Q2 2021 Anaplan Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Anaplan second quarter fiscal 2021 earnings Conference call.
All participants are in listen only mode. After the speakers presentations will be a question and answer session.
Ask a question during the session you'll need to press star one on your telephone if you require any further assistance. Please press star zero I would now like to handle conference over to your speaker today I've made a leader.
T Chek you may begin.
Good morning, Thank you for joining us on today's conference call to discuss at a planned second quarter fiscal year 2021 financial results joining me on the call the Frank Calderoni, Our Chief Executive Officer, and Dave Martin, Our Chief Financial Officer on.
On this call, we will be making forward looking statements, including financial guidance and expectations for third quarter fiscal year, 2021 anticipated future operating and financial performance strategies customer demand production technologies.
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 documents, we file with the FTC, including form 8-K filed today with today's press release. These documents contain risks and other factors that may cause our actual results could differ from those contained forward looking statements. These forward looking statement.
They 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 calling are 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 in operating results are on a non-GAAP basis.
Local period, a reconciliation of GAAP and non-GAAP results is provided in the press release any supplemental financial information on our website.
And with that I will turn the call over to Frank Calderoni.
Thank you Edelita good morning, and thank you all for joining us today.
I'd like to first start with our continued appreciation to those on the front line to keep us safe and healthy during this pandemic.
With the ongoing challenges associated with Covance 19 globally. It is damaged rising to see the commitment and the impact our anaplan team is having with our customers partners and each other during these times.
This was our first full quarter navigating cobot 19, as a global pandemic.
He mentioned last quarter, we focused on building, a healthy pipeline and driving expansion opportunities with existing customers.
Despite the current economic challenges digital transformation efforts remain a top priority for many companies.
Disruptive secular trends only continue fueling the need for businesses to invest in technology and capabilities that will help improve their competitive position.
This is where we're focused on helping our customers navigate the operational response and digital transformation efforts through connected planning.
Moving onto our execution in performance, we continue to see stability in our go to market, making further progress and pipeline quality and sales enablement.
Hi, remaining performance obligation or RPL balance.
Excluding the quarter was $703 million up 36% of last year.
Billings grew 22% year over year and subscription revenue was up 32% year over year.
With that I'd like to provide insights into how we are managing our business through this period.
As we mentioned last quarter due to the challenging business environment and the impact it had on the timing and pace of customer decisions, we increased our focused on near term opportunities within our existing customer base.
This quarter, we shifted more of our pipeline mix toward expanded opportunities as well as the mix of close business.
Approximately 60% of bookings this quarter came from existing customers, which is more in line with our historical average.
Most of our deals greater than 500, K or partner influence, we're driving tighter collaboration in our joint account planning processes, leveraging our partners to connect Anna plan into their digital transformation efforts, but they're driving with the largest customers.
Our partners continue to invest in there and upland practice, adding nearly 600, new certified model builders and 60% of these square with RG Aside partners.
As we've discussed before one of our priorities over this past year.
Has been increasing the number of certified Anaplan professionals with the long term vision of making and a plan the default planning standard for both companies and also for professional.
This quarter, we saw increases across all levels of our model builder certification.
Certified model builders were up 63% doubling in number in less than six months and the next level above level three model builders were up 185% quarter over quarter.
When I take a step back and look at what has changed compared to a year ago and how the enterprise cloud planning landscape has evolved.
Stands out to me is the rapid change that the global pandemic has forced upon businesses.
This endless pace of change has become unrelenting and the need for a connected platform is playing out.
This was highlighted by Gartner in their 2020 cloud financial planning and analysis solutions report, where they recommend companies execute an X.P. in a strategy that enables finance to lead companywide continuous planning and performance management.
Gartner defined this by using the term extended planning and analysis or X PNM.
X refers to the breaking down the silos between financial and operational planning processes.
This concept describes the essence of our connected planning strategy as our platform was purpose built to extend planning processes across the organization to a broader range of business areas.
Such as sales workforce planning and supply chain planning.
To demonstrate the ways in which connected planning enables companies to achieve their performance goals that span the entire enterprise, let me share a few customer highlights.
