax rate differential ( 1,193 ) ( 18.5 ) Net operating loss expiration 2,185 33.9 Unrealized currency translation gain 1,873 29.1 Changes in valuation allowances ( 5,039 ) ( 78.2 ) Other 199 3.1 Other foreign jurisdictions 2,008 31.2 Effect of cross-border tax laws Global intangible low-taxed income ( 2,283 ) ( 35.4 ) Other 33 0.5 Tax credits Research & development tax credits ( 3,991 ) ( 61.9 ) Changes in valuation allowances 5,937 92.1 Non-taxable or Non-deductible Items Share-based compensation 2,999 46.5 Other 937 14.5 Changes to unrecognized tax benefits 22 0.3 Total tax provision and effective tax rate $ 5,211 80.9 % (1) State taxes in Texas primarily make up this category. The largest state by apportionment percentage is Virginia. 90 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2024 and 2023, the provision for income taxes differs from the amount computed by applying the federal statutory income tax rates to our income before the provision for income taxes as follows: Percentage of Pretax Earnings 2024 2023 U.S. federal statutory tax rate 21.0 % 21.0 % State tax expense 4.3 3.8 Foreign rate differential ( 4.0 ) ( 3.1 ) Nondeductible expenses ( 1.0 ) ( 0.7 ) Foreign tax expense 0.1 ( 0.4 ) Equity compensation 3.7 ( 2.4 ) Tax credits 7.3 9.5 Unrecognized tax benefits ( 1.5 ) ( 1.8 ) Global intangible low-taxed income ( 3.0 ) — Change in tax rate 0.8 ( 0.9 ) Other ( 0.5 ) 0.2 Return to provision 3.3 — Deferred adjustments ( 1.4 ) ( 3.0 ) Change in valuation allowance ( 30.3 ) ( 25.2 ) Total ( 1.2 ) % ( 3.0 ) % The 2025 effective tax rate of 80.9 % is detailed in the above table. The effective tax rate is driven by jurisdictional profitability mix; specifically, tax losses in the U.S. and Switzerland provided no tax benefit, while profits in other international jurisdictions remained subject to tax. In 2024, the effective tax rate of ( 1.2 )% included $ 27.6 million of tax expense attributable to the change in the valuation allowances in the United States and Switzerland, partially offset by $ 6.7 million of favorable tax benefits for research credits. In 2023, the effective tax rate of ( 3.0 )% included $ 27.3 million of tax expense attributable to the change in the valuation allowances in the United States and Switzerland, partially offset by $ 10.3 million of favorable tax benefits for research credits. 91 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amount of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2025 and 2024, significant components of our deferred tax assets and liabilities were as follows (in thousands): As of December 31, 2025 2024 Deferred tax assets: Net operating losses $ 114,153 $ 107,170 Tax credits 39,002 34,885 Deferred revenue 310 521 Equity compensation 5,024 3,994 Lease liabilities 16,138 17,465 Accrued compensation 5,864 3,225 Bad debt 598 502 Other accrued expense 663 318 Capitalized research and development costs 36,186 45,820 Other 3,855 4,033 Gross deferred tax assets 221,793 217,933 Less: Valuation allowance ( 191,198 ) ( 187,969 ) Total deferred tax assets 30,595 29,964 Deferred tax liabilities: Prepaid expenses ( 11,518 ) ( 13,298 ) Right-of-use assets ( 7,809 ) ( 8,406 ) Depreciation ( 2,363 ) ( 3,245 ) Intangible assets ( 380 ) ( 688 ) Other ( 3,675 ) ( 198 ) Total deferred tax liabilities ( 25,745 ) ( 25,835 ) Net deferred tax assets $ 4,850 $ 4,129 As of December 31, 2025 and 2024, we had $ 325.6 million and $ 287.5 million, respectively, of gross net operating loss (“NOL”) carryforwards for U.S. federal tax purposes. U.S. federal NOL carryforwards in the gross amount of $ 23.5 million and generated prior to 2018 will expire, if unused, in 2037. Under the Tax Cuts and Jobs Act of 2017 (the “TCJA”), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely. As of December 31, 2025, we had $ 302.1 million of gross NOL carryforwards generated after 2017 for U.S. federal tax purposes, which may be used to offset up to 80% of our taxable income annually. Section 382 of the Internal Revenue Code limits the utilization of NOL carryforwards when ownership changes occur, as defined by that section. A number of states have similar laws that limit utilization of state NOL carryforwards when ownership changes occur. We have performed an analysis of our Section 382 ownership changes and determined all U.S. federal and state NOL carryforwards are available for use as of December 31, 2025. As of December 31, 2025 and 2024, we had $ 36.5 million and $ 32.5 million, respectively, of U.S. federal tax credit carryforwards which will expire, if unused, between 2031 and 2045. As of December 31, 2025 and 2024, we had U.S. gross state NOL carryforwards of $ 325.6 million and $ 297.5 million, respectively. We had