Greetings, and welcome to Appian's fourth quarter and full year 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to your host, Mr. Scott Walker, Director of Investor Relations. Thank you. You may begin.
Thank you, operator. Good afternoon, thank you for joining us today to review Appian's fourth quarter and full year 2020 financial results. With me on the call today are Matt Calkins, Chairman and Chief Executive Officer, and Mark Lynch, Chief Financial Officer. After prepared remarks, we will open the call to a question and answer session.
During this call, we may make statements related to our business that are forward-looking statements under federal securities laws and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial results, trends, and guidance for the first quarter and full year 2021, the impact of COVID-19 on our business and on the global economy, the benefits of our platform, industry and market trends, our go-to-market and growth strategy, our market opportunity and ability to expand our leadership position, our ability to maintain and upsell existing customers, and our ability to acquire new customers. The words anticipate, continue, estimate, expect, intend, will, and similar expressions are intended to identify forward-looking statements or similar indications of future expectations.
These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our 2020 10-K filing and our other periodic filings with the SEC. These documents and the earnings call presentation are available in the Investors section of our website at www.appian.com. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release in the investor relations portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measures.
With that, I'd like to turn the call over to our CEO, Matt Calkins. Matt?
Thanks, Scott, and thank you all for joining us today. In the fourth quarter of 2020, Appian's cloud subscription revenue grew 40% year-over-year to $36.9 million, and our adjusted EBITDA was a loss of $3.7 million. Subscriptions revenue grew by 33% to $56.1 million. Total revenue grew 19% year-over-year to $81.6 million. Our cloud subscription revenue retention rate was 119% as of December 31st, 2020. For the full year, Appian's cloud subscription revenue grew 36% year-over-year to $129.2 million, and our adjusted EBITDA was a loss of $16.8 million. Subscriptions revenue grew 31% year-over-year to $198.7 million. Total revenue grew 17% year-over-year to $304.6 million. Both our fourth quarter and full year 2020 results exceeded our guidance. Our gross renewal rate was 99% as of the end of December, higher than 96% at the end of the previous year.
We also set our best mark for gross profit margin at 74% in Q4. For the full year 2020, our gross profit margin was 72%, exceeding the previous year's margin by 639 basis points. The profile of low-code has risen substantially over the past year for reasons we've discussed on previous calls. Anecdotally, I hear many more people talking about low-code. When I say the term, I find people are more likely to recognize it. Popular publications and media, including The Wall Street Journal, Forbes, Inc., and CNBC, have written recently about low-code. Some smaller news outlets are calling 2021 the year of low-code. Forrester predicts that 75% of development shops will use low-code platforms by the end of 2021. Appian was the first company to go public as a low-code firm.
Our first annual report from 2017, I've got it right here, has a full-page picture of an ascending rocket ship on the inside cover. Not subtle at all. The headline says, "Appian launches the era of low-code." Four years later, low-code really has taken off. In addition to being first chronologically, we're a leader in over 10 analyst quadrants, including Gartner's Enterprise Low-Code Platforms and Forrester's Digital Process Automation. Buyers rank us as the number one choice for enterprise low-code, according to Gartner Peer Insights. Notably, we're also the clear top selection for companies that generate more than $10 billion in revenue. Appian is a preferred choice for both analysts and buyers for a few reasons. First, our platform is fast. Appian customers build applications by drawing a workflow, which is faster and more intuitive than coding.
We also accelerate a customer's deployment by allowing them to keep their data anywhere in the enterprise and connect to that data through low-code techniques, reducing sharply the difficulty of creating new applications. Deploying Appian accelerates a company's ability to ship new products, meet regulatory deadlines, and respond to their customers. Speed is a common reason for us to win new logos and expand within our customer base. For example, we had a multimillion-dollar expansion in Q4 with a top 10 global pharmaceutical company. It became a new Appian customer in early 2020 and manages the design of clinical trial protocols with our platform. In Q4, the company purchased additional Appian licenses to deploy multiple applications, including a clinical trials portal, to improve communication with participating healthcare professionals and provide more visibility about the studies.
We won this follow-on deal because of the speed we demonstrated when we deployed the customer's original application in just eight weeks with our 8-week Appian Guarantee. Our speed also won us a deal with a Fortune 500 insurance company, making them a new Appian customer in Q4. The insurer will use our low-code automation platform to manage its highly regulated online content and document creation processes. Before Appian, it lacked a digital tool to coordinate work across hundreds of users before publishing content publicly. We won this deal because Appian's low -code enabled the insurer to quickly build two applications within a strict compliance deadline. Each app will be launched within eight weeks. Our second advantage is complete automation. In 2020, we acquired a leading robotic process automation company to make us a one-stop shop for automation.
