Q3 2021 Anaplan Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the independent third quarter fiscal Twentytwenty One earnings conference call. At this time all participant lines are on mute. Please be advised that todays conference is being recorded after the speaker's presentation. There will be a question and answer session.
Good question during the session you'll need to press star one on your telephone if free acquire any further assistance. Please press star true I would now like to turn the call over true speaker today, Edelita Tichepco Vice President Investor Relations. Please go ahead. Good morning. Thank you for joining us on today's conference call to discuss on a planned third quarter fiscal year.
2021 financial results joining me on the call a Frank Calderoni, our Chief Executive Officer on Dave Martin Our Chief financial.
On this call, we will be making forward looking statements, including financial guidance and expectations for fourth quarter and fiscal year 2021 anticipated future operating and financial performance strategy customer demand product technologies. These.
These statements reflect our best judgment based on factors currently known to us on actual events or results may differ materially.
Please refer to documents on file 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 current or accurate.
He 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 gross margins expense is an operating results are on a non-GAAP basis for historical periods on a reconciliation of GAAP and non-GAAP results is provided in the press release and supplemental financial information on.
On our website and with that I will now turn the call over to Frank Calderoni.
Good morning, and thank you for joining us today.
This quarter, we continued to execute as companies prioritize investments toward initiatives that drive incremental business value.
While the economic backdrop remains challenging with the ongoing impact of the pandemic. We are at the forefront of helping our customers transform their business.
As strategic partners to our customers there isn't there more urgent time to have connected planning across an enterprise.
We are working closely with companies, who understand that effective planning is critical to managing their business in.
On a dynamic environment, we have the unique solution with our connected plenty platform, which link strategy execution and operations to financial metrics.
Our third quarter's performance is a testament.
Two our focused execution and the exceptional value we drive for our customers.
We now have 417 customers with our over $250000.
We're also meeting our customers expectations.
As a key strategic partner demonstrated by solid customer retention rate approach.
Approximately 60% of bookings this quarter came from existing customers, which is in line with historical average.
Growth in new Enterprise logos were also healthy this quarter, reflecting the focus on building a robust pipeline over the last several quarters.
Our remaining performance obligations or RPL balance exiting the quarter with $740 million up 25% over last year Bill.
Billings grew 27% year over year and subscription revenue.
It was up 31% year over year.
Our results continue to build on our market leadership and one of the strategic priorities I'm. Most proud of has been the focus on building a world class ecosystem of talent and.
On Master Anna planners.
This focus on the people element of planning is why we have built a community for planning professionals across a variety of functional background.
The number of certified Master Anaplan or is this quarter continues to grow.
Up over 50% year over year.
Our annual connected planning conference CPX is a premier event for this community of talent.
This past quarter, we had record attendance at CPX with over 7000 registered attendees, a 250% increase over last year.
We had strong partner involvement with over a thousand plus attending CPX.
Many of them, leading speaking engagements and workshops, including Deloitte Accenture, Eli Mackenzie Bain and Genpact.
We announced several key product updates at CPX. These innovations placed the power of our technology.
Into the hands of our end users.
We have been working diligently with our customers to provide innovative third party machine learning engine and we are expanding the ways to connect two additional data sources.
Our vision has been to offer a platform designed to help companies leap forward in their ability to anticipate the future.
Rather than on relying on an archaic unintelligent technology that only focuses on the past.
As an example, our newest innovation called plan on Q with Amazon forecast.
Leverages machine learning technologies M.
Amazon forecasting algorithms that they use for their own business will now be available for anaplan customers for a variety of use cases.
We believe forecasting is an integral part of any thoughtful planning and our customers will be able to improve accuracy to MLP driven forecasting without requiring any machine learning experience.
Another platform enhancement, we announced is cloud works.
We have now enables seamless and bidirectional integrations with a variety of cloud based systems.
As the connected plenty platform single source of insights.
We know our customers gather data from transactional systems through a variety of mechanisms.
A lot of this data and insights is being generated in cloud systems and in order to make it easier for our customers.
We have now automated that day to pull from a number of solutions, including a WSE growth.
GCP query or is your data lake.
Cloud works a simplified this data mechanism and will make it easier for end users.
