APPN

MKT CAP $3.7BP/E —DIV YIELD —FCF YIELD 2.09%REV TTM $795.3M +20.9%NET INCOME −$10.6MNET DEBT $114.9M52W 18.72 – 51.15NEXT EARNINGS Nov 5 EST.SEC XBRL · TTM TO Invalid Date

How APPN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risks 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.
We have experienced revenue growth with revenue of $726.9 million, $617.0 million, and $545.4 million in 2025, 2024, and 2023, respectively.
If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile.
In addition, we will need to continue to appropriately scale our internal business operations as well as grow our partner services systems, including our Professional Services organization and operations, to serve our growing customer base, particularly as our customer base expands over time.
As a result, our operating results or revenue growth rates could suffer due to: • Any decline or lower than expected growth in demand for our platform; • The failure of our platform to achieve continued market acceptance; • The market for process automation solutions not continuing to grow or growing more slowly than we expect; • The introduction of products and technologies (including AI technologies) that represent an improvement over, or serve as a replacement or substitute for, our platform; • Technological innovations or new standards that our platform does not address; • Sensitivity to current or future prices offered by us or competing solutions; • The inability to further penetrate our existing industry verticals or expand our customer base; and • Our inability to release enhanced versions of our platform on a timely basis.
Our main competitors fall into four categories: (1) providers of custom software and software solutions that address, or are developed to address, some of the use cases that can be addressed by applications developed on our platform; (2) providers of development platforms; and (3) providers of one or more automation technologies, including BPM, case management, process mining, and RPA and (4) potential customers using their own internal technology departments to develop, build, and modify their own proprietary systems.
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.
We have focused on optimizing our operations and headcount to ensure they remain in line with our growth plan and the size of our customer base, which we have significantly increased in the past several years.
Our growth in the past has placed, and any future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure.
Our success will depend in part on our ability to manage any growth effectively, and we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures.
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.
For example, during the years ended December 31, 2025, 2024, and 2023, revenue from U.S. federal government agencies represented 25.3%, 23.9%, and 21.3% of our total revenue, respectively, and the top three U.S. federal government customers generated 3.9%, 4.0%, and 4.2% of our total revenue for the years ended December 31, 2025, 2024, and 2023, respectively.
See our risk factor below at “A 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.” If we were to lose one or more of our significant customers and we were unable to recover the revenue from that customer from other customers, our revenue would significantly decline.
We also must comply with laws and regulations relating to the formation, administration, and performance of contracts, which provide public sector customers with specific rights, many of which are not typically found in commercial contracts.
If we commit to meeting special standards or requirements and do not meet them, including requirements related to security clearances for personnel and facilities, we could be subject to significant liability from our customers or regulators.
We have experienced losses in the past, and we may not be able to sustain profitability in the future.
We generated GAAP net income of $1.2 million in 2025 and GAAP net losses of $92.3 million and $111.4 million in 2024 and 2023, respectively.
As of December 31, 2025, we had an accumulated deficit of $610.9 million.
We will need to generate and sustain increased revenue levels in future periods in order to sustain profitability in the future.
If we are unable to sustain profitability, our stock price may significantly decrease.
The emerging technologies described as AI, which include machine learning, generative AI, including large language models, and similar means of algorithm self-generation, have the ability to affect the market for our software by directing what are now human-orchestrated processes into machine-orchestrated processes.
Should we fail to effectively compete with, adopt, or integrate emerging AI technologies that show benefits to our customers, or should AI technologies for code generation or application development reduce the demand for our process automation platform, we could struggle to continue to grow our business or lose business with existing customers to such technologies.
The use of generative AI, a technology that has evolved significantly over recent years, exposes us to additional risks, such as competitive, reputational, operational, legal, regulatory and other risks, including additional costs.
For example, generative AI has been known to produce false or “hallucinatory” inferences or output, and the models, prompts, algorithms, and datasets on which AI relies, as well as the content, analyses, or other output generated thereby, may be invalid, inaccurate, or biased or contain other errors or inadequacies, any of which may not be easily detectable by us or any of our related third-party providers.
While we make efforts to implement and use AI technologies designed to improve the accuracy and reduce the chances of hallucinatory inferences or outputs, we cannot completely eliminate the foregoing risks.
