Anaplan Announces Second Quarter Fiscal Year 2021 Financial Results

August 26, 2020

  • Second Quarter Subscription Revenue up 32% Year-Over-Year
  • Remaining Performance Obligation of $703.1 million, up 36% Year-Over-Year
  • Dollar-Based Net Expansion of 116%

Businesses need an agile digital connected planning platform in today’s challenging environment. We are at the forefront of offering real-time, valuable business performance insights, providing a competitive advantage to our customers,” said Frank Calderoni, chief executive officer at Anaplan. “I’m pleased with our progress this quarter, and we are confident in the long-term market opportunity for Connected Planning.”

Second Quarter Fiscal 2021 Financial Results

  • Total revenue was $106.5 million, an increase of 26% year-over-year. Subscription revenue was $97.1 million, an increase of 32% year-over-year.
  • GAAP operating loss was $37.7 million or 35.4% of total revenue, compared to $41.2 million in the second quarter of fiscal 2020 or 48.7% of total revenue. Non-GAAP operating loss was $9.6 million, or 9.0% of total revenue, compared to $16.6 million in the second quarter of fiscal 2020, or 19.7% of total revenue.
  • GAAP loss per share was $0.26, compared to $0.31 in the second quarter of fiscal 2020. Non-GAAP loss per share was $0.04, compared to $0.12 in the second quarter of fiscal 2020.
  • Cash and Cash Equivalents were $304.9 million as of July 31, 2020.

Financial Outlook

The company is providing the following guidance for its third quarter fiscal 2021:

  • Total revenue is expected to be between $109 and $110 million.
  • Non-GAAP operating margin is expected to be between negative 12.5% and 13.5%.
  • As a baseline for third quarter, we expect billings to be in the range of $133 million to $135 million.

The company is providing the following guidance for its full year fiscal 2021:

  • Total revenue is expected to be between $437 and $439 million.
  • Non-GAAP operating margin is expected to be between negative 11% and 12%.

The guidance provided above are forward-looking statements and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures used in this press release, definitions of our operating metrics and a reconciliation of GAAP and non-GAAP financial measures is contained in the tables below. A reconciliation of non-GAAP measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, costs and expenses, including the impact of stock-based compensation, which is dependent on factors such as future stock price and volume of equity awards granted in the future, that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant.

Recent Highlights

  • Anaplan was showcased in IDC’s study highlighting the market shares of the largest vendors in the worldwide Big Data and analytics software market for 2019.
  • Anaplan was named one of Supply Chain Brain’s 100 Great Supply Chain Partners of 2020.
  • Anaplan produced a report with Harvard Business Review Analytic Services on the importance of systematically orchestrating business performance to drive agility and resilience.

Webcast and Conference Call Information

Event: Anaplan Second Quarter Fiscal Year 2021 (Q2 FY21) Earnings Conference Call
When: Wednesday, August 26, 2020
Time: 5:30 a.m. PT / 8:30 a.m. ET
Live Call: Please see online registration
Replay: (855) 859-2056 or (404) 537-3406 with passcode 7758307
Live Webcast: https://investors.anaplan.com or with replay available for 12 months

