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Anaplan Inc (NYSE:PLAN)
Q2 2020 Earnings Call
Aug 27, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good morning. My name is Jessa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Anaplan's second-quarter fiscal 2020 earnings conference call. [Operator instructions] Ms.

Edelita Tichepco, vice president, investor relations, you may begin your conference.

Edelita Tichepco -- Vice President, Investor Relations

Good morning, and thank you for joining us on today's conference call to discuss Anaplan's second-quarter fiscal-year 2020 financial results. Joining me on the call are Frank Calderoni, our chief executive officer; and Dave Morton, our chief financial officer. On this call, we will be making forward-looking statements, including financial guidance and expectations for our third quarter and fiscal-year 2020, anticipated future operating and financial performance, strategies, customer demand, product and technologies. These statements reflect our best judgment based on factors currently known to us and actual events or results may differ materially.

Please refer to documents we filed with the SEC, including the Form 8-K filed with today's press release. Those documents contain risks and other factors that may cause our actual results to differ from those contained in our forward-looking statement. These forward-looking statements are being made as of today, and we disclaim any obligation to update or revise these statements. If this call is reviewed after today, the information presented during this call may not contain current or accurate information.

We'll also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. Unless otherwise stated, during the call, all references to our gross margins, expenses and operating results are on a non-GAAP basis. For historical periods, a reconciliation of GAAP and non-GAAP results is provided in the press release and in supplemental financial information on our website. We're planning for today's call to last approximately 45 minutes, and we will do our best to accommodate your questions following our prepared remarks if time permits.

And with that, I'll now turn it over to Frank Calderoni.

Frank Calderoni -- Chief Executive Officer

Thanks, Edelita. Good morning, everyone. I'm very pleased to share the results of another strong quarter. Our execution demonstrates the impressive progress we are making in scaling our business, continuing to accelerate our momentum and going after every opportunity to ensure we maintain our leadership in the connected planning space.

This quarter, we reached $85 million in revenue, growing 46% year over year. This confirms the strength of our connected planning platform and demand fueled by digital transformation taking place with many of our existing and prospective customers. We experienced success in a number of our strategic areas, including driving further customer adoption through a highly successful user conference held this past June and in elevating the user experience through the announcement of our new UI, mobility and intelligence platform. We are also seeing continued momentum with our customers, both existing and new.

Our new customer acquisition was strong, as we ended the quarter with over 1,250 total customers. We now serve approximately 300 customers with over $250,000 in annual recurring revenue, growth of 40% year over year. As a testament to the increasing awareness of the value of connected planning, we continue to see strength in our top 10 deals, which average well over $0.5 million. One of them was a multimillion-dollar deal with a Fortune 50 company, experiencing rapid growth and transformation.

This customer is investing in operational infrastructure to effectively manage scale, using Anaplan across several used cases within the sales organization. This is critical area for them and they plan to significantly grow their sales capacity over the next several years. We are also experiencing significant opportunity in supply chain as one of the growing areas where our platform is in demand from our customers. This quarter, we signed one of the largest retailers in Asia Pacific, with over 3,000 stores and 200,000 employees.

This leading retailer will use our platform to manage their assortment planning model, which handles over 150,000 SKUs across 100 different product categories and they will have the capacity to rapidly model new product introductions outside their existing transactional systems. This enables them to respond quickly to changing market demand, while remaining coordinated with the open-to-buy merchandise financial plan and transactional data. This example shows that more and more companies are focused on transforming their operational planning, driving agility and competitive differentiation in their sectors. From a go-to-market perspective, we continue to see strong contributions from our partner ecosystem with impressive results.

The number of partner transactions closed is increasing each quarter and the deal sizes are also expanding. For example, the average deal size of GSI-originated opportunities has grown steadily each quarter, from $100,000 a year ago to several hundred thousand dollars this quarter. In the U.S., Deloitte recently announced plans to double the number of consultants delivering Anaplan solutions over the next year. We also announced an alliance with Ernst and Young, adding to the partner ecosystem.

