Third Quarter Subscription Revenue up 33.1% Year-Over-Year
Remaining Performance Obligation of $923.2 million, up 24.8% Year-Over-Year
Dollar-Based Net Expansion of 119%

Anaplan, Inc. (NYSE:PLAN), provider of a leading cloud-native platform for orchestrating business performance, today announced financial results for its third quarter ended October 31, 2021.

"With a constantly changing environment, we solve our customers' complex challenges. I am excited about our innovation with the Anaplan Autonomous Enterprise, which provides a real-time, scalable, and intelligent approach to plan, analyze and act," said Frank Calderoni, chief executive officer of Anaplan. "We delivered another solid quarter and the robust demand for an enterprise-wide planning solution positions us well to capitalize on growth opportunities."

Third Quarter Fiscal 2022 Financial Results

Total revenue was $155.3 million, an increase of 35.2% year-over-year. Subscription revenue was $139.3 million, an increase of 33.1% year-over-year.
GAAP operating loss was $48.2 million or 31.0% of total revenue, compared to $35.9 million in the third quarter of fiscal 2021 or 31.2% of total revenue. Non-GAAP operating loss was $6.9 million or 4.4% of total revenue, compared to $6.1 million in the third quarter of fiscal 2021 or 5.3% of total revenue.
GAAP loss per share was $0.28, compared to $0.26 in the third quarter of fiscal 2021. Non-GAAP loss per share was $0.05, flat compared to the third quarter of fiscal 2021.
Cash and Cash Equivalents were $312.4 million as of October 31, 2021.

Financial Outlook

The company is providing the following guidance for its fourth quarter fiscal 2022:

Total revenue is expected to be between $154.0 and $155.0 million.
Non-GAAP operating margin is expected to be between negative 10.0% and 11.0%.
As a baseline for third quarter, we expect billings to be in the range of $213 million to $214 million.

The company is updating its previous guidance provided on August 31, 2021 for its full year fiscal 2022:

Total revenue is expected to be between $583.5 and $584.5 million (was between $571.5 and $573.5 million).
Non-GAAP operating margin is expected to be between negative 7.5% and 8.5%.

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 introduced next-generation Anaplan Polaris™ Calculation Engine for early adopters
Anaplan on AWS launched on the AWS Marketplace for customers in the United States
Anaplan on Google Cloud Platform launched for customers in Japan, the partnership's second market
Anaplan announced as a Google Cloud partner for Supply Chain Twin solution
Gartner named Anaplan a 2021 Gartner Peer Insights Customers' Choice for Cloud Financial Planning & Analysis Solutions and Sales Performance Management
Correlation One and Anaplan expanded Anaplan for All to help customers and partners build diverse Anaplan talent ecosystems

Webcast and Conference Call Information

Event: Anaplan Third Quarter Fiscal Year 2022 Earnings Conference Call

When: Tuesday, November 23, 2021

Time: 2:00 p.m. PT / 5:00 p.m. ET

Live Call: Please see online registration

Replay: (800) 770-2030 or (647) 362-9199 with passcode 47794

Live Webcast: https://investors.anaplan.com or with replay available for 12 months

Upcoming Investor Events

Anaplan management will be participating in the following investor conferences:

