Q4 2020 Earnings Call
[noise], ladies and gentlemen, thank you for standing by and welcome to the Anaplan fourth quarter and full fiscal year 2020 earnings conference call.
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Good morning, Thank you for joining us on today's conference call to discuss Anaplan fourth quarter and full fiscal year 2020 financial results joining me on the call a Frank Calderoni, Our Chief Executive Officer, and Dave Martin, Our Chief Financial Officer.
On this call, we will be making forward looking statements, including financial guidance and expectations for our first quarter in fiscal year, 2021 anticipated future operating and financial performance strategies customer demand product and technology.
These statements reflect our best judgment based on fact is currently known to US an actual events or results may differ materially. Please refer to the documents we filed with the FCC, 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.
This call is reviewed after today the information presented during this call may not be card or accurate.
We'll 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.
We're planning for today's call to lost approximately 45 minutes and we'll do our best accommodate your questions. Following our prepared remarks as time permits and with that I'll now turn it over to Frank Calderoni.
Thank you had a leader good morning, and welcome to our fourth quarter in fiscal year earnings call.
We had an outstanding fiscal year 2020, and we'd like to thank our employees partners and customers who have helped us achieve.
Exceptional results as our first full year as a public company.
We remain the predominant leader in the connected plenty space, especially with large and complex customers and we continue to see incredible growth opportunities with impressive new customer acquisition, while growing our business and footprint with our existing customer base.
Fiscal year 2020 performance was strong with total revenue of 348 million up 45% from the prior year and ending the year with over 1400 customers how subscription revenue for F. Why 20 was up 48% from the prior year.
Our remaining performance obligations or RPL balanced exiting the year was $656 million up 49% over last year.
With the strength of our differentiated platform and the breadth of connected planning use cases, we continue to grow our business within existing accounts with average a or about top 25 customers.
Well were $3.6 million up from $2.8 million from a year ago.
We also have 353 customers with a our our over $250000 up 42% from a year ago, and we saw similar year over year growth and a number of customers with over a million dollars and they are.
The total addressable market and demand for our platform or even larger than we saw a year ago. As recent reports have indicated the markets experiencing an acceleration in cloud solutions. So to ensure that we're able to capitalizing these opportunities. We have evolved our go to market efforts to ensure that we're scaling to meet the demand for our platform.
And we're well positioned for long term growth.
Some of you may recall, when I joined Anaplan over three years ago, we implemented several initiatives to direct the go to market focus on large enterprise companies and raised the market's awareness of the value of true enterprise wide connected planning.
These initiatives have generated tremendous success demonstrated by accelerated growth in category leadership.
Now three years later, we are building on this success and continuing to evolve and go to market approach.
Today, our customers are looking for ways to manage and respond to the rapid pace of change and the uncertainty in their respective industries, such as the volatility in the marketplace and trade fluctuations and our platform is becoming the obvious choice for enterprise wide planning.
To take advantage of this we have evolved a large enterprise customer focus into two customer segments majors and enterprise with greater sales specialization and align support resources related to these two segments.
We also hired impressive talent in the key go to market leadership roles in various regions and with our current sales leadership talent. We have created a more agile go to market team led by the managing directors from each region.
We also want to provide an update on Mark Anderson, our chief growth Officer, Mark has decided to step back from his full time role to spend more time with his family and to help ensure a smooth transition. He will continue to serve as an advisor to me we'd like to take this opportunity to acknowledge marks contribution to our go to market strategy.
We thank him for his valuable insights with the go to market team structure in place the managing directors from each region will report directly to me and we do not have any plans to backfill this role.
Looking ahead, we are confident our evolve go to market approach will position us for a strong year the refined approach to customer segmentation.
I will ensure we focus our resources and teams on the customer accounts with the highest propensity to buy and the greatest need for a broad enterprise wide platform.
We are driving tighter alignment and allocation of resources to these customer segments, ensuring that marketing partner engagement executive engagement and targeted solutions will more tightly aligned to the type of opportunity and customer.
This is key to scaling and matching our go to market capacity to the market opportunities that will provide the highest returns. We expect these refinements in our go to market strategy will drive heightened focus, particularly in the Americas, we continue to see growing demand for our platform supported by our pipeline and the tremendous traction and.
Partner ecosystem and impressive customer success stories.
As an example of a recent customer success story, one of our largest customers a telecommunications corporation with over $100 billion in revenue.
Operating in 150 locations recently identified Anaplan as their preferred platform of choice for all operational planning underscoring just how large the market opportunity is ahead for us I.
Another great success story comes from a large multinational manufacturer with revenue up $21 billion and more than 70 manufacturing and technology research centers globally. This customer saw over a 30% reduction in their merchandising planning cycle time.
