Q2 2022 Anaplan Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to <unk> second quarter fiscal 2000 earnings Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time, if I'm not sure they're crap assistance during the conference. Please.
<unk> zero and you touched on the telephone as a reminder, this conference call is being recorded.
Like to turn the conference over to your host Ms.
I believe that the chaparral, Vice President Finance and Investor Relations. Please go ahead.
Good afternoon. Thank you for joining us on today's conference call to discuss <unk> second quarter fiscal year 2022 financial results. Joining me on the call are Frank Calderone, Our Chief Executive Officer, and <unk> Smith, our Chief Financial Officer on today's call. We will review, our second quarter fiscal year 2022 financial results.
And discuss our financial guidance for the third.
Quarter and fiscal year 2022.
Please note that some of the information discussed on the call, particularly our guidance is based on information as of August 31st 2021 and contains forward looking statements that involve risks uncertainties and assumptions, including those related to the continued impact of COVID-19 on our business and global economic conditions.
The guidance, we will provide today is based on our assumptions as to the macroeconomic environment in which we will be operating.
Those assumptions are based on the facts that we know today.
Many of these assumptions relate to matters that are beyond our control and changing rapidly, including but not limited to the scope and effectiveness of precautionary measures designed to contain and prevent the spread of COVID-19. The continued impact of COVID-19 on customers' purchasing decisions and the length of our sales cycle, particularly for customers in certain geographies.
Please refer to the documents, we filed with the SEC, including our 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 and this call is reviewed after today. The information presented during this call may not be current 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.
Historical periods, a reconciliation of GAAP and non-GAAP results is provided in the press release and supplemental financial information on our website.
That I will turn the call over to Frank Alimony.
Thank you Ed leader good afternoon, everyone and thank you for joining us today.
We delivered a strong quarter with year over year revenue growth of 36%.
The highest growth in the last four quarters.
This quarter was a record performance in HCV and.
And expand deal volume as a result of the focus on driving platform expansion into other use cases and functional areas.
We had several large deals over $1 million as the demand for enterprise wide planning is growing this is evidenced by the strong expansions, we saw with 71% of new bookings coming from our existing customer base.
Our global footprint is also making an impact across the board and the increase of use cases going beyond just finance is a clear indication of how pervasive connected planning has become.
We now have over 1700.50 customers some of our new customers include Ford Motor credit, a leading provider of automotive financial products and services Yamaha a multinational corporation of musical equipment software won a global provider of end to end software and cloud.
<unk> solutions and discovery.
Global Mass media company.
From a go to market perspective as businesses continue to recover globally, we are taking advantage of the improving demand environment.
Under Bill shoes leadership, we've seen steady progress on our execution across areas, such as pipeline generation and moving into larger higher quality deals improving sales linearity and elevating the story to resonate with the customers most significant challenges.
Our focus in these areas drove higher asps and AE productivity.
Across our geographies, we had strong growth in all regions in the Americas, We had great traction in sales and marketing planning solutions deals as customers prioritize the acceleration of revenue growth.
This quarter four of the top six deals in the Americas or in sales planning.
In our international business outside of the Americas, EMEA delivered strong growth and a healthy mix of new logos, such as Morrison one of the largest grocery retailers in the U K.
Asia Pacific delivered the highest year over year and sequential growth in net new ACD I want to congratulate our Asia Pacific leader, Karen Clark for her stellar leadership.
Key expand deal in Asia Pacific was with Tata Motors, a global automotive company with over $30 billion in revenue.
This customer has built upon their existing ethanol P use case and intends to expand their use of Ana plan beyond operations into other critical areas, such as finance sales and workforce planning.
I'm also pleased with the momentum we're seeing in our partner ecosystem. This quarter. The majority of our greater than 1 million dollar deals were sourced or co sold with partners. Our partners continue to invest in and hire and a planned skilled resources, which is a testament to the level of customer interest.
They are seeing in the market for enterprise grade planning solutions.
Key GSI partners, our staffing additional and applying dedicated alliance development resources as they continue to grow it's exciting to see our partners scale their practices across newer territory, including our first wins in Switzerland, with Deloitte and two large wins in Asia Pacific.
<unk>, our strength with partners <unk> and Deloitte in that region.
A great example of how our partner ecosystem helps drive the vision and implementation process is with our alliance partner <unk>.
And a leading U S life insurance company to modernize their financial forecasting by offering the scale.
Accuracy, and real time data needed to make better decisions.
