Company: APPN
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001441683-25-000017
Chunk: 91

Company: APPIAN CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 91
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 engagements. 

Subscriptions gross margin was 89.1% in 2024, consistent with an 89.4% margin in the prior year as increases in subscriptions revenue were offset by a corresponding increase in hosting costs. Professional services gross margin decreased to 23.5% in 2024 as compared to 25.0% in 2023 due to a decline in professional services revenue and a marginal increase in personnel costs, both of which were partially offset by lower contractor costs. Total gross margin increased to 75.7% in 2024 as compared to 73.7% in 2023 driven largely by the increase in subscriptions revenue.

Sales and Marketing Expense

Year Ended December 31, 20242023$ Change% Change(dollars in thousands)Sales and marketing$230,885 $242,381 $(11,496)(4.7)%% of revenue37.4 %44.4 %

Sales and marketing expense decreased $11.5 million, or 4.7%, in 2024 compared to 2023, primarily due to a $15.3 million decrease in sales and marketing personnel costs and a $1.5 million decrease in information technology costs. These decreases were partially offset by a $3.6 million increase in marketing costs and a $1.7 million increase in travel and entertainment expenses. Personnel costs decreased due to a 23.6% decrease in sales and marketing personnel headcount from December 31, 2023 to December 31, 2024 and a $2.6 million decrease in stock compensation expense, both of which were partially offset by a $3.5 million increase in sales commissions driven by both contracts with new customers and renewals with existing customers. Information technology costs decreased primarily due to lower cloud computing expenses. Marketing costs increased due to a $3.2 million increase in spending on marketing events, in addition to increases in digital marketing and public relations expense. Travel and entertainment expenses rose due to increases in airfare and lodging associated with a higher number of in-person events and engagements relative to the prior year.

54

Research and Development Expense

Year Ended December 31,20242023$ Change% Change(dollars in thousands)Research and development$154,977 $153,098 $1,879 1.2%% of revenue25.1 %28.1 %

Research and development expense increased $1.9 million, or 1.2%, in