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spk04: Ladies and gentlemen, thank you for standing by and welcome to the ANAPLAN third quarter fiscal 2021 earnings conference call. At this time, all participant lines are on mute. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your speaker today, Annalita Tchepko, Vice President, Investor Relations. Please go ahead.
spk01: Good morning. Thank you for joining us on today's conference call to discuss Anaplan's third quarter fiscal year 2021 financial results. Joining me on the call are Frank Calderoni, our Chief Executive Officer, and Dave Morton, our Chief Financial Officer. On this call, we will be making forward-looking statements, including financial guidance and expectations for fourth quarter and fiscal year 2021. anticipated future operating and financial performance, strategies, customer demand, product, and technologies. These statements reflect our best judgment based on factors currently known to us and actual events or results may differ materially. Please refer to documents we filed with the SEC, including the Form 8-K filed with today's press release. Those documents contain risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements. These forward-looking statements are being made as of today and we disclaim any obligation to update or revise these statements. If this call is reviewed after today, the information presented during this call may not be current or accurate. We will also discuss non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles unless otherwise stated during the call. All references to our gross margins, expenses, and operating results are on a non-GAAP basis. For historical periods, a reconciliation of GAAP and non-GAAP results is provided in the press release and in supplemental financial information on our website. And with that, I will now turn the call over to Frank Calderoni.
spk07: Good morning, and thank you for joining us today. This quarter, we continue to execute as companies prioritize investments toward initiatives that drive incremental business value. While the economic backdrop remains challenging with the ongoing impact of the pandemic, we We are at the forefront of helping our customers transform their business. As strategic partners to our customers, there isn't a more urgent time to have connected planning across an enterprise. We are working closely with companies who understand that effective planning is critical to managing their business in a dynamic environment. We have the unique solution with our connected planning platform, which links strategy to execution and operations to financial metrics. Our third quarter's performance is a testament to our focused execution and the exceptional value we drive for our customers. We now have 417 customers with ARR over $250,000. We are also meeting our customers' expectations as a key strategic partner demonstrated by solid customer retention rates. Approximately 60% of bookings this quarter came from existing customers, which is in line with our historical average. Growth in new enterprise logos were also healthy this quarter, reflecting the focus on building a robust pipeline over the last several quarters. Our remaining performance obligations, or RPO balance, exiting the quarter was $740 million, up 25% over the last year. Billings grew 27% year over year, and subscription revenue was up 31% year over year. Our results continue to build on our market leadership, and one of the strategic priorities I'm most proud of has been the focus on building a world-class ecosystem of talent and master anti-planners. This focus on the people element of planning is why we have built a community for planning professionals across a variety of functional backgrounds. The number of certified master anti-planners this quarter continues to grow, up over 50% year over year. Our annual Connected Planning Conference, CPX, is a premier event for this community of talent. This past quarter, we had record attendance at CPX with over 7,000 registered attendees, a 250% increase over the last year. We had strong partner involvement with over 1,000-plus attending CPX, many of them leading speaking engagements and workshops, including Deloitte, Accenture, EY, McKinsey, Bain, and GenPack. We announced several key product updates at CPX. These innovations place the power of our technology into the hands of our end users. We have been working diligently with our customers to provide innovative third-party machine learning engines, and we are expanding the ways to connect to additional data sources. Our vision has been to offer a platform designed to help companies leap forward in their ability to anticipate the future rather than on relying on an archaic, unintelligent technology that only focuses on the past. As an example, our newest innovation called PlanIQ with Amazon Forecast leverages machine learning technologies. Amazon's forecasting algorithms that they use for their own business will now be available for Anaplan customers for a variety of use cases. We believe forecasting is an integral part of any thoughtful planning, and now our customers will be able to improve accuracy through ML-driven forecasting without requiring any machine learning experience. Another platform enhancement we announced is CloudWorks. We have now enabled seamless and bidirectional integration with a variety of cloud-based systems, As the Connected Planning Platform's single source of insights, we know our customers gather data from transactional systems through a variety of mechanisms. A lot of this data and insights is being generated in cloud systems. And in order to make it easier for our customers, we have now automated that data pull from a number of solutions, including AWS, GCP BigQuery, or Azure Data Lake. CloudWorks has simplified this data mechanism and will make it easier for our end users. We also announced a new strategic partnership with Google Cloud, which will enable the expanded reach of Anaplan's platform, access to newer geographies, and empowers customers to use the platform closer to where their users are located. Running in close proximity to a customer's user base helps drive even higher productivity and performance. while also addressing some of the data sovereignty use cases. Enterprise companies are making choices on their preferred or primary public cloud. And the Google Cloud partnership helps us with enterprise prospects and customers. For example, a large retail prospect in Asia Pacific has a deep strategic relationship with Google Cloud. And we're excited to see our commitment to this partnership. They see tremendous