<unk> worked closely with Ana plan and the customer to help craft the strategy identify necessary capabilities and launched the initial use case within five months.
<unk> offered the customer a diverse team of industry professionals, and master and the planners with a deep understanding of the Ana planned platform.
Our cloud partnership with Google Cloud announced late last year allows us to further build on our partner ecosystem. As you know Google has been a great customer of Anna plant and.
And now this partnership will expand the reach of our platform to new geographies and provide opportunities for collaboration with the <unk> go to market teams in.
In July we launched and are planning on Google cloud in the United States. This marks the first time and our plan is available on public cloud we have already signed our first two customers as part of our <unk> partnership.
<unk> Ford Motor credit, who is now using Ana plan on Google Cloud, which brings a wide variety of critical information about business operations into an automated and scalable environment.
Our success in expansion selling this quarter was across many industries, including technology organizations, such as fresh works, who leverage and a plan to meet their planning needs.
We are also seeing significant traction with longtime customers such as service now who has expanded the use of and a plan to drive improvements in sales productivity. In addition, they will use and have plans predictive insights with AI ml capabilities to inform and prioritize day to day sale.
Activities and support the success of their sellers.
We also saw traction under our health care vertical, including Arden and Jim a U K provider of health and social care system support.
Arden and Jim deployed and a plan to better manage the demand and supply chain planning of personal protective equipment given.
Given the successful partnership Arden and Jen is looking forward to delivering even more and a planned solutions to their national Health service clients.
Our leadership position in the office of the CFO helps us to further expand into other critical functional areas.
A key indicator of the broad impact of our solution is the increase in use cases across the enterprise.
S&P global.
With over 23000 employees and $7 billion in revenue is an early stage connected planning customer.
They were already using and a plan for revenue expense and workforce planning. They have now added sales forecasting quota and territory planning as a solution to transform that go to market organization.
S&P global extended.
They extended the use of and a plan to increase sales productivity and provide a real time single source of truth for sales leaders.
Supply chain planning use cases have also gained traction a new customer this quarter with accolade wine one of the biggest wine companies in the world with brands, including parties, saying pallet Rand Berge and house of ARAS.
This customer needed to accelerate their planning cycles to standardize production and planned commercial spend in conjunction with increasing sales volume.
Accolade wine chose Ana plan as the only vendor to provide a complete end to end solution.
Our customers see the critical need for powerful decision, making within both finance and operations. The pandemic has highlighted that sophisticated scenario planning capabilities are essential.
We created a new category with connected planning a few years ago.
I am pleased to announce that Gartner has validated our enterprise planning strategy and their first ever market guide for cloud extended planning and analysis solutions.
Which was just released earlier this month.
Have recognized and a plan as the only vendor who qualifies in all five additional planning functions with an ex PNA turnkey ability.
As we continue to build on our market leadership I'd like to share some of the progress we've made with our platform.
I am proud of our engineering and product team led by Anna Pins, Inc.
Under her leadership. This team continues to innovate, adding new features and capabilities to deliver even more value to our customers.
In June we announced the availability of plan IQ as another monetize will feature of our platform.
Since its launch we have closed several new plan IQ customers across various industries and regions.
This capability delivers higher value and ROI for customers and as a result, we are seeing growing demand and interest.
The power plant IQ.
Has helped our customers with increased time savings operational efficiencies and new levels of forecast accuracy.
Our UK customer South Central Ambulance service noted that plant IQ makes generating precise forecast easy taking only two and a half weeks to get up and running and.
And delivering quick time to value.
In July we announced the availability of new management reporting capabilities further extending and enriching and plans existing set of reporting features.
These new capabilities went live after running an early access program with select customers and we've already seen strong adoption post launch.
Customers using this capability include Zillow, a leading online real estate marketplace and Stena line, a shipping line company and one of the largest ferry operators in the world.
In summary, Q2 results reflect healthy momentum in our business.
As we closed the first half of fiscal 2022, I'm proud of our team and what we have accomplished we have all come together navigating the pandemic focusing on the future growth and maintaining a strong upstanding culture.
We have seen continued recovery with both the improvement in the macro environment.
And our.
Against the fast growing market opportunities for digital transformation.
With the post pandemic economy emerging we are now focused on the second half and beyond and we are confident in our ability to seize this opportunity to.
To help us take and a plan to the next level I am personally very excited to welcome the cost matter.
Our chief Financial Officer, his active engagement across the company with his enthusiasm for our customers and partners have been impressive I look forward to partnering with the cost and the rest of my leadership team with our dedicated employees and partners, we couldnt be better positioned to take advantage of this great.
