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Anaplan Announces Second Quarter Fiscal Year 2020 Financial Results

SAN FRANCISCO--(BUSINESS WIRE)--

  • Second Quarter Subscription Revenue up 48% Year-Over-Year
  • Remaining Performance Obligation of $516 million, up 56% Year-Over-Year
  • Dollar-Based Net Expansion of 121% Continues to Track Above 120%

Anaplan, Inc. (PLAN), a pioneer in Connected Planning, today announced financial results for its second quarter ended July 31, 2019.

“We had another great quarter of outstanding growth and execution. More customers are choosing us because of the value they see with connecting their entire enterprise,” said Frank Calderoni, chief executive officer at Anaplan. “Our Connected Planning solution couldn’t be more timely for our customers, who are managing constant change in their business. With so much momentum, we are excited about the large opportunity ahead of us.”

Second Quarter Fiscal 2020 Financial Results

  • Total revenue was $84.5 million, an increase of 46% year-over-year. Subscription revenue was $73.6 million, an increase of 48% year-over-year.
  • GAAP operating loss was $41.2 million or 48.7% of total revenue, compared to $19.9 million in the second quarter of fiscal 2019 or 34.5% of total revenue. Non-GAAP operating loss was $16.6 million, or 19.7% of total revenue, compared to $17.0 million in the second quarter of fiscal 2019, or 29.3% of total revenue.
  • GAAP loss per share was $0.31, compared to $0.90 in the second quarter of fiscal 2019. Non-GAAP loss per share was $0.12, compared to $0.18 in the second quarter of fiscal 2019.
  • Cash and Cash Equivalents were $356.0 million as of July 31, 2019.

Financial Outlook

The Company is providing the following guidance for its third quarter fiscal 2020:

  • Total revenue is expected to be between $85.5 and $86.5 million.
  • Non-GAAP operating margin is expected to be between negative 19.0% and 20.0%.

The Company is updating its previous guidance provided on May 28, 2019 for full year fiscal 2020:

  • Total revenue is now expected to be between $339 and $343 million (was between $326 and $331 million).
  • Non-GAAP operating margin is now expected to be between negative 19.5% and 20.5% (was between negative 22.5% and 23.5%).

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, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant.

Recent Highlights

Webcast and Conference Call Information

Anaplan will host a conference call for investors on August 27, 2019 at 5:30 a.m. Pacific Time and 8:30 a.m. Eastern Time to share the company’s financial results and business highlights. Investors are invited to listen to a live webcast of the conference call by visiting https://investors.anaplan.com. A replay of the webcast will be available for one year. The call can also be accessed live via phone by dialing (877) 823-8690 or, for international callers, (647) 689-4061 with conference ID 3130219. An audio replay will be available shortly after the call and can be accessed by dialing (800) 585-8367 or, for international callers (416) 621-4642. The passcode for the replay is 3130219.

About Anaplan

Anaplan, Inc. (PLAN) is pioneering the category of Connected Planning. Our platform, powered by our proprietary Hyperblock™ technology, purpose-built for Connected Planning, enables dynamic, collaborative, and intelligent planning. Large global enterprises use our solution to connect people, data, and plans to enable real-time planning and decision-making in rapidly changing business environments to give our customers a competitive advantage. Based in San Francisco, we have over 20 offices globally, 175 partners, and more than 1,250 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, in particular, the quotations from management, financial outlook and earnings guidance, statements about the Company’s plans, strategies and prospects, estimates of enterprise cloud-market growth, market demand, competitive position, current expectations and projections about future 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: 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; due to our 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; because we derive substantially all of our revenue from a single software platform, failure of our Connected Planning solutions in general and our platform in particular to satisfy customer demands or to achieve increased market acceptance would adversely affect our business, results of operations, financial condition, and growth prospects; 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 failure to achieve renewals and expansions may result in a material adverse effect on our business operations; 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; 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; we have experienced rapid growth in recent periods and expect to continue to invest in our growth for the foreseeable future; if we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges; 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; 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. 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 quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission on June 10, 2019 , the “Risk Factors” section of which is incorporated into this press release by reference, and other documents filed with or furnished to the Securities and Exchange Commission. 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,

2019

2018

2019

2018

Revenue:
Subscription revenue

$

73,598

 

$

49,618

 

$

138,683

 

$

94,539

 

Professional services revenue

 

10,942

 

 

8,210

 

 

21,687

 

 

14,839

 

Total revenue

 

84,540

 

 

57,828

 

 

160,370

 

 

109,378

 

Cost of revenue:
Cost of subscription revenue (1)

 

12,207

 

 

8,788

 

 

23,298

 

 

16,574

 

Cost of professional services revenue (1)

 

10,300

 

 

7,171

 

 

20,786

 

 

13,417

 

Total cost of revenue

 

22,507

 

 

15,959

 

 

44,084

 