The EY alliance will focus on planning functions in the financial services, health, life sciences and consumer product industries. Our joint efforts with our partner ecosystem are clearly driving results and we are still only at the beginning of realizing the significant potential of what it will bring to our customers, partners and Anaplan. In EMEA this quarter, we landed a new account with a leading telco and network provider. Our partnership with Deloitte and the expertise with Anaplan and digital transformation were key to the customer's decision.

This customer is embarking on a finance digital transformation to drive agility and increase bottom-line results. They are moving from a legacy planning system with over 50 offline disparate models to Anaplan's single cloud-based planning platform. Over several hundred employees will use Anaplan to run driver-based scenarios that will enable them to more accurately forecast based upon changing marketing conditions and by leveraging MLAI technologies. Our BYOK high-end encryption capability will also ensure customer compliance, with increasingly regulatory requirements as the customer serves government agencies, military and emergency services.

This is a great example of how our joint Anaplan Deloitte team was able to provide unique value to our customer. In Japan, our partners are rapidly expanding their Anaplan practices and realizing significant growth in services related to advising and implementing Anaplan in their customer base. I was recently in Japan, where I met with a number of CIOs of large global Japanese companies. There are significant opportunities for us with our partners as Japanese companies are driving operational efficiencies.

They are digitizing their business processes and maturing their digital transformation efforts as they are trying to much more efficiently manage their resources. We are working closely with a great group of partners like Accenture, Deloitte, PWC, and Queenie in Japan, offering a complete end-to-end solution as a strategic competitive advantage. What really differentiates Anaplan is that once customers realize the ease of use of our platform and the quick adoption, which usually occurs within weeks, they get to experience incredible value. This helps them adapt, react, and pivot in a very disruptive and tumultuous time in their industry and we become the platform of choice.

Once they choose us, they quickly understand the power of the honeycomb effect. We are impressed with how our customers are immediately grasping the concept. We had a new customer create their own honeycomb within one week after selecting us due to the value of what they can create within our platform. They had 25 potential used cases just in our sales line of business.

We identified 24 additional used cases with a very large Fortune 50 company from their initial eight within operations, finance and HR. This included used cases, such as incident backlog planning, scheduling optimization, recruitment capacity and customer facing KPIs. During our most successful global user conference, our connected planning experience demonstrated the power of educating our end users on Anaplan experts. We are providing users with the expertise and knowledge to help them become even more successful.

We celebrated our best master Anaplanners at CPX, and we are pleased to announce that we now have over 300 certified master Anaplanners. We are adding expertise and leadership to our fast-growing Anaplanner community and expect to substantially accelerate the number of certified master Anaplanners. A trend we noticed is that the more experts we create, the greater adoption and broader use of our platform. Several years ago, we launched this concept referred to as the center of excellence or COE.

The purpose of a COE is to make sure transformational business planning is fully realized and self-sustaining. COEs are our customers internal teams to dedicate and maintain and expand Anaplan. The number of customers with the CEO is growing, and we continue to invest in scaling this further through our internal enablement efforts and the customer-facing self-surface resources published on our community site. Customers with certified master Anaplanners generate more ACV than customers without, a multiply, which is increasing over time.

And we found that customers with both a certified Master Anaplanner and a standard of excellence generate over five times more ACV than those with neither. We are also being recognized externally by industry analysts. IDC recently published their annual report, worldwide enterprise performance management application software market share, where Anaplan was listed as the first industry shapper. We were recognized with the fastest growth rate among the top 10 players.

We were also named a leader in the Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions of differentiation for a third consecutive year because of our proven enterprise readiness, intelligent planning capabilities and high customer satisfaction. From a product perspective, this quarter we announced our new platform user experience and new mobile app. The new modern user interface includes highly customized views and reports that facilitates personalized experiences for every user of the platform and our workflow improvements include guided experiences for quicker execution. Finally, the mobile app enables decision-making on the go, taking planning from behind the desk and moving it to the field and frontlines of the business, our goal was to further increase efficiencies around planning processes and extend the reach of the platform.

