Company: APPN
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001441683-25-000053
Chunk: 100

Company: APPIAN CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 8
Chunk 100
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Three Months Ended June 30,20252024$ Change% Change(dollars in thousands)Cost of revenueSubscriptions$17,154$13,262$3,892 29.3 %Professional services26,76726,151616 2.4 Total cost of revenue$43,921$39,413$4,508 11.4 %Subscriptions gross margin87.1 %88.3 %Professional services gross margin29.5 %21.9 %Total gross margin74.3 %73.1 %

Cost of revenue increased $4.5 million, or 11%, in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $3.4 million increase in hosting costs coupled with a $2.0 million increase in contractor costs. These increases were partially offset by a $0.9 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 June 30, 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 headcount of 8% from June 30, 2024 to June 30, 2025.

Sales and Marketing Expense

Three Months Ended June 30,20252024$ Change% Change(dollars in thousands)Sales and marketing$60,458$66,592$(6,134)(9.2)%% of revenue35.4 %45.5 %

Sales and marketing expense decreased $6.1 million, or 9%, in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $5.0 million decrease in sales and marketing personnel costs and a $0.7 million decrease in marketing expenses. This decrease was partially offset by a $0.4 million increase in contractor costs. Sales and marketing personnel costs decreased due to a decrease in sales and marketing headcount of 25% from June 30, 2024 to June 30, 2025. Marketing expenses decreased due to reduced spending on marketing events and digital marketing.

Research and Development Expense

Three Months Ended June 30,20252024$ Change% Change(dollars in thousands)Research and development$40,347$