Anaplan (PLAN) Q2 Loss Narrower Than Expected, Revenues Up Y/Y

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Anaplan PLAN reported second-quarter fiscal 2022 adjusted loss of 9 cents per share, narrower than the Zacks Consensus Estimate of a loss of 14 cents. However, the figure was wider than a loss of 4 cents per share reported in the year-ago period.

Revenues of $144.3 million beat the Zacks Consensus Estimate by 7.64% and improved 35.5% year over year.

The top-line performance can primarily be attributed to healthy customer growth and booking strength at existing customers. The company’s partnerships with the likes of Alphabet’s GOOGL Google Cloud and Amazon’s AMZN cloud computing arm, Amazon Web Services also expanded its footprint.

Anaplan, Inc. Price, Consensus and EPS Surprise

Anaplan, Inc. price-consensus-eps-surprise-chart | Anaplan, Inc. Quote

Quarterly Details

Subscription revenues (90.6% of total revenues) increased 34.6% year over year to $130.8 million.

Revenues from professional services (9.4% of total revenues) climbed 44.5% year over year to $13.6 million.

The company’s dollar-based net expansion rate (NRR) was 119%.

Calculated billings in the fiscal second quarter were $148 million, up 36.2% year over year. Remaining Performance Obligation (RPO) increased 28.8% year over year to $906 million.

Anaplan is now serving 405 customers with more than $250K in annual recurring revenues, up 29.2% on a year-over-year basis. The company ended the quarter with over 1750 customers.

Operating Details

Non-GAAP gross margin was 77%, down 100 basis points (bps) year over year. Subscription gross margin was 84%, down 100 bps year over year. Services gross margin was 8%, down 100 bps from the year-ago quarter.

General & administrative expenses climbed 16.2% year over year to $24.7 million, while sales and marketing expenses rose 32% to $96.3 million. Additionally, research and development expenses surged 47.3% year over year to $36.2 million.

Anaplan’s non-GAAP operating loss was $10.9 million compared with a loss of $9.6 million reported in the year-ago quarter.

Balance Sheet & Cash Flow

Total cash and cash equivalents as of Jul 31, 2021 was $312.9 million compared with $327.5 million as of Apr 31, 2021.

Non-GAAP free cash outflow was $23.9 million in the quarter.

Key Announcements

Anaplan launched platform innovations, including Management Reporting. The new enriched reporting capabilities make it easy for model builders to create dynamic, accurate, and digestible reports, leveraging real-time data within the Anaplan Platform.

Moreover, Anaplan was recognized by Gartner in the first-ever Market Guide for Cloud Extended Planning and Analysis (XP&A) Solutions.

Guidance

For third-quarter fiscal 2022, Anaplan expects revenues between $145.5 million and $146.5 million.

Further, the company expects non-GAAP operating margin between negative 10% and 11%.

Billings are anticipated between $179 million and $181 million.

For fiscal 2022, Anaplan projects revenues to be $571.5-$573.5 million. Further, non-GAAP operating margin is anticipated between negative 8% and 9%.

Zacks Rank & A Key Pick

Anaplan currently carries a Zacks Rank #3 (Hold).

Cadence Design Systems CDNS, with a Zacks Rank #2 (Buy), is a stock worth considering in the broader technology sector. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Cadence Design is currently pegged at 11.6%.

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