 

29,991

 

Gross profit

 

62,033

 

 

41,869

 

 

116,286

 

 

79,387

 

Operating expenses:
Research and development (1)

 

16,442

 

 

12,158

 

 

31,501

 

 

23,849

 

Sales and marketing (1)

 

63,997

 

 

38,617

 

 

120,287

 

 

77,922

 

General and administrative (1)

 

22,801

 

 

11,042

 

 

42,814

 

 

22,870

 

Total operating expenses

 

103,240

 

 

61,817

 

 

194,602

 

 

124,641

 

Loss from operations

 

(41,207

)

 

(19,948

)

 

(78,316

)

 

(45,254

)

Interest income, net

 

1,339

 

 

36

 

 

2,590

 

 

125

 

Other income (expense), net

 

548

 

 

(229

)

 

302

 

 

(640

)

Loss before income taxes

 

(39,320

)

 

(20,141

)

 

(75,424

)

 

(45,769

)

Provision for income taxes

 

(1,322

)

 

(907

)

 

(2,409

)

 

(1,460

)

Net loss

$

(40,642

)

$

(21,048

)

$

(77,833

)

$

(47,229

)

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

$

(0.31

)

$

(0.90

)

$

(0.62

)

$

(2.10

)

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

 

129,549

 

 

23,338

 

 

126,277

 

 

22,453

 

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

$

637

 

$

75

 

$

1,128

 

$

138

 

Cost of professional services revenue

 

546

 

 

79

 

 

1,038

 

 

118

 

Research and development

 

2,494

 

 

277

 

 

4,330

 

 

536

 

Sales and marketing

 

8,184

 

 

1,151

 

 

14,801

 

 

2,036

 

General and administrative

 

8,258

 

 

1,358

 

 

15,124

 

 

2,072

 

Total stock-based compensation expense

$

20,119

 

$

2,940

 

$

36,421

 

$

4,900

 

 
Preliminary Consolidated Balance Sheets
(In thousands)
(Unaudited)

As of

July 31,

January 31,

2019

2019

ASSETS
Current assets:
Cash and cash equivalents

$

355,955

 

$

326,863

 

Accounts receivable, net

 

81,835

 

 

92,597

 

Deferred commissions, current portion

 

19,936

 

 

15,827

 

Prepaid expenses and other current assets

 

17,315

 

 

13,377

 

Total current assets

 

475,041

 

 

448,664

 

Property and equipment, net

 

44,682

 

 

43,340

 

Deferred commissions, net of current portion

 

43,109

 

 

35,063

 

Operating lease right-of-use asset

 

37,726

 

 

-

 

Other noncurrent assets

 

1,910

 

 

1,702

 

TOTAL ASSETS

$

602,468

 

$

528,769

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

7,286

 

$

6,182

 

Accrued expenses

 

73,603

 

 

52,570

 

Deferred revenue, current portion

 

164,904

 

 

149,611

 

Operating lease liabilities, current portion

 

7,980

 

 

-

 

Total current liabilities

 

253,773

 

 

208,363

 

Deferred revenue, net of current portion

 

2,085

 

 

1,232

 

Operating lease liabilities, net of current portion

 

33,044

 

 

-

 

Other noncurrent liabilities

 

9,529

 

 

11,696

 

TOTAL LIABILITIES

 

298,431

 

 

221,291

 

Stockholders' equity:
Common stock

 

13

 

 

12

 

Accumulated other comprehensive loss

 

(1,007

)

 

(3,036

)

Additional paid-in capital

 

726,100

 

 

653,738

 

Accumulated deficit

 

(421,069

)

 

(343,236

)

TOTAL STOCKHOLDERS' EQUITY

 

304,037

 

 

307,478

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

602,468

 

$

528,769

 

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

Six Months Ended July 31,

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss

$

(77,833

)

$

(47,229

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization

 

9,073

 

 

5,437

 

Amortization of deferred commissions

 

8,761

 

 

5,166

 

Stock-based compensation

 

36,421

 

 

4,900

 

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

 

4,987

 

 

-

 

Loss on disposal of property and equipment

 

128

 

 

457

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

10,213

 

 

10,461

 

Prepaid expenses and other current assets

 

(4,093

)

 

1,924

 

Other noncurrent assets

 

(266

)

 

(2,777

)

Deferred commissions

 

(21,587

)

 

(12,634

)

Accounts payable and accrued expenses

 

23,364

 

 

8,423

 

Deferred revenue

 

20,529

 

 

9,388

 

Payments for operating lease liabilities

 

(4,790

)

 

-

 

Other noncurrent liabilities

 

(1,712

)

 

789

 

Net cash provided by (used in) operating activities

 

3,195

 

 

(15,695

)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment

 

(1,603

)

 

(12,419

)

Capitalized internal-use software

 

(5,051

)

 

(3,379

)

Net cash used in investing activities

 