benefit in having a connected planning platform running on the same technology stack with deep integrations to other services. Several of our FSI banking customers in EMEA and Asia Pacific are using the Google Cloud technology stack and see significant advantages by having Anaplan also run on this technology for easier integration and data compliance. By leveraging the public cloud, We aim to expand the market penetration of Anaplan. Our new strategic relationship includes a joint go-to-market partnership with systems integrators, including tremendous opportunities for partner-developed solutions across functions and verticals that leverage both Anaplan and Google Cloud technologies. We have articulated every quarter our partner ecosystem is a key part of our strategy. enabling our business to scale both from a services and go-to-market perspective. Our partners' unique role in driving transformation for enterprise companies is also key to ensuring that our customers have access to the leading techniques and processes with our Anaplan platform technology at the center of these transformation efforts. We recently announced our elevated partnership with Deloitte to a global strategic level, demonstrated continued momentum, completing over 300 implementations at global enterprise customers across many different industries. We also have new executive sponsorship with Accenture and EY, and we are building joint offerings in areas such as banking and telecommunications. We saw strong contribution from partners in Q3, where over two-thirds of our top 20 deals had partner influence. The Anaplan value proposition is resonating with our partners. We are at the forefront of many digital transformation discussions, and partners are amplifying the Anaplan value to their customers into other pervasive digital transformation platforms like Salesforce, Adobe, ServiceNow, Workday, and SAP. Anaplan's connected planning platform and growing user community also continues to receive industry recognition. Anaplan was showcased as a leader for the fourth consecutive year in the Gartner Magic Quadrant for cloud financial planning and analysis solutions. We were also named the sole leader in the inaugural Gartner Peer Insights Customer's Choice for Sales Performance Management. Anaplan has moved up from major player to leader in IDC's 2020 vendor assessment for cloud enterprise performance management software. IDC highlights Anaplan as a cloud EPM vendor that approaches this space with the idea that planning encompasses more than just the finance function and labeled Anaplan as one of the larger, pure-play EPM vendors on the market. Despite the uncertainty in this current business environment, our customer wins this quarter underscore the value of Anaplan's unique ability to solve for enterprise-grade operational planning. A common theme across all our customer conversations is the need for significantly more insight into the performance of their business. They now have greater access to data and are looking for ways to identify the dynamic levers that will impact and influence their business outcomes. We recently announced an expansion of our relationship with Shell as part of a multi-year deal to help accelerate their digital transformation. One of our new customers this quarter is a Fortune 50 company who selected Anaplan to radically modernize its sales performance management capabilities. Moving away from a 20-year-old homegrown mainframe-based SPM solution that could no longer keep up with the needs of their business and 10,000-person sales force, this customer needed a platform that could support sales performance management on a larger scale with functionality to support further growth. They wanted the ability to move to more frequent and iterative planning, a better balance to their territories, onboard acquisitions in a shorter timeframe, and provide a better experience to sellers. They chose Anaplan as the only solution that could support a range of different use cases across territory and quota, sale forecasting, incentive comp, and much more, all on a single platform in essence, delivering a connected sales business outcome. Another new customer and large deal this quarter is a leading healthcare distribution company that provides products, education, clinical programs, and services across 13 different distribution channels with over $15 billion in revenue. Anaplan met both the functional and technical requirements. The customer is not just looking for a vendor, but a partner to help transform their current end-to-end processes. Anaplan was the only vendor to cover all requirements with one platform. Our platform's unique ability to extend across an entire operational landscape is what allows us to capture steady follow on business within our existing customer base by deploying the platform in other functional areas within an enterprise. This quarter, A Fortune 50 company expanded its use of Anaplan to now over 10 different use cases, covering over 20 critical go-to-market activities. The ability for thousands of users to collaborate simultaneously, immediate integrations between use cases, and the financial benefits in terms of incremental top-line growth are expected to drive significant ROI for this customer. We also recently kicked off an early access program for our newly announced Plan IQ with multiple customers. For example, the commercial team at a large pharma company will use Plan IQ for the demand forecasting of 2,500 prescription pharmaceutical products sold in over 20 countries. The forecast predicts patient demand for each product. This customer has four years of forecast data sets, which are a combination of internal and external attributes, for use in Early Access Program. Their goal is to use PlanIQ to significantly improve the forecast prediction accuracy while also reducing the resources required to create the forecast and cycle time. In summary, we continue to execute in an environment with the impacts of the ongoing COVID-19 pandemic by delivering value to our customers to help them achieve their digital transformation goals. This year continues to challenge the entire business community, but I am confident in our market leadership as we are strategic partners to enterprise customers. Our product innovation just in the last quarter alone demonstrates our category leadership in connected planning. Finally, I want to thank our customers, partners, investors, and especially our employees who have continued to persevere and remain resilient throughout this time period. Now let me turn over the call to Dave, who will discuss our third quarter financials and outlook.
