Q2 2020 Earnings Call
All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press the pound key. Thank you Ms. Edelita Tichepco Vice President Investor Relations you May begin your conference.
Good morning, and thank you for joining us on today's conference call to discuss and a planned second quarter fiscal year 2020 financial results. Joining me on the call are Frank Calderoni, Our Chief Executive Officer, and Dave Morton Chief Financial Officer.
On this call, we will be making forward looking statements, including financial guidance and expectations for our third quarter and fiscal year 2020 anticipated future operating and financial performance strategies customer demand product and technologies. These statements reflect our best judgment based on factors currently known to us and actual events or results may differ materially.
Please refer to documents, we 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 actual results to differ from those contained in our forward looking statements. These forward looking statements are made are being made as of today and we disclaim any obligation to update or revise these statements.
If this call is reviewed after today the information presented during this call may not contain current or accurate permission.
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 on a non-GAAP basis for historical periods. A reconciliation of GAAP and non-GAAP results is provided in the press release and supplemental financial information on our website.
We're planning for today's call to last approximately 45 minutes and we will do our best to accommodate your questions. Following our prepared remarks as time permits.
With that I'll now turn it over to Frank Calderoni. Thanks, Edelita. Good morning, everyone I'm very pleased to share the results of another strong quarter, our execution demonstrates the impressive progress we are making in scaling our business continuing to accelerate our momentum and going after every opportunity to ensure we maintain our leadership in the connected planning space.
This quarter, we reached $85 million in revenue growing 46% year over year. This confirms the strength of our connected plenty platform and demand fueled by digital transformation, taking place with many of our existing and prospective customers. We experienced success in a number of our strategic areas, including driving further customer adoption to our highly successful user conference held this past June and elevating the user experience to the announcement of our new you I mobility and intelligence platform.
We're also seeing continued momentum with our customers, both existing and new and new customer acquisition was strong as we ended the quarter with over 1250 total customers.
We now serve approximately 300 customers with over $250000 in annual recurring revenue growth of 40% year over year.
As a testament to the increasing awareness of the value of connected planning, we continued to see strength in our top 10 deals, which averaged well over half a million dollars. One of them was a multimillion dollar deal with a fortune 50 company experiencing rapid growth and transformation.
This customer is investing in operational infrastructure to effectively manage scale using anaplan across several use cases within the sales organization.
This is critical area for them and they plan to significantly grow their sales capacity over the next several years.
We are also experiencing significant opportunity in supply chain as one of the growing areas, where our platform is in demand from our customers. This quarter, we signed one of the largest retailers in Asia Pacific with over 3000 stores and 200000 employees.
This leading retailer will use our platform to manage their assortment planning model, which handles over 150000 skews across 100 different product categories and they will have the capacity to rapidly model new product introductions outside their existing transactional systems.
This enables them to respond quickly to changing market demands while remaining coordinated with the open to buy merchandise financial plans and transactional data.
This example shows that more and more companies are focused on transforming their operational planning driving agility and competitive differentiation in their sectors.
From a go to market perspective, we continue to see strong contributions from our partner ecosystem with impressive results.
The number of partner transactions closed is increasing each quarter and the deal sizes are also expanding for example, the average deal size of Gs site originated opportunities has grown steadily each quarter from $100000 a year ago to several hundred thousand dollars this quarter.
In the U.S., Deloitte recently announced plans to double the number of consultants delivering anaplan solutions over the next year.
We also announced an alliance with Ernst and young heading to the partner ecosystem.
The Y. Alliance will focus on planning functions in the financial services Health Life Sciences.
And consumer products industries, our joint efforts with our partner ecosystem are clearly driving results and we are still only at the beginning of realizing the significant potential of what it will bring to our customers partners and Anna plan.
In EMEA this quarter, we landed a new account with a leading telco and network provider.
Our partnership with Deloitte and the expertise with Aeroplan and digital transformation were key to the customer's decision.
This customer is embarking on a finance digital transformation to drive agility and increased bottom line results.
They are moving from a legacy planning system with over 50 offline disparate models to Anaplan single cloud based planning platform.
Over several hundred employees will use and a plan to run driver base scenarios that will enable them to more accurately forecast based upon changing market conditions and by leveraging M.L. AI technologies.
Our B.Y., Okay high end encryption capability will also ensure customer compliance.
