Appian (APPN) to Report Q2 Earnings: What's in the Cards?

Appian APPN is set to report second-quarter 2020 results on Aug 6.

For the quarter, the company projects total revenues between $60 million and $61 million. The Zacks Consensus Estimate for revenues is pegged at $60.5 million, indicating a decrease of 9.5% from the year-ago quarter’s reported figure.

Moreover, Appian expects non-GAAP net loss in the range of 23-26 cents per share. The consensus mark for loss stayed at 25 cents per share over the past 30 days.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 28%.

Appian Corporation Price and EPS Surprise

  Appian Corporation Price and EPS Surprise

Appian Corporation price-eps-surprise | Appian Corporation Quote

Let’s see how things have shaped up for this announcement.

Factors to Watch

Appian’s second-quarter 2020 earnings are expected to have benefited from consistent growth in subscription revenues. Cloud subscription revenues are projected in the range of $28.4 million and $28.7 million, indicating year-over-year growth between 25% and 26%.

Markedly, financial services remain Appian’s largest and one of the fastest-growing industries. Increased adoption of the company’s solutions is likely to have driven subscription revenues in the second quarter as well.

Early in the quarter, Appian announced an application that enabled banks to accept and manage Payment Protection Program (PPP) loan applications from small businesses, support their service requirements, and ensure compliance for PPP loans under the CARES Act.

Markedly, in the first quarter of 2020, the company unveiled its low-code automation platform that employs intuitive, visual interface and pre-built development modules, which reduce the time required to build powerful and unique applications. Appian launched the latest version in June that helps in delivering enterprise applications up to 20 times faster.

Notably, based on this platform, Appian built an application to support accredited lenders across the United Kingdom to manage the Coronavirus Business Interruption Loan Scheme applications from businesses, as well as the Coronavirus Large Business Interruption Loan Scheme.

Steady demand for Appian’s low-code automation platform is expected to have contributed to the company’s top line in the soon to-be-reported quarter.

Markedly, the United States Marine Corps included Appian’s low-code automation platform on its list of approved Platform as a Service tools for application development within the organization.

Moreover, Appian and KPMG LLP announced a new application built on Appian’s low-code automation platform that supports businesses impacted by the California Consumer Privacy Act.

Appian also inked a technology partnership with DocuSign DOCU involving the former’s low-code automation platform.

Additionally, the company signed a partnership with Box BOX, a leading cloud content-management platform. Users of Appian’s low-code automation platform can seamlessly integrate with the Box platform for a wide variety of document-centric use cases within a short span of time with Appian’s no-code plug-in connector.

Appian’s low exposure to industries that have been negatively impacted by the coronavirus and strong large-enterprise customer base are positives.

However, the bottom line is expected to reflect heightened competition. Moreover, given the coronavirus-induced macro-environmental uncertainties, Appian is expected to have experienced delays in closing large deals the to-be-reported quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Appian has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stock to Consider

Here is a company worth considering as our model shows that it has the right combination of elements to beat on earnings this reporting cycle:

Cambium Networks CMBM has an Earnings ESP of +24.73% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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