10-Q 1 plan-10q_20190731.htm 10-Q plan-10q_20190731.htm

 

 

 

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 July 31, 2019

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

 

(I.R.S. Employer

incorporation or organization)

 

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(s)

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  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   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: 

 

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   

As of August 28, 2019, the number of shares of the registrant’s common stock, $0.0001 par value per share, outstanding was 131,827,778.

 

 

 

 


Table of Contents

 

TABLE OF CONTENTS

 

 


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Table of Contents

 

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. 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 Result of Operations” and “Risk Factors.” Forward-looking statements contained in this report include, but are not limited to, statements about:

 

our future performance, including our revenue, costs of revenue, gross profit or gross margin, operating expenses, deferred revenue, billings and remaining performance obligation;

 

our ability to sell our platform to new customers;

 

our ability to retain, and expand use of our platform by, our existing customers;

 

our ability to train our customers and partners to effectively utilize our platform;

 

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

 

our ability to maintain the security of our platform and comply with privacy laws and regulations;

 

our ability to maintain the availability of our platform;

 

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 adapt to rapid technological change;

 

our ability to expand our network of partners;

 

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

 

our ability to comply with modified or new laws, regulations and accounting rules applying to our business, including those concerning collection, processing, and storage of personal information;

 

anticipated income tax rates, tax estimates and tax standards;

 

the attraction and retention of qualified employees and key personnel and the rate of expansion and productivity of our sales force;

 

our anticipated investments in sales and marketing and research and development;

 

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

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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.

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PART I

item 1. Financial Statements

ANAPLAN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 

 

 

As of

 

 

 

July 31,

 

 

January 31,

 

 

 

2019

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

355,955

 

 

$

326,863

 

Accounts receivable, net of allowances for doubtful accounts of $590

   and $842 as of July 31, 2019 and January 31, 2019, respectively

 

 

81,835

 

 

 

92,597

 

Deferred commissions, current portion

 

 

19,936

 

 

 

15,827

 

Prepaid expenses and other current assets

 

 

17,315

 

 

 

13,377

 

Total current assets

 

 

475,041

 

 

 

448,664

 

Property and equipment, net

 

 

44,682

 

 

 

43,340

 

Deferred commissions, net of current portion

 

 

43,109

 

 

 

35,063

 

Operating lease right-of-use assets

 

 

37,726

 

 

 

 

Other noncurrent assets

 

 

1,910

 

 

 

1,702

 

TOTAL ASSETS

 

$

602,468

 

 

$

528,769

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,286

 

 

$

6,182

 

Accrued expenses

 

 

73,603

 

 

 

52,570

 

Deferred revenue, current portion

 

 

164,904

 

 

 

149,611

 

Operating lease liabilities, current portion

 

 

7,980

 

 

 

 

Total current liabilities

 

 

253,773

 

 

 

208,363

 

Deferred revenue, net of current portion

 

 

2,085

 

 

 

1,232

 

Operating lease liabilities, net of current portion

 

 

33,044

 

 

 

 

Other noncurrent liabilities

 

 

9,529

 

 

 

11,696

 

TOTAL LIABILITIES

 

 

298,431

 

 

 

221,291

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, par value of $0.0001 per share; 25,000 shares

   authorized as of July 31, 2019 and January 31, 2019; no shares

   issued and outstanding as of July 31, 2019 and January 31, 2019

 

 

 

 

 

 

Common stock, par value of $0.0001 per share; 1,750,000 shares

   authorized as of July 31, 2019 and January 31, 2019; 131,631

   and 126,246 shares issued and outstanding as of July 31, 2019

   and January 31, 2019

 

 

13

 

 

 

12

 

Accumulated other comprehensive loss

 

 

(1,007

)

 

 

(3,036

)

Additional paid-in capital

 

 

726,100

 

 

 

653,738

 

Accumulated deficit

 

 

(421,069

)

 

 

(343,236

)

TOTAL STOCKHOLDERS' EQUITY

 

 

304,037

 

 

 

307,478

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

602,468

 

 

$

528,769

 

 

The information as of January 31, 2019 was derived from the Company’s audited Consolidated Balance Sheet as of January 31, 2019.