(6,654

)

 

(15,798

)

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

 

14,739

 

 

2,876

 

Proceeds from repayment of promissory notes

 

12,148

 

 

236

 

Proceeds from employee stock purchase plan

 

9,088

 

 

-

 

Principal payments on capital lease obligations

 

(2,382

)

 

(146

)

Net cash provided by financing activities

 

33,593

 

 

2,966

 

Effect of exchange rate changes on cash and cash equivalents

 

(1,042

)

 

(1,541

)

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

 

29,092

 

 

(30,068

)

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

 

326,863

 

 

117,026

 

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

$

355,955

 

$

86,958

 

 
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,

2019

2018

2019

2018

 
Revenue

$

84,540

 

$

57,828

 

$

160,370

 

$

109,378

 

 
GAAP operating loss

$

(41,207

)

$

(19,948

)

$

(78,316

)

$

(45,254

)

Stock-based compensation

 

20,119

 

 

2,940

 

 

36,421

 

 

4,900

 

Employer payroll tax expense related to employee stock plans

 

4,447

 

 

-

 

 

5,129

 

 

-

 

Amortization of acquired intangibles

 

-

 

 

53

 

 

35

 

 

106

 

Non-GAAP operating loss

$

(16,641

)

$

(16,955

)

$

(36,731

)

$

(40,248

)

GAAP operating margin %

 

-48.7

%

 

-34.5

%

 

-48.8

%

 

-41.4

%

Stock-based compensation %

 

23.8

%

 

5.1

%

 

22.7

%

 

4.5

%

Employer payroll tax expense related to employee stock plans %

 

5.2

%

 

0.0

%

 

3.2

%

 

0.0

%

Amortization of acquired intangibles %

 

0.0

%

 

0.1

%

 

0.0

%

 

0.1

%

Non-GAAP operating margin %

 

-19.7

%

 

-29.3

%

 

-22.9

%

 

-36.8

%

 
GAAP net loss

$

(40,642

)

$

(21,048

)

$

(77,833

)

$

(47,229

)

Stock-based compensation

 

20,119

 

 

2,940

 

 

36,421

 

 

4,900

 

Employer payroll tax expense related to employee stock plans

 

4,447

 

 

-

 

 

5,129

 

 

-

 

Amortization of acquired intangibles

 

-

 

 

53

 

 

35

 

 

106

 

Non-GAAP net loss

$

(16,076

)

$

(18,055

)

$

(36,248

)

$

(42,223

)

 
GAAP net loss per share, basic and diluted

$

(0.31

)

$

(0.90

)

$

(0.62

)

$

(2.10

)

Stock-based compensation

 

0.16

 

 

0.13

 

 

0.29

 

 

0.22

 

Employer payroll tax expense related to employee stock plans

 

0.03

 

 

-

 

 

0.04

 

 

-

 

Amortization of acquired intangibles

 

-

 

 

0.00

 

 

0.00

 

 

0.00

 

Impact of difference in number of GAAP and non-GAAP shares

 

-

 

 

0.59

 

 

-

 

 

1.45

 

Non-GAAP net loss per share

$

(0.12

)

$

(0.18

)

$

(0.29

)

$

(0.43

)

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

 

129,549

 

 

23,338

 

 

126,277

 

 

22,453

 

Weighted average effect of the assumed conversion of convertible preferred stock from the date of issuance

 

-

 

 

73,606

 

 

-

 

 

73,606

 

Weighted average effect of the assumed vesting of restricted stock unit from the date of issuance

 

-

 

 

1,662

 

 

-

 

 

1,512

 

Shares used to compute Non-GAAP net loss per share

 

129,549

 

 

98,606

 

 

126,277

 

 

97,571

 

 
GAAP net cash provided by (used in) operating activities

$

5,095

 

$

(6,893

)

$

3,195

 

$

(15,695

)

Purchase of property and equipment

 

(681

)

 

(6,666

)

 

(1,603

)

 

(12,419

)

Capitalized internal-use software

 

(2,890

)

 

(1,765

)

 

(5,051

)

 

(3,379

)

Non-GAAP free cash flow

$

1,524

 

$

(15,324

)

$

(3,459

)

$

(31,493

)

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 sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, 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.

Internal-use software. We include capitalization and the subsequent amortization of internal-use software, which is a non-cash expense, in certain of our non-GAAP financial measures. We capitalize certain costs incurred for the development of computer software for internal use and then amortize those costs over the estimated useful life. Capitalization and amortization of software development costs can vary significantly depending on the timing of products reaching technological feasibility and being made generally available.

Purchase of property and equipment. We include purchase of property and equipment in certain of our non-GAAP financial measures, such as free cash flow. Our management reviews cash flows generated from operations after taking into consideration capital expenditures such as purchase of property and equipment as these expenditures are considered to be a necessary component of ongoing operations.

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.

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