Appian at KeyBanc Forum: AI Drives Strategic Growth

On Monday, 11 August 2025, Appian Corp (NASDAQ:APPN) participated in the KeyBanc Capital Markets Technology Leadership Forum, where CFO Serge Tonga provided insights into the company’s strategic direction. Appian is leveraging AI to enhance its offerings, reporting strong Q2 performance with a 21% rise in cloud subscription revenue. However, the company anticipates a slight deceleration in growth for the latter half of the year as it balances profitability with strategic investments.

Key Takeaways

• Appian reported a 21% increase in cloud subscription revenue in Q2.
• The company is shifting focus towards enterprise clients and AI integration.
• A new Chief Revenue Officer is enhancing go-to-market strategies.
• Appian is optimistic about federal sector opportunities despite potential Q3 uncertainties.
• The company aims for continued margin expansion and sustainable growth.

Financial Results

• Cloud revenue growth was 21%, with total revenue growing by 17%.
• EBITDA margin stood at 5%, with guidance for mid to high single-digit margins for the year.
• The advanced tier, featuring AI capabilities, is priced at a 35% uplift, with a minimum of 25% after discounts.
• Appian has seen approximately 20 percentage points of margin gain over the past two years.

Operational Updates

• Appian is targeting the Global 2,000 with a focus on enterprise clients.
• 50% of new clients are adopting the advanced AI tier.
• The new Chief Revenue Officer is implementing disciplined processes to enhance value communication and negotiation.
• Appian is deepening its partner program with increased investments.

Future Outlook

• Appian expects continued strength but not at the same level as Q2.
• The company is optimistic about long-term growth, balancing profitability with strategic investments in AI and federal opportunities.
• There is a focus on improving go-to-market efficiency, R&D productivity, and internal process efficiency through AI deployment.

Q&A Highlights

• Sales cycles remain unchanged, with no macro negative impacts observed.
• AI funding has not affected core operational initiatives.
• The company is strengthening relationships with existing partners.

In conclusion, Appian’s strategic focus on AI and enterprise clients positions it well for future growth. For more details, readers are encouraged to refer to the full transcript below.

Full transcript - KeyBanc Capital Markets Technology Leadership Forum:

Devin Al, Part of the software research team, KeyBanc: All right. Why don’t we, get get started here. Welcome everybody for joining us today to day one of KeyBanc’s Technology Leadership Conference. My name is Devin Al. I am part of the software research team here at KeyBanc.

We are very pleased to have Appian’s CFO, Serge Tonga. Hope I didn’t You did agree. Mess that Excellent work. And for joining us for a twenty five minute fireside chat today. Really pleased to have you, and welcome.

Serge Tonga, CFO, Appian: Thank you. Thank you for having us.

Devin Al, Part of the software research team, KeyBanc: Maybe just like level set here, Serge, for the investors who are maybe a little bit unfamiliar or not fully understand the Appian story. Can we just give like a big a quick overview of the company as well as maybe kind of walk through how a customer would use the platform today?

Serge Tonga, CFO, Appian: Yes. Yes. So Appian is a software platform that allows customers to design, automate and optimize its various processes across the organization. And we’re best suited for complex mission critical processes that span across various portions of the organization or even the organization of the outside world. So to make that kind of more real life, maybe I’ll share a few examples.

Yes. For example, one of the largest asset managers in the world is using us in the process to onboard and manage their customers. This was a fragmented process that was partially manual before and they’ve aggregated a number of those pieces to build a new application on top of Appian and digitized and modernized the process as well. We’re also being used by one of the largest financial institutions in their credit card division. They need to monitor their corporate customers and monitor for regulatory reasons all the communications they have with them regarding spend, whether it is e mail telephone or any other means.

And those used to be separate systems that were again consolidated and brought onto a single application in Appian that makes the process far more efficient, but also more accurate. Or medical devices companies using us for life cycle of from order to install of the medical equipment. And again, that was replacing an internal application that was just struggling to scale. Or maybe a final example, we are big in the public sector. So one of the largest U.