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

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ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

July 31,

 

 

Six Months Ended

July 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription revenue

 

$

73,598

 

 

$

49,618

 

 

$

138,683

 

 

$

94,539

 

Professional services revenue

 

 

10,942

 

 

 

8,210

 

 

 

21,687

 

 

 

14,839

 

Total revenue

 

 

84,540

 

 

 

57,828

 

 

 

160,370

 

 

 

109,378

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription revenue

 

 

12,207

 

 

 

8,788

 

 

 

23,298

 

 

 

16,574

 

Cost of professional services revenue

 

 

10,300

 

 

 

7,171

 

 

 

20,786

 

 

 

13,417

 

Total cost of revenue

 

 

22,507

 

 

 

15,959

 

 

 

44,084

 

 

 

29,991

 

Gross profit

 

 

62,033

 

 

 

41,869

 

 

 

116,286

 

 

 

79,387

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

16,442

 

 

 

12,158

 

 

 

31,501

 

 

 

23,849

 

Sales and marketing

 

 

63,997

 

 

 

38,617

 

 

 

120,287

 

 

 

77,922

 

General and administrative

 

 

22,801

 

 

 

11,042

 

 

 

42,814

 

 

 

22,870

 

Total operating expenses

 

 

103,240

 

 

 

61,817

 

 

 

194,602

 

 

 

124,641

 

Loss from operations

 

 

(41,207

)

 

 

(19,948

)

 

 

(78,316

)

 

 

(45,254

)

Interest income, net

 

 

1,339

 

 

 

36

 

 

 

2,590

 

 

 

125

 

Other income (expense), net

 

 

548

 

 

 

(229

)

 

 

302

 

 

 

(640

)

Loss before income taxes

 

 

(39,320

)

 

 

(20,141

)

 

 

(75,424

)

 

 

(45,769

)

Provision for income taxes

 

 

(1,322

)

 

 

(907

)

 

 

(2,409

)

 

 

(1,460

)

Net loss

 

 

(40,642

)

 

 

(21,048

)

 

 

(77,833

)

 

 

(47,229

)

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

2,295

 

 

 

(126

)

 

 

2,029

 

 

 

(198

)

Comprehensive loss

 

$

(38,347

)

 

$

(21,174

)

 

$

(75,804

)

 

$

(47,427

)

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(0.31

)

 

$

(0.90

)

 

$

(0.62

)

 

$

(2.10

)

Weighted-average shares used in computing net loss per

   share attributable to common stockholders, basic and

   diluted

 

 

129,549

 

 

 

23,338

 

 

 

126,277

 

 

 

22,453

 

 

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

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ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

Stock

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

For the three months ended July 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 30, 2018

 

73,606

 

 

$

7

 

 

 

30,531

 

 

$

3

 

 

$

329,113

 

 

$

(2,054

)

 

$

(238,401

)

 

$

88,668

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

2,973

 

 

 

 

 

 

 

 

 

2,973

 

Repayment of promissory notes, net of early

   exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

 

 

 

14

 

Exercise of stock options, net of repurchases

   and early exercises

 

 

 

 

 

 

 

830

 

 

 

 

 

 

1,795

 

 

 

 

 

 

 

 

 

1,795

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,048

)

 

 

(21,048

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(126

)

 

 

 

 

 

(126

)

Balance at July 31, 2018

 

73,606

 

 

$

7

 

 

 

31,361

 

 

$

3

 

 

$

333,895

 

 

$

(2,180

)

 

$

(259,449

)

 

$

72,276

 

For the three months ended July 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 30, 2019

 

 

 

$

 

 

 

127,537

 

 

$

12

 

 

$

681,579

 

 

$

(3,302

)

