What the changes say
- Pegasystems litigation shifted from pursuing a $2.036 billion judgment to retrial and uncertain collection of insurance proceeds.
- Personnel risk now covers broader hiring, retention, at-will employment, equity compensation, and leadership turnover concerns.
- Federal agencies rose to 25.3% of revenue, while profitability improved to $1.2 million of GAAP net income.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Industry
We rely on the performance of highly skilled personnel, including senior management and our engineering, professional services, sales, and technology professionals; if we are unable to retain or motivate key personnel or hire, retain, and motivate qualified personnel, our business would be harmed
Losing or failing to attract skilled leaders, engineers, salespeople, and professional-services staff could disrupt Appian; equity values and at-will employment add retention risk.
- NewRisks Related to Our Business and Industry
We have obtained a judgment preservation insurance policy with respect to a now-vacated judgment and ongoing litigation against our competitor, Pegasystems, and both the payment on the policy and continued litigation are subject to risks and costs
The Pegasystems judgment was vacated; retrial costs, uncertain litigation results, and insurer solvency or coverage disputes could limit recovery of up to $500 million.
- NewRisks Related to Our Intellectual Property
quality of the code. In addition, certain open source licenses require source code for software programs subject to the license be made available to the public and that any modifications or derivative works to such open source software continue to be licensed under the same terms
Open-source license interpretations could require Appian to release source code, re-engineer software, or offer parts of its platform under open-source terms.
- NewRisks Related to Our Class A Common Stock
The dual class structure of our common stock and the existing ownership of capital stock by Matt Calkins, our founder and Chief Executive Officer, has the effect of concentrating voting control with Mr. Calkins for the foreseeable future, which will limit the ability of others to influence corporate matters
Matt Calkins and affiliates control about 77% of voting power, while Class B holders control about 88%, limiting other investors’ influence.
- NewRisks Related to Our Class A Common Stock
Actions of activist stockholders could adversely impact our business and cause us to incur significant expenses
Activist investors could push strategic, operational, governance, capital-allocation, or board changes, consuming management resources and causing expenses or stock-price volatility.
Dropped
- DroppedRisks Related to Our Business and Industry
motivate key personnel or hire, retain, and motivate qualified personnel, our business would be harmed
- DroppedRisks Related to Our Business and Industry
We are seeking to reinstate a substantial judgment against our competitor, Pegasystems, for willful and malicious trade secret misappropriation, and elements of our ability to reinstate and ultimately obtain payment with respect to that judgment are subject to risk
- DroppedRisks Related to Our Class A Common Stock
Mr. Calkins for the foreseeable future, which will limit the ability of others to influence corporate matters
- DroppedRisks Related to Our Class A Common Stock
thereby reducing the likelihood a stockholder would receive a premium for its shares of our Class A common stock in an acquisition
Reworded
- 69% rewrittenRisks Related to Our Intellectual Property
Portions of our platform utilize open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business
The risk now emphasizes unexpected open-source license obligations, including public source-code release and re-engineering, rather than mainly infringement claims and absent warranties.
- 59% rewrittenRisks Related to Our Class A Common Stock
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our Class A common stock
No material change: the risk still concerns charter and Delaware provisions delaying control changes and making management replacement harder.
- 51% rewrittenRisks Related to Our Business and Industry
We derive a significant portion of our revenue from a limited number of customers, and the loss of one or more of these customers could materially and adversely impact our business, results of operations, and financial condition
Federal-agency revenue concentration increased to 25.3% from 23.9%, while the top three federal customers declined to 3.9% from 4.0%; the $1 million customer statistic was removed.
Was: We derive a material portion of our revenue from a limited number of customers, and the loss of one or more of these customers could materially and adversely impact our business, results of operations, and financial condition
- 44% rewrittenRisks Related to Our Business and Industry
AI is a disruptive set of technologies that may affect the markets for our software dramatically and in unpredictable ways
The discussion removes the explicit risk that failing to adopt AI or AI code-generation tools could reduce demand for Appian’s platform.
