Market Overview

Anaplan Announces First Quarter Fiscal Year 2020 Financial Results

Share:
  • First Quarter Subscription Revenue grew 45% year-over-year
  • Dollar-Based Net Expansion Rate of 123%

Anaplan,
Inc.
(NYSE:PLAN), a pioneer in Connected Planning, today announced
financial results for its first quarter ended April 30, 2019.

"We are very pleased to start our fiscal year with strong first quarter
results. This is an indication of our continued success with our
Connected Planning solution," said Frank Calderoni, chief executive
officer at Anaplan. "Our customers are consistently impressed with the
value they receive from the results of deploying Anaplan across their
enterprise. We are excited many of them will be showcasing these results
at our global Connected Planning Xperience in San Francisco in June."

First Quarter Fiscal 2020 Financial Results

  • Total revenue was $75.8 million, an increase of 47% year-over-year.
    Subscription revenue was $65.1 million, an increase of 45%
    year-over-year.
  • GAAP operating loss was $37.1 million or 48.9% of total revenue,
    compared to $25.3 million in the first quarter of fiscal 2019 or 49.1%
    of total revenue. Non-GAAP operating loss was $20.1 million, or 26.5%
    of total revenue, compared to $23.3 million in the first quarter of
    fiscal 2019, or 45.2% of total revenue.
  • GAAP loss per share was $0.30, compared to $1.21 in the first quarter
    of fiscal 2019. Non-GAAP loss per share was $0.16, compared to $0.25
    in the first quarter of fiscal 2019.
  • Cash and Cash Equivalents were $332.7 million as of April 30, 2019.

Financial Outlook

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

  • Total revenue is expected to be between $77.5 and $78.5 million.
  • Non-GAAP operating margin is expected to be between negative 25.5% and
    26.5%.

The Company is updating its previous guidance provided on February 25,
2019 for full year fiscal 2020:

  • Total revenue is now expected to be between $326 and $331 million (was
    between $310 and $314 million).
  • Non-GAAP operating margin is now expected to be between negative 22.5%
    and 23.5% (was between negative 26% and 27%).

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

  • Anaplan Positioned as a Leader
    in 2019 Gartner Magic Quadrant
    for Sales and Operations Planning
    Systems of Differentiation.
  • MUFG Investor Services announces their
    choice to use Anaplan for clients' real-time planning processes.
  • Anaplan announces CPX
    2019
     in San Francisco, expected to welcome over 2000 attendees
    from around the world June 10-12.

Webcast and Conference Call Information

Anaplan
will host a conference call for investors on May 28, 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 6973538. 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 6973538.

About Anaplan

Anaplan (NYSE: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 1,150 customers
worldwide.

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 annual report on Form 10-K filed with the
U.S. Securities and Exchange Commission on March 29, 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 April 30,

2019   2018
Revenue:
Subscription revenue $ 65,085 $ 44,921
Professional services revenue   10,745     6,629  
Total revenue 75,830 51,550
Cost of revenue:
Cost of subscription revenue (1) 11,091 7,786
Cost of professional services revenue (1)   10,486     6,246  
Total cost of revenue 21,577 14,032
Gross profit 54,253 37,518
Operating expenses:
Research and development (1) 15,059 11,691
Sales and marketing (1) 56,290 39,305
General and administrative (1)   20,013     11,828  
Total operating expenses   91,362     62,824  
Loss from operations (37,109 ) (25,306 )
Interest income, net 1,251 89
Other expense, net   (246 )   (411 )
Loss before income taxes (36,104 ) (25,628 )
Provision for income taxes   (1,087 )   (553 )
Net loss $ (37,191 ) $ (26,181 )
Net loss per share attributable to common stockholders,

basic and diluted

$ (0.30 ) $ (1.21 )
Weighted-average shares used in computing net loss per share

attributable to common stockholders, basic and diluted

  122,992     21,587  
 
 
(1) Includes stock-based compensation expense as follows:
Cost of subscription revenue $ 491 $ 63
Cost of professional services revenue 492 39
Research and development 1,836 259
Sales and marketing 6,617 885
General and administrative   6,866     714  
Total stock-based compensation expense $ 16,302   $ 1,960  
 
   
Preliminary Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of
April 30, January 31,
2019 2019
ASSETS
Current assets:
Cash and cash equivalents $ 332,678 $ 326,863
Accounts receivable, net 91,830 92,597
Deferred commissions, current portion 17,379 15,827
Prepaid expenses and other current assets   12,802     13,377  
Total current assets 454,689 448,664
Property and equipment, net 45,326 43,340