Finally, we are very excited to announce that we have signed an agreement to acquire Mintigo, an Israeli-based company with an AI-powered customer engagement platform that provides predictive analytics for marketing and sales. Mintigo brings strong expertise in data science and machine learning automation. Mintigo's exceptional talent will strengthen our position as a leader in the category of connected planning by augmenting and elevating the predictive capabilities of our solutions, while accelerating toward our vision for an AI-enabled platform. We also believe the Mintigo team is very well aligned with our culture.

We expect to complete this transaction by the end of the quarter subject to closing conditions. We are very excited about this moment in time for Anaplan. Since our IPO last fall, the momentum in our business has been extremely consistent, reinforcing the value and market demand for connected planning. We are hitting our product and operational milestones and I am feeling very confident with the way we are executing as we continue to grow very quickly.

We have built a world-class leadership team, including the recent addition of Mark Anderson as our chief growth officer. And with the acquisition of Mintigo, we will leverage their talent and technology to enhance our predictive capabilities across the Anaplan platform. We wouldn't be here without our investors, employees, partners and customers. I thank everyone who continues to be very supportive of our mission as we believe we are in the early stages of Anaplan's long-term success.

Now let me turn the call over to Dave, who will discuss our second quarter financials and outlook for the third quarter and fiscal-year 2020.

Dave Morton -- Chief Financial Officer

Thanks, Frank, and good morning, everyone. We delivered strong results and executed our plan for the second fiscal quarter. Revenue grew 46%, and within this, subscription revenues accelerated, growing 48% year over year and comprised 87% of total revenue. Service revenues were $11 million, up from $8 million in the second quarter last year.

Calculated billings of $89 million grew 46% year over year. To the extent we experience any significant impacted FX, we will provide this amount to provide a better review into our business momentum. This quarter, given the fact that we do have some exposure to the GDP and with its recent volatility, we saw a 400-basis-point FX impact to calculated billings this quarter. Taking this into account, our calculated billings would be 50% on an adjusted basis.

Our remaining performance obligations or RPOs, represents the total booked or signed business within a quarter and we believe this provides a more accurate commercial view into the underlying momentum of our business. We exited the second quarter with RPOs of $516 million, up 56% over last year and representing continued acceleration at scale compared to last quarter's year-over-year growth rate of 53%. This is also the highest quarterly growth rate we have achieved in RPOs over the past eight quarters, reflecting the strength we're seeing across the entire business from new customer acquisitions to large deal momentum and customers beginning to expand their business with us on an accelerated basis. Highlighting results from some additional key metrics.

Our dollar-based net expansion rate or NRR was 121% and continues to track above 120%, underscoring our success and retaining and steadily expanding business with our existing customer base. In some cases, we're seeing customers expand on an accelerated basis, or sooner than the 12 months, driven by the growing awareness and value of enterprise connected planning. In these situations, our reported NRR does not fully capture these accelerated expand deals since the standard NRR calculation is based on a one-year look back. For the second quarter, the accelerated expand deals represented an additional 430 basis points in growth, taking this into account, our NRR would be 125% on an adjusted basis.

We also continue to serve a growing base of customers with over $250,000 in annual recurring revenue, which this quarter was approximately 300 customers, up from 213 customers this time last year. And within this, the number of customers over $1 million in annual recurring revenue grew 80% compared to the same period last year. Turning to our profitability metrics for the second quarter, total non-GAAP gross margin was 75%, up 240 basis points on a year-over-year basis. Within this, subscription gross margins were 84%, up 200 basis points year over year and service gross margins were approximately 12%, down 180 basis points year over year.