About Anaplan

Anaplan, Inc. (NYSE: PLAN) is a cloud-native enterprise SaaS company helping global enterprises orchestrate business performance. Leaders across industries rely on our platform—powered by our proprietary Hyperblock® technology—to connect teams, systems, and insights from across their organizations to continuously adapt to change, transform how they operate, and reinvent value creation. Based in San Francisco, Anaplan has over 20 offices globally, 175 partners and approximately 1,500 customers worldwide. To learn more, visit anaplan.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including all statements other than statements of historical fact contained in this press release and includes, without limitation, statements about the company’s expectations regarding the impact of the COVID-19 pandemic and resulting global economic uncertainty, the quotations from management, statements regarding market demand, market opportunity, competitive position including of the company’s solutions compared to the offerings of competitors, use of the company’s solutions and potential results of such use, financial outlook and guidance which may include expected GAAP and non-GAAP financial and other results, statements regarding growth and momentum, statements about the company’s plans, strategies and prospects, and statements about events and trends including events and trends that we believe may affect our financial condition, results of operations, short- and long-term business operations and objectives, and financial needs. These statements identify prospective information and may include words such as “expects,” “intends,” “continue,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “should,” “may,” “will,” or the negative version of these words, variations of these words and comparable terminology. These forward-looking statements are based on information available to the company as of the date of this press release and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties, and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the company’s control and may pose a risk to the company’s operating and financial condition. Such risks and uncertainties include, but are not limited to: the ongoing COVID-19 pandemic, and resulting global economic downturn, has materially impacted how we, our customers, and our partners are operating, and could result in a material adverse effect on our business, financial condition, operating results and cash flows; we have a limited history of operating at our current scale and under our current strategy, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future; we have a history of net losses, we anticipate increasing our operating expenses in the future, and we do not expect to be profitable for the foreseeable future; our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business; economic uncertainty and volatility in the broader financial markets may result in our customers and prospective customers reducing their spending, scaling back their digital transformation efforts, delaying purchasing decisions or deferring implementation projects, any of which may adversely impact our business, financial condition and cash flows; if we are unable to achieve and sustain a level of liquidity sufficient to support our operations and fulfill our obligations, our business, operating results and financial position could be adversely affected; if we are unable to attract new customers, both domestically and internationally, the growth of our revenue will be adversely affected and our business may be harmed; our business depends substantially on our customers renewing their subscriptions and expanding their use of our platform and if we fail to achieve renewals and expansions or our customers renew or expand their subscriptions on less favorable terms, our business operations and financial condition may be materially and adversely affected; the markets in which we participate are intensely competitive, and if we do not compete effectively, our business and operating results could be adversely affected; our success depends in part on the continued performance of our strategic partners, and uncertain economic conditions including those caused by the COVID-19 pandemic may disrupt the operations and performance of our partners and ultimately adversely impact our financial results; if we experience a security incident, our platform may be perceived as not being secure, our reputation may be harmed, customers may reduce the use of or stop using our platform, we may incur significant liabilities, and our business could be materially adversely affected; real or perceived errors, failures, bugs, service outages, or disruptions in our platform could adversely affect our reputation and harm our business; our success depends upon training our customers to effectively utilize our platform and providing high-quality support services and if our ability to provide effective training or support is limited by the COVID-19 pandemic and ensuing remote work restrictions, then our results of operations and financial condition may be adversely affected; we could incur substantial costs in protecting or defending our intellectual property rights, and any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand; our global operations and sales to customers outside the United States or with international operations subject us to risks inherent in international operations that can harm our business, results of operations, and financial condition; and the uncertainty in and volatility of the broader stock market generally or the stock price of our common stock specifically may result in stockholders not being able to resell their shares at or above the price at which they purchased shares. Furthermore, the additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may amplify many of these risks. Information concerning risks, uncertainties and other factors that could cause results to differ materially from the expectations described in this press release is contained in the company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including its quarterly report on Form 10-Q filed with the SEC on June 4, 2020, and other documents the company may file with or furnish to the SEC from time to time such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. These forward-looking statements should not be relied upon as representing the company’s views as of any subsequent date and the company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made. The information contained in, or that can be accessed through, Anaplan’s website and social media channels are not part of this press release.

Preliminary Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended July 31,Six Months Ended July 31,
(In thousands, except per share amounts)

2020

2019

2020

2019

Revenue:
Subscription revenue

$

97,117

 

$

73,598

 

$

190,941

 

$

138,683

 

Professional services revenue

 

9,394

 

 

10,942

 

 

19,414

 

 

21,687

 

Total revenue

 

106,511

 

 

84,540

 

 

210,355

 

 

160,370

 

Cost of revenue:
Cost of subscription revenue (1)

 

16,148

 

 

12,207

 

 

31,333

 

 

23,298

 

Cost of professional services revenue (1)

 

9,294

 

 

10,300

 

 

18,849

 

 

20,786

 

Total cost of revenue

 

25,442

 

 

22,507

 

 

50,182

 

 

44,084

 