spk09: Dave? Thank you, Frank, and good morning, everyone. Total revenue for the third quarter was $115 million, up 28% year over year. Within this, subscription revenues grew 31% and comprised 91% of total revenue. Service revenues were $10 million, roughly flat from the third quarter last year, as we continue to maintain our services contributions as a percentage of total revenue. Third quarter billings growth rate improved sequentially. Calculated billings for the third quarter were $145 million, up 27% year-over-year, and represents a sequential improvement compared to last quarter's year-over-year growth rate of 22%. RPO exiting the third quarter was $740 million, up 25% over last year. The current portion of RPO that is expected to be recognized as revenue over the next 12 months is $383 million, up 28% year over year. Turning to additional key metrics, we demonstrated healthy new enterprise growth and ended the quarter with over 1,500 customers. Our dollar-based net expansion rate, or NRR, is 113% this quarter. We remain focused on driving higher volume and expand deals. However, NRR does continue to reflect a lower volume of expand deals as compared to this time last year, primarily due to the impact of COVID-19 on the timing and velocity of deals. There was no change in churn this quarter, and our overall customer retention rate is in line with historical levels. Turning to our profitability metrics, total non-GAAP gross margin was 76 percent, roughly flat year-over-year. Within this, subscription gross margins were 83 percent, down approximately 167 basis points year-over-year, and services gross margins were approximately 5 percent, down four percentage points year-over-year. For the third quarter, non-GAAP operating expenses were 93 million, up from 77 million in the prior year. primarily due to increases in go-to-market investments. We continue to drive leverage in Anaplan's financial model while investing in key areas within go-to-market and product development. Third quarter operating margins were negative 5%, an improvement of approximately 5 percentage points compared to negative 10% in the same period last year. Net loss per share in the third quarter was 5 cents. based on 141 million weighted average shares. Free cash flow for the third quarter was negative 9 million. We demonstrated good working capital management and we experienced minimal deal exception requests for extended payment terms and split billings. We exited the quarter with 297 million in cash and cash equivalents. Looking ahead, while there may be continued economic uncertainty, Digital transformation efforts remain a top priority for many companies. As we mentioned last quarter, we'll continue to remain focused on building a healthy pipeline and driving expansion opportunities with existing customers. For the fourth quarter, we anticipate revenue in the range of $118.5 million to $119.5 million. Within this, we expect services revenues to be in the range of $9.5 million to $10.5 million. In order to provide more visibility during this time of uncertainty, we'll provide a baseline for fourth quarter billings, which we expect to be in the range of $152 million to $153 million. This implies a year-over-year growth rate in the range of 20% to 21%. Non-GAAP operating margin for the fourth quarter is expected to be in the range of negative 10.5% to 11.5%. Weighted average share count is expected to be approximately 143 million shares. As a result of our third quarter performance and guide for fourth quarter, we are raising our four-year revenue guidance to be in the range of $444 million to $445 million. With the continued leverage in our operating model, we expect an improved non-GAAP operating margin to be in the range of negative 9% to 10%, representing a seven percentage point year-over-year improvement Weighted average share count is expected to be approximately 140 million shares. While we've yet to conclude our fiscal year 22 planning cycle, we'd like to provide a preliminary and high-level view as we continue to remain confident in our long-term ability to capture the strong momentum from digital transformation and the value that we bring to our customer base. As such, we are currently planning for preliminary fiscal year 22 revenue of approximately $550 million. In closing, looking beyond next quarter, our runway for growth and large market opportunity remain intact. We will continue to make strategic investments to extend our leadership in this market and drive towards profitable growth. I'll now turn it over to the operator for questions.
