Company: APPN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001441683-25-000068
Chunk: 50

Company: APPIAN CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 50
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%Professional services gross margin30.9 %25.6 %Total gross margin75.8 %75.9 %

Cost of revenue increased $8.2 million, or 22%, in the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $3.1 million increase in hosting costs coupled with a $2.5 million increase in contractor costs and a $2.2 million increase in professional services and product support personnel costs. Hosting costs increased due to an increase in sales of our cloud offering during the three months ended September 30, 2025, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements. Professional services and product support personnel costs increased due to an increase in headcount from September 30, 2024 to September 30, 2025.

Sales and Marketing Expense

Three Months Ended September 30,20252024$ Change% Change(dollars in thousands)Sales and marketing$51,918$50,865$1,053 2.1 %% of revenue27.8 %33.0 %

Sales and marketing expense increased $1.1 million, or 2%, in the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $1.3 million increase in marketing expenses and a $1.2 million increase in sales and marketing personnel costs. These increases were partially offset by a $1.0 million decrease in contractor costs. Although sales and marketing headcount decreased from September 30, 2024 to September 30, 2025, overall sales and marketing personnel costs increased due to higher bonuses and commissions expense. 

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Research and Development Expense

Three Months Ended September 30,20252024$ Change% Change(dollars in thousands)Research and development$40,263$38,572$1,691 4.4 %% of revenue21.5 %25.0 %

Research and development expense increased $1.7 million, or 4%, in the three months ended September 30, 2025 compared to the same period in 2024. This change is primarily attributable to a $1.0 million increase in research and development personnel costs and a $0.5 million increase in information technology costs. Although research and development headcount remained relatively consistent period over period, overall