10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:                  to

Commission File Number 001-38698

ANAPLAN, INC.

(Exact name of registrant as specified in its charter)

Delaware	27-0897861
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

50 Hawthorne Street

San Francisco, California 94105

(Address of principal executive offices)

(415) 742-8199

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	PLAN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No þ

As of May 28, 2021, the number of shares of the registrant’s common stock, $0.0001 par value per share, outstanding was 144,732,009.

TABLE OF CONTENTS

		Page
	Part I. FINANCIAL INFORMATION	5
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	30
	Part II. OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 6.	Exhibits	66
	Signatures	67

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements. All statements other than statements of historical facts contained in this report are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” or the negative version of these words and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements include these identifying words. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. The forward-looking statements are contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements contained in this report include, but are not limited to, statements about:

•the impact of the ongoing COVID-19 pandemic, related public health measures and any associated economic uncertainty on our business, operating results and financial condition and the businesses of our customers, prospective customers and partners;

•our anticipated responses to, or actions arising out of, the COVID-19 pandemic;

•our future performance, including our revenue, costs of revenue, gross profit or gross margin, operating expenses, remaining performance obligations, deferred revenue, dollar-based net expansion rate and billings;

•the demand for and benefits from the use of our platform and solutions;

•our growth strategy and ability to compete;

•our ability to sell our platform to new customers;

•our ability to retain, drive user adoption rates and expand use of our platform by our existing customers;

•our ability to develop and maintain a pipeline of qualified and trained users of our platform for utilization with our customers and partners;

•the sufficiency of our cash and cash equivalents to meet our projected operating requirements;

•our ability to maintain the security of our platform, networks and systems and protect the data of our customers;

•our ability to maintain the availability and functionality of our platform;

•the development of our platform on the infrastructure of third-party public cloud partners;

•our ability to achieve widespread market acceptance of our platform;

•the provision of professional services by our partners, including the breadth and volume of such services;

•our ability to successfully expand in our existing markets and into new markets;

•our ability to effectively manage our growth and future expenses;

•our ability to broaden and deepen our partner ecosystem and successfully operationalize our partnerships;

•the utilization of our partner ecosystem to help drive growth;

•our estimated total addressable market;

•our ability to maintain, protect, and enhance our intellectual property;

•our ability to enhance our platform, adapt to technological change and satisfy the cloud infrastructure priorities of our customers;

•our ability to comply with laws, regulations and accounting rules applying to our business, including privacy regulations such as the General Data Protection Regulation;

•anticipated income tax rates, tax estimates and tax standards;

•the recruitment, hiring, training and retention of qualified employees and key personnel including direct sales, research and development and engineering personnel;

3

•the rate of expansion and productivity of our sales force;

•our anticipated investments in sales and marketing, research and development and other company functions;

•our ability to grow our international business and manage the risks inherent in global operations;

•our ability to realize anticipated benefits from strategic transactions in a timely manner;

•changes in the competitive environment in our industry and the markets in which we operate;

•our ability to manage changes in foreign currency exchange rates and effectively hedge our foreign currency exposure;

•our ability to secure financing on favorable terms, or at all, to satisfy future capital needs; and

•our ability to successfully defend litigation brought against us.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this report.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this report and the documents that we reference in this report and have filed with the Securities and Exchange Commission as exhibits to this report with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

4

PART I

ITEM 1. FINANCIAL STATEMENTS

ANAPLAN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	As of
	April 30, 2021		January 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	327,516	$	320,990
Accounts receivable, net of allowances for credit losses of $2,900 and $3,162 as of April 30, 2021 and January 31, 2021, respectively	104,600		147,005
Deferred commissions, current portion	38,414		36,797
Prepaid expenses and other current assets	25,626		24,252
Total current assets	496,156		529,044
Property and equipment, net	55,062		51,603
Deferred commissions, net of current portion	83,935		82,405
Goodwill	32,379		32,379
Operating lease right-of-use assets	37,509		33,985
Other noncurrent assets	9,460		9,709
TOTAL ASSETS	$	714,501	$	739,125
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	7,374	$	7,949
Accrued expenses	90,881		101,507
Deferred revenue, current portion	286,922		287,778
Operating lease liabilities, current portion	8,561		7,951
Total current liabilities	393,738		405,185
Deferred revenue, net of current portion	5,739		7,765
Operating lease liabilities, net of current portion	33,152		30,130
Other noncurrent liabilities	19,175		18,032
TOTAL LIABILITIES	451,804		461,112
Stockholders' equity:
Common stock, par value of $0.0001 per share; 1,750,000 shares authorized as of April 30, 2021 and January 31, 2021; 144,682 and 143,502 shares issued and outstanding as of April 30, 2021 and January 31, 2021	14		14
Accumulated other comprehensive loss	(8,803)		(7,528)
Additional paid-in capital	969,955		932,505
Accumulated deficit	(698,469)		(646,978)
TOTAL STOCKHOLDERS' EQUITY	262,697		278,013
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	714,501	$	739,125

The information as of January 31, 2021, was derived from the Company’s audited Consolidated Balance Sheet as of January 31, 2021.

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended April 30,
	2021		2020
Revenue:
Subscription revenue	$	118,343	$	93,824
Professional services revenue	11,482		10,020
Total revenue	129,825		103,844
Cost of revenue:
Cost of subscription revenue	21,329		15,185
Cost of professional services revenue	11,492		9,555
Total cost of revenue	32,821		24,740
Gross profit	97,004		79,104
Operating expenses:
Research and development	33,212		23,762
Sales and marketing	88,470		71,674
General and administrative	24,945		22,428
Total operating expenses	146,627		117,864
Loss from operations	(49,623)		(38,760)
Interest income (expense), net	(151)		511
Other income (expense), net	(459)		(331)
Loss before income taxes	(50,233)		(38,580)
Provision for income taxes	(1,258)		(1,022)
Net loss	(51,491)		(39,602)
Comprehensive loss:
Foreign currency translation adjustments	(1,275)		1,751
Comprehensive loss	$	(52,766)	$	(37,851)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.36)	$	(0.29)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	144,161		136,362

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
For the Three Months Ended April 30, 2021
Balance at January 31, 2021	143,502	$	14	$	932,505	$	(7,528)	$	(646,978)	$	278,013
Stock-based compensation	—	—		35,352		—		—		35,352
Exercise of stock options, net of repurchases and early exercises	357	—		2,098		—		—		2,098
Vesting of restricted stock units	823	—		—		—		—		—
Net loss	—	—		—		—		(51,491)		(51,491)
Foreign currency translation adjustments	—	—		—		(1,275)		—		(1,275)
Balance at April 30, 2021	144,682	$	14	$	969,955	$	(8,803)	$	(698,469)	$	262,697
For the Three Months Ended April 30, 2020
Balance at January 31, 2020	135,495	$	13	$	788,447	$	(4,326)	$	(492,453)	$	291,681
Cumulative adjustment upon adoption of ASC 326, Financial Instruments - Credit Losses	—	—		—		—		(558)		(558)
Stock-based compensation	—	—		23,486		—		—		23,486
Exercise of stock options, net of repurchases and early exercises	698	—		3,798		—		—		3,798
Vesting of restricted stock units	938	—		—		—		—		—
Net loss	—	—		—		—		(39,602)		(39,602)
Foreign currency translation adjustments	—	—		—		1,751		—		1,751
Other	—	—		25		—		—		25
Balance at April 30, 2020	137,131	$	13	$	815,756	$	(2,575)	$	(532,613)	$	280,581

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended April 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(51,491)	$	(39,602)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	6,970		6,070
Amortization of deferred commissions	9,708		7,718
Stock-based compensation	34,071		22,493
Reduction of operating lease right-of-use assets and accretion of operating lease liabilities	2,434		2,852
Other non-cash items	(324)		1,106
Changes in operating assets and liabilities:
Accounts receivable	43,939		12,848
Prepaid expenses and other current assets	(1,301)		1,508
Other noncurrent assets	(108)		114
Deferred commissions	(12,547)		(10,056)
Accounts payable and accrued expenses	(11,120)		(2,546)
Deferred revenue	(4,845)		(3,159)
Payments for operating lease liabilities, net	(2,293)		(2,835)
Other noncurrent liabilities	716		1,985
Net cash provided by (used in) operating activities	13,809		(1,504)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(3,113)		(1,583)
Capitalized internal-use software	(3,086)		(2,880)
Net cash used in investing activities	(6,199)		(4,463)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	2,092		3,792
Principal payments on finance lease obligations	(2,520)		(1,728)
Net cash provided by (used in) financing activities	(428)		2,064
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(656)		(743)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	6,526		(4,646)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period	320,990		309,894
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period	$	327,516	$	305,248
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	145	$	184
Cash paid for income taxes	$	784	$	307
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in purchases of property and equipment included in liabilities	$	(482)	$	1,687
Finance leases for property and equipment	$	2,910	$	568

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

ANAPLAN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)Summary of Business and Significant Accounting Policies

Description of Business

Anaplan, Inc. (the Company, Anaplan, we, us, or our) was incorporated in Delaware on July 9, 2009 and is headquartered in San Francisco, California, with offices in multiple U.S. and international locations.

The Company provides a cloud-based Connected Planning platform that helps connect organizations and people to make better and faster decisions. The Company delivers its application over the Internet as a subscription service using a software-as-a-service (SaaS) model. The Company also offers professional services related to implementing and supporting its application.

Fiscal Year

The Company’s fiscal year ends on January 31. References to fiscal 2022, for example, refer to the fiscal year ending January 31, 2022.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting and include the accounts of the Company and its wholly owned subsidiaries (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet as of January 31, 2021, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of comprehensive loss, statements of stockholders’ equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Form 10-K filed with the SEC on March 12, 2021.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, the determination of revenue recognition, certain assumptions in the valuation of stock awards, the determination of the period of benefit for deferred commissions, the determination of the incremental borrowing rate used for operating lease liabilities, the allowance for credit losses, and the fair value of assets acquired and liabilities assumed for business combinations. Actual results could differ from those estimates.

The Company continues to assess the impact of COVID-19 and as of the date of filing of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require updating significant estimates or judgments or revising the carrying value of the Company's assets or liabilities as presented in the unaudited interim condensed consolidated financial statements. These estimates may change as new events occur and additional information is obtained. Actual results could differ from those estimates and any such differences may be material to our financial statements.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 1 of the notes to the consolidated financial statements included in the Company’s Form 10-K filed with the SEC on March 12, 2021. There have been no significant changes to these policies during the three months ended April 30, 2021.

9

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles of income taxes and reducing the cost and complexity in accounting for income taxes. The guidance is effective for interim and annual periods beginning after December 15, 2020. The adoption of the new standard had no material impact on the Company's condensed consolidated financial statements.

(2)Consolidated Balance Sheet Components

Property and Equipment, net

Property and equipment consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Computer and office equipment	$	62,643	$	58,231
Leasehold improvements	14,337		14,055
Internal-use software	44,975		41,475
Construction in progress	8,967		6,941
Property and equipment, gross	130,922		120,702
Less: accumulated depreciation	(75,860)		(69,099)
Property and equipment, net	$	55,062	$	51,603

Depreciation expense was $6.6 million and $5.7 million for the three months ended April 30, 2021 and 2020, respectively.

The Company capitalized $4.2 million and $3.8 million in internal-use software in the three months ended April 30, 2021 and 2020, respectively, of which $1.1 million and $1.0 million was stock-based compensation expense for each respective period. Amortization of the capitalized internal-use software, included in total depreciation expense above, was $2.6 million and $2.1 million in the three months ended April 30, 2021 and 2020, respectively.

Accrued Expenses

Accrued expenses consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Vendor accruals	$	10,600	$	11,262
Accrued commission	8,622		12,521
Accrued bonuses	7,925		15,583
Accrued other payroll liabilities	36,864		31,238
Current portion of finance lease obligations	7,658		8,031
Accrued other	19,212		22,872
Accrued expenses	$	90,881	$	101,507

10

Preferred Stock

As of April 30, 2021 and January 31, 2021, the authorized preferred stock of the Company consisted of 25 million shares with a par value of $0.0001 per share. There were no shares of preferred stock issued and outstanding as of April 30, 2021, and January 31, 2021.

(3)Bank Borrowing

In April 2020, the Company entered into the Third Amendment to Credit Agreement and First Amendment to Collateral Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) as administrative agent and lender (the “Third Amendment”). Among other things, the Third Amendment further amends the Credit Agreement entered into with Wells Fargo in April 2018, as amended in September 2018 and October 2019 (the “Credit Agreement”) in order to: (1) increase the aggregate revolving credit commitment amount by $20.0 million, so that the Company may borrow up to $60.0 million under a secured revolving credit facility, subject to the terms of the Credit Agreement including the accounts receivable borrowing base, for general corporate purposes; and (2) extend the maturity date of the revolving credit facility until April 23, 2022. Also, pursuant to the Third Amendment, any loans drawn on the credit facility will incur interest at a rate equal to the highest of (A) the prime rate, (B) the federal funds rate plus 0.5%, and (C) the one-month LIBOR plus 1%. Interest is payable monthly in arrears with the principal and any accrued and unpaid interest due on April 23, 2022. As of April 30, 2021, and January 31, 2021, the Company had not drawn down any amounts under this agreement. As of April 30, 2021, the Company was in compliance with the financial covenants contained in the agreement.

(4)Leases

The Company leases certain facilities under operating leases, and property and equipment under finance leases that expire from fiscal 2022 to 2028.

The components of lease expense were as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Operating lease costs	$	2,434	$	2,852
Finance lease costs
Amortization of assets	$	2,570	$	1,785
Interest on lease liabilities	145		184
Total finance lease costs	$	2,715	$	1,969

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Supplemental balance sheet information related to leases is as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Operating leases:
Operating lease ROU assets	$	37,509	$	33,985
Operating lease liabilities, current portion	$	8,561	$	7,951
Operating lease liabilities, net of current portion	33,152		30,130
Total operating lease liabilities	$	41,713	$	38,081
Finance leases:
Property and equipment, gross	$	32,041	$	29,132
Less: accumulated depreciation	(18,446)		(15,876)
Property and equipment, net	$	13,595	$	13,256
Accrued expenses	$	7,658	$	8,031
Other noncurrent liabilities	6,346		5,761
Total finance lease liabilities	$	14,004	$	13,792

Weighted-average lease terms and discount rates are as follows:

	As of April 30, 2021
	Operating Leases	Finance Leases
Weighted-average remaining lease terms	4.5 years	2.0 years
Weighted-average discount rates	5.2%	3.9%

Future minimum lease payments under operating leases and finance leases as of April 30, 2021, are as follows:

	As of April 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
Years ending January 31,
2022(remaining 9 months)	$	7,554	$	6,795
2023	10,779		5,339
2024	9,879		2,331
2025	8,317		184
2026	7,855		—
Thereafter	2,452		—
Total lease payments	46,836		14,649
Less: amount representing interest	(4,956)		(645)
Less: leases less than 12 months	(167)		—
Total lease liabilities	$	41,713	$	14,004

The Company enters into commitments to lease computer and office equipment for which the timing of the lease payments is not determined until the date of commencement. As of April 30, 2021, the amounts related to these leases were approximately $4.4 million, which are to be paid over three years after the date of commencement.

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(5) Acquisition-Related Intangible Assets

The components of identifiable intangible assets included in other noncurrent assets are as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Developed technology	$	5,200	$	5,200
Customer relationships	2,976		2,976
Intangible assets, gross	$	8,176	$	8,176
Less: accumulated amortization	(2,998)		(2,663)
Intangible assets, net	$	5,178	$	5,513

Amortization expense of acquisition-related intangible assets was immaterial for the three months ended April 30, 2021 and 2020.

The expected future intangible assets amortization as of April 30, 2021 is as follows:

	As of April 30, 2021
	(In thousands)
Years ending January 31,
2022 (remaining 9 months)	$	1,005
2023	1,340
2024	1,340
2025	993
2026	300
Thereafter	200
Total future intangible assets amortization	$	5,178

(6) Employee Stock Plans

As of April 30, 2021 and January 31, 2021, the Company was authorized to issue 1,750,000,000 shares of common stock. Shares were reserved for future issuance as follows:

	As of
	April 30, 2021	January 31, 2021
	(In thousands)
Outstanding stock options	6,236	6,600
Outstanding restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs")	9,789	8,558
Shares available for future issuances under the 2018 Stock Plan	26,692	21,564
Shares available for future issuances under the 2018 ESPP	5,152	3,717
Total	47,869	40,439

13

Stock Options

A summary of stock option activity for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)			(In thousands)
Balance as of January 31, 2021	6,600	$	11.83	$	362,149
Options exercised	(357)	5.86		—
Options forfeited	(7)	6.26		—
Balance as of April 30, 2021	6,236	$	12.18	$	296,046
Exercisable as of April 30, 2021	6,087	$	11.80	$	291,293
Vested and expected to vest as of April 30, 2021	4,542	$	8.64	$	231,713

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $12.0 million, which is expected to be recognized over a weighted-average period of 1.9 years.

RSUs and PSUs

A summary of RSUs and PSUs activities for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted- Average Grant Date Fair Value
	(In thousands)
Balance as of January 31, 2021	8,558	$	37.15
RSUs and PSUs granted	2,280	61.98
RSUs and PSUs vested	(823)	32.62
RSUs and PSUs forfeited	(226)	44.03
Balance as of April 30, 2021	9,789	$	43.15

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested RSUs that are expected to vest was $293.5 million, which is expected to be recognized over a weighted-average period of 3.0 years.

In the first quarter of fiscal 2022, the Company granted PSUs to certain senior executive officers under the 2018 Stock Plan. PSUs are subject to service-based and market-based vesting conditions. The number of shares that could be earned is based on our total stockholder return as compared to the constituents of the S&P Software & Services Select Index over 1-year, 2-year and 3-year cumulative performance periods inclusive of our fiscal 2022 through the fiscal year ended January 31, 2024. The number of shares that could be earned will range from 0% to 200% of the target number of shares. The fair value of the PSUs grant was determined using a Monte Carlo simulation approach. The compensation cost is recognized under the accelerated attribution method.

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested PSUs that are expected to vest was $12.8 million, which is expected to be recognized over a weighted-average period of 2.2 years.

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Stock-Based Compensation

The stock-based compensation expense, net of estimated forfeitures, by line item in the accompanying condensed consolidated statements of comprehensive loss is summarized as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Cost of subscription revenue	$	1,522	$	708
Cost of professional services revenue	831		508
Research and development	6,966		3,646
Sales and marketing	16,633		10,031
General and administrative	8,119		7,600
Total stock-based compensation expense	$	34,071	$	22,493

The Company’s estimated forfeiture rate is based on accumulated historical forfeiture data.

(7) Fair Value Measurements

Cash and cash equivalents included investments in money market funds of $252.4 million and $240.0 million at April 30, 2021 and January 31, 2021, respectively. The fair value of the money market funds was determined using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs under the fair value measurements and disclosure guidance.

Other than the money market funds, the Company did not hold any assets or liabilities that are measured at fair value on a recurring basis as of April 30, 2021, and January 31, 2021. There were no transfers into or out of Level 1, Level 2, or Level 3 during the three months ended April 30, 2021 and 2020.

(8) Revenue Recognition

The Company derives revenue primarily from sales of subscription services and, to a lesser degree, from professional services. Revenue is recognized when a customer obtains access to the platform and receives the related professional services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services.

Disaggregation of Revenue

The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use the Company’s cloud-based application:

	Three Months Ended April 30,
	2021				2020
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
	(In thousands, except percentage data)
Americas	$	71,254	55	%	$	60,070	58	%
EMEA	43,658		34		32,843		32
APAC	14,913		11		10,931		10
Total	$	129,825	100	%	$	103,844	100	%

The United States and the U.K. were the only two countries that represented more than 10% of the Company’s total revenue in any period. Revenue in the United States and as a percentage of total revenue comprised of $68.0 million and 52%, and $57.7 million and 56% in the three months ended April 30, 2021 and 2020, respectively. Revenue in the U.K. comprised of $15.7 million and 12%, and $12.0 million and 12% in the three months ended April 30, 2021 and 2020, respectively.

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Contract Balances

Contract assets represent revenue recognized for contracts that have not yet been invoiced to customers, typically for multi-year arrangements. Total contract assets were $0.2 million and $0.3 million as of April 30, 2021, and January 31, 2021, respectively, which were included within prepaid expenses and other current assets and other noncurrent assets on the condensed consolidated balance sheets.

Contract liabilities consist of deferred revenue. Revenue is deferred when the Company has the right to invoice in advance of performance under a contract. The current portion of deferred revenue balances are recognized over the following 12-month period. The amount of revenue recognized in the three months ended April 30, 2021 and 2020 that was included in deferred revenue at the beginning of each period was $107.3 million and $88.6 million, respectively.

Remaining Performance Obligation

As of April 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $832.3 million, which consists of both billed consideration in the amount of $292.7 million and unbilled consideration in the amount of $539.6 million that the Company expects to recognize as revenue in the future periods. The Company expects to cumulatively recognize approximately 53% and 84% of this amount as revenue in the next 12 months and 24 months, respectively, with the remaining balance recognized thereafter.

As of January 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $817.6 million, which consists of both billed consideration in the amount of $295.5 million and unbilled consideration in the amount of $522.1 million that the Company expects to recognize as revenue in the future periods. The Company expects to recognize 51% and 83% of this amount as revenue in the next 12 months and 24 months, respectively, with the remaining balance recognized thereafter.

The Company applied a practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original expected duration of one year or less.

(9) Commitments and Contingencies

On August 24, 2020, a purported stockholder of the Company filed a putative securities class action complaint in the United States District Court for the Northern District of California, captioned Grobler v. Anaplan, Inc., et al., 3:20-cv-05959, against the Company and certain of the Company’s executive officers. The Court appointed a lead plaintiff on November 12, 2020, and on January 6, 2021, the lead plaintiff filed an amended complaint, captioned Sakkal v. Anaplan, Inc., et al. The amended complaint alleges violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, purportedly on behalf of all persons who purchased Anaplan, Inc. securities between November 21, 2019, and February 26, 2020, inclusive. The claims are based upon allegations that the defendants misrepresented and/or omitted material information in certain of the Company’s prior public filings regarding the business, operations and prospects of the Company. The Company filed a motion to dismiss the amended complaint on March 8, 2021, and the plaintiff filed opposition to the motion on May 7, 2021 . At this point, no discovery has occurred in this case. The case is still in the preliminary stages, and it is not possible for the Company to quantify the extent of potential liability to the defendants, if any. The Company believes that the lawsuit lacks merit and intends to vigorously defend the action. The Company cannot predict the outcome of or is not able to reasonably estimate the amount or range of possible loss from the above described matter.

From time to time, the Company is party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, the Company may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position. The Company is not presently party to any legal proceedings that, in the opinion of management, if determined adversely to the Company, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

(10) Income Taxes

The Company computed its interim provision using its estimated annual effective tax rate. The Company’s income tax expense was $1.3 million and $1.0 million during the three months ended April 30, 2021 and 2020, respectively.

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(11) Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

	Three Months Ended April 30,
	2021		2020
	(In thousands, except per share data)
Numerator:
Net loss	$	(51,491)	$	(39,602)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	144,161		136,362
Net loss per share attributable to common stockholders, basic and diluted	$	(0.36)	$	(0.29)

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:

	As of April 30,
	2021	2020
	(In thousands)
Stock options	6,236	9,802
RSUs and PSUs	9,789	10,184
Total	16,025	19,986

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended January 31, 2021, filed with the SEC on March 12, 2021. This discussion contains forward-looking statements that involve risks and uncertainties as discussed in “Cautionary Note Regarding Forward-Looking Statements” included in this Quarterly Report on Form 10-Q. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, impacts on our business and general economic conditions due to the current COVID-19 pandemic, those identified below and those discussed in “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q. Our fiscal year ends January 31.