- 37% rewrittenRisks Related to Our Business and Industry
We have experienced losses in the past, and we may not be able to sustain profitability in the future
Appian reported $1.2 million of 2025 GAAP net income, shifting the concern from achieving profitability to sustaining it; accumulated deficit fell to $610.9 million.
Was: We have experienced losses in the past, and we may not achieve or sustain profitability in the future
- 29% rewrittenRisks Related to Our Business and Industry
If we are unable to sustain our revenue growth rate, we may not be able to maintain profitability in the future
Revenue increased to $726.9 million from $617.0 million, and the risk now expressly links inconsistent revenue growth to stock-price volatility.
Was: If we are unable to sustain our revenue growth rate, we may not achieve or maintain profitability in the future
- 22% rewrittenRisks Related to Our Business and Industry
In the past, we have experienced significant corporate growth, which may not be indicative of our future growth and, if we grow in the future, we may not be able to manage our growth effectively
The wording shifts from scaling operations and headcount to optimizing them, while stressing that future growth may strain infrastructure.
Was: Our recent corporate growth may not be indicative of our future growth and, if we continue to grow, we may not be able to manage our growth effectively
- 21% rewrittenRisks Related to Tax and Accounting Matters
Our ability to use net operating losses to offset future taxable income may be subject to certain limitations
Reported NOL carryforwards changed from separate federal and state amounts of $287.5 million and $297.5 million to $325.6 million combined.
All 59 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Industry
- 01If we are unable to sustain our revenue growth rate, we may not be able to maintain profitability in the future29% rewritten
- 02We may not be able to scale our business quickly enough to meet our customers’ growing needs, and if we are not able to grow efficiently, our operating results could be harmed
- 03We are dependent on a single product, and the lack of continued market acceptance of our platform could cause our operating results to suffer
- 04Our sales cycle is long and unpredictable, particularly with respect to large customers, and our sales efforts require considerable time and expense, all of which may cause our operating results to fluctuate
- 05Market adoption of process automation platforms to drive process automation may not grow as we expect, which may harm our business and prospects
- 06We currently face significant competition
- 07In the past, we have experienced significant corporate growth, which may not be indicative of our future growth and, if we grow in the future, we may not be able to manage our growth effectively22% rewritten
- 08If our security measures are actually or perceived to have been breached, or if unauthorized access to our platform or customer data occurs, our platform may be perceived as not being secure, and customers may reduce the use of or stop using our platform, and we may incur significant liabilities
- 09We derive a significant portion of our revenue from a limited number of customers, and the loss of one or more of these customers could materially and adversely impact our business, results of operations, and financial condition51% rewritten
- 10A portion of our revenue is generated from subscriptions sold to governmental entities and heavily regulated organizations, which are subject to a number of challenges and risks
- 11We have experienced losses in the past, and we may not be able to sustain profitability in the future37% rewritten
- 12AI is a disruptive set of technologies that may affect the markets for our software dramatically and in unpredictable ways44% rewritten
- 13Regulatory and legislative developments related to the use of AI could adversely affect our use of such technologies in our products, services, and business
- 14Our future results of operations may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict
- 15We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause our stock price to decline
- 16We rely on the performance of highly skilled personnel, including senior management and our engineering, professional services, sales, and technology professionals; if we are unable to retain or motivate key personnel or hire, retain, and motivate qualified personnel, our business would be harmedNew
- 17If we do not continue to innovate and provide a platform that is useful to our customers, we may not remain competitive, and our revenue and operating results could suffer
- 18We may continue to need to change or reduce our pricing model to remain competitive
- 19Our business could be adversely affected if our customers are not satisfied with the deployment services provided by us or our partners
- 20We are substantially dependent upon customer renewals, the addition of new customers, and the continued growth of our subscriptions revenue
- 21Because we generally recognize revenue from cloud subscriptions ratably over the term of the subscription agreement, near-term changes in sales may not be reflected immediately in our operating results
- 22We may not continue to achieve market acceptance of our pre-built solutions, which may adversely impact our financial results
- 23If we are not able to maintain and enhance our brand, our business and operating results may be adversely affected
- 24If our platform fails to perform properly or there are defects or disruptions in the rollout of our platform updates or enhancements, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims
