Appian (NASDAQ:APPN) reported 25% revenue growth in the third quarter of 2026 and raised its full-year outlook, as demand for artificial intelligence tools and self-managed software contributed to what executives described as a strong period for new business.
Revenue rose to $235 million, while cloud subscription revenue increased 20% to $136 million. Total subscription revenue grew 28% to $188 million. The company said it exceeded its guidance for cloud revenue, total revenue and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA.
Adjusted EBITDA was $43 million, up from $32 million a year earlier and above the company’s forecast range of $30 million to $33 million. Non-GAAP net income was $37 million, or $0.51 per diluted share, compared with $24 million, or $0.32 per share, a year earlier.
Cloud net annual recurring revenue expansion reached 120%, compared with 115% in the prior quarter and 112% a year earlier. Chief Financial Officer Serge Tanjga said it was the strongest reading in more than five years, but declined to predict where the metric would go next.
AI and Self-Managed Software Drive Demand
Chairman and Chief Executive Officer Matt Calkins said customers are looking for ways to use AI in important business processes while maintaining control over data, costs and reliability. Appian’s AI usage rose more than 50% from the prior quarter, he said.
Calkins cited a large European bank that upgraded its licenses to embed Appian AI in its internal audit workflow. The bank selected the company’s Data Fabric technology to provide agents with access to data, with the goal of reducing review times from 10 days to 30 minutes.
He also said a North American insurer expanded its use of Appian’s document-processing AI and increased its spending with the company by 86%. The tool classifies and extracts data from 100,000 files annually in the insurer’s claims appeal operations, according to Calkins.
Tanjga said most customers seeking production access to Appian’s AI features choose its Advanced subscription tier, which carries a 25% to 35% premium over the Standard tier. Customers exceeding the AI usage included in their subscriptions can pay overage charges or purchase additional usage bundles. That consumption-based revenue is growing but is not yet material, he said.
Appian also saw strong demand for self-managed software, which customers can operate on their own premises. Calkins said public-sector customers have historically leaned toward that deployment option, while European businesses are increasingly interested in controlling their technology and data.
Tanjga noted that accounting rules require Appian to recognize roughly 70% of self-managed software bookings upfront, contributing to variability in the revenue line. He said the company’s on-premises contracts are one year in length and that the quarter did not benefit from multiyear pull-forwards.
Raised Outlook and Investment Plans
For the fourth quarter, Appian forecast cloud subscription revenue of $143 million to $145 million and total revenue of $233 million to $237 million. Adjusted EBITDA is expected to be $30 million to $33 million, with non-GAAP earnings of $0.30 to $0.34 per share.
For the full year, the company expects:
- Cloud subscription revenue of $536 million to $538 million, representing 23% growth at the midpoint.
- Total revenue of $873 million to $877 million, representing 20% growth at the midpoint.
- Adjusted EBITDA of $116 million to $119 million, representing 53% growth at the midpoint.
- Non-GAAP earnings of $1.20 to $1.24 per share.
Tanjga said the company expects foreign exchange movements to reduce reported revenue growth by 2 to 3 percentage points in the fourth quarter. Appian is forecasting nearly 3 percentage points of adjusted EBITDA margin improvement for 2026, compared with the 1 percentage point it expected at the start of the year.
The company is hiring sales staff ahead of 2027 and making additional investments, Tanjga said. He committed to further margin expansion next year but said it was premature to specify the amount. He also declined to provide a quantitative 2027 growth outlook before the company completes its fourth quarter.
Cash Flow and Public-Sector Business
Appian used $15 million in operating cash during the third quarter, compared with $19 million generated a year earlier. Tanjga attributed the change to the timing of collections, noting that October was one of the company’s strongest collection months. Cash, cash equivalents and investments stood at $89 million on September 30, down from $187 million at the end of 2025.
During the quarter, Appian repurchased approximately half a million shares for $17 million, bringing purchases under its current $100 million authorization to $83 million.
Calkins said Appian exceeded its plans across major regions, particularly in the U.S. public sector. Among the deals he cited were a seven-figure license agreement with a cabinet-level agency for procurement automation and a seven-figure software contract with a military branch for fleet management modernization.
About Appian (NASDAQ:APPN)
Appian Corporation (NASDAQ: APPN) develops and provides a low-code platform designed to help organizations build, manage and automate business applications and processes. Its platform combines process orchestration, workflow automation, artificial intelligence, robotic process automation, case management and data management capabilities in a unified environment.
Appian’s software is used to improve operational efficiency, connect data and systems, and support applications such as customer service, compliance, supply chain management and government services.