With increasingly regulatory requirements as the customer service government agencies military and emergency services.
This is a great example of how our joint Anaplan Deloitte team was able to provide unique value to our customer.
In Japan, our partners are rapidly expanding their anaplan practices and realizing significant growth in services related to advising and implementing and a plan and their customer base.
I was recently in Japan, where we met with a number of CIO is of large global Japanese companies.
There are significant opportunities for us with our partners as Japanese companies are driving operational efficiencies.
They are digitizing their business processes and maturing that digital transformation efforts as they are trying to much more efficiently manage their resources. We're working closely with a great group of partners like Accenture, Deloitte Pwc and quinney in Japan, offering a complete end to end solution as a strategic competitive advantage.
What really differentiates and the plan is that once customers realize the ease of use of our platform and the quick adoption, which usually occurs within weeks they get to experience incredible value.
This helps them adapt react and pivot in a very disruptive and tumultuous time in their industry and we become the platform of choice.
Once they choose us they quickly understand the power of the honeycomb effect. We are impressed with how our customers are immediately grasping. The concept, we had a new customer create their own honeycomb within one week after selecting us due to the value of what they can create within our platform.
They had 25 potential use cases, just in our sales line of business. We identified 24 additional use cases with a very large fortune 50 company from their initial eight within operations finance and HR. This included use cases, such as incident backlog planning scheduling optimization recruitment capacity and customer facing Kate.
During our most successful global user conference are connected planning experience demonstrated the power of educating our end uses on Anaplan experts, we are providing users with the expertise and knowledge to help them become even more successful.
We celebrated our best Master and the plan is that CBX and we're pleased to announce that we now have over 300 certified Master Anna planners.
We are adding expertise and leadership to our fast growing and a plan or community and expect to substantially accelerate the number of certified Master Anna planners.
A trend we noticed is that the more experts, we create the greater adoption and broader use of our platform.
Several years ago, we launched this cuts concept referred to as a center of excellence or steel wheat.
The purpose of a sealy is to make sure transformational business planning is fully realized and self sustaining feel weve, our customers' internal teams to dedicate and maintain and expand anaplan. The number of customers with the Seo is growing and we continue to invest in scaling. This further through our internal enablement efforts and the customer facing self service resources published on our community site.
Customers with certified Master and planners generate more ACB then customers without.
Multiplier, which is increasing over time.
And we found that customers with both a certified master and a planner and a center of excellence generate over five times more a CV than those with neither.
We are also being recognized externally by industry analyst I'd see recently published their annual report worldwide Enterprise performance management application software market share, where Anaplan was listed as the first industry Shaper, we were recognized with the fastest growth rate among the top 10 players. We were also named a leader in the Gartner Magic quadrant for cloud financial planning and analysis solutions of differentiation for a third consecutive year because of our proven enterprise readiness intelligent planning capabilities and high customer satisfaction.
From a product perspective, this quarter, we announced our new platform user experience and new mobile App.
The new modern user interface includes highly customized views and reports that facilitate personalized experiences for every user of the platform and our work flow improved improvements include guided experiences for quicker execution.
Finally, the mobile App enables decision, making on the go taking planning from behind the desk and moving it to the field and front lines of the business. Our goal was to further increase efficiencies around planning processes and extend the reach of the platform.
Finally, we are very excited to announce that we have signed an agreement to acquire meant to go and Israeli based company with an AI powered customer engagement platform that provides predictive analytics for marketing and sales.
Mid to go bring strong expertise in data science and machine learning automation minted goes exceptional talent will strengthen our position as the leader in the category of connected planning by augmenting and elevating the predictive capabilities of our solutions, while accelerating toward our vision for an AI enabled platform. We also believe the mid to go team is very well aligned with our culture. We expect to complete this transaction by the end of the quarter subject to closing conditions.
We are very excited about this moment in time for Anna plant since our IPO last fall the momentum in our business has been extremely consistent reinforcing the value end market demand for connected planning.
We are hitting our product and operational milestones and I am feeling very confident with the way we are executing as we continue to grow very quickly.
We have built a world class leadership team, including the recent addition of Mark Anderson, Chief growth Officer, and with the acquisition of Mint to go we will leverage their talent and technology to enhance our predictive capabilities across the Anaplan platform.