We also announced a new strategic partnership with Google Cloud.
Which will enable the expanded reach of Anaplan platform access to new geographies and empowers customers to use the platform closer to where the uses are located.
Running in close proximity to a customer's user base helps drive even higher productivity and performance. While also addressing some of the data sovereignty use cases.
Enterprise companies are making choices on their preferred or primary public cloud.
On the Google Cloud partnership helps us with enterprise prospects and customers.
For example, a large retail prospects in Asia Pacific has a deep strategic relationship with Google Cloud.
And we're excited to see our commitment to this partnership day.
They see tremendous benefit in having a connected planning platform running on the same technology stack with deep integrations to other services said.
Several of our ESI banking customers in EMEA and Asia Pacific are using the Google Cloud technology stack and see significant advantages by having anaplan.
Also run on this technology for easier integration and data compliance.
By leveraging the public cloud, we aim to expand the market penetration of Anaplan.
Our new strategic relationship includes a joint go to market partnership with systems integrators, including tremendous opportunities for partner developed solution across functions and verticals that leverage both Anaplan bank.
Google Cloud technologies.
We have articulated every quarter.
Our partner ecosystem is a key part of our strategy, enabling our business to scale, both from a services and go to market perspective.
Our partners unique role in driving transformation.
Enterprise companies is also key to ensuring that our customers have access to the leading techniques and processes with our Anaplan platform technology at the center of these transformation efforts.
We recently announced our elevated partnership with Deloitte to a global strategic level demonstrated continued momentum completing over 300 implementations at global enterprise customers across many different industries.
We also have new executive sponsorship with Accenture and Eli and we are building joint offerings in areas, such as banking and telecommunications.
We saw strong contribution from partners in Q3 were over two thirds of our top 20 deals had partner influence.
The anaplan value proposition is resonating with our partner we are at the forefront of many digital transformation discussions.
On partners are amplifying the anaplan value to their customers into other pervasive digital transformation platforms like Salesforce, Adobe Servicenow workday and S&P.
Anna plants connected planning platform and growing user community also continues to receive industry recognition.
On a plane was showcased as a leader for the fourth consecutive year in the Gartner Magic quadrant for cloud financial planning and analysis solutions.
We were also named the sole leader.
In the inaugural Gartner peer insights customers choice for sales performance management.
Anaplan has moved up from major player to leader in Idcs 2020 vendor assessment.
For cloud Enterprise performance management software.
I'd see highlights anaplan as a cloud M vendor that approaches this space with the idea that planning encompasses more than just the finance function.
And labeled Anaplan as one of the larger pure play M vendors on the market.
Despite the uncertainty in this current business environment.
A customer wins this quarter underscore the value of Anaplan is unique ability to solve for enterprise great operational planning.
A common theme across all our customer conversations is the need for significantly more insight.
Into the performance of their business. They now have greater access to data and are looking for ways to identify that dynamic levers that will impact and influence their business outcomes.
We recently announced an expansion of our relationship with shell.
As part of a multiyear deal to help accelerate their digital transformation.
One of our new customers. This quarter is a fortune 50 company.
Who selected Anaplan to radically modernize its sales performance management capabilities.
Moving away from a 20 year old home grown mainframe based SPM solution that could no longer keep up with the needs of their business and 10000 person sales force.
This customer needed a platform that could support sales performance management on a larger scale.
With functionality to support further growth.
They wanted the ability to move to more frequent and iterative planning a better balance to their territories on board acquisitions in a shorter timeframe and provide a better experience to sellers.
They chose anaplan as the only solution that can support a range of different use cases across.
Across territory and quota sales forecasting incentive comp and much more all on a single platform in essence, delivering a connected sales business outcome.
Another new customer and large deals this quarter.
As a leading healthcare distribution company that provides products education clinical programs and services across 13 different distribution channels with over $15 billion in revenue.
Anaplan net both the functional and technical requirements the.
The customer is not just looking for a vendor for a partner to help transform the current end to end processes.
Anaplan was the only vendor to cover all requirements with one platform.
Our platform's unique ability to extend across an entire operational landscape is what allows us to capture steady follow on business within our existing customer base by deploying the platform and other functional areas within an enterprise.
