Anaplan Announces Second Quarter Fiscal Year 2021 Financial Results

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%

SAN FRANCISCO–(BUSINESS WIRE)–Anaplan, Inc. (NYSE:PLAN), a pioneer in Connected Planning, today announced financial results for its second quarter ended July 31, 2020.

“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.

Contacts

Investor Contact:
Edelita Tichepco

investors@anaplan.com

Media Contact:
Caitlin Tridle

press@anaplan.com

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