One major software-as-a-service company announced an impressive first fiscal quarter financial results, leading to a surge in its stock price. Appian (NASDAQ: APPN), a SaaS business that focused on providing low-code software, jumped by almost 20 percent over the course of Friday and investors were more than impressed by the performance.
While the software sector as a whole has been doing well in relation to the current market, Appian’s performance over the course of the year has been particularly noteworthy for investors.
Overall, the company had a quarterly loss of $0.10 per share, which was well above the average consensus loss expected by most analysts of around $0.17. However, this is still an improvement from a year ago, where Appian reported a loss of $0.14 per share.
Overall, this quarterly report represented a 41 percent surprise in earnings, a pattern which has been going on the for the past four quarters, with every three months the company surpassing EPS estimates set by Wall Street.
Subscription revenue also jumped by 41 percent, while total revenue rose by 12 percent to a $66.9 million, again topping management’s guidance range and Wall Street’s $63.5 million target.
“In the second quarter of 2019, Appian subscription revenue grew 41% year-over-year to $38.0 million. Also, once again we raised our revenue guidance, increasing both subscription and total revenue for the year,” said Matt Calkins CEO & Founder. “The growing interest from partners, prospects, and customers in our platform and the Appian Guarantee demonstrates that low-code has arrived.”
Although Appian has outperformed the market so far, gaining 52.9 percent over the course of the way as opposed to the S&P 500’s gain of just 15 percent in comparison, the question remains whether or not the stock will continue to perform well. While the company has surpassed expectations for almost a year now, it’s certainly going to hit a point where Appian will settle down.
The consensus at this point, however, is that this isn’t going to happen anytime soon and that the remainder of 2019 will likely continue to be a stellar year for the company. Software as an industry is among the higher-performing sectors in the U.S. markets so far, despite their cyclical nature and the looming potential threat of a recession brewing on the horizon.
Shares of Appian jumped by 17 percent on Friday, ending the day at $51.45 per share. This jump marked the biggest single-day move in over a year and ended up reaching a 5-year high in the process. Most analysts currently have a “hold” rating on the stock, but that could change soon as these targets haven’t taken into account Friday’s performance announcements.
Appian Company Profile
Appian Corp provides a leading low-code software development platform as a service that enables organizations to rapidly develop powerful and unique applications. With its platform, organizations can rapidly and easily design, build and implement powerful, enterprise-grade custom applications through intuitive, visual interface with little or no coding required.
The company’s customers use applications built on its low-code platform to launch new business lines, automate vital employee workflows, manage complex trading platforms, accelerate drug development and build global procurement systems. The group generates majority of its revenue from the domestic market. – Warrior Trading News