One of our new customers, a fortune 500 company with over 20000 employees globally chose Anaplan for integrated planning reporting scenario modeling and the unique ability to connect plans across multiple business units segments and functional areas.
We also address their need for agility and speed by meeting their requirement for business self service the ability for business uses to change logic.
Hierarchies and update model assumptions, removing the burden and the barriers to speed that often comes with centralized administration required by the legacy products.
A large expand this quarter was with the technology company with over $50 billion in revenue.
This company has undergone significant change and is transforming its current finance product demand marketing annual quarterly and monthly planning into an integrated cross company collaborative process with a focus on demand planning accuracy and people efficiency.
And a plan was able to meet their key requirements for agility as well as becoming the single source for all planning insights across multiple functional areas.
This customer's investment in Anaplan is expected to generate ROI.
From an anticipated reduction in inventory logistics and other operating costs.
Another key expand and supply chain was with a leading high growth apparel retailer.
This customer needed support with their strategic growth plans on a global scale.
In a fundamentally different way to operationalize the management of in season demand planning and item management.
Our platform provided a flexible business owners solution that would meet their current and evolving needs.
Our in memory calculation functionality allows for a quick decision, making with the planners and allocators.
They also understood the power of connecting to the rest of their supply chain and working with industry partners.
This customer expects to see returns from better inventory management.
And product margins, while also protecting brand loyalty.
In addition to these customer highlights we continue to receive industry recognition Anna plan was showcased in Ibcs study.
Highlighting the market share of the largest vendors in the worldwide Big data analytics software market for 2019.
In a few weeks, we will be hosting our annual user conference connected planning experience virtually.
We will announce some new product expansion related to predictive AI and intelligence technique.
Extending and building on the strength of our connected planning platform, we look forward to sharing the details at CPX.
In summary, we have made good progress this quarter.
And our teams have demonstrated better execution.
Looking ahead, we remain cautious due to the broader economic environment and the uncertainty caused by the ongoing pandemic.
During this time.
We are focused on continued improvement in execution and we acknowledge we have more to do however, we're confident we are on the right track.
I'd like to take a moment to thank all the employees announced plan for being tenacious and resilient.
Our customers' needs for better daily insights across their business has become the norm and there was a lot more we can accomplish together as a connected planning community.
Now, let me turn over the call today, who will discuss our second quarter financials and outlook Dave.
Thank you Frank and good morning, everyone.
Anaplan second quarter results reflect stronger sequential execution.
And then on certain economic environment.
Total revenue for the second quarter was 107 million up 26% year over year.
Within this subscription revenues grew 32% in comprise 91% of total revenue.
Service revenues were 9 million down from 11 million in the second quarter last year as we continue to deemphasize services as a percentage of total revenue.
Second quarter billings growth rate improved sequentially.
Calculated billings for the second quarter were 109 million up 22% year over year. This represents an improvement compared to last quarters year over year growth rate of 10%.
Our PEO exiting the second quarter was 703 million up 36% over last year.
The current portion of ARPO that is expected to be recognized as revenue over the next 12 months is 358 million up 32% year over year and consistent with last quarters year to year growth rate.
Turning to key metrics.
We ended the quarter with almost 1500 customers. In addition, our mix of bookings from expand deals within existing customers improve sequentially.
The number of customers with over 250 K. in annual recurring revenue was 391 up 31% year over year.
Our dollar base net expansion rate or ANRR is 116% this quarter.
This reflects a lower volume of expand deals as compared to this time last year, primarily due to the impact of cobot 19 on the timing and velocity of deals. There was no change in churn this quarter. Our overall customer retention rate is in line with historical levels.
On a sequential basis. The overall volume of expand deals did improve as discussed last quarter exiting Q1, we focused on increasing the level of expand business with our existing customers and as a result, we saw improvement during the second quarter.
While ANRR is still below our historical level of 120%. We remain focused on driving continued sequential improvement in the volume of expand business into the back half of fiscal year.
