Appian Corp at Needham Technology & Media Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Cikos - Needham & Company, LLC - Analyst : Absolutely. I do just want to get some logistics out of the way. I have a list of questions prepared on my side that we will be running through with management. (Conference Instructions) And with that out of the way, let's jump right into the questions. So first, really is a broader intro guys. For those maybe less familiar with that, can you give a quick introduction to what the company does, the problems that you are aiming to solve for your customers.

Question: Mike Cikos - Needham & Company, LLC - Analyst : Yes, absolutely. And we will be tackling a number of those items later. But I guess one of the things just more current but I know that you guys, last month, wrapped up Appian World. And it seemed like there were a number of announcements coming out of you guys. For those that maybe didn't attend, can you just walk through the newer announcements that came out of that? And I guess slimming it down a bit, which ones -- I know you love all your children equally -- but which one should we be paying attention to more out of the bunch?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Awesome. Just building on one element there. I know that we were talking about this unified platform being built off that acquisition you guys made last year. And I guess this process, Mike, can you give us an idea -- does -- is the expectation that there will be new competitors that you guys are squaring off against in the market because you have this more robust platform offering versus maybe where we were even 12 to 18 months ago. Like does that conversation change and are you seeing competitors -- different competitors more frequently today?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, okay. And if I'm thinking about the customers to bring it back to them, so what are some of the more common use cases in the customer base? And it probably goes hand in hand with -- when a customer typically lands with you, is there a more common use case where they are coming online?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, okay. Terrific. And then that supply chain use cases, especially in today's environment, makes a ton of sense. But I guess if I look at the model that you guys have, a pretty meaningful portion of revenue is tied to the professional services. I think it was just north of 25% in the most recent quarter. How do you guys see that trending over time? And really, I know it's a longer-term question, but let's say three to five years from now, how does that move -- I imagine go-to-market plays an element in there as well but what would be your thoughts?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Right, okay. And I know -- let's say the company has spoken about 70% of new business being partner influenced or partner driven, right? Can you walk us through the inroads that you have made on that front? I know it's a courtship, right? So how is it you plan on continuing to engage with these partners and driving further development efforts for the future?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, okay. And when we are -- again, just talking about these partners that you're working with, it's easy -- I could see it from an execution standpoint as far as maybe getting too far ahead of your skis with quantity versus driving the quality and the depth and breadth with these partners. Can you help us think about how you're balancing these different puts and takes?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay. And I know we are already talking about low-code a number of times throughout this so far, but can you just remind us about the promise of Appian's low-code, right? I think, earlier, you had cited a 10x factor when thinking about the build-out of these applications. But what would you describe to being Appian's real competitive advantages? Or how do you guys differentiate from a technology standpoint versus others that might be trying to execute against something similar with this low-code approach?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, okay. (Conference Instructions) Mark, I think with low-code, and sticking with that theme for a second, but I know -- we hear about CIOs increasingly talking about low-code on their roadmaps. But it still doesn't seem to be as widespread today. So the question is like where do you think we are in terms of awareness or adoption? And what, if any, are some of the gating factors towards more widespread adoption?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Got it. And -- yeah, go ahead.

Question: Mike Cikos - Needham & Company, LLC - Analyst : Terrific. Terrific. And I think about it, like, if you guys -- I don't know if evangelizing was the right word a couple of years ago but now that it is in most people's lexicon and you do have the partners helping that education process as well, it really becomes more of a virtuous cycle as far as driving down towards engagement and adoption ultimately. That makes a ton of sense. I think one of the things that I wanted to address as well is -- we're talking about this broader platform that you guys have. And I know -- the way I think about it, if the CIOs are building low-code into the roadmap -- it's one thing to build that in but at the same time, I don't see a CIO probably having a budget for low-code. So with this broader platform, can you maybe help us think about some of the buckets or categories from a budget perspective that Appian is competing for and how that's expanded over time as you guys have built out new features and products since your offering?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay. And I know Porter continues to come up just because it is a large part of the go-to-market strategy today but there is a direct component as well. How has your model evolved over the past years, especially when you think about Eric's leadership and the velocity or the quicker sales cycles that you guys are driving towards? Anything on the direct would be beneficial.