Deferred commissions, net of current portion

37,227 35,063
Operating lease right-of-use asset 36,567 -
Other noncurrent assets   2,174     1,702  
TOTAL ASSETS $ 575,983   $ 528,769  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,538 $ 6,182
Accrued expenses 57,230 52,570
Deferred revenue, current portion 161,426 149,611
Operating lease liabilities, current portion   7,604     -  
Total current liabilities 233,798 208,363
Deferred revenue, net of current portion 738 1,232
Operating lease liabilities, net of current portion 32,136 -
Other noncurrent liabilities   11,449     11,696  
TOTAL LIABILITIES   278,121     221,291  
Stockholders' equity:
Common stock 12 12
Accumulated other comprehensive loss (3,302 ) (3,036 )
Additional paid-in capital 681,579 653,738
Accumulated deficit   (380,427 )   (343,236 )
TOTAL STOCKHOLDERS' EQUITY   297,862     307,478  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 575,983   $ 528,769  
 
   
Preliminary Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended April 30,
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (37,191 ) $ (26,181 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 4,355 2,428
Amortization of deferred commissions 4,139 2,534
Stock-based compensation 16,302 1,960
Amortization of operating lease right-of-use assets and accretion of
operating lease liabilities
2,442 -
Loss on disposal of property and equipment - 457
Changes in operating assets and liabilities:
Accounts receivable, net 278 9,501
Prepaid expenses and other current assets 518 460
Other noncurrent assets (513 ) (1,158 )
Deferred commissions (8,191 ) (5,807 )
Accounts payable and accrued expenses 6,470 824
Deferred revenue 12,061 5,086
Payments for operating lease liabilities (2,361 ) -
Other noncurrent liabilities   (209 )   1,094  
Net cash used in operating activities (1,900 ) (8,802 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (922 ) (5,753 )
Capitalized internal-use software   (2,161 )   (1,614 )
Net cash used in investing activities (3,083 ) (7,367 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 3,004 1,081
Proceeds from repayment of promissory notes 9,280 222
Principal payments on capital lease obligations   (1,088 )   -  
Net cash provided by financing activities 11,196 1,303
Effect of exchange rate changes on cash and cash equivalents   (398 )   (607 )
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH
5,815 (15,473 )
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period   326,863     117,026  
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period $ 332,678   $ 101,553  
 
   
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except percentages and per share amounts)
(Unaudited)
Three Months Ended April 30,
2019 2018
 
Revenue $ 75,830 $ 51,550
 
GAAP operating loss $ (37,109 ) $ (25,306 )
Stock-based compensation 16,302 1,960
Employer payroll tax expense related to employee stock plans 682 -
Amortization of acquired intangibles   35     53  
Non-GAAP operating loss $ (20,090 ) $ (23,293 )
GAAP operating margin % -48.9 % -49.1 %
Stock-based compensation % 21.5 % 3.8 %
Employer payroll tax expense related to employee stock plans % 0.9 % 0.0 %
Amortization of acquired intangibles %   0.0 %   0.1 %
Non-GAAP operating margin %   -26.5 %   -45.2 %
 
GAAP net loss $ (37,191 ) $ (26,181 )
Stock-based compensation 16,302 1,960
Employer payroll tax expense related to employee stock plans 682 -
Amortization of acquired intangibles   35     53  
Non-GAAP net loss $ (20,172 ) $ (24,168 )
 
GAAP net loss per share, basic and diluted $ (0.30 ) $ (1.21 )
Stock-based compensation 0.13 0.09
Employer payroll tax expense related to employee stock plans 0.01 0.00
Amortization of acquired intangibles 0.00 0.00
Impact of difference in number of GAAP and non-GAAP shares   (0.00 )   0.87  
Non-GAAP net loss per share $ (0.16 ) $ (0.25 )
 
Shares used to compute GAAP net loss per share attributable to
common stockholders, basic and diluted
122,992 21,587
Weighted average effect of the assumed conversion of convertible
preferred stock from the date of issuance
- 73,606
Weighted average effect of the assumed vesting of restricted stock
unit from the date of issuance
  -     1,357  
Shares used to compute Non-GAAP net loss per share   122,992     96,550  
 
GAAP net cash used in operating activities $ (1,900 ) $ (8,802 )
Purchase of property and equipment (922 ) (5,753 )
Capitalized internal-use software   (2,161 )   (1,614 )
Non-GAAP free cash flow $ (4,983 ) $ (16,169 )
 

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.

View Comments and Join the Discussion!