 

$

(380,427

)

 

$

297,862

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

20,371

 

 

 

 

 

 

 

 

 

20,371

 

Repayment of promissory notes, net of early

   exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

3,297

 

 

 

 

 

 

 

 

 

3,297

 

Exercise of stock options, net of repurchases

   and early exercises

 

 

 

 

 

 

 

2,653

 

 

 

1

 

 

 

11,765

 

 

 

 

 

 

 

 

 

11,766

 

Vesting and settlement of restricted stock units

 

 

 

 

 

 

 

812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee

   stock purchase plan

 

 

 

 

 

 

 

 

 

629

 

 

 

 

 

 

9,088

 

 

 

 

 

 

 

 

 

9,088

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,642

)

 

 

(40,642

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,295

 

 

 

 

 

 

2,295

 

Balance at July 31, 2019

 

 

 

$

 

 

 

131,631

 

 

$

13

 

 

$

726,100

 

 

$

(1,007

)

 

$

(421,069

)

 

$

304,037

 

For the six months ended July 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 31, 2018

 

73,610

 

 

$

7

 

 

 

29,947

 

 

$

3

 

 

$

325,831

 

 

$

(1,982

)

 

$

(212,220

)

 

$

111,639

 

Conversion of Series B convertible preferred

   stock

 

(4

)

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

4,952

 

 

 

 

 

 

 

 

 

4,952

 

Repayment of promissory notes, net of early

   exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

236

 

 

 

 

 

 

 

 

 

236

 

Exercise of stock options, net of repurchases

   and early exercises

 

 

 

 

 

 

 

1,410

 

 

 

 

 

 

2,876

 

 

 

 

 

 

 

 

 

2,876

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,229

)

 

 

(47,229

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(198

)

 

 

 

 

 

(198

)

Balance at July 31, 2018

 

73,606

 

 

$

7

 

 

 

31,361

 

 

$

3

 

 

$

333,895

 

 

$

(2,180

)

 

$

(259,449

)

 

$

72,276

 

For the six months ended July 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 31, 2019

 

 

 

$

 

 

 

126,246

 

 

$

12

 

 

$

653,738

 

 

$

(3,036

)

 

$

(343,236

)

 

$

307,478

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

36,995

 

 

 

 

 

 

 

 

 

36,995

 

Repayment of promissory notes, net of early

   exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

11,454

 

 

 

 

 

 

 

 

 

11,454

 

Exercise of stock options, net of repurchases

   and early exercises

 

 

 

 

 

 

 

3,375

 

 

 

1

 

 

 

14,825

 

 

 

 

 

 

 

 

 

14,826

 

Vesting and settlement of restricted stock units

 

 

 

 

 

 

 

1,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee

   stock purchase plan

 

 

 

 

 

 

 

629

 

 

 

 

 

 

9,088

 

 

 

 

 

 

 

 

 

9,088

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(77,833

)

 

 

(77,833

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,029

 

 

 

 

 

 

2,029

 

Balance at July 31, 2019

 

 

 

$

 

 

 

131,631

 

 

$

13

 

 

$

726,100

 

 

$

(1,007

)

 

$

(421,069

)

 

$

304,037

 

 

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

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ANAPLAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended July 31,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(77,833

)

 

$

(47,229

)

Adjustments to reconcile net loss to net cash used in operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

9,073

 

 

 

5,437

 

Amortization of deferred commissions

 

 

8,761

 

 

 

5,166

 

Stock-based compensation

 

 

36,421

 

 

 

4,900

 

Amortization of operating lease right-of-use assets and accretion

   of operating lease liabilities

 

 

4,987

 

 

 

 

Loss on disposal of property and equipment

 

 

128

 

 

 

457

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

10,213

 

 

 

10,461

 

Prepaid expenses and other current assets

 

 

(4,093

)

 

 

1,924

 

Other noncurrent assets

 

 

(266

)

 

 

