Haven’t noticed any discussion about this stock on this board. If this isn’t the place to ask, please let me know. Otherwise…with all the brains on here, I was hoping to get some insight. This is considered a growth stock, correct? Is it too early to tell how this will perform? Thanks for taking the time to comment.
Appian has its own premium board at https://discussion.fool.com/4056/-appian-appn-121793.aspx?mid=34…
Lots of discussions going on there.
Eric (long APPN)
Unfortunately, this is not how this board works. If you like a stock, do some homework and post your thoughts and reasons as to why you like it. You will generate far more replies this way. It will be a good learning experience for you as well. As for Appian, I know it is a Fool Rec, but it is growing far too slowly compared to most if not all stocks widely owned here. If you can convince me why I should own APPN over Crowdstrike, Zoom, Datadog, Livongo, etc, I’d love to hear it!
I would also be interested in getting folks’ take on Appn in this forum. The link you have posted has little in the way of discussion, appearing to be predominantly a collection of infrequently published articles from fool.com rather than a vibrant discussion by members (including non-premium) such as one would see on here.
Unless I’m missing something, Appian would fall within the guidelines for a subscription based growth stock (30-40+% subscription revenue growth) that could inform folks here and benefit from their sage advice and thought processes.
I’ve had Appian in my portfolio for over 2 years and it’s been a steady performer over that time. As demand for software development increases, low code toolsets that allow non-programmers to translate their knowledge of how business processes work on the ground into repeatable logical instructions become valuable, especially at times when programming skills are in short supply. Amongst other things, I worked in a financial environment in the 1980s and was able to produce high performing software applications using so-called 4th Generation languages (4-GL) that allowed me to quickly put very acceptable systems in place which I could never have done in Cobol because I didn’t know Cobol.
That was then and this is now. The Appians of the now serve similar speed and lower code burdens as did the 4-GL tools of the 1980s. They allow for complex business processes to be automated and facilitate rule changes much more easily than is the case when writing straight code. They won’t replace the specificity that is possible when you can write in code, but if they allow you a 20x development speed advantage, with an ability to drop into code when needed, they can make a lot of sense.
Gartner sees Appian as a leader in a number of Magic Quadrants. It does have competitors (such as Pegasystems) so one would need to do one’s own due diligence before investing. Pega had a recently publicised scalability issue with the U.S. census count project, although that issue (ability to scale to a target of 600,000 users) won’t impact most organisations’ automation plans.
Hope this helps and that it is an appropriate contribution for consideration by members on this very fine board.
As a follow up to my original post…I now understand that I need to do my own research before asking for opinions. In retrospect, I think that this issue was posted in the board rules and it slipped my mind. I guess computer coding is really not in my wheel house, so I was looking for more thoughts from people that actually use coding and if they see a benefit in using APPN. One other thought…is there any way to do a search on this board to see any prior discussions that may have occurred on a subject. Thanks again. And thank you for being patient with a new learner.
As far as searching the board for prior discussions I would recommend using a query like below in google:
AAPL Saul’s site:fool.com
Search this board for APPN:
site:fool.com “Saul’s Investing Discussions” APPN
f you have premium access there is a Deep Dive recording. An hour-long discussion on the company: https://www.fool.com/premium/coverage/4056/coverage/2020/05/…
I started a position on May 14th. Talk about short-term luck…it is up 28.5%! Fun, but I invest for the longer term so moving on. Here are the notes I have gathered so far. I didn’t take notes related to the link above but it was a great listen. Everything here is publicly accessible.
Description From Yahoo Finance
Appian Corporation provides low-code automation platform that enables organizations to develop various applications in the United States and internationally. The company’s platform automates the creation of forms, data flows, records, reports, and other software elements that are needed to be manually coded. Its principal software markets include business process management systems, dynamic case management, robotic process automation, application platform as a service, and low-code development. The company also offers professional and customer support services. Its customers include financial services, life sciences, government, telecommunications, media, energy, manufacturing, and transportation organizations. The company was founded in 1999 and is headquartered in Tysons, Virginia.
Investor Relations Site
2020 Q1 Earnings Presentation
Q1 2020 Business Highlights
Companies are using Appian to respond to the COVID-19 crisis
• Hundreds downloaded Appian’s COVID-19 Response Management application
• Leading healthcare providers using Appian to manage clinical trials and to protect healthcare workers and patients
• Leading banks are using Appian to process loan requests for the US Paycheck Protection Program
Appian became the first vendor to natively offer full-stack automation
• Became the only vendor to offer the ability to orchestrate bots, AI, and people in a workflow on a single platform • Acquired a leading Robotic Process Automation company
• Released a fully integrated version of our low-code automation platform with native RPA
• Remained an open platform, allowing customers to integrate best-in-class software with their Appian applications
Appian hired new executive talent • Eric Cross as Chief Revenue Officer
• Pavel Zamudio as Senior Vice President of Customer Success 3
Q1 2020 Financial Highlights
• Cloud Subscription Revenue was $28.4m in Q1 2020, growth of 33% over Q1 2019
• Subscriptions Revenue was $50.4 million in Q1 2020, growth of 46% over Q1 2019
• Total Revenue was $78.9m in Q1 2020, growth of 31% over Q1 2019
• Cloud Subscription Revenue Retention Rate was 115% as of March 31, 2020, consistent with 115% as of December 31, 2019
• Subscriptions Margin was 90%
• Professional Services Margin was 35%
• Overall Gross Margin was 70%
YoY all metrics are up or even accelerating except retention which started 2019 at 126% and has now been flat for 2 Qs at 115%. I’ve read this is still good. Perhaps 126% wasn’t sustainable. Watch this. This is weird though. In the presentation last year it shows Q1 2019 “Subscription Revenue Retention” at 116% but this year iit is called “Cloud Subscription Revenue Retention” (https://seekingalpha.com/article/4259364-appian-corporation-…)
Gross margins are the highest they’ve been. 60% in 2018, 64%-67% in 2019, now 70%. Subscription margins specifically are roughly flat at 90% (nice margins!)