spk04: At this point, we will be going to our Q&A session. To allow for as many questions as possible, we ask that you please limit your questions to one question with one related follow-up. In order to ask a question, please press star, then the number one on your telephone keypad. Your first question comes from a line of Alex Lucan with RBC. Alex, your line is open.
spk10: Hey, guys. Thanks for taking the question, and I hope you're all staying safe and well and have a great Thanksgiving. I wanted to ask. just around the selling environment and what you're seeing, the sequential kind of improvements from 2Q to 3Q. And as you look at the pipeline for 4Q, and beyond. It's nice to see the preliminary guide. That's a nice surprise for next year. It gives us a sense of increased confidence. But just walk us through what that demand environment feels like, how it's changed, where you sit today. And then I've got a quick follow-up on the delta between Billings and CNPO.
spk07: Thanks, Alex. Appreciate the question. The first thing I would say is that If you think about the selling cycle, you know, we've continued to be focused as we've progressed through the last few quarters, really on the linear progression of our business, kind of recovering from Q1 to Q2 and to Q3, and then also kind of how we look at Q4. And if you think about the overarching backdrop that we have here, it has to go with a lot of the digital transformation projects. And, you know, as we just mentioned, both Dave and I, That is becoming more and more a top priority for either existing customers or new customers. And we're seeing that more and more. You know, I spend probably every week talking to, on average, five to six, maybe even more, executives at either existing customers and new customers. And they're talking about some of the changes underway in their business, even when they're doing well. and the importance of really kind of focusing on scenario-based planning. So overall, we're seeing that continue and that trend is accelerating. With that backdrop, similar to what we said last quarter, we continue to build a good pipeline, both near-term and long-term, so that pipeline continues to improve based on that. As you saw, you know, we had a good mix this quarter of 60-40, 60% expand, 40% new. So on the Xpand side, which has been our focus over the past two quarters, we are seeing existing customers rethink new opportunity for them to leverage the platform that they have within Anaplan, which is great. On the other side, even our new businesses quarter showed some strength, which was good to see. And so we're building both. We're focusing on Xpand. We're focusing on new platforms. um as we think about the pipeline and that's kind of um i would say a similar type of trend that we're seeing as we uh now enter q4 and also as we think about fy22 and how how that could play out and the continued momentum we see from that perspective so i think that's still about the same from what we saw in q2 as far as the importance of planning within businesses and then secondly for us it's a matter of continuing the execution within the backdrop of a pandemic right and we all have to deal with that uh still for some time and uh that adds always some challenge but i think the important aspect here is companies are looking at the longer term and where they need to position their business i think that's important for us that's great to hear and then maybe just um one for dave
spk10: If I look at the – calculated billing is really strong this quarter at 27%. And then when I look at the CRPO, if we calculate the CRPO subscription bookings, that change in CRPO plus subscription revenue, it's 20% growth. So that's a, you know, it's a delta that's, you know, last quarter it was the other way. It was 22% buildings growth and 29% CRPO subscription bookings growth. Maybe just remind us why that tends to jump around and which one is the better forward-looking indicator.
spk09: Yeah, for sure. Good morning, Alex. You know, when you think about just year-over-year comps, it gets a little more difficult because our FQ3 a year ago, we were coming off of just our all-time high performance pre-pandemic. And so coming into this backdrop and our continued linear progression, as Frank had narrated on, i i would tell you that we're always going to have timing deltas within our billings um you know from quarter to quarter which makes it a little more difficult to provide an even repeatable scalable forecast that looks very clean in that manner with that said we still try to provide our best view at that time with the known timing of renewables, as well as the deals that we have within our pipe. And so we'll continue to provide that baseline. When you think about kind of the context for looking, I still tend to lean on the RPO, the current RPO, because I think that gives you a very clear understanding persona of the true economic and commercial deal ahead of us versus timing of the actual transaction. So hopefully that gives you a good sense of kind of what goes in and around our planning process.