This quarter, a fortune 50 company expanded its use of Anaplan to now over 10 different use cases, covering over 20 critical go to market activities.
The ability for thousands of users to collaborate simultaneously immediate integrations between used cases and the financial benefits in terms of incremental topline growth are expected to drive significant ROI for this customer.
We also recently kicked off in early access program for our newly announced plan on Q with multiple customers.
For example, the commercial team at a large pharma company.
We'll use plan Q4, the demand forecasting of 2500 prescription pharmaceutical products sold in over 20 countries.
The forecast predicts patient demand for each product. This customer has four years of forecast datasets, which are a combination of internal and external attribute for use in early access program.
Their goal is to use plan on Q to significantly improve the forecast prediction accuracy, while also reducing the resources required to create the forecast and cycle time.
In summary, we continue to execute in an environment with the impact of the ongoing COVID-19 pandemic by delivering value to our customers to help them achieve that digital transformation goals.
This year continues to challenge the entire business community, but I am confident in our market leadership as we our strategic partners to enterprise customers.
Product innovation just in the last quarter alone demonstrates our category leadership in connected planning.
Finally, I want to thank our customers partners investors and especially our employees, who have continued to persevere and remain resilient throughout this time period.
Now, let me turn over the call to Dave who will discuss our third quarter financials and outlook Dave.
Thank you Frank and good morning, everyone total.
Total revenue for the third quarter was 115 million.
28% year over year.
Within this subscription revenues grew 31% and comprised 91% of total revenue.
Service revenues were 10 million roughly flat from the third quarter last year as we continue to maintain our services contribution as a percentage of total revenue.
Third quarter billings growth rate improve sequentially.
Calculated billings for the third quarter were 145 million up 27% year over year and represents a sequential improvement compared to last quarter's year over year growth rate of 22%.
Our PEO exiting the third quarter was $740 million.
From 25% over last year.
The current portion of RPM growth that is expected to be recognized as revenue over the next 12 months is $383 million up 28% year over year.
Turning to additional key metrics, we demonstrated healthy new enterprise growth and ended the quarter with over 1500 customers.
Our dollar based net expansion rate ER and our AR is 113% this quarter.
We remain focused on driving higher volume and expand deals. However at our does continue to reflect a lower volume of expand deals as compared to this time last year.
Primarily due to the impact of COVID-19 on the timing and velocity of deals.
There was no change in churn this quarter and our overall customer retention rate is in line with historical levels.
Turning to our profitability metrics total non-GAAP gross margin was 76% roughly flat year over year.
Within this subscription gross margins were 83% down approximately 167 basis points year over year and services gross margins were approximately 5%.
Now four percentage points year over year.
For the third quarter non-GAAP operating expenses were 93 million.
Up from $77 million in the prior year, primarily due to increases in go to market investments.
We continue to drive leverage and Anaplan financial model, while investing in key areas within go to market and product development third.
Third quarter operating margins were negative 5% an improvement of approximately five percentage points compared to negative 10% in the same period last year.
Net loss per share in the third quarter was five cents.
Based on 141 million weighted average shares.
Free cash flow from the third quarter was negative $9 million we.
We demonstrated good working capital management, and we experienced minimal deal exception request for extended payment terms and split billing.
We exited the quarter with $297 million in cash and cash equivalents.
Looking ahead, while there may be continued economic uncertainty digital transformation efforts remain a top priority for many companies as we mentioned last quarter. We'll continue remain focused on building, a healthy pipeline and drive and expansion opportunities with existing customers.
For the fourth quarter, we anticipate revenue in the range of $118.5 billion to 119.5 million.
Within this we expect services revenues to be in the range of 9.5 million to 10.5 million.
In order to provide more visibility during this time of uncertainty will provide a baseline from fourth quarter billings, which we expect to be on the range of 152 million to 153 million.
This implies a year over year growth rate in the range of 20% to 21%.
Non-GAAP operating margin for the fourth quarter is expected to be in the range of negative 10.5% to 11.5%.
Weighted average share count is expected to be approximately 143 million shares.
As a result of our third quarter performance and guide for fourth quarter, we are raising our full year revenue guidance to be on the range of 444 million to 445 million.
