Shares of Appian (APPN -3.46%) were taking a dive today after the low-code cloud software company reported first-quarter results that matched analyst expectations on the top line but came up short on the bottom line.
Appian also cut its bottom-line forecast for the year.
As a result, the stock was down 19.1% as of 11:43 a.m. ET.
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Appian is growing, but not fast enough
Appian had already given investors preliminary results at its Investor Day conference in April, so the first-quarter numbers weren't a big surprise.
Revenue in the quarter rose 11% to $149.8 million, slightly ahead of the consensus at $149.5 million. Revenue from its cloud subscriptions, the category that Appian prioritizes, rose 24% to $86.6 million, indicating solid growth in its core business.
Revenue from professional services, which it has been outsourcing to strategic partners, declined in the quarter by 11% to $32.1 million.
On the bottom line, the company narrowed its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $1.3 million, which was an improvement from a loss of $15.8 million.
It also reported an adjusted loss per share of $0.24, which was an improvement from a loss of $0.27 in the quarter a year ago but worse than the consensus at $0.16.
Appian continues in AI tools like Process HQ, its process mining technology, and data fabric, but those new products have yet to move the needle for the business.
What's next for Appian?
Investors were disappointed with the second-quarter guidance and lower bottom-line forecast for the full year.
The company noted that the second quarter is its seasonally weakest and forecast revenue growth of 10%-13% to $140 million-$144 million, which was below the consensus at $145.3 million.
It also dialed down its full-year forecast of a per-share loss of $0.79-$0.85, which was below the consensus at $0.68.
While CEO Matt Calkins believes the company is going through a foundational building period as it invests in new AI products and implements a new advanced pricing tier, it's understandable why the cloud software stock is down based on the forecast.