Opportunity.
Now, let me turn the call over to the cost who will discuss our second quarter financials and provide our outlook for the third quarter and fiscal year 2022 for cost.
Thank you Frank I'm thrilled to be part of <unk> team.
I believe that in the next decade business applications will become even more intelligent integrated real time, and we have a massive opportunity to make an impact.
It has been great getting to know the team here and I also look forward to working closely with the investment community.
Moving on to business performance I'm pleased to report our second quarter results. We beat the high end of our revenue billings and operating margin guidance metrics, driven by solid execution and improving global trends.
Total revenue was $144 million above the high end of our guidance range and up 36% year over year.
Within this subscription revenue grew 35% and comprised 91% of total revenue.
Service revenue was $14 million up 44% year over year, representing 9% of total revenue, which is in the range of prior and expected levels of around 10%.
Our revenue results reflect improvement in bookings linearity.
From a geography perspective, we are pleased with the results from our continued investment and expansion of field coverage and capacity.
International operations, which we define as the EMEA and Asia Pacific Geographic businesses represented approximately 45% of total revenue.
This compares to 43% of total revenue in the same quarter last year and 40% in the second quarter fiscal year 2020.
As you can see global demand remains strong for enterprise solutions targeted at delivering true digital transformation across their business.
This is highlighted by healthy growth of new customers in the quarter, bringing our total customer count over 1750.
We now have 505 customers with <unk> over 250000, representing 29% growth year over year.
Additionally, the number of customers with ear out over 500000, and $1 million increased 33% and 53% year over year, respectively.
As Frank mentioned earlier, we saw significant strength in expansion this quarter as customers continue to find additional value in the <unk> platform.
More than 70% of our net new ECB came from existing customers.
This performance resulted in dollar based net expansion rate or <unk> of 119%, representing the third consecutive quarter of improvement.
This is a testament to upsell success in the installed base as well as market validation of the need to extend planning to other areas beyond finance.
In addition to continued success in delivering year over year growth in the volume of expand use our overall customer retention rate remains healthy and in line with historical levels.
Looking at the performance metrics calculated billings for the second quarter was $148 million up 36% year over year.
Remaining performance obligations or RPE or exiting the second quarter was $906 million up 29% over last year.
The current portion of IPO that is expected to be recognized as revenue over the next 12 months is $475 million up 33% year over year.
Looking at Q2, CRP or bookings growth of 33% reflects acceleration in net new ACB growth.
As a modeling note we expect to see continued variability in calculated billing and CRM bookings growth rates based on differences in the timing of billing versus booking early renewals and off cycle renewals.
We recommend looking at both billings and see our IPO bookings metrics on a trailing 12 month basis, which will help normalize for these timing differences.
On a trailing 12 month basis billings grew 33% and see at Apio bookings grew 30% year over year and is a clear indicator of the underlying growth in our business.
Turning to margins total non-GAAP gross margin was 77% less than 1% lower year over year, driven by higher services revenue mix and investments in our data centers and public cloud.
Within this subscription gross margin was 84% and services gross margin was approximately 8%.
Over the near term our gross margin will include the impact of a gradual increase in the cost of hosted services to reflect the impact of ramping our public cloud usage.
Non-GAAP operating margin for the second quarter was negative seven 6% over 1% improvement compared to negative 9% in the same period last year.
Operating margin beat our expectations, reflecting strong revenue results and a shift in the timing of hiring and marketing expenses, which are now expected to shift to Q3.
Net loss per share in the second quarter was negative nine based on 145 million weighted average shares.
Turning to the balance sheet and cash flow free cash flow for the second quarter was negative $24 million and we exited the quarter with $313 million in cash and cash equivalents.
Looking ahead, we are closely watching the impact of the Delta variant on the improving global recovery and how factors such as rising labor costs, our production challenges could affect our customers.
For the second half of the year, we expect third quarter fiscal 2022 revenue in the range of $150.0 million to $151.0 million.
Within this we expect services revenue to be in the range of 11 million to $12 million.
As we mentioned last quarter, we remain focused on investments to expand our go to market and product enhancements to drive further growth in the next year.
That said non-GAAP operating margin for the third quarter is expected to be in the range of negative 10 to negative 11% as the timing of incremental investments in hiring and marketing costs shift from Q2 to Q3.
