![]() That is an 18% increase in just 9 months. Consider that the number of customers who provided a recurring revenue of over $250,000 grew from 353 in January 2020 to 417 in October of 2020. Working with a growing company is always a good sign as to the quality and stability of their service. Anaplan is currently focusing on high growth. Anaplan’s future financial status is all but certain to change over time (in fact that’s what Anaplan investors are betting on since Anaplan is currently pre-profit). While what has been discussed above is useful in a stagnant world, ours is one of constant change and adaptation. Both of these expenses could probably be lowered if needed without much detrimental effect. Similarly, since companies pay regular subscription fees to Anaplan, sales and marketing are also more like investments to bring in new enterprises. The investment into R&D will improve Anaplan’s platform which directly positively affects you or your company. Research and development have grown however, R&D is more like an investment than a real cost when done correctly. First, general and administrative expenses have not grown considerably from prior periods. Within the operating expenses, there are also some very good signs. Anaplan maintains a high gross profit that has been consistently growing. As with many subscription services the cost of the subscription revenue is only a small fraction of the actual subscription revenue. Since 2019, the cost of revenue has scaled pretty closely with the total revenue. It is important to remember that Anaplan uses the now popular product as a service business model, which will justify many of its current expenses. A deeper dive into their income statement will show what factors are keeping them from being profitable. From the perspective of an Anaplan user rather than an investor, the latter option is very attractive as it adds funding without the need to take on potentially dangerous debt and there is little to no downside to someone who isn’t a shareholder risking dilution.Įven if Anaplan can stay afloat for a long time without turning a profit, unprofitable companies definitely can’t survive forever. ![]() To extend this runway they could always take on debt or issue more stock. While not the longest time, it is still a good sign as to Anaplan’s health. Assuming their net income stays about constant and barring all other current factors, Anaplan has about 2 years left before they run out of cash. Anaplan suffered a net loss in the 3 rd quarter of 2020 of about $37 million, higher than the 3 rd quarter of 2019 by $2 million. According to their quarterly report (10-q), Anaplan had about $297 million in cash and cash equivalents and no debt. You can find Anaplan’s actual financial reports and accompanying documents here.įirst, since Anaplan is a pre-profit company, it is important to know how much cash runway it has before more funding is needed. ![]() Now let’s take a look under the hood at the actual financials. While we are not looking into the potential profitability of an investment into Anaplan stock, it is always good to know that investors are confident in a company’s future. The stock’s performance is a very good sign as it means investors are very bullish about this pre-profit company’s future. Since it is a tech company, COVID-19 has not seemed to seriously hinder its accent. In this article, we will be taking a deep dive into Anaplan as a business and its financials to see if any worries are warranted.Īt the time of writing this, Anaplan stock (ticker: PLAN) has performed extremely well since its IPO debut in 2018. While many of us know what services Anaplan has to offer and how we can leverage them to maximize our business planning, we seldom think of the potential risks in using 3 rd party software as an integral part of our businesses and livelihoods as both model builders and end-users. Even though the average ROI is extremely high for Anaplan implementations, it would be a complete loss if Anaplan shut down services or went out of business. Professional Anaplan implementors spend hundreds of hours on Anaplan’s training courses. Companies often spend hundreds of thousands if not millions of dollars on their Anaplan implementations and upkeep. ![]()
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