tax-effected state NOL carryforwards of $ 17.1 million and $ 17.8 million as of 92 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024, respectively. The rules regarding carryforwards vary from state to state, and the ability to utilize NOLs varies based on timing and amount. The majority of state NOL carryforwards generated prior to 2018 will expire, if unused, in 2037. Due to the TCJA, certain state NOL carryforwards generated after 2017 have an indefinite carryforward period. As of December 31, 2025 and 2024, we had foreign gross NOL carryforwards of $ 231.6 million and $ 230.1 million, respectively, primarily attributable to our subsidiary in Switzerland. We had tax-effected foreign NOL carryforwards of $ 28.7 million and $ 29.0 million as of December 31, 2025 and 2024, respectively. In 2025, $ 3.0 million of tax-effected Swiss NOLs expired related to the 2018 tax year. An additional portion of those NOL carryforwards will expire each year, if unused, between 2026 and 2032. As of December 31, 2025 and 2024 we had a total valuation allowance of $ 191.2 million and $ 188.0 million, respectively. The following table summarizes the activity related to our valuation allowances for the years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Beginning balance $ 187,969 $ 161,966 $ 132,581 Charged to expense ( 437 ) 27,605 27,267 Foreign currency translation adjustments 3,666 ( 1,602 ) 2,118 Deductions from reserve — — — Ending balance $ 191,198 $ 187,969 $ 161,966 As of December 31, 2025, we continued to maintain a full valuation allowance against U.S. deferred tax assets based on our cumulative operating results as of December 31, 2025, three-year cumulative loss, and an assessment of our expected future results of operations. We have evaluated all evidence, both positive and negative, in assessing the likelihood of realizability, and we determined the negative evidence outweighed the positive evidence. As of December 31, 2025, we have a valuation allowance of $ 22.6 million against foreign deferred tax assets at our subsidiary in Switzerland. Based on our cumulative operating results as of December 31, 2025 and an assessment of expected future results of operations, we determined it was not more likely than not we would be able to realize the deferred tax assets prior to expiration. We plan to distribute previously undistributed earnings of our foreign subsidiaries back to the United States in future years. Upon repatriation of those earnings, if any, we may be subject to taxes, including withholding taxes, net of any applicable foreign tax credits. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable. 93 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2025, 2024, and 2023, cash paid, net of refunds received, consisted of the following: Year Ended December 31, 2025 2024 2023 Federal $ — $ — $ — Aggregated state and local jurisdictions (1) 162 115 154 Disaggregated foreign jurisdictions: Australia 829 298 664 Canada 389 84 447 India 524 766 212 Italy 684 359 586 Mexico 31 204 162 Netherlands 41 237 162 Spain 670 263 567 United Kingdom 1,666 798 835 Other (1) 124 210 210 Net cash paid for income taxes 5,120 3,334 3,999 [1] No jurisdictions are individually above the threshold of 5% of total income taxes paid, net of refunds received, for the periods presented. As of December 31, 2025 and 2024, we had unrecognized tax benefits of $ 8.8 million and $ 7.8 million, respectively, none of which would affect our effective tax rate if recognized due to the valuation allowance. The following table summarizes the activity related to our unrecognized tax benefit from December 31, 2022 to December 31, 2025 (in thousands): Balance as of December 31, 2022 $ 4,488 Additions for tax positions in current years 1,740 Additions for tax positions in prior years 256 Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2023 6,484 Additions for tax positions in current years 1,374 Reductions for tax positions in prior years ( 18 ) Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2024 7,840 Additions for tax positions in current years 1,001 Additions for tax positions in prior years 7 Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2025 $ 8,848 We recognize interest and penalties related to uncertain tax positions in income tax expense. Our uncertain tax positions primarily relate to U.S. federal research and development tax credits. During the years ended December 31, 2025, 2024, and 2023, we recognized nominal amounts in interest. The cumulative balances of interest and penalties as of December 31, 2025 and 2024 were immaterial. 