Our platform gives organizations everything they need to orchestrate their people, existing systems, data, bots, and AI in a single workflow. Complete automation allows organizations to make the most of their resources. For example, a Fortune 500 consumer products company has been an Appian customer since 2016 and uses our low-code automation platform to manage its end-to-end product lifecycle. In Q4, it purchased more licenses to automate approvals and launch products to market faster. Before, the company lacked a centralized view of its product information because its data was siloed across many systems. Now, Appian will orchestrate the approval process as Appian RPA bots fetch and aggregate data so employees can holistically review and approve products within a single tool. We won this deal because our platform was the fastest way to unify the company's people, data, and technologies into a single workflow.
The third and final advantage is that our platform is enterprise-ready. The largest organizations trust Appian to run their core business applications with world-class performance, governance, DevOps, and security. Our platform is open, allowing organizations to integrate their preferred best-of-breed technologies. In fact, we provide a simple no-code integration designer. Our designer allows customers to connect with almost any modern external system. Our commitment to openness and our enterprise-grade cloud allows customers to scale their companies with our platform as they add new products, grow their customer base, and hire more employees. For example, a Fortune 500 electronics manufacturer became a new Appian customer in Q4. It selected our low-code automation platform to unify over a dozen disparate systems across its enterprise. All employees will use Appian to manage tens of thousands of approvals annually, ranging from IT service requests to travel reimbursements.
We won this deal because the customer will be able to deploy its mobile-enabled application in just eight weeks under the Appian Guarantee. This customer, by the way, is not alone in their demand for mobile. Appian customers increased their mobile usage sixfold in 2020 compared to 2019. Appian gained 167 net new subscription customers in 2020, adding 50% more than we did in 2019. These customers are high-quality global organizations in a variety of industries, including a top jewelry maker, a top telecommunications company, and a top publisher. Existing customers also expanded their use of our platform in 2020. For example, 81% of our seven-figure ARR customers from 2019 purchased more software in 2020. 81%. These customers include a U.S. federal health agency that selected Appian to automate its contract writing process in early 2020.
This quarter, it purchased our Acquisition Requirements Management solution to completely replace its acquisition system and modernize its end-to-end procurement process with Appian. A top five global automotive supplier also expanded in Q4. The German company has been an Appian customer since 2018 and uses our low-code automation platform to manage its global product design process. This quarter, the company purchased over $1 million of new licenses to automate more than a dozen new manufacturing processes. Now, factory workers will use Appian to oversee the design and building of prototypes, reducing its design-to-order time from weeks to days. I'd like to spotlight two areas that are performing particularly well. First, our EMEA region had a strong year, doubling its new logo contribution in Q4 2020 compared to the prior year period. It also won twice as many seven-figure deals in 2020 as it did in 2019.
One noteworthy new logo example in Q4 is a top five bank in the U.K. It purchased over $1 million of Appian licenses to replace its inflexible and overly manual internal audit solution. Our low-code automation platform will fully digitize the audit lifecycle and provide a comprehensive view of the bank's risk profile. The bank selected Appian after an existing banking customer reported that it saves over $6 million annually in audit costs with their Appian application. Another highlight in 2020 was our partner ecosystem, which was again a leading growth driver. Partners delivered more than 70% of our new logos for the year. It's worth mentioning that partners alone contributed more new logos in 2020 than our entire company in 2019. For example, a partner helped us win a $1 million new logo deal with a leading European insurance company in Q4.
The insurer will use our platform to fully manage its life insurance policies across [audio distortion], including writing, servicing, policy termination. Appian will replace three legacy applications and integrate with the insurer's existing customer management and risk profiling systems. We won this deal because our partner demonstrated the speed and power of our platform with a complex custom demo built in just days. Partners also win new customers with solutions they pre-build on the Appian platform. For example, a Fortune 500 global medical devices manufacturer became a new Appian customer in Q4 by purchasing PwC's Interactions Hub solution. This partner solution manages the highly regulated end-to-end process of engaging healthcare professionals as speakers and spokespeople for medical device and pharmaceutical events. Appian will manage tens of thousands of interactions annually. PwC's unique Appian solution won this deal over competitors. low-code is not a complicated idea.
Unlike other terms like digital transformation, its meaning is not ambiguous. It means exactly what it says. It's a new way to build applications with less code, resulting in productivity gains of 10x or more. Some people think it's just for citizen developers, but that's incorrect. IT developers need 10x productivity gains just as much as citizen developers do. In fact, more, because their applications are the most important in the enterprise. Low-code is frequently and increasingly used for mission-critical applications. Four years ago, Appian's IPO launched the era of low-code. For three years, we advanced in what I would call a slow revolution. Low-code grew steadily and felt inevitable, driven by developer shortages and the booming demand for new applications, driven by frustration over enterprise fragmentation and the rising cost of technical debt. Our slow revolution was preempted by a fast revolution.
The disruptions of 2020 focused every organization in the world on the necessity of agile change. The events of last year will shape the low-code market profoundly. Appian now has an opportunity to be a leader in a leading market. I'll turn the call over to Mark for a deeper discussion of our finances. Mark?
