Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How does Appian view its positioning in the uncertain US Federal budget environment, especially with the strength in the public sector vertical? A: Matthew Calkins, CEO, expressed caution due to the uncertainty. He emphasized the principles of efficiency and modernization but noted the difficulty in predicting how these will translate into the buying environment. Mark Lynch, CFO, added that the 65% cloud and 35% on-prem ratio was an anomaly due to large public sector deals and expects it to return to 80% cloud and 20% on-prem next year.
Q: What can customers expect from Appian's product roadmap, particularly regarding the agent strategy? A: Matthew Calkins, CEO, highlighted the goal of demonstrating the practical value of agents when structured with guardrails. He emphasized the importance of showing real value through practical applications, aiming to improve existing processes with AI rather than drastically changing business operations.
Q: How does Appian's approach to AI differ from other market approaches, and how is it being received by customers? A: Matthew Calkins, CEO, explained that Appian's approach focuses on deploying AI where work is happening, integrating it into the core of business processes. This contrasts with other approaches that may position AI as an auxiliary tool. Appian aims to demonstrate the value of this integration through success stories and demonstrations.
Q: Can you provide more details on the demand trends across Appian's core verticals and the outlook for these sectors? A: Mark Lynch, CFO, reported that the performance and pipeline were strong across the four key verticals: financial services, public sector, insurance, and life sciences. He also noted success in other verticals like energy, manufacturing, and education.
Q: How is Appian pricing its AI agents, and what are the expectations for cloud subscription revenue retention rates? A: Matthew Calkins, CEO, stated that AI agents are priced by usage, but Appian is currently subsidizing their use to encourage adoption. Mark Lynch, CFO, noted that the cloud subscription revenue retention rate is within the target range of 110% to 120%, with a gross renewal rate of 99%, which is considered best in class.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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