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Commitments, Contingencies, and Other Matters | 9 Months Ended
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Sep. 30, 2025
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 nine months ended September 30, 2025 totaled $14.3 million and $37.6 million, respectively. Spending under this agreement for the three and nine months ended September 30, 2024 totaled $10.8 million and $31.8 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. Exclusive of the AWS contract, we have other non-cancellable agreements for subscription software products that contain provisions stipulating minimum purchase commitments. However, the annual purchase commitments under these contracts are, individually and in the aggregate, immaterial to our consolidated financial statements. Pegasystems Litigation 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 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. On March 7, 2025, the Supreme Court of Virginia granted Appian’s petition and agreed to hear Appian’s appeal as well as Pegasystems’ cross-issues for appeal. Appian’s argument on the appeal was heard on October 28, 2025. The timeline for deciding Appian’s appeal is solely in the control of the Supreme Court, and we cannot predict the outcome of any appeals or the exact time it will take to resolve them. Judgment Preservation Insurance On September 1, 2023, we entered into 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 length of the appeals process. We currently estimate the total length of the appeals process (solely for amortization purposes) to be approximately four years. This estimate is reviewed each reporting period. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $3.2 million and $9.4 million for the three and nine months ended September 30, 2025, respectively. JPI amortization expense was $3.6 million and $12.6 million for the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, $12.5 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $13.6 million is classified as 'Other assets’ on our consolidated balance sheets. 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 In May 2025, our Board of Directors authorized a program to repurchase up to $10.0 million of our common stock from May 2025 to December 2025. In June 2025, we repurchased 0.3 million shares under this program at an average share price of $31.91, totaling an aggregate cost of $10.0 million. In August 2025, our Board of Directors authorized a second program to repurchase up to an additional $10.0 million of our common stock from August 2025 to August 2027. In September 2025, we repurchased 0.3 million shares under this program at an average share price of $30.60, totaling an aggregate cost of $10.0 million. As of September 30, 2025, shareholders’ equity included 73.8 million shares outstanding, net of 0.6 million shares of common stock held in treasury.

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