Thanks, Matt. I'll review the financial highlights of the quarter and full year, and then we'll provide details on our Q1 and full year 2021 guidance. Cloud subscription revenue for the fourth quarter was $36.9 million, an increase of 40% year-over-year, and above the top end of our guidance. Our total subscriptions revenue was $56.1 million, an increase of 33% year-over-year. Subscriptions revenue was 69% of total revenue in the fourth quarter, an increase from 61% in the prior year period. Professional services revenue was $25.5 million, down 4% from $26.5 million in the prior year period, and down from $26.5 million in the prior quarter. Okay. Sorry about that. Professional services revenue was $25.5 million, down 4% from $26.5 million in the prior year period, and down from $26.5 million in the prior quarter.
Partners continue to be a larger part of our ecosystem and are increasingly helping us sell more software. All of our services engagements, both cloud and on-prem, continue to be performed remotely. Total revenue in the fourth quarter was $81.6 million, an increase of 19% year-over-year, and also above our guidance range. Our Cloud subscription revenue retention rate as of December 31st was 119%, within the 110%-120% range that we target on a quarterly basis. We remain pleased with our customers' expanded use of our platform. Our international operations contributed 33% of total revenue for Q4, compared with 34% in the prior year period, demonstrating the balance of our business, both domestically and internationally. Now turning to our profitability metrics. For the fourth quarter, our non-GAAP gross profit margin was 74%, an increase of 7% compared to the same period in 2019.
Subscriptions non-GAAP gross profit margin was 90% in the fourth quarter, compared to 89% in the same quarter of 2019. Our non-GAAP professional services gross profit margin was 38% in the fourth quarter, compared to 34% in the same period of 2019. The services gross profit margin was positively impacted by a reduction in services performed by subcontractors and decreased travel and entertainment costs. I continue to expect our non-GAAP professional services margins to be closer to 30%. Total non-GAAP operating expenses were $65.6 million, an increase of 17% from $56 million in the prior year period. Impacts from COVID-19 have naturally decreased certain expenditures like travel, entertainment, and office-related expenses. Adjusted EBITDA loss was $3.7 million in the fourth quarter, ahead of our guidance and compared to an adjusted EBITDA loss of $8.2 million in the year ago period.
In the fourth quarter, we had approximately $3.9 million of foreign exchange gains, compared to $2.3 million in Q4 2019. We don't estimate movement in FX rates, therefore, they aren't considered in our guidance. Non-GAAP net loss was $1.8 million for the fourth quarter of 2020, or a loss of $0.03 per basic and diluted share, compared to non-GAAP net loss of $7.4 million, or a loss of $0.11 per basic and diluted share for the fourth quarter of 2019. This is based on 70.4 million basic and diluted shares outstanding for the fourth quarter of 2020, and 67.3 million basic and diluted shares outstanding for the fourth quarter of 2019. Turning to our balance sheet. As of December 31st, 2020, our cash and cash equivalents and investments were $258.4 million, compared with $251.1 million as of September 30, 2020.
For the fourth quarter, cash provided by operations was $5.8 million. Total deferred revenue was $120.1 million as of December 31st, 2020. With respect to our billing terms, the majority of our customers are invoiced on an annual upfront basis, but we also have large customers that are billed quarterly or monthly. Due to the variability of our billing terms, changes in our deferred revenue are generally not indicative of the momentum in our business. I'll recap our full year 2020 results. Cloud subscription revenue was $129.2 million, representing growth of 36% year-over-year. Our total subscriptions revenue for the year was $198.7 million, an increase of 31%. Professional services revenue for 2020 was $105.9 million, down 3% compared to 2019. Total revenue up for 2020 was $304.6 million, up 17% compared to 2019. Adjusted EBITDA loss was $16.8 million in 2020 compared to $29.3 million in 2019.
Non-GAAP net loss was $18.2 million in 2020, or a loss of $0.26 per basic and diluted share compared to non-GAAP net loss of $34.1 million, or a loss of $0.52 per basic and diluted share for 2019. This is based on 69.1 million and 65.5 million basic and diluted shares outstanding for 2020 and 2019 respectively. For the year ended December 31, 2020, cash used in operations was $7.6 million. For the year ended December 31, 2019, cash used in operations was $8.9 million, which also included the reimbursement of $17 million in tenant and improvement allowances. Excluding that, our cash used in operations was $25.9 million. Now I'll turn to guidance. For the first quarter of 2021, cloud subscription revenue is expected to be in the range of $37.7 million and $38.2 million, representing year-over-year growth of between 33% and 35%.