We wouldn't be here with our investors employees partners and customers I. Thank everyone, who continues to be very supportive of our mission as we believe we are in the early stages of Anna plans long term success.
Now, let me turn the call over to Dave who will discuss our second quarter financials and outlook for the third quarter and fiscal year 2020.
Thanks, Frank and good morning, everyone. We delivered strong results and executed our plan for the second fiscal quarter revenue grew 46% and within this subscription revenues accelerated growing 48% year over year and comprised 87% of total revenue.
Service revenues were $11 million up from $8 million in the second quarter last year.
Calculated billings of $89 million grew 46% year over year.
To the extent, we experience any significant impact to the FX.
We will provide this amount to provide a better view into our business momentum this quarter given the fact, we do have some exposure to the GDP and with its recent volatility we saw a 400 basis point FX impact to calculated billings. This quarter, taking this into account our calculated billings would be 50% on an adjusted basis.
Our remaining performance obligations or ARPU rose represents the total book or sign business within a quarter that we believe this provides a more accurate commercial view into the underlying momentum of our business.
We exited the second quarter with ARPU of 516 million up 56% over last year, representing continued acceleration at scale compared to last quarter's year over year growth rate of 53%.
This was also the highest quarterly growth rate.
We have achieved and ARPU is over the past eight quarters, reflecting the strength, we're seeing across the entire business from new customer acquisitions to large deal momentum and customers beginning to expand their business with us on an accelerated basis.
Highlighting results from some additional key metrics our dollar based net expansion rate or an AR was 121% and continues to track above 120%.
Underscoring our success in retaining and steadily expanding business with our existing customer base.
In some cases, we're seeing customers expand on an accelerated basis or sooner than the 12 months driven by the growing awareness and value of enterprise connected planning in these situations are reported and our our does not fully capture these accelerated expand deals since the standard and our calculation is based on a one year look back.
For the second quarter, the accelerated expand deals represented an additional 430 basis points and growth.
Taking this into account, our and our would be 125% on an adjusted basis.
We also continue to serve a growing base of customers with over 250000 in annual recurring revenue, which this quarter was approximately 300 customers up from 230 13 customers. This time last year.
And within this the number of customers over 1 million in annual recurring revenue grew 80% compared to the same period last year.
Turning to our profitability metrics for the second quarter total non-GAAP gross margin was 75% up 240 basis points on a year over year basis.
Within this subscription gross margins were 84%.
Up 200 basis points year over year and service gross margins were approximately 12% down a 180 basis points year over year.
Total non-GAAP operating expenses were $80 million up from $59 million in the prior period.
Year over year growth in spending was primarily driven by strategic go to market investments.
And as mentioned on our last earnings call second quarter operating expenses include costs associated with our annual user conference held in June .
We continue to drive leverage in our financial model through productivity from the investments we have made over the past 18 months.
Operating margins of negative, 19.7% improved approximately 10 percentage points compared to negative 29.3% in the same period last year.
We are demonstrating significant progress, we're making towards our financial objectives of productivity and profitability.
Our unit economics are healthy with LTV to CAC of five times contribution margins at 60% after year, two and payback period of less than 24 months.
Net loss per share in the second quarter was 12 cents based on a 130 million weighted average shares.
Free cash flow, which is cash flow from operations less capital expenditures for the second quarter was positive.
1.5 million.
We ended the second quarter with 356 million in cash and cash equivalents.
For the third quarter fiscal 2020, we expect total revenue to be in the range of $85.5 million to $86.5 million and the non-GAAP operating margin to be in the range of negative 19% to negative 20% weighted average share count for the third quarter is expected to be 133 million shares.
For the full fiscal 2020, we are raising our revenue and operating margin outlook driven by the second quarter performance and the ongoing strength, we see in our business.
For the full year, we expect total revenue to be in the range of $339 million to 343 million.
As previously stated calculated billings can fluctuate from quarter to quarter impacted by timing of renewals and transactions. However, we believe billings to track in line with overall revenue growth rates. We also expect ARPU goes to track in line with overall revenue growth rates and our net dollar expansion rate to remain above 120%.
non-GAAP operating margin is now expected to be in the range of negative 19.5% to negative 20.5%.
Weighted average share count for the full year is expected to be approximately 130 million shares.