Total non-GAAP operating expenses were $80 million, up from $59 million in the prior period. Year-over-year growth and spending was primarily driven by strategic go-to-market investments, and as mentioned on our last earnings call, second quarter operating expenses include costs associated with our annual user conference held in June. We continue to drive leverage in our financial model through productivity from the investments we have made over the past 18 months. Operating margins of negative 19.7% improved approximately 10 percentage points, compared to negative 29.3% in the same period last year.

We are demonstrating significant progress we're making toward our financial objectives on productivity and profitability. Our unit economics are healthy with LTV to CAC of five times, contribution margins at 60% after year two and payback periods of less than 24 months. Net loss per share in the second quarter was $0.12 based on 130 million weighted average shares. Free cash flow, which is cash flow from operations less capital expenditures for the second quarter was positive of $1.5 million.

We ended the second quarter with $356 million in cash and cash equivalents. For the third quarter of fiscal 2020, we expect total revenue to be in the range of $85.5 million to $86.5 million and the non-GAAP operating margin to be in the range of negative 19% to negative 20%. Weighted average share count for the third quarter is expected to be 133 million shares. For the full fiscal 2020, we are raising our revenue and operating margin outlook driven by the second-quarter performance and the ongoing strength we see in our business.

For the full year, we expect total revenue to be in the range of $339 million to $343 million. As previously stated, calculated billings can fluctuate from quarter to quarter, impacted by timing of renewals and transactions, however, we believe billing is to track in line with overall revenue growth rates. We also expect RPOs to track in line with overall revenue growth rates and our net dollar expansion rate to remain above 120%. Non-GAAP operating margin is now expected to be in the range of negative 19.5% to negative 20.5%.

Weighted average share count for the full year is expected to be approximately 130 million shares. In summary, we drove excellent operating results in the second quarter, with strong continued top-line growth and improved leverage in our business model. We're entering the second half of the year with significant momentum in our business as we're increasingly being viewed as a key strategic partner to our enterprise customers, helping to drive greater value and agility in how health company's run their business in a rapidly changing market. With that, we will now turn it back to the operator to take your questions.

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of Sarah Hindlian from Macquarie. Please go ahead.

Sarah Hindlian -- Macquarie Research -- Analyst

All right. Great. Thank you very much, and appreciate you giving us the impact of FX on the billings numbers as well, that was helpful. One thing I really wanted to hear little bit more about from you guys is your partnership with AWS.

And maybe you can talk about the forecasting tool they released last week and how we should think about that? And how it plays into the planning ecosystem?

Frank Calderoni -- Chief Executive Officer

Sarah, this is Frank. Good morning.

Sarah Hindlian -- Macquarie Research -- Analyst

Good morning.

Frank Calderoni -- Chief Executive Officer

I'll start by just talking about technology partnerships in general. I think we're in the fortunate position at Anaplan, where the platform that we've begun to create around connected planning is attracting a significant amount of attention with other technology companies wanting to partner with us in so many different areas. And I think that bodes well not only for Anaplan, but I think it helps build the ecosystem that allows our customers to really leverage now and in the future.As it relates to AWS and the forecast, I'm not sure if you recall, but some of you attended our event back in September -- I'm sorry, back in June in San Francisco, our customer experience, we had Amazon and the team from Seattle that's been working on the forecast do a demo of the product in front of our customers and partners. I think that was a great showcase, looking at the statistical modeling or I should say, the statistical activity that they've created and how it connects into our platform.

So it's a good example of a partnership with AWS in this case on behalf of customers to really continue to leverage technology that they're delivering, in this case, it's kind of ML statistical modeling, in with the platform that we have for our customers.

Sarah Hindlian -- Macquarie Research -- Analyst

All right. That's very helpful. And just a quick follow-up on the financial side. Looking at the growth in total RPO and it looks like your bookings were up over 63% year over year, I'm wondering if you could help us a little bit with understanding the mix of current and total within RPO?

Dave Morton -- Chief Financial Officer

Yes. We look at our current for the remainder of the fiscal year. And so that number will be approximately $150 million on the current basis, and remember, that's just over a six-month window.