Turning to our profitability metrics total non-GAAP gross margin was 78% up three percentage points year over year within if subscription gross margins were 85% approximately flat year over year and services gross margins were approximately 9% down three percentage points year.
Over here.
For the second quarter total non-GAAP operating expenses were 93 million up from 80 million in the prior year, primarily due to increases in go to market investments.
We continue to drive leverage and Anna plants financial model and second quarter operating margins were negative 9%.
An improvement of approximately 11 percentage points compared to negative 20% in the same period last year.
As a reminder, Anna plans first half spend is traditionally seasonally heavier with events, including our annual sales kick off meeting and our annual user conference.
With co. The 19, we subsequently pushed our user conference to late September this year and the event is a virtual format.
While the format and timing change for this event yield at favorable operating leverage in the second quarter, we do not expect this rate and pace in the back half of the year as we move forward investing in our go to market and product engineering organizations for continued sustainable growth.
Net loss per share in the second quarter was negative four cents based on 138 million weighted average shares.
Free cash flow for the second quarter was negative 12.9 million.
We demonstrated good working capital management, and we experienced minimal deal exception requests for extended payment terms and split point.
We exited the quarter were 305 million in cash and cash equivalents.
While we remain highly competent a long term digital transformation trends and the relevancy of our platform across all industries, given the near term economic uncertainty from ongoing pandemic, we remain cautious on a broader demand environment for the second half of the year and how these conditions may impact the overall timing for deals.
For third quarter guidance, we anticipate revenue in the range of 109 million to 110 million.
Dennis we expect services revenue to be in the range of 8 million to 9 million.
In order to provide more visibility during this time of uncertainty.
We'll provide a baseline for third quarter billings, which we expect to be in the range of 133 million to 135 million. This implies a year over year growth rate in the range of 16% to 18%.
As a reminder, we have higher year over year compares as the billings growth rate for F Q3 last year's 59%.
Non-GAAP operating margin for the third quarter is expected to be in a range of negative 12.5% to negative 13 and half percent.
Weighted average share count is expected to be approximately 141 million shares.
We have made sequential progress this quarter, both in the mix of new and expand business and our pipeline build.
As a result, we are reinstating our annual guidance.
For the full fiscal year, we expect revenue to be in a range of 437 million to 439 million.
Weighted average share count is expected to be approximately 140 million shares.
Non-GAAP operating margin for the full year as expected to be in a range of negative 11% the negative 12%, representing a 470 basis point year over year improvement at the midpoint.
Longer term, our runway for growth and large market opportunity remain the same way.
We will continue to make investments to extend our leadership in this market, whilst improving execution and profitable growth.
I'll now turn it over to the operator for questions.
At this time I'd like to remind everyone in order to ask a question. Please press star and the number one on your telephone keypad.
Your first question comes from the line Michael Carroll from Wells Fargo. Your line is open.
Hey, there thanks and good morning.
It looks like top line results came in.
Ahead of the guidance you provided last quarter.
It ahead of where many investors were expecting could you just it sounds like some of the expansion activity anticipated.
Came through this quarter, but can we just spend a bit more time on what the drivers of upside versus where you previously forecast looks like and then were there any impacts from FX on either revenue or billings. This quarter, we should be aware of as well. Thank you.
Michael Thanks for your question so as we mentioned the focus this quarter.
This was kind of carrying over from Q1.
I was really to help build our pipeline.
And really work with our partners with especially with expand opportunities with many of our current customers.
A lot of the trends.
That we thought we'd see as it relates to digital transformation working through some finance.
We engineering projects, which were put on hold started to.
He said at the show some traction so we continue to build the pipeline throughout the quarter and we had good close rate.
As the quarter progressed throughout the quarter.
And that led us to the increase.
As you saw in billing and also with our ability to kind of think through how things play out for the rest of year.
As far as.
Anything different we did have a couple of points of benefit.
Billings number from an ex FX perspective, this quarter, but everything else in billing no major pull forward no changes and billing terms it was pretty standard.
Great.
Dave the decision to bring guidance back what gave the confidence to resume here is there anything you can add just around the trends you saw throughout the quarter that that are pointing to the stabilization throughout the rest of the year.