Additionally, the use of AI technologies by companies has resulted in, and may in the future result in, cybersecurity incidents and data privacy violations that implicate the confidential, proprietary, or personal information of users of such AI technologies.
If any of our employees, contractors, vendors, or service providers use any third-party AI technologies in connection with our business or the products or services they provide to us, it may lead to the inadvertent disclosure or incorporation of our confidential, sensitive, or proprietary information into publicly available or other third-party training sets which may impact our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or sensitive or confidential information, harming our competitive position and business.
Moreover, given we rely on third-party providers for the underlying large language models and other technology, as do many others in the software industry, we do not have full access to the underlying software code to address such issues.
If the AI technologies that we or our third-party providers use are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected.
In addition, new laws and regulations, or the interpretation of existing laws and regulations, in any of the jurisdictions we operate may affect our ability to leverage AI in any of our operations, products, and services and may expose us to government enforcement or civil suits.
As the legal and regulatory framework encompassing AI evolves, it may result in increases in our operational, compliance, and development expenses that impact our ability to develop, earn revenue from, or utilize any products or services incorporating AI.
If we do not have sufficient rights to use the models, prompts, algorithms, and datasets on which our AI and machine learning technologies rely, or the content, analyses, recommendations or other output generated thereby, we could also incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights or contracts to which we are a party.
In the U.S., a number of civil lawsuits have been initiated related to the foregoing and other concerns, any of which may, amongst other things, require us to limit the ways in which AI technologies are trained, refined or implemented, and may affect our ability to develop or use products or services using or incorporating AI.
Given we rely on third-party providers for the underlying large language models and other technology, our ability to differentiate our AI products or services from our competitors could be limited.
Further, to the extent other, larger technology companies with greater resources and market power gain exclusive or advantageous access to large language model or other AI technology providers, our ability to offer competing AI products or services could be negatively impacted.
The increasing use of generative AI by third parties may also negatively impact the integrity of our own proprietary data, data sets, and content databases if and to the extent any invalid, inaccurate, incomplete, misleading, biased, or otherwise flawed data produced by any such AI technologies may inadvertently be incorporated in our proprietary data, data sets, or content databases, negatively affecting our reputation and the value of our proprietary data, data sets, or content databases.
As generative AI and other AI technologies are relatively new, sophisticated, and evolving quickly, we cannot predict all of the risks that may arise from our current or future use of AI in our business.
For example, the European Union’s Artificial Intelligence Act will likely have a material impact on the way AI is regulated in the EU, including significant fines for violations related to offering prohibited AI systems or data governance, high-risk AI systems and for supplying incorrect, incomplete, or misleading information to EU and member-state authorities.
Our revenue and results of operations have historically varied from period to period, and we expect they will continue to do so as a result of a number of factors which may occur, many of which are outside of our control, including: • The level of demand for our platform and our professional services; • The rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers; • Large customers failing to renew their subscriptions; • The size, timing, and terms of our subscription agreements with existing and new customers, including revenue recognition issues; • Variations in the revenue mix of our professional services and growth rates of our cloud subscription and professional services offerings, as well as the timing of subscriptions and sales offerings that include an on-premises software element for which the revenue allocated to that deliverable is recognized upfront; • The timing and growth of our business, in particular through our hiring of new employees and international expansion; • The timing of our adoption of new or revised accounting pronouncements applicable to public companies and the impact on our results of operations; • The introduction of new products and product enhancements by existing competitors or new entrants into our market and changes in pricing for solutions offered by us or our competitors; • Network outages, security breaches, technical difficulties, or interruptions with our platform; • Changes in the growth rate of the markets in which we compete; • The mix of subscriptions to our platform and professional services sold during a period; • Customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our competitors or otherwise; • Changes in customers’ budgets; • Changes in the administration and their priorities in terms of public sector budgets and funding; • Lapses of federal appropriations in the United States for our government customers; • Seasonal variations related to sales and marketing and other activities such as expenses related to our customers; • Our ability to increase, retain, and incentivize the strategic partners that market and sell our platform; • Our ability to control costs, including our operating expenses; • Our ability to hire, train, and maintain our direct sales team; • Unforeseen litigation and intellectual property infringement; • Fluctuations in our effective tax rate; and • General economic and political conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers operate.