Overview

Anaplan is a cloud-native enterprise SaaS company and a market leader, empowering global enterprises to orchestrate transformative business performance. Our customers rely on the Anaplan platform—powered by our proprietary Hyperblock® technology—to connect teams, systems, and insights from across their organizations to continuously adapt to change, transform how they operate, and reinvent value creation. Our cloud platform empowers enterprises to orchestrate complex scenario planning and conduct continuous forecasting to systematically identify possibilities, seize opportunities, and reduce risk. Users of our platform can view and assess the impact of assumptions on plans and key performance indicators in real time and across multiple business dimensions. The Anaplan platform enables businesses to be more agile, make better decisions and to plan and execute their ongoing digital transformation to compete in today’s digital economy.

Our customers often initially adopt our platform within a specific business function for one or more planning use cases, but also because our platform has the potential to be used as an enterprise-wide integrated planning and forecasting tool and as part of a broader digital transformation initiative. We sell subscriptions to our cloud-based planning platform primarily through our direct sales team targeting these customers. We also have a robust partnership ecosystem that serves as an integral part of our go-to-market strategy and an extension of our direct sales force. Our strategic consulting and systems integration partners provide us with a significant source of lead generation and implementation leverage. These partners act as strategic advisors to senior executives in corporate, functional, and process transformation initiatives of organizations. They often promote our platform as their clients examine how to plan more effectively or seek digital transformation through organizational change or improved business processes. We also rely on partners with deep subject-matter expertise in the implementation of specific use cases who can facilitate implementations for our customers. Our partners also help to drive thought leadership in promoting Connected Planning and digital transformation.

Once our customers see the benefits and wide applicability of our platform, we use a “land and expand” sales strategy to encourage our existing customers to increase the number of users, add new use cases, and expand to additional lines of business, divisions, and geographies. This expansion often generates a natural network effect in which the value of our platform to customers increases as more use cases are adopted, more users are connected, and greater amounts of data are incorporated in our platform delivering exponential value to our customers.

We see a greenfield opportunity to help over 70 million knowledge workers around the world plan more efficiently using Anaplan’s platform.

We derive the substantial majority of our revenue from subscriptions for users on our platform. Our initial subscription term is typically two to three years, although some customers commit for shorter periods. We generally bill our customers annually in advance. We also offer professional services, including consulting, implementation, and training, but are increasingly leveraging our partners to provide these services. During the three months ended April 30, 2021 and 2020, subscription revenue was $118.3 million and $93.8 million, respectively, representing a year-over-year subscription revenue growth rate of 26%. During the three months ended April 30, 2021 and 2020, services revenue was $11.5 million and $10.0 million, respectively. Our subscription revenue as a percentage of total revenue was 91% and 90% in the three months ended April 30, 2021 and 2020, respectively.

During the three months ended April 30, 2021 and 2020, our total revenue was $129.8 million and $103.8 million, respectively. Approximately 48% and 44% of our total revenue was generated from outside of the United States in the three months ended April 30, 2021 and 2020, respectively. Our net loss was $51.5 million and $39.6 million in the three months ended April 30, 2021 and 2020, respectively.

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We believe that our focus on customer success allows us to retain and expand the subscription revenue generated from our existing customers, and is an indicator of the long-term value of our customer relationships for Anaplan as a whole. We track our performance in this area by measuring our dollar-based net expansion rate, which compares our annual recurring revenue from the same set of customers across comparable periods. The dollar-based net expansion rate was 118% and 114% as of April 30, 2021, and January 31, 2021, respectively.

Our dollar-based net expansion rate equals the annual recurring revenue at the end of a period for a base set of customers from which we generated annual recurring revenue in the year prior to the date of calculation, divided by the annual recurring revenue one year prior to the date of the calculation for that same set of customers. Annual recurring revenue is calculated as subscription revenue already booked and in backlog that will be recorded over the next 12 months, assuming any contract expiring in those 12 months is renewed and continues on its existing terms and at its prevailing rate of utilization.

The number of customers with greater than $250,000 of annual recurring revenue was 473 and 453 as of April 30, 2021, and January 31, 2021, respectively. We monitor this metric and believe it is a useful tool to investors, as an indicator of the scale of customer adoption and expansion of our platform.

We define calculated billings as total revenue plus the change in deferred revenue in the period. Calculated billings in any particular period is comprised of subscription contracts with existing customers (including renewal contracts and add-on contracts), subscription contracts with new customers, and contracts for professional services. Calculated billings is intended to provide information about our subscription revenue growth over time and can typically be seen as an early indicator of trends in revenue growth. While calculated billings can increase as our revenues grow, it may significantly fluctuate from period to period for several reasons, including the timing of contracted billings, the timing of renewals, and other factors. See Part II, Item 1A, “Risk Factors—Operational Risks—The sum of our revenue and changes in deferred revenue may not be an accurate indicator of business activity within a period” for a description of some limitations in the use of calculated billings.

Calculated billings is calculated as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Total revenue	$	129,825	$	103,844
Add: Deferred revenue (end of period)	292,661		212,238
Less: Deferred revenue (beginning of period)	(295,543)		(220,208)
Calculated billings	$	126,943	$	95,874

We regularly evaluate acquisitions or investment opportunities in complementary businesses, services and technologies and intellectual property rights as a means to expand our offerings through a disciplined and strategic acquisition process. We may continue to make such acquisitions and investments in the future, and we plan to reinvest a significant portion of our incremental revenue in future periods to grow our business.

COVID-19 Update

The COVID-19 pandemic continues to persist. While the broader implications of the COVID-19 pandemic on our business, results of operations, and overall financial performance remain uncertain, the economic effects of the COVID-19 pandemic have negatively impacted our financial performance, and we currently expect they will continue to do so, at least for the immediate future. We have seen and may continue to see in certain geographies some of our customers and prospective customers defer or delay buying decisions and project implementations and prolonged sales cycles. We have seen and may continue to see these deferrals and delays impact our new business pipeline and large deals, including delays in deals arising out of our strategic relationships with our global partners. We may also experience contraction in our existing customer base. These and other changes in customer demand for our solutions could materially and adversely impact our business, results of operations, and overall financial performance in future periods.

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As the impact of the COVID-19 pandemic continues to unfold around the world, we remain focused on supporting our employees, customers, and partners. In response to the COVID-19 pandemic, we modified the manner in which we operate to prioritize the health and safety of our employees, customers and the communities in which we operate. Among other modifications, we required our employees to work remotely, maintained business-related travel restrictions, and virtualized, postponed or cancelled our sales and marketing, employee or industry events. For the immediate future, we intend to continue to operate in a modified manner, although our approach may vary among geographies depending on local authority guidelines. We are slowly moving toward normal operations on a market-by-market basis in accordance with local authority guidelines, and ensuring that our return to in-person work is thoughtful, prudent, and handled with an abundance of caution with the health of our employees being the top priority. When we determine that it is safe for employees to return to our offices, we have developed health and safety procedures to enable our employees to do so safely. The impact, if any, of these and any additional operational changes we may implement is uncertain, but we currently believe the changes we have implemented have not materially affected, and are not expected to have a material and adverse effect on, our ability to maintain financial reporting systems, internal control over financial reporting and disclosure controls and procedures.

The extent to which the ongoing COVID-19 pandemic, and associated global economic uncertainty, may impact our business will depend on future developments, including the duration and spread of the pandemic; the scope and effectiveness of precautionary measures designed to contain and prevent the spread of COVID-19; and the impact on our current and prospective customers, employees, and partners; all of which are highly uncertain and cannot be predicted at this time. While we have developed and continue to develop plans to help mitigate the negative impact of the pandemic on our business, these efforts may not be effective and any protracted economic downturn may limit the effectiveness of our mitigation efforts. In addition, even after the immediate impacts of the pandemic on the global economy and our business subside, the residual effects of the pandemic may present additional challenges to our business that are currently difficult to predict. We are continuing to monitor the actual and potential effects of the COVID-19 pandemic on our business. See Part II, Item 1A, “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business.

Factors Affecting Our Performance

We believe that our future performance will depend on many factors, including those described below. While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. See Part II, Item 1A, “Risk Factors”. If we are unable to address these challenges, our business and operating results could be adversely affected.

Market adoption of our platform.    Our long-term success will depend on widespread adoption of Connected Planning by enterprises for numerous planning applications with broad use of those applications within their organizations. While we believe that we are still in the early stages of penetrating our addressable market, we have benefited from rapid customer growth.

Customer First strategy.    We put the success of our customers at the center of our culture, strategy, and investments. We view our Customer First strategy as core to capturing our Connected Planning vision and driving the continued adoption and expansion in the use of our platform. By aligning our thought leadership, worldwide development and delivery capabilities, and local sales and service resources, our Customer First strategy drives exceptional value throughout our customers’ Connected Planning and digital transformation journeys. Our continued success depends in part on our ability to continue to put customers at the center of our strategy.

Expansion of existing customers.    We employ a “land and expand” approach, with many of our customers initially deploying our product for a specific use case and group of users. Once they realize the benefits and wide applicability of our platform, many of our customers subsequently renew their subscriptions and expand the number of users or use cases within and across lines of business and geographies as they continue unlocking the agile enterprise planning and operating model across functional boundaries. As a result, we are able to generate a significant increase in revenue from the expanded use of our platform across the enterprise. Going forward we are focused on targeting customers where the opportunity for expansion and need for our planning solutions are greatest. Our future revenue growth and our ability to achieve and maintain profitability is dependent upon our ability to maintain existing customer relationships and to continue to expand our customers’ use of our platform.

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Scaling our sales team.    Our ability to achieve significant growth in revenue in the future will depend, in large part, upon the effectiveness of our sales leadership and sales efforts, both domestically and internationally. We have invested and intend to continue to invest in expanding and retaining our sales leadership and direct sales force, particularly in attracting and retaining sales personnel with experience selling to larger enterprises. Our ability to increase our revenue will depend on the new members of our sales force becoming fully productive and executing expeditiously and effective sales leadership. A customer’s decision to use our platform may be an enterprise-wide decision. These types of sales require us to provide greater levels of education regarding the use and benefits of our platform, which involves substantial time, effort, and costs.

International sales.    Our total revenue generated outside of the United States during the three months ended April 30, 2021 and 2020, was approximately 48% and 44%, respectively, of our total revenue. We believe global demand for our platform will continue to develop as organizations experience the benefits that our platform can provide to international enterprises with complex planning needs spanning multiple geographies. Accordingly, we believe there is significant opportunity to grow our international business. We have invested, and plan to invest, ahead of this potential demand in personnel, marketing, and access to data center capacity to support our international growth.

Partner ecosystem.    Our partner ecosystem extends our geographic coverage, accelerates the usage and adoption of our platform, and enables more efficient delivery of service solutions. We intend to augment and deepen our partnerships with strategic and advisory consulting, systems integration, public cloud and technology firms. We believe our partners’ scale and route to market can significantly contribute to our ability to penetrate our addressable market, extend our geographic coverage, and extend usage and adoption of our platform.

Product velocity.    We have invested and intend to continue to invest significantly in research and development in an effort to enhance and expand the functionality of our platform, to attract and retain development personnel, and to protect our market-leading technology advantage. We have a well-defined technology roadmap to introduce new features and functionality to our platform that we believe will improve our ability to generate revenue by broadening the appeal of our platform to potential new customers as well as increasing the opportunities for further expanding the use of our platform by existing customers. We are also investing to further enhance the functionality, intelligence, user experience, scale, extensibility and security of our platform. We will need to continue to focus on bringing cutting-edge technology to market in order to remain competitive.

Components of Results of Operations

Revenue

We offer subscriptions to our cloud-based planning platform. We derive our revenue primarily from subscription fees and, to a lesser degree, from professional services fees. Subscription revenue consists primarily of fees to provide our customers access to our cloud-based platform. Professional services revenue includes fees from assisting customers in implementing and optimizing the use of our cloud-based platform. These services include implementation, consulting, and training.

Subscription Revenue

Subscription revenue accounted for 91% and 90% of our total revenue for the three months ended April 30, 2021 and 2020, respectively. Subscription revenue is driven primarily by the number of customers, the number of users at each customer, the price of user subscriptions, and renewal rates.

Subscription fees are recognized ratably as revenue over the contract term beginning on the date the platform is made available to the customer. Our new business subscriptions typically have a term of two to three years. We generally invoice our customers in annual installments at the beginning of each year within the subscription period. Amounts that have been invoiced are initially recorded as deferred revenue and are recognized ratably over the subscription period.

Most of our contracts are non-cancelable over the contract term. We had remaining performance obligations, or backlog, in the amount of $832.3 million and $817.6 million as of April 30, 2021 and January 31, 2021, respectively, consisting of both billed and unbilled consideration.

Because we recognize revenue from subscription fees ratably over the term of the contract, changes in our contracting activity in the near term may not impact our reported revenue until future periods.

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Professional Services Revenue

Professional services revenue is generally recognized as the services are rendered for time and material contracts, or on a proportional performance basis for fixed price contracts. The substantial majority of our professional service contracts are on a time and materials basis. Implementations generally take one to six months to complete depending upon the scope of engagement with the customer. Our professional services revenue fluctuates from quarter to quarter as a result of the requirements, complexity, and timing of our customers’ implementation projects.

Cost of Revenue

Cost of Subscription Revenue

Cost of subscription revenue primarily consists of costs related to providing cloud applications, compensation and other employee-related expenses for data center staff, including salaries and bonuses, benefits, and stock-based compensation, payments to outside service providers, customer service, data center and networking expenses, depreciation expenses, and amortization of capitalized software development costs.

Cost of Professional Services Revenue

Cost of professional services revenue primarily consists of costs related to providing implementation and configuration services, optimization services and training services, personnel-related costs directly associated with our professional services and training departments, including salaries and bonuses, benefits, and stock-based compensation, the costs of contracted third-party vendors, and travel.

Professional services associated with the implementation and configuration of our subscription platform are performed directly by our services team, as well as by contracted third-party vendors. When third-party vendors invoice us for services performed for our customers, those fees are recognized as expense as incurred.

Operating Expenses

Research and Development

Research and development expenses consist primarily of personnel-related costs for our development team, including salaries and bonuses, benefits, stock-based compensation expense, and allocated overhead costs. We have invested, and intend to continue to invest, in developing technology to support our growth. We capitalize certain software development costs that are attributable to developing new features and adding incremental functionality to our platform, and amortize such costs as costs of subscription revenue over the estimated life of the new incremental functionality, which is generally two to three years. We plan to increase our investment in research and development for the foreseeable future as we focus on further developing our platform and enhancing its use cases. However, we expect our research and development expenses to decrease as a percentage of our total revenue over time, although they may fluctuate as a percentage of our total revenue from period to period.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel-related costs directly associated with our sales and marketing staff, including salaries and bonuses, benefits, commissions, and stock-based compensation. Other sales and marketing costs include promotional events to promote our brand, including our Anaplan Connected Planning Xperience (CPX) user conferences, advertising, and allocated overhead costs. We plan to increase our investment in sales and marketing over the foreseeable future, primarily stemming from increased headcount in sales and marketing, and investment in brand- and product-marketing efforts. However, we expect our sales and marketing expenses to decrease as a percentage of our total revenue over time, although they may fluctuate as a percentage of our total revenue from period to period.

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General and Administrative

General and administrative expenses consist primarily of personnel-related costs associated with our executive, finance, legal, and human resources personnel, including salaries and bonuses, benefits, and stock-based compensation expense, professional fees for external legal, accounting and other consulting services, and allocated overhead costs. We expect to increase the size of our general and administrative function to support the growth of our business and continue to incur additional expenses as a result of operating as a public company. As a result, we expect the dollar amount of our general and administrative expenses to increase for the foreseeable future. However, we expect our general and administrative expenses to decrease as a percentage of our total revenue over time, although they may fluctuate as a percentage of our total revenue from period to period.

Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest income earned on our cash and cash equivalents, net of interest expense from our finance leases.

Other Income (Expense), Net

Other income (expense), net consists primarily of foreign exchange gains and losses.

Provision for Income Taxes

Provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal, state, U.K. and Israel deferred tax assets as we have concluded that it is not more likely than not that the deferred assets will be utilized.

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Results of Operations

The following tables set forth selected condensed consolidated statements of operations data for each of the periods indicated:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Revenue:
Subscription revenue	$	118,343	$	93,824
Professional services revenue	11,482		10,020
Total revenue	129,825		103,844
Cost of revenue:
Cost of subscription revenue (1)	21,329		15,185
Cost of professional services revenue (1)	11,492		9,555
Total cost of revenue	32,821		24,740
Gross profit	97,004		79,104
Operating expenses:
Research and development (1)	33,212		23,762
Sales and marketing (1)	88,470		71,674
General and administrative (1)	24,945		22,428
Total operating expenses	146,627		117,864
Loss from operations	(49,623)		(38,760)
Interest income (expense), net	(151)		511
Other income (expense), net	(459)		(331)
Loss before income taxes	(50,233)		(38,580)
Provision for income taxes	(1,258)		(1,022)
Net loss	$	(51,491)	$	(39,602)
(1) Includes stock-based compensation expense as follows:
Cost of subscription revenue	$	1,522	$	708
Cost of professional services revenue	831		508
Research and development	6,966		3,646
Sales and marketing	16,633		10,031
General and administrative	8,119		7,600
Total stock-based compensation expense	$	34,071	$	22,493

Three Months Ended April 30, 2021 and 2020

Revenue

	Three Months Ended April 30,
	2021		2020		% Change
	(In thousands, except percentage data)
Subscription revenue	$	118,343	$	93,824	26	%
Professional services revenue	11,482		10,020		15
Total revenue	$	129,825	$	103,844	25

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Total revenue was $129.8 million in the three months ended April 30, 2021, compared to $103.8 million in the three months ended April 30, 2020, an increase of $26.0 million, or 25%.

Subscription revenue was $118.3 million, or 91% of total revenue, in the three months ended April 30, 2021, compared to $93.8 million, or 90% of total revenue, in the three months ended April 30, 2020, an increase of $24.5 million, or 26%. The increase in subscription revenue was primarily driven by existing customers expanding their use of our platform, which accounted for 65% of the increase, and acquisition of new customers, which accounted for approximately 35% of the increase.

Professional services revenue was $11.5 million in the three months ended April 30, 2021, compared to $10.0 million in the three months ended April 30, 2020, an increase of $1.5 million, or 15%. The increase in professional services revenue was primarily driven by sales of our professional services resulting from the growth of our customer base.

Cost of Revenue

	Three Months Ended April 30,
	2021		2020		% Change
	(In thousands, except percentage data)
Cost of subscription revenue	$	21,329	$	15,185	40	%
Cost of professional services revenue	11,492		9,555		20
Total cost of revenue	$	32,821	$	24,740	33

Total cost of revenue was $32.8 million in the three months ended April 30, 2021, compared to $24.7 million in the three months ended April 30, 2020, an increase of $8.1 million, or 33%.

Cost of subscription revenue was $21.3 million in the three months ended April 30, 2021, compared to $15.2 million in the three months ended April 30, 2020, an increase of $6.1 million, or 40%. The increase in cost of subscription revenue was primarily due to an increase in salaries and bonuses, and benefits costs of $2.4 million, including stock-based compensation, an increase in hosting costs of $1.8 million, and an increase in amortization of our equipment leases and capitalized software development costs of $1.1 million.

Cost of professional services revenue was $11.5 million in the three months ended April 30, 2021, compared to $9.6 million in the three months ended April 30, 2020, an increase of $1.9 million, or 20%. The increase in cost of professional services revenue was primarily due to an increase in salaries and bonuses, and benefits costs of $1.6 million, including stock-based compensation.

Gross Profit and Gross Margin

	Three Months Ended April 30,
	2021			2020			% Change
	(In thousands, except percentage data)
Subscription gross profit	$	97,014		$	78,639		23	%
Professional services gross profit	(10)			465			(102)
Total gross profit	$	97,004		$	79,104		23
Subscription gross margin	82		%	84		%
Professional services gross margin	—		%	5		%
Total gross margin	75		%	76		%

Gross profit was $97.0 million in the three months ended April 30, 2021, compared to $79.1 million in the three months ended April 30, 2020, an increase of $17.9 million, or 23%. The increase in gross profit was the result of the increases in our subscription revenue primarily driven by existing customers expanding their use of our platform and acquisition of new customers in the three months ended April 30, 2021.

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Gross margin was 75% in the three months ended April 30, 2021, compared to 76% in the three months ended April 30, 2020. The decrease was primarily due to higher hosting costs, partially offset by an increase in subscription revenue, which generates a significantly higher gross margin than our professional services revenue, as a percentage of total revenue.

Our gross margins can fluctuate from quarter to quarter as a result of the requirements, complexity, and timing of our customers’ implementation projects that can vary significantly.

Operating Expenses

	Three Months Ended April 30,
	2021		2020		% Change
	(In thousands, except percentage data)
Operating expense:
Research and development	$	33,212	$	23,762	40	%
Sales and marketing	88,470		71,674		23
General and administrative	24,945		22,428		11
Total operating expenses	$	146,627	$	117,864	24

Research and Development

Research and development expenses were $33.2 million in the three months ended April 30, 2021, compared to $23.8 million in the three months ended April 30, 2020, an increase of $9.4 million, or 40%. The increase was primarily due to an increase in salaries and bonuses, and benefits costs related to an increase in headcount of $9.8 million (which included an increase in stock-based compensation of $3.3 million), partially offset by a decrease of $0.4 million in consulting costs.

Sales and Marketing

Sales and marketing expenses were $88.5 million in the three months ended April 30, 2021, compared to $71.7 million in the three months ended April 30, 2020, an increase of $16.8 million, or 23%. The increase was primarily due to an increase in salaries and bonuses, and benefits costs related to an increase in headcount of $16.3 million (which included an increase in stock-based compensation of $6.6 million and an increase in commission expenses of $2.6 million), partially offset by a reduction of $1.0 million of discretionary spend such as marketing events and travel related expenses due to the COVID-19 pandemic.

General and Administrative

General and administrative expenses were $24.9 million in the three months ended April 30, 2021, compared to $22.4 million in the three months ended April 30, 2020, an increase of $2.5 million, or 11%. The increase was primarily due to an increase in salaries and bonuses, and benefits costs of $2.8 million, including stock-based compensation, partially offset by a decrease in allowance for credit losses of $0.6 million.

Other Income (Expense), Net

	Three Months Ended April 30,
	2021		2020		% Change
	(In thousands, except percentage data)
Interest income (expense), net	$	(151)	$	511	(130)	%
Other income (expense), net	(459)		(331)		39

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Interest income (expense), net

Interest income (expense), net decreased by $0.7 million in the three months ended April 30, 2021. The decrease in interest income (expense), net was primarily due to lower interest income from our cash and cash equivalents as a result of lower interest rates in the three months ended April 30, 2021 compared to the three months ended April 30, 2020.

Other income (expense), net

Other income (expense), net was a loss of $0.5 million in the three months ended April 30, 2021, compared to a loss of $0.3 million in the three months ended April 30, 2020, an increase in expense of $0.2 million, or 39%. The change was primarily due to currency fluctuations and the related remeasurements during the periods.

Provision for Income Taxes

	Three Months Ended April 30,
	2021		2020		% Change
	(In thousands, except percentage data)
Provision for income taxes	$	(1,258)	$	(1,022)	23	%

The provision for income taxes was $1.3 million in the three months ended April 30, 2021, compared to $1.0 million in the three months ended April 30, 2020, an increase of $0.3 million or 23%. The increase in provision for income taxes was primarily due to an increase in taxable income generated from intercompany cost-plus arrangements in certain European and Asian countries.