S. Cities is using us to run their budgeting process. It used to be manual and paper. You would submit your proposal and paper and you’d wait for a response. Now that’s through an online application from Appian that reduces the wait to hear your answer for in more than 50%.

But hopefully, that gives you some sense of sort of some of the unifying characteristics here, is around replacing manual processes, consolidating into a single platform, allowing better visibility, tracking and performance of things that were previously done in a siloed manner. And frankly, there’s plenty of Vestal in the outside world and plenty of opportunities for us to go after. And the other thing I would say is just that I know we’ll get into AI. I’m sure we’ll get into AI.

Devin Al, Part of the software research team, KeyBanc: I’m we have to, yes.

Serge Tonga, CFO, Appian: Of impossible not to. AI only further increases what’s possible in terms of automating and improving processes, and that’s a significant opportunity, incremental opportunity for us.

Devin Al, Part of the software research team, KeyBanc: Okay. And maybe just staying on the recap of the company really quick. Could you just quickly touch on like the pricing model of some of your products? I know just given how pervasive AI is, are you guys seat based, consumption based? How do you guys price your product?

Serge Tonga, CFO, Appian: So we have a number of pricing models. The biggest one is per seat. We also have per app. We also have varieties of consumption models that are sort of in various stages of its development. I think the pricing models are important and we’re going to continue being flexible and sort of responsive to however customers want to interact with us.

But what’s more important than pricing is actually how you determine value. And our customers get significant value from our platform, and we believe we have no problem pricing to get that value. We’ve been raising prices over the last couple of years and just on an apples to apples basis, and we continue to believe that no matter how the world of pricing models evolves, we’ll be able to get the value, and that value only goes up in the world of AI.

Devin Al, Part of the software research team, KeyBanc: Okay. And I know we’ll get into this a little bit more, just pricing and packaging a little bit more so. But just given Serge, it’s your first conference with us, but also you’ve been in the CFO role for Appian for a few months here. So maybe a quick background of yourself, but also what drove you to join Appian?

Serge Tonga, CFO, Appian: Yes. So I actually was on the other side of the fence for a long time. I was an investor investment analyst for a variety of buy side firms for fifteen years. Then I joined MongoDB as VP of Finance and sort of ran the entire finance function outside of the accounting team for a period of about six years and I’ve joined Appian earlier this year. There’s really a few things that attracted me to Appian.

The first one is just the quality of the product. Our product really spans breadth of use cases in terms of processes that we can cover. Ease of use is great. Flexibility is great. And our customers really like us.

They see us as a partner, somebody they want to invest more in. And that’s a strong that’s an amazing asset. It’s kind of like if you get that right, you get a lot of other things wrong, but still build a great company. Second thing is the AI value proposition. We are a company that can deliver value with AI today, tangible value in ways that enterprises are prepared to consume it.

And I think that that’s a very powerful sort of medium and long term driver for incremental growth at Appian. And then finally, as a sort of improved efficiency and execution, the company has done a lot over the last couple of years to position itself for more efficient growth, and I look forward to being a part of that journey going forward.

Devin Al, Part of the software research team, KeyBanc: Okay. Yes, I mean, lot of goodness that you just mentioned. We’ll dive into it a little bit more here. But maybe just to recap second quarter results that you guys printed last week. Really strong results there, probably one of the largest beats and races in the company’s recent history, but also I think cloud subscription revenue, is which kind of main metric you guys look at, accelerated 21% reported, really solid.

Maybe just briefly talk about where you guys saw the strength in the quarter and what drove the acceleration?

Serge Tonga, CFO, Appian: Yes. So very pleased with the quarter. Cloud revenue growth 21% or 18% on a constant currency basis acceleration both with and without FX compared to the prior quarter. Total revenue growth of 17% another acceleration and margins EBITDA margin of 5% in our seasonally highest expense quarter because a number of our large sales and marketing events happened in the second quarter and well ahead of guidance. So really across the board above our expectations.

And frankly, main driver is really the strength of new business. And the strength of new business, we think, come from two areas, broadly speaking. One is, we’ve pivoted our go to market about a year ago to focus more exclusively on the high end of the market, the enterprise segment, the Global 2,000. And we’re seeing evidence that they’re working. We’re seeing larger deal sizes.