Total revenue is expected to be in the range of $81.7 million and $82.7 million. I want to remind everyone that Q1 2020 is a difficult comparison. For example, we closed a three-year on-prem contract during the quarter where the customer did not want the contract to auto-renew on an annual basis. As a result, we recognized $2.8 million in revenue upfront versus recognizing approximately $1 million each year upon auto-renewal. Adjusted EBITDA loss is expected to be in the range of $9 million and $8 million. Non-GAAP net loss per share is expected to be between $0.15 and $0.13. This assumes 70.8 million basic and diluted common shares outstanding. For the full year 2021, cloud subscription revenue is expected to be in the range of $167.5 million and $169.5 million, representing year-over-year growth of between 30% and 31%.
Total revenue is expected to be in the range of $353 million and $355 million. Adjusted EBITDA loss is expected to be in the range of $38 million and $36 million. Non-GAAP net loss per share is expected to be between $0.64 and $0.60. This assumes 71 million basic and diluted common shares outstanding. Our revenue guidance reflects expected ongoing headwinds to our professional services revenue from the impacts of COVID and from the continued growth in our partner ecosystem who are increasingly implementing our software. In addition, our adjusted EBITDA guidance reflects increased investments in sales and marketing and R&D throughout the year, along with expected T&E expenditures normalizing in the back half of the year. For years, we've been saying that Appian is a 30% grower, by which we mean that we expect our software revenue to grow at least 30% each year.
We met that growth goal in 2020. I'd like to reiterate that expectation for 2021. With that, let's turn it over to questions.
At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, as we poll for questions. Our first question comes to the line of Sanjit Singh with Morgan Stanley. Please proceed with your question.
Congrats on another year of 30% subscription growth and the cloud's been doing really well for several quarters now, so congrats to the team. I have two questions. They're kind of longer term in nature, which is kind of what does the growth equation for Appian look like over the next two, three, four, five years? I think you're up to, by my count, 650 + customers. Should we think about the growth equation as Appian getting to 1,000 customers, 1,500 customers, spending a $500,000 or a $1,000,000 over time? Do you think it's gonna be more of this longer tail because of sort of like in your remarks talking about just becoming more pervasive. We're talking about, I don't know, 5,000 or 10,000 customers. Just wanted to get your latest view on the [P x Q] equation, if you will.
Yeah. No, that's a great thing to ask about. I think that we're capable of capturing more of a tail, than we have so far. I want to emphasize that that is not our primary target, even though it's available to us and we're going after it. I do not want to trade the largest organizations, the highest-spending organizations for the tail. We won't do that. We're going to emphasize big deals. We're going to continue to emphasize important high-end mission-critical deployments, not lose sight of that. We know that that's our edge in this market. Being the best at that gives us a carryover advantage in competing for less essential, less mission-critical applications, and perhaps for less feature-conscious consumers. By becoming the standard that's adopted by the high-end cases and customers, we establish our capability to handle all the other cases.
We are absolutely not moving away from the high end and the customer who's willing to spend a $500,000 or $1,000,000 per year on this technology. I believe that being strong with those customers will allow us to capture also a portion of the tail. I think we're going to expand in both directions, but we won't lose track of the fact that our priority is the large, the mission-critical application.
That's great to hear. The sort of second question along that dimension is, if we take ourselves back to the IPO back in 2017, your services mix was roughly half of the business. Today, I think in Q4, it's in the low 30s. I think it was 31% by my math. The question is that, is this 31% going into the mid-20%, which would put you guys at a pretty standard software versus services mix? Should we expect to trend back up because of COVID? My suspicion is that it probably is sustainable because you've added so many new customers this year. It didn't seem like services was a headwind or necessarily impacted by COVID, but just wanted to double-check on that line of thinking.
Yeah. Well, I think your suspicion is correct, that services will continue to shrink as a percentage of Appian's revenue. Yeah, it's going down to the 20s, and I think that every year it's going to be smaller than the year it was before. I'm not saying it's going to be 20s this year. I'm saying that that's the direction it's going in. The trend was probably exacerbated a little bit by COVID and by the fact that it was more difficult to deliver a service than it was to deliver a product in 2020. The trend holds. The trend will continue. It's what we expect, and it's what we're managing the business toward because we want to elevate partners and leverage their influence in major customers.
Got it. Maybe if I could just sneak one in for Mark. Mark, as it relates to the guidance, I know we've been talking about a couple of different things. Moving to one-year auto renewals and the sort of 606 headwind that potentially turns into a tailwind in 2021. To what extent does guidance sort of reflect those impacts from a higher renewal base on the one-year auto renewals and then the impact on the headwind in 2020 that turns into a tailwind because of the 606 accounting? Was that sort of contemplated or embedded in your 2021 guidance framework?
I think there's not really the tailwind that you guys are talking about because those multi-year deals that haven't gotten into the annual auto renewal, some of them are coming up for renewal in 2021, some are coming in 2022. It's not a material amount, but we've done a good job of migrating everybody over. It's not really a tailwind, I would say, that's implicit in the guide. I think what's implicit in the guide, which is important, is that we expect right now that services will actually decline year-over-year, and that's what's implied in the guide. I think personally, and Matt personally believes that the services will actually grow, but what we've got implied right now in the guide is a reduction in services. To be candid, we don't know how long COVID's going to last.