94 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Due to NOL carryforwards, tax years 2016 through 2025 remain open to examination by the major taxing jurisdictions to which we are subject. There are no open examinations that would have a meaningful impact to our consolidated financial statements. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted, which extends most expiring TCJA provisions and reforms certain international tax rules. The application of the OBBBA to the Company did not have a material impact on its financial statements during the year ended December 31, 2025. 10. Stock-Based Compensation Equity Incentive Plans In May 2017, our Board of Directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”), stock appreciation rights, performance-based stock awards, and other forms of equity compensation to employees, including officers, non-employee directors, and consultants. We initially reserved 6,421,442 shares of Class A common stock for issuance under the 2017 Plan, which included 421,442 shares that remained available for issuance under our 2007 Stock Option Plan (the “2007 Plan”) at the time the 2017 Plan became effective. The number of shares reserved under the 2017 Plan increases for any shares subject to outstanding awards originally granted under the 2007 Plan that expire or are forfeited prior to exercise. As a result of the adoption of the 2017 Plan, no further grants may be made under the 2007 Plan. As of December 31, 2025, there were 7,196,535 shares of Class A common stock reserved for issuance under the 2017 Plan, of which 585,638 are still available to be issued. Stock Options In June 2022, our Board of Directors granted our Chief Executive Officer a stock option to purchase 700,000 shares of our Class A common stock under the 2017 Plan with an exercise price of $ 50.63 per share (the “2022 CEO Grant”). The 2022 CEO Grant is eligible to vest based on the achievement of various stock price appreciation targets of our Class A common stock. Specifically, the 2022 CEO Grant vests in four installments of 25 % each if the average closing price per share for a 365 day calendar period equals or exceeds each of $ 175 , $ 200 , $ 225 , and $ 250 , respectively (the “Vesting Price Threshold”), prior to June 7, 2030. The option also vests if the Company engages in a Corporate Transaction, as defined in the Plan, in which the Company’s Class A common stock is valued at or above the Vesting Price Threshold. The fair value of the 2022 CEO Grant was determined using a Monte Carlo simulation. The fair value of the award at the grant date was $ 18.8 million and is being amortized over derived service periods ranging from 3.4 years to 4.1 years. 95 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes stock option activity for the years ended December 31, 2025, 2024, and 2023: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 2,697,959 $ 20.25 5.1 $ 45,862 Granted — — Exercised ( 98,610 ) 7.56 3,387 Expired — — Forfeited — — Outstanding at December 31, 2023 2,599,349 20.73 4.2 53,089 Granted — — Exercised ( 1,543,436 ) 9.37 36,383 Expired ( 384 ) 12.00 Forfeited — — Outstanding at December 31, 2024 1,055,529 37.34 5.6 7,751 Granted — — Exercised ( 107,821 ) 10.37 2,557 Expired ( 2 ) 6.03 Forfeited — — Outstanding at December 31, 2025 947,706 $ 40.41 5.1 $ 5,918 Exercisable at December 31, 2025 247,706 $ 11.53 1.2 $ 5,918 No stock options vested during the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO Grant, was $ 1.0 million. This amount will be recognized over a remaining weighted average period of 0.4 years. 96 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock Units In 2025, we changed our annual bonus program to provide eligible employees with the option to receive a portion or all 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 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 year ended December 31, 2025, we recognized $ 5.6 million of stock-based compensation related to this program. The following table summarizes RSU activity for the years ended December 31, 2025, 2024, and 2023: Number of Shares Weighted Average Grant Date Fair Value Non-vested and outstanding at December 31, 2022 1,190,720 $ 65.97 Granted 710,278 42.52 Vested ( 668,119 ) 58.64 Forfeited ( 154,815 ) 62.73 Non-vested and outstanding at December 31, 2023 1,078,064 55.52 Granted 987,528 35.61 Vested ( 657,897 ) 52.04 Forfeited ( 261,535 ) 45.81 Non-vested and outstanding at December 31, 2024 1,146,160 42.59 Granted 1,901,704 30.19 Vested ( 678,558 ) 43.65 Forfeited ( 256,556 ) 39.15 Non-vested and outstanding at December 31, 2025 2,112,750 $ 31.49 As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was approximately $ 49.8 million, which will be recognized over a weighted average period of 1.8 years. Performance Share Units Pursuant to the terms of his