A five point reduction in forecast error rates, which translated to a full day supply of product representing about $20 million the savings.
This team was able to take a four person 55, our forecast process down to one minute.
These type of results our game changing when you think about the competitive advantage and the agility. This is driving within our customers business.
We have more customer highlights from this quarter, but I'd like this year, including a new European customer a leading international food products company.
They are ranked fourth worldwide in their industry with 20000 employees multiple subsidiaries and selling to over 120 countries.
When this customer as it was evaluating new business planning technology to roll out in both corporate and across their subsidiaries. The customer was looking to address two primary challenges first.
They had many different solutions for financial planning an analytics throughout the organization.
All of which were on Prem.
It was costly to maintain these applications and ineffective in bringing together a complete and dynamic picture of the total business.
Second the customer understood that in order to drive agility, the business needed to be able to own and manage the solution.
Once they learned about anaplan being non I T depend highly flexible and fully autonomous current needs as well as future business scenarios and models. They quickly cios and a plan with the ability to expand to sales and their supply chain business planning processes in the future.
Another key win for us a leading insurance provider selected anaplan as part of a global finance transformation. This customer had spent two years implementing one of the legacy vendors, but the technology was not scalable and flexible enough to meet their global business requirements. For example, managing multiple current.
These multiple earnings profile for different products and global allocations were challenge for the other solution, which also came short on the performance and scalability necessary to calculate complex business rules.
Lastly, the customer also had to dedicate a significant amount of I T resources from a shared service center to manage the solution.
As a result, the customer decided to stop the project can reevaluate.
Our capabilities to meet their short term needs within F. DNA, but also the longer term ability to consider other use cases and business value outside of Ftn, a made anaplan the obvious choice.
When it comes to expand you have heard us say this over the past year, our ability to expand the use of the platform to other functions use cases business units or regions within existing customers is key.
Through our customer success.
One of our largest expand deals this quarter was from a global technology company founded over 30 years ago generating over 50 billion in revenue. This customer initially deployed anaplan for zero based budgeting sales performance management and marketing resource management.
Looking ahead this customer is undertaking what they referred to as an intelligence transformation project to increase the agility and efficiency of the business, enabling their transition to new business models.
We're also reviewing system simplification and processed standardization to reduce cost and improved business performance, resulting in an enterprise performance management initiative to replace legacy solutions and multiple homegrown systems.
Across just two projects over $30 million, an annual savings have already been identified.
This customer plans to leverage and a plan as their core foundation for planning and forecasting across all of their functions lines of business as well as geographies.
This is the appear to me of connected planning and this was all accomplished in less than a year.
Looking at our partner ecosystem. They are core to our go to market strategy and we're very pleased with how is progressing.
In F. Why 20, we more than doubled the amount of partner source business over the previous year, our largest deals in the year had significant partner involvement and partners continue to add significant capacity for selling and delivering anaplan.
In Q4 alone partners added over 500, new certified Anaplan resources into the market, which brings the total to over 2000.
At our recent sales kickoff out 200, plus partner attendees were embedded in and in some cases co lead our sales enablement sessions, we recognized our partners at this event and congratulated Deloitte once again for winning our global partner of the year, we're very fortunate.
You have such an incredible cohort of partners, who are early adopters of the Anaplan platform for driving significant planning transformation with their clients.
We are seeing more traction with our partners as a position and the plan has a broader platform and complementary to some of the legacy transaction systems, which we referred to as Cana plan plus.
If we look at how customers leverage Anaplan, it's a middle office planning platform, which means it needs to align with back office transactional systems and front end systems, such as your CRM and other digital applications.
Many of our leading ESI are taking this anaplan plus concept to deliver customer value because they are experiencing a major shift in spend towards our type of solution.
More and more partners want to engaged so they could take advantage early on and be part of this transformation. For example over the last few months Deloitte define the anaplan plus ecosystem as a complementary software platform to accelerate and deliver even more value with their transferred.
Maintenance.
So far Deloitte has developed solutions around Anaplan plus salesforce in the digital mix solution Anaplan plus Google cloud.
In their precision view solution and Anaplan plus Adobe in the marketing performance management solution.
Deloitte led in Anaplan rollout in a fortune 25, CPG company that had Sep has their core ERP.
Beginning with financial planning this customer is just in the early phase of their connected planning journey as they prepare for workforce planning and other supply chain use cases in the transformation roadmap.
We are also gaining significant momentum with all major GE ESI strategic partners, who all have made commitments to accelerate investments in building their anaplan practice.
From a recognition perspective and a plan was showcased as a major player in five different recent I'd see worldwide supply chain vendor assessments.
In sales and operations planning or SLP inventory optimization.