In summary, we drove excellent operating results in the second quarter was strong continued topline growth and improved leverage in our business model. We're entering the second half of the year with significant momentum in our business as we are increasingly being viewed as a key strategic partner to our enterprise customers, helping to drive greater value and agility and how companies run their business and a rapidly changing market.
With that we'll now turn it back to the operator to take your questions.
Thank you at this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad, we will pause for just a moment to compile the culinary roster.
Your first question comes from the line of Sarah Hindlian from Macquarie. Please go ahead.
Alright, great. Thank you very much and I appreciate you, giving us the impact.
FX on the billings number as well that was helpful. One thing I really wanted to hear a little bit more about from you guys is your partnership with a double you ask.
And maybe you can talk about the forecasting tool they released last week and how we should think about that on how it plays into the planning ecosystem.
Sorry, this is Frank good morning.
Ill start by talking I'd start by just talking about.
Technology partnerships in general.
No I think we're in a fortunate position at Anaplan.
Where the platform that we've begun to create around connected planning is attracting a significant amount of attention with other technology companies wanting to partner with us in so many different areas I think that bodes well not only for Anna planned, but I think it helps build the ecosystem that allows our customers to really leverage now and in the future.
As it relates to.
NWS and the forecast I'm not sure if you recall, but some of you attended our event back in September I am sorry back in June in San Francisco, a customer experience, we had Amazon and the team from Seattle, that's been working on the forecast due a demo.
Love the product in front of our customers and partners I think that was a great showcase looking at the statistical modeling or I should say the fiscal activity that they've created and how it connects into our platform. So it's a good example of a partnership with a W. West in this case on behalf of customers to really continue to leverage technology that they're delivering in this case, it's kind of eminent ml kind of statistical modeling in with the platform that we have for our customers.
All right terrific. That's very helpful and just a quick follow up on on the financial side.
Looking at the growth in total ARPU.
And.
It looks like your bookings were up over 63% year over year I'm wondering if you could help us a little bit with understanding the mix currency and total within our PEO.
Yes, we look at our current for the remainder of the fiscal year and so that number will be approximately $150 million.
On the current basis and remember that's just over a six month.
Window.
Alright, Thats terrific. Thank you so much.
Your next question comes from the line of Michael Tarkan from Deutsche Bank. Please go ahead.
Hey, there thanks good morning.
I was hoping we could go back to the expansion rate. So wanted to revisit that calculation you provided to get to the adjusted 125% and then just in thinking about that metric going forward do you still feel confident in that 120 plus percent range can we just talk a bit more around what it is youre seeing that provide that level of confidence.
Yeah, Michael this is Dave.
I'll I'll talk about just the generalities the calculation itself and then Frank and talk about just some of the customer expands we've seen and so if you think about the calculation itself. It really blocks out your current year. So you get without this 12 month look back and so we are doing expands sooner within our own ecosystem call. It three months six months nine months in theory, Youre not getting the credit for your NR.
And so for our case as not only our cohort of our air are this year has grown almost five times, if you compare it to a cohort going back to like 2015. So you had a re acceleration of that ARR as well as we're seeing expands happening a lot quicker within our ecosystem and so thats why we called it out in this instance.
As will do so on certain metrics episodic Lee just so you can understand some of the business momentum that we're seeing here.
You know Michael last quarter, we called out the honeycomb and I think it's getting a life of its own.
I think just in general, but also with customers as you saw earlier on the call I mentioned that we are having customers now use the honeycomb approach to really start to think aggressively about how they can leverage the value that they're getting from the platform.
I mentioned about the customer just this past quarter that within a week they started creating their own honeycomb and really driving a large number of use cases, that's allowing for a larger expands and faster expands and that momentum has been the case for the last two quarters Q1, and Q2 and I'm anticipating based on what we see those customers doing that that will continue.
I wanted to just throw out some other data just to kind of give you a perspective of the value that we're seeing from customers and what it means to Anaplan. If you think about the top 25 customers. The average aer are as of the end of the second quarter.
It is now over $3 million and that's that's seven times higher than the initial HCV. So it illustrates customers that are starting on their journey. They are aggressively moving forward with their expansion of Anaplan. The top 10 customers the average Jr.
It's getting close to $5 million at $4.7 million and that continues to increase each quarter, which is good to see and then as we said on the call earlier the average size of the top 10 deals in the quarter alone were over 500, K. So I think it's it's showing that the connected planning ecosystem.