Q.
Yes rural real fast Michael.
As Frank heading barricaded onto some of the deal work overall, the quarter, which was about really good.
Linear progression and so with that continued.
Momentum as well as some of the pipeline Bill that we experience for the back half of the year.
Just enabled us to.
Give us the confidence heading into the back half a year, which that we reinstated our pull your guide.
Thank you.
Your next question comes from the line Scott Berg from Needham Your line is open.
Thanks, Craig can Dave Congrats on great quarter, Thanks for taking the questions.
Frank I wanted to.
Yeah, I wanted to start with a partner execution in the quarter, it's something that we read about in multiple aspects of our checks you seem to be pretty pleased with what probably there is really in the quarter, but.
Anything that you notice that was maybe did put around the execution or maybe.
Wanted to your velocity deals.
Led to some of the optimism excuse me.
Yes, so one of the end we mentioned this again at the end of last quarter.
The key focus, especially in difficult times is to really hunker down.
And work even more closely with partners.
They have a lot of visibility with their clients to actually look through.
And I understand with their clients are and how they're working through any kind of transformation.
Even with any issues they may have based on business environment around cobot.
So we've got closer partners over the past couple of months.
We focus with them on building pipeline.
And we also focus with them on really going in.
Specifically with current customers and looking at different opportunities to help them too cold it.
And we worked on even more so.
Building joint solutions.
For those particular customers with those partners and that helps us I think it's going to help us not only for this quarter was going to help us still import the other thing, which we did mention a few minutes ago.
As we continue to see good traction as far as the investment departments and making an ecosystem as you recall last quarter, we mentioned that our partner ecosystem added about 500, new.
And a plant or model builders this quarter they added 600.
With a substantial number in the.
The large partners so that shows that they see the opportunity working with Anaplan again, forming a much tighter relationship with us and not only is help US now I think it's going to continued helps going forward.
Got it Thats very helpful. Then from a follow up perspective.
Upsells were more I think the word was normal in the quarter in terms of the mix of contributions from new bookings.
It is.
Post call that type of environment or have you seen your customers purchase anything different within those upsells or is that a similar mix between what you see for finance supply chain operation sales maybe age here.
I would say two things one.
As as coal that continues to play out there's been a couple of areas that have been high focus, especially in finance organization around financial health.
Balancing some of the disruption with having some planning for recovery for their business being more predictable about how they can look at different scenarios.
And then the other thing I would say supply chain resiliency slowed those seem to be the four key theme.
But on the other side.
Just talking with a CFO yesterday, we were getting ready for our CTX conference coming up we're going to do a round table.
And I ask them a couple of questions just impressive.
And he said that we've always known like five years ago, we've always known that we've had to make some changes.
And we delayed we delayed any delayed and now even more so we're seeing the need and I think I think is that resonated with me yesterday and I think that's starting to come out I mean, it's still early I don't want to get too far away. It's starting to come out were organizations, especially finance organization a.
Realizing that they can make some changes and pivot now, especially with these challenging environments and start to see some of the benefit.
Associate that so they're starting to bring some of these projects.
Back in for consideration.
I think thats, helping us as it relates the pipeline, but again these projects.
As it takes some time they required funding, but not only funding. They also requires some of the skill and that's been one of the challenges to with limited skill going through coded how do we how they have they build those skills to be able to kind of make sure that can work on these projects along with Anna plant as well so that part so we're trying to help them to that.
Very helpful. Thank you congrats again.
Your next question comes on the line of current Madelyn Evercore. Your line is open.
Thanks, very much and I'll echo the congrats on a good quarter. Frank I was wondering if you just talk a little bit about.
Served the verticals that you're seeing success in and if Theres any particular reason for that meeting I think we all understand the verticals that are more impacted by covance, but you given where the economy is right. Now are you having more success in some areas where budgets, maybe a little bit more open.
Just curious if there's any sort of vertical.
Aspect to this quarter or how you see you might want shaping up into the end the year.
Sure Good question.