spk10: Is there maybe just another way to ask it? Is there any kind of timing or contractual differences that are important to just, again, that delta? The delta between the current RPO growth and the billings growth is actually very small. But if you look at the change in current RPO, That delta looks pretty meaningful. So just, again, any color on, is there a contractual term duration element here, payment element, any other element that would kind of call that to call out?
spk09: No, everything was pretty standard fare. When you, again, just remind everybody, our standard contracts are three years. We ask for one year up front cash. So that's typical of what generates... our overall RPO. And there's been no change within that contractual duration of that I'll call cohort of RPOs. Perfect. Thank you.
spk04: Our next question comes from the line of Ramo Lenshaw with Barclays. Ramo, your line is open.
spk03: Yes, thanks. A question I had was around the dollar net expansion that you saw there. Frank, you mentioned a little bit, like, customers are looking at it, but then the number that we see, 113, seems a little bit lacking. Could you just talk to that a little bit in more detail to see, like, okay, you know, how does this play out through the model? Many thanks.
spk07: Yeah, Ramo, you know, I would say that, you know, the NRR reflects the overall volume of expand deals, net of churn, as you know. And although at 113 is kind of below what we've normally seen pre-pandemic, the current NRR is really about the fact that the total volume of expand deals booked this past quarter is really not at the same level as it was pre-pandemic. So with a lower volume, that's going to have an impact on the NRR, as we said last quarter. So nothing different than what we said last when we talked about the Q2 number. No large, you know, Dave just mentioned there were no large elevated amount of churn this quarter. You know, we continuously churn the single digit. Overall customer retention rate is in line, which is very positive. So nothing out of the ordinary.
spk03: Okay, perfect.
spk07: Congrats. Thank you.
spk04: Your next question comes from the line of Kirk McTern with Evercore. Kirk, your line is open.
spk05: Thanks very much. Congrats on the quarter. Frank, I was just wondering if you could talk a little bit about sort of just how you think about visibility in your pipeline today, maybe versus, you know, three to six months ago. Obviously, you made some sale changes last year at this time. We've had a pandemic. I mean, there's been a lot to sort of work through, but you guys are putting up good results. And I was just kind of curious about your your confidence level on conversion rates against the, you know, the quality of the pipeline being built and then the conversion rates against that pipeline. Thanks.
spk07: Kurt, good question. I think all of us can kind of reflect back on this past year and say it has been clearly a challenging one. But, you know, similar to what we said throughout the last few quarters, the focus for us kind of coming into COVID was really to kind of get down and focus on building pipeline. And within that pipeline was focusing on existing customers. And within those existing customers, those clearly that had perhaps some ability to invest in the current environment. And I think that's played out well for us because our focus back toward the end of Q1 into Q2 and now in Q3 has been building both short-term and long-term pipelines. And it's all based on transformation projects, and it's also based on some of the solutions that we've been implementing in the last two quarters with our partners around dealing with some of the immediate needs that businesses have had in the finance area, focusing on cash flow, able to do more frequent scenario planning. On supply chain, it's really trying to get more visibility On the sales, it's been primarily around forecasting. So we've seen opportunity in all of these functional parts of our business, and we've been building. You know, if I look at – you asked about the pipeline, the visibility. I feel good about the pipeline that we have at the moment kind of going into Q4, and that's the backdrop of providing the guidance that we just did. And then also I see that pipeline continuing into FY22. So, as I said, we're building more long-term pipeline, and that also gave us a bit more confidence as we think about next year. As Dave mentioned earlier, we've just begun our FY22 planning, and part of that planning kind of takes into consideration the pipeline, the type of pipeline, the projects in the pipeline, both expand as well as new. And the other thing which I really want to highlight, which I think is important for us around the pipeline, is the partner ecosystem. And I know we've talked about this the last two quarters as far as the buildup of investment that partners have been making in their Anaplan consultants. We saw a continued increase in that investment this quarter again by another couple of hundred. And we even had one customer, one partner, I should say, actually mention to us even within the last few weeks that they're pretty much at kind of a, I guess you can say, a sold-out capacity, meaning that they have to do even more hiring because the current consultants that they have are now either engaged in projects or about to be engaged in projects. So I think that's also a good indication, and I think many of you do tend to talk to a lot of our partners and get some good insight. They're seeing the transformation project starting to build, and we're working along with them, making investment as well, not only for Q4, but going into FY22. Great. Thanks, Ryan.