The continued leverage in our operating model, we expect an improved non-GAAP operating margin to be in the range of negative 9% to 10% representing a seven percentage point year over year improvement weighted average share count is expected to be approximately 140 million shares.
While we have yet to conclude our fiscal year 22 planning cycle, we'd like to provide a preliminary and high level view as we continue to remain confident in our long term ability to capture the strong momentum from digital transformation and the value that we bring to our customer base.
As such we are currently planning per preliminary fiscal year 22 revenue of approximately $550 million.
In closing looking beyond next quarter, our runway for growth and large market opportunity remain intact.
We will continue to make strategic investments to extend our leadership in this market from drive towards profitable growth.
I'll now turn it over to the operator for questions.
At this point, we will be crank on our Q1 day session to allow for as many questions as possible. We ask that you. Please limit your questions to one question with one related follow up in order to ask a question. Please press Star then the number one on your telephone keypad. Your first question how much from the line of Alex Zukin with RBC, Alex Your line is open.
Hey, guys. Thanks for taking the question.
Hope, you're all staying safe and well.
Have a great Thanksgiving I wanted to ask.
Just around the selling environment and what you're seeing the sequential kind of improvements from Twoq to Threeq, you and as you look at the pipeline for for Q.
And beyond that is nice to see the preliminary guidance from nice surprise for next year that gives us a sense of of increased confidence, but just walk us through what that demand environment feels like how it's changed where you sit today and then I've got a quick follow up on the delta between billings and share.
Hi.
Thanks, Alex I appreciate the question in the first thing I would say is.
If you think about the selling cycle.
We've continued to be focused as we've kind of recovering from Q1 into Q.
Two into Q3 and then also.
So kind of how we look at Q4 and if you think about the overall it has to go with a lot of the digits.
And as we just mentioned both sides.
David I.
We.
Net is becoming more and more top priority for us.
Customers.
And we're seeing that.
More and more.
And probably every week talking to on average five to six maybe.
The more.
Executives.
At either existing customers or new customers and they're talking about some of the changes underway in their business model.
Even when they are doing well.
And the importance of really kind of focusing on scenario based plan on so overall, we're seeing that can you to build a good pipeline.
Both the near term.
In long term so that pipeline continues to improve.
Based on that as you saw we had a good mix this quarter, 60% expand 40% new.
So on the expense side, which has been our focused on over the past two quarters.
We are seeing existing customers rethink.
The platform that they have within Anaplan.
Which is great.
On the other side.
This quarter showed some strength, which was good to see and so were building both we're focusing on expense.
As we think about the pipeline and that's kind of I would say a similar type of trend that we're seeing as we now enter Q4 and also as we think about free 22, and how we how that could play out on that.
So I think thats still about the same.
Same from what we saw on Q2.
[laughter] planning.
Within businesses and then secondly.
For us it's a matter of continuing the execution within the backdrop of a pandemic right and we all have to deal with that skills, we're seeing some time and that adds.
At least some challenge, but I think the important aspect here is companies are looking at the longer term and where they need to.
Correct.
Yes.
Once per day, if I look at the debt like calculated billings growth strong this quarter of 27 per se and non what I look on the CRP, though if we calculate CR geos subscription bookings on a change in CRP, though.
Plus subscription revenue grew 20% growth so that's a no.
It had dealt with the last quarter. It was the other way it was 22% billings growth and 29% year subscription bookings growth, maybe just remind us why that tends to jump around and which one is the better forward looking indicator.
Yeah sure good morning, Alex.
Year over year comps it gets a little more debt.
On a year ago, we were coming off.
Bump just.
Just our all time high performance pre pandemic and so coming into.
This backdrop and.
As Frank had married at on.
I would tell you do that we're always going to have timing Delta us within our billings.
Ill from quarter to quarter, which makes it a little more difficult to provide.
He then.
Repeatable scalable forecast.
That looks very clean in that manner with that said, we still try to provide our best value at that time with no timing of renewals as well as the deals that we have within our pipe and so world will continue to provide that baseline. When you think about kind of the context for forward look.
Game I still tend to lean on the.
Our appeal the current RPL, because I think that gives you a very clear.
Persona of the true economic and commercial deal ahead of us versus timing.
Hopefully that gives you a good sense of kind of what goes in and around our planning process.