Billings for the third quarter are expected to be in the range of $179 million to $181 million. This implies a year over year growth rate in the range of 23% to 25%.
Looking at billings from a trailing 12 month basis, the midpoint of our Q3 billings guidance would represent 32% year over year growth.
Weighted average share count for the third quarter is expected to be approximately 147 million shares.
With over first half performance and expected performance in the second half we are raising our full fiscal 2022 revenue guidance to be in the range of 571.5 million to 573.5 million up from 555 million to five.
$560 million.
We expect non-GAAP operating margin for the full year to be in the range of negative eight to negative 9% consistent with our prior expectations and also reflective of our continued investment strategy and our platform go to market and our overall global scale.
Weighted average share count for the full fiscal year is expected to be approximately 146 million shares.
In closing Q2 was a strong quarter and we are very pleased with our first half performance.
Looking forward to expanding our field and platform capabilities and continuing to deliver great customer success with that let's now open it up for questions.
Thank you ladies and gentlemen, if you have a question at this time. Please press Star then the number one key on your Touchtone telephone. We also ask that you limit yourself to one question only and if a question has been answered or you wish to remove yourself from the queue. Please press the pound key.
Your first question comes from the line of Brian <unk> from Barclays. Your line is open.
Thank you and congrats on the great quarter.
My question is around the <unk>.
What you're seeing in terms of customer engagement. So we sold this quarter very good numbers around the installed base and you really have kind of done a great job over the last few quarters to focus there.
That will be coming out of the pandemic and digital transformation part of yourself picking up again, what are you seeing in terms of new customer interest picking up in <unk> and.
And given the longer sales cycle, you guys have that's probably showing up more in the pipeline that are numbers, but what are you seeing there in general Thank you.
Thanks Raimo good question.
The first thing I would say is.
We're seeing first of all that the macro trends are improving.
Signs of a pandemic recovery I think that over the last couple of months.
Then up and down a little bit, but I think it's trending in the right direction I think many companies are realizing as they've gone through the pandemic that there is a need for digital transformation and specifically from a planning perspective, the importance of agility and scenario planning.
I know, we've talked now for a while about digital transformation, but I think what I'm seeing especially in the last six months is an acceleration of that and I think those trends are sustainable longer term because of the <unk>.
I'd say that because of the magnitude.
The opportunities have come up you saw that we mentioned that.
Past quarter, we had over six deals which were over $1 million.
That's an indication of transformational opportunities that had been opening up.
I think that's continuing and specifically around planning.
It's further validation.
With some of the information that Gartner came out with earlier this month with their market guide really talking about the importance of operational planning.
They gave out some statistics in that report that.
There is only 5% of companies today that are actually leveraging operational planning.
They made a prediction that by 2024.30.
30% of organizations, where we do operational planning and by 2024, they feel like 50% will actually be developing roadmaps to get to operational planning.
So I think all of those macro trends.
Demick digital transformation the importance of planning.
And really the attention of all of those at the executive level from what I've seen especially over this past quarter.
Has heightened the importance of what companies are doing now, but also as they look out over the next six months and over the next few years.
Thank you.
Thank you and your next question comes from the line of Brent <unk> from Jefferies. Your line is open.
Good afternoon, Frank maybe if you can talk to some of the use cases, you're seeing beyond finance you mentioned sales.
The work we've done we've heard a lot of supply chain.
Adoption can you walk through.
New areas that youre seeing an exciting kind of maybe greenfield.
You haven't seen.
Pre pandemic. Thank you.
Sure again. This is just kind of highlights what I just mentioned as far as the importance of operational planning and what Gartner mentioned in their market guidance.
We've been working on that for the last few years really setting the stage for operational planning and really leading the way and what we're doing and what we offer in our platform plus the innovation that we're having so clearly we've been in that $50, 55% of our business.
Originates in finance.
But we are seeing an acceleration as you just pointed out.
In supply chain as well as in.
Sales performance management I think if you look at some of the critical things that was mentioned even this morning on CNBC as far as businesses Theyre looking at.
Apply chain shortages, they're looking at hiring.
Tiring dynamics in the environment that we're in right now theyre looking at interest rate volatility all of those point to the need for operational planning and from our pipeline, even though we had a strong.
Second quarter with some of those metrics that we mentioned earlier on the call.
The pipeline as we see it right now continues that strength going forward looking at sales performance management.
Supply chain as far as some key indicators first of all I would say from a use case standpoint.
We're seeing increased interest in that supply chain and sales planning.
As these opportunities become more multi function.