We may continue to need to change or reduce our pricing model to remain competitive.

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Gone since FY2024

Risks Related to Our Business and Industry If we are unable to sustain our revenue growth rate, we may not achieve or maintain profitability in the future.
We have experienced revenue growth with revenue of $617.0 million, $545.4 million, and $468.0 million in 2024, 2023, and 2022, respectively.
If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability.
In addition, we will need to continue to appropriately scale our internal business operations as well as grow our partner services systems, including our Customer Success organization and operations, to serve our growing customer base, particularly as our customer base expands over time.
As a result, our operating results or revenue growth rates could suffer due to: • Any decline or lower than expected growth in demand for our platform; • The failure of our platform to achieve continued market acceptance; • The market for process automation solutions not continuing to grow or growing more slowly than we expect; • The introduction of products and technologies (including AI technologies) that serve as a replacement or substitute for, or represent an improvement over, our platform; • Technological innovations or new standards that our platform does not address; • Sensitivity to current or future prices offered by us or competing solutions; • The inability to further penetrate our existing industry verticals or expand our customer base; and • Our inability to release enhanced versions of our platform on a timely basis.
Our main competitors fall into four categories: (1) providers of custom software and customer software solutions that address, or are developed to address, some of the use cases that can be addressed by applications developed on our platform; (2) providers of low-code development platforms; and (3) providers of one or more automation technologies, including BPM, case management, process mining, and RPA and (4) potential customers using their own internal technology departments to develop, build, and modify their own proprietary systems.
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.
We have focused on scaling our operations and headcount to ensure they remain in line with our growth plan and the size of our customer base, which we have significantly increased over the last several years.
Our growth has placed, and any future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure.
Our success will depend in part on our ability to manage this growth effectively, and we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures.
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.
For example, during the years ended December 31, 2024, 2023, and 2022, revenue from U.S. federal government agencies represented 23.9%, 21.3%, and 19.2% of our total revenue, respectively, and the top three U.S. federal government customers generated 4.0%, 4.2%, and 4.5% of our total revenue for the years ended December 31, 2024, 2023, and 2022, respectively.
Further, nearly 12% of our subscription customers spent more than $1 million on our software in 2024.
If we were to lose one or more of our significant customers and we were unable to recover the revenue from that customer from other customers, our revenue would significantly decline.
If we commit to meeting special standards or requirements and do not meet them, we could be subject to significant liability from our customers or regulators.
We have experienced losses in the past, and we may not achieve or sustain profitability in the future.
We generated GAAP net losses of $92.3 million, $111.4 million, and $150.9 million in 2024, 2023, and 2022, respectively.
As of December 31, 2024, we had an accumulated deficit of $612.2 million.
We will need to generate and sustain increased revenue levels in future periods in order to achieve or sustain profitability in the future.
If we are unable to achieve and sustain profitability, our stock price may significantly decrease.
The emerging technologies described as AI, which include machine learning, application of large language models, generative AI, and similar means of algorithm self-generation have the ability to affect the market for our software by directing what are now human-orchestrated processes into machine-orchestrated processes.
Should we either fail to adopt or integrate with emerging AI technologies that show benefits to our customers or AI technologies for code generation or application development reduce the demand for our process automation platform, we could struggle to continue to grow our business or lose business with existing customers to such technologies.
The use of generative AI, a technology that has evolved significantly over the years, exposes us to additional risks such as damage to our reputation, competitive position, business, legal, and regulatory risks, and additional costs.
For example, generative AI has been known to produce false or “hallucinatory” inferences or output, and certain generative AI uses machine learning and predictive analytics, which can create inaccurate, incomplete, or misleading content, unintended biases, and other discriminatory or unexpected results, errors, or inadequacies, any of which may not be easily detectable by us or any of our related service providers.
While we make efforts to implement and use AI products and services to improve the accuracy and reduce the chances of hallucinatory outputs, we cannot completely eliminate the chances of inaccurate or false outputs.