Barclays Global Technology, Media and Telecommunications Conference

Tuesday, December 7, 2021

10:50am PT/1:50pm ET

About Anaplan

Anaplan (NYSE:PLAN) is a transformative way to see, plan, and run your business. Using our proprietary Hyperblock™ technology, Anaplan lets you contextualize real-time performance, and forecast future outcomes for faster, confident decisions. Because connecting strategy and plans to collaborative execution across your enterprise is required to move business FORWARD today. Based in San Francisco, Anaplan has over 175 partners and more than 1,800 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 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 the results of such use, statements regarding the need for, or interest in, enterprise planning or digital transformation, statements about the company's plans, strategies and prospects, statements about offerings, solutions, services and functionality, statements regarding growth and momentum, statements about customers' challenges, plans and priorities, the financial outlook and guidance, which may include expected GAAP and non-GAAP financial and other results, for the company's fourth fiscal quarter ending January 31, 2022 and for the full fiscal year ending January 31, 2022 and the underlying assumptions, 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 following risks: the ongoing COVID-19 pandemic, and resulting global economic uncertainty, has 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; our recent revenue growth rates may not be indicative of our future performance or growth; 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 near future; our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business; we have experienced rapid growth and expect to continue to invest in our growth in the future, and 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 and our business, financial condition and results of operations may be adversely affected; we derive substantially all of our revenue from a single software platform and if our platform fails to satisfy customer demands or to achieve widespread market acceptance it would adversely affect our business, operating results, 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 if we fail to achieve renewals or expansions or our customers renew or expand their subscriptions on less favorable terms or if they fail to add more users in more functional areas or upgrade to a higher level of functionality on our platform, our business and operating results will be adversely affected; failure to effectively expand our sales and marketing capabilities, including to hire and retain direct sales personnel, could harm our ability to increase our customer base and achieve broader market acceptance of our service; our growth depends in part on the success of our strategic relationships with third parties and their continued performance; if our customers and partners do not have access to highly skilled and trained users of our platform, our customers may not be able to unlock the full potential of our platform, customer satisfaction may suffer, and our results of operations, financial condition and growth prospects may be adversely affected; if we fail to continue to enhance our platform, satisfy the cloud infrastructure priorities of our clients or adapt to rapid technological change, our ability to remain competitive could be impaired; if we experience a security incident affecting our platform, networks, systems or data or the data of our customers, or are perceived to have experienced such 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 depend on the experience and expertise of our senior management team and certain key employees, especially engineering, research and development and sales personnel, and our inability to retain these executive officers and key employees or recruit them in a timely manner, could harm our business, operating results, and financial condition; 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; we collect, process and store personal information and furthermore, our platform could be used by customers to do the same, and evolving domestic and international privacy and security laws, regulations and other obligations could result in additional costs and liabilities to us or inhibit sales of our platform. 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 annual report on Form 10-K filed with the SEC on March 12, 2021, 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 Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
(In thousands, except per share amounts)	2021			2020			2021			2020
Revenue:
Subscription revenue	$	139,343		$	104,707		$	388,437		$	295,648
Professional services revenue	16,005			10,168			41,060			29,582
Total revenue	155,348			114,875			429,497			325,230
Cost of revenue:
Cost of subscription revenue (1)	25,627			19,187			69,601			50,520
Cost of professional services revenue (1)	16,512			10,188			41,586			29,037
Total cost of revenue	42,139			29,375			111,187			79,557
Gross profit	113,209			85,500			318,310			245,673
Operating expenses:
Research and development (1)	40,782			24,629			110,211			72,986
Sales and marketing (1)	92,859			73,893			277,610			218,481
General and administrative (1)	27,732			22,851			77,362			66,514
Total operating expenses	161,373			121,373			465,183			357,981
Loss from operations	(48,164		)	(35,873		)	(146,873		)	(112,308		)
Interest income (expense), net	(122		)	(208		)	(404		)	119
Other income (expense), net	(368		)	(291		)	(3,202		)	3,385
Loss before income taxes	(48,654		)	(36,372		)	(150,479		)	(108,804		)
Benefit from (provision for) income taxes	7,676			(420		)	6,889			(3,114		)
Net loss	$	(40,978	)	$	(36,792	)	$	(143,590	)	$	(111,918	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.28	)	$	(0.26	)	$	(0.99	)	$	(0.81	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	146,966			140,603			145,549			138,448
(1) Includes stock-based compensation expense as follows:
Cost of subscription revenue	$	2,184		$	953		$	5,536		$	2,537
Cost of professional services revenue	1,170			506			2,992			1,706
Research and development	9,748			5,235			25,098			13,261
Sales and marketing	16,907			12,570			51,604			33,814
General and administrative	8,984			7,696			23,292			23,114
Total stock-based compensation expense	$	38,993		$	26,960		$	108,522		$	74,432

Preliminary Condensed Consolidated Balance Sheets (In thousands) (Unaudited)

	As of
	October 31, 2021		January 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	312,367	$	320,990
Accounts receivable, net	138,825		147,005
Deferred commissions, current portion	43,309		36,797
Prepaid expenses and other current assets	27,295		24,252
Total current assets	521,796		529,044
Property and equipment, net	60,912		51,603
Deferred commissions, net of current portion	92,787		82,405
Goodwill	32,379		32,379
Operating lease right-of-use asset	33,587		33,985
Other noncurrent assets	17,027		9,709
TOTAL ASSETS	$	758,488	$	739,125
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	10,227	$	7,949
Accrued expenses	103,651		101,507
Deferred revenue, current portion	320,064		287,778
Operating lease liabilities, current portion	9,576		7,951
Total current liabilities	443,518		405,185
Deferred revenue, net of current portion	3,658		7,765
Operating lease liabilities, net of current portion	28,580		30,130
Other noncurrent liabilities	17,652		18,032
TOTAL LIABILITIES	493,408		461,112
Stockholders' equity:
Common stock	14		14
Accumulated other comprehensive loss	(9,338)		(7,528)
Additional paid-in capital	1,064,972		932,505
Accumulated deficit	(790,568)		(646,978)
TOTAL STOCKHOLDERS' EQUITY	265,080		278,013
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	758,488	$	739,125