QoQ Cash decreased from $159.8M to $149.1M (perhaps the acquisition)
QoQ Liabilities down a little from $166.2 to $161.7M
QoQ EPS improved $0.24 to $0.17 (A net loss of $11.6M down from $15,2M), however, it looks like it was this low in 2019 Q2 so thinking of this as flat…though I don’t know enough to read anything in to this.
More notes from https://www.globenewswire.com/news-release/2020/05/07/202992…
First Quarter 2020 Business Highlights:
- Deloitte and Appian formed a strategic alliance to modernize mission systems for government and commercial clients. (https://www.appian.com/news/news-item/deloitte-and-appian-fo…)
- Appian offered a free application for enterprises and government agencies to manage their COVID-19 response. (https://www.appian.com/news/news-item/appian-offers-free-app…)
- Google and Appian expanded their partnership, enhancing the Appian AI offering to include out-of-the-box AI capabilities pre-configured for Intelligent Document Processing. (https://www.appian.com/news/news-item/appian-announces-expan…)
- Celonis, the market leader in AI-enhanced Process Mining and Process Excellence software, and Appian announced a technology partnership. (https://www.appian.com/news/news-item/appian-announces-partn…)
- Appian acquired a Robotic Process Automation (RPA) company making the platform a one-stop shop for automation. (https://www.appian.com/news/news-item/appian-acquires-roboti…)
- Appian announced Appian RPA, providing full-stack automation combining AI, RPA, workflow, decision rules and case management at the speed of low-code. (https://www.appian.com/news/news-item/appian-announces-appia…)
- Appian released the latest version of its low-code automation platform. (https://www.appian.com/news/news-item/latest-version-of-appi…)
- Appian also announced the appointment of Eric Cross as Chief Revenue Officer and Pavel Zamudio as Senior Vice President, Customer Success.
2020-01: Adds Robotic Process Automation (RPA) via its first acquisition
Spanish Novayre Solutions, developer of the Jidoka RPA platform. RPA is a virtual robot that can be programmed to interact with a piece of software just like a real-life human would.
“Appian is extending our lead in low-code automation by adding RPA,” Appian CEO and founder Matt Calkins said in a statement. “Together, the products enable end-to-end process orchestration where humans, software robots, and AI all work together in a coordinated way.”
The plan will be to allow RPA products from Appian that also work with leading RPA vendors such as Blue Prism and UIPath, according to an announcement by Appian. It also gives Appian reach into an industry that its low-code competitors, such as Pegasystems and SAP, also have.
Adds a TAM of $12B by 2023 and growing at 40%+ per year. By comparison I’ve read the TAM for Appian’s existing low-code side is going to be around $20B in the same timeline and growing double digits per year.
I ended up selling Appian. I wanted to share this follow-up
I will check back in quarterly to see how things progress. Some I sell because I am done with the company (fundamental changes). I have been learning more recently that there are times to take action based on conviction (fuelled by fundamentals as well as personal preferences). When I already have a lot of holdings and there are a crop of those that are clearly executing at a higher level (and right now as opposed to just being “positioned well for ________ future”) then I do not want to hesitate. I’m going to be wrong a lot anyway, in any case, so might as well take a chance at being wrong this way. To be clear I am not talking about trading for the short term. I AM talking about trying to be more agile than buy-and-forget. The middle ground. I’m still figuring out exactly where that middle ground is; I’m working on it.
Just for fun (BECAUSE THIS IS EXTREMELY SHORT-TERM). Here is the action I took and how it has done so far:
Jun 26th Today Change sell... APPN 49.76 50.54 1.6% buy... CRWD 99.23 108.54 9.4% *(~50% of proceeds went here)* DDOG 86.22 91.09 5.7% SHOP 914.69 1029.00 12.5% average 9.2% **vs sold 7.7%**
Also for fun, here is how this period looks for benchmarks. I use an average of these for my own portfolio comparisons (These are: S&P500, Nasdaq and Russel2000)
SPY 300.05 316.36 5.4% XQQ 77.83 83.67 7.5% IWM 136.67 143.12 4.7% **benchmark 5.9%** **Sells vs benchmark -4.3%** **Buys vs benchmark +3.3%**
I won’t go in to too much detail about the companies I moved to except to say I see them as essential right now. Quick notes:
CRWD (8.9% of portfolio) recent Q: Rev up 85%, recurring rev + 88%! Gross margin 78% (up again). Turned a profit! net retention >120%!!! Expanding at existing customers too. Best of breed. CEO with serious cred. Also has some info over at SA if you subscribe.
DDOG (8.5% of portfolio) has been growing revenues >80% TTM (or YoY, can’t recall if different) for the last 4 quarters. 87% this time! 80% gross margins. Landing AND expanding nicely. Net retention >130%!!!.
SHOP (7.7% of portfolio) - I posted the story side of why I like this company here: https://discussion.fool.com/i-consider-shopify-a-core-holding-i-…. Compared to the others this is a slow grower at “just” ~46% revenue growth and with gross margins ~55%. This is a holding I will definitely consider selling at some point if the numbers deteriorate, but I see no sign of that yet and for now the story points I posted above keep me onboard. This combination of great growth, disruption and expansion are very attractive. My other holdings are the only reason I won’t be adding any more any time soon though. Better places for new money.