Liquidity and Capital Resources

As of April 30, 2021, our principal sources of liquidity were cash and cash equivalents totaling $327.5 million, which were held for working capital purposes and strategic initiatives. Our cash equivalents are comprised primarily of money market funds and bank deposits.

Cash from operations could be affected by various risks and uncertainties, including but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part II, Item 1A, “Risk Factors”.  We believe our existing cash and cash equivalents will be sufficient to meet our projected operating requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our pace of growth, subscription renewal activity, the timing and extent of spend to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced platform offerings, and the continuing market acceptance of the platform. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, and intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition would be adversely affected.

Loan and Credit Facility Agreements

In April 2020, we entered into the Third Amendment to Credit Agreement and First Amendment to Collateral Agreement with Wells Fargo as administrative agent and a lender (the “Third Amendment”). Among other things, the Third Amendment further amends the Credit Agreement entered into with Wells Fargo in April 2018, as amended in September 2018 and October 2019 (the “Credit Agreement”) in order to (1) increase the aggregate revolving credit commitment amount by $20.0 million, so that we may borrow up to $60.0 million under a secured revolving credit facility, subject to the terms of the Credit Agreement including the accounts receivable borrowing base, for general corporate purposes, and (2) extend the maturity date of the revolving credit facility until April 23, 2022. Also, pursuant to the Third Amendment, any loans drawn on the credit facility will incur interest at a rate equal to the highest of (A) the prime rate, (B) the federal funds rate plus 0.5%, and (C) the one-month LIBOR plus 1%. Interest is payable monthly in arrears with the principal and any accrued and unpaid interest due on April 23, 2022. As of April 30, 2021 and January 31, 2021, we had not drawn down any amounts under this agreement.

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As part of the Credit Agreement, we granted Wells Fargo a first priority lien in our accounts receivable, all of the issued shares of capital stock and equity interests in certain of our subsidiaries, and other corporate assets and agreed not to pledge our intellectual property to other parties. The Credit Agreement, as amended by the Third Amendment, includes affirmative and negative covenants, including financial covenants requiring the maintenance of: (1) minimum tangible net worth (defined as assets, excluding intangible assets, less liabilities) as of the last day of any fiscal quarter of not less than $150.0 million for any fiscal quarter ending on or prior to January 31, 2021 and $125.0 million for any fiscal quarter ending thereafter, and (2) minimum billings for the most recent twelve months ending as of the last day of any fiscal quarter of not less than $350.0 million. As of April 30, 2021, we were in compliance with the financial covenants contained in the Credit Agreement.

Cash Flows

The following table summarizes our cash flows for the periods presented:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Net cash provided by (used in) operating activities	$	13,809	$	(1,504)
Net cash used in investing activities	(6,199)		(4,463)
Net cash provided by (used in) financing activities	(428)		2,064

Operating Activities

Net cash provided by operating activities of $13.8 million for the three months ended April 30, 2021, reflecting a net loss of $51.5 million, adjusted by non-cash charges for stock-based compensation of $34.1 million, amortization of deferred commissions of $9.7 million, depreciation and amortization of $7.0 million, amortization of operating lease right-of-use assets and accretion of operating lease liabilities of $2.4 million. Changes in working capital were favorable to cash flows from operations by $12.4 million primarily due to a decrease in accounts receivable of $43.9 million due to timing of customer billings and collections, and an increase in other noncurrent liabilities of $0.7 million, partially offset by an increase in deferred commissions of $12.5 million related to commissions capitalized on our sales, a decrease in accounts payable and accrued expenses of $11.1 million due to timing of payments, a decrease in deferred revenue balance of $4.8 million, net payments for operating lease liabilities of $2.3 million, and an increase in prepaid expenses and other current assets of $1.3 million.

Net cash used in operating activities of $1.5 million for the three months ended April 30, 2020, was primarily due to a net loss of $39.6 million, partially offset by non-cash charges for stock-based compensation of $22.5 million, depreciation and amortization of $6.1 million, amortization of deferred commissions of $7.7 million, and amortization of operating lease right-of-use assets and accretion of operating lease liabilities of $2.9 million. Changes in working capital were unfavorable to cash flows from operations by $2.1 million primarily due to an increase in deferred commissions of $10.1 million related to commissions capitalized on our sales, a decrease in deferred revenue balance of $3.2 million due to lower billings, a decrease in accounts payable and accrued expenses of $2.5 million due to timing of payments, and payments for operating lease liabilities of $2.8 million, partially offset by a decrease in accounts receivable of $12.8 million due to lower billings, an increase in other noncurrent liabilities of $2.0 million and a decrease in prepaid expenses and other current assets of $1.5 million.

Investing Activities

Net cash used in investing activities for the three months ended April 30, 2021 of $6.2 million was related to the capitalization of internal-use software of $3.1 million as we expanded our platform and increased our development efforts, and purchases of property and equipment of $3.1 million related to our growth.

Net cash used in investing activities for the three months ended April 30, 2020 of $4.5 million was related to the capitalization of internal-use software of $2.9 million as we expanded our platform and increased our development efforts, and purchases of property and equipment of $1.6 million related to our growth.

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Financing Activities

Net cash used in financing activities for the three months ended April 30, 2021 of $0.4 million consisted primarily of $2.5 million principal payment on finance lease obligations, offset by $2.1 million in proceeds from the exercise of stock options.

Net cash provided by financing activities for the three months ended April 30, 2020 of $2.1 million consisted primarily of $3.8 million in proceeds from the exercise of stock options, partially offset by $1.7 million principal payment on finance lease obligations.

Commitments and Contractual Obligations

There were no material changes outside of the ordinary course of business in our contractual obligations and commitments during the three months ended April 30, 2021 from the contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 filed with the SEC on March 12, 2021.

Off-Balance Sheet Arrangements

Through April 30, 2021, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

During the three months ended April 30, 2021, there were no significant changes to our critical accounting policies and estimates as described in the financial statements contained in the Annual Report on Form 10-K for the year ended January 31, 2021 filed with the SEC on March 12, 2021.

Recent Accounting Pronouncements

See “Summary of Business and Significant Accounting Policies” in Note 1 of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound Sterling, Euro, Swedish Krona and Singapore Dollar. Fluctuations in foreign currency exchange rates, including those resulting from COVID-19 pandemic, may cause variability in our results of operations. Impacts to our operations from changes in foreign currency have been fairly limited to date and thus we have not instituted a hedging program. We expect our international operations to continue to grow in the near term and we will monitor our foreign currency exposure to determine when we should begin a hedging program. A majority of our agreements have been and we expect will continue to be denominated in U.S. dollars. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have had a material effect on operating results for the three months ended April 30, 2021 and 2020.

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Interest Rate Sensitivity

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of April 30, 2021, we had cash and cash equivalents of $327.5 million, which consisted primarily of money market funds and bank deposits. The carrying amount of our cash equivalents reasonably approximates fair values. Due to the short-term nature of our money market funds, we believe that exposure to changes in interest rates will not have a material impact on the fair value of our cash equivalents. A hypothetical 10% change in interest rates would not have had a material impact on our operating results for the three months ended April 30, 2021 and 2020.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 9, “Commitments and Contingencies” to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

ITEM 1A. RISK FACTORS

A description of the risks and uncertainties associated with our business and ownership of our common stock is set forth below. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below could materially and adversely affect our business, financial condition, results of operations, and growth prospects. In such an event, the market price of our common stock could decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See “Cautionary Note Regarding Forward-Looking Statements.”

Risk Factor Summary

Below is a summary of the principal factors that make an investment in our common stock speculative or subject to risk. This summary does not address all of the risks facing our business. You should consider the risks in this summary together with the detailed discussion of risks that immediately follows this summary in this section titled “Risk Factors,” as well as the other information in this Quarterly Report on Form 10-Q.

•The ongoing COVID-19 pandemic, and resulting global economic uncertainty, has impacted how we, our customers, and our partners are operating, and could result in a material adverse effect on our business, financial condition, operating results and cash flows.

•We have a limited history of operating at our current scale and under our current strategy, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

•Our recent revenue growth rates may not be indicative of our future performance or growth.

•We have a history of net losses, we anticipate increasing our operating expenses in the future, and we do not expect to be profitable for the near future.

•Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

•We have experienced rapid growth and expect to continue to invest in our growth in the future. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges and our business, financial condition and results of operations may be adversely affected.

•We derive substantially all of our revenue from a single software platform and if our platform fails to satisfy customer demands or to achieve widespread market acceptance it would adversely affect our business, operating results, financial condition, and growth prospects.

•If we are unable to attract new customers, both domestically and internationally, the growth of our revenue will be adversely affected and our business may be harmed.

•Our business depends substantially on our customers renewing their subscriptions and expanding their use of our platform. If our customers do not renew their subscriptions, if they renew on less favorable terms, or if they fail to add more users in more functional areas or upgrade to a higher level of functionality on our platform, our business and operating results will be adversely affected.

•Failure to effectively expand our sales and marketing capabilities, including to hire and retain direct sales personnel, could harm our ability to increase our customer base and achieve broader market acceptance of our service.

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•Our growth depends in part on the success of our strategic relationships with third parties and their continued performance.

•If our customers and partners do not have access to highly skilled and trained users of our platform, our customers may not be able to unlock the full potential of our platform, customer satisfaction may suffer, and our results of operations, financial condition and growth prospects may be adversely affected.

•If we fail to continue to enhance our platform, satisfy the cloud infrastructure priorities of our clients or adapt to rapid technological change, our ability to remain competitive could be impaired.

•If we experience a security incident affecting our platform, networks, systems or data or the data of our customers, or are perceived to have experienced such a security incident, our platform may be perceived as not being secure, our reputation may be harmed, customers may reduce the use of or stop using our platform, we may incur significant liabilities, and our business could be materially adversely affected.

•Real or perceived errors, failures, bugs, service outages, or disruptions in our platform could adversely affect our reputation and harm our business.

•We depend on the experience and expertise of our senior management team and certain key employees, especially engineering, research and development and sales personnel, and our inability to retain these executive officers and key employees or recruit them in a timely manner, could harm our business, operating results, and financial condition.

•The markets in which we participate are intensely competitive, and if we do not compete effectively, our business and operating results could be adversely affected.

•Because we collect, process and store personal information and furthermore, because our platform could be used by customers to do the same, evolving domestic and international privacy and security laws, regulations and other obligations could result in additional costs and liabilities to us or inhibit sales of our platform.

If we are unable to adequately address these and other risks we face, our business, financial condition, operating results, and prospects may be adversely affected.

Operational Risks

The ongoing COVID-19 pandemic, and resulting global economic uncertainty, has impacted how we, our customers, and our partners are operating, and could result in a material adverse effect on our business, financial condition, operating results and cash flows.

The COVID-19 pandemic continues to persist. Precautionary measures designed to prevent the spread of COVID-19, such as travel restrictions, shelter-in-place orders, and business shutdowns, remain in place in many of the regions in which we conduct business, and new or more restrictive measures have been and may continue to be adopted if the pandemic worsens. These factors have increased economic and financial market volatility and uncertainty. Although multiple vaccines to protect against COVID-19 have been approved for use by various governments, the production and distribution of such vaccines, and inoculation of a sufficient segment of the population to contain the pandemic, may require a significant amount of time and is subject to uncertainties including the ability of pharmaceutical companies to quickly increase vaccine production and the willingness of the general population to be vaccinated. As such, the duration and severity of the COVID-19 pandemic and the degree of its impact on our business remains uncertain and difficult to predict.

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As a result of the COVID-19 pandemic, we continue to operate in a modified manner employing precautionary measures designed to protect the health of our employees while enabling us to support our customers and partners. Among other modifications, we required our employees to work remotely, maintained business-related travel restrictions, and virtualized, postponed or cancelled our sales and marketing, employee or industry events. For the immediate future, we intend to continue to operate in a modified manner, although our approach may vary among geographies depending on local authority guidelines. These business modifications have and may continue to result in inefficiencies, delays and additional costs in our sales and marketing, professional services and research and development efforts, which could have an adverse effect on our operations. In regions where we permit our employees to return to our offices and we resume in-person sales and marketing, employee and industry events, we may face additional challenges and incur additional costs, including those associated with managing personnel and workplace safety protocols, disparate regional safety guidelines and workplace or labor disputes or claims related to COVID-19, which could negatively impact our business.

The remote work measures that we implemented have generally allowed us to provide uninterrupted service to our customers, but have affected the way we conduct our sales, research and development, testing, customer support, and other activities. While we have not observed significant impacts to the productivity of our workforce, working remotely poses additional operational challenges that may impact productivity in the future. Working remotely has made our employees more reliant on cloud-based communication services, and if those services are interrupted, or are less secure, employee productivity could be harmed. Our employees may also face unexpected child-care or other related family responsibilities while working from home that could impact productivity and employee retention. In addition, work-from-home and related business practice modifications present significant challenges to maintaining our corporate culture, including employee engagement, productivity and retention, both during the immediate pandemic crisis and as we make additional adjustments in the eventual transition from it. Our remote work measures and in-person safety protocols may not be sufficient to mitigate the risks posed by the COVID-19 pandemic, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions.

Our future growth is substantially dependent on our direct sales team and partners driving new customer acquisition and expanded use of our platform within existing customers. Prior to the COVID-19 pandemic, we held in-person sales, marketing, and industry events and our employees traveled frequently to establish and maintain relationships with our customers, prospective customers, and partners. Our business operations, including sales-related and customer support activities, could be increasingly adversely affected by continued or additional business closures, travel restrictions impacting employees and partners, virtualization of events, and other precautionary measures, especially in regions where we have material operations or sales. We may also experience negative impacts on our business if COVID-19 related governmental restrictions, or the easing or tightening of those restrictions, occurs at different rates in the markets in which we, our customers, or our partners operate, and as a result of the disparate restrictions we are unable to meet customer expectations. We may not be able to fully mitigate the impact of these disruptions which cannot be predicted or quantified at this time and which could negatively impact our business.

The pandemic and associated global economic uncertainty is also having an adverse impact on many of our customers, prospective customers and partners, which could result in reduced consumer demand and willingness to enter into or renew contracts with us, and ultimately could have a material adverse effect on our financial results. We have seen and may continue to see our customers and prospective customers deferring or delaying buying decisions and project implementations, prolonged sales cycles, and an increase in requests for extended payment terms due to uncertain economic conditions including those caused by the COVID-19 pandemic. In addition, the macroeconomic factors triggered by the pandemic have and could continue to result in decreased business spending by our customers and prospective customers, reduced demand for our solutions, longer sales cycles, lower renewal rates by our customers and increased competition, all of which could result in a material adverse impact on our business operations and financial condition even after the COVID-19 pandemic is contained and the shelter-in-place orders are lifted. If our customers are unable or unwilling to pay for their subscriptions to our platform, we may be adversely affected by an inability to collect amounts due, the cost of enforcing the terms of our contracts, including litigation, or a reduction in revenue. Further, if we experience a decrease in demand in a given period it could negatively affect our revenue in future periods, particularly if experienced on a sustained basis, because a substantial proportion of revenue related to our platform is recognized over time. While we have developed and continue to develop plans to help mitigate the negative impact of the COVID-19 pandemic on our business, these efforts may not be effective and a protracted economic downturn may limit the effectiveness of our mitigation efforts.

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The extent to which the ongoing COVID-19 pandemic, and associated global economic uncertainty, may impact our business will depend on future developments, including the duration and spread of the pandemic, the scope and effectiveness of precautionary measures designed to contain and prevent the spread of COVID-19, the availability and effectiveness of vaccines, and the impact on our current and prospective customers, employees, and partners, all of which are highly uncertain and cannot be predicted at this time. The COVID-19 pandemic may also have the effect of heightening many of the other risks described in this “Risk Factors” section. We will continue to evaluate the nature and extent of the impact of the COVID-19 pandemic on our business.

We have a limited history of operating at our current scale and under our current strategy, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

While we were originally formed as Anaplan, LLC in 2008 and first introduced our business planning platform in 2011, much of our growth has occurred in recent years. Over the last few years, we have substantially increased our headcount, shifted our sales strategy to increase our focus on driving the adoption and expansion of our platform by our customers and increased our reliance on partners to accelerate our sales process and provide implementation services, and invested in enhancing the features of our platform. As we have a limited history of operations at our current scale and under our current strategy, our ability to forecast our future operating results and plan for and model future growth is more limited than that of companies with longer operating histories and subject to a number of uncertainties, including those resulting from the COVID-19 pandemic and the associated economic disruptions and market volatility. In addition, we have encountered and will encounter risks, uncertainties and challenges frequently experienced by growing companies in rapidly changing markets, such as the risks, uncertainties and challenges described this report. If our assumptions regarding these risks, uncertainties and challenges are incorrect or change, or if we do not execute on our strategy and manage these risks, uncertainties and challenges successfully, our operating results could differ materially from our expectations and those of securities analysts and investors, and our business could suffer and the trading price of our common stock could decline.

Our recent revenue growth rates may not be indicative of our future performance or growth.

From fiscal 2020 to fiscal 2021, our total revenue grew from $348.0 million to $447.8 million, an increase of 29%, and from fiscal 2019 to fiscal 2020, our total revenue grew from $240.6 million to $348.0 million, an increase of 45%. In future periods, we may not be able to sustain revenue growth consistent with recent history and/or that meets the expectations of securities analysts or investors. You should not consider our recent or historical revenue growth as indicative of our future performance or growth.

We have a history of net losses, we anticipate increasing our operating expenses in the future, and we do not expect to be profitable for the near future.

We have incurred significant losses in each period since inception, including net losses of $154.0 million, $149.2 million, $131.0 million, and $51.5 million, respectively, in fiscal 2021, 2020, 2019, and for the three months ended April 30, 2021. We had an accumulated deficit of $698.5 million at April 30, 2021. Our losses and accumulated deficit reflect the substantial investments we have made to acquire new customers and develop our platform. We expect our operating expenses to increase in the foreseeable future as we continue to make investments and implement initiatives designed to grow our business, including:

•expanding our sales and marketing organization to increase our overall customer base, pursue larger transactions and expand sales within our current customer base;

•expanding our offices and headcount internationally as we seek to continue to penetrate international markets, provided appropriate economic conditions and opportunities are present;

•investing in research and development to improve the capabilities, accessibility, features and functionality of our platform;

•growing our partner ecosystem;

•making additional investments to broaden and deepen our user community;

•expanding our operations and infrastructure, both domestically and internationally, to support future growth; and

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•investing in legal, accounting, human resources and other administrative functions necessary to support our operating as a public company.

These initiatives may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue, if at all, in an amount sufficient to offset these higher expenses and to achieve and sustain profitability. Growth of our revenue may slow or revenue may decline for a number of possible reasons, including a decrease in our ability to attract and retain customers, a failure to successfully implement our “land and expand” strategy, a failure to increase our number of partners, a decrease in the effectiveness of our partners, increasing competition, decreasing growth of our overall market, decreasing business spending by customers and prospective customers due to uncertain economic conditions including those caused by the COVID-19 pandemic, an increase in legal risk from the use of our products due to evolving laws, regulations or standards, an inability to timely and cost-effectively introduce new products and services that are favorably received by customers and partners, a security incident, or our failure, for any reason, to continue to capitalize on growth opportunities. Further, we have entered into non-cancelable multi-year purchase commitments with respect to cloud partnership services with third-party public cloud partners, which require us to pay for such services irrespective of actual usage and may not be offset by increased revenue if we are unable to use these partnerships to attract new customers. To the extent we are successful in increasing our customer base, we will also initially incur increased losses because costs associated with acquiring customers are generally incurred up front. In contrast, subscription revenue is generally recognized ratably over the terms of the agreements that last typically two to three years, although some customers commit for shorter periods. Accordingly, we cannot assure you that we will achieve or maintain profitability in the future. Furthermore, any failure to achieve or maintain profitability, or the failure to do so on the timeline expected by investors or securities analysts, could adversely affect the value of our common stock.

Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly results of operations, our key metrics discussed elsewhere in this report, including the levels of our revenue, gross margin, cash flow, remaining performance obligations and deferred revenue, as well as other metrics that analysts use to evaluate our business such as billings and dollar-based net expansion rate, have fluctuated in the past and may vary significantly in the future. Quarter-to-quarter comparisons of our operating results and other key metrics may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly financial results and metrics may fluctuate as a result of a variety of factors, many of which are outside of our control and may not fully reflect the underlying performance of our business. These fluctuations could result in our failure to meet our expectations or those of securities analysts or investors. If we fail to meet these expectations for any particular period, the trading price of our common stock could decline significantly. Factors that may cause these quarterly fluctuations include, without limitation, those listed below:

•the impact of an economic downturn or market volatility, including the current uncertainty caused by the COVID-19 pandemic, on the price of our common stock, our business and the businesses of our customers, prospective customers and partners;

•our ability to attract new customers;

•our customer renewal and adoption rates, and our ability to expand use of our platform by existing customers;

•the timing and rate at which we sign agreements with customers, including the impact of cost reduction measures, delayed purchasing decisions or prolonged sales cycles at prospective or existing customers as a result of the effects of the COVID-19 pandemic;

•the contract value of agreements with customers;

•the addition or loss of large customers, including through acquisitions or consolidations;

•the timing of recognition of revenue;

•the amount and timing of operating expenses;

•the amount and timing of completion of professional services engagements;

•our ability to hire, train and retain sales personnel, and their productivity rate including, any impact to productivity due to governmental restrictions adopted in response to the COVID-19 pandemic;

•changes in our pricing policies or those of our competitors;

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•fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; 

•seasonal variations in sales of our software subscriptions, which have historically been highest in the fourth quarter of a calendar year but may vary in future quarters;

•the timing and success of new product features, updates, and enhancements by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners;

•the financial condition and creditworthiness of our customers;

•the timing of expenses related to the development or possible acquisition and integration of technologies or businesses and potential future charges for impairment of goodwill and long-lived assets from acquired companies;

•our ability to achieve and sustain a level of liquidity sufficient to grow and support our business and operations;

•network outages, technical difficulties or interruptions affecting the delivery and use of our platform or actual or perceived security breaches;

•any adverse litigation, judgments, settlements, or other litigation-related costs;

•changes in the legislative or regulatory environment;

•non-cancelable multi-year purchase commitments with third-party partners which require us to pay for services irrespective of actual usage;

•the effects of global pandemics, such as the ongoing COVID-19 pandemic; and

•general economic, industry, market and geopolitical conditions and uncertainty, both domestically and internationally.

We have experienced rapid growth and expect to continue to invest in our growth in the future. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges and our business, financial condition and results of operations may be adversely affected.

We have experienced a period of rapid growth in our headcount and operations in the United States and internationally. We have also significantly increased the size of our customer base and our partner ecosystem. We sell our platform to customers across the globe and have operations in North America, Europe, Asia-Pacific and Israel. We anticipate that we will continue to expand our domestic and international operations and headcount in the future, provided appropriate economic conditions and opportunities are present. This growth has placed, and future growth will place, a significant strain on our management, and administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively and execute our business plan. To manage the expected growth of our operations and personnel, we must effectively recruit, motivate, integrate and retain employees in a manner consistent with, and that preserves, our corporate culture. We will also need to continue to develop our physical and remote work infrastructure to support our business growth, promote our workers’ safety, and enable our global workforce to effectively and securely communicate with each other, our partners and customers. As our customer base grows, we will need to maintain a high level of customer satisfaction by providing high quality customer support, consistency across deployments of our platform, and access to ongoing training. As we grow and our organizational structure becomes more complex, we will need to continue to improve our operational, financial, reporting, compliance, information technology and management systems, controls and procedures, and our risk management activities related to the activities of our customers and partners. For the duration of the COVID-19 pandemic, we will also need to monitor and respond to various and constantly changing local regulations, restrictions and requirements that could impact our operations, personnel and systems, controls and procedures.