(2,777

)

Deferred commissions

 

 

(21,587

)

 

 

(12,634

)

Accounts payable and accrued expenses

 

 

23,364

 

 

 

8,423

 

Deferred revenue

 

 

20,529

 

 

 

9,388

 

Payments for operating lease liabilities

 

 

(4,790

)

 

 

 

Other noncurrent liabilities

 

 

(1,712

)

 

 

789

 

Net cash provided by (used in) operating activities

 

 

3,195

 

 

 

(15,695

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,603

)

 

 

(12,419

)

Capitalized internal-use software

 

 

(5,051

)

 

 

(3,379

)

Net cash used in investing activities

 

 

(6,654

)

 

 

(15,798

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

14,739

 

 

 

2,876

 

Proceeds from repayment of promissory notes

 

 

12,148

 

 

 

236

 

Proceeds from employee stock purchase plan

 

 

9,088

 

 

 

 

Principal payments on finance lease obligations

 

 

(2,382

)

 

 

(146

)

Net cash provided by financing activities

 

 

33,593

 

 

 

2,966

 

Effect of exchange rate changes on cash, cash equivalents, and

   restricted cash

 

 

(1,042

)

 

 

(1,541

)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS,

   AND RESTRICTED CASH

 

 

29,092

 

 

 

(30,068

)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning

   of period

 

 

326,863

 

 

 

117,026

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of

   period

 

$

355,955

 

 

$

86,958

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

443

 

 

$

6

 

Cash paid for income taxes

 

$

652

 

 

$

221

 

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND

   FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Increase in purchases of property and equipment included

   in liabilities

 

$

1,126

 

 

$

2,432

 

Finance leases for property and equipment

 

$

2,568

 

 

$

8,228

 

 

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

8


Table of Contents

 

ANAPLAN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Summary of Business and Significant Accounting Policies

Description of Business

Anaplan, Inc. (the Company or Anaplan) was incorporated in Delaware on July 9, 2009 and is headquartered in San Francisco, California, with offices in several locations including Minneapolis, New York, the United Kingdom (U.K.), France, Japan, Australia, India, and Singapore.

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 2020, for example, refer to the fiscal year ending January 31, 2020.

Principles of Consolidation

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, 2019 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 29, 2019.

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, the fair value of stock awards issued, the determination of the period of benefit for deferred commissions, the determination of the incremental borrowing rate used for operating lease liabilities, and the allowance for doubtful accounts. Actual results could differ from those estimates.

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 29, 2019. There have been no significant changes to these policies during the three and six months ended July 31, 2019, except as noted below.

9


Table of Contents

 

Leases

The Company adopted Accounting Standards Codification Topic 842 (ASC 842), Leases, effective February 1, 2019, using the effective date transition method, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. The Company elected certain practical expedients permitted under the transition guidance within the new guidance, which allows it to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. The Company also elected not to use the hindsight practical expedient in determining the lease term and impairment of the right-of-use (ROU) assets and elected to keep operating leases with an initial term of 12 months or less off of its condensed consolidated balance sheet. The Company elected not to separate lease and non-lease components for all classes of underlying assets. Adoption of the new standard had a material impact on the Company’s condensed consolidated balance sheets related to the recognition of ROU assets and lease liabilities for operating leases. The adoption had no impact on the Company’s condensed consolidated statements of operations or total cash flows from operations, but had an impact on the changes in operating assets and liabilities within operating cash flow.

The cumulative effect of the changes made to the Company’s condensed consolidated balance sheet as of February 1, 2019 were as follows:

 

 

 

Classification

 

Balance at

January 31, 2019

 

 

ASC 842

Adjustments

 

 

Balance at

February 1, 2019

 

 

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease assets

 

Property and equipment - net

 

$

14,227

 

 

$

 

 

$

14,227

 

Operating lease assets

 

Operating lease right-of-use assets

 

 

 

 

 

38,175

 

 

 

38,175

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current: