Company: APPN
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001441683-25-000017
Chunk: 90

Company: APPIAN CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 90
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 due to an increase in our subscriptions revenue of $78.2 million, which was partially offset by a decrease in our professional services revenue of $6.6 million. The increase in subscriptions revenue was driven by a $63.5 million increase in cloud subscriptions revenue, a $9.9 million increase in on-premises software revenue, and a $4.8 million increase in maintenance and support revenue. With respect to new versus existing customers, $63.3 million of the increase in subscriptions revenue was derived from expanded deployments and corresponding sales of additional subscriptions to existing customers while $14.9 million was driven from sales of subscriptions to new customers. The decrease in professional services revenue was due to an $18.7 million decrease in revenue from existing customers, which was partially offset by a $12.1 million increase in sales to new customers.

53

Cost of Revenue

Year Ended December 31,20242023$ Change% Change(dollars in thousands)Cost of revenue:Subscriptions$53,487 $43,563 $9,924 22.8%Professional services96,692 99,759 (3,067)(3.1)%Total cost of revenue$150,179 $143,322 $6,857 4.8%Subscriptions gross margin89.1 %89.4 %Professional services gross margin23.5 %25.0 %Total gross margin75.7 %73.7 %

Cost of revenue increased $6.9 million, or 4.8%, in 2024 compared to 2023, primarily due to an $8.5 million increase in hosting costs and a $0.2 million increase in professional services and product support personnel costs, both of which were partially offset by a $1.5 million decrease in contractor costs. Hosting costs increased due to an increase in sales of our cloud offering during 2024. Although professional services and product support personnel headcount decreased 11.9% from December 31, 2023 to December 31, 2024, personnel costs increased due to a $1.2 million increase in severance costs and slightly higher salaries and benefits, which were substantially offset by a $0.7 million decrease in bonus expense and a $0.5 million decrease in stock compensation expense. Contractor costs decreased in 2024 compared to 2023 due to a decrease in the usage of subcontractors for professional service