We’re seeing better execution. We’re seeing more strategic conversations with customers. And outside of the largest numbers, I would say, you kind of look under the hood at some of the deals that Matt was talking about in his script, just really impressive deals in terms of their size, their duration. Some of them are ramping deals with significant incremental commitments over the years from our customers. So that’s just really very good to see and encouraging from where we might be going in the future.

And the second, of course, is AI. We’re seeing steady building of AI demand. We are seeing customers who agree with us in terms of how AI should be deployed, meaning in process with very specific tasks, delivering tangible value, but within a security parameter and compliance terms that enterprises are comfortable with. We see that from existing customers who are upgrading to our advanced pricing tier where they have access to AI features as well as from new customers with 50% of our new logos over the last few quarters coming on this advanced year, meaning they are interested in just off the street showing up and using AI. So just one quarter doesn’t let a trend make, but we’re encouraging what we’re seeing with Q2 and believe that’s a sign of more good things to come.

Devin Al, Part of the software research team, KeyBanc: Yes. I know it’s definitely encouraging. I want to maybe peer under the hood a little bit on some of the go to market changes you guys made, you’re finding success, upmarket. I know previously you guys have done something around kind of make that conversation around value a little bit more clear, right, as you guys go to market. Can you just explain a little bit more about that motion?

I know that’s been probably one of the benefits you guys saw that drove the results.

Serge Tonga, CFO, Appian: Yes. I would say a year ago, we decided to sharpen the focus by spending less time and less resources in the mid market and focusing exclusively at the enterprise segment. And again, the reason why we’re focusing on the enterprise segment is because when you are a mission critical platform for complex applications, that’s sort of where you belong. And so that’s not to say that we don’t have a value proposition for the mid market or that we want to invest more over time there as well. But as we think about where we’re seeing the best returns right now, that’s certainly an area to double down on.

And it is about value. It’s about communicating that value clearly to the customer. It’s about negotiating that value, keeping its fair share of it. We have a new Chief Revenue Officer who joined us in November, who’s instituting frankly a higher level of discipline and focus and rigor in our process all the way through pipeline and forecasting, but also fundamentally believing in the value that you’re delivering and negotiating until you get that value. And again, these things take time to kind of fully manifest themselves, and we are excited about the early steps, but it’s positive so far.

Devin Al, Part of the software research team, KeyBanc: Okay. That’s great to hear. And then maybe switching gears a little bit to the AI, the up tiering efforts. Great to hear the results you guys are having. You mentioned 50% of the new logos have attached or attached the advanced tier with AI capabilities embedded.

Could you maybe just step back and kind of talk about what uplift are you guys kind of seeing from these up tiering efforts? And are you guys mainly rolling it out to new customers? Or could we see more concerted efforts to target the existing base, which is the bigger opportunity here?

Serge Tonga, CFO, Appian: Yes. So the advanced tier, we effectively have three tiers of cellular licenses going forward. The standard tier, which has the regular, if you will, functionality of our platform. Advanced tier, that is list price 35% uplift, but we sell it we allow some discounts, so it can be no less than 25% uplift. And that includes our advanced AI features, our data fabric functionality as well as a number of other or more recent and more sort of incremental features.

And so we’ve rolled that out eighteen months ago and we’re selling it to new and existing customers. And it’s actually really good to see that both are picking up. On the existing customer side, it’s frequently a part of the upgrade cycle. So it comes up when customer comes up for renewal and that’s when we have conversations with them. But the other governor isn’t just when the customer talks to us, but it’s also when they have use cases, AI use cases that they want to bring into production.

Because if you don’t have that, there’s really no you’re not going to derive value from the advanced tier. And some customers are ready sooner than others and that’s why we see 50% of new logos coming in because those are customers that have a production ready AI use case and are looking for us even though they don’t have prior experience with us and have decided that we’re the best platform to build this use case. So it’s a strong sign of our value proposition in the market. But we’ll see it keep coming from both directions, both from continued effort to upgrade existing customers as well as new logos that come in, in advanced tier.