Within customers and across customers continues to be very positive.
Thanks, I'll always appreciate the those extra data points, maybe just a quick follow up can congrats on the additional mark Anderson any sense, a key focus areas and responsibilities for that role and what his skill set specifically brings to help enhance your I'll go to market efforts. Thanks.
So we're really excited about mark joining the team has been onboard now for a couple of weeks.
I think we all know Marquees highly regarded he has an experienced operating executive.
What I like about Mark and I've known him for a while is he's operate in a similar environment to what we have here two times before so he brings that experience in a time for Anna plant as we are thinking about growing our business and scaling it above $1 billion. It provides a significant amount of.
Of leverage experience for the sales team as we continue to expand his focus as you would expect.
It's going to be focused on really building talent, helping us continue to refine our processes. So we can improve our efficiency and then focusing on where else were going to make our investment as we continue to scale.
Great. Thank you.
Your next question comes from the line of Heather Bellini from Goldman Sachs. Please go ahead.
Great. Thank you I just wanted to ask a little bit about linearity in the quarter was interested in what you saw in the what if it was any different than what you expected and also from a competitive perspective now that workday has adapted for a year or I guess a couple of questions. There are you seeing that but more in our PE I'm also.
Could they actually be helping to drive even more in the market and maybe what you used to see just given the number of sales people. They now and how would you say your win rate versus then has been trending thank you.
Yes. Good morning, Heather This is Dave I'll take the first part of the question just on the linearity for the quarter and then Frank will address some of the competitive landscape overall.
In regards to this quarter very much like the previous quarters, we've just seen a continued momentum.
You know as we started the quarter with a good amount.
Pipeline, great visibility into that not only from the ecosystem of our of our ease on the ground, but also through our strong partner.
The economy, if you will.
And so.
All through the quarter things worked really well for us and we continue to be very disciplined in how we continue to go to market and drive the respective.
Productivity measures across our whole enterprise.
So heather on the competitive environment no change this quarter and all similar to what I said before.
I think we have again, a unique enterprise wide planning approach, which enables our customers as they talked about a few minutes ago.
To really think about the platform more extensively.
Within a function and even across the enterprise, which no one really company and it close to to matching and as we continue to have I would say larger lands faster expands.
These illustrates that importance of connected planning and it puts us in a very favorable position.
Versus competition, so again really no change we have a very high success rate.
Our strategy is to sell high in the organization.
Make it focus more on a transformational direction finance transformation digital transformation supply chain transformation and when we can do that especially when we're partnering with a deloitte accenture and so forth that allows us to really have a very winning formula. The other thing I would just put out there as it relates to not so much competition, but it goes back to one of the examples I provided earlier when you think about especially in the finance organization a lot of the legacy applications that finance organizations have have been around for at least a decade or two and we're finding that many customers are looking for alternatives.
To really kind of move off of those legacy applications and that provides us. If you think about the inventory that's out there. It does provide us with a tremendous amount of potential as we think about the next couple of years.
Okay, Great and then just one more for David If you don't mind, just given your exposure to 40% of revenue asphalt. The U.S.K. can you share with us kind of any thoughts on how we should be thinking about deferred revenue trends for the upcoming quarter given given the multiple on results. This quarter welcome Tony Tom Kelly won't shale about how we should be thinking about that.
Sequentially the deferred revenue balance thank you.
Yeah.
On the FX look we.
At the end of day, a lot of volatility came from the last month.
In July specifically in so as it relates for costs thinking about our business model going forward.
We should see relatively minimal impacts.
But as far as deferred revenue.
And any additional narrative on that I would call it.
De Minimis as we think about how we continue to scale.
Okay. Thank you.
Your next question comes from the line of Brent Bracelin from Keybanc capital markets. Please go ahead.
Thank you one for Frank and one for Dave If I could Frank obviously strong quarter here accelerating subscription growth accelerating kind of ARPU growth I guess my question really is less about the growth profile of the business. That's very strong in and wanted to drill down into the acquisition strategy the broader M&A strategy.
Mid to go.
Isn't obvious from our marketing software perspective.
Relative to kind of the fit and I'd get supply chain I get sales or get financed transformations, but it's a little less obvious to me the fit for connector planning and marketing. So could you just talk about.
Kigo the product fit.