[noise]. That's all I guess is there just maybe just another way to ask it is there any kind of timing or contractual differences look better.
So just again that delta, but the delta between the current RPL growth on the billings growth is actually very small, but if you look at the change in current our IPO.
That delta looks looks pretty meaningful so just I got any any color on the reserve contractual term duration element here [noise] payment.
Payment element any other element on the clinical hold on to call out.
No everything was pretty standard fare when you again, just remind everybody our standard contracts or three years, we asked for one year upfront on on cash.
So that that's typical of what generates.
Our overall RPL and there has been no change within that contractual duration on that I'll call cohort on.
Yes.
Perfect. Thank you.
Our next question comes from the line of Raimo Lenschow with Barclays made on your line is open.
Yes. Thanks.
The question I had was around the Dol on net expansion that you saw there.
Thank you you mentioned a little bit like.
Customers on looking at it but then the number that we assume the standard for team seems a little bit lacking could you just talk to that a little bit in more detail to see like okay. How does this play out from the model many thanks.
[noise] Yeah Raimo.
I would say that the innerwear reflects the overall volume of expand deals net of churn as you know.
And although we had 113 is kind of below what weve normally seen pre Penn tree pandemic.
The current NR, it's really about the fact that the total volume.
Expand deals book this past quarter is really not at the same level as it was pre pandemic. So with the lower volume that's going to have an impact on the ANRR as we said last quarter.
So nothing different than what we said last the non we saw that we talked about the Q2 number no large.
Day, just mentioned there were no large elevated amount of churn this quarter, we continue to see churn in the single digit.
Overall customer retention rate is in line, which is very positive so nothing out of the ordinary okay.
Okay perfect. Congrats thank you.
Your next question comes from the line of Chris the carry on with Evercore. Your line is open.
Hi, Thanks, very much on congrats on the quarter. Frank I was just wondering if you could talk a little bit about sort of just how you think about visibility in new pipeline today maybe versus.
Three to six months ago, obviously, you made some sale changes last year at this time without a pandemic I mean, there's been a lot to sort of work through but you guys are putting up good results I was just kind of curious about your given your sort of your confidence level on on conversion rates against the pie the quality of the pipeline being built and then on.
The conversion rates against that pipeline. Thanks.
Kurt Good question I think all of us being kind of reflect back on this past year and say it has been clearly a challenging one but similar to what we said throughout the last few quarters.
The focus for us kind of coming into coated.
It was really to kind of get down and focused on building pipeline.
And within that pipeline was focusing on existing customers and within those existing customers those clearly that had.
Perhaps some ability to invest.
In the current environment, and I think thats played out well for us.
Because our focus back towards the end of Q1 into Q2 and now in Q3 has been building both the short term on long term pipeline.
And that's all based on transformation projects and it's also based on some of the solutions that we have been implementing in the last two quarters without partners around dealing with some of the immediate need that the businesses have had in the finance area.
Focusing on cash flow.
Able to do more frequent scenario planning on supply chain, it's really trying to get more visibility on the sales it's been primarily around forecasting. So we see an opportunity in all of these functional.
Parts of our business.
And we've been building.
If I look at you asked about the the pipeline visibility I feel good about the pipeline that we have at the moment kind of going into Q4 net backdrop.
Providing the guidance that we just did.
And then also I see that pipeline continuing its fight 22.
So as I said, we're building more long term pipeline and that also gave us a bit more confidence as we think about next year as.
As Dave mentioned earlier, we've just begun our free 22 planning.
And part of that planning kind of takes into consideration.
The pipeline.
The type of pipeline the project from the pipeline, both expand as well as new and the other thing was I really want to highlight which I think is important for us.
Around the pipeline is the partner ecosystem.
And I know we've talked about this the last two quarters as far as the buildup.
Of investments that partners have been making in their anaplan and.
Felt that.
We saw continued increase in net investment this quarter again by another couple of hundred.
And we even had one customer one partner I should say.
Actually mentioned to us either within the last few weeks.
They are pretty much at a kind of a I guess you can say a sold out capacity, meaning that they have to do even more hiring because the current consultant that they have are now either engaged on projects were about to be engaged on project. So I think thats also a good indication and I think many of you can.