If the partners continue to bring in 70% of the logos, they're going to get most of the services. We're just trying to be, as we have been since we've been public for four years now, when we give guidance, we generally try to be conservative. In particular, we generally try to be conservative on that line item because we don't have the visibility that we have on the software.
Understood. Thank you, Mark. Appreciate the response.
Our next question comes from the line of Mohit Gogia with Barclays. Please state your question.
Hey, guys. Thanks for taking my question. Also my congrats to a really strong end to the year as well there. My question was around the expansion, right? I think, Matt, you mentioned that some of your even larger customers, the seven-figure ARR customers, continue to expand. I was just wondering if you can give us some more color there as to, you guys have a pricing model around either number of apps or number of users. Wondering if there is a trend that you can see based on the expansions, where maybe it's the number of apps that are primarily driving these expansions, or you also see customers going from wall to wall within lines of businesses with the number of users. Any color on those two dimensions in driving the expansion will be very helpful. I have a question for Mark.
All right. We are pleased with the expansion. I'm particularly pleased with the expansion as it pertains to customers who are already spending a lot with us. They're seeing the value and they want more. The fact that 81% of the seven-figure ARR customers from last year wanted to buy more in 2020 represents not only a great uptick, but a great turnaround time, that they saw the value so quickly, and they wanted to expand. I'm particularly pleased with that. The expansion happens along multiple dimensions. You mentioned that we price according to application and also according to user. Both of those are primary routes for expansion. Generally, a customer decides which of the two pricing vectors they prefer to be on, and then they stay with that vector. I would not say that one of the vectors is more conducive to growth than the other.
Instead, I would say that growth occurs no matter which vector the customer chooses, and accordingly, they pay more for either more applications or more users, depending on whichever way they chose. We're going to emphasize expansion even more in 2020, and I believe that there's a lot of potential there, not just at the largest accounts, but at all of them.
Great. My follow-up question is for Mark, and just along that dimension. We saw this tick up in cloud subscription retention rate, this quarter to the higher end of the range you have been communicating. Just also, this is another quarter of 40% cloud subs growth. I think last time around, you were alluding to some linearity helping it. Obviously, given the performance this quarter, I'm assuming this is becoming a more fundamental trend rather than something one-off. Can you help me unpack as to what the drivers there are? Obviously, the land and expand motion is working, but just trying to figure out as to what is driving this 40% growth and how sustainable that is. Thanks, guys, for taking my questions.
Yeah. I'll take that. As we said in the prepared remarks, we are a 30% plus grower. That's how we viewed ourselves from the time of the IPO, and we continue to see ourselves going forward. Having said that, there was no linearity phenomenon in this quarter. It was a pretty typical back-end loaded quarter. It was a lot of the momentum of the business. A lot of it's expansion. We had 50% more new logos this year, right? That's a big piece of it. The other big piece of it is the expansion. Matt mentioned, that 81% of all of our seven-figure ARR customers bought more software in 2020, and obviously that goes right to that NRR calculation. We see both expansion and net new logos working to our benefit.
I think, going forward in 2021, as Matt was saying, low-code's a thing now, and we're getting more and more inbound interest in the low-code platform. We're hoping to take advantage of that momentum.
Great. Thanks for taking my question, guys.
Our next question comes from the line of Bhavan Suri with William Blair. Please proceed with your question.
Hey, gents. Thanks for taking my question, and I'll echo my congrats. Nice job there. I guess I want to touch a little bit on the customers that have adopted Appian over the past year. If you think about this cohort relative to past pre-COVID cohorts, and maybe add partners to the second vector, I guess, has there been any change in who's buying? Are use cases different? Are landing ACV different? Are deployment size different? I guess, have you seen a pattern with some of the newer use cases, newer cohorts, partially because low-code has become more common, maybe because of partners, or has it been pretty consistent from, say, a year and a half, two years ago, pre-COVID?
All right. Yeah, let me talk about that. First of all, I want to say they're largely the same. They haven't changed all that much. A few dozen of them bought into Appian because they wanted our Workforce Safety Solution. That's a small portion of our sales. The dollars per customer is steady if you're talking about licenses. It decreases only on the services side. If you're looking for any changes, I would say it's that our services component per customer has decreased, our license has stayed equal, almost exactly equal. The depth of their usage and the fact that they prefer platform and they come to us as a platform buyer, that has remained constant.
Gotcha. I want to take that and marry that with a comment you made that said the large customers last year, which expanded, came in 80% +, came in and bought again in 2020. You're excited about the product they were able to realize and the value. If we touch on the core thesis here, which is it's a platform. You get in, you show the value of the low-code environment. They see how quickly they can build an application, in a shorter amount of time, fewer human resources, so to speak. Shouldn't that flywheel continue to accelerate? Now, it'll slow down at some point when you've penetrated an organization, but we've got a ways to go for almost any customer of yours.
