NASDAQ APPN stock at https://www.webull.com/quote/nasdaq-appn has been a profitable but small-capitalization firm in the past few years. Its shares have also increased by 250% in the past three years. However, the sudden outburst or coronavirus has hit this low-code software development platform.
On the one hand, many businesses and firms are struggling to amend their conventional mode of working by switching to work from home. While on the contrary, things are not the same as the aforementioned. The companies of the digital world have been witnessing a higher demand for their services owing to the pandemic. Moreover, the pandemic seems to bode well for Appian too. However, if the management’s guidance for the year of the second quarter and its axing of full-year expectations are any indications, the company is finding the coronavirus crisis anything but a smooth ride.
The unpredictable business of the firm
After a strong record with a 34% increase in full-year revenue, 17% growth in total revenue in the year 2019, 2020, started with a good start. The revenue growth of APPN stock increased at an unprecedented rate with the number of losses narrowing. Owing to the advancement in the company’s high-profit-margin subscription revenue part, its gross profit on the services that it rendered soared in the first quarter. If the company had not purchased a robotic process automation company for $6.14 million in the quarterly update, it would have gone through many break-evens. The company’s low-code development segment accounts for nearly two-thirds part of the total revenue it generates.
Along with this, its low-profit margin and an unpredictable segment of professional services also amount to a pretty sizeable part in the revenue generated. However, the company’s cloud-specific subscription revenue is expected to grow and increase by another 25% to 26% in the second quarter. Most importantly, management said that the firm’s overall revenue will fall by 7% to 8%.
Can anyone expect growth?
Even though the pandemic has brutally hurt every sector of the society, the company is preparing after the coronavirus induced headwinds will be diminished. In addition to this, the revenue that was expected to be gained in the second-quarter got pulled forward into the first, which explains the stability and consistent growth of the company before the current events. Even the CFO of the company confessed that it is not easy to determine how much the pandemic is going to affect the company’s working or its customers.
It is advised to investors that they should expect the ongoing strength in subscriptions to be offset shortly. It can be caused due to the recession and damage the pandemic is causing. You can also check altr stock at https://www.webull.com/quote/nasdaq-altr .