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These and other improvements in our operations, personnel and systems, controls and procedures will require significant capital expenditures and the allocation of valuable management and employee resources. Failure to effectively manage growth or execute our business plan could result in difficulty or delays in increasing the size of our customer base, declines in quality of customer support or customer satisfaction, increases in costs and expenses, failures to make timely and accurate reports of our operations and financial results, which would escalate the risk of noncompliance with applicable policies or laws, difficulties in introducing new features or other operational difficulties, harm to our reputation and brand. Any of these developments could adversely affect our business performance, results of operations and financial position.

We derive substantially all of our revenue from a single software platform and if our platform fails to satisfy customer demands or to achieve widespread market acceptance it would adversely affect our business, operating results, financial condition, and growth prospects.

We derive and expect to continue to derive substantially all of our revenue from our cloud-based enterprise planning software platform. As such, market acceptance of our platform is critical to our continued success. Demand for our platform is affected by a number of factors, some of which are beyond our control. These factors include continued market acceptance of our platform for existing and new use cases, the introduction of enhancements to our platform that are well received by existing and prospective customers, the pace at which existing customers realize benefits from the use of our platform and its features and decide to expand deployment of our platform across their business, the extent to which our customers involve a wider group of employees in planning, the timing of development and release of new products by our competitors, technological change, the perception of ease of use, reliability and security of our platform, the pace at which enterprises engage in digital transformation initiatives, the success of our strategic partners, and developments in data privacy regulations. In addition, we expect that the planning and integration needs of our customers will continue to rapidly change and increase in complexity. We will need to improve the functionality, ease of use, and performance of our platform continually to meet those rapidly changing, complex demands. If we are unable to continue to meet customer demands or to achieve widespread market acceptance of our platform, our business operations, financial results, and growth prospects will be materially and adversely affected.

If we are unable to attract new customers, both domestically and internationally, the growth of our revenue will be adversely affected and our business may be harmed.

Our ability to achieve significant growth in revenue and improvement in other key metrics in the future will depend, in large part, upon the effectiveness of our sales and marketing efforts, both domestically and internationally, and our ability to attract new customers. This may be particularly challenging where an organization has already invested substantial personnel and financial resources to integrate traditional strategic planning and management solutions into its business, as such organization may be reluctant or unwilling to invest in new products and services. Furthermore, as our industry matures or if competitors introduce lower cost and/or differentiated products or services that are perceived to compete with ours, our ability to sell to new customers based on factors such as pricing, technology, and functionality could be impaired. Additionally, mitigation and containment measures adopted by government authorities to contain the spread of COVID-19, including travel restrictions and other requirements that limit in-person meetings, could limit our ability to establish relationships with new customers in certain geographies. The effects of the COVID-19 pandemic and the related global economic uncertainty, including decreased spending by prospective customers, delays in the implementation of digital transformation initiatives and prolonged sales cycles have disrupted the effectiveness of our sales and marketing efforts, and the duration and scope of this disruption remains unclear. As a result, we may be unable to attract new customers at rates or on terms that would be favorable or comparable to prior periods, and our business, revenue, operating results, and financial condition could be adversely affected.

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Our business depends substantially on our customers renewing their subscriptions and expanding their use of our platform. If our customers do not renew their subscriptions, if they renew on less favorable terms, or if they fail to add more users in more functional areas or upgrade to a higher level of functionality on our platform, our business and operating results will be adversely affected.

In order for us to maintain or improve our operating results, it is important that our customers renew their subscriptions when the contract term expires, add additional authorized users to their subscriptions, and upgrade to a higher level of functionality on the platform. Our customers generally enter into agreements with two- to three- year subscription terms and have no obligation to renew their subscriptions after the expiration of their initial subscription period. Our customers may decide not to renew their subscriptions with a similar contract period, at the same prices or terms or with the same or a greater number of authorized users or level of functionality as a result of a number of factors including uncertain economic conditions due to the COVID-19 pandemic. Some of our customers have elected not to renew their agreements with us, and we may not be able to accurately predict renewal rates. Our customer retention may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our platform and features, the quality of the professional services provided by us or our partners, our prices, the features and pricing of competing products, reductions in our customers’ spending levels, customer adoption and expanded use of our platform, mergers and acquisitions involving our customers and deteriorating general economic conditions.

In addition, our growth strategy is a “land-and-expand” strategy that depends in substantial part on our customers expanding the use of our platform in their organizations through use by additional users, use across more functional areas of their organization, including finance, sales, supply chain, marketing, human resources, and operations, and the purchase of subscriptions providing additional features and functionality, such as the mobile app and predictive capabilities of our platform for sales and marketing. We refer to our “land and expand” strategy as the Honeycomb™ effect where our platform’s agility enables additional use cases across business functions. To increase the opportunities for further expanding the use of our platform by existing customers, we will need to introduce new features and functionality to our platform to more comprehensively address the needs of customers deploying our platform to address a wider variety of use cases and to support large, complex models. We will also need to drive user adoption rates of our platform. If our customers do not realize benefits through their initial adoption of our platform, or if they do not believe that they will realize additional benefits through broader deployment of our platform in other functional areas of their organizations, or in other uses cases, our ability to increase our revenue will suffer. Achieving incremental sales to our current customer base requires increasingly sophisticated and costly sales efforts that are targeted at senior management. If we are not able to attract the attention of our customers’ senior management or to do so in a cost-effective manner, our sales efforts may not be effective and our ability to increase our revenue will suffer. We have seen and may continue to see prolonged sales cycles and other sales disruptions arising as a result of a number of factors including uncertain economic conditions due to the COVID-19 pandemic. These disruptions may impact our “land and expand” strategy in certain geographies.

If our customers do not renew their subscriptions, if they renew on less favorable terms, or if they fail to add more users in more functional areas or upgrade to a higher level of functionality on our platform, our business and operating results as well as certain metrics that may be used to evaluate our business such as billings and dollar-based net expansion rate will be adversely affected.

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Failure to effectively expand our sales and marketing capabilities, including to hire and retain direct sales personnel, could harm our ability to increase our customer base and achieve broader market acceptance of our service.

Our ability to increase our customer base, achieve broader market acceptance of our platform, grow our revenue, and achieve and sustain profitability will depend, to a significant extent, on our ability to effectively expand our sales and marketing operations and activities, specifically our direct sales efforts targeted at executives of customers with the most complex planning needs. As we are substantially dependent on our direct sales force to obtain new customers and expand usage of our platform within existing customers, our ability to execute on our sales and marketing strategy will depend, in large part, on our success in recruiting, training, incentivizing and retaining a sufficient number of qualified direct sales personnel and on such personnel attaining desired productivity levels within a reasonable amount of time. In recent years, we have increased the size of our direct sales force, and accordingly many of the new members of our sales force have not yet become fully productive. While remote work restrictions remain in place, newly hired direct sales personnel may need additional time to become fully productive as they may face additional hurdles due to remote onboarding and more limited access to customers. We plan to continue to expand our direct sales force both domestically and internationally but we may not be able to recruit and hire a sufficient number of sales personnel to successfully execute our hiring strategy, which may adversely affect our ability to expand our sales capabilities. New hires require significant training and time before they achieve full productivity, particularly in new sales territories. Our recent hires and planned hires may not become as productive as quickly as we would like, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business. Furthermore, hiring sales personnel in new countries can be costly, complex, and time-consuming, and requires additional set up and upfront costs that may be disproportionate to the initial revenue that we expect to receive from those countries. We believe that there is significant competition for direct sales personnel with the sales skills and technical knowledge that we require. Attrition rates may increase, and we may face integration challenges as we continue to seek to expand our sales force. Moreover, we do not have significant experience as an organization developing and implementing overseas marketing campaigns, and such campaigns may be expensive and difficult to implement. Our business will be harmed if our continuing investment in increasing our sales and marketing capabilities does not generate a significant increase in revenue. Our sales and marketing expenses represent a significant percentage of our expenses, and our operating results will suffer if our sales and marketing expenditures do not contribute to increasing revenue as we anticipate.

The COVID-19 pandemic has changed the way we interact with our customers and prospective customers. We have, and may continue to, alter, postpone or cancel planned customer, employee and industry events or shift them to a virtual only format. Our operating results may also suffer if sales and marketing personnel are unable to maintain the same level of productivity while working remotely during the COVID-19 pandemic. These and other changes in the ways in which we interact with and market to our customers and prospective customers could adversely impact our business if they prove to be less effective than in-person events.

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Our growth depends in part on the success of our strategic relationships with third parties and their continued performance.

We have established strategic relationships with global strategic consulting firms, global systems integrators, regional consulting firms, implementation partners, public cloud partners and technology partners. We intend for these parties, as members of our partner ecosystem, to contribute to our growth by, among other things, extending the coverage and enhancing the expertise of our professional services, expanding the reach of our platform, and accelerating the usage and adoption of our platform. Partners can also exercise a significant role in revenue generation, by referring opportunities to us, enhancing the effectiveness of our sales efforts by establishing connections with senior management at prospective customers and/or promoting the use of our platform as a key component of digital transformation projects that the partner is implementing with their own customers. In order to grow our business, we anticipate that we will need to broaden and deepen our partner ecosystem by continuing to establish and maintain relationships with such third parties. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are not able to successfully operationalize our partnerships, we may not be able to generate growth sufficient to meet our contractual commitments, which could adversely affect our revenue, gross margin, profitability, financial position, and cash flow. Our partners may conclude that they are not receiving sufficient benefits, economic or otherwise, from their relationships with us, resulting in a reduction or termination of their involvement in our partner ecosystem. Our partners may have relationships with our competitors or experience with their products or services and such relationships or experience may result in our partners recommending our competitors’ products or services over ours. Furthermore, our competitors may be effective in providing incentives to our partners to favor their products or services or to prevent or reduce subscriptions to our services. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our current and potential customers, as our partners may no longer facilitate the adoption of our platform by potential customers. Uncertain economic conditions, including those caused by the COVID-19 pandemic, have and may continue to have an adverse impact on the business operations of our existing partners and on our ability to attract and retain new partners, which could result in reduced demand generation and ultimately could disrupt our business operations with a material adverse effect on our financial results.

If we are unsuccessful in establishing or maintaining our relationships with third parties, or our partners fail to perform or are unable to perform (including due to the impact of the COVID-19 pandemic), our ability to compete in the marketplace or to grow our revenue could be impaired, we could incur increased operating expenses and our operating results may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer adoption or usage of our platform or increased revenue.

If our customers and partners do not have access to highly skilled and trained users of our platform, our customers may not be able to unlock the full potential of our platform, customer satisfaction may suffer, and our results of operations, financial condition and growth prospects may be adversely affected.

In order for our customers to unlock the full potential of our platform, both our customers and partners need access to highly skilled and trained users of our platform, such as Master Anaplanners. Implementations of our platform may be technically complicated because our platform is designed to be deployed in a wide range of technological environments and integrates data from a broad and complex range of workflows and systems. In order for our customers to successfully implement our platform, they need access to highly skilled users that are familiar with their operating environment and with our platform. Further, our partners rely heavily on highly skilled and trained users of our platform to effectively provide implementation, training and consulting services to our customers. Incorrect or improper implementation or use of our platform could result in customer dissatisfaction and harm our business and financial condition. If our customers are unable to implement our platform, perceptions of our company and our platform may be impaired, our reputation and brand may suffer, and customers may choose not to renew their subscriptions or increase their purchases of our related services. Our “land and expand” growth strategy depends in large part on existing customers adding new users and use cases, and expanding to additional lines of business, divisions, and geographies. We have found that this strategy is most successful when internal users quickly adopt our platform and build out their expertise as informed end users of our platform. Our partners’ trained users also develop new solutions on our platform and promote and facilitate adoption of our platform at our customers. If our customers and partners do not have access to highly skilled and trained users of our platform, implementation and adoption of our platform may not be effective, customer satisfaction may suffer, and our results of operations, financial condition and growth prospects may be adversely affected.

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We need to continue to develop a steady pipeline of highly qualified and trained personnel to meet customer and partner demand, but our efforts may be ineffective. While we continue to expand our training resources for trained users of our platform, we increasingly rely on our customers and partners to encourage their users to enhance their Anaplan expertise using our training resources. If our customers and partners do not encourage enough internal users to become highly skilled users of our platform, there may not be enough trained users of our platform to meet demand. If a customer has not developed an internal cohort of trained users of our platform, the loss of a trained user could have an adverse impact on their ability to unlock the value of our platform and ability to expand the platform’s use within the organization. Further, the courses we offer on the Anaplan Academy, Anaplan’s online training portal providing a full range of training courses on our platform, may not serve their intended purpose or the certification programs we offer may take longer than anticipated to create a robust and consistent pipeline of talent. Our customers and partners need regular training to support disparate technologies involved in large-scale deployments and maximize potential of our platform as technology changes without which our results of operations and growth prospects could be materially adversely affected. Our ability to effectively educate and train users of our platform may be negatively impacted if our customer support employees or the users of our customers or partners are unable to receive training virtually while COVID-19 restrictions remain in place or the virtual training is not as effective as in-person training methods. If we fail to develop and maintain a sufficient pipeline of qualified and trained users of our platform for utilization with our customers and partners, we may suffer adverse consequences including professional services not being furnished correctly, incorrect or improper use of our platform by partners and customers, damage to our reputation and brand, and customers choosing not to renew their subscriptions or expand their use of our platform. Any of these events could have an adverse effect on our business, financial position and growth prospects.

If customers are not satisfied with the implementation services provided by us or our partners, our business could be adversely affected.

Our business depends on the professional services that are performed to help our customers implement and use our platform. Professional services may be performed by our own staff, by a third-party partner or by a combination of the two. Our strategy is to work with partners to increase the breadth of capability and depth of capacity for delivery of these services to our customers, and we expect the number of our partner-led implementations to continue to increase over time. Our ability and the ability of our third-party partners to successfully implement services may be negatively impacted by remote work environments and travel restrictions adopted as a result of the COVID-19 pandemic. In response to the travel restrictions and other measures enacted in connection with COVID-19, professional services, including implementation projects that were previously performed at a customer location are now provided virtually. However, virtual provision of services may not be as effective or deliver the same benefits as services performed on-site. If a customer is not satisfied with the quality of work performed by us or a partner or with the type of professional services or functionality delivered, even if we are not contractually responsible for the partner services, then we could incur additional costs to address the situation, the profitability of that work might be impaired and the customer’s dissatisfaction with our or our partner’s services could damage our ability to expand the scope of functionality subscribed to by that customer. In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.

If we fail to continue to enhance our platform, satisfy the cloud infrastructure priorities of our clients or adapt to rapid technological change, our ability to remain competitive could be impaired.

The industry in which we compete is characterized by rapid technological change, frequent introductions of new products, and evolving industry standards. Our ability to attract new customers and increase revenue from existing customers will depend on a number of factors including: our ability to anticipate industry standards and trends, to continue to enhance our platform and introduce new functionality in a timely manner, to update and expand our infrastructure, and to keep pace with technological developments. The success of any enhancement, new functionality, or infrastructure development depends on several factors, including timely completion and market acceptance. Any new enhancement, functionality, or infrastructure development might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue. If any of our competitors implements new technologies before we are able to implement them or if our competitors are able to respond more quickly and effectively to new or changing opportunities, those competitors may be able to provide more effective products than ours at lower prices.

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We have experienced, and may in the future experience, delays in the planned release dates of enhancements to our platform. Delays could result in adverse publicity, loss of sales, delay in market acceptance of our platform, any of which could cause us to lose existing customers or impair our ability to attract new customers. In addition, the introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings could make our platform obsolete or adversely affect our ability to compete. Any delay or failure in the introduction of enhancements, functionality, or infrastructure developments could harm our business, results of operations, and financial condition.  

Our platform must also integrate with a variety of third-party technologies, and we need to continuously modify and enhance our platform to adapt to changes in cloud-enabled hardware, software, networking, browser, and database technologies. Any undetected errors or defects in this third-party software, or cybersecurity threats or attacks related to such software, could impair the functionality of our platform, result in increased costs, and injure our reputation. Any failure of our platform to operate effectively with existing or future technologies, or any failure of a third-party cloud infrastructure partner to support one or more of the features of our platform, could cause customer dissatisfaction and reduce the demand for our platform, resulting in harm to our business. Further, the emergence of new industry standards related to strategic planning and operational execution products and services may adversely affect the demand for our platform. In addition, because our platform is cloud-based, we need to continually enhance and improve our platform to keep pace with changes in Internet-related hardware, software, communications, and database technologies and standards. Any failure of our platform to operate effectively with future hardware or software technologies, or to comply with new industry standards, could reduce the demand for our platform and harm our business, results of operations, and financial condition.

We invest significantly in research and development, and to the extent our research and development investments are not directed efficiently or do not result in material enhancements to our platform, our business and results of operations would be harmed.

A key element of our strategy is to invest significantly in our research and development efforts to enhance the features, functionality, performance, and ease of use of our platform to address additional applications and use cases that will broaden the appeal of our platform and facilitate the broad use of our platform across customers with complex planning needs. If we do not spend our research and development budget efficiently or effectively on compelling enhancements, innovations and technologies, such as public cloud functionality, predictive analytics and machine learning, our business may be harmed and we may not realize the expected benefits of our strategy. We will need to appropriately deploy our human resources, and may need to hire new employees with highly technical skills who are often in high demand, or we may not be able to effectively execute on our research and development strategy. Our ability to conduct research and development activities as planned may also be negatively impacted by our remote work environment adopted as a result of the COVID-19 pandemic. Moreover, research and development projects can be technically challenging and expensive. As a result of the nature of research and development cycles, there will be delays between the time we incur expenses associated with research and development activities and the time we are able to offer compelling enhancements to our platform and generate revenue, if any, from those activities. Additionally, anticipated customer demand for a platform enhancement we are developing could decrease after the development cycle has commenced. If we expend a significant amount of resources on research and development efforts that do not lead to the successful introduction of functionality or platform improvements that are competitive in our current or future markets our business and results of operations will suffer.

If we experience a security incident affecting our platform, networks, systems or data or the data of our customers, or are perceived to have experienced such a security incident, our platform may be perceived as not being secure, our reputation may be harmed, customers may reduce the use of or stop using our platform, we may incur significant liabilities, and our business could be materially adversely affected.

Our platform involves the storage, transmission and processing of our customers’ sensitive proprietary information, including their business and financial data. We also use third-party service providers to deliver services to our customers and employees, and those providers may store or process the personal or confidential information of our customers or employees. Security incidents have become more prevalent across industries and our platform, systems, networks or the systems or networks of our third-party service providers may become the subject of such an incident. These security incidents may be caused by the intentional acts of third-party actors, or may arise from failures or defects in our or our partners’ software, systems or controls.

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While we have many security measures in place designed to protect customer and other sensitive information and the integrity of our information technology systems and prevent data loss and other security breaches, our security measures or those of our third party service providers may not be sufficiently broad in scope to protect all relevant information, may be deployed incorrectly, may not be adequately monitored or supported due to insufficient personnel or resources, may not function as planned, or could be breached as a result of third-party action, human error, technical malfunction, malfeasance, or otherwise. As we do not control our third-party service providers, or have real-time visibility of their security measures, we cannot ensure the integrity or sufficiency of their security measures and hackers or other third parties may successfully breach our systems by exploiting a vulnerability in third-party software or applications that are utilized by, or have access to, our systems. Third parties may attempt to fraudulently induce our employees, contractors, or users into disclosing sensitive information such as user names, passwords or other information or otherwise compromise the security of our platform, systems or networks in order to breach our security measures and gain unauthorized access to our data or our customers’ data. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, become more complex over time or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement sufficient preventative measures to defend against these techniques. Further, once a security incident is identified, we may be unable to remediate or otherwise respond to such incident in a timely manner. Our users may also disclose or lose control of their passwords, or use the same or similar passwords on third parties’ systems, which could lead to unauthorized access to their accounts on our platform. Further, we may face additional cybersecurity risks related to our employees and partners working remotely during the ongoing COVID-19 pandemic, and potentially beyond as remote work becomes more commonplace.

A security incident may result in unauthorized access, use, loss, modification or disclosure of our or our customers’ sensitive information, or denial or degradation of service, which could seriously harm our or our customers’ businesses and reputations. Any security incidents, whether real or perceived, could result in the expenditure of significant resources to analyze, correct, eliminate, or remediate errors or vulnerabilities, negatively affect our ability to attract new customers or partners, cause existing partners to end their relationship with us and existing customers to reduce the use of our platform or elect to not renew their subscriptions, expose us to reputational damage, subject us to contractual liability, third-party lawsuits, regulatory inquiries or fines, or other action or liability, which could adversely affect our operating results. We cannot assure you that any limitations of liability provisions in our contracts for a security breach or incident would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim. While we maintain insurance, our insurance coverage related to security and privacy damages may not be adequate for liabilities actually incurred and we cannot be certain that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage of a future claim. These risks are likely to increase as our brand becomes more widely known and recognized, governments enact increasingly strict regulations regarding data security and privacy, we continue to grow the scale and functionality of our platform and process, store, and transmit increasingly large amounts of our customers’ information and data, which may include proprietary or confidential data or personal or identifying information.

We may also experience disruptions, outages, and other performance problems on our systems due to service attacks, unauthorized access, or other security-related incidents. For example, third parties may conduct attacks designed to temporarily deny customers access to our services. Any successful denial of service attack could result in a loss of customer confidence in the security of our platform and damage to our brand.

Real or perceived errors, failures, bugs, service outages, or disruptions in our platform could adversely affect our reputation and harm our business.

Our platform is complex, has contained defects and errors and may continue to contain undetected defects or errors. We are continuing to evolve the features and functionality of our platform through updates and enhancements, and as we do so, we may introduce additional defects or errors that may not be detected until after deployment by our customers. In addition, if our platform is not implemented or used correctly or as intended, inadequate performance and disruptions in service may result. Our platform is often used in connection with large scale computing environments which may expose errors, failures, or vulnerabilities in our platform or integrations. Moreover, we have acquired and may in the future acquire companies or integrate into our platform technologies developed by third parties and we may encounter difficulty in incorporating the newly-obtained technologies into our platform or maintaining the quality standards that are consistent with our reputation, and furthermore, we may face technological incompatibilities with the newly-acquired intellectual property. In addition, while we seek to maintain sufficient excess capacity in our operations infrastructure to meet the needs of all of our customers, we have experienced, and may in the future experience, disruptions, outages, and other performance problems.

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Since our customers use our platform for important aspects of their business, any actual or perceived errors, defects, disruptions in service, outages, or other performance problems could damage our customers’ businesses. Any defects or errors in our platform and solutions, or the perception of such defects or errors, or other performance problems could result in any of the following, each of which could adversely affect our business and results of operations:

•expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors or defects;

•loss of existing or potential customers or partners;

•interruptions or delays in sales of our platform;

•delayed or lost revenue;

•delay or failure to attain market acceptance;

•delay in the development or release of new functionality or improvements to our platform;

•negative publicity, which could harm our reputation;

•sales credits or refunds for prepaid amounts related to unused subscription services;

•diversion of development and customer service resources;

•breach of warranty claims against us, which could result in an increase in our provision for doubtful accounts; and

•an increase in collection cycles for accounts receivable or the expense and risk of litigation.