And also demonstrating the capability and a plan has to address these capabilities. We're also seeing.
Our father as far as the industry growth and pipeline deals for financial services technology companies manufacturing companies Life Sciences, healthcare and also and I know we've talked about this in the past we're seeing some early signs of some travel and hospitality deals companies kind of coming back into the pipeline.
So that doesn't minimize the importance of finance I, just want to emphasize that as well because operational planning begins and ends in the office of the CFO, which I think is important and it also showcases again.
Destructive a platform to be able to do that.
Thank you.
Next up we have <unk> from Goldman Sachs. Your line is open.
This is dan or John for cash wrong, and thanks for taking the question I guess, just a quick one for me and you talked a little bit about it on the call, but now now that <unk> had a couple of quarters with with.
The sales and marketing org.
Any kind of incremental changes and improvements driving efficiency or any low hanging fruit and then you talked a little about investments in hiring pushing into the back half. So if you could just give a little color on how hiring has trended relative to plan and some of those investments youre looking to make that would be really helpful. Thank you sure.
So bills coming up on its eight months anniversary with Ana plan and so it's great to have him as part of the leadership team.
I would say under Bill's leadership, we've seen steady progress in our go to market execution.
I think the second quarter was a good indication of that.
Bill has been focused on prioritizing our foundational performance.
Really focusing on the basics of pipeline generation two opportunity progression in the stages of that pipeline.
I think as a result of that what we saw this quarter and similar to what I just mentioned as far as our pipeline for the second half, we're moving into larger higher quality deals.
Resulting in as I said this quarter, we had six deals large deals that are over $1 million, which is great to see.
We're also seeing improving sales linearity.
More consistency across the quarter or throughout the quarter.
Which has driven improved bookings linearity in Q2, and we expect that to continue.
We're seeing increasing to Bill's leadership executive engagement.
Driving higher expands and larger asps as we get more of our customers at the C suite engaged without transactions.
I think as part of that Bill is been getting the team to really elevate the story to resonate with customers and the most significant challenges to go back to what I was saying before if we could get in there and we can talk about some of the problems that they're dealing with and offer solutions.
That are able to meet those challenges in the near term.
And that's the beauty of Ana plan that we're able to go in there and deliver results ROI.
Results of improvement in a short period of time, I think that goes a long way.
The momentum that we saw this past quarter.
In our expand deals would not have been impossible without the support of our customers' 16, which is part of Bill's organization I have to say that they've done an excellent job really supporting I would say best in class expansion selling.
Driving that greater customer adoption, and making sure that we can get the realization of that value, becoming a top priority for our customers.
And I know Ive discussed this previously but one of the factors that influenced us greater adoption is the number of customers who have implemented the Coa or a center of excellence. We've mentioned that in previous calls we continued even this quarter and I'm excited about this the number of customers with a Coa grew.
<unk> grew again this quarter over 100% year over year and this is now the third consecutive quarter, where the Coes are now approximately one third of our customer base, which is which is great to see so a lot of great.
Success.
Really want to thank bill and the go to market team for that success over the past two quarters.
Really helpful. Thank you.
Yeah.
Thank you and your next question comes from the line of Kirk Mccarron from Evercore ISI. Your line is open.
Oh, yes, thanks, very much Frank I was wondering if you could expand a little bit more on your comments around some of the wins you've had with the bigger GSI as recently I think you've mentioned a couple of deals with Deloitte.
Are those deals when you go in there with them really sort of enterprise planning outerwear served at a higher level or are they still sort of going after operational planning and then they can expand from there I'm just trying to get a sense on how they're positioning you as a platform for planning or is it more sort of precise solving one issue and then grow from there.
I'm, just trying to get a sense on where that is today and maybe where it can be 612 months from now thanks.
So.
At the highest level I'd say, it's both but again when you start seeing transactions larger transactions more transformational transactions as part of an overall digital transformation of specifically, what some customers call revolutionizing planning and that goes into that whole operational approach, that's really happening at the.
Executive level.
The C suite at the CFO level, and so forth and we're seeing more of those opportunities come forward. If there's one I just.
This morning came up which I can't mention the name, but I want to bring it up as an example.
This happened in Q1 of last year, we talked about a health care company that was really looking to de call revolutionize their planning.
In finance, but really kind of looking at it from an operational standpoint.
We got the deal in Q1 of last year, we've been working with them and one of our strategic partners over this past year implementing that planning that is a strategic planning and actually this months.
They just went live.