And supply chain demand planning and in worldwide supply chain planning as well as an overall supply chain planning.
It's important to note that in just two years, we have had more leadership placements in overall analysts rankings reports on planning and performance management than anyone else.
For the fourth consecutive year and a plan has been recognized as a leader in Gartners 2020 Magic quadrant for sales performance management.
Sales leaders have visibility into their entire sales organization on anaplan and make decisions confidently in today's complex selling environments.
In addition to traditional sales performance management capabilities and a plan for sales also includes sale forecasting account segmentation and scoring pipeline optimization and additional sales insights that fuel that go to market strategy.
From a marketplace perspective, we believe and a plan has become the new foundational layer in the middle office and especially in the office of the CFO.
Businesses have moved beyond the system of record and are now searching for a true system of insights, which anaplan can fulfill.
We have seen this in the way our platform is being deployed by our customers to help drive major transformation that affect every part of their business. Let me give you an example.
One of our key customers is searching for a chief planning officer, along with two new executives in ICTI. These three new hires will form the foundation of their Anaplan Center of excellence. This customer has a three year roadmap that shows their continued expansion of Anaplan, which will result in a complete replaced.
One of legacy solutions and a drastic reduction in this customer's reliance on spreadsheets throughout the entire organization.
To fuel this innovation of the Middle office, we're focused on providing the talent and ecosystem necessary to help our customers.
This quarter over 700 customers completed level, one training and we continue to see an uptick in the demand for these skills and expertise in the marketplace.
We have also seen an increase in the number of companies that have deployed a center of excellence driving transformation at a significantly larger scale.
From a technology perspective, we're very proud of the pace of innovation, we are seeing from a product and engineering teams to provide our customer is the best platform experience.
We are increasing our scale modeling infrastructure as we released features faster with better performance.
This quarter, we released 47, new agile features and we also beta tested our larger model scaling with early access to some of our biggest customers with very positive feedback.
We have also been investing in our AI in ml expertise and this quarter, we introduced our AI powered capabilities for predictive sales planning to health businesses optimized sales and revenue strategies and coupled with our new modern user experience and mobile app.
We are making it easier for sales lead us to analyze performance and add inputs from anywhere in real time.
Sales operations is becoming the modern day change agent that leaders are leveraging to find their competitive edge as we continue to go after larger customers who have higher complexity. We are innovating at an accelerated rate and we look forward to sharing more at our connected planning experienced user conference, which will be in San Diego in June.
Overall, we had an amazing first year as a public company with how we have positioned ourselves with our customers and partners, which has fueled rapid growth at scale. We had a strategy become an enterprise wide connected planning platform and is now becoming a reality.
We have had remarkable momentum and opportunity as we continue to position ourselves as the connected planning leader, we feel very confident our customers will continue to be enthusiastic about our solution and we look forward to another exceptional year.
Now, let me turn over the call to Dave who will discuss our fourth quarter and full year financials and provide our outlook for the first quarter fiscal year 2021.
Dave.
Thanks, Frank and good morning, everyone.
And our plans Q4 and full fiscal year 2020 results demonstrated solid business momentum growing broad based demand for our platform and we realized steady progress and extending our leadership position in connected planning the go to market and platform technology investments, we've made coupled with large and growing global Tam resulted in.
Meaningful velocity and our fiscal year topline growth.
Total revenue for the fourth quarter was 98 million up 42% year over year.
Within this subscription revenues grew 50% and comprised 91% of total revenue.
Services revenues were 9 million down from 10 million and the fourth quarter last year.
Total revenue for the fiscal 2020 was 348 million up 45%, reflecting strong revenue growth at scale and a reacceleration of revenue as compared to the prior fiscal year.
Calculated billings for the fourth quarter were 126 million and grew 25% year over year.
On a plants calculated billings can fluctuate from quarter to quarter impacted by timing of renewals and transactions. However, fourth quarter billings were specifically impacted by the management changes discussed earlier these changes affect that alignment around some key near term opportunities specifically in the Americas, resulting in a lower than planned.
Hey, good growth and billings, we do not believe our fourth quarter billings results reflect our growth and execution potential and we are focused on improving these results with the refinements in our go to market organization, we recently implemented.
For the full fiscal year calculated billings were $417 million and grew 44% compared to the prior year and representing our third straight year of acceleration of billings growth.
Our remaining performance obligation or arpino exiting the fourth quarter was 656 million up 49% over last year, representing an acceleration of growth compared to our 44% increased in Q4 for 19.
As a reminder, our remaining performance obligations or ARPO represents the total booked or sign business within a quarter and we believe this provides a more accurate commercial view into the underlying momentum of our business.
Moving onto our additional key metrics for the fiscal year. Our total customer base continues to grow exiting F. Why 20 with over 1400 customers. The average size of our land deals grew 24%, reflecting the increasing breadth and value of new customer deals.
