Company: APPN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001441683-25-000068
Chunk: 53

Company: APPIAN CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 53
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 Ended September 30,20252024$ Change% Change(dollars in thousands)Cost of revenueSubscriptions$49,810$39,614$10,196 25.7 %Professional services78,32274,8803,442 4.6 Total cost of revenue$128,132$114,494$13,638 11.9 %Subscriptions gross margin88.0 %88.8 %Professional services gross margin28.7 %22.4 %Total gross margin75.6 %74.6 %

Cost of revenue increased $13.6 million, or 12%, in the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to a $8.8 million increase in hosting costs coupled with a $4.9 million increase in contractor costs. These increases were partially offset by a $0.3 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 nine months ended September 30, 2025, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements. Although professional services and product support headcount increased from September 30, 2024 to September 30, 2025, overall personnel costs decreased due to a $1.4 million decrease in severance expense as compared to the prior year. 

Sales and Marketing Expense

Nine Months Ended September 30,20252024$ Change% Change(dollars in thousands)Sales and marketing$166,929$175,613$(8,684)(4.9)%% of revenue31.9 %39.0 %

Sales and marketing expense decreased $8.7 million, or 5%, in the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to a $6.1 million decrease in sales and marketing personnel costs, and a $1.5 million decrease in information technology spend. These decreases were partially offset by a $1.3 million increase in travel and entertainment costs. Sales and marketing personnel costs decreased due to a decrease in sales and marketing headcount from September 30, 2024 to September 30, 2025. Information technology costs declined largely due to lower cloud computing expense. Travel and entertainment expense increased due to a higher number of in-person events