compensation package, our Chief Financial Officer (“CFO”) is entitled to receive a recurring annual grant of performance share units (“PSUs”) valued at $ 1.5 million each year he is employed with the Company. For 2025, the PSUs will be granted based on the attainment of a financial performance measure aligning our combined revenue growth and margin targets. If the performance measure is met, the CFO receives 100 % of the value of the PSU whereas if the performance measure is not met, 75 % of the value is received. The award is subject to a four-year vesting schedule, with 25 % immediately vesting upon grant and per year thereafter. The calculation of the PSUs to be granted will be made annually after the close of the calendar year and approved at the Board of Directors meeting thereafter. The award 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 year ended December 31, 2025, we recognized $ 0.6 million of stock-based compensation related to this award. 97 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the components of our stock-based compensation expense by instrument type for the years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 RSUs $ 35,437 $ 33,267 $ 37,563 Stock options 4,827 5,059 5,045 PSUs 580 — — Common stock awards to Board of Directors 696 719 779 Total stock-based compensation expense $ 41,540 $ 39,045 $ 43,387 The following table summarizes stock-based compensation expense by line item in the accompanying consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue Subscriptions $ 1,810 $ 1,638 $ 1,690 Professional services 5,787 5,925 6,354 Operating expenses Sales and marketing 8,434 8,526 11,247 Research and development 12,407 12,077 12,864 General and administrative 13,102 10,879 11,232 Total stock-based compensation expense $ 41,540 $ 39,045 $ 43,387 11. Stockholders' Equity We have authorized 500,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each with a par value of $ 0.0001 per share. As of December 31, 2025, our shares of Class A common stock, which are publicly traded on the Nasdaq Global Market, totaled 43,408,828 issued while our shares of Class B common stock, which are not publicly traded, totaled 31,088,085 issued and outstanding. The rights of the holders of Class A common stock and Class B common stock are identical except with respect to voting and conversion rights. In particular, the holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share on all matters subject to stockholder vote. The holders of Class B common stock also have approval rights for certain corporate actions. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10 % of the aggregate voting power of our capital stock, all outstanding shares of Class B common stock will convert automatically into Class A common stock. Share Repurchases 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 December 31, 2025, shareholders’ equity included 74.0 million shares outstanding, net of 0.5 million shares of common stock held in treasury. 98 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On February 17, 2026, the Board of Directors authorized a program to repurchase up to $ 50.0 million of our common stock (the “Share Repurchase Program”), effective February 2026 through February 2028. The Share Repurchase Program does not obligate Appian to acquire any specific number of shares, and shares of common stock may be repurchased using a variety of methods, including privately negotiated and/or open market transactions, under plans complying with Rule 10b5-1 of the Exchange Act, as part of accelerated share repurchases, or other methods. The timing and amount of any purchases of common stock will be based on our liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities. 12. Basic and Diluted Earnings (Loss) per Common 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 and PSUs, 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 except per share amounts): Year Ended December 31, 2025 2024 2023 Net income (loss) $ 1,233 $ ( 92,262 ) $ ( 111,441 ) Weighted average common shares outstanding, basic 74,049 72,988 73,102 Effect of dilutive securities Stock options 193 — — Restricted stock units 402 — — Performance share units 5 — — Weighted average number of shares outstanding - diluted 74,649 72,988 73,102 Earnings (loss) per Class A and Class B share - basic $ 0.02 $ ( 1.26 ) $ ( 1.52 ) Earnings (loss) per Class A and Class B share - diluted $ 0.02 $ ( 1.26 ) $ ( 1.52 ) For the year ended December 31, 2025, approximately 1,046,000 outstanding common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. As we reported net losses for the years ended December 31, 2024 and 2023, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised. 13. 