Last quarter, we realized especially with the large amount of new business that we had coming into the quarter.
That cold it hasn't met a dramatic impact in certain verticals.
And so throughout the latter part of last quarter, and then going into this quarter.
I think we did a fairly good job of kind of scrubbing, our pipeline really can make sure that we were identifying the areas, where we thought customers.
Did have the resources it had the fund.
And they have the capability to start to move some of these projects forward.
Among those.
I would say that has been.
Let's say more active with us over the past couple of months first I would say health care.
Which is fairly obvious.
We've been doing quite a bit of work with healthcare companies, we've had some small medium and large transactions with healthcare.
The healthcare opportunities have been within finance, but it also extended into work with clinical trials.
As you know Thats, a big area right now, especially with the work on the vaccine and things like that but organizations healthcare companies that are looking to find better ways of planning around.
Around some of these clinical trials and set can help for us.
The other vertical I would say is technology.
We've had quite a bit of activity.
Within the technology sector in finance, but also in supply chain.
If you recall last last quarter, we mentioned that technology company that was actually working through a supply chain transaction to help them get better visibility into various components.
We see more of that activity this quarter with technology.
The other one I would say the third one I would highlight.
Is some segments of retail.
And I think the retail piece.
Is it mix story, we you've got some detail that had been very strong too cold it and I think they're investing.
Primarily to make sure that they have the agility and resilience in dealing with some of the changes, especially tying financing to supply chain.
Those are the three I would highlight that come to mind is probably a few others that those to the top three thats helpful. Thanks, Frank and then Dave just one quick one for you on dollar base net expansion in 116 as it goes better than some were obviously, fearing given the uncertainty going this quarter do you feel like that sort of mid one teams range is probably a owner.
Rich you guys, maybe you're going to bottom out and I know theres a lot of uncertainty still so I'm not trying to take you down too much but you feel better about that metric continued to improve I think you mentioned that sequentially or in your comments, but just wondering if you could just.
Talking about that a little bit thanks.
Yeah, Good morning Kirk.
It continues to be area of focus of ours, not only the velocity, but also the expand motion.
When you think about it and the overall context, the just the cost of acquisition.
But to your point last quarter, we narrated on ranges that could have been as long as onetime.
Yes.
From a from a downside perspective.
We're a little bit more confident on that and so I think your.
Conversation point in and around the mid teens.
Kind of as the trough.
If things don't go our way the kind of the the low end of the range.
But as we continue on with the stabilization our execution our linear progression.
Something that we continue to be very mindful of.
Thanks for taking the questions.
Your next question comes from the line Terry Tillman from current security Your line is open.
Yes. Thank you for taking my question I Echo the congrats on the improving results I guess I just had one question and I don't know.
Just starting to come back to your reinstating full year guidance, what I'm curious about as we get kind of pro more on new deal pipeline. What are you seeing there in terms of the size and scope of some of these newer logos that are showing up again in the pipeline.
Do they tend to be global 2000, or more midmarket and just how do you see that starting to then monetize and actually start closing again, the new deals. Thank you.
So so Terry the.
As we said the focus this quarter was on expands and I think it worked well for us, but we continue to support new customers.
I would say that the from a new customer perspective.
It's kind of a mix I would say we have.
Low end.
Medium and also some large larger transactions with some new customers as they start to think about.
Working especially in some of the verticals I mentioned before.
Talked about one on the call today.
With the technology company, that's actually working through a finance transformation.
That's a new customer that has been starting to move down a path, let's say over the past two three quarters on digitizing a lot of their processes.
And so it was time for them also now to think about the planning side of that and so we were able to kind of work with them.
I'd like that one because I would say, it's it's a it's a medium sized deal, but it has a lot of potential to further expansion.
Not only in finance, because it's continued to be a platform.
Transaction over a longer period of time, but also the capability.
Similar to what we've seen with other technology companies tying that back into supply chain as well.
So those are the types of of new business.
Dave mentioned, we got close to about 1500 as far as customers. So we did see some new customers join anaplan about 40%.
Every business is new customers.
In some of the verticals I mentioned before as well as mostly I would say on the finance side with some in supply chain.