We do tend to talk to a lot of on partners and get some good insight there seeing.
The transformation projects, starting to build and we're working along with them on making investment as well not only for Q4, but going into F 22.
Great. Thanks.
Your next question comes from the line net stance on day one.
Ask your line is open.
Okay perfect. Thank you so much guys and.
Our world on in Q3.
So maybe from my end.
How are you guys doing as far as.
The deals that were pushed out of Q4 of last year and then maybe from the beginning of this year.
How are you doing as far as closing those deals.
And then I have a quick follow up.
[laughter] so.
Similar to what we had mentioned.
At the end of Q2 timeframe, we close some of those deals in Q2.
We closed some further deals in Q3.
And then we even have some deals in Q4.
So we felt at that time based on.
Where things were with the mix of our customers let's.
Some would be more near term and some would take a little bit more time and.
And I think that continues to play out I think the ones that has taken more time to close.
Happened to be projects that.
I would say our larger.
On our more complex and so they needed more time, one to make sure that they had the right funding, but also more importantly, the net that they had the right.
Skill and support from those projects.
And I think as time has progressed.
The importance of those really hasn't changed but the ability for them now to fund and also get the appropriate amount of resource.
To cover them has seen then play through.
I can't say as of today, we have them all.
Close because we still probably working with with a couple of customers and at the same time similar to the last couple of questions. On my response, there we continue to add additional projects within the pipeline.
Okay.
Got it Thats very helpful on.
Then maybe just a follow up for free.
For Dave.
Maybe.
Just following up on Alex.
Alex This question to kick off the Q and a.
Is there anything that we need you would like to call out as far as Q3, a year ago on because I do believe that those from FX and in a little bit of acquisition that went into.
You had referred to that we can see through when we look at the cash flow statement.
So when we calculate for example subscription.
Subscription.
Bookings or billings, rather based on cash flow, we can see a very nice inflection this quarter, but.
But that obviously is looking at the cash flow statement. So we can control for some of the effects from a year ago, but maybe those same effect of FX and acquisition, we cannot really see in current RPL and his day, creating a really tough comp for this year.
[laughter].
I.
Stepping back and when you look at just the performance for Q3 of 20 when you when you look at where the billings and ARPO is we're at clearly.
There was.
Just a lot higher amount of activity and so coming through.
You know in this in this period.
A lot of our metrics have taken a hit.
So we continue to work out back on and a positive format and so.
That's that's where it's difficult just to look at year over year comps because of all those moving parts.
Just where.
Not only were our bookings were at a year ago, where ANRR was that a year ago and our Pos both current as well as the total and so what I think we posted up for this current Q3.
Was fair it continues on the linear progression and we continue to strive for sequential quarter improvement.
Got it all right. Thank you so much.
Your next question comes from the line as for T. 10 agree with.
Your line is open.
Sure.
Thanks for taking my question, Frank you talked about some new strategic any share do like not day of love solution, but bringing some kind of function in verticals could you elaborate a little bit more on that is that something is that how we should think about new products coming more driven by partners.
Anything would be helpful.
The key thing in this this is the kind of what we mentioned even a couple of quarters ago.
As we got into the pandemic.
Although we've been focused on different types of use cases, we wanted to focus in on areas, where we felt it was most important.
For customers, especially customers or clients on some of our partner and so we looked at kind of four major category, we looked at kind of in the office and CFO financial health.
Actually we look to the second one was balancing disruption within the recovery the.
The third was.
Predicting in protecting revenue.
On the fourth was supply chain resiliency.
And so what we did over the last number of months. If we had more focused solution. So that we can go to market.
Faster and also be able to.
I would say more quickly implement some of these solutions that customers, who are looking to alleviate some of the near term pain points that they had and so thats kind of played out well.
The other thing I would say around the solutions, which I think has worked with us for us with partners.
It is the more direct focus on verticals.
You know as we mentioned earlier.
Even focusing around telecommunications focusing around health care. So so in some of the verticals, where there was a lot of either continued investment or there was changes going on within their businesses Tom.
To target some of the solutions around that was important.
Okay, and then a follow up to the announcement of new data CPX more like plan a Q on.
Amazon forecast on them Google partnership.