And it's the first phase of a multi year transformation for them and the comments that came back today as they were celebrating their go live.
Really our phenomenal as far as taking a whole new approach to planning and talking about it from a finance out.
Into the business and really kind of addressing some of the critical strategic needs that they have in their business and so we're seeing more of those examples I think we saw more in Q2.
Looking at the pipeline in the second half I feel good.
Those those types of transactions.
And the team as I said before with Bill and the rest of the go to market team and I would say even across Ana plan.
Rising to the occasion with our partners to use this also as a vehicle to say that I want to thank our partners. The partner ecosystem that I think we've built allows us to jointly go after these opportunities solve some of these challenges that these businesses are having and begin a multi year engagement.
<unk>.
Okay. Thanks, a lot congrats.
Thank you your next up we have Michael <unk> from Wells Fargo Securities. Your line is open Sir.
Hey, there. Thanks, good afternoon welcome to guess.
Links up 36% you saw a big snapback in subscription revenue, which really stands out too so just want to.
Make sure is there anything one time or unexpected to call out that drove the more pronounced strength in Q2, and then you're guiding for mid Twenty's billings growth here.
Here in Q3 is that just a more patient.
Towards recovery you've talked about.
That you're assuming for the rest of the year or is there anything else for us to be mindful of just as we work through our models from here. Thank you.
Michael Thank you for the warm welcome and I'd.
I'd start by saying that I'm really pleased with the second quarter results that we had we had strong Q2 with the highest growth that we have seen in last four quarters.
We had a strong and are at 119%.
And as you also saw we raised our full year guidance.
For the quarter, specifically I'd say two.
Two things.
The first one was we saw strong bookings linearity here.
And I credit the sales team and bill for the strong execution there.
Second is in terms of services.
And this is also an area, where we did really well with 44% growth and what our chief customer officer.
<unk> has been driving has been fantastic Frank highlighted that in an earlier question as well. So overall, we saw good strength across the board both in the subscriptions through over.
Bookings linearity as well as the number of subscriptions.
And services.
In terms of execution, we specifically saw strength in expansions and as we highlighted 71% of our net new mix came from expansions.
We look forward, we feel we'd be.
Have a very healthy and robust pipeline.
And that is the reason why we raised our full fiscal year guidance.
Also what I what.
What I had stated earlier in the script as well as the prepared remarks was looking at trailing 12 months in terms of our billings as well as bookings, which were both the 33% and 30% respectively and as you look forward.
For the next quarter, the Billings guide would be 32% if you take a trailing 12 month basis overall.
I'm confident in our ability to execute and we see a healthy and robust pipeline.
Thank you nice job to the team.
Thank you next we have Savi <unk> from Mizuho. Your line is open.
Hey, Thank you and because congratulation I also extend my warm welcome.
Frank I wanted to ask a little bit in Google.
Google partner, if you talked about mainly the cloud partnerships help us understand a little bit the.
The strategy more and cutting encouraging your GCB the Plano.
Your partners to Csp's two.
Oh, you know closed deals on these partners on cloud and Azure a little on their books and how does it help you in a long run and dump show margin, Oregon deal cyclic fluids.
So let me just step back and just go through the strategy that we put in place, where we announced back in the fall of last year.
With TCP and a similar strategy with AWS.
First.
As I mentioned, Google has been a great customer a and a plan.
And they've leveraged and a plan.
In various areas within Google we.
We saw it and they saw it as an opportunity.
For us to bring that.
Performance of Ana plan on their cloud to our customers. So that was the first initiative that we were looking for as we think about expanding on the global footprint.
Having more access to cloud when you start thinking about data residency and various other requirements from that perspective, the partnership with Google Cloud allows us to really.
Expand our opportunities and go after different opportunities from that standpoint, so that was the first second.
We have also.
<unk> been working with DCP.
Two.
Look at this as a vehicle to expand further partnership and the go to market.
And so beginning now in the United States.
As we went live on Google Cloud in July we're now able for DCP sales team.
Start to sell <unk>.
And our plan on DCP.
To go after new opportunities new customers from that perspective.
One of those opportunities clearly that we talked about on DCP at Ford credit one that we just Mount So it's great that we have that partnership between Ford credit as well as DCP and Anna plant.
And then the third part of the partnership with Google and.
And specifically DCP is on technology.
Are there things that Google technology can bring.
Two and a plan.
For our customers, our joint customers to be able to leverage more capabilities on the <unk> platform.
That's great. Thanks.