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay. And I know it's -- I think it was early last year when you guys also announced the hiring of Chief Marketing Officer, right? Can you help us -- or just provide an update on some of the initiatives that we have been seeing on that front as well since we're tackling some of the go-to-market

Question: Mike Cikos - Needham & Company, LLC - Analyst : Great. And on the product front, I know process mining came up but you guys did some recently [GAed] product. What has been some of the findings or what's some of the initial feedback that you guys are receiving from customers and partners? And it would be interesting to hear as REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2022 / 3:45PM, APPN.OQ - Appian Corp at Needham Technology & Media Conference (Virtual) well, like, if you could maybe separate a little bit -- customers versus partners. I'd just be curious if there's different responses or if it's been pretty uniform across the board.

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, great. And maybe if I can just parse it out a little bit more, but if I think about, again, the customers, has there been anything surprising as far as the split between maybe new customer lands with process mining versus adoption you're seeing at the existing customer base? How has that flow been so far as well?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay. And I know -- I guess coming back to the competitive dynamic, I know we hit on it a little bit earlier but, again, I'm just thinking about specific vendors like Salesforce or ServiceNow; Pega came up. But I guess, when you think about the durability of your competitive moat, what gives you the greatest conviction when thinking about your offering and how you're bringing that to bear for customers?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Right. Okay. And I know we spoke about the prioritization or how you guys are making sure you're striking a balance and attracting new partners and making sure they're educated and driving for these deeper relationships with them. Let's move away from the partners but keep the same line of thinking when going to customers, right? So two-part question here. How are you guys prioritizing new customer acquisition versus expansion with new customers -- or I'm sorry, expansion with existing customers, maybe in the use cases or application builds? And then the second question is, as you guys have, call it, around 900 customers today, how do we get to the rest of the Global 2000 or well beyond that as you guys think about this part of the market you're tackling?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Awesome. Okay, okay. And I guess we could squeeze maybe two more questions in with the remaining time that we have. But the first -- you guys have some impressive statistics out there: around $1 million-plus customers. And I'm just curious, flipping that on its head, but when you think about the downmarket opportunity, is the SMB something that the company feels it can address over time -- excuse me -- as low-code continues to gain momentum throughout the market?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Okay, okay. (Conference Instructions) A top of mind for investors is the macroenvironment. And I'm curious what you guys are seeing on the macro front, if any of that is either benefiting you guys from a demand driver standpoint or if there's more caution when thinking about the sales cycles and people's willingness to ink the contract? How are these various puts and takes impacting your business today?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Right. It's interesting and it probably speaks to exactly what you were going on with. But if I think about a more difficult macro environment, maybe not recession, but the two big reasons or tailwinds behind investing and so far specifically or tech more broadly, is to think about, one, driving REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2022 / 3:45PM, APPN.OQ - Appian Corp at Needham Technology & Media Conference (Virtual) efficiency; or second, if you are more forward-thinking company and you have the capital at hand, this is an environment where you can really drive your competitive advantages to keep up versus the next guy. So in that sense, if the market does take a downturn, it's an interesting opportunity for the companies that have the willingness and stomach to kind of keep going forward with their, whatever it is, digital transformation initiatives or the cloud progress and journey. And in that respect, for all the reasons we're talking about, the different cost savings and ROIs that your low-code platform can really provide, it's an interesting element to think about.

Question: Mike Cikos - Needham & Company, LLC - Analyst : I think one of the last things here -- I know that you guys have this Appian -- this community membership with Appian members. And I'm just curious, what are your thoughts as far as the strength of it, the benefits to your model from having that in place, and having that kind of market share when thinking about thought leadership?

Question: Mike Cikos - Needham & Company, LLC - Analyst : Terrific, terrific. Well, with that, we are out of time, but I just wanted to thank you, guys, again for the time today. And thank you to our listeners for tuning in.