Although we have contractual protections, such as warranty disclaimers and limitation of liability provisions, in our standard terms and conditions of sale, they may not fully or effectively protect us from claims by customers, partners or other third parties. Any insurance coverage we may have may not adequately cover all claims asserted against us, or cover only a portion of such claims. A successful product liability, warranty, or other similar claim against us could have an adverse effect on our business, operating results, and financial condition. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources.

We depend on computing infrastructure operated by third parties, and any delays in service or disruption in these operations or an inability to increase capacity could impair the use or functionality of our platform, harm our business, and subject us to liability.

We currently serve our customers from third-party data center facilities operated by Equinix, Inc. located in the United States, the Netherlands, and Germany. We are also developing our platform on the infrastructure of certain third-party public cloud partners in order to increase the accessibility and reach of our platform. If we are unable to renew our cloud infrastructure agreements on commercially reasonable terms, we may be required to transfer our servers and other infrastructure, and we may incur significant costs and experience possible service interruptions in connection with doing so.

Although we have disaster recovery plans in place, we may experience interruptions, delays and outages in service and availability from time-to-time arising from problems with our third-party data center or cloud partner infrastructure including technical failures, power loss or telecommunications failures or capacity issues, natural disasters, security incidents, and other events beyond our control which could negatively affect the use, functionality or availability of our platform and harm our reputation, damage our customers’ businesses, and adversely affect our business. In addition, the ongoing COVID-19 pandemic may have an adverse operational impact on our data center and public cloud infrastructure partners, as they navigate restrictions, health and safety regulations and other impacts from the pandemic. Furthermore, in the event of interruption or delay in service, our insurance coverage may not adequately compensate us for any losses that we may incur.

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In addition, as we continue to increase the number of customers and users on our platform, we will need to increase the capacity of our cloud infrastructure, including internationally. If we do not increase our capacity in a timely manner, customers could experience interruptions or delays in access to our platform, and we may not be able to attract potential customers in specific regions of the world unless we provide localized offerings in those regions. As we continue to increase our cloud capacity, we may move or transfer our data and our customers’ data. Despite precautions taken during this process, any unsuccessful data transfers may impair the use or functionality of our platform. Any damage to, or failure of, our systems, or those of our third-party data center or public cloud infrastructure partners, could interrupt our service and hinder the use or functionality of our platform. Impairment of or interruptions in our service may reduce our revenue, cause us to issue credits or pay penalties, subject us to claims and litigation, cause our customers to terminate their subscriptions, and adversely affect our renewal rates and our ability to attract new customers. Our business will also be harmed if our customers and potential customers believe our platform is unreliable.

Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and our financial results.

Once our platform is implemented, our customers depend on our support organization to resolve technical issues or perceived technical issues relating to the platform. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services. We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors. Our ability to provide support services may also be negatively impacted by our remote work environment adopted as a result of the COVID-19 pandemic. Increased customer demand for these services, without corresponding revenue, could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on our business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell subscriptions to our platform to existing and prospective customers and our business, operating results, and financial position.

If we fail to develop, maintain, and enhance widespread brand awareness in a cost-effective manner or if we receive negative publicity, our revenue and competitive position may be materially and adversely affected.

We believe that developing, maintaining, and enhancing widespread awareness of our brand and our platform solutions that enable Connected Planning and digital transformation in a cost-effective manner is critical to achieving widespread acceptance of our platform, attracting new customers, and maintaining existing customers. For example, widespread awareness of our brand is critical to ensuring that we are invited to participate in requests for proposals from prospective customers. We have made, and will continue to make, significant investments to promote our brand. However, brand promotion activities may not generate customer awareness or increase revenue, and, even if they do, any increase in revenue may not offset the expenses we incur in building our brand. Furthermore, the ongoing COVID-19 pandemic has made it more challenging to develop, maintain and enhance widespread awareness of our brand. Numerous marketing and brand promotion events, held in-person with customers and prospective customers in prior years, have been delayed, cancelled or converted into a virtual format. Virtual events may not be as successful as in-person interactions, and the precautions and safety measures that have been adopted in response to the COVID-19 pandemic, particularly if extended for prolonged periods, could have a detrimental effect on our ability to develop, maintain and enhance widespread awareness of our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses, we may fail to attract or retain customers necessary to realize a sufficient return on our brand-building efforts or to achieve the widespread brand awareness that is critical for broad customer adoption of our platform. We believe that the importance of our brand and reputation will increase as competition in our market further intensifies.

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Negative publicity, whether or not justified, relating to our company, our platform, or events or activities attributed to us, our employees, our partners or others associated with any of these parties, may tarnish our reputation and reduce the value of our brand. Independent industry analysts often provide reviews of our platform, as well as the products and services of our competitors, and perception of our platform in the marketplace may be significantly influenced by these reviews. If these reviews are negative, or less positive as compared to those of our competitors’ products and services, our brand may be adversely affected. Additionally, the performance of our partners may affect our brand and reputation if customers do not have a positive experience with our partners’ services. Damage to our reputation and loss of brand equity may reduce demand for our platform and have an adverse effect on our business, operating results, and financial condition. Moreover, any attempts to rebuild our reputation and restore the value of our brands may be costly and time consuming, and such efforts may not ultimately be successful. The upfront investment and costs incurred to build and maintain our brand, both domestically and internationally, may not generate increased market acceptance and may negatively impact our results of operations.

Because our platform is sold to enterprises with complex operating environments, we can encounter long and unpredictable sales cycles, which could adversely affect our operating results in a given period.

Our ability to increase revenue and achieve profitability depends, in large part, on widespread adoption of our platform by customers with complex operating environments who tend to make larger purchases of our products. As we target our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in completing some of our sales. Further, we have experienced and we expect to experience prolonged sales cycles as a result of uncertain economic conditions including those caused by the COVID-19 pandemic. As a result of the variability and length of the sales cycle in certain geographies, we have only a limited ability to forecast the timing of sales. A delay in or failure to complete large sales to one or more enterprise customers could harm our business and financial results, and could cause our financial results to vary significantly from period to period. Our sales cycle varies widely, reflecting differences in potential customers’ decision-making processes, procurement requirements, and budget cycles, and is subject to significant risks over which we have little or no control, including:

•customers’ budgetary constraints and priorities;

•the timing of customers’ budget cycles;

•the need by some customers for lengthy evaluations;

•announcements of new products, features, or functionality by us or our competitors;

•external factors such as economic uncertainty (including due to the COVID-19 pandemic); and

•the length and timing of customers’ approval processes and disruptions to their approval process arising from disruptions in operations due to the COVID-19 pandemic.

A customer’s decision to use our platform may be an enterprise-wide decision, requiring us to expend substantial time, effort, and money educating customers as to the use and value of our platform and encouraging widespread adoption of our platform by users. In addition, our ability to successfully sell our platform to customers with complex planning needs is dependent on us attracting and retaining sales personnel with experience in selling to these customers. Moreover, our target customers may prefer to purchase software that is critical to their business from one of our larger, more established competitors. Our typical sales cycles can range from three to nine months, and we expect that this lengthy sales cycle may continue or lengthen further. Longer sales cycles could cause our operating and financial results to suffer in a given period.

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Because we recognize revenue over varying periods depending on the nature of the revenue, changes in our business including downturns or upturns in new sales and renewals will not be immediately reflected in our operating results and may be difficult to discern.

We generally recognize subscription revenue from customers ratably over the terms of their contracts, which are typically two to three years, although some customers commit for shorter periods. As a result, most of the subscription revenue we report in each quarter is derived from the recognition of deferred revenue relating to subscriptions entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any single quarter will likely have only a small impact on our revenue for that quarter. However, such a decline will negatively affect our revenue in future quarters. In addition, the severity and duration of events that affect revenue may not be predictable and their effects could extend beyond a single quarter. Accordingly, the effects of the COVID-19 pandemic, significant downturns in sales and market acceptance of our platform, and potential changes in our pricing policies or rate of renewals, may not be fully apparent from our reported results of operations until future periods.

In addition, a majority of our costs are expensed as incurred, while subscription revenue is recognized over the life of the customer agreement. As a result, increased growth in the number of our customers could continue to result in our recognition of more costs than revenue in the earlier periods of the terms of our agreements with them. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.

In addition, professional services revenue is recognized as the services are performed or upon the completion of the project, depending on the type of professional services arrangement involved. Professional services engagements typically span from a few weeks to several months, which can make it difficult to predict the timing of revenue recognition for such services and the corresponding effects on our results of operations. Professional services revenue has fluctuated and may continue to fluctuate significantly from period to period, as we are increasingly leveraging our partners to provide these services. In addition, because professional services expenses are recognized as the services are performed, professional services margins can significantly fluctuate from period to period.

The sum of our revenue and changes in deferred revenue may not be an accurate indicator of business activity within a period.

Investors or analysts sometimes look to the sum of revenue and changes in deferred revenue, sometimes referred to as “estimated billings,” as an indicator of business activity in a period for businesses such as ours. However, these measures may significantly differ from underlying business activity for a number of reasons including:

•a relatively large number of transactions occur at the end of the quarter. Invoicing of those transactions may or may not occur before the end of the quarter based on a number of factors including receipt of information from the customer, volume of transactions, and holidays. A shift of a few days has little economic impact on our business, but will shift deferred revenue from one period into the next;

•multi-year upfront billings may distort trends;

•subscriptions that have deferred start dates; and

•services that are invoiced upon delivery.

Accordingly, we do not believe that estimated billings are an accurate indicator of future revenue for any given period of time. However, many companies that provide subscriptions report changes in estimated billings as a key operating or financial metric, and it is possible that analysts or investors may view this metric as important. Thus, any changes in our estimated billings could adversely affect the market price of our common stock.

Changes in our subscription or pricing models could adversely affect our operating results.

As the markets for our software subscriptions grow, as new competitors introduce new products or services that compete with ours or as we enter into new international markets, we may be unable to attract new customers at the same price or based on the same pricing model as we have historically used. Regardless of pricing model used, large customers may demand higher price discounts than in the past. As a result, we may be required to reduce our prices, offer shorter contract durations or offer alternative pricing models, which could adversely affect our revenue, gross margin, profitability, financial position, and cash flow.

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In the past, we have been able to increase our prices for our platform and services, but we may choose not to introduce or be unsuccessful in implementing future price increases. Our competitors may introduce new products that compete with ours or reduce their prices, or we may be unable to attract new customers or retain existing customers based on our historical pricing models. As we expand internationally, we also must determine the appropriate pricing to enable us to compete effectively internationally. In addition, if our mix of products sold changes, then we may need to, or choose to, revise our pricing. As a result, we may be required or choose to reduce our prices or change our pricing model, which could harm our business, results of operations and financial condition.

We depend on the experience and expertise of our senior management team and certain key employees, especially engineering, research and development and sales personnel, and our inability to retain these executive officers and key employees or recruit them in a timely manner, could harm our business, operating results, and financial condition.

Our success depends largely upon the continued services of our key executive officers and certain key employees. We rely on our executive leadership team in the areas of business strategy, research and development, marketing, sales, services, and general and administrative functions. We have experienced, and may in the future experience, changes in our executive management team or key employees resulting from the hiring or departure of executives or key employees, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. Conversely, we may terminate the employment of the senior management team and certain key employees, which may subject us to costly and time-consuming negotiations over severance, litigation and employment claims. While we seek to carefully manage any changes in our executive management team or key employees, including by establishing processes and procedures and engaging in succession planning, such measures may be insufficient and the departure or unavailability of one or more of our executive officers or key employees could have a serious adverse effect on our business.

To execute our growth plan, we must attract and retain highly qualified personnel, especially engineering, research and development and sales personnel. Competition for personnel can be intense, especially for engineers with high levels of experience in designing and developing software for Internet-related services and for direct sales personnel with the sales skills and technical knowledge that we require. For example, competition is intense for experienced software and cloud infrastructure engineers in San Francisco in the United States, London and York in the U.K., and Israel, our primary development locations. We have experienced, and expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be adversely affected.

Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or our company have breached their legal obligations, resulting in a diversion of our time and resources and potential litigation. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived value of our stock awards declines, it may adversely affect our ability to recruit and retain highly skilled employees. Further, in times of increased economic uncertainty, employees and potential employees may perceive older or larger companies to be more attractive and the current period of economic uncertainty may adversely affect our ability to recruit and retain highly skilled employees. The challenges we face in recruiting and hiring qualified personnel may be compounded by a decreased willingness of candidates to leave their current employment due to various factors including economic uncertainty caused by the COVID-19 pandemic and uncertainty regarding immigration policies. As the economic uncertainty related to the COVID-19 pandemic eases, we may face additional challenges in recruiting and retaining qualified personnel as other companies increase the pace of hiring.

Our global operations and sales to customers outside the United States or with international operations subject us to risks inherent in international operations that can harm our business, results of operations, and financial condition.

A key element of our strategy is to operate globally and sell our products to customers across the world. We derive a significant portion of our revenue from customers located outside the United States. Operating globally requires significant resources and management attention. We cannot be certain that the investment and additional resources required to operate globally will produce desired levels of revenue or profitability. Further, operating globally subjects us to various risks, including:

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•increased management, travel, infrastructure and legal compliance costs associated with having operations in many countries;

•increased financial accounting and reporting burdens and complexities;

•variations in adoption and acceptance of cloud computing in different countries, requirements or preferences for domestic products, and difficulties in replacing products offered by more established or known regional competitors;

•new and different sources of competition;

•laws and business practices favoring local competitors;

•differing technical standards, existing or future regulatory and certification requirements and required features and functionality;

•communication and integration problems related to entering and serving new markets with different languages, cultures, and political systems;

•compliance with foreign privacy and security laws and regulations, including data privacy laws that require customer data to be stored and processed in a designated territory, and the risks and costs of non-compliance;

•compliance with laws and regulations for foreign operations, including anti-bribery laws (such as the U.S. Foreign Corrupt Practices Act, the U.S. Travel Act, and the U.K. Bribery Act), import and export control laws, tax laws, tariffs, trade barriers, economic sanctions, and other regulatory or contractual limitations on our ability to sell our products in certain foreign markets, and the risks and costs of non-compliance;

•compliance with foreign laws, regulations and orders related to health and safety, including the ongoing COVID-19 pandemic;

•heightened risks of unfair or corrupt business practices in certain geographies that may impact our financial results and result in restatements of our consolidated financial statements;

•fluctuations in currency exchange rates and related effects on our results of operations;

•difficulties in repatriating or transferring funds from or converting currencies in certain countries;

•different pricing environments, longer sales cycles, and longer accounts receivable payment cycles and collections issues;

•political and economic conditions and uncertainty in the countries or regions in which we operate and around the world;

•difficulties in recruiting, managing and retaining local partners, including consulting and implementation firms, to support our operations and sales;

•differing labor standards, including restrictions related to, and the increased cost of, terminating employees in some countries;

•difficulties in recruiting, hiring and retaining employees in certain countries;

•difficulties in managing a global workforce and maintaining our corporate culture globally;

•the preference for localized software and licensing programs;

•the preference for localized language support;

•weaker protection in some jurisdictions for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States;

•compliance with the laws of numerous foreign taxing jurisdictions, including withholding obligations, and overlapping of different tax regimes;

•compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy, and data protection laws and regulations;

•the fragmentation of longstanding regulatory frameworks caused by Brexit; and

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•global pandemics such as the ongoing COVID-19 pandemic and travel restrictions and other measures undertaken by governments in response to such pandemics.

Any of the above risks could adversely affect our international operations, reduce our revenue from customers outside of the United States or increase our operating costs, each of which could adversely affect our business, results of operations, financial condition, and growth prospects.

Some of our business partners also have international operations and are subject to the risks described above. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.

Our corporate culture promotes an entrepreneurial mindset, and if we cannot maintain this culture as we grow, we could lose the entrepreneurial spirit, innovation, creativity, and other qualities we believe contribute to our success, and it could harm our business.

We believe that our culture has been, and will continue to be, a key contributor to our success because it fosters the entrepreneurial spirit, innovation, creativity, and other qualities we believe drive our growth. As we continue to grow, we will need to maintain our corporate culture among a larger number of employees dispersed in various geographic regions. However, our growth may result in a change to, or dilution of, our corporate culture, and we may not be able to effectively integrate new hires in our fast-paced culture. The challenge we face in maintaining our culture is compounded by the COVID-19 pandemic and its effects including an employee base that is working remotely and facing personal and professional challenges. Any failure to maintain the cohesiveness of our culture could negatively affect our business, decrease employee engagement and productivity, result in current or former employees posting negative feedback on third-party company review sites, damage our reputation, reduce our ability to retain and recruit personnel and could lead to the failure to achieve our vision and implement our strategy.

We may engage in strategic transactions, which could divert our management’s attention, result in additional dilution to our stockholders, disrupt our operations and adversely affect our operating results. We may not be able to successfully integrate acquired businesses and technologies or achieve the anticipated benefits of such acquisitions.

In pursuing our business strategy, we have in the past acquired and may in the future seek to acquire or invest in businesses, products, technologies, or talent that we believe could complement or expand our platform, augment our product offerings, enhance our technical capabilities or otherwise offer growth opportunities. We often compete with others for the same opportunities. The pursuit of any of these strategic transactions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable transactions, whether or not they are consummated.

Any strategic transaction may result in unforeseen operating difficulties and expenditures. If we acquire additional businesses or enter into other strategic transactions, we may not be able to integrate the acquired personnel, operations, and technologies successfully, or effectively manage the combined business following the strategic transactions. In addition, we have limited experience in consummating strategic transactions. We also may not achieve the anticipated benefits from the strategic transactions due to a number of factors, including:

•failure to evaluate, integrate, utilize or benefit from or accurately anticipate the adoption rates of acquired technologies or services;

•product synergies, cost reductions, increases in revenue and economies of scale may not materialize as expected;

•difficulty in retaining, motivating and integrating key management and other employees of the acquired business;

•the business culture of the acquired entity may not match well with our culture;

•unforeseen delays, unanticipated costs and liabilities may arise when integrating operations, processes and systems in geographies where we have not conducted business;

•unanticipated costs or liabilities associated with the strategic transactions;

•incurrence of transaction-related costs;

•assumption of the existing obligations or unforeseen liabilities of the acquired business that we were not able to mitigate through due diligence or other means;

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•difficulty integrating the accounting systems, security infrastructure, operations, and personnel of the acquired business;

•difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

•difficulty converting the current and prospective customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support, or professional services model of the acquired company;

•diversion of management’s attention from other business concerns;

•adverse effects to our existing business relationships with business partners and customers as a result of the strategic transactions;

•unexpected costs may arise due to unforeseen changes in tax, payroll, pension, labor, trade, environmental and safety policies in new jurisdictions where the acquired entity operates;

•use of resources that are needed in other parts of our business; and

•use of substantial portions of our available cash to consummate the strategic transaction.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations.

Strategic transactions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results, increase our financial risk, and cause the market price of our common stock to decline. In addition, if a strategic transaction fails to meet our expectations, our operating results, business, and financial position may suffer.

Industry Risks

The markets in which we participate are intensely competitive, and if we do not compete effectively, our business and operating results could be adversely affected.

The market for business planning software is highly competitive, with relatively low barriers to entry for some software or services. As a result, we anticipate aggressive competition not only from established vendors of business planning software but also from new entrants into the industry. Our ability to compete successfully in our market depends on a number of factors, both within and outside of our control. Any failure by us to compete successfully in any one of these or other areas may reduce the demand for our platform, as well as adversely affect our business, operating results, and financial condition.  

Our competitors primarily include Oracle Corporation (Oracle), SAP AG (SAP), Workday, Inc. (Workday) and International Business Machines Corporation (IBM), which are well-established providers of business planning and analytics software with long-standing relationships with many customers. Some customers may be hesitant to adopt cloud-based software such as ours or to purchase cloud-based software from us and may prefer to purchase from such legacy software vendors. Oracle, SAP, and IBM are larger than we are and have greater name recognition, longer operating histories, larger marketing budgets, and significantly greater resources than we do. These vendors, as well as other competitors, may offer business planning software on a standalone basis at a low price or bundled as part of a larger product sale. Our competitors have offered, and may continue to offer, new products developed through acquisitions or organic development that more directly compete with our products and solutions. Our competitors may also seek to partner with other leading cloud providers.

We may also face competition from a variety of vendors of cloud-based and on-premises software products that address only a portion of the use cases addressed by our platform, including spreadsheets, which are used by virtually every business to some degree for business planning. Some of these applications may have greater functionality than our platform for the specific use cases for which they were designed, even if they lack the breadth of planning capabilities provided by our platform. In addition, other companies that provide cloud-based software in different target markets may develop software or acquire companies that operate in our target markets, and some potential customers may elect to develop their own internal software or simply use the manual processes that they have traditionally used. With the introduction of new technologies and market entrants, we expect competition to intensify in the future.

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Many of our competitors have longer operating histories and greater name recognition than we do, and are able to devote greater resources to the development, promotion, and sale of their products and services than we can. As a result, our competitors may be able to respond more quickly and effectively to new or changing opportunities, technologies, operational requirements and industry standards, as well as to new challenges such as those resulting from the COVID-19 pandemic. Furthermore, our current or potential competitors may acquire or be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition, and the resulting change in the competitive landscape could adversely affect our ability to compete effectively. In addition, many of our competitors have established marketing relationships, access to larger customer bases, and major distribution agreements with consultants, systems integrators, and resellers. Our competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their product offerings or resources. If our competitors are successful in bringing their products or services to market earlier than ours or if their products or services are more technologically capable than ours, then our revenue could be adversely affected. In addition, some of our competitors may offer their products and services at a lower price. If we are unable to achieve our target pricing levels, our operating results would be negatively affected. Pricing pressures and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.

If the market for Connected Planning solutions develops more slowly than we expect or declines, or if we are unable to successfully capitalize on the market, our business could be adversely affected.

Our success will depend to a substantial extent on continued growth in the demand for cloud-based Connected Planning and digital transformation solutions and on our ability to continue to capitalize on this demand. Many enterprises have invested substantial resources on legacy planning products, emerging point products and manual processes and, therefore, may be reluctant or unwilling to migrate to enterprise cloud planning software. Our ability to capitalize on this market depends in part on our ability to sell customers on the benefits that the Connected Planning and digital transformation features of our platform can provide over their existing solutions. The growth rate of the Connected Planning market depends on a number of factors, including the cost, performance, and perceived value and security associated with Connected Planning software. If the market for Connected Planning solutions fails to grow, grows more slowly than we currently expect, or decreases in size, or if we are unable to successfully capitalize on the market, our business could be adversely affected.

Legal and Compliance Risks

We typically provide service level commitments under our customer contracts. If we fail to meet these contractual commitments, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face contract terminations, which could adversely affect our revenue.

Our customer agreements typically provide service level commitments on a monthly basis. If we are unable to meet the stated service level commitments or suffer extended periods of unavailability for our platform, we may be contractually obligated to provide these customers with service credits, or we could face contract terminations, in which case we would be subject to refunds for prepaid amounts related to unused subscription services. Our revenue could be significantly affected if we suffer unexcused downtime under our agreements with our customers. Any extended service outages could adversely affect our reputation, ability to attract new customers and retain existing customers, revenue, and operating results.

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Because we collect, process and store personal information and furthermore, because our platform could be used by customers to do the same, evolving domestic and international privacy and security laws, regulations and other obligations could result in additional costs and liabilities to us or inhibit sales of our platform.