Our dollar base net expansion rate or in our AR was 122% for F. Why 20 and continues to track above 120%.
Turning to our profitability metrics total non-GAAP gross margin for Q4 was 77% up five percentage points year over year within this subscription gross margins were 84% of 140 basis points year over year and services gross margins were approximately 3% down 150.
Six basis points year over year.
For the year total non-GAAP gross margin was 76% up three percentage points year over year.
Total non-GAAP operating expenses for the fourth quarter were 87 million up from 66 million year over year, primarily driven by go to market investments.
For the full fiscal year operating expenses were $319 million up 28% year over year from 249 million.
With persistent efforts towards driving leverage on our financial model Q4, operating margins were negative 11% a significant improvement of approximately 12 percentage points compared to negative 23% in the same period last year.
For the full fiscal year operating margins were negative, 16% representing substantial improvement from negative 31% in the prior year and demonstrating significant progress towards our financial objectives of productivity and profitability.
Our business unit economics are healthy as we balance rapidly scaling our business with improving economics around our cost of acquisition contribution margins and payback period in Q4 payback period of 22 months continued to improve.
LTV to CAC trended upwards to 5.4 times slightly higher compared to the previous six quarters.
Net loss per share in the fourth quarter was a negative seven cents based on 134 million weighted average shares for the full year net loss per share was negative 44 cents, representing a 40% improvement year over year.
Free cash flow, which is cash flow from operations less capital expenditures for the fourth quarter was negative 6.1 million and negative 29 million for the full fiscal year, we exited the fiscal year were $310 million in cash and cash equivalents.
Turning to our outlook.
For the first quarter fiscal 2021, we expect total revenue to be in the range of 102 to 103 million first quarter expenses will include targeted investment for increased rate and pace of innovation and with continued investment and go to market along with seasonality in certain expenses such as our annual sales kickoff event.
An annual fiscal yearend audit fees.
We expect our non-GAAP operating margin to be in the range of negative 17.5% to negative 18.5%.
Weighted average share count for the first quarter is expected to be approximately 136 million shares.
For the full fiscal 2021, we are raising total revenue guidance to be in the range of 463 million to 467 million.
We expect calculated billings to track in line with overall revenue growth rates and our net dollar expansion rates remain above 120% walk quarter to quarter billings can fluctuate with a timing of renewals and transactions. We are confident in the growth of opportunities we're seeing in the marketplace.
Non-GAAP operating margin is expected to be in the range of negative 12.5% to 13.5% while exiting the year in position for sustainable free cash flow positive.
Weighted average share count for the full year is expected to be approximately 139 million shares in summary fiscal 2020 was a strong year for anaplan throughout the year, we achieved solid revenue substantial performance on our key business metrics and improved leverage in our operating model at the same time, we strategically invested the dry.
Business momentum and sustained leadership and the connected planning marketplace over the long term, we are already on our way to executing another strong year in fiscal 2021, and I want to thank all of our shareholders for their support.
Thanks for joining us today, and I'll now turn it over to the operator for questions.
And ladies and gentlemen, as a reminder, if you would like to ask a question. Please press star one.
And your first question comes from the line of Heather Bellini with Goldman Sachs. Please go ahead.
Great. Thank you so much for us for taking my question. Both of you I had to the first one would be you commented about the execution challenges caused by marks departure I guess, what would be really helpful. Just given as we're watching the performance of the stock in the pre market could you give us a sense of how many deals.
The dollar value of the deals that you can and I know, it's hard to quantify but give us a sense of how much got pushed out that you think got delayed because of the execution challenges and then I have a follow up.
Hi, Heather good morning, Thanks trying to on your question.
So first let me just go back to what I mentioned before which was.
Some of this is.
Victim of our own success I mean, if we go back three years when I joined as I mentioned, a few minutes ago.
The key thing for us to do here is focus on the opportunities. We have so many opportunities we want to focus on it we did that effectively over the last three years.
Now what we felt and Mark was very helpful. In helping worked through this was to how do we get a further refinement of our go to market. So that we can focus on the top deals or the potential deals that would give us the best response.
From customers, both in new opportunities as well as expand opportunities and so we've evolved that go to market as I mentioned.
To really have a concentration around our major accounts and our enterprise accounts now the major accounts is basically to hone in on those accounts, which have a higher propensity to buy anaplan.
So what we did is we worked with our own technology. Some of the technology that we acquired through our mid to go acquisition, our planning AI group to really kind of get more refined as to what these customers are with their profiles are and then to make sure that we had the right support in anaplan aligned to them.
