Anaplan, Inc.

Thank you for standing by and welcome to the Anaplan first quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen-only mode. 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Adelita Pichepko. Thank you. Please go ahead, ma'am.

Good morning. Thank you for joining us on today's conference call to discuss Annapurna's first quarter fiscal year 2022 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 second quarter and fiscal year 2022. anticipated future operating and financial performance, strategies, customer demand, product, and technology. These statements reflect our best judgment based on factors currently known to us and actual events or results made different materially. Please refer to documents we filed with the SEC, including the Form 8K filed with today's press release. Those documents contain risks and other factors that may cause our actual results to differ, and 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 the 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 turn the call over to Frank Calderoni.

Thank you, Adelita. Good morning, everyone, and thank you for joining us today. We started our fiscal year with a solid first quarter, as the need for enterprise-wide planning is increasing globally. This quarter reflects our steady execution with healthy new customer growth, ending the quarter with over 1,700 customers. Our results continue to build on our market leadership and the growing interest in digitizing planning across every function. The unique breadth of our platform and the ability to cross-sell was also reflected in the strength of bookings from existing customers. Approximately 64% of new bookings this quarter came from expand deals. This was slightly above our historical average of 60%. We now have 473 customers with ARR over 250K. Billings grew 32% year-over-year, and we exited the first quarter with the remaining performance obligation of RPO balance of $832 million, up 29% over the last year. We are pleased to see that our new customer wins and expand deals work across a broad set of industries. One key industry where we made an impact is in automotive. This sector is seeing several disruptive technology-driven trends in mobility, autonomous driving, electrification, and connectivity. As a result of these trends, this industry needs a platform that can manage in real time all the major implications related to manufacturing and supply chain. With our robust platform, we want several key customers in the automotive sector. A large global auto supplier with over $40 billion in revenue chose Anaplan as the only planning solution that can improve the quality and overall speed of decision-making across their entire business in order to proactively respond to the disruptive trends in the automotive sector. Another key win for us this quarter was with one of the world's largest commercial vehicle manufacturers based in Europe. This customer selected Anaplan to improve margins through optimizing their supply chain. This customer needed our solution to manage an increasingly complex global production network and higher market volatility. Now more than ever, there is a greater urgency and opportunity for Anaplan to help businesses leverage planning as a strategic management tool by connecting their goals to tangible business outcomes. I would like to provide a few examples of the ways in which we enable this for our customers. A multi-billion dollar global leader in cloud computing is leveraging Anaplan for go-to-market planning. In the first quarter after implementation, the customers saw top-line revenues increase up to 10% and an additional reduction in their cost of acquisition by up to 10%, delivering significant P&L impact. The most advanced companies are positioning their business for the next normal after the crisis. And sales planning is a key area of focus. Anaplan helps customers identify sustainable, profitable growth through a range of strategies around intelligent segmentation, promotions, trade management, and pricing. Another area of focus that has been highlighted by the pandemic is the impact on global supply chain. For example, the ability to get supply from your suppliers in different countries. What's happening with the end customer and the ways in which inventory can drain your profits? Our platform has helped many customers manage their supply chain. A large U.S. appliance repair provider deployed Anaplan to help drive down inventory by 55% in less than six months, improving working capital for the business. Following that success in supply chain, just a year and a half later, the company went live with our workforce planning solution, driving improvement in productivity and greater ability to respond to changing customer needs. In the healthcare industry, we've seen this space undergo sweeping change. To emerge as winners, healthcare companies need to have a modern planning solution enabling rapid decision-making. Another customer, a leading healthcare technology company, leveraged Anaplan to help improve the predictability of their business, enable a better patient experience, and expand revenue opportunities. Historically, their planning models had unpredictable swings and poor forecast accuracy. After implementing Anaplan, they predicted a 15% increase in revenue and ultimately landed that quarter with 98% accuracy. These customer examples highlight how a modern approach to real-time planning can drive business outcomes and serve as a key competitive differentiator in today's fast-paced environment. From an innovation perspective, we have been investing in our technology to deliver even more impact and value for our customers. I'm excited to share that we are on track to launch Anaplan PlanIQ with Amazon Forecast. PlanIQ makes AI and ML more accessible to help business users make faster and more accurate decisions. We completed the early access program for PlanIQ with positive customer feedback while providing