We collect, process, store and transfer various types of information, including personally identifiable information or other sensitive information, for our customers and similar data about our employees, services providers, partners and potential customers in the normal course of business. Additionally, our customers can use our platform to collect, process, and store certain types of personal or identifying information regarding their employees and customers. In most cases we contractually prohibit our customers from using our platform to collect, process, or store sensitive information (such as personal health information or credit card information); however, our customers may breach such use prohibitions without our knowledge. Such a breach could result in our violation of the laws, rules, or regulations governing the collection, use, and protection of personal information, which could adversely impact our business, financial condition, and operating results. Moreover, as our customers face increased scrutiny for data privacy breaches, they may elect to transfer the risk to us through contractual provisions which may subject us to increasing levels of contractual liability for data privacy breaches.

Data privacy and security have become significant issues in the United States (“U.S.”) and in many other countries where our platform is available. Laws, rules, and regulations in these jurisdictions apply broadly to the collection, use, storage, data residency, disclosure, and security of various types of data, including data that identifies or may be used to identify an individual, such as names, email addresses, and in some jurisdictions, Internet Protocol addresses. In the U.S., these include laws, rules, and regulations promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, Computer Fraud and Abuse Act, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and state laws relating to privacy and data security. Internationally, virtually every jurisdiction in which we operate has established its own data security and privacy legal framework with which we, or our customers, must comply. Interpretation of, and costs of compliance with, these laws, rules, and regulations and their application to our platform and services in the United States and foreign jurisdictions is ongoing and cannot be fully determined at this time.

Further, the regulatory framework for privacy and security issues worldwide is rapidly evolving, subject to change and is likely to remain uncertain for the foreseeable future. Many federal, state, and foreign government bodies and agencies are considering adopting or amending laws, rules, and regulations regarding the collection, use, storage, data residency, security, and disclosure of personal information and breach notification procedures. In addition to government regulation, privacy advocates, and industry groups may propose new and different self-regulatory standards that may apply to us.

Recent changes to privacy and security laws, including the CCPA, the GDPR, the Data Protection Act, and ongoing legal challenges to Model Clauses, could impact our business. Aspects of these laws, and their interpretation and enforcement remain unclear, and we cannot yet fully predict their impact on our business or operations. We have taken and will continue to take steps to comply with these and other new and changing privacy and security laws, rules, regulations and standards, but such laws, rules, regulations and standards may be unclear and we cannot assure you that our steps will be compliant. The interpretation and application of privacy and data protection laws, regulations, rules, and other standards remains uncertain and may be interpreted and applied in a manner that is inconsistent with our data management practices or the features of our platform. If so, we could be required to fundamentally change our business activities and practices or modify our platform, which we may be unable to do in a commercially reasonable manner or at all, and which could have an adverse effect on our business. As a result of changing standards, we may experience reluctance or refusal by current or prospective multi-national customers or customers in geographies with strict privacy laws, like the EU and the United Kingdom, to use our products, and we may find it necessary or desirable to make further changes to our handling of personal data for those customers. The changing regulatory environment applicable to the handling personal data, and our actions taken in response, may cause us to assume additional liabilities or incur additional costs or regulatory penalties, and could result in our business, operating results, and financial condition being harmed. Our efforts to comply new data protection laws and regulations may cause us to incur substantial operational costs, require us to modify our data handling practices, and may otherwise adversely impact our business, financial condition and operating results.

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Despite our compliance efforts, we may fail to achieve compliance with applicable privacy or data protection laws and regulations as they evolve, or adhere to contractual obligations regarding the collection, processing, storage and transfer of data (including data from our customers, prospective customers, partners and employees), either due to internal or external factors such as resource limitations or a lack of vendor cooperation. Any actual or perceived failure to comply with these laws or obligations could result in enforcement action against us, including fines, claims for damages by customers and other affected individuals, damage to our reputation, and loss of goodwill (both in relation to existing customers and prospective customers), any of which could harm our business, results of operations, and financial condition.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our platform. Privacy concerns, whether valid or not valid, may inhibit market adoption of our software particularly in certain industries and foreign countries.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.

Our agreements with customers and other third parties generally include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, or other liabilities relating to or arising from our software, services or other contractual obligations. Large indemnity payments could harm our business, results of operations, and financial condition. Although we normally contractually limit our liability with respect to such indemnity obligations, those limitations may not be fully enforceable in all situations, and we may still incur substantial liability under those agreements. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business and results of operations.

We could incur substantial costs in expanding, protecting or defending our intellectual property rights, and any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.

Our success and ability to compete depend in part upon our intellectual property and our ability to expand our existing intellectual property portfolio. We primarily rely on copyright, patent, trade secret and trademark laws, trade secret protection, and confidentiality or contractual agreements with our employees, customers, partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be inadequate and we may not be able to secure our intellectual property rights in the U.S. and international markets in which we operate.

Some or all of our issued patents may be invalidated or otherwise limited, allowing our competitors to develop competitive offerings. In addition, issuance of a patent does not guarantee that we have a right to practice the patented invention or that we can effectively use that patent to limit the ability of other companies to develop competitive products. We cannot be certain that we are the first to use the inventions claimed in our issued patents or pending patent applications or otherwise used in our platform, that we are the first to file for protection in our patent applications, or that third parties do not have blocking patents that could be used to prevent us from marketing or practicing our patented technology. While we have patents and patent applications pending, we may be unable to obtain patent protection for the technology covered in our patent applications or the patent protection may not be obtained quickly enough to meet our business needs. In addition, our existing patents and any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties. Effective patent, trademark, copyright, and trade secret protection may not be available to us in every country in which our platform is available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States (in particular, some foreign jurisdictions do not permit patent protection for software), and mechanisms for enforcement of intellectual property rights may be inadequate. Additional uncertainty may result from changes to intellectual property legislation enacted in the United States, including the America Invents Act, and by other national governments and from interpretations of the intellectual property laws of the United States and other countries by applicable courts and agencies. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

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Although we generally enter into confidentiality and invention assignment agreements with our employees and consultants that have access to material confidential information and enter into confidentiality agreements with our customers and the parties with whom we have strategic relationships and business alliances, these agreements may not be effective in controlling access to and distribution of our platform and propriety information or preventing reverse engineering. Further, these agreements may not prevent competitors from independently developing technologies that are substantially similar or superior to our platform.

Unauthorized use of our intellectual property may have already occurred or may occur in the future. In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights and could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Our failure to secure, protect, and enforce our intellectual property rights could seriously and adversely affect our brand and our business.

We may be sued by third parties for alleged infringement of their proprietary rights, which may be costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

There has been considerable activity in our industry to develop intellectual property and enforce intellectual property rights. Our success depends upon our not infringing upon the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our platform and underlying technology, and we may be unaware of the intellectual property rights that others may claim cover aspects of our platform or the underlying technology. In the future, others may claim that our platform and underlying technology infringe or violate their intellectual property rights.

Claims of intellectual property rights infringement or other violations of intellectual property rights might require us to stop using technology found to violate a third party’s rights, redesign our platform, which could require significant effort and expense and cause delays of releases, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling our platform. With respect to such technology for which intellectual property rights are claimed to be infringed or otherwise violated by our technology or the conduct of our business, if we cannot or do not license any infringed or otherwise violated technology on commercially reasonable terms or at all, or substitute similar non-infringing technology from another source, we could be forced to limit or stop selling our platform, we may not be able to meet our obligations to customers under our customer contracts, we may be unable to compete effectively, and our revenue and operating results could be adversely impacted. We may also be obligated to indemnify our customers and business partners or to pay substantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, modify our platform, or refund fees, which could be costly. Even if we were to prevail in such a dispute, any litigation regarding intellectual property could be costly and time-consuming, damage our reputation and brand, delay or reduce potential sales, deter our partners from promoting adoption of our platform and divert the attention of our management and key personnel from our business operations. As the number of competitors in our market increases, claims of intellectual property rights infringement or other violations of intellectual property rights may increase. Furthermore, our insurance coverage may not adequately cover losses from intellectual property rights infringement claims.

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We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.

Our platform incorporates certain third-party software obtained under licenses from other companies, and we use third-party software development tools as we continue to develop and enhance our platform. We anticipate that we will continue to rely on such third-party software in the future. If we are required to replace such software, commercially reasonable alternatives may not be available, and if they are available, they might require substantial investment of our time and resources. In addition, integration of the software used in our platform with new third-party software may require significant work and require substantial investment of our time and resources. Also, to the extent that our platform depends upon the successful operation of third-party software in conjunction with our software, any undetected errors or defects in this third-party software could prevent the deployment or impair the functionality of our platform, delay new feature introductions, result in a failure of our functionality or a security incident, and injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with third parties. In the event that we are not able to maintain our licenses to third-party software, or cannot obtain licenses to new software as needed, or in the event third-party software used in conjunction with our platform contains errors or defects, our business, operating results, and financial condition may be adversely affected.

Our platform utilizes open source software, which could negatively affect our ability to offer our products and subject us to litigation or other adverse consequences.

Our platform utilizes software governed by open source licenses, which may include, by way of example, the MIT License and the Apache License. The use of open source software involves a number of risks, many of which cannot be eliminated and could negatively affect our business. For example, the terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market our platform. By the terms of certain open source licenses, if we combine our proprietary software with open source software in a certain manner, we could be required to release the source code of our proprietary software and to make our proprietary software available under open source licenses. We may face claims alleging noncompliance with open source license terms or misappropriation or other violation of open source technology. These claims could result in litigation, damage our reputation in the open-source community, or require us to purchase a costly license, devote additional research or development resources to re-engineer our products or services, discontinue the sale of our products if re-engineering could not be accomplished on a timely or cost-effective basis, require us to make the source code of our proprietary code generally available, or result in us being enjoined from the offering of components of our platform that contained the open source software, any of which would have a negative effect on our business and operating results. We also could be subject to lawsuits from other parties claiming ownership of what we believe to be open source software. Litigation could be costly for us to defend, have a negative effect on our operating results or financial condition, and could require us to devote additional research and development resources to re-engineer our platform. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of the software.

We are subject to anti-corruption, anti-bribery, and similar laws, and failure to comply with these laws could subject us to criminal penalties or significant fines and harm our business and reputation.

We are subject to anti-corruption and anti-bribery and similar laws, such as the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act 2010, and other anti-corruption, anti-bribery, and anti-money laundering laws in countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees and agents from promising, authorizing, making or offering improper payments, or other benefits to government officials and others in the private sector. As we increase our international sales and business, our risks under these laws may increase. Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage, and other consequences. Any investigations, actions, or sanctions could harm our business, operating results, and financial condition.

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We are subject to governmental export and import controls and economic sanctions programs that could impair our ability to compete in international markets or subject us to liability if we violate the controls or programs.

We are subject to certain U.S. export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our platform must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including: the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. Obtaining the necessary authorizations, including any required license, for a particular sale may be time-consuming, is not guaranteed, and may result in the delay or loss of sales opportunities.

We incorporate encryption technology into our platform. These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations. In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our platform or could limit our customers’ ability to implement our platform in those countries. Governmental regulation of encryption technology and regulation of imports or exports of encryption products, or our failure to obtain required import or export approval for our platform, when applicable, could harm our international sales and adversely affect our revenue. Furthermore, U.S. export control laws and economic sanctions programs prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions. Any violations of such economic embargoes and trade sanction regulations could have negative consequences, including government investigations, penalties, and reputational harm.

Changes in our platform or future changes in export and import regulations may create delays in the introduction and sale of our platform in international markets, prevent our customers with international operations from deploying our platform globally or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether. Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell our platform to, existing or potential customers with international operations. Any decreased use of our platform or limitation on our ability to export or sell our platform would likely adversely affect our business, financial condition, and results of operations.

We incur significant costs, devote substantial management time, and may have difficulty attracting qualified board members as a result of operating as a public company.

As a public company, we are subject to various securities rules and regulations, including the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the New York Stock Exchange listing standards, and rules and regulations subsequently implemented by the SEC and the New York Stock Exchange. We expect that complying with these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective disclosure controls and procedures and internal control over financial reporting. Compliance with these various requirements has increased, and we expect will continue to increase, our legal and financial compliance costs and makes some activities more time consuming and costly. In addition, our management and other personnel need to divert attention from operational and other business matters to devote substantial time to these public company requirements, which could adversely affect our business, financial condition, and operating results. Although we have hired additional employees to help comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

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In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Compliance with evolving laws, regulations and standards may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may impose fines, initiate legal proceedings or take other action against us and our business may be adversely affected.

As a result of the rules and regulations applicable to public companies, it may be more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. It may also be more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a public company we file certain information publicly, which provides visibility into our business and financial condition. We are currently subject to litigation related to our public filings, and may continue to be subject to threatened or actual litigation in the future. If such claims are successful, our business, and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them and the diversion of management resources, could adversely affect our business and operating results.

If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements, or comply with applicable regulations could be impaired.

As a public company, we are required to design and maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. The Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting, including through our internal audit team. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. If we fail to develop or maintain effective controls, encounter difficulties in their implementation or improvement, or identify a material weakness in our controls, our operating results could be harmed or we could fail to meet our reporting obligations and may be required to restate our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that will be filed with the SEC. Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Ineffective disclosure controls and procedures and internal control over financial reporting could result in regulatory scrutiny and sanctions, cause investors to lose confidence in our reported financial and other information, and subject us to stockholder or other third party litigation, any of which could have a material adverse effect on our business and operating results and a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange.

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Financial and Credit Risks

If we are unable to achieve and sustain a level of liquidity sufficient to support our operations and fulfill our obligations, our business, operating results and financial position could be adversely affected.

We actively monitor and manage our cash and cash equivalents so that sufficient liquidity is available to fund our operations and other corporate purposes. As an example of our liquidity management, in April 2020, we amended our credit agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) to, among other things, increase the aggregate revolving credit commitment amount to allow us to borrow up to $60.0 million, subject to the terms of the credit agreement, including the accounts receivable borrowing base, and extend the maturity date of the revolving credit facility from April 2020 to April 2022. In the future, increased levels of liquidity may be required to adequately support our operations and initiatives and to mitigate the effects of business challenges or unforeseen circumstances. If we are unable to achieve and sustain such increased levels of liquidity, we may suffer adverse consequences including reduced investment in our platform and its functionality, difficulties in executing our business plan and fulfilling our obligations, and other operational challenges. Any of these developments could adversely affect our business, operating results and financial position.

We may face exposure to foreign currency exchange rate fluctuations.

While our international contracts are sometimes denominated in U.S. dollars, a significant portion of our revenue is in foreign currencies and the majority of our international costs are denominated in local currencies. Over time, an increasing portion of our international contracts may be denominated in local currencies. Therefore, fluctuations in the value of the U.S. dollar and foreign currencies may affect our operating results when translated into U.S. dollars. We do not currently engage in currency hedging activities to limit the risk of exchange rate fluctuations. However, in the future, we may engage in hedging activities including the use of derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not successfully offset any of the risks associated with exchange rate fluctuations, including uncertainty caused by volatility in the currency exchange rates. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

We have funded our operations since inception primarily through equity financings and payments by customers. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. In the future, we may require additional capital to respond to business opportunities, challenges, strategic transactions, a decline in the level of customer prepayments or unforeseen circumstances. We may determine to engage in equity or debt financings or enter into credit facilities for these or other reasons, and we may not be able to timely secure additional debt or equity financing on favorable terms, or at all, especially during a global economic downturn. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential strategic transactions. If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

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If we default on our credit obligations, our operations may be interrupted and our business could be seriously harmed.

We have a credit facility that we may draw on to finance our operations, strategic transactions, and other corporate purposes. Our obligations pursuant to this credit facility are secured by a first priority lien on our assets for the benefit of the lenders. Our credit facility contains financial and operating covenants, including maintenance of a specific minimum tangible net worth, customary limitations on the incurrence of certain indebtedness and liens, restrictions on certain intercompany transactions, and limitations on the amount of dividends and stock repurchases. Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants or other obligations in the credit facility, or the occurrence of certain events specified in the credit facility, could result in a default under the credit facility and any future financial agreements into which we may enter. If we default on the obligations under our credit facility, our lenders may pursue various remedial actions against us, including:

•requiring repayment of any outstanding amounts drawn on our credit facility;

•terminating our credit facility;

•disposing of our assets subject to the lien; and

•requiring us to pay significant damages.

If any of these events occur, our operations may be interrupted and our ability to fund our operations or obligations, as well as our business, could be seriously harmed. For more information on our credit facility, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

We may not be able to utilize a significant portion of our net operating loss or research tax credit carryforwards, which could adversely affect our potential profitability.

We have federal and state net operating loss carryforwards due to prior period losses, which if not utilized will begin to expire in fiscal 2029 and 2025 for federal and state purposes, respectively. These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our potential profitability.

Also, under the Tax Cuts and Jobs Act of 2017 (“Tax Reform Act”), tax losses generated in taxable years beginning after December 31, 2017, may be utilized to offset no more than 80% of taxable income annually. Although the subsequent CARES Act modified the Tax Reform Act by, among other things, eliminating the aforementioned 80% limitation for taxable years beginning before January 1, 2021, we may still face reduced availability of net operating losses in future taxable years, which could adversely affect our potential profitability.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, our ability to utilize net operating loss carryforwards or other tax attributes, such as research tax credits, in any taxable year may be limited if we experience an “ownership change.” Such an “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. We completed an analysis under Sections 382 and 383 of the Code for the Company’s tax years through January 31, 2019, and determined two “ownership changes” occurred, one in fiscal 2011 and one in fiscal 2012. We believe utilization of our net operating losses and tax credit carryforwards have become limited. This could result in increased U.S. federal income tax liability for us if we generate taxable income in a future period. Limitations on the use of net operating loss carryforwards and other tax attributes could also increase our state tax liability. The use of our tax attributes will also be limited to the extent that we do not generate positive taxable income in future tax periods.

We are subject to the tax laws of various jurisdictions, which are subject to changes and to interpretation, which could harm our future results.

We are subject to income, sales, use, value added, and other similar taxes in the United States and foreign jurisdictions, and our domestic and international tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses as a result of acquisitions, the valuation of deferred tax assets and liabilities, the interpretation and application of existing tax laws within a jurisdiction, and changes in federal, state, or international tax laws and accounting principles.

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Changes to various tax laws, rules and regulations are currently being considered by the United States and other countries where we do business. Certain of these proposed changes could be applied solely or disproportionately to services provided over the internet. These tax initiatives, if implemented, could result in additional tax obligations that we are required to pay or adversely affect our sales activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows. In addition, existing tax laws, rules, or regulations could be interpreted, modified, or applied adversely to us (possibly with retroactive effect), which could require us or our customers to pay additional tax amounts, or require us or our customers to pay fines, penalties and interest for past amounts. If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, thereby adversely affecting our operating results and cash flows.

Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction and are subject to varying interpretations that change over time. We do not collect sales and use, value added, and similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are not applicable or that we are not required to collect such taxes with respect to the jurisdiction. Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future.

Our customers may fail to pay us in accordance with the terms of their agreements, necessitating action by us to compel payment.

We typically enter into multiple year, non-cancelable arrangements with our customers. If customers fail to pay us under the terms of our agreements, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the terms of our contracts, including litigation. The risk of such negative effects increases with the term length of our customer arrangements. Furthermore, some of our customers may seek bankruptcy protection or other similar relief, including as a result of the impacts and disruptions caused by the COVID-19 pandemic, and fail to pay amounts due to us, or pay those amounts more slowly, either of which could adversely affect our business, results of operations and financial condition.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results for periods prior and subsequent to such change. For example, recent new standards issued by the FASB that could materially impact our financial statements include certain changes to accounting for leases. We may adopt one or more of these standards retrospectively to prior periods, and the adoption may result in an adverse change to previously reported results. Additionally, the adoption of these standards may potentially require enhancements or changes in our systems and could require our financial management to devote significant time and resources to implementing those changes.

Risks Related to Ownership of Our Common Stock

The stock price of our common stock may be volatile and may decline regardless of our operating performance and you may lose all or part of your investment.

The market price of our common stock has been and may continue to be volatile. In addition to factors discussed in this report, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

•the COVID-19 pandemic and the extent to which, and for how long, it impacts our business and that of our customers and prospective customers;

•overall performance of the equity markets;

•our operating performance, including key metrics, and the performance of other similar companies;

•changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock;

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•changes in our financial, operating or other metrics, regardless of whether we consider those metrics as reflective of the current state or long-term prospects of our business, and how those results compare to securities analyst expectations;

•announcements of technological innovations, new software or enhancements to services, acquisitions, strategic alliances, or significant agreements by us or by our competitors;

•disruptions in our services due to computer hardware, software, or network problems;

•a data breach or other security incident involving us, or one of our customers or partners, or another company in the cloud planning software market;

•announcements of customer additions and customer cancellations or delays in customer purchases;

•recruitment or departure of key personnel;

•the economy as a whole, market conditions in our industry and the industries of our customers;

•the sale, purchase, or exercise of a significant block of our common stock;

•the impact of environmental, social, governance or other matters on our reputation or investor confidence in our operations;

•the size of our market float; and

•any other factors discussed in this Quarterly Report on Form 10-Q.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. For example, in August 2020, a purported stockholder filed a putative securities class action complaint in the United States District Court for the Northern District of California against us and certain of our executive officers. This lawsuit is further described in Note 9, Commitment and Contingencies, in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Although we believe this lawsuit lacks merit and intend to vigorously defend against it, this matter, and any other similar matters, could subject us to substantial costs, divert resources, and the attention of management from our business and adversely affect our business.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts cease or reduce coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following:

•a classified board of directors so that not all members of our board of directors are elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

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•the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

•the right of our board of directors, subject to the rights of the holders of any series of preferred stock, to the extent such preferred stock is issued by the board of directors in the future, to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, or removal of a director, could impede an attempt by stockholders to fill vacancies on our board of directors;

•a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

•the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

•advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. This provision may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from engaging in a business combination with us even if the business combination would be beneficial to our existing stockholders. A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.

These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws, and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer, or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for many types of disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws or any action asserting a claim against us that is governed by the internal affairs doctrine. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees and may discourage these types of lawsuits. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

63

General Risk Factors

Uncertain global economic and market conditions may negatively impact our business, results of operations and cash flows.

Our business depends on the overall demand for information technology and on the economic health of our current and prospective customers in the United States and abroad. Any significant weakening of the economy in the United States or in regions globally like Europe and Asia, more limited availability of credit, a reduction in business confidence and activity, decreased government spending, perceived impact of global trade barriers like tariffs and sanctions and the corresponding retaliatory actions, economic uncertainty, or other difficulties may affect one or more of the sectors or countries in which we sell our platform. Global economic and political uncertainty, including the uncertainty surrounding the COVID-19 pandemic, Brexit, increased tariffs and international trade disputes, may cause some of our customers or potential customers to curtail spending, scale back their digital transformation efforts, delay their expansion of Anaplan use cases, result in new regulatory and cost challenges to our international operations and cause customers to delay or reduce their technology spending overall. In addition, a strong dollar could reduce demand for our products in countries with relatively weaker currencies. Global economic conditions and market conditions may also continue to experience volatility and remain uncertain for an indefinite period of time as a result of the COVID-19 pandemic. We expect our business will be impacted in a variety of ways by these conditions because, among other reasons, some prospective and existing customers may curtail business spending, there may be greater unpredictability in some customers’ ability to pay for their subscriptions to our platform, business disruptions for us and/or our customers are likely to persist in at least some jurisdictions and travel by us and our partners to customer sites has been and may continue to remain limited. These adverse conditions have, in part, resulted in and may result in certain of our customers and prospective customers deferring or delaying buying decisions and project implementations, prolonged sales cycles, and increased requests for extended payment terms. These adverse conditions could result in reductions in the rate of enterprise software spending generally, sales of our platform, longer sales cycles, slower adoption of new technologies, lower renewal rates, and increased price competition. Any of these events could have an adverse effect on our business, operating results, and financial position.

