Anaplan, Inc.

Good day. My name is Savannah, and I will be your conference operator for today. At this time, I'd like to welcome everyone to the AnnaPlan fourth quarter fiscal 2022 earnings conference call. Today's call is being recorded. Please be advised that the IR website vendor is experiencing intermittent website access issues, and we are aware of that and apologize for any inconvenience. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star one on your telephone keypad. Thank you. I would now like to turn the conference over to Vikram Khosla. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss Anaplan's fourth quarter fiscal year 2022 financial results. Joining me on the call are Frank Calderoni, our Chief Executive Officer, and Vikas Mehta, our Chief Financial Officer. On today's call, we will review our fourth quarter and full fiscal year 2022 financial results and discuss our financial guidance for the first quarter and fiscal year 2023. Please note that some of the information discussed on the call Particularly, our guidance is based on the information as of March 2nd, 2022, and contains forward-looking statements that involve risks, uncertainties, and assumptions, including those related to the continued impact of COVID-19 on our business and global economic and geopolitical conditions. The guidance we will provide today is based on our assumptions as to the macroeconomic environment in which we will be operating. Those are today. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including but not limited, to the scope and effectiveness of precautionary measures designed to contain and prevent the spread of COVID-19, the continued impact of COVID-19 on customers' purchasing decisions, and the length of a sales cycle, particularly for customers in certain geographies. Please refer to documents we filed with the SEC, including the Form 8K file with today's press release. Those documents contained 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. When 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 the current 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.

Good afternoon, everyone. Thank you, Vikram, and a warm welcome to AnaPlans. Vikram is our new VP of Corporate Finance, and we are very happy to have him join the team. Before we begin, I would like to take a moment to acknowledge what is happening in the Ukraine. We are devastated by the events unfolding, and we support those who are personally impacted by this heartbreaking situation. Now turning to our results. Anaplan delivered a very strong fourth quarter. We finished the year with over 1,900 customers and we had the highest ACV and net new ACV growth in three years. I am proud that our RPO this quarter grew 34 percent year over year, resulting in an RPO balance of over $1 billion. As we start the new fiscal year, we remain confident in the large opportunity ahead and our ability to execute. A Q4 highlight was the record number of deals over $1 million. which demonstrates the strong demand for connected planning, especially with the Office of the CFO, where software spend remains a high priority. In fact, in Q4 alone, the number of million-dollar deals equaled what we had in all of fiscal year 2021. This was driven by outstanding expansions, contributing to 78% of new bookings mixed. We also had the highest land bookings growth in the last two years. We continue to experience increasing demand for use cases within finance, supply chain, and sales performance management. This is a clear indication of how today's challenges are being solved by connected planning for some of our largest customers. Last month, we held our annual sales kickoff to drive our FY23 go-to-market strategy, and the energy was inspiring. We have grown our sales capacity through fiscal year 22, and we brought in exceptional new sales talent. We have also elevated longtime high-performing sales leaders. We feel good about our pace of hiring and ability to meet the increasing demand in FY23. Bill Hsu and his team are driving four pillars of excellence. First, by elevating the go-to-market motion. Second, by building a scalable and efficient land motion. Third, by creating a world-class adoption and delivery model. And fourth, by investing in key partnerships. Our first pillar is elevating our go-to-market motion. This is where we engage with C-suite executives to drive strategic digital transformations. As I speak to these executives on a regular basis, they need an all-in-one planning solution. The latest disruptions, whether it's continued supply chain challenges or massive talent turnover, are causing unprecedented shifts that need to be planned quickly with agility. Our elevated go-to-market motion is highlighted with our transformative land with ODP Solutions, also known as Office Depot. This customer is undergoing a strategic transformation, leveraging its B2B assets to support an increasingly dynamic end market. This requires constant evolution to drive performance, and they are modernizing their sales compensation management to be prepared for these changes. ODP Solutions selected Anaplan for the ability to scale and meet the future needs of the business. Our second pillar of building a scalable and efficient land motion is geared to accelerate new logo acquisitions. We welcome Manchester University NHS Foundation Trust, Vitality Health Limited, TwinStar Homes, and Europecar International SASU. Our platform provides critical scenario planning to enable smarter decisions for a variety of customers and industries. An exciting land this quarter was the largest deal in Canada with the Government of Ontario. We will support the financial community in the overall management of Ontario's fiscal plan. Ministry plans, budgets, and forecasts will be developed and managed within Anaplan, which is expected to lead to better financial management outcomes. Advanced Pharma is another good example of a scalable land. This customer is a specialty pharmaceutical company which supplies to over 90 countries with more than 200 types of medicines across the multiple therapy areas. They wanted to broaden their access to complex medicines while maintaining agile and efficient operations. This customer set out to optimize their supply chain operations, selecting our data-driven platform to help bring greater resilience to the company's network. Our ability to interconnect demand signals with supply chain outcomes in real time and to model various what-if scenarios were deciding factors in selecting Anaplan. We also landed an S&OP win with Bobst. This company is one of the world's leading suppliers of substrate processing, printing, and converting equipment and services to the packaging