Should we.
These new products study youre going to cross sell how should we think of orders contributing any kind of revenue going forward.
[noise] yeah.
On the key thing and I love the the opportunity back in September to have CPX.
We try to new format with the digital.
You know online and it worked out well for us as I said, we had great engagement both from.
Existing customers prospects as well as with the partners and the key thing here, which I would say around your question is.
It's really the importance of our platform.
And I think it's clearly been recognized both by Gartner and I do see others around.
The uniqueness of our platform and how differentiated it.
And that truly is a platform.
That can next.
The business across the different assumptions and when we announced new products like we did with plan I Q or cloud works and various other things that we were pleased to bring forward in the September timeframe. They will sit on the current platform and they allow our customers have much more capability and.
And we continue to have an ongoing dialogue with a group of our customers.
Where they provide us ongoing feedback it's kind of back even a year or two years ago. When we got feedback about our uxc and making enhancements around that I thought we were getting feedback about bringing.
Bringing more intelligence into the platform, that's where plan on Q came from.
More interoperability within the platform kind of doing more things with open a pie. So all the product enhancements that we that we announced around the platform is to continue to give our customers more capabilities on that platform, bringing data in taking data from.
And then allowing them to connect.
With many of the other digital platforms that they are using and I mentioned earlier, what we do on the also with partners is what we call Anaplan plus.
So we're showing that we can connect to Adobe connect to sales force, we can connect to.
Service now so that we have a help our customers throughout partners.
Spanned their ecosystem.
To enable the interaction.
Information among the different platforms that they have.
Your next question from from the line Brent No with Jefferies. Your line is open.
Good morning drilling into the new business this quarter I'm curious if you could just compare cash.
Crash activity to past periods, the velocity of deals on a deal sizes on any other color you could add on that side that would be helpful. Thank you.
[laughter] Yeah. A good question is as I said, you know we had a good mix we're back to our historical mix to 60 40.
Which is a kind of played out well for us so both.
Good execution list with expands but also good execution from a new customer standpoint.
Most of the I would say some of the new customers.
Mentioned some earlier.
Tend to be.
Around some of the solutions that I just mentioned with the previous question.
We see opportunities clearly within finance around the office the CFO.
On some of those has been.
Kind of finance transformation projects at the largest scale, we had some of those this quarter and even some smaller ones, which may be more around scenario planning.
The other day the other two I would highlight.
One of course flow sales sales performance management.
And that comes around that whole suite sales forecasting territory and quota management incentive compensation we.
We started to see an.
An increase in that as well.
Companies are now focusing on fully on.
Being more.
[noise] resilience within their business and having more insights into how their business to play out I think with those one that I would highlight and on another part of your question, which I think is important to know here too.
Looking at some of this data yesterday.
If you look at some of the indices. This is a combination of both new and expand if I look at the you know the top 10 deals in the average size of those deals.
We saw an increase this quarter.
So.
Which are on budget that was positive and the top 10 and also the.
Also increased this quarter, so we've seen kind of a.
An increase from that perspective so.
Again, we're seeing goes back to what I said before about pipeline.
It's getting better I will also say.
And I think we said this earlier, we're not at pre pandemic levels. So we still continue to proceed with caution that as we look at a lot of pipeline, but the strength of companies looking at transformational projects looking at planning the importance of planning as bear.
Demicks still plays a role in.
How quickly we can get these deals across the finish line how long they take the kind of true, which I think it's also important to note.
Thank you.
Okay.
Your next question comes from the line of Kerry Tom It's true.
Curious Jerry your line is open.
Yes. Thank you can you hear me okay.
Yes.
Question on kind of product question.
Follow up on the master interplay on kind of it.
And with that when you add me on Master Anaplan or is just something happened with usage without accounts.
Kind of under the old honeycomb model that used to talk about going on a follow on.
[laughter] so so.
Mastered anaplan or is is the highest level of certification that you can get within Anaplan, we had master.
The plan is within our partners.
The merger.
And we incurred.
You have the skills available, especially if they're working on a large project or are there further in there.
Yeah.
As you said, there honeycomb transition as far as multiple use cases.
And so.
Hello.
I think that.