Catastrophic events and other events beyond our control may disrupt our business and adversely affect our operating results.

Natural disasters, catastrophic events, and other events beyond our control may cause damage or disruption to our business. As an example, our corporate headquarters are located in San Francisco, California and the west coast of the United States contains active earthquake zones. An earthquake affecting our headquarters may result in disruption to our business and operations. Additionally, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems, and our website for our development, marketing, operational support, hosted services, and sales activities and such infrastructure and systems may also be affected by natural disasters or other catastrophic events. For example, our data centers are critical infrastructure located in the United States, the Netherlands, and Germany, including in areas with active earthquake zones. From time to time, global pandemics may result from outbreak of diseases such as the MERS, SARS, avian flu and COVID-19, which may result in a material adverse impact on our or our customers’ and partners’ business operations including reduction or suspension of operations in the U.S. or certain parts of the world. We serve a wide range of customers with international operations in varying industries including manufacturing. Depending upon the continuity and severity of pandemics such as the COVID-19 pandemic, our customers and partners may suspend or delay their engagement with us, or our partners may have difficulty engaging with customers and delivering the services we typically expect them to provide, which could result in a material adverse effect on our financial condition. Although we maintain disaster and crisis recovery plans, in the event of an earthquake, hurricane, flood, natural disaster or catastrophic event such as fire, power loss, telecommunications failure, breach of security protocols, global pandemics like the COVID-19 pandemic, cyber-attack, war, or terrorist attack, such plans or the disaster recovery plans established by the third-party data centers and other infrastructure that we rely on may prove to be inadequate and we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our product development, lengthy interruptions in our services, breaches of data security, and loss of critical data, all of which could have an adverse effect on our business, operating results, and financial condition. Furthermore, in the event of a catastrophic event or other crisis, our insurance coverage may not adequately compensate us for any losses that we may incur.

64

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sale of Unregistered Securities and Use of Proceeds

Sale of Unregistered Securities

None.

Use of Proceeds

The information required by this item regarding the use of our IPO proceeds has been omitted pursuant to SEC rules because such information has not changed since our last periodic report was filed.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

65

ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1†	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2†	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

__________________

†  This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

66

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ANAPLAN, INC.
	By:	/s/  David H. Morton, Jr.
Date: June 3, 2021		David H. Morton, Jr.
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

67

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OR 15(d)-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank Calderoni, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Anaplan, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 3, 2021

By:	/s/ Frank Calderoni
	Frank Calderoni
	Chairman & Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OR 15(d)-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David H. Morton, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Anaplan, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 3, 2021

By:	/s/ David H. Morton, Jr.
	David H. Morton, Jr.
	Executive Vice President & Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank Calderoni, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report of Anaplan, Inc. on Form 10-Q for the quarterly period ended April 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Anaplan, Inc. for the periods presented therein.

Date: June 3, 2021

By:	/s/ Frank Calderoni
	Frank Calderoni
	Chairman & Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David H. Morton, Jr., certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report of Anaplan, Inc. on Form 10-Q for the quarterly period ended April 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Anaplan, Inc. for the periods presented therein.

Date: June 3, 2021

By:	/s/ David H. Morton, Jr.
	David H. Morton, Jr.
	Executive Vice President & Chief Financial Officer
	(Principal Financial Officer)

XML

Cover - shares	3 Months Ended
	Apr. 30, 2021	May 28, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2021
Document Transition Report	false
Entity File Number	001-38698
Entity Registrant Name	ANAPLAN, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0897861
Entity Address, Address Line One	50 Hawthorne Street
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94105
City Area Code	415
Local Phone Number	742-8199
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	PLAN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		144,732,009
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001540755
Current Fiscal Year End Date	--01-31

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Current assets:
Cash and cash equivalents	$ 327,516	$ 320,990
Accounts receivable, net of allowances for credit losses of $2,900 and $3,162 as of April 30, 2021 and January 31, 2021, respectively	104,600	147,005
Deferred commissions, current portion	38,414	36,797
Prepaid expenses and other current assets	25,626	24,252
Total current assets	496,156	529,044
Property and equipment, net	55,062	51,603
Deferred commissions, net of current portion	83,935	82,405
Goodwill	32,379	32,379
Operating lease right-of-use assets	37,509	33,985
Other noncurrent assets	9,460	9,709
TOTAL ASSETS	714,501	739,125
Current liabilities:
Accounts payable	7,374	7,949
Accrued expenses	90,881	101,507
Deferred revenue, current portion	286,922	287,778
Operating lease liabilities, current portion	8,561	7,951
Total current liabilities	393,738	405,185
Deferred revenue, net of current portion	5,739	7,765
Operating lease liabilities, net of current portion	33,152	30,130
Other noncurrent liabilities	19,175	18,032
TOTAL LIABILITIES	451,804	461,112
Stockholders' equity:
Common stock, par value of $0.0001 per share; 1,750,000 shares authorized as of April 30, 2021 and January 31, 2021; 144,682 and 143,502 shares issued and outstanding as of April 30, 2021 and January 31, 2021	14	14
Accumulated other comprehensive loss	(8,803)	(7,528)
Additional paid-in capital	969,955	932,505
Accumulated deficit	(698,469)	(646,978)
TOTAL STOCKHOLDERS' EQUITY	262,697	278,013
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 714,501	$ 739,125

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, net, allowances for credit losses	$ 2,900	$ 3,162
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,750,000,000	1,750,000,000
Common stock, shares issued (in shares)	144,682,000	143,502,000
Common stock, shares outstanding (in shares)	144,682,000	143,502,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Revenue:
Total revenue	$ 129,825	$ 103,844
Cost of revenue:
Total cost of revenue	32,821	24,740
Gross profit	97,004	79,104
Operating expenses:
Research and development	33,212	23,762
Sales and marketing	88,470	71,674
General and administrative	24,945	22,428
Total operating expenses	146,627	117,864
Loss from operations	(49,623)	(38,760)
Interest income (expense), net	(151)	511
Other income (expense), net	(459)	(331)
Loss before income taxes	(50,233)	(38,580)
Provision for income taxes	(1,258)	(1,022)
Net loss	(51,491)	(39,602)
Comprehensive loss:
Foreign currency translation adjustments	(1,275)	1,751
Comprehensive loss	$ (52,766)	$ (37,851)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.36)	$ (0.29)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares)	144,161	136,362
Subscription revenue
Revenue:
Total revenue	$ 118,343	$ 93,824
Cost of revenue:
Total cost of revenue	21,329	15,185
Professional services revenue
Revenue:
Total revenue	11,482	10,020
Cost of revenue:
Total cost of revenue	$ 11,492	$ 9,555

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment
Beginning balance at Jan. 31, 2020	$ 291,681	$ (558)	$ 13	$ 788,447	$ (4,326)	$ (492,453)	$ (558)
Beginning balance (in shares) at Jan. 31, 2020			135,495,000
Stock-based compensation	23,486			23,486
Exercise of stock options, net of repurchases and early exercises	3,798			3,798
Exercise of stock options, net of repurchases and early exercises (in shares)			698,000
Vesting of restricted stock units (in shares)			938,000
Net loss	(39,602)					(39,602)
Foreign currency translation adjustments	1,751				1,751
Other	25			25
Ending balance at Apr. 30, 2020	280,581		$ 13	815,756	(2,575)	(532,613)
Ending balance (in shares) at Apr. 30, 2020			137,131,000
Beginning balance at Jan. 31, 2021	278,013		$ 14	932,505	(7,528)	(646,978)
Beginning balance (in shares) at Jan. 31, 2021			143,502,000
Stock-based compensation	35,352			35,352
Exercise of stock options, net of repurchases and early exercises	2,098			2,098
Exercise of stock options, net of repurchases and early exercises (in shares)			357,000
Vesting of restricted stock units (in shares)			823,000
Net loss	(51,491)					(51,491)
Foreign currency translation adjustments	(1,275)				(1,275)
Ending balance at Apr. 30, 2021	$ 262,697		$ 14	$ 969,955	$ (8,803)	$ (698,469)
Ending balance (in shares) at Apr. 30, 2021			144,682,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (51,491)	$ (39,602)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	6,970	6,070
Amortization of deferred commissions	9,708	7,718
Stock-based compensation	34,071	22,493
Reduction of operating lease right-of-use assets and accretion of operating lease liabilities	2,434	2,852
Other non-cash items	(324)	1,106
Changes in operating assets and liabilities:
Accounts receivable	43,939	12,848
Prepaid expenses and other current assets	(1,301)	1,508
Other noncurrent assets	(108)	114
Deferred commissions	(12,547)	(10,056)
Accounts payable and accrued expenses	(11,120)	(2,546)
Deferred revenue	(4,845)	(3,159)
Payments for operating lease liabilities, net	(2,293)	(2,835)
Other noncurrent liabilities	716	1,985
Net cash provided by (used in) operating activities	13,809	(1,504)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(3,113)	(1,583)
Capitalized internal-use software	(3,086)	(2,880)
Net cash used in investing activities	(6,199)	(4,463)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	2,092	3,792
Principal payments on finance lease obligations	(2,520)	(1,728)
Net cash provided by (used in) financing activities	(428)	2,064
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(656)	(743)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	6,526	(4,646)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period	320,990	309,894
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period	327,516	305,248
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	145	184
Cash paid for income taxes	784	307
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in purchases of property and equipment included in liabilities	(482)	1,687
Finance leases for property and equipment	$ 2,910	$ 568

XML

Summary of Business and Significant Accounting Policies

3 Months Ended

Apr. 30, 2021

Accounting Policies [Abstract]

Summary of Business and Significant Accounting Policies

Summary of Business and Significant Accounting Policies

Description of Business

Anaplan, Inc. (the Company, Anaplan, we, us, or our) was incorporated in Delaware on July 9, 2009 and is headquartered in San Francisco, California, with offices in multiple U.S. and international locations.

The Company provides a cloud-based Connected Planning platform that helps connect organizations and people to make better and faster decisions. The Company delivers its application over the Internet as a subscription service using a software-as-a-service (SaaS) model. The Company also offers professional services related to implementing and supporting its application.

Fiscal Year

The Company’s fiscal year ends on January 31. References to fiscal 2022, for example, refer to the fiscal year ending January 31, 2022.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting and include the accounts of the Company and its wholly owned subsidiaries (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet as of January 31, 2021, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of comprehensive loss, statements of stockholders’ equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Form 10-K filed with the SEC on March 12, 2021.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, the determination of revenue recognition, certain assumptions in the valuation of stock awards, the determination of the period of benefit for deferred commissions, the determination of the incremental borrowing rate used for operating lease liabilities, the allowance for credit losses, and the fair value of assets acquired and liabilities assumed for business combinations. Actual results could differ from those estimates.

The Company continues to assess the impact of COVID-19 and as of the date of filing of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require updating significant estimates or judgments or revising the carrying value of the Company's assets or liabilities as presented in the unaudited interim condensed consolidated financial statements. These estimates may change as new events occur and additional information is obtained. Actual results could differ from those estimates and any such differences may be material to our financial statements.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 1 of the notes to the consolidated financial statements included in the Company’s Form 10-K filed with the SEC on March 12, 2021. There have been no significant changes to these policies during the three months ended April 30, 2021.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles of income taxes and reducing the cost and complexity in accounting for income taxes. The guidance is effective for interim and annual periods beginning after December 15, 2020. The adoption of the new standard had no material impact on the Company's condensed consolidated financial statements.

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Consolidated Balance Sheet Components

3 Months Ended

Apr. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated Balance Sheet Components

Consolidated Balance Sheet Components

Property and Equipment, net

Property and equipment consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Computer and office equipment	$	62,643	$	58,231
Leasehold improvements	14,337		14,055
Internal-use software	44,975		41,475
Construction in progress	8,967		6,941
Property and equipment, gross	130,922		120,702
Less: accumulated depreciation	(75,860)		(69,099)
Property and equipment, net	$	55,062	$	51,603

Depreciation expense was $6.6 million and $5.7 million for the three months ended April 30, 2021 and 2020, respectively.

The Company capitalized $4.2 million and $3.8 million in internal-use software in the three months ended April 30, 2021 and 2020, respectively, of which $1.1 million and $1.0 million was stock-based compensation expense for each respective period. Amortization of the capitalized internal-use software, included in total depreciation expense above, was $2.6 million and $2.1 million in the three months ended April 30, 2021 and 2020, respectively.

Accrued Expenses

Accrued expenses consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Vendor accruals	$	10,600	$	11,262
Accrued commission	8,622		12,521
Accrued bonuses	7,925		15,583
Accrued other payroll liabilities	36,864		31,238
Current portion of finance lease obligations	7,658		8,031
Accrued other	19,212		22,872
Accrued expenses	$	90,881	$	101,507

Preferred Stock

As of April 30, 2021 and January 31, 2021, the authorized preferred stock of the Company consisted of 25 million shares with a par value of $0.0001 per share. There were no shares of preferred stock issued and outstanding as of April 30, 2021, and January 31, 2021.

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Bank Borrowing	3 Months Ended
	Apr. 30, 2021
Debt Disclosure [Abstract]
Bank Borrowing	Bank BorrowingIn April 2020, the Company entered into the Third Amendment to Credit Agreement and First Amendment to Collateral Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) as administrative agent and lender (the “Third Amendment”). Among other things, the Third Amendment further amends the Credit Agreement entered into with Wells Fargo in April 2018, as amended in September 2018 and October 2019 (the “Credit Agreement”) in order to: (1) increase the aggregate revolving credit commitment amount by $20.0 million, so that the Company may borrow up to $60.0 million under a secured revolving credit facility, subject to the terms of the Credit Agreement including the accounts receivable borrowing base, for general corporate purposes; and (2) extend the maturity date of the revolving credit facility until April 23, 2022. Also, pursuant to the Third Amendment, any loans drawn on the credit facility will incur interest at a rate equal to the highest of (A) the prime rate, (B) the federal funds rate plus 0.5%, and (C) the one-month LIBOR plus 1%. Interest is payable monthly in arrears with the principal and any accrued and unpaid interest due on April 23, 2022. As of April 30, 2021, and January 31, 2021, the Company had not drawn down any amounts under this agreement. As of April 30, 2021, the Company was in compliance with the financial covenants contained in the agreement.

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Leases

3 Months Ended

Apr. 30, 2021

Leases [Abstract]

Leases

Leases

The Company leases certain facilities under operating leases, and property and equipment under finance leases that expire from fiscal 2022 to 2028.

The components of lease expense were as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Operating lease costs	$	2,434	$	2,852
Finance lease costs
Amortization of assets	$	2,570	$	1,785
Interest on lease liabilities	145		184
Total finance lease costs	$	2,715	$	1,969

Supplemental balance sheet information related to leases is as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Operating leases:
Operating lease ROU assets	$	37,509	$	33,985
Operating lease liabilities, current portion	$	8,561	$	7,951
Operating lease liabilities, net of current portion	33,152		30,130
Total operating lease liabilities	$	41,713	$	38,081
Finance leases:
Property and equipment, gross	$	32,041	$	29,132
Less: accumulated depreciation	(18,446)		(15,876)
Property and equipment, net	$	13,595	$	13,256
Accrued expenses	$	7,658	$	8,031
Other noncurrent liabilities	6,346		5,761
Total finance lease liabilities	$	14,004	$	13,792

Weighted-average lease terms and discount rates are as follows:

	As of April 30, 2021
	Operating Leases	Finance Leases
Weighted-average remaining lease terms	4.5 years	2.0 years
Weighted-average discount rates	5.2%	3.9%

Future minimum lease payments under operating leases and finance leases as of April 30, 2021, are as follows:

	As of April 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
Years ending January 31,
2022(remaining 9 months)	$	7,554	$	6,795
2023	10,779		5,339
2024	9,879		2,331
2025	8,317		184
2026	7,855		—
Thereafter	2,452		—
Total lease payments	46,836		14,649
Less: amount representing interest	(4,956)		(645)
Less: leases less than 12 months	(167)		—
Total lease liabilities	$	41,713	$	14,004

The Company enters into commitments to lease computer and office equipment for which the timing of the lease payments is not determined until the date of commencement. As of April 30, 2021, the amounts related to these leases were approximately $4.4 million, which are to be paid over three years after the date of commencement.

Leases

Leases

The Company leases certain facilities under operating leases, and property and equipment under finance leases that expire from fiscal 2022 to 2028.

The components of lease expense were as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Operating lease costs	$	2,434	$	2,852
Finance lease costs
Amortization of assets	$	2,570	$	1,785
Interest on lease liabilities	145		184
Total finance lease costs	$	2,715	$	1,969

Supplemental balance sheet information related to leases is as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Operating leases:
Operating lease ROU assets	$	37,509	$	33,985
Operating lease liabilities, current portion	$	8,561	$	7,951
Operating lease liabilities, net of current portion	33,152		30,130
Total operating lease liabilities	$	41,713	$	38,081
Finance leases:
Property and equipment, gross	$	32,041	$	29,132
Less: accumulated depreciation	(18,446)		(15,876)
Property and equipment, net	$	13,595	$	13,256
Accrued expenses	$	7,658	$	8,031
Other noncurrent liabilities	6,346		5,761
Total finance lease liabilities	$	14,004	$	13,792

Weighted-average lease terms and discount rates are as follows:

	As of April 30, 2021
	Operating Leases	Finance Leases
Weighted-average remaining lease terms	4.5 years	2.0 years
Weighted-average discount rates	5.2%	3.9%

Future minimum lease payments under operating leases and finance leases as of April 30, 2021, are as follows:

	As of April 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
Years ending January 31,
2022(remaining 9 months)	$	7,554	$	6,795
2023	10,779		5,339
2024	9,879		2,331
2025	8,317		184
2026	7,855		—
Thereafter	2,452		—
Total lease payments	46,836		14,649
Less: amount representing interest	(4,956)		(645)
Less: leases less than 12 months	(167)		—
Total lease liabilities	$	41,713	$	14,004

The Company enters into commitments to lease computer and office equipment for which the timing of the lease payments is not determined until the date of commencement. As of April 30, 2021, the amounts related to these leases were approximately $4.4 million, which are to be paid over three years after the date of commencement.

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Acquisition-Related Intangible Assets

3 Months Ended

Apr. 30, 2021

Finite-Lived Intangible Assets, Net [Abstract]

Acquisition-Related Intangible Assets

Acquisition-Related Intangible Assets

The components of identifiable intangible assets included in other noncurrent assets are as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Developed technology	$	5,200	$	5,200
Customer relationships	2,976		2,976
Intangible assets, gross	$	8,176	$	8,176
Less: accumulated amortization	(2,998)		(2,663)
Intangible assets, net	$	5,178	$	5,513

Amortization expense of acquisition-related intangible assets was immaterial for the three months ended April 30, 2021 and 2020.

The expected future intangible assets amortization as of April 30, 2021 is as follows:

	As of April 30, 2021
	(In thousands)
Years ending January 31,
2022 (remaining 9 months)	$	1,005
2023	1,340
2024	1,340
2025	993
2026	300
Thereafter	200
Total future intangible assets amortization	$	5,178

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Employee Stock Plans

3 Months Ended

Apr. 30, 2021

Retirement Benefits [Abstract]

Employee Stock Plans

Employee Stock Plans

As of April 30, 2021 and January 31, 2021, the Company was authorized to issue 1,750,000,000 shares of common stock. Shares were reserved for future issuance as follows:

	As of
	April 30, 2021	January 31, 2021
	(In thousands)
Outstanding stock options	6,236	6,600
Outstanding restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs")	9,789	8,558
Shares available for future issuances under the 2018 Stock Plan	26,692	21,564
Shares available for future issuances under the 2018 ESPP	5,152	3,717
Total	47,869	40,439

Stock Options

A summary of stock option activity for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)			(In thousands)
Balance as of January 31, 2021	6,600	$	11.83	$	362,149
Options exercised	(357)	5.86		—
Options forfeited	(7)	6.26		—
Balance as of April 30, 2021	6,236	$	12.18	$	296,046
Exercisable as of April 30, 2021	6,087	$	11.80	$	291,293
Vested and expected to vest as of April 30, 2021	4,542	$	8.64	$	231,713

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $12.0 million, which is expected to be recognized over a weighted-average period of 1.9 years.

RSUs and PSUs

A summary of RSUs and PSUs activities for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted- Average Grant Date Fair Value
	(In thousands)
Balance as of January 31, 2021	8,558	$	37.15
RSUs and PSUs granted	2,280	61.98
RSUs and PSUs vested	(823)	32.62
RSUs and PSUs forfeited	(226)	44.03
Balance as of April 30, 2021	9,789	$	43.15

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested RSUs that are expected to vest was $293.5 million, which is expected to be recognized over a weighted-average period of 3.0 years.

In the first quarter of fiscal 2022, the Company granted PSUs to certain senior executive officers under the 2018 Stock Plan. PSUs are subject to service-based and market-based vesting conditions. The number of shares that could be earned is based on our total stockholder return as compared to the constituents of the S&P Software & Services Select Index over 1-year, 2-year and 3-year cumulative performance periods inclusive of our fiscal 2022 through the fiscal year ended January 31, 2024. The number of shares that could be earned will range from 0% to 200% of the target number of shares. The fair value of the PSUs grant was determined using a Monte Carlo simulation approach. The compensation cost is recognized under the accelerated attribution method.

As of April 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested PSUs that are expected to vest was $12.8 million, which is expected to be recognized over a weighted-average period of 2.2 years.

Stock-Based Compensation

The stock-based compensation expense, net of estimated forfeitures, by line item in the accompanying condensed consolidated statements of comprehensive loss is summarized as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Cost of subscription revenue	$	1,522	$	708
Cost of professional services revenue	831		508
Research and development	6,966		3,646
Sales and marketing	16,633		10,031
General and administrative	8,119		7,600
Total stock-based compensation expense	$	34,071	$	22,493

The Company’s estimated forfeiture rate is based on accumulated historical forfeiture data.

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Fair Value Measurements

3 Months Ended

Apr. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Cash and cash equivalents included investments in money market funds of $252.4 million and $240.0 million at April 30, 2021 and January 31, 2021, respectively. The fair value of the money market funds was determined using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs under the fair value measurements and disclosure guidance.

Other than the money market funds, the Company did not hold any assets or liabilities that are measured at fair value on a recurring basis as of April 30, 2021, and January 31, 2021. There were no transfers into or out of Level 1, Level 2, or Level 3 during the three months ended April 30, 2021 and 2020.

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Revenue Recognition

3 Months Ended

Apr. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The Company derives revenue primarily from sales of subscription services and, to a lesser degree, from professional services. Revenue is recognized when a customer obtains access to the platform and receives the related professional services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services.

Disaggregation of Revenue

The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use the Company’s cloud-based application:

	Three Months Ended April 30,
	2021				2020
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
	(In thousands, except percentage data)
Americas	$	71,254	55	%	$	60,070	58	%
EMEA	43,658		34		32,843		32
APAC	14,913		11		10,931		10
Total	$	129,825	100	%	$	103,844	100	%

The United States and the U.K. were the only two countries that represented more than 10% of the Company’s total revenue in any period. Revenue in the United States and as a percentage of total revenue comprised of $68.0 million and 52%, and $57.7 million and 56% in the three months ended April 30, 2021 and 2020, respectively. Revenue in the U.K. comprised of $15.7 million and 12%, and $12.0 million and 12% in the three months ended April 30, 2021 and 2020, respectively.