Sarah Hindlian -- Macquarie Research -- Analyst

All right. That's terrific. Thank you so much.

Operator

Your next question comes from the line of Michael Turrin from Deutsche Bank. Please go ahead.

Michael Turrin -- Deutsche Bank -- Analyst

Hey, there. Thanks. Good morning. I was hoping we could go back to the expansion rate.

So I wanted to revisit that calculation you provided to get to the adjusted 125%. And then just been thinking about that metric going forward, you still sound confident in that 120-plus percent range. Can we just talk a bit more around what it is you're seeing that provides that level of confidence?

Dave Morton -- Chief Financial Officer

Yes. Michael, this is Dave. I'll talk about just the generalities of the calculation itself and then Frank can talk about just some of the customer expands we've seen. And so if you think about the calculation itself, it really blocks out your current year.

So you get without this 12-month look back. And so if we're doing expands sooner within our own ecosystem, call it, three months, six months, nine months, in theory, you're not getting the credit for your NRR. And so for our case, as not only our cohort of our ARR this year has grown almost five times if you compare it to a cohort going back to like 2015, so you had a reacceleration of that ARR, as well as we're seeing expands happening a lot quicker within our ecosystem. And so that's why we called it out in this instance as we'll do so on certain metrics episodically, just so you can understand some of the business momentum that we're seeing here.

Frank Calderoni -- Chief Executive Officer

Michael, last quarter we called out the honeycomb, and I think it's getting a life of its own, I think just in general but also with customers as you saw earlier on the call, I mentioned that we're having customers now use the honeycomb approach to really start to think aggressively about how they can leverage the value that they're getting from the platform. I mentioned about the customer just this past quarter that within a week they started creating their own honeycomb and really driving a large number of used cases. That's allowing for larger expands and faster expands. And that momentum has been the case for the last two quarters, Q1 and Q2.

And I'm anticipating based on what we see those customers doing that that will continue. I wanted to just throw out some other data just to kind of give you a perspective of the value that we're seeing from customers and what it means to Anaplan. If you think about the top 25 customers, the average ARR as of the end of the second quarter is now over $3 million and that's seven times higher than the initial ACV. So it illustrates customers that are starting on their journey.

They're aggressively move forward with their expansion of Anaplan. The top 10 customers, the average ARR is getting close to $5 million, it's $4.7 million, and that continues to increase each quarter, which is good to see. And then as we said on the call earlier, the average size of the top 10 deals in the quarter alone were over $500,000. So I think it's showing that the connected planning ecosystem within customers and across customers continues to be very positive.

Michael Turrin -- Deutsche Bank -- Analyst

I always appreciate those extra data points. May be just a quick follow-up. Congrats on the addition of Mark Anderson. Any sense of key focus areas and responsibilities for that role? And what his skill set specifically brings to help enhance your own go-to-market efforts?

Frank Calderoni -- Chief Executive Officer

We're really excited about Mark joining the team. He's been on board now for a couple of weeks. I think we all know Mark, he is highly regarded, he has an experience operating executive. What I like about Mark and I have known him for a while is, he's operated in a similar environment to what we have here two times before, so he brings that experience in a time for Anaplan as we're thinking about growing our business and scaling it above $1 billion, it provides a significant amount of leverage, experience for the sales team as we continue to expand.

His focus, as you would expect, is going to be focused on really building talent, helping us continue to refine our processes so we can improve our efficiency and then focusing on where else we're going to make our investment as we continue to scale.

Michael Turrin -- Deutsche Bank -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Heather Bellini from Goldman Sachs. Please go ahead.

Heather Bellini -- Goldman Sachs -- Analyst

Great. Thank you. I just wanted to ask a little bit about linearity in the quarter. Was interested in what you saw and if it was any different than what you expected? And also from a competitive perspective, now the Workday has owned Adaptive for a year, I guess a couple of questions there.

Are you seeing that more in RFPs? I'm also -- could they actually be helping to drive even more RFPs in the market than maybe what you used to see just given the number of sales people they have? And how would you say your win rate versus them has been trending?

