Cloud Stocks: Is Anaplan A Prospect For Oracle, SAP?

According to a recent Fortune Business Insights report, the global ERP software market is expected to grow at 8.5% CAGR to reach $71.63 billion by 2026. Cloud-based planning software provider Anaplan (NYSE: PLAN) recently reported its first-quarter results that delivered mixed results despite the growth forecast.

Anaplan’s Financials

Revenues for the first quarter grew 37% to $103.8 million, ahead of the Street’s forecast of $101.08 million. Adjusted loss for the quarter improved 37.5% over the year to $0.10 per share, compared with the Street’s forecast of a loss of $0.14 per share.

By segment, subscription revenues grew 44% to $93.8 million and professional services revenues reduced 7% to $10 million.

Among key metrics, the company now has 367 customers with more than $250,000 in annual recurring revenues, recording a growth of 32% over the year. Its dollar-based expansion rate was 117%.

Anaplan did not provide earnings guidance for the second quarter. It expects Q2 revenues in the range of $103-$104 million, significantly short of the Street’s estimate of $110.2 million.

Anaplan’s Growth Concerns

Anaplan attributed the slower revenues to customers refocusing their investments to managing COVID-related issues instead of investing in Anaplan-related projects. However, the redistribution of priorities varies across industries. For instance, it saw a greater impact in hospitality and travel due to the pandemic. At the same time, it is witnessing growth in healthcare. Its solution is addressing this demand as experts have created 17 production-ready models that can be downloaded and deployed at no cost by any Anaplan customer. These healthcare-focused models address COVID-19 specific use cases such as hospital bed planning, PPE redistribution, and FEMA-type expense tracking. It also recently launched a 90-day free trial and met with nonprofit organizations and government authorities to address their challenges related to COVID-19.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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