Company: APPN
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001441683-25-000041
Chunk: 90

Company: APPIAN CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 90
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 support revenue. With respect to new versus existing customers, there was an $8.1 million increase in subscriptions revenue from sales to new customers, while the remaining $8.5 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The decrease in professional services 

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revenue was due primarily to a $4.9 million decrease in revenue from existing customers, which was largely offset by a $4.8 million increase in sales to new customers.

Cost of Revenue

Three Months Ended March 31,20252024$ Change% Change(dollars in thousands)Cost of revenueSubscriptions$14,894$12,270$2,624 21.4 %Professional services24,02425,727(1,703)(6.6)Total cost of revenue$38,918$37,997$921 2.4 %Subscriptions gross margin88.9 %89.6 %Professional services gross margin25.1 %20.0 %Total gross margin76.6 %74.6 %

Cost of revenue increased $0.9 million, or 2.4%, in the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a $2.4 million increase in hosting costs coupled with a $0.4 million increase in contractor costs. These increases were partially offset by a $1.6 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