Contract Balances

Contract assets represent revenue recognized for contracts that have not yet been invoiced to customers, typically for multi-year arrangements. Total contract assets were $0.2 million and $0.3 million as of April 30, 2021, and January 31, 2021, respectively, which were included within prepaid expenses and other current assets and other noncurrent assets on the condensed consolidated balance sheets.

Contract liabilities consist of deferred revenue. Revenue is deferred when the Company has the right to invoice in advance of performance under a contract. The current portion of deferred revenue balances are recognized over the following 12-month period. The amount of revenue recognized in the three months ended April 30, 2021 and 2020 that was included in deferred revenue at the beginning of each period was $107.3 million and $88.6 million, respectively.

Remaining Performance Obligation

As of April 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $832.3 million, which consists of both billed consideration in the amount of $292.7 million and unbilled consideration in the amount of $539.6 million that the Company expects to recognize as revenue in the future periods. The Company expects to cumulatively recognize approximately 53% and 84% of this amount as revenue in the next 12 months and 24 months, respectively, with the remaining balance recognized thereafter.

As of January 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $817.6 million, which consists of both billed consideration in the amount of $295.5 million and unbilled consideration in the amount of $522.1 million that the Company expects to recognize as revenue in the future periods. The Company expects to recognize 51% and 83% of this amount as revenue in the next 12 months and 24 months, respectively, with the remaining balance recognized thereafter.

The Company applied a practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original expected duration of one year or less.

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Commitments and Contingencies

3 Months Ended

Apr. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

On August 24, 2020, a purported stockholder of the Company filed a putative securities class action complaint in the United States District Court for the Northern District of California, captioned Grobler v. Anaplan, Inc., et al., 3:20-cv-05959, against the Company and certain of the Company’s executive officers. The Court appointed a lead plaintiff on November 12, 2020, and on January 6, 2021, the lead plaintiff filed an amended complaint, captioned Sakkal v. Anaplan, Inc., et al. The amended complaint alleges violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, purportedly on behalf of all persons who purchased Anaplan, Inc. securities between November 21, 2019, and February 26, 2020, inclusive. The claims are based upon allegations that the defendants misrepresented and/or omitted material information in certain of the Company’s prior public filings regarding the business, operations and prospects of the Company. The Company filed a motion to dismiss the amended complaint on March 8, 2021, and the plaintiff filed opposition to the motion on May 7, 2021 . At this point, no discovery has occurred in this case. The case is still in the preliminary stages, and it is not possible for the Company to quantify the extent of potential liability to the defendants, if any. The Company believes that the lawsuit lacks merit and intends to vigorously defend the action. The Company cannot predict the outcome of or is not able to reasonably estimate the amount or range of possible loss from the above described matter.

From time to time, the Company is party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, the Company may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position. The Company is not presently party to any legal proceedings that, in the opinion of management, if determined adversely to the Company, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

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Income Taxes	3 Months Ended
	Apr. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company computed its interim provision using its estimated annual effective tax rate. The Company’s income tax expense was $1.3 million and $1.0 million during the three months ended April 30, 2021 and 2020, respectively.

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Net Loss Per Share Attributable to Common Stockholders

3 Months Ended

Apr. 30, 2021

Earnings Per Share [Abstract]

Net Loss Per Share Attributable to Common Stockholders

Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

	Three Months Ended April 30,
	2021		2020
	(In thousands, except per share data)
Numerator:
Net loss	$	(51,491)	$	(39,602)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	144,161		136,362
Net loss per share attributable to common stockholders, basic and diluted	$	(0.36)	$	(0.29)

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:

	As of April 30,
	2021	2020
	(In thousands)
Stock options	6,236	9,802
RSUs and PSUs	9,789	10,184
Total	16,025	19,986

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Summary of Business and Significant Accounting Policies (Policies)

3 Months Ended

Apr. 30, 2021

Accounting Policies [Abstract]

Description of Business

Description of Business

Anaplan, Inc. (the Company, Anaplan, we, us, or our) was incorporated in Delaware on July 9, 2009 and is headquartered in San Francisco, California, with offices in multiple U.S. and international locations.

The Company provides a cloud-based Connected Planning platform that helps connect organizations and people to make better and faster decisions. The Company delivers its application over the Internet as a subscription service using a software-as-a-service (SaaS) model. The Company also offers professional services related to implementing and supporting its application.

Fiscal Year

Fiscal Year

The Company’s fiscal year ends on January 31. References to fiscal 2022, for example, refer to the fiscal year ending January 31, 2022.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting and include the accounts of the Company and its wholly owned subsidiaries (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated balance sheet as of January 31, 2021, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of comprehensive loss, statements of stockholders’ equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Form 10-K filed with the SEC on March 12, 2021.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, the determination of revenue recognition, certain assumptions in the valuation of stock awards, the determination of the period of benefit for deferred commissions, the determination of the incremental borrowing rate used for operating lease liabilities, the allowance for credit losses, and the fair value of assets acquired and liabilities assumed for business combinations. Actual results could differ from those estimates.

The Company continues to assess the impact of COVID-19 and as of the date of filing of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require updating significant estimates or judgments or revising the carrying value of the Company's assets or liabilities as presented in the unaudited interim condensed consolidated financial statements. These estimates may change as new events occur and additional information is obtained. Actual results could differ from those estimates and any such differences may be material to our financial statements.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles of income taxes and reducing the cost and complexity in accounting for income taxes. The guidance is effective for interim and annual periods beginning after December 15, 2020. The adoption of the new standard had no material impact on the Company's condensed consolidated financial statements.

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Consolidated Balance Sheet Components (Tables)

3 Months Ended

Apr. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Property and Equipment, Net

Property and equipment consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Computer and office equipment	$	62,643	$	58,231
Leasehold improvements	14,337		14,055
Internal-use software	44,975		41,475
Construction in progress	8,967		6,941
Property and equipment, gross	130,922		120,702
Less: accumulated depreciation	(75,860)		(69,099)
Property and equipment, net	$	55,062	$	51,603

Schedule of Accrued Expenses

Accrued expenses consisted of the following:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Vendor accruals	$	10,600	$	11,262
Accrued commission	8,622		12,521
Accrued bonuses	7,925		15,583
Accrued other payroll liabilities	36,864		31,238
Current portion of finance lease obligations	7,658		8,031
Accrued other	19,212		22,872
Accrued expenses	$	90,881	$	101,507

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Leases (Tables)

3 Months Ended

Apr. 30, 2021

Leases [Abstract]

Components of Lease Expense, Supplemental Balance Sheet Information, Lease Term and Discount Rate

The components of lease expense were as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Operating lease costs	$	2,434	$	2,852
Finance lease costs
Amortization of assets	$	2,570	$	1,785
Interest on lease liabilities	145		184
Total finance lease costs	$	2,715	$	1,969

Supplemental balance sheet information related to leases is as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Operating leases:
Operating lease ROU assets	$	37,509	$	33,985
Operating lease liabilities, current portion	$	8,561	$	7,951
Operating lease liabilities, net of current portion	33,152		30,130
Total operating lease liabilities	$	41,713	$	38,081
Finance leases:
Property and equipment, gross	$	32,041	$	29,132
Less: accumulated depreciation	(18,446)		(15,876)
Property and equipment, net	$	13,595	$	13,256
Accrued expenses	$	7,658	$	8,031
Other noncurrent liabilities	6,346		5,761
Total finance lease liabilities	$	14,004	$	13,792

Weighted-average lease terms and discount rates are as follows:

	As of April 30, 2021
	Operating Leases	Finance Leases
Weighted-average remaining lease terms	4.5 years	2.0 years
Weighted-average discount rates	5.2%	3.9%

Future Minimum Operating Lease Payments

Future minimum lease payments under operating leases and finance leases as of April 30, 2021, are as follows:

	As of April 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
Years ending January 31,
2022(remaining 9 months)	$	7,554	$	6,795
2023	10,779		5,339
2024	9,879		2,331
2025	8,317		184
2026	7,855		—
Thereafter	2,452		—
Total lease payments	46,836		14,649
Less: amount representing interest	(4,956)		(645)
Less: leases less than 12 months	(167)		—
Total lease liabilities	$	41,713	$	14,004

Future Minimum Finance Lease Payments

Future minimum lease payments under operating leases and finance leases as of April 30, 2021, are as follows:

	As of April 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
Years ending January 31,
2022(remaining 9 months)	$	7,554	$	6,795
2023	10,779		5,339
2024	9,879		2,331
2025	8,317		184
2026	7,855		—
Thereafter	2,452		—
Total lease payments	46,836		14,649
Less: amount representing interest	(4,956)		(645)
Less: leases less than 12 months	(167)		—
Total lease liabilities	$	41,713	$	14,004

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Acquisition-Related Intangible Assets (Tables)

3 Months Ended

Apr. 30, 2021

Finite-Lived Intangible Assets, Net [Abstract]

Components of Identifiable Intangible Assets Included In Other Noncurrent Assets

The components of identifiable intangible assets included in other noncurrent assets are as follows:

	As of
	April 30, 2021		January 31, 2021
	(In thousands)
Developed technology	$	5,200	$	5,200
Customer relationships	2,976		2,976
Intangible assets, gross	$	8,176	$	8,176
Less: accumulated amortization	(2,998)		(2,663)
Intangible assets, net	$	5,178	$	5,513

Summary of Expected Future Intangible Assets Amortization

The expected future intangible assets amortization as of April 30, 2021 is as follows:

	As of April 30, 2021
	(In thousands)
Years ending January 31,
2022 (remaining 9 months)	$	1,005
2023	1,340
2024	1,340
2025	993
2026	300
Thereafter	200
Total future intangible assets amortization	$	5,178

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Employee Stock Plans (Tables)

3 Months Ended

Apr. 30, 2021

Retirement Benefits [Abstract]

Schedule of Shares Reserved for Future Issuance

As of April 30, 2021 and January 31, 2021, the Company was authorized to issue 1,750,000,000 shares of common stock. Shares were reserved for future issuance as follows:

	As of
	April 30, 2021	January 31, 2021
	(In thousands)
Outstanding stock options	6,236	6,600
Outstanding restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs")	9,789	8,558
Shares available for future issuances under the 2018 Stock Plan	26,692	21,564
Shares available for future issuances under the 2018 ESPP	5,152	3,717
Total	47,869	40,439

Summary of Stock Option Activity

A summary of stock option activity for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)			(In thousands)
Balance as of January 31, 2021	6,600	$	11.83	$	362,149
Options exercised	(357)	5.86		—
Options forfeited	(7)	6.26		—
Balance as of April 30, 2021	6,236	$	12.18	$	296,046
Exercisable as of April 30, 2021	6,087	$	11.80	$	291,293
Vested and expected to vest as of April 30, 2021	4,542	$	8.64	$	231,713

Summary of RSU Activity

A summary of RSUs and PSUs activities for the three months ended April 30, 2021, was as follows:

	Number of Shares	Weighted- Average Grant Date Fair Value
	(In thousands)
Balance as of January 31, 2021	8,558	$	37.15
RSUs and PSUs granted	2,280	61.98
RSUs and PSUs vested	(823)	32.62
RSUs and PSUs forfeited	(226)	44.03
Balance as of April 30, 2021	9,789	$	43.15

Summary of Stock-Based Compensation Expense, Net of Estimated Forfeitures

The stock-based compensation expense, net of estimated forfeitures, by line item in the accompanying condensed consolidated statements of comprehensive loss is summarized as follows:

	Three Months Ended April 30,
	2021		2020
	(In thousands)
Cost of subscription revenue	$	1,522	$	708
Cost of professional services revenue	831		508
Research and development	6,966		3,646
Sales and marketing	16,633		10,031
General and administrative	8,119		7,600
Total stock-based compensation expense	$	34,071	$	22,493

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Revenue Recognition (Tables)

3 Months Ended

Apr. 30, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use the Company’s cloud-based application:

	Three Months Ended April 30,
	2021				2020
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
	(In thousands, except percentage data)
Americas	$	71,254	55	%	$	60,070	58	%
EMEA	43,658		34		32,843		32
APAC	14,913		11		10,931		10
Total	$	129,825	100	%	$	103,844	100	%

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Net Loss Per Share Attributable to Common Stockholders (Tables)

3 Months Ended

Apr. 30, 2021

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

	Three Months Ended April 30,
	2021		2020
	(In thousands, except per share data)
Numerator:
Net loss	$	(51,491)	$	(39,602)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	144,161		136,362
Net loss per share attributable to common stockholders, basic and diluted	$	(0.36)	$	(0.29)

Summary of Potential Shares of Common Stock that were Excluded from the Computation of Diluted Net Loss Per Share

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:

	As of April 30,
	2021	2020
	(In thousands)
Stock options	6,236	9,802
RSUs and PSUs	9,789	10,184
Total	16,025	19,986

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Consolidated Balance Sheet Components - Schedule of Property and Equipment Net (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant, and equipment, gross	$ 130,922	$ 120,702
Less: accumulated depreciation	(75,860)	(69,099)
Property and equipment, net	55,062	51,603
Computer and office equipment
Property, Plant and Equipment [Line Items]
Property, plant, and equipment, gross	62,643	58,231
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant, and equipment, gross	14,337	14,055
Internal-use software
Property, Plant and Equipment [Line Items]
Property, plant, and equipment, gross	44,975	41,475
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant, and equipment, gross	$ 8,967	$ 6,941

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Consolidated Balance Sheet Components - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020	Jan. 31, 2021
Consolidated Balance Sheet Components [Line Items]
Depreciation expense	$ 6,600	$ 5,700
Internal use software capitalized	4,200	3,800
Share based compensation expense	34,071	22,493
Amortization of capitalized internal-use software	$ 2,600	2,100
Preferred stock, shares authorized (in shares)	25,000,000		25,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001		$ 0.0001
Preferred stock, shares issued (in shares)	0		0
Preferred stock, shares outstanding (in shares)	0		0
Internal-use software
Consolidated Balance Sheet Components [Line Items]
Share based compensation expense	$ 1,100	$ 1,000

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Consolidated Balance Sheet Components - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Vendor accruals	$ 10,600	$ 11,262
Accrued commission	8,622	12,521
Accrued bonuses	7,925	15,583
Accrued other payroll liabilities	36,864	31,238
Current portion of finance lease obligations	7,658	8,031
Accrued other	19,212	22,872
Accrued expenses	$ 90,881	$ 101,507

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Bank Borrowing - Additional Information (Detail) - Third Amendment - Wells Fargo - Revolving credit facility - USD ($)	1 Months Ended
	Apr. 30, 2020	Apr. 30, 2021	Jan. 31, 2021
Debt Instrument [Line Items]
Aggregate revolving credit commitment amount increase	$ 20,000,000.0
Credit facility maximum borrowing capacity	$ 60,000,000.0
Credit facility current borrowing balance		$ 0	$ 0
Fed funds effective rate overnight index swap rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
One-month LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%

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Leases - Components of Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Leases [Abstract]
Operating lease costs	$ 2,434	$ 2,852
Finance lease costs
Amortization of assets	2,570	1,785
Interest on lease liabilities	145	184
Total finance lease costs	$ 2,715	$ 1,969

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Leases - Schedule of Supplemental Balance Sheet Information Related To Leases (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Operating leases:
Operating lease ROU assets	$ 37,509	$ 33,985
Operating lease liabilities, current portion	8,561	7,951
Operating lease liabilities, net of current portion	33,152	30,130
Total operating lease liabilities	41,713	38,081
Finance leases:
Property and equipment, gross	32,041	29,132
Less: accumulated depreciation	(18,446)	(15,876)
Property and equipment, net	$ 13,595	$ 13,256
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property and equipment, net	Property and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses	Accrued expenses
Accrued expenses	$ 7,658	$ 8,031
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other noncurrent liabilities	Other noncurrent liabilities
Other noncurrent liabilities	$ 6,346	$ 5,761
Total finance lease liabilities	$ 14,004	$ 13,792

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Leases - Weighted-Average Lease Term and Discount Rate (Detail)	Apr. 30, 2021
Weighted-average remaining lease terms
Operating Leases	4 years 6 months
Finance Leases	2 years
Weighted-average discount rates
Operating Leases	5.20%
Finance Leases	3.90%

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Leases - Schedule of Future Minimum Lease Payments Under Operating Leases and Finance Leases (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Operating Leases, Years ending January 31,
2022 (remaining 9 months)	$ 7,554
2023	10,779
2024	9,879
2025	8,317
2026	7,855
Thereafter	2,452
Total lease payments	46,836
Less: amount representing interest	(4,956)
Less: leases less than 12 months	(167)
Total lease liabilities	41,713	$ 38,081
Finance Leases, Years ending January 31,
2022 (remaining 9 months)	6,795
2023	5,339
2024	2,331
2025	184
2026	0
Thereafter	0
Total lease payments	14,649
Less: amount representing interest	(645)
Less: leases less than 12 months	0
Total lease liabilities	$ 14,004	$ 13,792

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Leases - Additional Information (Detail) - Computer and office equipment $ in Millions	Apr. 30, 2021 USD ($)
Lease liabilities	$ 4.4
Lease payment term	3 years

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Acquisition-Related Intangible Assets - Components of Identifiable Intangible Assets Included In Other Noncurrent Assets (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 8,176	$ 8,176
Less: accumulated amortization	(2,998)	(2,663)
Intangible assets, net	5,178	5,513
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	5,200	5,200
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 2,976	$ 2,976

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Acquisition-Related Intangible Assets - Summary of Expected Future Intangible Assets Amortization (Detail) - USD ($) $ in Thousands	Apr. 30, 2021	Jan. 31, 2021
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2022 (remaining 9 months)	$ 1,005
2023	1,340
2024	1,340
2025	993
2026	300
Thereafter	200
Intangible assets, net	$ 5,178	$ 5,513

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Employee Stock Plans - Additional Information (Detail) $ in Millions	3 Months Ended
	Apr. 30, 2021 USD ($) shares	Jan. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares authorized (in shares) | shares	1,750,000,000	1,750,000,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation	$ 12.0
Unrecognized stock based compensation, weighted-average period	1 year 10 months 24 days
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock based compensation, weighted-average period	3 years
Unrecognized stock-based compensation cost related to outstanding unvested RSUs expected to vest	$ 293.5
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock based compensation, weighted-average period	2 years 2 months 12 days
Cost of nonvested award not yet recognized	$ 12.8
Performance stock units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount granted	0
Performance stock units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount granted	2
Performance stock units | Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	1 year
Performance stock units | Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	2 years
Performance stock units | Tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	3 years

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Employee Stock Plans - Schedule of Shares Reserved for Future Issuance (Detail) - shares shares in Thousands	Apr. 30, 2021	Jan. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance	47,869	40,439
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance	6,236	6,600
RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance	9,789	8,558
2018 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance	26,692	21,564
2018 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance	5,152	3,717

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Employee Stock Plans - Summary of Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2021 USD ($) $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	6,600
Exercised (in shares) | shares	(357)
Forfeited (in shares) | shares	(7)
Ending balance (in shares) | shares	6,236
Exercisable (in shares) | shares	6,087
Vested and expected to vest (in shares) | shares	4,542
Weighted Average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 11.83
Exercised (in dollars per share) | $ / shares	5.86
Forfeited (in dollars per share) | $ / shares	6.26
Ending balance (in dollars per share) | $ / shares	12.18
Exercisable (in dollars per share) | $ / shares	11.80
Vested and expected to vest (in dollars per share) | $ / shares	$ 8.64
Aggregate Intrinsic Value
Beginning balance | $	$ 362,149
Ending balance | $	296,046
Exercisable | $	291,293
Vested and expected to vest | $	$ 231,713

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Employee Stock Plans - Summary of RSU Activity (Detail) - RSUs and PSUs shares in Thousands	3 Months Ended
	Apr. 30, 2021 $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	8,558
Granted (in shares) | shares	2,280
Vested (in shares) | shares	(823)
Forfeited (in shares) | shares	(226)
Ending balance (in shares) | shares	9,789
Weighted- Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 37.15
Granted (in dollars per share) | $ / shares	61.98
Vested (in dollars per share) | $ / shares	32.62
Forfeited (in dollars per share) | $ / shares	44.03
Ending balance (in dollars per share) | $ / shares	$ 43.15

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Employee Stock Plans - Summary of Stock-Based Compensation Expense, Net of Estimated Forfeitures (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 34,071	$ 22,493
Subscription revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,522	708
Professional services revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	831	508
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	6,966	3,646
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	16,633	10,031
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 8,119	$ 7,600

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Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020	Jan. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers of assets from level 1 into level 2	$ 0	$ 0
Transfers of assets out of level 2 to level 1	0	0
Transfers of liabilities from level 1 into level 2	0	0
Transfers of liabilities out of level 2 to level 1	0	0
Transfers of assets into level 3	0	0
Transfers of assets out of level 3	0	0
Transfers of liabilities into level 3	0	0
Transfers of liabilities out of level 3	0	$ 0
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0		$ 0
Liabilities measured at fair value	0		0
Fair Value, Measurements, Recurring | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 252,400,000		$ 240,000,000.0

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Revenue Recognition - Summary of Revenue by Geographical Region Based of Customer (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Disaggregation of Revenue [Line Items]
Total revenue	$ 129,825	$ 103,844
Operating segments
Disaggregation of Revenue [Line Items]
Total revenue	$ 129,825	$ 103,844
Percentage of Revenue	100.00%	100.00%
Operating segments | Americas
Disaggregation of Revenue [Line Items]
Total revenue	$ 71,254	$ 60,070
Percentage of Revenue	55.00%	58.00%
Operating segments | EMEA
Disaggregation of Revenue [Line Items]
Total revenue	$ 43,658	$ 32,843
Percentage of Revenue	34.00%	32.00%
Operating segments | APAC
Disaggregation of Revenue [Line Items]
Total revenue	$ 14,913	$ 10,931
Percentage of Revenue	11.00%	10.00%

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020	Jan. 31, 2021
Total revenue	$ 129,825	$ 103,844
Contract assets	200		$ 300
Deferred revenue recognized	$ 107,300	$ 88,600
United States and United Kingdom | Minimum
Percentage of Revenue	10.00%	10.00%
United States
Percentage of Revenue	52.00%	56.00%
Total revenue	$ 68,000	$ 57,700
United Kingdom
Percentage of Revenue	12.00%	12.00%
Total revenue	$ 15,700	$ 12,000

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Revenue Recognition - Performance Obligation (Detail) - USD ($) $ in Millions	Apr. 30, 2021	Jan. 31, 2021
Remaining performance obligation	$ 832.3	$ 817.6
Billed revenues
Remaining performance obligation	$ 292.7	$ 295.5
Billed revenues | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-02-01
Remaining performance obligation percentage		51.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period		12 months
Billed revenues | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-05-01
Remaining performance obligation percentage	53.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Unbilled revenues
Remaining performance obligation	$ 539.6	$ 522.1
Unbilled revenues | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-02-01
Remaining performance obligation percentage		83.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period		24 months
Unbilled revenues | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-05-01
Remaining performance obligation percentage	84.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	24 months

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Income Tax Disclosure [Abstract]
Income tax expenses	$ 1,258	$ 1,022

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Net Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Numerator:
Net loss	$ (51,491)	$ (39,602)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares)	144,161	136,362
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.36)	$ (0.29)

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Net Loss Per Share Attributable to Common Stockholders - Summary of Potential Shares of Common Stock That Were Excluded From the Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - shares shares in Thousands	3 Months Ended
	Apr. 30, 2021	Apr. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were not included in the diluted per share calculation (in shares)	16,025	19,986
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were not included in the diluted per share calculation (in shares)	6,236	9,802
RSUs and PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were not included in the diluted per share calculation (in shares)	9,789	10,184

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Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201613Member