Appian Corp., the business automation software provider, posted a solid earnings and revenue beat today as it delivered its second quarter results. But the results didn’t create a lot of enthusiasm, and its stock was trading a couple of percentage points lower after-hours.

The company reported a loss before certain costs such as stock compensation of 39 cents per share, coming in ahead of Wall Street’s consensus estimate of a 42-cent loss. Revenue rose 16% from a year earlier to $127.7 million, beating analysts’ target of $123.9 million.

It may be that Wall Street is more concerned with Appian’s slow progress toward profitability. The company posted a net loss of $42.4 million, down only slightly from the $49.3 million loss one year earlier.

Appian is emerging as a key player in the low-code business process automation software market, alongside rivals such as UiPath Inc. and Automation Anywhere Inc. It sells a platform that makes it simpler for nontechnical workers to automate complex processes and create custom applications that can be deployed on any device. It also provides social collaboration tools that enable users to connect with team members and collaborate on projects.

Appian founder and Chief Executive Matt Calkins (pictured) said today the company has emerged as the leader in artificial intelligence-based process automation. “Our practical and private approach to AI is garnering customer and media interest, differentiating us from the competition,” he stressed.

Whether it’s the AI angle or something else, interest is certainly growing. Appian noted that its cloud subscription revenue increased 30% from a year ago, to $74.4 million, while total subscription revenue rose 22%, to $93.8 million. The company also reported professional services revenue of $33.9 million, up just 2% from a year earlier.

Another encouraging metric was Appian’s net revenue retention rate of 115% at the end of the quarter. NRR is a measure of how much money customers from a year ago are spending today. The score shows that if Appian didn’t win any new customers over the last 12 months, its revenue would still have grown by 15%.

Holger Mueller of Constellation Research Inc. praised Appian, explaining that its strong results in the quarter were the result of enterprises needing the ability to build software as fast as possible. “This is the key driver for low code platforms, and AI is becoming another one,” the analyst said.

Another positive for Appian is that it now has a nice revenue mix, Mueller stated. “Subscription revenue is growing and services remained constant,” he pointed out. “On the downside, Appian’s costs are increasing and so its earnings per share is down for the last two quarters. The question for investors now is can Appian grow itself into profitability?”

For the current quarter, Appian said it sees losses of between 23 and 28 cents per share, more or less in line with Wall Street’s call for a 25-cent loss. In terms of revenue, it’s looking at a range of $134 million and $136 million, just ahead of Wall Street’s $134.2 million target.

One thing that may have perturbed investors was Appian’s adjusted full-year guidance. The company revised its full-year earnings forecast, saying it now sees a total loss of between $1.10 and $1.16 per share, down from its earlier range of $1.07 to $1.14 per share. On the other hand, Appian raised its full-year revenue guidance, saying it now sees sales of between $538 million to $543 million, up from an earlier range of $530 million to $535 million.

Photo: Appian