- 25The costs incurred in correcting any material defects or errors might be substantial and could adversely affect our operating results
- 26We rely upon AWS to operate our cloud offering; any disruption of or interference with our use of AWS would adversely affect our business, results of operations, and financial condition
- 27Our growth depends in part on the success of our strategic relationships with third parties
- 28Because our long-term growth strategy involves further expansion of our sales to customers outside the United States, our business will be susceptible to risks associated with international operations
- 29We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all
- 30We have obtained a judgment preservation insurance policy with respect to a now-vacated judgment and ongoing litigation against our competitor, Pegasystems, and both the payment on the policy and continued litigation are subject to risks and costsNew
- 31We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance
- 32Pursuant to the terms of our outstanding indebtedness, we may be limited in our ability to incur future debt
- 33If currency exchange rates fluctuate substantially in the future, our financial results, which are reported in U.S. dollars, could be adversely affected
- 34We employ third-party licensed software for use in or with our software, and the inability to maintain these licenses or errors in the software we license could result in increased costs or reduced service levels, which would adversely affect our business
- 35If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use in their businesses, our revenue will decline
- 36Catastrophic events may disrupt our business
- 37Adverse economic conditions abroad may negatively impact our business
- 38Future acquisitions could disrupt our business and adversely affect our business operations and financial results
Risks Related to Regulatory Compliance and Governmental Matters
- 39Failure to comply with governmental laws and regulations could harm our business
- 40Any inability to adequately address privacy or cybersecurity concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations, and policies could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business
- 41If our platform fails to function in a manner allowing our customers to operate in compliance with regulations and/or industry standards, our revenue and operating results could be harmed
- 42Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our platform and could have a negative impact on our business
- 43We are subject to anti-corruption laws with respect to our domestic and international operations, and non-compliance with such laws can subject us to criminal and/or civil liability and materially harm our business
- 44We are subject to governmental export and import controls and economic and trade sanctions that could impair our ability to conduct business in international markets and subject us to liability if we are not in compliance with applicable laws and regulations
Risks Related to Our Intellectual Property
- 45Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results
- 46We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages, and could limit our ability to use certain technologies
- 47Portions of our platform utilize open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business69% rewritten
- 48quality of the code. In addition, certain open source licenses require source code for software programs subject to the license be made available to the public and that any modifications or derivative works to such open source software continue to be licensed under the same termsNew
Risks Related to Tax and Accounting Matters
- 49If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected
- 50Our operating results may be negatively affected by additional tax liabilities
- 51Our ability to use net operating losses to offset future taxable income may be subject to certain limitations21% rewritten
- 52We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock
Risks Related to Our Class A Common Stock
- 53The dual class structure of our common stock and the existing ownership of capital stock by Matt Calkins, our founder and Chief Executive Officer, has the effect of concentrating voting control with Mr. Calkins for the foreseeable future, which will limit the ability of others to influence corporate mattersNew
- 54Actions of activist stockholders could adversely impact our business and cause us to incur significant expensesNew
- 55We do not intend to pay dividends on our common stock for the foreseeable future, so any returns will depend on appreciation in the price of our Class A common stock
- 56Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our Class A common stock59% rewritten
- 57Unfavorable conditions in the global economy or the vertical markets we serve could limit our ability to grow our business and negatively affect our operating results
- 58Our stock price has been volatile and may be volatile in the future
- 59If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline
Other Appian 10-Ks
- FY2024 10-K risk factors58 risks
Appian faces heavy customer concentration with U.S. federal agencies generating 23.9 percent of 2024 revenue. The company relies entirely on a single software platform hosted on AWS infrastructure. Growth depends heavily on process automation demand, AI integration, and the outcome of litigation against competitor Pegasystems.
Filed Feb 19, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.