What you're what got you excited about that opportunity and the new use cases youre looking there and then could you just touch on the broader M&A strategy. Given this is the first acquisition you made here as a public company. Thanks.
So good question Brent.
So the first thing I would say and I think for those of you attended our CPX back in June .
Kind of test to uneven goes back to the question we got from Sarah.
Earlier about the Amazon forecast customers are constantly looking at ways to improve as they as you think about the future and they try to model the future, they're thinking about ways to better forecast right get closest to the pen, especially with the dynamics that are going on in the world and especially in some of the industries that our customers are in.
So it forces them to be much more on top of their business and ability to react. So we've been working now oh, probably for a good year and a half with very large customers that have been with US now for about two years plus.
On thinking of ways of working with ways with them.
We've done some pfcs to think about how they can better predict from a forecasting perspective and bringing in some of these AI ml type of capabilities.
As I mentioned with Amazon forecast.
We've worked with some other technology partners to be able to do that we will continue to do that one of the things that we've done as a result of the.
Let's say the plc that we've had with customers is it requires certain skill right from a data scientists perspective, and so as we look out the landscape. There are a lot of companies that are working on AI ml and so we don't intend to be specifically in that business, but we do see the alignment into our platform. We want our platform to capture whatever technology is best for our customers.
Bringing in minutes ago, we were very impressed with the talent that the team has.
They are based in Israel, as we said on the call and they've got a team in several places in the us as well and that talent is the what is the area that we are most interested in bringing the team on accelerates our ability.
Good morning, with the PL CS, but extends the amount of AI enabled opportunities that we work with our customers on.
So that was the primary objective.
For doing that they have been focused in the sales and marketing areas were focused clearly much broader when we think about our portfolio. So we want to leverage their skill the data scientist skill. So that we can do more on behalf of our customers from an AI enablement within our platform.
Got it very helpful color, there and and it's very clear what the strategy I guess, Dave My follow up for you is looking just at.
Free cash flow I kind of double check my numbers. It looks like you guys generated positive free cash flow for the first time.
In the history of the company. So walk me through where are we at the point now where you can balance hypergrowth and and positive free cash flow or were there. Some kind of one time items that you had a benefit there that we should not think about that going forward.
Yeah look were stolen.
Invest mode, and so I don't want to fall set any expectations will be free cash flow positive from here on out with that said, we're very judicious.
And good stewards of the investments we're making.
We did have very good working capital management this past quarter and we'll continue to do so but with that said, we're still investing and all the opportunities.
As Frank and I have narrated on this morning.
Got it very clear thank you.
Your next question comes from the line of Richard Davis from Canaccord. Please go ahead.
Hey, thanks.
This one phone so it sounds like then it goes like just want to make sure I got that straight it's kind of like an on ramp to help your customers and just more data. So thats one and then the second one is kind of your sales go to motion.
You guys are really good at DNA that oftentimes, where you land.
But have you how do you think about kind of evolving the.
The go to market sales motion.
Right now at this point if on the salesman and I get the client is my also in charge of doing the up sell or the cross sell into sales ops and supply chain or is this something that I hand off to the customer success team or and or how do you see that evolving. Thanks.
Sure so as far as the first I wouldn't say, it's a day to ramp as far as men to go.
Look at mid to go as a group of very talented engineers that are going to be added onto our team for us to do more than what we've currently been doing to really accelerate the ability to bring AI into our platform for our customers more so I would look more into that than that I just said.
As it relates to it's not getting into anything with big data or anything associated with that figure is to get a core group of engineers.
That are helping us some data science standpoint, do more than what we current able to do so we can faster ramp some of these capabilities that our customers are working with us on.
As far as the land and expand the sales team that we continue to expand.
Oh grow I should say rather than kind of get into that is.
Is responsible for the land. They are there they are out there hunting for new opportunities with customers. They also managed the account.
And so they also are part of if you want to call. It the honeycomb or the connected planning journey with those customers. They partner with our customer success team. So the customer success team is assigned to certain account.
They work with those customers they work with the sale lease that I mentioned before the master Anna planners that are within the customers that we continue to encourage our customers to invest in and they continue to map out.
That journey and that honeycomb on a day to day basis, they align with the E. The account executive.
And they both work on the expands as appropriate for the customer.
And then just layering on that you also have.
A partner so for partners working on lets say a transformational project.