Gross profit

 

81,069

 

 

62,033

 

 

160,173

 

 

116,286

 

Operating expenses:
Research and development (1)

 

24,595

 

 

16,442

 

 

48,357

 

 

31,501

 

Sales and marketing (1)

 

72,914

 

 

63,997

 

 

144,588

 

 

120,287

 

General and administrative (1)

 

21,235

 

 

22,801

 

 

43,663

 

 

42,814

 

Total operating expenses

 

118,744

 

 

103,240

 

 

236,608

 

 

194,602

 

Loss from operations

 

(37,675

)

 

(41,207

)

 

(76,435

)

 

(78,316

)

Interest income (expense), net

 

(184

)

 

1,339

 

 

327

 

 

2,590

 

Other income (expense), net

 

4,007

 

 

548

 

 

3,676

 

 

302

 

Loss before income taxes

 

(33,852

)

 

(39,320

)

 

(72,432

)

 

(75,424

)

Provision for income taxes

 

(1,672

)

 

(1,322

)

 

(2,694

)

 

(2,409

)

Net loss

$

(35,524

)

$

(40,642

)

$

(75,126

)

$

(77,833

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.26

)

$

(0.31

)

$

(0.55

)

$

(0.62

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

138,335

 

 

129,549

 

 

137,359

 

 

126,277

 

 
 
(1) Includes stock-based compensation expense as follows:
Cost of subscription revenue

$

876

 

$

637

 

$

1,584

 

$

1,128

 

Cost of professional services revenue

 

692

 

 

546

 

 

1,200

 

 

1,038

 

Research and development

 

4,380

 

 

2,494

 

 

8,026

 

 

4,330

 

Sales and marketing

 

11,213

 

 

8,184

 

 

21,244

 

 

14,801

 

General and administrative

 

7,818

 

 

8,258

 

 

15,418

 

 

15,124

 

Total stock-based compensation expense

$

24,979

 

$

20,119

 

$

47,472

 

$

36,421

 

Preliminary Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of

July 31,

January 31,

2020

2020

ASSETS
Current assets:
Cash and cash equivalents

$

304,894

 

$

309,894

 

Accounts receivable, net

 

88,269

 

 

109,217

 

Deferred commissions, current portion

 

30,546

 

 

25,990

 

Prepaid expenses and other current assets

 

16,639

 

 

17,814

 

Total current assets

 

440,348

 

 

462,915

 

Property and equipment, net

 

53,171

 

 

48,639

 

Deferred commissions, net of current portion

 

68,372

 

 

57,947

 

Goodwill

 

32,379

 

 

32,379

 

Operating lease right-of-use asset

 

33,590

 

 

37,875

 

Other noncurrent assets

 

13,031

 

 

10,052

 

TOTAL ASSETS

$

640,891

 

$

649,807

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

5,832

 

$

5,331

 

Accrued expenses

 

80,735

 

 

79,024

 

Deferred revenue, current portion

 

209,373

 

 

216,059

 

Operating lease liabilities, current portion

 

6,510

 

 

7,278

 

Total current liabilities

 

302,450

 

 

307,692

 

Deferred revenue, net of current portion

 

5,181

 

 

4,149

 

Operating lease liabilities, net of current portion

 

31,039

 

 

34,017

 

Other noncurrent liabilities

 

20,077

 

 

12,268

 

TOTAL LIABILITIES

 

358,747

 

 

358,126

 

 
Stockholders' equity:
Common stock

 

14

 

 

13

 

Accumulated other comprehensive loss

 

(5,862

)

 

(4,326

)

Additional paid-in capital

 

856,129

 

 

788,447

 

Accumulated deficit

 

(568,137

)

 

(492,453

)

TOTAL STOCKHOLDERS' EQUITY

 

282,144

 

 

291,681

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

640,891

 

$

649,807

 

Preliminary Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Six Months Ended July 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss

$

(75,126

)

$

(77,833

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization

 

12,263

 

 

9,073

 

Amortization of deferred commissions

 

16,184

 

 

8,761

 

Stock-based compensation

 

47,472

 

 