Devin Al, Part of the software research team, KeyBanc: Okay. And then maybe just double clicking on the customers that have adopted the AI tiers. Is there like a commonality of industries and customers that have been adopting AI? Is there like industries more matured or like maybe more educated around AI? And I think also on the call, think your CEO, Matt Calkins, kind of talked about AI pulling you guys into new industries that you guys haven’t seen before.

Maybe just talk about that as well.

Serge Tonga, CFO, Appian: Yes. I think we’re seeing it across the board. So I don’t think there’s a single industry that we can call out as being a particular leader when it comes to it. It’s more company specific. So but we’re seeing it across financial services.

We’re seeing it across life sciences. We’re seeing it in some of the sectors that, as Matt was speaking about, some of the sectors where maybe we’ve been less represented in the past. The key is the customer’s willingness to move to production with AI and the use cases that we’re seeing are related to our in particular to our product that’s called AI Document Center, which allows customers to insert AI into their existing processes and more quickly derive value from their documents, whether that’s from extraction of information, summarization or actioning based on what that information says. And frankly, we’re seeing very solid adoption in those use cases because it’s a logical extension of what we already do for customers, a significant value in a way that’s tangible and recognizable by customers while still adhering to the constraints that today is that enterprise processes need to adhere to.

Unidentified speaker: Got it. Sounds like, yes, a lot of strength coming from a

Devin Al, Part of the software research team, KeyBanc: broad base of customers and markets. Maybe just kind of tying back to the financials, right? I mean a lot of things are happening, good things happening, go to market, upmarket success, AI up tiering, seeing success. When I look at the second half guide for cloud subscription revenue, I think you’re guiding to a slight deceleration, especially in the fourth quarter. But maybe just for the audience, how should we reconcile the momentum you’re seeing go to market AI and then the decel that you’re kind of projecting in the second half year?

Serge Tonga, CFO, Appian: Yes. So we exceeded our guidance in the second quarter. It was an exceptionally strong quarter sort of across the board. So we expect continued strength, but maybe not to the same level that we’ve seen in Q2. Now of course, if we deliver it, that will be great.

But as we look at our pipeline and sort of opportunities, we think that the current guidance is prudent.

Devin Al, Part of the software research team, KeyBanc: Okay. I’m just going to pause here and see if there’s any questions in the audience before I move on here. All right. Maybe just stepping back and kind of ask you about macro, specifically federal and public sector. I know you guys have some exposure in that regard, public sector and U.

S. Fed. Curious how has your conversations been with the customers in that sector lately just given Doge, a lot of disruptions happening and kind of what your expectations are for the rest of the year for that particular sector?

Serge Tonga, CFO, Appian: Yes. So why don’t we take macro more generally and then Doge specifically as kind of So two individual when it comes to macro, obviously, there’s been a lot of excitement in the headlines in terms of tariffs and changes and what that means for The U. S. Economy and for the global economy. And we obviously don’t have a macro crystal ball.

But what we can tell you is that, let’s say, macro volatility that we’ve experienced so far or at least headline volatility hasn’t really impacted our business, not in terms of customers’ willingness to buy, length of the cycles. Maybe it’s because we don’t see it, others may see it, maybe we’re not large enough to be affected, maybe our value proposition stands more strongly. But purely from our perspective, we have not seen an overall macro negative impact. And of course, again, that’s the rearview mirror. It may be different going forward.

But so far, we’ve been able to execute without really, I would call it, business as usual. Then on the federal side, I would maybe divide the story in three pieces. So when the new administration came in and when sort of when the Doge efforts kicked into gear, there was a lot of confusion within the various sort of spending centers within the government in terms of what’s allowed, what’s not allowed and maybe a bit of a vacuum. So we’ve executed really well through that. So if you look at the first half of the year, our federal business grew faster than our total business on most relevant metrics.

So we feel very good about that. And it does feel that it’s more normalized state of affairs when it comes to doing business with the government now compared to say February or March. That said, as we look immediately ahead of us and think about the third quarter, that’s the big federal quarter. That’s the end of the fiscal year. We were obviously pursuing deals, number of renewals as well as new opportunities that we feel confident about.