significant business outcomes. As an example, a large retailer in Asia Pacific improved forecast accuracy by several points, revealing several million dollars in potential cost savings. Furthermore, it only took about two days to launch PlanIQ for demand planning, incorporating many years of historical data for over 10,000 SKUs. We also worked with a pharmaceutical company who experienced significant improvement in predictions for a majority of their SKUs by up to 16%, enabling millions in upside to profitability. As businesses begin to recover, we are ready to take advantage of the improving demand environment. From a go-to-market perspective, it's great to have Bill Hsu on board as he will continue to build operational excellence in areas such as better customer qualification, rigorous opportunity reviews, and coaching to drive sales productivity. Through Bill's leadership, we are also focused on the expansion of Anaplan's platform to other use cases and functional areas within our customer base. Evaluating our pipeline, we're seeing interest in areas such as supply chain and HR, as well as opportunities for multifunction deals. As part of supporting best-in-class expansion selling, one of the areas we are focused on is driving greater customer adoption and value realization. For example, one of the factors that influences adoption is the number of customers who have implemented a COE or a center of excellence. which broadens the use of our platform. I'm excited to share that the number of customers with a COE grew over 100% year-over-year. The continued scaling of our partner economy will also ensure our ability to take advantage of the large market opportunity. Throughout all of last year and this past quarter, our partners have continued to invest and higher Anaplan resources, which is a testament to the level of customer interest and momentum they are seeing in the market for enterprise-grade planning solutions. This quarter, seven of the top 20 deals were sourced by partners, and another 11 had strong partner influence in the sales cycle. GSIs are investing heavily in scaling their Anaplan practice in areas such as alliance managers, go-to-market leads, solution development, co-marketing funds, and more. Over the next year, major GSIs will continue to expand and build Anaplan global delivery centers around the world. It's exciting to see our partners grow their practices across newer territories, including WINS in Germany with EY in Deloitte, and one of our largest deals ever in Japan with PwC. Our cloud partnerships with Google Cloud and AWS announced late last year allow us to further build on this ecosystem. These partnerships will expand the reach of our platform through new geographies and provide powerful opportunities for collaboration with the GCP and AWS go-to-market teams. From a market perspective, we believe Anaplan's strategic positioning within the planning category has strengthened as both Gartner and Forrester validate the importance of extended planning to other functional areas. Similar to Gartner's concept of XP&A, Forrester recently published a report that discusses the emergence of digital operations platform planning and analytics tools. Forrester reiterates that businesses need modern purpose-built planning applications that can cut across the business, They recommend to customers that while EPM solutions have historically been associated with financial planning and budgeting, the category of applications has now evolved across a wider range of business functions. We have solidified our strategic position in the XP&A category, further validating Anaplan's next-generation approach to planning. Looking ahead, I'm excited to provide an update on our annual user conference, Digital CPX. Demand for both user-centered content and business decision-maker content geared towards C-level and leadership has remained high. So we have decided to host two global customer events, the first in June, which will feature Anaplan customers and our model-builder community with a focus on user training and briefings to accelerate platform value realization. In October, we are revealing an entirely new virtual experience of business transformation leaders, platform power users, and aspiring master Anaplanners. Our user conference plays an important role in bringing together our world-class ecosystem of certified Anaplan experts. Over the last year, we have expanded the number of Anaplan-trained experts across a variety of functional backgrounds. The total number of professionals that completed one of Anaplan's certification levels has increased over 100% year over year. This includes Anaplan talent at our customers, partners, as well as our own employees. We have also partnered with Correlation One to enhance our Anna Plan for All program focused on building one of the largest and most diverse communities of data professionals through training in data skills and career navigation. In summary, we made solid progress on our growth strategy in Q1. We are in the early stages of the recovery, and we're confident in the momentum that we will build throughout the rest of this year. Digital transformation efforts remain a top priority for many companies, and we expect this will continue to be a strong driver for our business. Before Dave gets started on the financial details for the quarter, I'm sure everyone saw the announcement today that Dave will be transitioning out of his role later this year to spend more time with his family. I want to take a moment to thank you, Dave, for your significant contributions to Anaplan as Chief Financial Officer. Since joining the company in 2018, Dave has dedicated himself to our core business objectives and made a lasting impact on the company. Dave will continue in his role until his successor is hired. Now let me turn over the call to Dave, who will discuss our first quarter financials and provide our outlook for the second quarter and fiscal year 2022. Dave?