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

	Nine Months Ended October 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(143,590	)	$	(111,918	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	21,465			18,934
Amortization of deferred commissions	31,003			24,418
Stock-based compensation	108,522			74,432
Reduction of operating lease right-of-use assets and accretion of operating lease liabilities	7,549			7,642
Foreign currency remeasurement losses (gains)	1,565			(3,178		)
Release of deferred tax valuation allowance	(7,639		)	—
Other non-cash items	582			2,609
Changes in operating assets and liabilities:
Accounts receivable	7,241			(22,012		)
Prepaid expenses and other current assets	(3,143		)	1,290
Other noncurrent assets	(698		)	(1,376		)
Deferred commissions	(49,292		)	(43,439		)
Accounts payable and accrued expenses	5,620			10,271
Deferred revenue	29,304			26,831
Payments for operating lease liabilities, net	(6,956		)	(6,907		)
Other noncurrent liabilities	554			7,468
Net cash provided by (used in) operating activities	2,087			(14,935		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(9,089		)	(5,243		)
Capitalized internal-use software	(10,207		)	(7,666		)
Net cash used in investing activities	(19,296		)	(12,909		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	7,891			12,575
Proceeds from employee stock purchase plan	11,514			9,481
Principal payments on capital lease obligations	(7,579		)	(6,160		)
Net cash provided by financing activities	11,826			15,896
Effect of exchange rate changes on cash and cash equivalents	(3,240		)	1,005
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(8,623		)	(10,943		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period	320,990			309,894
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period	$	312,367		$	298,951

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

	Three Months Ended October 31,								Nine Months Ended October 31,
(In thousands, except percentages and per share amounts)	2021				2020				2021				2020
Revenue	$	155,348			$	114,875			$	429,497			$	325,230
GAAP operating loss	$	(48,164	)		$	(35,873	)		$	(146,873	)		$	(112,308	)
Stock-based compensation	38,993				26,960				108,522				74,432
Employer payroll tax expense related to employee stock plans	1,334				1,622				4,936				4,982
Business combination and other related cost	644				880				2,205				2,835
Amortization of acquired intangibles	335				335				1,005				1,005
Non-GAAP operating loss	$	(6,858	)		$	(6,076	)		$	(30,205	)		$	(29,054	)
GAAP operating margin %	-31.0			%	-31.2			%	-34.2			%	-34.5			%
Stock-based compensation %	25.1			%	23.5			%	25.3			%	22.9			%
Employer payroll tax expense related to employee stock plans %	0.9			%	1.4			%	1.2			%	1.5			%
Business combination and other related cost %	0.4			%	0.7			%	0.5			%	0.9			%
Amortization of acquired intangibles %	0.2			%	0.3			%	0.2			%	0.3			%
Non-GAAP operating margin %	-4.4			%	-5.3			%	-7.0			%	-8.9			%
GAAP net loss	$	(40,978	)		$	(36,792	)		$	(143,590	)		$	(111,918	)
Stock-based compensation	38,993				26,960				108,522				74,432
Employer payroll tax expense related to employee stock plans	1,334				1,622				4,936				4,982
Business combination and other related cost	644				880				2,205				2,835
Amortization of acquired intangibles	335				335				1,005				1,005
Non-GAAP tax adjustments	(7,639		)		—				(7,639		)		1,250
Non-GAAP net loss	$	(7,311	)		$	(6,995	)		$	(34,561	)		$	(27,414	)
GAAP net loss per share, basic and diluted	$	(0.28	)		$	(0.26	)		$	(0.99	)		$	(0.81	)
Stock-based compensation	0.27				0.19				0.74				0.54
Employer payroll tax expense related to employee stock plans	0.01				0.01				0.03				0.03
Business combination and other related cost	—				0.01				0.02				0.02
Amortization of acquired intangibles	—				—				0.01				0.01
Non-GAAP tax adjustments	(0.05		)		—				(0.05		)		0.01
Non-GAAP net loss per share	$	(0.05	)		$	(0.05	)		$	(0.24	)		$	(0.20	)
Shares used to compute GAAP net loss per share attributable to common stockholders, basic and diluted	146,966				140,603				145,549				138,448
Shares used to compute Non-GAAP net loss per share	146,966				140,603				145,549				138,448
GAAP net cash provided by (used in) operating activities	$	5,560			$	(6,479	)		$	2,087			$	(14,935	)
Purchase of property and equipment	(2,721		)		(247		)		(9,089		)		(5,243		)
Capitalized internal-use software	(3,672		)		(2,286		)		(10,207		)		(7,666		)
Non-GAAP free cash flow	$	(833	)		$	(9,012	)		$	(17,209	)		$	(27,844	)

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 and release of deferred tax valuation allowance 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211123006102/en/

Anaplan Announces Third Quarter Fiscal Year 2022 Financial Results