Moreover, given we rely on third party providers for underlying large language model technology, as do many others in the software industry, we do not have full access to the underlying software code to address such issues.
If the content, analyses, or recommendations produced by any of our products or services that use or incorporate generative AI are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected.
In addition, new laws and regulations, or the interpretation of existing laws and regulations, in any of the jurisdictions we operate may affect our ability to leverage AI in any of our products and services and may expose us to government enforcement or civil suits.
As the legal and regulatory framework encompassing AI matures, it may result in increases in our operational and development expenses that impact our ability to develop, earn revenue from, or utilize any products or services incorporating AI.
Additionally, if any of our employees, contractors, vendors or service providers use any third-party software incorporating AI in connection with our business or the services they provide to us, it may lead to the inadvertent disclosure or incorporation of our confidential, sensitive or proprietary information into publicly available training sets which may impact our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or sensitive or confidential information, harming our competitive position and business.
In the U.S., a number of civil lawsuits have been initiated related to the foregoing and other concerns, any of which may, amongst other things, require us to limit the ways in which AI tools and technologies are trained, refined or implemented, and may affect our ability to develop products or services using or incorporating AI.
Given we rely on third party providers for underlying large language model technology, our ability to differentiate our AI offerings from our competitors could be limited.
Further, to the extent other, larger technology companies with greater resources and market power gain exclusive or advantageous access to large language model providers, our ability to offer competing AI services could be negatively impacted.
The increasing use of generative AI by third parties may also negatively impact the integrity of our own proprietary data, data sets, and content databases if and to the extent any invalid, inaccurate, biased, or otherwise flawed data produced by any such AI systems may inadvertently be incorporated in our proprietary data, data sets, or content databases, negatively affecting our reputation, and the value of our proprietary data, data sets, or content databases.
As generative AI and other AI tools are relatively new, sophisticated, and evolving quickly, we cannot predict all of the risks that may arise from our current or future use of AI in our business.
For example, the European Union’s proposed Artificial Intelligence Act will likely have a material impact on the way AI is regulated in the EU, including significant fines for violations related to offering prohibited AI systems or data governance, high-risk AI systems and for supplying incorrect, incomplete, or misleading information to EU and member-state authorities.
Our revenue and results of operations have historically varied from period to period, and we expect they will continue to do so as a result of a number of factors, many of which are outside of our control, including: • The level of demand for our platform and our professional services; • The rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers; • Large customers failing to renew their subscriptions; • The size, timing, and terms of our subscription agreements with existing and new customers, including revenue recognition issues; • Variations in the revenue mix of our professional services and growth rates of our cloud subscription and professional services offerings, as well as the timing of subscriptions and sales offerings that include an on-premises software element for which the revenue allocated to that deliverable is recognized upfront; • The timing and growth of our business, in particular through our hiring of new employees and international expansion; • The timing of our adoption of new or revised accounting pronouncements applicable to public companies and the impact on our results of operations; • The introduction of new products and product enhancements by existing competitors or new entrants into our market and changes in pricing for solutions offered by us or our competitors; • Network outages, security breaches, technical difficulties, or interruptions with our platform; • Changes in the growth rate of the markets in which we compete; • The mix of subscriptions to our platform and professional services sold during a period; • Customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our competitors or otherwise; • Changes in customers’ budgets; • Changes in the administration and their priorities in terms of public sector budgets and funding; • Lapses of federal appropriations in the United States for our government customers; • Seasonal variations related to sales and marketing and other activities such as expenses related to our customers; • Our ability to increase, retain, and incentivize the strategic partners that market and sell our platform; • Our ability to control costs, including our operating expenses; • Our ability to hire, train, and maintain our direct sales team; • Unforeseen litigation and intellectual property infringement; • Fluctuations in our effective tax rate; and • General economic and political conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers operate.
As a result of the COVID-19 pandemic, many more employers allowed remote work, which resulted in the market for employee talent becoming more national and some employees preferring remote work.
As we have chosen to return to office-based work over time to benefit from the better culture and productivity we believe in-office work affords, we may not be able to attract and retain employees who would choose to work remotely, while we also still face hiring competition from companies with remote-based workforces who can hire without respect to office location.
We may need to reduce or change our pricing model to remain competitive.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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