industry. The company selected Anaplan as its global sales and operations planning solution to enhance collaboration between sales, supply chain, and service teams. With a scalable and flexible platform, this customer will have a dynamic and integrated view of customer demand. BOPS can adjust resources, evaluate financial impacts of changes to demand and capacity, and reduce manufacturing and resource costs to help drive increased revenue. Our third pillar of creating a world-class adoption and delivery model was driven by our expansion metrics of strong customer health and natural expansion opportunities. This quarter, by delivering strategic value, we are deepening our relationship with existing customers such as Autodesk, Bayer, Adobe, Jaguar Land Rover, Nomura, Ricoh, and L'Oreal. These customers span across multiple industries and geographies to help further the digital transformations. Solvay, a global leader in materials, Chemicals and Chemical Solutions is undergoing a finance transformation to break down silos, increase efficiency, and enable a customer-centric approach. The company expanded their use of Anaplan from zero-based budgeting to integrate workforce cost planning and budget consolidation and planning. This enables end-to-end financial planning on a single platform. Sleep Number also expanded with Anaplan with PlanIQ this quarter. They use Anaplan for demand planning and has expanded to include use cases in sales and operations, workforce, and supply chain. The company is furthering its connected planning journey with PlanIQ to deliver greater accuracy across top line, product level, and market level sales forecasting. Sleep Number can forecast daily across sales planning demand planning and store staffing to get deeper insights and run multiple scenarios related to its seasonal promotions. Finally, our fourth pillar is investing in key partnerships. Our partner ecosystem provides opportunities to further differentiate our market-leading solutions and to drive more demand for our offerings. This quarter, Partners participated in 18 out of 20 of the largest Net New ACV deals worldwide. And Net New ACV, sourced by GSIs, was more than any quarter since Q1 fiscal 21. Our partners continue to invest and hire Anaplan skilled resources, which is a testament to the level of customer interest they're seeing in the market for enterprise-grade planning solutions. Major partners see opportunities to gain a larger footprint with customers by working with Anaplan. We recently expanded our long-term strategic collaboration with Microsoft. This brings together the predictive intelligence and advanced modeling capabilities of our sales solutions with planning, incentives, and insights with Microsoft Dynamics 365. With Anaplan and Microsoft, Sales leaders can build a data-driven go-to-market strategy by leveraging company and third-party insights to model market scenarios and create accurate revenue forecasts. These insights can also help leaders design cost-effective sales incentive programs. I think this relationship is going to make a major impact to our customers who have large, expansive go-to-market teams. Our partner ecosystem also helps us go deeper with our customers in strategic ways. One great example is through our partnership with Deloitte, who has successfully delivered differentiated ESG solutions to Anaplan customers. These sustainability models are critical to supporting their ESG vision through environmental and social-related planning and reporting. We also partner with BCG to bring similar solutions for our mutual customers. In fact, I was recently speaking to a CFO of a $7 billion global consumer product company who is interested to learn more about our carbon emissions management and other ESG-related initiatives with our solution. Our industry-leading platform is helping mitigate risk, allowing customers to plan ahead and predict what is needed. Another lever within our growth strategy is our cloud partnership with GCP and AWS. These relationships have been instrumental for us to scale quickly and broaden our reach. We closed several deals on GCP Cloud, both in the U.S. and Japan. We also launched on AWS Cloud in November, and we have started to make progress, closing our first deals this quarter, one of which was over $1 million. And finally, with the increased usage of our platform solutions, there is a constant need for more skilled Anaplant experts. Our ecosystem of talent continues to grow with the total number of certified model builders increasing over 90% year-over-year. From a customer perspective, over one-third of them currently have a center of excellence with the number of COEs up over 65% year-over-year. To recap, our four go-to-market pillars of excellence drive both growth and efficiency, and we are confident in our ability to increase demand for our solutions to our customers. Now onto our innovation. We know that one of the biggest drivers behind our growth and continued customer adoption is our relentless focus on innovation. As I mentioned last quarter, we are committed to the next level of connected planning. and remain leaders in this space, outpacing our competition. We introduced the concept of the autonomous enterprise to extend our platform with embedded intelligence capabilities and simplify complex problems across large enterprises. Our strategy is to help our customers plan, analyze, and act in an autonomous system that is unified to drive AI and ML intelligence. With this investment in the next stage of planning, we can further our customer success with greater agility, intelligence, and automation within one sophisticated platform. In summary, Anaplan delivered a very strong finish to the fiscal year in Q4, adding over 100 customers, closing a record number of million-dollar deals, and achieving our highest ACV and net new ACV growth in three years. I am proud of our performance. We are well positioned within our growth strategy, strategic partnerships, talented employees, and the next level of innovation to take advantage of the opportunities ahead. Moving into FY23, we feel confident as leaders in our space to focus on investments in our go-to-market motions and build upon our platform differentiators. We offer immense value to our customers, and we are committed to delivering the most innovative planning solution. I'd like to take a moment to thank our employees for their continued tenacity and commitment. You are the reason for our results, and I appreciate what you bring every day. Now let me turn over the call to Vikas, who will discuss our fourth quarter and full fiscal year financials and provide our outlook for the first quarter and fiscal year FY23. Vikas? Thank you, Frank.