Now the key thing for US is to make sure that we had that all in place of the start of new fiscal year, because we saw the opportunity ahead of us and kind of work through that so mark and the team kind of helped us work through that.
As part of that process.
We made some leadership changes specifically in the Americas.
Individuals we added some additional leaders new to the company.
So with those changes.
Caused us a little bit of an impact as it relates to some of the opportunities in Q4, but again.
The opportunities are there was still working on those as we go into fly 21, which we now have month, then we still feel very positive about those opportunities plus even more opportunities we had to kick off the sales kickoff Heather back at the beginning of February. So we started the year off.
Very strong all the new team members were able to get their new accounts, the new territories. So they can get a strong start to the fiscal year. So we feel very confident on the changes that we made to kind of worked through the evolution.
And we feel very well positioned for flight 21.
Thank you for that Frank and then I just had a follow up based on based on what you just said and.
But then a strong start to the fiscal year. So based on the fact that your billings growth in Q4 was about half what it's been running at and arguably like your salesforce with what's going through these changes yet that the management change in the Americas. As you mentioned should we then be expecting that youre billings growth.
If you look at where you ended billings for the year right. You. If we take a look at that you did 25, you had been running between.
46, and 59 for the previous three quarters should we then be expecting that growth in billings rebound because you're going after your better aligned for these bigger opportunities that you mentioned and perhaps the 44% billings growth that you just registered obviously a strong performance for the fiscal year in fiscal year, 20, but but should that actually if there is there.
A likelihood based on what you're saying and how you teed it up and kind of sacrifices. He made in Q4 that that accelerates in fiscal 21.
So first let me start by saying that we don't forecast billings all the statements that Dave just went through billings can fluctuate from quarter to quarter. We are focused on making sure that we continue to add new customers were continuing to expand existing customers I think with the new focus.
Around these accounts that we feel have a higher propensity to buy anaplan and be with Anup and long term.
It should be a good amount of opportunity as we work through this year.
I'm very pleased with the if I look back at slide 20, and the overall growth that we saw both in land as well as expand.
I'd like to see that continue I think we have an opportunity to continue momentum again I'm not forecasting billings will take each quarter as AECOM and make sure that we can continue to refine a go to market.
Thank you.
And ladies and gentlemen, as a reminder, please limit your questions to one.
Timing Q you can always press star one to re prompt one follow up question and your next question comes from the line Brent Bracelin with Piper Sandler. Please go ahead.
Thank you.
Yes first for you Frank Good luck to kind of just understand the decision on why you're playing not to backfill for Mark Anderson.
Obviously, there's been a lot of changes to kind of sales leadership over the last three years. So it should love to understand the decision there why you're not going to backfill and then Dave again, just wanted to follow up on Q1 billings you have a really tough computer here you did say billings would track overall revenue growth, but it just seems like with all the uncertainty around qubic.
19, with all the changes to go to market.
It just seems like a really tough market turbulence of snapped back here to track revenue growth in Q1 so.
Loved to get just a little more color on the comments around billings growth tracking to revenue growth.
Given just to sum up all of the uncertainty seasonality all the challenges you have just for Q1, which seems like it's more reasonable the billings would be tracking with what you saw in Q4, so any color there Frank on that and then David just billings. Thanks.
So thanks, Brent So the question so first.
Again, we're very fortunate to be in this in the.
Market that we're in a way, there's so much potential and opportunity and also had a lot of success. There. So the first thing I would say is we will continue to have changed.
I say that externally I constantly say that internally, it's just part of the.
The accelerated growth opportunity that we have and what was experience so as it relates to the sales organization.
I feel very comfortable and very happy about the talent that we have in the sales organization.
If I go around the world what we've accomplished over this past year in Asia Pacific.
It's been ups down outstanding Asia Pacific is a very diverse geography with various different countries and we've continued to perform very well we have a strong leader in place who has been there for two years and she is going to continue to build on that success. This year. If I look at the European market again, we've made a tremendous amount of progress over this past year in Europe.
So many different fronts with large customers new customers expanded customers, we actually had a largest.
Customer of the year in Europe. This year, which is fantastic see it was it was a major expand across multiple businesses within the holding company, which which was outstanding we continue to see more progress.
In Europe, we have a very strong leader who has great experience.
In various other SaaS companies prior to Anaplan and so I'm very pleased in the Americas, where we also have a lot of growth we have a strong leader. There. We've also now supplemented the leadership team in the Americas.
Just overall just to give you a perspective some of which we put in place toward the end of Q4, others that are started in the beginning of this year, we're adding 14 14, new I would say regional accounts.
Cross Anaplan right and so all of those account teams have been established we have leaders in place their strong leaders they've got good experience either from anaplan or prior to Anaplan and they're all reporting into these three regional leaders. So I feel really confident with those leaders.
