Anaplan (PLAN) analysis

I thought to revisit Anaplan after the announcement on 5 Jan that they have appointed a new CRO. I wrote about them in May and my thesis at that time - that they had a temporary 1-quarter blip - turned out wrong. COVID hit them quite hard. So I was wondering if there were signs that the worst was behind them and whether they could be returning to >40% yoy rev growth as well as what that may mean for other COVID-impacted software names.

tldr: Possibly - some green shoots. Not yet sure, but Q4 results should make it clear. Key thing to watch imo is whether NRR ticks up in Q4.


My write-up in May 2020 after Q4 2020 results last year. They had a significant drop in billings which I thought was behind the selloff of the stock, and which I incorrectly thought would reverse in the next Q.…

Q3 Results:…

Relatively upbeat MF write-up on 1 Dec 2020 by Nicholas Rossolillo:…

Appointment of new CRO effective 5 Jan 2021, Bill Schuh: ex Medallia and Sunrun.…


**2020	2020	2020	2020	2021	2021	2021**
**$m	Q1	Q2	Q3	Q4	Q1	Q2	Q3**
Rev.	75.8	84.5	89.4	98.2	103.8	106.5	114.8
yoy%	47%	46%	44%	42%	37%	26%	28%
qoq%		11%	6%	10%	6%	3%	8%
%of lq billings	97%	100%	**86%	82%**	111%	105%
GM%	71%	72%	73%	75%	76%	77%	**78%**
Sub Rev	65	74	80	90	94	97	105
% Rev	86%	88%	89%	92%	91%	91%	91%
#cust	1,105	?	1,255	1,310	?	1,475	1,525							
#est.	1,105	1,171	1,242	1,304	1,356	1,451	1,523
qoq%		6%	6%	5%	4%	7%	5%
#>$250k	279	299	324	353	367	391	417
qoq%		7%	8%	9%	<4%	7%	7%
Billing	87	89	114	126	96	109	145
yoy%	57%	46%	59%	25%	10%	22%	27%
qoq%		2%	28%	11%	-24%	14%	**33%**
RPO	473	516	590	656	647	703	740
yoy%	53%	56%	55%	49%	37%	36%	25%
qoq%		9%	14%	11%	-1%	**9%	5%**
NRR	123%	121%	123%	122%	117%	116%	**113%**
Op Loss	-20.1	-16.1	-11	-10.1	-13.4	-9.5	-6.1
Op M%	-27%	-19%	-12%	-10%	-13%	-9%	**-5%**
FCF	-5	1.5	-19.9	-6.1	-5.9	-12.8	-9



  • QoQ growth back to 2020 levels; up 2%pts yoy

  • Rev seems to be back to roughly in line/slightly higher than prior q billings (I calculated revenue as a % of the prior quarter’s billings, and during the initial pandemic quarters this was significantly lower)

  • High subscription rev as % of total

++ QoQ billings growth the highest it has been in 2 yrs

  • RPO growth ticked up again in the last 2 Q’s, but was slightly down in Q3 vs Q2

– NRR declined due to renewals being done without as much expand as prior to COVID. this is probably the biggest issue I see as they also don’t seem to have a strategy of monetising additions to their platform, rather opting to use those as enhancements.


  • They don’t disclose exact customer numbers (or I couldn’t find it) so I tried to fill in the gaps, based on my assumptions (cust est.) it looks like qoq customer growth picked up in the last 2 Qs to ±5-6% qoq.

  • customers with >$250k ARR growth recovered after slowdown in Q1 to 7% qoq - almost at pre-pandemic levels.


  • GM% increasing steadily over the last couple of quarters from 71% in Q1 2020 to 78% in Q3 2021.

  • Improving Operating margins; getting close to break-even: -5% in Q3 2021 vs -27% in Q1 2020 - breakeven could be in next Q or 2.


  • FCF inching upwards, and with just shy of $300m cash on hand cash is not a concern


Key issue fixed?

I wrote in May 2020 that I thought the key issue that they faced was that yoy billing growth dropped from >50% in prior Qs to 25% in Q4 2020. This seems to have seen a definite turnaround, but management warned that they would rather look at RPO which is much more stable. So is the worst behind them? Are they accelerating? Not sure. Could be though.

