Company: APPN
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001441683-25-000041
Chunk: 44

Company: APPIAN CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 44
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million decrease 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 March 31, 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 decreased due to a decrease in cost of sales headcount of 11% from March 31, 2024 to March 31, 2025.

Subscriptions gross margin decreased slightly to 88.9% for the three months ended March 31, 2025, compared to 89.6% in the same period in 2024. The decrease in subscriptions gross margin was attributable to an increase in hosting costs, which was substantially offset by an increase in subscriptions revenue during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Professional services gross margin increased to 25.1% for the three months ended March 31, 2025 compared to 20.0% in the same period in 2024 due largely to a decrease in professional services personnel expense, partially offset by a slight decrease in professional services revenue in the comparable period. Gross margin increased to 76.6% for the three months ended March 31, 2025 compared to 74.6% for the three months ended March 31, 2024, driven largely by the increase in subscriptions revenue and the improvement in professional services gross margin.

Sales and Marketing Expense

Three Months Ended March 31,20252024$ Change% Change(dollars in thousands)Sales and marketing$54,553$58,156$(3,603)(6.2)%% of revenue32.8 %38.8 %

Sales and marketing expense decreased $3.6 million, or 6.2%, in the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a $2.2 million decrease in sales and marketing personnel costs. This decrease was partially offset by a $0.3 million increase travel and entertainment costs and a $0.2 million increase in contractor costs. Sales and marketing personnel costs decreased due to a decrease in sales and marketing headcount of 24% from March 31, 2024 to March 31, 2025 and a $0.3 million decrease in stock compensation expense. Travel and entertainment expense increased