Shouldn't that continue and maybe even accelerate as they begin to realize this is the best way to build new applications because they've got to feed the project list they have from all the businesses to develop this? Should that, again, I'm not saying it's adding to it, but logically, should that play out?
Okay. Let me address that on both a micro and a macro dimension. On a micro dimension, I think that, yes, it should. We should see acceleration as we prove the concept and we sell more. We are not saturating our customers. There is more room to sell nearly everywhere. The more we prove our concept, the more benefit they get from each incremental purchase. I believe the conclusion would be, yes, this is a flywheel, or we should expect to see further acceleration. That's the micro answer. The macro answer is. We're a 30% grower, and I don't want to indicate that I expect anything other than that.
Fair enough. I'm going to squeeze one more quick one in here. I noticed you launched a 14-day free trial recently, which is not something typically, at least we associate with Appian go-to-market, given the enterprise focus. Could you just walk us through the strategic rationale behind this and what are the objectives for that free trial?
Okay. There's good reasons why we would have a 14-day trial. First of all, even for enterprise software, most of the sale is done before the customer contacts the vendor. Putting a good foot forward in that hidden part of the sale is essential. Secondly, Appian shows well. I would prefer the experience of Appian's first 14 days to the experience of our competitor's first 14 days. I think that it does us good to allow the customer to explore and understand the difference. Furthermore, with our product, you can actually do something in 14 days. We would like to have them experience the accomplishment that's possible. I think for all these reasons, it's good for us to be out there selling in this manner. By the way, it may appeal to a different kind of a buyer.
I think it was a really good step, and we've been working on this for a while, and we've experienced some good pipeline development as a result of our free trial. Yeah, I think it suits our situation pretty well, even though you might not have expected it from an enterprise software vendor.
Great. Appreciate the color and the understanding. Thank you.
Our next question comes from the line of Chris Merwin with Goldman Sachs. Please proceed with your question.
All right. Thanks very much for taking my question. I wanted to ask about some of your solution-based apps. Can you talk a bit about how those have been doing lately? I think I saw that there's now a Connected Claims Solution for insurance companies. I imagine that may or may not actually compete with some of the vertical software vendors. Maybe just at a higher level, if you can talk about, are you trying to come in with net new solutions for companies as opposed to competing with any of these dedicated vendors in the space and just overall, just talking about the traction of those solutions. Thanks so much.
Sure. Appian is a platform company, and generally when we sell, we sell the platform. I believe that there are a number of advantages that we could accrue from being more focused on solutions, from cutting the cycle time of a sale, to differentiating against competition, to raising our price point, partly due to that differentiation. I think that mostly, however, we are still a platform company, and what benefits there are to be had from solutions are largely benefits that we might experience in the future. Right now, our solutions are not the primary thing that we're selling, and most customers do not interact with an Appian solution. We understand this to be an advantageous route for the future, which is why we keep working on it. Some customers, of course, are seeing terrific benefits.
I think mostly when they approach Appian, they approach us for what we're known for, and that is the platform. Down the road, I look forward to us being known also for solutions, and I think there's a good potential for us.
Okay, great. Thank you. Maybe just to follow up on investments this year, I think Mark talked about investing more in R&D and in S&M. Can you maybe just go into a little bit more detail about how and why you're ramping that spend? Obviously, there's a very long-term opportunity here, but just curious if anything else you can comment about the investments you're making in 2021.
We've made some investments during 2020 in senior executives. We brought in a senior vice president in charge of customer success, a new CRO, and a new CMO. Thus far, the new CRO has been here for nine months or so, and we're starting to see good traction. Our sales cycles, one of the things, the length of our sales cycles historically have been long and painful, and they've actually shrunk about 30% this year. We've gotten better and more efficient. We're seeing a lot of opportunities out there, and we want to hire sales reps pretty aggressively. At the same time, I think that we're not really well-known. We're not top of mind when you think of things. From a marketing perspective, with a new CMO, we're giving her additional budget.
Matt has given her a lot more budget than I wanted to, we're giving it to her. No, seriously, we want to invest both in the marketing side as well as the sales. The TAM, as you guys know, no matter how you slice it's massive. We just want to take advantage of it, and we're starting to see traction right now and momentum. We're pretty excited about where we're headed. Obviously, we're always looking to bring on smart software engineers to help out and build the platform.
Yeah, let me just add to that. This is a really exciting moment in the history of this organization. We are, of course, a careful, conservative organization, and we don't like to spend too much. I'll take the fall for wanting to spend more on marketing right now. I think we should be expanding on all fronts. I think we should be hiring more account reps. We should be spending more in engineering. I'm more upset these days when we underspend than when we overspend our budget. I want to be sure that all the money we allocate is actually converted, and then that we learn from it, and we grow from it. I think that we've reached a unique point in low-code, and we want to take advantage of it.
Makes a lot of sense. Thank you.