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 years ended December 31, 2025, 2024, and 2023 totaled $ 53.3 million, $ 41.2 million, and $ 36.6 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. 99 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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. Appian's petition was heard on February 11, 2025. On January 6, 2026, the Supreme Court of Virginia issued an opinion affirming the opinion rendered by the Court of Appeals on both sides and remanding the case for a retrial. The timeline for any such retrial is in the control of the courts of Virginia. We cannot predict the outcome of any further appeals or any retrial or the exact time it will take to resolve them. Judgment Preservation Insurance On September 1, 2023, we obtained a judgment preservation insurance (“JPI”) policy in connection with our original $ 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 period to obtain a final and unappealable judgment. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $ 12.5 million, $ 15.8 million, and $ 6.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, $ 12.5 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 10.4 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 Annual Report, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 100 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. 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 license 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) expense, net and income tax expense are included in the consolidated statements of operations. The CODM does not review any significant segment expense information that differs from the expense presented 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 years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Domestic $ 453,724 $ 391,002 $ 350,210 International 273,213 226,020 195,153 Total $ 726,937 $ 617,022 $ 545,363 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 December 31, 2025 were $ 49.0 million and $ 12.4 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. 15. Retirement Plans We have a defined contribution 401(k) retirement and savings plan (the “Plan”) to provide retirement benefits for all eligible employees. With limited exceptions, all employees over the age of 21 on the first day of the month immediately following the month of hiring are eligible to participate in the Plan. The Plan allows eligible employees to make salary-deferred contributions up to 75 % of their pre-tax annual compensation, as defined in the Plan, as long as the total contributed does not exceed the annual maximum allowable amount under the Internal Revenue Code. The Company makes a semi-monthly matching contribution of 100 % of the employee's contribution for that pay period, up to a maximum of 4 % of the employee's eligible gross compensation for that pay period. Company contributions vest ratably based on years of service over a four year period, beginning with the completion of the first year of service. For the years ended December 31, 2025, 2024, and 2023, we incurred $ 13.0 million, $ 12.8 million, and $ 12.9 million, respectively, in contribution expense related to employer matching contributions. 101 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16. 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 • 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 during the years ended December 31, 2025 and 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 December 31, 2025 and 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 current market rates. 102 APPIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 December 31, 2025 and 2024 are as follows (in thousands): As of December 31, 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 $ 118,297 $ — $ 118,297 $ 118,297 $ — Money market fund Level 1 17,513 — 17,513 17,513 — U.S. Treasury bonds Level 2 26,627 22 26,649 — 26,649 Commercial paper Level 2 6,147 4 6,151 — 6,151 Corporate bonds Level 2 18,599 16 18,615 — 18,615 Total investments $ 187,183 $ 42 $ 187,225 $ 135,810 $ 51,415 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 years ended December 31, 2025 and 2024. Additionally, there were no transfers between Levels 1 and 2 during the years ended December 31, 2025 and 2024. Interest income on our investments, which is recorded within ‘Other (income) expense, net’ on our consolidated statements of operations, totaled $ 6.9 million, $ 6.8 million, and $ 9.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. The contractual maturities of our debt securities as of December 31, 2025 and 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. 103 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.