Your next question comes from the line of Heather Bellini from Goldman Sachs. Your line is open.
Great. Thank you.
Might have been answered, but just wanted to go back to the Salesforce changes that you announced a couple of quarters ago, and given kind of how the pace.
You know your comments about focusing more on the installed base I'm just wondering if there if he made any pivot.
Back that are going to be.
Long term in nature or are you going to kind of keep going down the path.
She started this fiscal year in terms of southwest orientation. Thank you.
Thanks Heather.
We're continuing the plans that we put in place at the beginning of the year.
As I mentioned last quarter.
Putting those plans in place and then dealing with the Covance situation 30 days later.
Was not the best timing, but I think we state and work through it.
If I look at where we are now like until six months into the first half of the year.
We have a very I'd say as they're stable go to market organization around the world.
In all regions.
The leadership position.
In the various regions are filled we've got the meters they're focused.
Despite a lot of the distraction that we've had the last few months with cobot.
It's been really kind of working through.
Having our go to market teams spend their time, where they do have the time to work with our partners and then very very much with customers I think we've done a lot this quarter.
With our Anaplan helps.
Really being empathetic to what our customers experiencing offering assistance, where we could and nothing I think that buys a lot of goodwill, but it also allows us to get even closer to some of these customers.
And that's the approach we've enhanced our sales enablement on them as far as some of the new people to join the team make sure that they.
They get trained pretty quickly on the platform.
And on a go to market and again jointly with our partner, it's kind of working through that I I think it's developing nicely and I feel good about where we are and I think we're positioned as I said.
To continue that in the back half of the year.
Great. Thank you.
Your next question comes from the line Farah headwind from Macquarie. Your line is open.
Great. Thank you. Thanks for taking my questions guys and it's nice to see accelerate apples last quarter realistic about environment.
Well I'm, hoping you could give us the mix of what you're seeing today in terms of customers, who are using anaplan for traditional finance roles, which has been more diverse supply chain and plans at this app range that many customers are using you for today.
Yes, so our mix, which has been pretty steady is around 60% of our business. If I look at even current business, which is in finance.
And we have been that our platform is an enterprise platform.
We focus.
Most of our efforts will be call around the offices and answer the offices CFO, because we think I firmly believe having spent my career.
In financing in different planning roles.
At any type of planning, although this planning across the enterprise.
It really starts and ends in the finance organization and the challenges that companies that had over the years has been the disconnect finance tends to work in the silo and then everyone else plan in their own specific functions, so, allowing a connecting point at or at least a strategy to get that connecting point.
Tom has been very helpful, but we try to emphasize.
Finance as there are significant.
Lets say foothold into an organization to make sure that even if we are working in other parts initially.
We've got finance team in the CFO engaged in aware and supportive of what we're doing that ultimately again, it's been type backend.
So that's that's kind of where that played out even though we've seen good.
Growth rates in sales performance management.
As well as in supply chain.
But a lot of those like one ammonia we had a deal this quarter.
In Europe.
Which was.
That's a sales performance management transaction.
This was a very large customer.
That is looking to align a lot of their sales team specifically in Europe, but also thinking about it more globally overtime.
Tying back into a lot of the performance into the finance organization and so that was a great example of really selling into sales performance, but actually connecting back into the finance organization.
Your next question comes from a line of Joseph Zapping from Canaccord. Your line is open.
Hi, good morning, Thanks for taking your questions and congrats on the group results like I know that with the reinstatement of guidance.
Origin, but just wondering with them some of the continued focus on expand deals.
Perhaps versus new how you feel about can change your kind of mine that opportunity.
Endemic continues here for a while we think there's enough in there.
To kind of continue to execute on this kind of kind of more expansion.
Centric growth strategy for a couple of quarters among the quick follow sure.
So give me an opportunity to kind of mentioned as we talked about earlier.
The covert situation is still with us.
Got it looks like it's going to be with us for some period of time.
That does provide a tremendous amount of uncertainty.
And things of course can always change so I just want to put that out there.
But if I, if I think about.