Our next question comes from the line of George Kurosawa with KeyBanc. Please go with your question.
Hi, guys. Thanks for taking my question. This is George on for Steve. I had a question about something you mentioned in the prepared remarks about pre-built partner solutions. I was just curious if you could maybe unpack a little more, what are some of the kind of typical use cases for that look like? Is it fair to think about that kind of following up on a previous question as maybe like a stepping stone into more of the solution space? Thanks.
I do think that they're a terrific stepping stone into the solution space, and I believe that they are going to make our reputation as a platform on which solutions can easily, efficiently, and successfully be developed. These partner-led solutions are typically industry-specific. They reflect something that a team within one of our partners has deep expertise in deploying. They're already subject matter experts. They've already got the connections. They know who the buyers are, they know what the buyer's problem is, and they choose to build it once instead of N times for N buyers. This gives the buyer reassurance, both that others have done the same thing before, that it's predictable, and that the seller truly knows how to solve the problem the buyer is experiencing. It's a high-credibility way for us to deliver a solution, maybe the most, the highest credibility way.
I'm pleased with the progress so far. Many of our partners have done this or are planning to do this, and many solutions have been developed on the Appian platform by partners. I do believe that this is going to be a primary way that we are established as a solutions platform.
Great. Thank you very much. Just one quick follow-up. Obviously, some really impressive results out of EMEA. Anything you would call out in terms of the drivers? Did it feel like that was kind of an improving demand environment or anything specific on your execution? That's it for me. Thank you.
Yeah. If I had to attribute that strong EMEA performance to one thing, it would be Partners. Partners really came through for us. I think that we solved a need for them. They needed to deploy an agile solution to help their customers change in a tempestuous year, and they turned to Appian because they knew it worked, and they drove us into many new opportunities. Their trust in us, our confidence in being able to solve problems together, and the urgency of the problems that faced everybody last year, is what I would attribute that growth to, above all, the partners.
Our next question comes to the line of Jack Andrews with Needham. Please do with your question.
Good afternoon. Thanks for taking the question, and congratulations on the results. I want to ask a little bit more about just given your comments about how the profile of low-code platforms has risen substantially in the last year, could you talk a little bit more about the changes you're seeing in terms of just the deal processes? You mentioned a moment ago that deal cycles are compressing, which is great. I assume that relates to the fact that you need to spend less time educating people about the value proposition. What else is happening behind the scenes? Because so many vendors these days say that they're in the low-code market. Should we think of more head-to-head bake-offs or what else is happening in this market now that it's becoming more mainstream?
Yeah. I believe mainstreaming low-code will result in shorter sales cycles. Though the interpretation of the definition of low-code is still at issue, and different vendors may call themselves low-code, but really represent very different products. That's why I made a point of saying that, in our opinion, low-code was not a citizen developer tool, at least not exclusively. We believe in low-code for mission-critical applications. It's more difficult, it's more valuable, and if you think that low-code's reputation was made in 2020 when businesses needed to deal with change, then you must believe low-code belongs in mission-critical applications because those are the applications that organizations needed to change. We are satisfying the most valuable demand in the low-code industry, and not everyone is. Not everyone who calls themself low-code can do that or wants to do that.
Low-code's still something of an enigma, and therefore, there'll still be some explaining that goes into selling it. You still got to explain what is low-code in order to connect with the customer and be sure you're on the same page. However, it should be faster. By the way, the acceleration we saw last year, it's about 30% faster deal cycles and sales cycles. That I don't believe was very much affected by a new mutual understanding or higher profile for low-code. I would say that happened for reasons of its own, and that whatever benefit we get from low-code going household has yet to be seen.
Well, that's great. Appreciate your perspective on that. Just as a follow-up question, when we think about the new logos that were delivered by your partner ecosystem over the last year, could you just talk about, are there characteristics of these new logos that are maybe different than Appian was capturing historically through your direct sales force? Are partners helping you get into new verticals that you haven't gotten into? How do we think about a potential changing mix over time given that contribution?
For the most part, they are alike. There are a few niche cases in which a partner has built a solution that appeals to a certain customer that we would not have been able to appeal to in the past, and that is the minority of the cases. For the most part, the partners are sourcing exactly the kind of customers that Appian would like to source, maybe doesn't have a relationship with or doesn't have the reputation and the established connection with. The partners are really emphasizing what we already found in our customers.
Great. Thanks for taking my questions.
Our next question comes from the line of Derrick Wood with Cowen. Please proceed with the question.
Hey, guys. It's Andrew on for Derrick. Thanks, and congrats to a strong finish to the year. Just wanted to ask about the government performance in the quarter versus your expectations and any color in the pipeline for this year? Given the strong logo growth there, what type of expansion cadence should we expect out of that this year?