Thanks Bye.
Okay.
Thank you next we have Alex Zukin from Wolfe Your line is open.
Thanks, so much.
The first one.
If you think about the pipeline from the construct of how much of it would you classify the pain.
And even the quarter itself pent up demand from customers that were may be waiting to see more consistency.
Macro economy before making a decision.
How much do you feel like there's pent.
Pent up demand how sustainable is some of the demand.
Had a quick follow up for others.
So Alex I think I got most of that you were breaking up a bit.
But as far as the demand that we're seeing.
I'd go back to some of the comments I mentioned before.
See it from a macro trend standpoint kind of improving.
First I think it's a result of the pandemic recovery.
Second I would say, it's the digital transformation accelerating.
Especially with some of the challenges I mentioned before within companies dealing with the pandemic, bringing that front and center and I said I think those projects are.
Now accelerating and I think thats more of a longer term trend for us.
Third I, just think the emphasis on planning and the need for a scenario based planning.
Focusing on agility.
<unk> changes within organizations and operations played well to our platform and the capability that we have so I see that as the primary driver of the business trend that we saw in Q2.
That which we're continuing to see as we look at the forecast for the second half.
Understood and then because maybe you meant you guys talked about seeing some really strong expansion dynamics within inside of your customer base can you talk to how we should think about the trend line for <unk> in the back half of the year or is this 119 right.
Way to think about it as a potentially higher than that how should we think about that in the guidance.
Hi, Alex and thank you for the question.
Look if you step back and look at our business model I think it's a pretty simple business model with land expand and customer success.
Learn more and larger deals.
Drive great experience for those customers and then extended further into other use cases and what is interesting is our product is inherently built to drive that why reality as well as extensive lithium.
And this was evidenced as you mentioned in another mix of customers with net new ACB being 70% plus as.
As well as Frank mentioned, several one 1 million deals as well as other strong and are at 119%. So this is all evidence that the business model.
We are looking at it is working really well in terms of land expand and customer success.
And specifically for <unk>, if you look at it.
We had <unk>.
<unk> expense this quarter and if you include those in fact, the NR or would be greater than 120%.
As we look beyond looks club is not guidance, specifically to what it is and we don't but.
But we will continue to aspire for steady improvement there.
One thing I'll just jump in because I just want to add to that really pleased with the <unk>.
The amount of expansion that we had with existing customers and I know we've talked about this on previous calls, especially during the pandemic. The focus on current customers and working with them as to meeting their needs and I think this shows how it's playing out just as a further validation of as you continue to focus on.
Current customers and expansion.
Top 25 customers. We were just looking at this the other day as we prep for this call of the top 25 customers on average there are it's approaching $5 million with several higher than that and it just shows that those customers are clearly seeing continued need.
For Anna plan, the other thing, which I think is also of note, which we did some analysis on it at the top 25 customers.
The 50% over 50% of those top 25 had three or more buying centers.
Approximately a third.
Represented had about two or more buying centers. So it shows that of those 25, they're not just in one use case or in one functional area they've seen the value of operational planning and it goes back to what we said before about the validation of what Gartner.
Gartner said in their market guide as far as that importance.
And where it is right now versus where it is going to continue to go in the next several years.
Perfect. Thanks, guys. Congrats on a great first quarter as CFO.
Thank you Alex.
Thank you your next up we have Brent <unk> from Piper Sandler Your line is open.
Thank you good afternoon, and a warm welcome to the <unk> on the first call Frank.
The highest subscription arps growth in past years is certainly encouraging here. My question is on the composition of the second half pipeline.
Do you expect existing customer mix to put to be drive to drive the recovery here I think was what 70% in the quarter or are there signs that the new customers are also starting to rebound here and then two if you look at the breadth of the pipeline I think they were up $6 million deals in Q2.
You see broader breath in the pipeline for the second half or do you still see a larger contribution of $1 million plus deals. Thanks.
So I would answer that question Bose I feel really good about the new business the new lands.
That we've seen in the first half and especially in the second quarter.
And also how that will continue in our pipeline going forward and then continued success with the expansion thats the costs and I just talked about.
If I look at.
From a new perspective.
In the second quarter, we had some impressive new customers some of which we highlighted we able to mention some of their names, but we also had a large global financial institution, which was very close to a million dollar deal as a new customer this customer had a need for rapidly modeling different macroeconomic scenarios tap a potential.
<unk> impact on their capital requirements.
They're deploying anaplasma will be deploying in a plan.