Finance transformation supply chain transformation, they're working with the customer with their consultancy to think about the longer term journey, and we kind of aligned in with that with the and the the BP on the customer side to make sure that we have a seamless roadmap on behalf of the customer.
Great. Thank you.
Your next question comes from the line of Terry Tillman from Suntrust Robinson. Please go ahead.
Yes, thanks for taking my questions I guess first on the user conference. It was great now the weather was a little hot but.
Yes, one of the things I enjoy it was just hearing from other partners wanted hottest good, especially in San Francisco.
Sorry, I'm sorry.
No it's okay.
But I'm curious with the partner ecosystem, how often are they actually building IP or building.
Our apps that they can go monetize like the Deloitte example, and I wanted to touch on that specifically with assortment planning.
How meaningful is that now because they were actually talking at the analyst events about the excitement they saw with that thank you.
Yes, so now that these partners Deloitte Accenture Wipro I mean, you can.
Even some of the.
Others as well, they're investing in anaplan in there and the plant practice.
As far as bringing on.
Like consultancy experienced around and appliance platform. What they are now trying to do so that it can enhance their go to market, but also go out and reach for new customer new clients, but also offer existing customers examples of where they can do more with anaplan is they are creating solutions.
I would say in the last six months alone.
The large.
Partners have developed a unique solutions that they go to market with not just one or two there were in the point of of.
Offering three four or five they continue we just had a quarterly business review with one of the partners just last week.
And they talked about how they are using their in house consults in the practice.
To bring customers or clients in to showcase some of those solutions and talk to them about implementing those solutions.
So thats continuing to expand some of them are available on our app hub, the probably the less sophisticated ones and others become more generally available or they may be more specific to a particular partner based on their part proprietary IP or anything else that may come into the equation from that standpoint.
So good tracks all right.
I continue to see that advancing as we think about the next couple of quarters.
Yes, I just had a quick follow up there with your Chief growth Officer addition, like is there any low hanging fruit or any kind of early initial kind of initiatives. He may be focused on that we should think about as it relates to going into next year. Thank you.
No just the hope that everything that we've been working on from the standpoint of the growth Thats, what we called the Chief growth Officer continued to drive the expands with existing customers and look for ways of expanding.
The territory and some of the Green field opportunity that we have in all geographies.
And Thats Mark Mark comes in he does a lot of.
Outreach he is very good at that he listens.
Any starting to calibrate right now kind of the path forward, which is which is perfect.
Your next question comes from the line of curriculum attorney from Evercore ISI. Please go ahead.
Yes, thanks, very much I'll add my congrats on the quarter of Frank I was wondering if you could just or maybe Dave could you guys just talk a little bit about the make up of a sort of where the lands are coming from sort of a functional perspective, you know whether it's sales financing if thats changing at all meaning I'd be curious to see if you're gaining traction in any sort of new area, where there might be supply chain, just I know you're not gonna play anything quantitatively, but maybe qualitatively. If you could just walk us through kind of what you're seeing on that front. Thanks.
So if you step back and look at overall, we're about 60% finance.
And then 40% outside of finance.
That's an average I would probably say its inching up meaning the 40% is probably getting a little larger.
And the reason for that is we're seeing a significant number.
Of opportunities I mentioned on the call earlier.
That supply chain continues to be an area of interest of our customers.
Last quarter, I mentioned steel supply chain across cosmetic industry customers across spirit industry customers has been significant we're now seeing that expand into other indices as well CPG and so forth. We have if I think back over the past quarter and I look at areas, where we've made some further investment in talent.
I would have to say it's in supply chain working on these opportunities we tend to work with partners that have expertise in supply chain and we've also added to our own bench of supply chain experts and I have to say we've been very successful last couple of weeks, attracting some really good talent.
It's kind of work on that so I'd say supply chain. The other area that I have mentioned.
And more broadly is workforce planning.
Because when you think about.
Most companies now are dealing with managing their resources more efficiently.
They have large numbers of resources is if you look at some of the cost metrics they trying to drive efficiency.
And so therefore, there is much more attention to workforce planning across the enterprise.
I think in the past workforce planning has been something that we've looked at within lets a finance or within HR now its being looked at in all parts of the business and so workforce planning.
Use cases that we've seen across different industries.
Have kind of spanned looking at how best to why leverage my resources.
