Anaplan, Inc.

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.

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.

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.