And I didn't feel based on where we are and what we have ahead of us that we needed to add or had that layer again, mark was very instrumental over the last several months, helping us kind of work through this and helped develop.
Further develop the team to be ready for asked by 21, So I feel good about it.
None that Brian Thats very helpful. On your sorry, Brian just following up on your question.
Related to billings.
We're always going to be very prudent on our forward looking guidance and I feel.
Comparable and what we provided and as Frank has articulated just on the strength of the momentum.
And just really the aperture of the type of deals we're going after and so I think when you put that in the context and that thesis you can start to correlate kind of the opportunities that we look forward to coming into 2021. So one more thing, but I wanted to add because I didn't say this as I said, we had our sales kickoff meeting the first the February it still is.
It's.
Sometimes this pros and cons about having it like that for suite. The pro is we get everybody ready for the new year, but the reason I want to the mentioned this.
And we had as I said earlier, we had over 200 partners at this event in top of.
All the folks we have with Anaplan.
The excitement that we had at I'll kick off the amount of training and support from the partners and also from the Anaplan team was phenomenal I was very I left that meeting very jazzed.
About the team and how energized about the opportunity ahead.
Thank you.
And your next question comes from online of Alex Zukin with RBC capital markets. Please go ahead.
Hey, guys. Thanks for taking my question. So maybe just any sense, we can get on the timing of the of the decision by by Mark Anderson was this made prior to kick off prior to the closing of the quarter.
And then maybe just going back to Heather's question any kind of quantification in terms of how many deals may have slipped out of Fourq you into one Q.
We could get.
Okay.
So so as I said, Mark Mark has been with US the past two quarters. He's worked with us through the month of January and February.
Closing out the quarter, but also from the standpoint of throughout February at the kick off making sure. We had all the go to market plans in place.
He was that he led the whole kickoff.
For the first week of February.
His work with US the last couple of weeks on ensuring that everything was in place. We had there all the territories assigned we had all the quote is issued again, so we get a fast start to the year. So he's been very active very participatory and what we've done. He just made his decision. This week as he and I were talking this week as far as where he is and as I said based on part.
No commitments that he has and also where he wants to spend his time going forward Thats, where he is now fortunate he'll still be as an advisor to me. So celebrity his expertise as we continue to go through the next number of months, so thats helpful as well.
And then as far as far as I'll just go back.
To the question that Heather asked earlier as far as looking at Q4.
Things, it's hard to when when things are growing so fast.
It's hard to continue to add to the team like some of the leaders that we did add in the Americas and get everything established.
As quickly as you would like I think we we've done a good job. So we did have a little.
Disruption through some of those changes towards the end of the quarter, but again, if I look back we did not lose any opportunities.
Thats important to note.
It's just a matter of making sure now as we further refine our go to market and maintain the focus.
Thing I, just I wanted to bring up which I think its importance on highlight.
The what I mentioned earlier about the partners. The partners have also been extremely instrumental.
In this as well.
And I mentioned, Deloitte and their Anaplan plus.
They have been working on that more recently and to have that in place now at the started the year Anaplan plus Salesforce Anaplan, plus Adobe Anaplan plus Google cloud, it's not just the naming.
But there's really a lot of substance within Deloitte working with Anaplan.
Around these solutions and all those solutions are ready and they are in.
The stage of deployment the the magnitude of what that enables.
For our customers our joint customers is fantastic.
If you think back I'll, just give an example of.
Looking at the the digital mix, which is the Anaplan plus salesforce, they're integrating data across their plan to pay ecosystem that that in itself. If you think back of where companies are and the transformation that they are undertaking that is a fantastic solution and a service that is applying to alone.
Many large companies and that fits right into the focus that we have around some of these majors, where they're looking at territory and quota management powered by Hana plan to looking at compensation and crediting which is powered by some of the legacy systems that they have like Sep detailed account opportunity management, which is powered by their sales for.
Yes, and then automated data flow, which is powered by Neusoft.
Think about how that all kind of comes together as a solution that's being marketed by to light and the opportunity Thats out there I think thats just an an example, I think thats why many I've been reading some of the notes that have been coming out of last couple of days from various analyst.
And I know you've been connected with a lot of the partners you're hearing a lot of the but that's why you here in the buzz.
Because they're doing a lot of things right now in support of the opportunity not only for 21 I think theyre looking at this opportunity over the next couple of years.
And your next question comes online Stan Zlotsky with Morgan Stanley. Please go ahead.
Perfect.
Thank you so much guys.
Maybe two questions from money and so with all the changes that are going on sales organization.
From a from a structural perspective on how are you thinking about actual hiring.
Around quota carrying sales reps into fiscal two new on and then a quick follow up one thing that we are hearing from from partners coming out of.