But as with every large deal and particularly in this environment, there’s an element of let’s see how it plays out. And obviously, we’ve taken a view in the context of our guide, but we’ll give you more context obviously when we report the quarter and see how we play out. But we do look at it with cautious optimism. What I’m most excited about, though, in the context of our federal space is really if we take a step back and think about it beyond kind of a quarter or two and think about the changes that have been now put into place and what they mean for Appian. I think there’s two things to keep in mind.

First, federal government has made it very clear that they want to modernize, that they want to eliminate legacy systems, consolidate on more modern solutions and get out of business or managing legacy technologies that are thirty, forty or even older 30 years old or even older. And so that’s an opportunity for us as the net beneficiary of sort of getting out of those old technologies and getting onto a new platform like ours. And we think that’s a tailwind that’s going to benefit us for years to come. And then the second thing that the government has made very clear is that they don’t want to operate through intermediaries. So they don’t want to have companies that are serving as contractor and people like us being as subcontractors because the contractors primarily sell consulting and their incentives may not be aligned with that of the government.

They are aligned with ongoing projects, incremental purchase orders, incremental hours on-site as opposed to delivering the value and moving on to the next project. So as I think about what that means for us, that likely means us working more directly with the government, which will give us not just opportunity to pick up some professional services revenue as we go along, but also more clearly communicate the value of our platform, which we think we just do a better job than an intermediary. And that will mean, going back to the first point, our ability to win more software revenue over time. And so whatever happens in this quarter, good, bad or in the middle, those trends seem to be firmly in place and will benefit us going forward.

Devin Al, Part of the software research team, KeyBanc: Okay. That’s super helpful context. And then maybe just sort of Jason in the market conversation we’re having, maybe on a competitive landscape side of things. I think some of the large software players are getting a little bit more emphasis on getting into automation. I think one of your peers in the industry is getting a little bit more aggressive on pricing, kind of expanding on their partnerships channel a little bit just to expand the target market.

Could you just speak to competitive side of things? Have you seen win rates kind of change materially at all? Just kind of give us an update on that.

Serge Tonga, CFO, Appian: Yes. I would say we generally divide our competitors into two buckets, what I would call the tech conglomerates that do a bunch of other things, including dabbling in automation and then the pure plays, if you will, that play exclusively in our space. And what we see on the conglomerate side is that, obviously, they are bigger companies than us, better at name recognition and they each have their own foothold inside the enterprise depending on where they started. And so they from there try to expand into the automation space, but there’s only so much complexity they can handle. They can handle simpler tasks, simpler processes.

And beyond that, you need to customize, you need to build custom code, you need to basically do things that are antithetical to the actual process of automation. And we find that as they kind of get out of their comfort zone, a, we do better competing against them or b, if they win the deal, occasionally they fail to deliver it and then we get the customer just we get them a little bit And we don’t see that competition changing. We don’t see the fundamental difference in product quality really impacting us anytime soon. It’s interesting that you’re talking about pricing. Haven’t seen and or heard our win rates are holding steady.

So we feel good about that. And then on the other side, when it comes to pure plays, those are actually the opposite. They are over engineered, overly complex. The tech stack is too many layers in that layer cake. So you can build something and it can be very helpful in day one, but then a, it’s expensive to get there and b, it’s expensive to change it, whereas one of the things that’s superpower to Appian is the breadth of the offering and then the second one is time to value.

You can relatively quickly see value from Appian, and that’s how we get into customers and that’s kind of how we continue winning new business.

Devin Al, Part of the software research team, KeyBanc: Got it. And then I just want to quickly touch on kind of your strategy around partners kind of expanding that ecosystem. I think that has been a theme in the past few years. I’m just kind of curious how has that ecosystem evolved over the years and kind of where are we in that investment cadence or cycle, I guess?

Serge Tonga, CFO, Appian: Yes. So we have the breadth of our partnership program is significant. What we’ve actually been working over the last couple of years is more on the depth of it. And what that means is identifying partners who are willing to bet on us and betting on them in turn as well. So increasing investments from both sides to deliver greater go to market success.