The customers that we have right now.
The focus.
When you have no around 1500 customers that have started on the journey with Anaplan.
And the journey was not really I would have to say a majority of our customers.
Didn't come to end the plan to do a single use case.
They came to Anaplan with an objective to really drive.
More extensive extensive use of our platform.
And so that provides us with with good opportunity.
I've said this before I'll say it now.
I do believe with many of our customers who in the early stages of working with them.
If I look at some of the ones, we highlighted last quarter, we highlighted a pharmaceutical company.
Highlight a technology company this quarter, we talked about another technology company all the ones that we highlight on this cold EEZE a platform transaction.
It has ongoing.
Roadmap.
Working with Anaplan and working with partners I think again, it's early early stages.
In some of these 10, our objective similar to what we did this quarter.
Right now is to continue to keep focused with our customers again, staying close to them. How can we help them leveraging the strong relationship that we have with them and seeing what more we can do to offer and I think that provides us with a good foundation again, I caveat that with the environment.
Spending is still challenged as I said before getting the right resources to do some of the work continues to be a challenge.
And then how does it prioritizing some of the other things that they going on but we're trying to work to that balance with many their expand.
Opportunities that we have some than we've had this quarter and that we see coming up.
Your next question comes from the line of KLM Mckinnis from Deutsche Bank. Your line is open.
Yes, hi, Thanks for taking my question and congrats on a really solid corridor. So I wonder is of course on the billings guide of 18% growth at the high end because I thought that that was really solid, especially given the tougher comparison three Q. So can you talk about what you're seeing in the pipeline that gives you comfort with this level of growth and maybe offer some assumptions around.
New business, our net retention or churn that's embedded into this guy and then lastly, just curious if you think this is representative of an inflection the demand environment, our sales execution or not just yet.
So I'll start and I'll, let Dave I'll, let you jump in as well.
Again.
When we think about the guidance.
Provided.
We did see linear progression in the topline results this quarter billings calculated bookings.
That helps that pace of business starts to help give us.
Better insight secondly, the pipeline that we've been working with with ourselves as well so partners.
Good improved and so that provides.
More visibility into opportunities third similar to what I just mentioned.
Expansion.
Understanding appreciating where customers are.
What they need to do.
It is important as well and just.
Again, just watching the last few months and the deal velocity as far as.
The activity and having been able to close those transactions.
Again, I put that out there.
We try as we gave the guidance yes, it is tough compare.
Mobile phone make sure.
That would balanced in what we're seeing.
So we don't get ourselves too far ahead and Thats why we gave the guidance that we did from a billings perspective.
Did you want to anything to that.
Yeah. The only thing I'd add is we've got nominal ranges on low single digit churn you know, we're not seeing in any anything evolve there.
We continue to put our customers first will not work good good customer retention.
So that obviously plays into the model and our specifically where.
Refocused motions on expands and so even if you play.
Well on that the case of 114, and then upside case is above the 106 statement. So.
The price point, we're really prudent on providing this is.
Actual guy.
And now we're confident in the numbers we perform.
And again, the whole caution I'd put out there right because of the unknown, but the environment.
And try to keep that balance with some of the things that we've experienced as it relates to the pipeline. So trying to keep that balances can be important for us as well as for all of you that are interested in.
In endpoint.
Your next question comes from the line Josh back from Keybanc. Your line is open.
Thank you for us for taking the question I wouldn't follow up on some of the partner commentary it seems like you're getting a really strong.
Dorst when I think you mentioned 600, new builders.
Quarter, which was actually up from last quarter. So I don't know if you could maybe just help us understand maybe what is in their mindset. You know obviously be similar some large system integration partners you know they have other pressures. It seems like they are investing in this more so is it is of the category of planning the rigs.
Hi, this is about visit.
Digital transformation, just you know any other color you can provide on this kind of increase.
The investment from partners.
So I think it's all that I mean, if you think about partners are going to make investments where they can see opportunity there businesses driving not only building out anaplan models as part of the platform, but providing consultancy around what they're doing so.