Fiscal 20, and as well as the kick off is the strength of your supply chain business.
When or where are you on that in supply chain.
Business in terms of not just having anaplan coming its customers and.
Standing alongside the supply chain modules standalone to supply chain modules, but also potentially starting to replace.
Some of the supply chain solutions are out there in the market.
With Anticalin. Thank you.
Yes sure. So let me let me just part of your first question as far as the changes I just wanted to be clear as I said, we're always going to be haven't changed so thats just.
Mode of operation Die for us, but separate from the change that's going to continue over the next several years all the changes that were that we put in place for the started 21 are done.
Right. So they are in place we've got leaders in place we've got territories assigned aligned with the accounts aligned with our partners. So as they said the change is in place we put in place. The first week of February where there and I think were already start executing against those so I just want to did that there's a constant.
Change I want to put that out there, but as far as any of the changes associated with the refinements that we made.
In the go to market because it's just a refinement we continuing the successfully go to market that we had before our in place.
Now as far as supply chain.
I can talk about supply chain for long time.
As you can appreciate in certain industries, there's a tremendous amount of focus in digitizing the supply chain.
And making sure that information is available real time, because they have to make decisions pretty much on a and many cases on an hourly basis. When you think about a lot of retail customers CPG customers. When you think about I mean, there's so many in the field I'm thinking a customer segments, we have the cause.
Medic industry, that's all pretty much on Hana plan, we've got a food distribution organization, we have technology company that.
Work through that they're doing a lot of work.
I think even with the environment that we currently have where there's challenges and supply chain based on various things happening globally, having more insights allows them to pivot better and so we have a stand up business unit on supply chain thats, providing support to our field, where the opportunities are in place.
And we also have various partners in our ecosystem that are providing solutions I mentioned some before that so we're working with our partners to address these opportunities.
40% of our business is outside of finance, it's still continues to be about 60 40 within that 40%. That's primarily split between SPM and supply chain I will say supply chain is growing at the fastest rate.
And we've added we continue to add a lot many new customers on supply chain and we continue to see extensions of those opportunities with expand opportunities throughout this past year.
Your next question comes on line of Citi tenant bar with Mizuho. Please go ahead.
Thanks for taking my question I just wanted to ask about the professional services line that was below our expectation or was that the factor of this new deals.
Not close in Q4 or are you Offloading implementation foster the next stricter and how should we think about that for 21.
As we have narrated in and around that before we will continue to deemphasize that think of think of our professional services as more of like us sales enablement portion or an absolute backstop the key to our whole go to market.
As we continue to evolve is within the whole partner landscape that Frank discussed earlier and so it's not.
There was a DSL specifically there it was more about that's just something we continue to deemphasize and over the long term it will sustainably be less than 10% of our of our total revenue strategy.
Yes.
Your next question comes from the line Scott with Needham. Please go ahead.
Hi, David.
Great. Thanks for taking my question here I guess the one question have received most from some of your shareholders. This morning at least 45 minutes is why make all these changes in the fourth quarter.
The expectation of change every quarter trend to refine what you're doing it.
Obviously appropriate given the large opportunity out there, but seems like most sales organizations make these changes in Q1 versus the seasonally strong fourth quarter.
Okay.
Okay.
So first.
Again, I want I want to just highlight this is a refinement of our go to market.
Which was important.
As we continue to focus on some of these opportunities.
It's important to make sure as we start the fiscal year that we get these things in place.
We're also expanding and expanding requires you to add talent and so we wanted we had the talent when we can add the talent. There is no right or wrong time, we've got to do it as the opportunity presents itself.
Right. So I think we work to all through that.
Again, it's not.
We have to we want to make sure that we can continue to evolve.
Not necessarily have any disruption.
We just in the Americas, we added some additional people wouldn't expected to have.
Any.
And the implications we had some but were there and we're moving forward.
Okay.
And your next question comes from the lineup Richard Davis with Canaccord. Please go ahead.
Hey, thanks.
It sounded like to the extent that you're kind of moving.
A little bit up market to larger more lucrative targets.
Historically, when we've seen that happened so why or why not should you start to see kind of quarterly billings move more towards the more seasonally towards the back end of the year, because that's often times.
People buy and or will they be bouncy quarter to quarter and.
Yes, I realize billings as a.
Gary approximate thing, but I will tell you guys give us net new they are are we after kind of live off of that so thanks.
The quick quick answer your question Richard is really you know were growing at scale.
In a very hyper growth method and so.
I don't I don't view seasonality.
At this point in time, and I think weve narrated add before and really the customers.
That are going to have their propensity to buy that that.
We articulated a little bit earlier are going to be the ones that you know irrespective of what time of year. It is because they may be going through their own digital transformation looking for further system of insights.