And we call them focus partners. We give them better access to our professional services deals that we source. We expect them to promote Appian as their front top of the list solution when they go talk to customers. And we’re seeing their work. We’re seeing their work in terms of benefit to the pipeline and just general strength of our go to market presence, and we’re going to continue pushing that while of course continuing to invest in our own direct go to market efforts at the same time.

Devin Al, Part of the software research team, KeyBanc: Do you have any numbers around like how much has partners and channel kind of influenced deals today?

Serge Tonga, CFO, Appian: We do, do, but we we haven’t changed. Okay.

Devin Al, Part of the software research team, KeyBanc: Got it. Pause here again. Question?

Unidentified speaker: Have you seen any changes in terms of sales cycles? Like are you seeing them shortened because people are excited about time to value that you guys are delivering? Or is it held constant? And then also on budgets, do you see customers reallocating budget from sort of OpEx? Or are they creating new budget for these AI initiatives?

Serge Tonga, CFO, Appian: So we have not seen any change in the sales cycles. And our sales cycles tend to be long. It’s a complicated sale and technically involved and involves usually a number of sort of parties that need to sign off. So we haven’t seen but we haven’t seen it getting any worse. I don’t think that we’re necessarily expecting it to get better nor do we need to.

And then budgets, what we’ve generally seen is that AI funding hasn’t come at the expense of operational so AI experimentation funding has not come at the expense of core operational initiatives, which is where we compete for capital. So it hasn’t impacted our ability to win business.

Devin Al, Part of the software research team, KeyBanc: Thanks for the questions. Just going to move back into financials since we have you here. Serge, maybe on margins a little bit. I know you mentioned Appian has done a really good job getting efficient with their operations as such. And then I think also you guys just recently raised the EBITDA guidance kind of implying four points of year over year expansion.

Nice to see. Can you just speak to the initiatives you guys have put in place to drive this level of expansion?

Serge Tonga, CFO, Appian: Yes. So there’s been a concerted effort for the last two years of the company to improve profitability. And when it’s all said and done, we will have gained close to 20 percentage points of margin EBITDA margin over the last couple of years. And frankly, we’ve done that by eliminating low productivity areas of effort, whether that’s on the go to market side or the R and D side. And we’ve done that with significant amount of rigor and frankly doing things that at times can be unpopular, right?

And that’s how we’ve gotten to the point where we are right now where we’re guiding to something like mid to high single digit EBITDA margin for the year. And also if you look at our financials, our OpEx has been basically flat for much of the last two years because again we’ve been reducing areas of investment that have low returns and use that money to fund what’s been working. As I look forward, there’s a few things that give me comfort and excitement. The first one is our unit economics are very strong. We have strong gross retention rate.

As a result, our LTV to CAC is very strong. And what that means is that we ought to be able to continue growing while at the same time expanding margins. It’s not an eitheror. We need to be able to do both and I believe that we can. And the three areas that I think that we’re going to focus on is continued go to market efficiencies.

We can improve payback on our go to market investments both by continued improvement in our processes and execution as well as incremental investment that will have disproportionate return on the total spend. On the R and D side, we’re going to continue investing in ways to make our R and D effort more productive, whether that’s AI or hiring in low cost centers. And then of course, we are an AI company, one that promises benefits of AI on process efficiency across the board and we’ll eat our own cooking. So that will be both in terms of customer facing functions in R and D as well as back office, We can get more efficiency across the board as we deploy in our own tools as well as other tools just like our customers do. Where that will all net out is continued margin expansion, but we do see an opportunity to grow the OpEx base because again some of the things that we talked about whether that’s the AI opportunity, whether that’s the federal opportunity, we haven’t talked about the modernization opportunity, but that’s also incrementally unlocked in the context of AI.

We’ve seen opportunity to grow and build a much larger company than one that it is right now. So we will be balancing growth and profitability going forward.

Devin Al, Part of the software research team, KeyBanc: Awesome. And it seems like we are out of time, Serge. Really appreciate the conversation here and everyone for joining today. Thank you so much.

Serge Tonga, CFO, Appian: Thank you. Appreciate it.

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