I'd like to say that government performance was exceptionally in 2020. That was more in Q3 than in the other quarters. This was a really solid year for Appian in the federal space. We advanced in areas that we hadn't always advanced in. We have a higher profile now. We've got a building reputation, and we've got some terrific winning use cases that are leading to expansion and good adoption. You know how the government works, where if you establish value, word gets out fast. We've been fortunate enough to have the opportunity a few times over the past year to demonstrate value in a high-profile example in the government, sometimes in defense.
We've done well with those opportunities, and I think that we're sowing seeds that are going to turn into good things down the road by providing real value in high-profile federal opportunities.
Great. Matt, on the partner front, any new initiatives planned there for this year to keep that strong momentum going? Are you seeing them lean even more into their practices given how strong this year was?
Yes, definitely. I think 2020, we got more partner momentum in the Federal space than I have ever seen. We got programmatic institutional support. We were very pleased with the cooperation we got and winning leads to winning in situations like this. I believe that it sets the stage for 2021.
Great. Thanks, guys.
Our next question comes from the line of Brett Knoblauch with Berenberg Capital Markets. Please proceed with your question.
Hi. Thanks for taking my question, and congrats on the quarter. I might have missed it, but did you guys provide an update to the number of customers with $1 million plus in ARR? As you look at your 2021 guide, what percentage of those customers will purchase more software? Do you think it'll be similar to the 81% you saw in 2020?
All right. Well, I don't have a number for you, but I will say that I am enthusiastic about our expansion prospects in the year ahead because I'm enthusiastic about the value we're delivering right now. Not for nothing did Appian come out number one in the Gartner Peer Insights poll that just shipped this month, by the way. That's absolutely fresh analyst update. Appian comes out. Not only did we get top marks from our customers, but we got the number one count of responses also. Some companies try to get a high average by having just a few customers respond. Appian had not only the top marks, but the top count of reviews. We were the only listed in the leader quadrant for companies over $10 billion or companies between $1 billion and $10 billion.
The entire big company side of low-code, we were left as the sole leader. I feel great about the value we're delivering and the reception that we're getting from our customers today. I believe that there is no better predictor for expansion than customer satisfaction. On that basis, I feel good.
Got you. Maybe just one follow-up. When you're talking about kind of increasing investment in your sales team, how has sales force productivity been? Obviously, the channel partners are performing greatly. Maybe your direct sales force and how that performed in 2020 compared to initial expectations.
Yep. I'd say 2020 better than 2019 in terms of a sales force efficiency. I see it rising, and I feel good about 2021 as well. We're in a good position to continue to increase sales force efficiency.
Yeah, I think it definitely improved in 2020. There's definitely more room for improvement, the sales executive team is focused on that. We're looking to obviously squeeze out more efficiencies out of the current and the existing sales force, but we're also looking to aggressively ramp headcount in the sales force as well.
Perfect. Thanks, guys.
Our final question comes from the line of Fred Havemeyer with Macquarie. Please proceed with your question.
Hi. Thank you. It looks like my ask here, that subscription revenue per customer remained about flat year-over-year while you've accelerated customer adds and also expanded your net retention rate. Would I be interpreting this dynamic correctly as you seeing more upsell among existing customers offset by some new customers landing with lower ASPs?
Let me do the ASP.
Go ahead. Yeah.
The ASP has stayed similar year-over-year, right? So it's really more subscription software, both in the expansion side as well as the net new logos. When we land, we generally land in the kind of $100,000, $120,000 ASP range, even higher, I'm being told here. The Workforce Safety, some of the solutions are a little bit lower, but our ASPs have been basically very steady year-over-year. It's like I said, we ticked up to 119. Our perspective, obviously, that reflects expansion. It also reflects, to Matt's point when he was talking about happy customers, our gross renewal rate was 99%, which is really. I don't think it can get any higher, right? We're happy with both of those metrics. Your point on the subscriptions revenue being steady year-over-year is a good one.
Thank you. That's helpful color there. Then just as a second follow-up question, I'd like to explore your platform effect in a little more depth. I'm curious, how frequently do you see your customers building apps on their own that are robust enough that if Appian built them, you'd be able to charge for them on, say, a per app basis?
All right. Customers build unique applications, for the most part. There are only a few examples of applications which are the same for one customer to another. Those are good candidates for reselling, but most of what customers build is suitable for their environment specifically. The first thing I would want to say to your question is, because we are unique and because we allow customers to express their own uniqueness, be it their strategic, their enterprise, their infrastructure, whatever uniqueness, there wouldn't be a direct portability of an application from one customer to the others. However, do they build things that are of a quality that other customers would want? Do they create IP that other customers would find of value? I believe, yes. The answer would be yes to those questions. Which is to say that expertise is being created out there that would have value.
Of course, it's not on the market. In some cases, a customer has even asked us if they could resell a solution that they've created. We have yet to enter into an agreement like that, but once in a while, it is floated by a customer who feels very strongly about the quality of the application that they've created on our platform.
Helpful color. Thank you.
With that, this concludes today's question and answer session, as well as today's conference call. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.