According to a Market Research Planning report, the global Enterprise Resource Planning market is expected to grow to $49.5 billion by the year 2024 driven by the increased adoption of mobile and cloud planning solutions and the penetration of these solutions within the SMB segment. Cloud-based planning services provider Anaplan (NYSE: PLAN) recently reported its fourth quarter results that surpassed market expectations.
Anaplan’s Financials
Revenues for the fourth quarter grew 42% to $98.2 million, ahead of the Street’s forecast of $97 million. Adjusted loss was $0.07 per share, compared with the Street’s forecast of a loss of $0.11 per share and previous year’s loss of $0.13 per share.
By segment, subscription revenues grew 50% to $89.5 million and professional services revenues fell 9% to $8.7 million. Its dollar-based expansion rate was 122% driven by the continued to demand for its Connected Planning solution. It ended the quarter with over 1400 total customers. It is now catering to over 350 customers with more than $250K in annual recurring revenues.
Despite impressive results, analysts weren’t too pleased with Anaplan’s slowing billing growth rates. For the quarter, calculated billings grew 25% over the year to $126 million. The market was looking for billings of $138 million for the quarter.
Anaplan also announced that its Chief Growth Officer Mark Anderson was stepping down. Mark had been on the job for less than a year. While the official announcement states that he was stepping down to spend time with him family and to pursue philanthropic opportunities, analysts suspect that the departure may suggest “deeper issues” as reflected in the billing growth rates.
Anaplan ended the year with revenues growing 45% to $348 million. Its losses grew from $56.5 million a year ago to $148.4 million. On an adjusted basis, loss per share fell to $0.44 from $0.73 last year.
Anaplan expects to end the current quarter with revenues of $102-$103 million, against the market’s forecast of $103.1 million. Anaplan forecast revenues of $463-$467 million for the year, which was better than the market’s forecast of $462.7 million.
Anaplan’s Product Upgrades
Anaplan continued to deliver several product upgrades during the quarter. It recently introduced AI-powered capabilities for Predictive Sales Planning to help organizations design and execute on their sales and revenue strategies. The tool will provide sales leaders with access to deeper insights into the accounts such as company growth trends, business partnerships, hiring trends, and buyer intent. Users will be able to leverage the tool to prioritize accounts that have a higher probability of making the purchase. It will allow sales teams to carve potential sales territories across multiple dimensions such as geography, industry, or product and will help leaders design fair quotas for the year.
Besides helping organizations execute on their sales strategy, Anaplan is also leveraging AI to improve its forecast accuracy. Anaplan has integrated Salesforce Einstein Analytics with its Connected Planning platform so that Opportunity data from Sales Cloud and commitment data from Anaplan forecasting models can be integrated together with Einstein’s capabilities to deliver a more accurate predicted win rate.
Anaplan’s Platform Focus
Besides product upgrades, Anaplan continued to grow its platform community. Anaplan is very attentive to its developer community. In a recent talk, its CEO Frank Calderoni talked about building more API connectors for the platform to ensure that it can connect to any data source to deliver more accurate and reliable planning solutions. Its engineering team has defined quarterly targets on the number of applications that it needs to connect to.
Anaplan’s ultimate goal is to becoming a “complete app store of available connectors”. It believes that by building these connectors, Anaplan will be able to deliver seamless integration with data streams and extend the power of its platform across the enterprise. Additionally, by delivering a rich API and micro services framework within the platform, it will also be able to open up more opportunities for next-gen App Hub.
Anaplan’s open platform currently has more than 200 pre-built models spanning multiple enterprise use cases. It clearly wants to keep adding to this library.
Anaplan is currently trading at $45.56 with a market capitalization of $6 billion. It touched a 52-week high of $63.71 earlier this month. It hit a 52-week low of $33.59 in March last year. The stock had listed at $17 in October 2018 when it raised $263.5 million at a valuation of $1.8 billion.
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