From a portfolio standpoint across the enterprise and so were very helpful.
In working with partners and customers along that path.
Any sort of touched on this and it's maybe dovetails a little bit of Terry's earlier question about partners, but when you partner up with a big ESI are you partnering from a functional perspective or is it more across.
Later, accenture are going to work with us across the enterprise.
They're very strong in the transformational projects that span.
Multi function when you start getting into let's say some of the boutique firms.
They tend to have a specialty in a specific areas. Some have specialties in finance and so we will work with them on that others. As I said, a few minutes ago have specialties and supply chain and sometimes and I'm looking here at just I brought this in this morning as far as just looking at some of the.
Major expands that we had the past quarter and as I look across.
I start to see.
Kind of a mixture of partners.
Right, we will have a larger deloitte accenture doing a transformational and then you have in addition, a little bit more expertise that may come from some of the boutiques and so we do see sometimes a combination of a one or two partners working together.
So thanks very much.
Your next question comes from the line of scans Blocky from Morgan Stanley . Please go ahead.
Hi, This is hamza fodderwala for Stan Zlotsky. Thank you for taking my question.
So you mentioned the currency impact.
Out of the UK earlier.
You do have about 40% of your business from coming internationally just for me.
Fundamental macro standpoint are you seeing any pockets of weakness in either Europe or Asia Pac either stemming from the trade tensions or some of the recessionary.
Fears in Europe .
And the second question is to what degree.
Was FX headwind to revenue growth in Q2, and your expectations for the full year.
You know when you look at.
The whole topic, a digital transformation.
Which I think is an area of expertise for us.
We have not seen any change.
If I think about it in various industries or various geographies, so consistently across those industries and across those geographies, we continue to see strength.
I can't really identify any weakness as I think back over the last couple of months and I've traveled.
I've been in Europe , I've been in Asia Pacific I mentioned about my trip to Japan, which I came back like on cloud nine.
Just understanding and appreciating what the Japanese companies global companies are thinking about specifically into the supply chain, but even more broadly than that.
As they aggressively try to digitize so no.
I've seen strength in all our markets and that seems to continue.
Based on some of the trends that we're seeing.
Across the board.
Yes, and just on the FX for the topline revenue.
You know to Franks point, we look at it is just opportunities for the overall digital transformation, we really don't want to start narrating on a constant currency basis headwind, because we actually view it as all opportunity as we continue to go forward. So.
I'll just say it was de Minimis and the only reason we provided the other color was just to show the continued business momentum.
In our in our results for this past quarter.
Okay. Thank you.
We have time for one last question. Your last question comes from the line of Pat Walravens from JMP Securities. Please go ahead.
Oh, great. Thank you and congratulations.
I was wondering if we could talk about.
How long sales cycles are maybe in.
The upper market versus the middle market and then also I am guessing they've been shortening but.
I would just love to hear any commentary in terms of sort of what the trajectory has been for them.
So.
As you continue to expand.
And focus on sales team and the expansion that we've had over the past year I'd say.
Cycles are improving as we get more talented people.
As we continue to support that talent.
With partners as well as with.
Various other support teams that we have in place.
I would say that a couple of stats I'd put over half of our reps are still ramping.
The let's say if I look back at the ramping reps just some stats as far as is showing some of the efficiency half of them closed deals in the quarter. So those that are still ramping.
And as we continue to add reps, that's a good sign as far as just showing some productivity. They don't have to go through the whole ramping process in order to produce results, which is a good sign.
We're seeing a significant number of ramp reps performed this quarter.
Which is continuing to improve quarter after quarter, so I like the productivity improvement.
Goes back to some of the stats that Dave was talking about before when we talk about our BPO, but also when we talk about LTV to CAC when things from that perspective, and I think as I mentioned now at least once or twice on the call with Mark on board and the amount of experience that he has in similar types of of ramping organizations. He is going to be an another level of expertise to this so I'm expecting that to improve even further so good good results across the board ramp result ramp reps ramping reps and we continue to bring new on and we're accelerating that pace going forward.
All right great. Thank you.
Mr. Calderon, he I turn the call back over to you for closing remarks.
I want to thank everyone for joining the call today, we look forward to continued dialogue at various events that we have coming up and also as we report earnings next call next quarter. Thank you very much and I appreciate your time and support.
Thank you. This concludes today's conference call you may now disconnect.