spk04: Your next question comes from the line of Stan Slotsky with Morgan Stanley. Stan, your line is open.
spk11: Hey, perfect. Thank you so much, guys. Well done in Q3. So maybe from my end, how are you guys doing as far as the deals that were pushed out of Q4 of last year and then maybe from the beginning of this year? How are you doing as far as closing those deals? And then I have a quick follow-up.
spk07: So, you know, similar to what we had mentioned in the Q2 timeframe, we closed some of those deals in Q2. uh we closed uh some further deals in q3 um and then we even have some deals in q4 so we felt at that time based on where things were with the mix of our customers that some would be more near term and some would take a little bit more time and i think that continues to play out i think the ones that have taken more time to close happen to be projects that i would say are larger are more complex, and so they needed more time, one, to make sure that they had the right funding, but also more importantly than that, that they had the right skill and support for those projects. And I think as the time has progressed, the importance of those really haven't changed, but the ability for them now to fund and also get the appropriate amount of resource to cover them has seen them play through. I can't say as of today we have them all,
spk11: uh closed because we're still probably working with uh with a couple customers and at the same time similar to the last couple of questions in my response there we continue to add additional projects uh within the pipeline got it that's very helpful um and then maybe just a follow-up for um uh for dave maybe um just following up on um alex's question to um kick off the um q a Is there anything that we need that you would like to call out as far as Q3 a year ago? Because I do believe that there were some effects in a little bit of acquisition that went into your deferred that we can see through when we look at the cash flow statement. So when we calculate, for example, subscription rates, bookings or billings rather based on cash flow we can see a very nice inflection this quarter uh but that obviously is looking at the cash flow statement so we can control for some of the effects from a year ago but maybe those same effects of fx and acquisition we cannot really see in current rpo and is that creating a really tough comp for this year i i
spk09: You know, stepping back and when you look at just the performance for FQ3 of 20, when you look at where the billings and RPOs were at, clearly there was, you know, just a lot higher amount of activity. And so, you know, coming through, you know, in this period, a lot of our metrics have taken a hit. And so we continue to work that back in a positive format. And so, you know, that's where it's difficult just to look at the year-over-year comps because of all those moving parts, you know, just where not only where our bookings were at a year ago, where NRR was at a year ago, and our RPOs, both current as well as the total. And so what I think we posted up for this current FQ3 was fair. It continues on the linear progression, and we continue to strive for sequential quarter improvement.
spk11: Got it. All right. Thank you so much.
spk04: Your next question comes from the line of Siti Panagrave with Mizuho. Siti, your line is open.
spk02: Thanks for taking my question. Frank, you talked about some new strategic initiative like partner-developed solution, bringing some kind of function and verticals. Could you elaborate a little bit more on that? Is that how we should think about new products coming more driven by partners? Anything would be helpful.
spk07: The key thing, and this is kind of what we mentioned even a couple of quarters ago, as we got into the pandemic, Although we've been focused on different types of use cases, we wanted to focus in on areas where we felt it was most important for customers, especially customers or clients of some of our partners. And so we looked at kind of four major categories. We looked at kind of in the office of CFO, financial health. Actually, we looked, second one was balancing disruption within the recovery. The third was predicting and protecting revenue. And the fourth was supply chain resiliency. And so what we did over the last number of months is we had more focused solutions so that we can go to market faster and also be able to, I would say, more quickly implement some of these solutions at customers who were looking to alleviate some of the near-term pain points that they had. And so that's kind of played out well. The other thing I would say around the solutions, which I think has worked for us with partners, is the more direct focus on verticals. As we mentioned earlier, even focusing around telecommunications, focusing around healthcare. So in some of the verticals where there was a lot of either continued investment or there was changes going on within their businesses, to target some of these solutions around that was important.