36,421

 

Reduction of operating lease right-of-use assets and accretion of operating lease liabilities

 

5,544

 

 

4,987

 

Foreign currency remeasurement gains

 

(3,247

)

 

(653

)

Other non-cash items

 

950

 

 

357

 

Changes in operating assets and liabilities:
Accounts receivable

 

17,927

 

 

10,637

 

Prepaid expenses and other current assets

 

1,317

 

 

(4,093

)

Other noncurrent assets

 

(1,493

)

 

(266

)

Deferred commissions

 

(29,947

)

 

(21,587

)

Accounts payable and accrued expenses

 

2,459

 

 

23,364

 

Deferred revenue

 

(4,367

)

 

20,529

 

Payments for operating lease liabilities, net

 

(4,938

)

 

(4,790

)

Other noncurrent liabilities

 

6,546

 

 

(1,712

)

Net cash provided by (used in) operating activities

 

(8,456

)

 

3,195

 

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment

 

(4,996

)

 

(1,603

)

Capitalized internal-use software

 

(5,380

)

 

(5,051

)

Net cash used in investing activities

 

(10,376

)

 

(6,654

)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options

 

8,624

 

 

14,739

 

Proceeds from repayment of promissory notes

 

-

 

 

12,148

 

Proceeds from employee stock purchase plan

 

9,481

 

 

9,088

 

Principal payments on capital lease obligations

 

(3,671

)

 

(2,382

)

Net cash provided by financing activities

 

14,434

 

 

33,593

 

Effect of exchange rate changes on cash and cash equivalents

 

1,548

 

 

(1,042

)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

(2,850

)

 

29,092

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period

 

309,894

 

 

326,863

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period

$

307,044

 

$

355,955

 

Reconciliation of GAAP to Non-GAAP Financial Measures  
(In thousands, except percentages and per share amounts)  
(Unaudited)  
 

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands, except percentages and per share amounts) 

2020

2019

2020

2019

  
Revenue  

$

106,511

 

$

84,540

 

$

210,355

 

$

160,370

 

  
GAAP operating loss 

$

(37,675

)

$

(41,207

)

$

(76,435

)

$

(78,316

)

Stock-based compensation 

 

24,979

 

 

20,119

 

 

47,472

 

 

36,421

 

Employer payroll tax expense related to employee stock plans 

 

1,875

 

 

4,447

 

 

3,360

 

 

5,129

 

Business combination and other related cost 

 

936

 

 

-

 

 

1,955

 

 

-

 

Amortization of acquired intangibles 

 

335

 

 

-

 

 

670

 

 

35

 

Non-GAAP operating loss  

$

(9,550

)

$

(16,641

)

$

(22,978

)

$

(36,731

)

GAAP operating margin % 

 

-35.4

%

 

-48.7

%

 

-36.3

%

 

-48.8

%

Stock-based compensation % 

 

23.4

%

 

23.8

%

 

22.6

%

 

22.7

%

Employer payroll tax expense related to employee stock plans % 

 

1.8

%

 

5.2

%

 

1.6

%

 

3.2

%

Business combination and other related cost % 

 

0.9

%

 

0.0

%

 

0.9

%

 

0.0

%

Amortization of acquired intangibles % 

 

0.3

%

 

0.0

%

 

0.3

%

 

0.0

%

Non-GAAP operating margin %  

 

-9.0

%

 

-19.7

%

 

-10.9

%

 

-22.9

%

  
GAAP net loss 

$

(35,524

)

$

(40,642

)

$

(75,126

)

$

(77,833

)

Stock-based compensation 

 

24,979

 

 

20,119

 

 

47,472

 

 

36,421

 

Employer payroll tax expense related to employee stock plans 

 

1,875

 

 

4,447

 

 

3,360

 

 

5,129

 

Business combination and other related cost 

 

936

 

 

-

 

 

1,955

 

 

-

 

Amortization of acquired intangibles 

 

335

 

 

-

 

 

670

 

 

35

 

Non-GAAP tax adjustments 

 

1,250

 

 

-

 

 

1,250

 

 

-

 