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And so.
That those economics will be there that Tam.
Is very addressable.
Our competitive positioning.
His first and foremost.
The strength of our platform and so we really to art susceptible at this point in time to some.
Narrative on.
Associated seasonality.
And our next question comes from Kirk Mccarney with Evercore. Please go ahead.
Yes, thanks very much.
Sorry, keep picking and then I guess, Frank just when you think about the changes that happened in the fourth quarter you.
You're going through the quarter. It was there a miss where you live where deals were in certain stages of the closing process and that sort is.
Did you to believe is it good time to make some of these changes which I'll take it makes it are you.
With you that our medical and necessary as you all grow kind of or was it simply just a bad handoff from account.
So control from one person that's coming into the other I guess the reason I ask is.
With that is starting to step down in sort of bookings and billings in the quarter I think it's important for people to get a handle on that those those opportunities work just misread, they're there and they still sort of exist as we go into fiscal 2001. So.
He could keep asking for more color on that but any granularity would be would you help that.
Yes, so clearly I think the key thing here based on your question is if I were to step back.
If I I think there's lot of positive first.
The opportunities are there.
As I mentioned before it's not lost opportunities.
So thats good news from the standpoint, if I look at the overall funnel of potential opportunities both near term and long term continues to grow which is great.
I talked to a lot of what we've been doing the last three years plus.
Secondly.
From a competitive perspective, nothing has changed I know it continue to always get the question about competition I think from that standpoint, we continue to get stronger.
Primarily for many of the things I just talked about.
The opportunity and the shift in those opportunities in where whether it's in finance, whether it's in supply chain, whether it's in sales whether it's in workforce planning.
That transition that transformation, that's going on in more and more companies is accelerating and I think if you go back and look at I read some of the reports that came out toward the end of the calendar year as as they were looking at software spend for the new year.
A lot of those reports talk about that shift and where it's going in why it's accelerating so all of that positions us well the alignment with our partners.
The closer that we get with these partners, whether it's the size whether its various other boutique partners that are continuing to grow around the world aligning with Anaplan, making investments in what we're doing.
Further illustrates many of those previous points.
Positions us well it positions us in that Middle office.
Aligns us with those that are in the front office those that are in the back office and helps.
There are partners clients, our customers rich that and as I mentioned earlier.
It's really the transition that's going from a focus on system of record to the system of insights and all those trends continue to move in our direction. So that's that's really powerful.
Thats why I get so excited about what we're doing and men and Thats why even saw at our kickoff meeting and those of us in the partner as well as an anaplan continue leverage that so I just want to position that as far as.
We have it's important for us to continue to refine the go to market.
As we hone in on these I feel good about how we're now focusing without partners.
On where there is a higher propensity.
Two by looking at those that are ready for this transformation that are faster either they're starting of the further along and so thats why you've got I did three years ago step back lets refocus right now we're stepping back and refocusing I don't I do want to over emphasize this it's not we didn't throw everything up in store.
Total over its a refinement is and its and its a very positive refinement that as I said positions us to better work with our partners around these opportunities.
And your final question comes from the line of carry Telamon with Suntrust. Please go ahead.
Hey, how are you guys is actually Nick on for Terry I. Appreciate your question.
Just want to pivot more toward international getting especially international investments going forward I guess, what you're seeing related to deal size internationally.
And also when you internationally is typically for finance or another let's use cases. Thanks.
Sure So as I mentioned earlier.
If I look at us globally.
And I look back on this past year fiscal 2000 for us.
We've we've had.
I can probably say this I'll just talk about Asia Pacific recently, we've now gotten Asia Pacific to start with their million dollar deals right. So.
Thats started later as far as the evolution within Anaplan.
There now.
Cheating deals that are over a million dollars.
The good success.
The customers that were working with in Asia.
Our global global in that they are.
Pan Asia Pacific, but there were also accounts like in Japan that have businesses in Europe as well as in in the Americas from a European standpoint, I mentioned earlier, we had our largest customer this year in Europe. That's not just one we've had a significant number of very large.
Transactions in Europe.
Continued with the aggressive expands.
We continue to make investments in both Asia Pacific as well as Europe from the perspective of adding more resources.
So both both regions.
I have been doing well and I anticipate a continuation of that we're making investments in all three in the Americas in Europe as well as in Asia Pacific.
And now I would like to turn the conference back over to thank Frank Calderoni CEO for any closing remarks.
So thanks again, everyone for joining our call today I just want to thank all of our customers our partners and our shareholders and the team members for your continued support and we look forward to talking to again next quarter. Thank you.
And ladies and gentlemen, thank you for your participation. This does conclude today's conference call you may now disconnect.
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