Chief Growth Officer Appointment - second time lucky?

Bill Shuh was appointed 5 Jan 2021, a year after this role was vacated by Mark Anderson, who was appointed 5 Aug 2019 and left 27 Feb 2020. That hire did not work out and the role was not backfilled until now. So it sounds like the US sales/distribution issues have been sorted out now? Again not sure but sounds like the CEO has more confidence now to make such an appointment (or maybe the search just took this long?) Either way this is probably a good thing and Bill Schuh looks like the real deal.



Approximately, 60% of bookings this quarter came from existing customers, which is in line with the historical average.

NRR: continues to reflect a lower volume of expand deals, primarily due to the impact of COVID-19 on the timing and velocity of deals. There was no change in churn this quarter and overall customer retention rate is in line with historical levels.


PlanIQ: Amazon Forecast leverages ML and AI forecasting algorithms

CloudWorks: seamless and bidirectional integration with AWS, GCP BigQuery, Azure Data Lake.

Anaplan was showcased as a leader for the fourth consecutive year in the Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions & moved up from major player to leader in IDC’s 2020 vendor assessment for cloud enterprise performance management software


The number of Certified Master Anaplanners this quarter continues to grow, up over 50% year-over-year.

Record attendance at CPX with over 7,000 registered attendees, a 250% increase over last year.

Strong partner involvement: 1,000 plus attending CPX including Deloitte, Accenture, EY, McKinsey, Bain and Genpact

Strat partnership with Google: joint go-to-market partnership with systems integrators.

Global partnership with Deloitte, exec parterships with EY, Accenture

We saw strong contribution from partners in Q3, where over two-thirds of our top 20 deals had partner influence.

→ So it seems the partnership focus of last year is starting to bear fruit


Guiding for Revenue $119.4 at mid-point, so 4% QoQ (after 8% in Q3) and 22% yoy.

→ If they did 8% qoq they would still only do 26% yoy. However if the QoQ story starts to improve towards 9% or higher, then yoy revenue growth of above 40% could be on the cards again. I don’t yet see that.


Q: Billings growth very high vs RPO lower? Which is better fwd indicator?

A: Billings will fluctuate, lean towards RPO, because I think that gives you a very clear persona of the true economic and commercial deal ahead of us versus timing of the actual transaction.

Standard contracts are 3 years, we ask for 1 year upfront cash. So that’s typical, what generates our overall RPO. And there has been no change within that contractual duration.

Q: NRR low?
A: Expand lower than pre-pandemic, churn in line

Q: Pipeline quality in context of sales changes and COVID?
A: Pre-covid building pipeline in existing customers, Q1,2,3 building more short and long term pipeline.
“that also gave us a bit more confidence, as we think about next year.”
Importance of partnership ecosystem that has been building the last couple of quarters: “They’re seeing the transformation projects starting to build, and we are working along with them, making investment as well, not only for Q4, but going into FY ‘22.”

Q: Velocity of deals, deal sizes Q3 vs prior?
A: We’re back to historical 60 expand/40 new. Pipeline is getting better: “If I look at the top 10 deals and the average size of those deals, we saw an increase this quarter, which I thought was positive. And the top 10 and also the top 25 customer ARRs also increased this quarter. So, we have seen kind of an increase from that perspective.”
BUT “we’re not at pre-pandemic levels, so still we have to continue to proceed with caution”

Q: Relevance of Master Anaplanner (the metric that’s up 50%yoy)
A: Master Anaplanner is the highest level of certification - inside Anaplan, at partners, at customers. So the more that we see that increase, the more expansion around the knowledge and potentially the use of Anaplan.

Q: New innovations: extend platform capability, or monetization?
A: planIQ will be rolled out end 2020 and still working on monetization, but most improves are enhancements.


PLAN could be seeing signs of acceleration; Q4 results will confirm whether this is in fact happening. Skills to implement their solution has expanded: 50% yoy growth of Master Anaplanners; focus on partner ecosystem seems to be starting to bear fruit, billing growth spiked, but was played down by CEO, customer growth of last 2 q’s seem better than in prior 2 Q’s, but NRR has slowed for older cohorts. Just appointed a new CRO.

→ I will wait and see on this one