One isn't system, because not only do they handle some of the more technical requirements within the wherever they're located.
But they also tend to build that ecosystem, either with anaplan of the partner or within the customer as far as.
The skill and talent.
So the more that we see that increase.
The more expansion around the knowledge and potentially the use of anaplan.
And so I mentioned that it was up 50% year on year.
One of the things that I mentioned this I believe it was the last quarter the quarter before that we've been doing this year and I think it's worked out well for us, especially in the current environment is to offer the animals on the master Anaplan courses online.
And as a result, we're able to do more training and.
In certification on.
And then we're seeing a higher interest in taking that training so.
One I think the interest is there and two I think our ability to deliver.
The training and certification has also been increased so that bodes well for that.
Got it and just a follow up relates to plan on Q and just more kind of adding value on top of just the core seats. So your software are those monetization opportunities, we're still to be determined or they just strength on the the underlying use cases, just trying to understand if there are monetizable taking on plan on Q. Thank you.
Some of the things are I mean, it's all part of.
It's all part of that as I said before it's all part of the platform to build some of the capabilities, we do have situations with.
With some of the things that we announced what we do monetize in addition to the base license.
You know things like the hyper models.
And potentially a plan on Q plan I accuse actually.
The example, I gave earlier thats in early stage.
So we will announce so I think we rollout plan I Q by the end of the year or beginning of the new calendar year.
So we're still working as far as how we monetize that but there is a combination of both most we kind of enhanced the platform, but there are certain areas, where we do get a get chance to monetize debt.
We have time for one final question. Your last question comes from the line of Joe said that Inc. With Canaccord Genuity. Your line is open.
Yeah.
Hi, guys. Thanks for squeezing me in here on this.
Good morning, just on a question on the preliminary outlook for next year and the mix. There do you see that being kind of following you're now you're you're on.
On your historical 60, 40 mix or is there anything to call out there in terms of touch offer.
Strong verticals or other things and then just as a quick follow up on.
I think I'd be interested in some of the most interesting new used cases, perhaps you've seen as a result of the pandemic that you may be able to share. The word use case clearly wouldn't be the case from.
It does not happen expense.
Yes. Good question, so as far as you know again, we're in early stages of planning for July 22.
And I would say based on some of the comments I just mentioned about the pipeline that we're seeing going in and also kind of what we're hearing from our partner ecosystem I would say at this point on the 60 40 split.
Should continue at least that's what.
Our expectation would be for the next couple of quarters.
And I think the reason why it's played out for us before.
Yes, we do have such a large install base.
Customers that are now seeing more opportunity to leverage the platform.
And then also there is a continued new interest.
With some of the things that we're doing around the solutions as we said before.
On new new areas that we're trying to focus on with our partner ecosystem.
As part of the second question you know, there's so many that I can probably mentioned I think the one.
That I have myself has been more personally involved in which I found extra.
Extremely interesting and this goes back to Ethan back in the April may timeframe.
His clinical trials.
And many of our health care.
This new customers and on new customers.
Our scene that anaplan can be used to.
To do a lot of the analysis.
And keep track and planned for many the efforts within the clinical trials and as you know clearly with the pandemic.
There's so many companies that are doing with drugs as well as with vaccine.
And leveraging anaplan to be able to do that.
I think is I think it's super important with where we are overall and to be able to kind of help some of these companies.
Plan better around all the activity that they have within their company. So that's one and like I said and I have been engaged in that one myself with senior levels within healthcare organizations as they think true.
One what they can do and also kind of look back and see some of the progress that they've achieved the last couple of months, even leveraging in the plant and one last thing I'll say on this before we close.
What I love about Anaplan in that situation is the ability for us to quickly implement right. It's not like it's going to take them a year to.
To work on the planning platform before they start to yield some results they.
They can put in place within weeks.
Eight week nine weeks 12 weeks and then start to see some of the benefits would show which is well underway.
Thanks very much.
Okay.
This concludes our question answer session I will now turn the call back on just think collar on for closing remarks.
[laughter]. Thank you I want to thank everyone for joining us today appreciate all your questions.
On your continued support of Anaplan we.
Wish you a good day and we look forward to talking to you again next quarter. Thank you.
This concludes today's conference call you may now disconnect.
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