For several hundred users across finance.
And being that they are a large global financial institution.
They decided to come with Ana plan.
And not only just the this transaction, but to really kind of start to transform.
On the <unk> platform for years to come so I feel good about those type of opportunities that we saw in the second quarter.
And further opportunities as we look at the pipeline in the second half and even beyond that.
And then the continued focus.
For the expansion the whole focus on our customer adoption working with our customers to solve more of their challenges as they.
See value and get leverage in Ana plan.
So it's a combination of both.
Helpful. Thank you.
Thank you and your next question comes from the line of Scott Berg from Needham. Your line is open Sir.
Yeah.
Hey, guys. This is Josh on for Scott.
Thanks for taking my question, how should we think about the source of new logos, whether from direct sales or partner driven and has there been any change in that mix post COVID-19 and following some of the internal sales changes that you've made and then secondly quickly just along that front are you seeing any difference in sales side.
Oh recovery domestically versus international markets anything to highlight there thanks guys.
So there are a couple of questions. There I'll take the first really kind of talking about the.
The land business I'll ask <unk> to talk about the international if you're okay with that.
So as far as.
The new customer business.
I would say that.
If I step back and look at both the new and expand business.
What we're seeing.
Is a continuation of some of the trends I mentioned earlier.
As things have been progressing through the pandemic.
And the need for digital transformation as well as the.
Enhanced need for planning and scenario planning.
That's had the most impact as far as the <unk>.
Amount of business that we have from land and expand.
And I would I would again suggest that.
It's a good mix good focus for us.
I think if I look at back what I was saying before about bill in the go to market team.
The way that we go after those opportunities we go after them through our account executives seeking out new deals.
Which they work on their own as well as in partnership with partners.
We have an STR basically a call center that goes after transactions and then we also develop expansion opportunities from our customer success team that is not changed throughout the pandemic, but going back to some of the points that I mentioned earlier that bill has been emphasizing.
The team as well as with our partner ecosystem.
To focus on the customer business outcomes to make sure that we're going after some of the opportunities and challenges that they have.
Going higher in the organization I think are enabling us to work all of those in a more effective way and being more.
Getting better at the execution.
Let me jump in with the geographic perspective here look we had a very good broad based growth across all three geographies.
Growth was north of 30% across each of each of the.
North America, EMEA as well as APAC and specifically as you look at our Q2 productivity.
We also saw where deal velocity improve especially as we were driving more expansive here.
Sales productivity increased and improved in general both sequentially as well as year over year.
If we look specifically at international.
Both EMEA and APAC that did really well and we called out APAC, specifically as they had a very strong net new ACD quarter. So overall from a.
Profit perspective, we feel that theres, a very balanced growth.
At the same time, we're watchful of uneven recovery that we see through the sort of pandemic, but overall, we remain confident.
Thank you and our last question for today is from Pat Walraven from JMP. Your line is open.
Oh, great. Thank you and congratulations.
So I think Thats, where we can make the last one about you if that's okay.
I mean, you have a great you enjoyed relatively recently you have a great backgrounds.
10 years at Microsoft time at Walmart Nike.
What made you wanted to take this job.
That's a great question and thank you for asking me that listen.
I'll highlight three things that really forced make me feel that I made the right decision and also highlight why I made the decision.
The first and most important thing.
Was in our plan is of value first company, it's a value driven company through and through and how the employees behave how integral is foremost is comes through in the value driven discussion. So the value of the fixed values, we have openness authenticity inclusive.
Yes.
Collaboration creativity tenacity come through in everyday business that we have within the company. The second thing, which was very impressive for me is the product.
And our plant runs on and our plan internally and I see that on a day to day basis, but even when I was outside and talking to customers partners.
As well as being a customer I saw just the potential of the product pad as well as what it could do in terms of solving customer challenges and complexities.
And the last one I'd say similar to the calibration point I made earlier.
I felt the leadership team is very cohesive in my discussions with Bill Madeline and Frank One thing came through very clearly there was a shared vision shared purpose and b ownership mindset.
So those were the things that I was looking for in addition to of course, a massive opportunity that is ahead of us.
It's always people first when I think about opportunities and.
I feel I made the right choice.
That's super Thank you.
And because I have to say, it's great to have you here.
The first month has been a great one I've enjoyed the partnership and I see so much opportunity going forward. So welcome again.
I want to thank everyone for joining us on today's call. We appreciate your continued support and we look forward to speaking you again next quarter.
Have a great evening.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.
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