As they work with their clients their focus is going to be on digital transformation finance reengineering projects that are going to you know for them not only just give them.
An initial engagement, but perhaps the longer term engagement.
And so they're working through that I think with a lot of I'll go back to what I mentioned earlier about the Gartner study.
And the X DNA be extended financing planning.
If you go into that study that came out a few months ago.
You'll see that they may some fairly.
Bold predictions over the next four years as far as specifically around what finance organization. So we'll be doing and some of the projects that they feel.
Are likely to occur as finance organization modernized.
And it's similar to what I mentioned, a few minutes ago, when I talked about the CFO that I spent some time with yesterday.
I believed it for a couple of decades some of the challenges that have been out there and that have been delayed delay delayed. So I think that partners to seeing that whether it's you know they can't really say is it this quarter next quarter. The next few quarters cold. It does play a role, but they are seeing that shift.
And that trend over the next several years.
Which is why think.
They've been getting closer to Anaplan and also by they've been making the investment they wouldn't be investing 500 last quarter 600. This quarter, if they didnt see the ability to get the return so I think thats a good indication.
I'll just say this this quarter I spend quite a bit of time.
With our partners, we do QB ours with them.
And just and misses in the early July July timeframe relate the at senior levels really thinking through some of the investments how we're doing and.
Some good indications from them as far as the interest.
And the focus around planning and specifically the engagement endpoint.
Yeah last question comes from a line.
Raimo Lenschow from Barclays. Your line is open.
Hey, Thanks for squeezing me in them Congrats from me as well.
Two quick questions.
Frank.
We only have two things going on for you we have to the sales sales execution team just a charge into that it's just that started in Q4 and if you've been working on and then they have corporate.
Talking where where we are on on and then kind of fixing sales execution, usually takes a couple of quarters and so we saw that in Q1, you've got a little bit better Q2, we got a little bit better where are you on on that journey, we kind of pretty much time now and now we just battling to covert effects or are we still it kind of the tail end of that one.
And then one last word on what are you seeing in terms of competition because obviously your area is greenfields very interesting.
And our guys are kind of obviously seeing that as well what are you seeing in terms of competitive dynamics. Thank you.
So as far as coded Covis Corbett I think we're all working to that and trying to figure out that landscape and how it will continue to evolve and I've just said before I think it's going be with us for some time and equal getting.
Two except that and trying to make the necessary plans to work through it.
As I said, we try to adjust pretty quickly to be work from home environment and continue to make the necessary investments to ensure that our employees are doing the best that they can in that environment and thats an ongoing that's really ongoing even as of this week last week and dealing with some of that so we'll continue to work through that has.
And as the sales.
It's continued evolution as you said made progress in Q1 further progress in Q2 as they said we're going to continue to make progress it's the constant.
Evolution, we're growing company and we want to make sure but people that we add with quickly enabling.
With the right type of information and training.
And the alignment with partners, we make you want to make sure opposition to filled I feel good about where we all right now from the staffing perspective, we've had.
You know low attrition, which is also good sign that the.
Energy morale of the team in comparison to with others and also in historical for Us.
So we're going to continue to stay focused I mean and continued to build the Reits have culture.
That's that's always evolving from that perspective as far as competition.
You really have had any change with competition.
Customers are choosing us because the value that.
They stay fee in the platform and as I've been saying the left in responses last couple of question. The platform an approach that we have which is enterprise wide is unique.
Even though there's others that are out there, providing a financial or supply chain or sales performance management.
They tend to be more narrow and more the opportunity to go back to Gartner.
It's on extended at DNA, So I think we.
We are I believe in a leadership position from that perspective, and our objective is to.
Continue to invest in stay there.
We'll talk more about some of the things that we're doing as we continue to.
Add to the platform.
As we get the next couple of weeks and CBX.
So I want to thank everyone for joining the call today.
Just to also want to thank our customers partners and also our shareholders all view.
And our team has been Anna plan for the continued support we look forward to talking to again next quarter and we invite you to participate in our CTX virtual CPX.
Which will be in mid September. Thank you all.
This concludes today's conference call you may now disconnect.
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