spk02: Okay, and then a follow-up to the announcement you did at CPX, more like PlanIQ with Amazon Forecast and then Google Partnership. Are these new products that you're going to cross-sell? How should we think about this contributing any kind of revenue going forward?
spk07: Yeah, you know, the key thing, and I love the opportunity back in September to have CPX. We tried a new format with the digital, you know, online, and it worked out well for us. As I said, we had great engagement, both from existing customers, prospects, as well as with partners. And the key thing here, which I would say around your question, is really the importance of our platform. And I think it's clearly been recognized both by Gartner and IDC and others around the uniqueness of our platform and how differentiated it is. And that truly is a platform that connects the business across the different functions. And when we announce new products, like we did with PlanIQ or CloudWorks and various other things that we were pleased to bring forward in the September timeframe. They all sit on the current platform and they allow our customers to have much more capability. And we continue to have an ongoing dialogue with a group of our customers where they provide us ongoing feedback. It's kind of back even a year, two years ago when we got feedback about our UX and making enhancements around that. We've been getting feedback about bringing more intelligence into the platform. That's where PlanIQ came from. More interoperability within the platform, kind of doing more things with open APIs. So all the product enhancements that we announce around the platform is to continue to give our customers more capabilities on that platform, bringing data in, taking data from, and then allowing them to connect with many of the other digital platforms that they're using. And, you know, I mentioned earlier what we're doing also with partners is what we call Anaplan Plus. So we're showing that we can connect to Adobe. We can connect to Salesforce. We can connect to ServiceNow so that we have helped our customers through our partners expand their ecosystem to enable the interaction of information among the different platforms that they have.
spk04: Your next question comes from the line of Brent Bill with Jefferies. Brent, your line is open.
spk06: Good morning. Drilling into the new business this quarter, I'm curious if you could just compare the past period, the velocity of deals, deal sizes, any other color you could add on that side that would be helpful. Thank you.
spk07: Yeah, a good question. As I said, you know, we had a good mix. We're back to our historical mix of 60-40, which has kind of played out well for us. So both uh good execution with uh with expands but also good execution from a new customer standpoint most of i would say some of the new customers i mentioned some earlier tend to be around some of the solutions that i just mentioned with the previous question we've seen opportunities clued within finance around the office of cfo Some of those have been kind of finance transformation projects at the larger scale. We had some of those this quarter, and even some smaller ones, which may be more around scenario planning. The other two I would highlight, one, of course, was sales, sales performance management. And that comes around that whole suite, sales forecasting, territory and quota management, incentive compensation. We started to see an increase in that as companies are now focusing clearly on being more resilient within their business and having more insights into how their business could play out, I think was one that I would highlight. And another part of your question, which I think is important to note here too, And I was looking at some of this data yesterday. If you look at some of them, this is a combination of both new and expand. If I look at the top 10 deals and the average size of those deals, we saw an increase this quarter, which I thought was positive. And the top 10 and also the top 25 customer ARRs, also increased this quarter. So we've seen kind of an increase from that perspective. So again, we're seeing those back to what I said before about pipeline. It's getting better. I will also say and I think we said this earlier, we're not at pre-pandemic levels, so we still have to continue to proceed with caution as we look at a lot of this pipeline. But the strength of companies looking at transformational projects, looking at planning, the importance of planning is there, but the backdrop of the pandemic still plays a role in how quickly we can get these deals across the finish line, how long they take to kind of work through, which I think is also important to note.
spk06: Thank you.
spk04: Your next question comes from the line of Terry Tillman with Truism Securities. Terry, your line is open.
spk08: Yeah, thank you. Can you hear me okay? Yes. Frank, I had a question, kind of product question and a follow-up. On the master anti-planner, is that a KPI we should be looking at? And with that, when you add more master anti-planners, does something happen with usage with that account and or their propensity to expand kind of under the old honeycomb model they used to talk about? And then I had a follow-up.
