Commitments, Contingencies, and Other Matters |
6 Months Ended |
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Jun. 30, 2026 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments, Contingencies, and Other Matters | 12. Commitments, Contingencies, and Other Matters Minimum Purchase Commitments We have a non-cancellable cloud hosting arrangement with Amazon Web Services (“AWS”) that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $220.0 million over five years. The agreement, which originated in July 2021 and was amended in October 2024, currently contains minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending under this agreement for the three and six months ended June 30, 2026 totaled $17.2 million and $33.4 million, respectively. Spending under this agreement for the three and six months ended June 30, 2025 totaled $12.9 million and $23.3 million, respectively. The timing of payments under the agreement may vary, but we expect to meet our minimum annual spending requirement during the term of the arrangement. Pegasystems Litigation Trade Secrets Case On May 29, 2020, we filed a civil complaint against Pegasystems, Inc. (“Pegasystems”) and Youyong Zou, a Virginia resident, in the Circuit Court for Fairfax County, Virginia. Appian Corp v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). On May 10, 2022, we announced the jury awarded us $2.036 billion in damages for misappropriation of our trade secrets and $1 in damages for violating the Virginia Computer Crimes Act. Pegasystems filed several post-trial motions seeking relief in the form of reducing the damages award or setting aside the jury’s verdict and either granting a new trial or entering judgment in Pegasystems’ favor. All of these motions were denied, and final judgment was entered by the Court on September 15, 2022. The final judgment reaffirmed the $2.036 billion in damages and also ordered Pegasystems to pay Appian $23.6 million in attorney's fees associated with the case as well as statutory post-judgment interest on the judgment at an annual rate of 6%, or approximately $122.0 million per year. Defendant Youyong Zou has satisfied the judgment of $5,000 (plus interest) against him in lieu of appealing that judgment. On September 15, 2022, Pegasystems filed a notice of appeal to the Court of Appeals of Virginia. On July 30, 2024, the Court of Appeals of Virginia issued a decision reversing the judgment against Pegasystems and remanding the case for a new trial. The decision rejected Pegasystems’ argument that Appian had not presented evidence that trade secrets were misappropriated but reversed the judgment on the basis of evidentiary and damages rulings made by the trial court. On August 29, 2024, Appian submitted a petition to the Supreme Court of Virginia seeking to reverse the Court of Appeals decision and reinstate the full judgment against Pegasystems. Pegasystems filed an opposition to the petition and cross-issues for appeal on October 21, 2024. Appian's petition was heard on February 11, 2025. On January 6, 2026, the Supreme Court of Virginia issued an opinion affirming the opinion rendered by the Court of Appeals on both sides and remanding the case for a retrial. On May 7, 2026, the Circuit Court set the retrial to begin on January 11, 2027. We cannot predict the outcome of any further appeals or any retrial or the exact time it will take to resolve them. Judgment Preservation Insurance On September 1, 2023, we obtained a judgment preservation insurance (“JPI”) policy in connection with our $2.036 billion judgment against Pegasystems. The total cost of the policy was $57.3 million and is comprised of the premium, a one-time broker fee, and Virginia lines tax. The policy provides up to $500.0 million of coverage. The total cost of the policy was capitalized and is being amortized on a straight-line basis over the estimated period to obtain a final and unappealable judgment. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $2.0 million and $4.0 million for the three and six months ended June 30, 2026, respectively. JPI amortization expense was $3.1 million and $6.2 million for the three and six months ended June 30, 2025, respectively. As of June 30, 2026, $6.9 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $12.0 million is classified as 'Other assets’ on our consolidated balance sheets. Defamation Case On August 2, 2023, Pegasystems filed a complaint against the Company in the U.S. District Court for the District of Massachusetts. Pegasystems Inc. v. Appian Corporation, 1:23-cv-11776-LTS (D. Mass.). The complaint asserts claims for defamation, trade libel, and violations of the Lanham Act, 15 U.S.C. § 1125(a). On February 20, 2024, the Company answered the complaint, asserted counterclaims against Pegasystems for defamation, trade libel, violations of the Lanham Act, 15 U.S.C. § 1125(a), and violations of Mass. Gen. Laws ch. 93A §§ 2 and 11 and sought a declaratory judgment that Pegasystems was not entitled to the recovery sought in its claims. The parties exchanged opening expert reports in March 2026. Pegasystems claims up to $41.9 million in damages resulting from its claims, while the Company claims up to $109.5 million in damages from competitive situations related to the counterclaims and up to $2.33 billion in damages from Pegasystems' total profits derived from the conduct at issue in the counterclaims. A hearing on summary judgment motions was held on July 24, 2026 and a jury trial is currently scheduled for November 2026. While the Company believes strongly in its claims and defenses, we are unable to reasonably estimate the likelihood of success for either party or the range of any possible gain or loss to the Company given the uncertainty as to the likelihood, amount, and timing of any potential gain or loss related to our counterclaims or Pegasystems’ claims. Other Legal Matters From time to time, we are subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of business. Other than as disclosed elsewhere in this Quarterly Report, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Share Repurchase Program On February 17, 2026, the Board of Directors authorized a program to repurchase up to $50.0 million of our common stock (the “Share Repurchase Program”), effective February 2026 through February 2028. On May 5, 2026, the Board of Directors approved an additional $50.0 million for the Share Repurchase Program, bringing the total aggregate authorization under the program to $100.0 million. All other terms and conditions of the Share Repurchase Program remain unchanged. In the second quarter of 2026, we repurchased 1.8 million shares under this program at an average share price of $23.75, totaling an aggregate cost of $43.9 million. As of June 30, 2026, shareholders’ equity included 71.8 million shares outstanding, net of 2.8 million shares of common stock held in treasury.
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