Appian Corp Q2 2025 Earnings Call Transcript

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

Question: Raimo Lenschow - Barclays Services Corp - Analyst : I've got two quick questions. One for Matt and one for Serge. Matt, if you think that dream or the idea of app modernization, as you said, has been around for quite a while and AI should really help here, where are we on that journey, though, to kind of really get this to happen? And how much will come from just one vendor rather than like tools from different ones? And then for Serge, can you just talk a little bit about the cloud NRR, that kind of 111%, kind of stepped down a little bit again? Are we finding the level here? What are the drivers there?

Question: Keith Weiss - Morgan Stanley - Analyst : I think this is similar to Raimo's question, but maybe a little bit more specific. So Matt, on the call, you talked about Appian's advantages that won't be easy for others to replicate in this market opportunity. But I think that's exactly what a lot of investors are worried about overall for software, but particularly for app development platforms and companies such as yourself, is this view that generative AI, agentic computing and these AI labs are going to be able to do more and more on a go-forward basis, automate more processes and obviate a lot of legacy or existing vendors or even the SaaS layer altogether. Can you dig in a little bit on sort of what those advantages are that Appian holds that you think are going to prove true moats, right, that aren't going to be able to be replicated by just agentic AI or kind of what the AI labs are doing to help us and help investors get a little bit more comfortable about durability, if you will?

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent. That's a great analogy. And I think you're right that we're at a part of the kind of the innovation cycle and the hype cycle where there's a lot of broad sort of aspirations what AI will have to do. So you guys bringing out sort of analogues like the car versus the engine, I think, is really important to help investors in the marketplace understand what's the right place that AI will go into. Serge, it's great to hear from you again in the new role. So congratulations on the new seat. I had a question more specifically for you. We're seeing 14% constant currency growth overall in Appian and flat OpEx growth. And Matt was talking about some of the efficiencies. You guys are already seeing in the business, particularly in sales and marketing productivity from utilizing AI. Where are we in the Appian journey? Like how much more is there to go in terms of you guys garnering efficiencies out of your own use of these technologies and getting those margins heading in the right direction?

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent. That's super helpful. And congratulations on a solid quarter.

Question: Steven Enders - Citi Infrastructure Investments LLC - Analyst : Great. Serge, looking forward to working with you more moving forward here. I guess maybe just to start, just in terms of the contribution that Appian AI is maybe having on the pipeline or maybe how is it changing the customer conversations in terms of how they're viewing, I guess, Appian as a key partner moving forward, just what have you seen from those dynamics? And is it having a, I guess, impact to -- or how would you kind of frame the impact it's having to some of the demand out there for Appian right now?

Question: Steven Enders - Citi Infrastructure Investments LLC - Analyst : Okay. That's great to hear. And then maybe just on the guide, it's pretty healthy raise here. I'm trying to understand how much of that is maybe a bit of a change in the guidance philosophy or the guide framework here? Or is there some impact here from the change in FX rates? Can you just kind of help maybe walk through what's different today with the guide versus 90 days ago from the prior annual outlook?

Question: Jake Roberge - William Blair Capital Partners - Analyst : Serge, looking forward to working with you moving forward. Great to see the continued productivity on the go-to-market side. Serge, you talked about this being a key area to drive more efficiency in the business. As you've looked at things, can you talk about what's worked for the company thus far and where you think some of the low-hanging fruit is moving forward? And then are you starting to see your new AI solutions help drive faster decisions from customers just given the ROI for them might be a little bit clearer as you're going to market with those?

Question: Jake Roberge - William Blair Capital Partners - Analyst : Okay. That's helpful. And then can you just double-click on what you're seeing with your public sector business? Things seem to be progressing really well thus far this year. But as we head into the third quarter, could you just talk about how conversations with customers are going just given the larger Q3 buying cycle there?