spk07: So the master anti-planners is the highest level of certification that you can get using anti-plan. We have master Anaplanners within Anaplan. We have master Anaplanners within our partners. We have master Anaplanners at customers. And we encourage customers to have the skill available, especially if they're working on a large project or they're further in their, as you said, their honeycomb transition as far as multiple use cases. And so I think that One is important as it relates to the ecosystem because not only do they handle some of the more technical requirements wherever they're located, but they also tend to build that ecosystem either within Anaplan or the partner or within the customer as far as skill and talent. So the more that we see that increase, the more expansion around the knowledge and potentially the use of Anaplan. And so I mentioned that it was up about 50% year on year. uh one of the things and i mentioned this i believe it was the last quarter of the quarter before that we've been doing this year and i think it's worked out well for us especially in the current environment is to offer the animal the master anaplan courses online and as a result we're able to do more training and certification and then we're seeing a higher interest in taking that training so one i think the interest is there and two i think our ability to deliver
spk08: uh the training uh and the certification has also uh been increased uh so that that bodes well for that got it and just the follow-up relates to plan iq and just more kind of adding value on top of just the core seats to your software are those monetization opportunities or still to be determined or they just strengthen the uh the underlying use cases just trying to understand if they're monetizable things like plan iq thank you
spk07: Some of the things are. I mean, it's all part of, as I said before, it's all part of the platform to build some of the capabilities. We do have situations with some of the things that we announced where we do monetize in addition to the base license. you know things like the hyper models um and and potentially you know plan iq plan iq is actually uh you know the example i gave earlier uh that's in early uh stage uh so we will announce uh i think we roll out plan iq uh by the end of the year beginning of the new uh calendar year uh so you know we're still working as far as how we uh monetize that but there's a combination of both most we we kind of enhance the platform uh but there are certain areas where we do get uh get chance to monetize separately
spk04: We have time for one final question. Your last question comes from the line of Joseph Bathy with Tenacord. Joseph, your line is open.
spk00: Hi, guys. Thanks for squeezing me in here this morning. Just a question on the preliminary outlook for next year and the mix there. Do you see that being kind of following your historical 60-40 mix? or is there anything to call out there in terms of catch-up or strong verticals or other things? And then just as a quick follow-up, Frank, I'd be interested in some of the most interesting use cases that perhaps you've seen as a result of the pandemic that you may be able to share that, you know, were use cases that clearly wouldn't be the case if, you know, the pandemic did not happen. Thanks. Mm-hmm.
spk07: Yes, good question. So as far as, you know, again, we're in early stages of planning for FY22. And I would say based on some of the comments I just mentioned about the pipeline that we're seeing going in and also kind of what we're hearing from our partner ecosystem, I would say at this point, you know, the 60-40 split should continue. At least that's what our expectation would be for the next couple of quarters. And I think there's a reason why it's played out for us before, because we do have such a large install base of customers that are now seeing more opportunity to leverage the platform. And then also there's a continued new interest with some of the things that we're doing around the solutions, as I said before, and new areas that we're trying to focus on with our partner ecosystem. As part of the second question, there's so many that I can probably mention. I think the one that I have myself has been more personally involved in, which I found extremely interesting, and this goes back to even the April-May timeframe, is clinical trials. And many of our healthcare existing customers and or new customers are seeing that Anaplan can be used to do a lot of the analysis and keep track and plan for many of the efforts within the clinical trials. And as you know, clearly with the pandemic, there's so many companies that are doing with drugs as well as with vaccines and leveraging Anaplan to be able to do that. I think is super important with where we are overall and be able to kind of help some of these companies plan better around all the activity that they have within their companies. So that's one, and like I said, and I've been engaged in that one myself with senior levels within healthcare organizations as they think through, one, what they can do and also kind of look back and see some of the progress that they've achieved the last couple of months, even leveraging Anaplan. And one last thing I'll say on this before we close, what I love about Anaplan in that situation is the ability for us to quickly implement, right? It's not like it's going to take them a year to work on a planning platform before they start to yield some results. They can put it in place within weeks, eight weeks, nine weeks, 12 weeks, and then start to see some of the benefits, which is well underway.
spk00: Thanks very much.
spk04: This concludes our question and answer session. I will now turn the call back over to Frank Calderoni for closing remarks.
spk07: Thank you. I want to thank everyone for joining us today. I appreciate all your questions and your continued support of Anaplan. We wish you a good day, and we look forward to talking to you again next quarter. Thank you.
spk04: This concludes today's conference call. You may now disconnect.
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