Non-GAAP net loss  

$

(6,149

)

$

(16,076

)

$

(20,419

)

$

(36,248

)

  
GAAP net loss per share, basic and diluted 

$

(0.26

)

$

(0.31

)

$

(0.55

)

$

(0.62

)

Stock-based compensation 

 

0.18

 

 

0.16

 

 

0.35

 

 

0.29

 

Employer payroll tax expense related to employee stock plans 

 

0.02

 

 

0.03

 

 

0.02

 

 

0.04

 

Business combination and other related cost 

 

0.01

 

 

-

 

 

0.02

 

 

-

 

Amortization of acquired intangibles 

 

-

 

 

-

 

 

-

 

 

-

 

Non-GAAP tax adjustments 

 

0.01

 

 

-

 

 

0.01

 

 

-

 

Non-GAAP net loss per share  

$

(0.04

)

$

(0.12

)

$

(0.15

)

$

(0.29

)

  
Shares used to compute GAAP net loss per share attributable to common stockholders, basic and diluted 

 

138,335

 

 

129,549

 

 

137,359

 

 

126,277

 

Shares used to compute Non-GAAP net loss per share  

 

138,335

 

 

129,549

 

 

137,359

 

 

126,277

 

  
GAAP net cash provided by (used in) operating activities 

$

(6,952

)

$

5,095

 

$

(8,456

)

$

3,195

 

Purchase of property and equipment 

 

(3,413

)

 

(681

)

 

(4,996

)

 

(1,603

)

Capitalized internal-use software 

 

(2,500

)

 

(2,890

)

 

(5,380

)

 

(5,051

)

Non-GAAP free cash flow  

$

(12,865

)

$

1,524

 

$

(18,832

)

$

(3,459

)

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures, including non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, and free cash flow. The non-GAAP financial information is presented for supplemental informational purposes only, and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. The non-GAAP measures presented here may be different from similarly-titled non-GAAP measures used by other companies.

We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe these non-GAAP measures, when viewed collectively with the GAAP measures, may be helpful to investors because they provide consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our operating results.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. The definitions of our non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may utilize metrics that are not similar to ours. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures. Please see the reconciliation tables in this release for the reconciliation of GAAP and non-GAAP results.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation expense. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.

Employer payroll tax expense related to employee stock plans. We exclude employer payroll tax expense related to employee stock plans, which is a cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, this expense is tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of exercise or vesting, which may vary from period to period independent of the operating performance of our business.

Amortization of acquired intangible assets. We exclude amortization of acquired intangible assets, which is a non-cash expense, from certain of our non-GAAP financial measures. Our expenses for amortization of intangible assets are inconsistent in amount and frequency because they are significantly affected by the timing, size of acquisitions and the inherent subjective nature of purchase price allocations. We exclude these amortization expenses because we do not believe these expenses have a direct correlation to the operation of our business.

Business combinations and related cost. We exclude transaction, integration, and retention expenses that are directly related to business combinations from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information regarding operational performance.

Non-GAAP tax adjustments. We exclude discrete tax expenses associated with non-recurring intercompany transactions because we believe that excluding these items facilitate a comparison of the non-GAAP tax provision in the current and prior periods.

Free cash flow. Our management reviews cash flows generated from operations after taking into consideration capital expenditures such as purchase of property and equipment and internal-use software as these expenditures are considered to be a necessary component of ongoing operations. We define non-GAAP free cash flow as net cash provided by (used in) operating activities, reduced by purchase of property and equipment and capitalization of internal-use software.

Operating Metrics

Annual recurring revenue (ARR) is calculated as subscription revenue already booked and in backlog that will be recorded over the next 12 months, assuming any contract expiring in those 12 months is renewed and continues on its existing terms and at its prevailing rate of utilization.

Dollar-based Net Expansion Rate is calculated as the ARR at the end of a period for the base set of customers from which we had ARR in the year prior to the calculation, divided by the ARR one year prior to the date of calculation for that same customer base.

Contacts

Investor Contact: Edelita Tichepco [email protected]

Media Contact: Caitlin Tridle [email protected]