Dave Morton -- Chief Financial Officer

Yes. Heather, this Dave. I'll take the first part of the question just on the linearity for the quarter and then Frank will address some of the competitive landscape overall. In regards to this quarter, very much like the previous quarters, we've just seen a continued momentum as we started the quarter with a good amount of pipeline, great visibility into that, not only from the ecosystem of our AEs on the ground but also through our strong partner economy, if you will.

And so all through the quarter, things worked really well for us and we continue to be very disciplined in how we continue to go-to-market and drive the respective productivity measures across our whole enterprise.

Frank Calderoni -- Chief Executive Officer

So Heather, on the competitive environment, no change this quarter. Similar to what I said before, I think we have again a unique enterprisewide planning approach, which enables our customers, as I talked about a few minutes ago, to really think about the platform more extensively within a function and even across the enterprise, which no one really comes any close to matching. And as we continue to have, I would say, larger lands, faster expands it illustrates that importance of Connected Planning. And it puts us in a very favorable position versus competition.

So again, really no change. We have a very high success rate. Our strategy is to sell high in the organization, make it focus more on a transformational direction, finance transformation, digital transformation, supply chain transformation and when we can do that, especially when we're partnering with a Deloitte, Accenture and so forth, that allows us to really have a very winning formula. The other thing I would just put out there as it relates to not so much competition but it goes back to one of the examples I provided earlier, when you think about, especially in the finance organization, a lot of the legacy applications that finance organizations have has been around for at least a decade or two.

And we're finding that many customers are looking for alternatives to really kind of move off of those legacy applications and that provides us -- if you think about the inventory that's out there, it does provide us with a tremendous amount of potential as we think about the next couple of years.

Heather Bellini -- Goldman Sachs -- Analyst

OK. Great. And just one more for Dave, if you don't mind. Just given your exposure of nearly 40% of revenue outside the U.S., can you share with us kind of any thoughts on how we should be thinking about deferred revenue trends for the upcoming quarter given that you have a couple of results this quarter, like is there any commentary you want to share about how we should be thinking about sequentially the deferred revenue balance?

Dave Morton -- Chief Financial Officer

Yes. On the FX, look, we -- at the end of the day, a lot of volatility came from the last month in July, specifically. And so as it relates for us thinking about our business model going forward, we should see relatively minimal impacts. But as far as deferred revenue and any additional narrative on that, I would call it de minimus as we think about how we continue to scale.

Heather Bellini -- Goldman Sachs -- Analyst

OK. Thank you.

Operator

Your next question comes from the line of Brent Bracelin from KeyBanc Capital Markets. Please go ahead.

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Thank you. One for Frank and one for Dave, if I could. Frank, obviously, strong quarter here, accelerating subscription growth, accelerating kind of RPO growth. I guess my question really is less about the growth profile of the business that's very strong and wanted to drill down into the acquisition strategy, the broader M&A strategy.

Mintigo, isn't obvious from a marketing software perspective relative to kind of the fit and I get supply chain, I get sales, I get finance transformations but it's a little less obvious to me the fit for Connected Planning and marketing. So could you just talk about Mintigo, the product fit? What got you excited about that opportunity? And the new used cases you're looking there? And then could you just touch on the broader M&A strategy, given it's just kind of the first acquisition you make here as a public company?

Frank Calderoni -- Chief Executive Officer

So good question, Brent. So the first thing I would say and I think for those of you who attended our CPX back in June can attest to -- and even goes back to the question we got from Sarah earlier about the Amazon Forecast. Customers are constantly looking at ways to improve as they think about the future and they try to model the future, they're thinking about ways to better forecast, right? Get closest to the pen, especially with the dynamics that are going on in the world and especially in some of the industries that our customers are in. So it forces them to be much more on top of their business and an ability to react.

So we've been working now probably for a good year and a half with very large customers that have been with us for now two years plus on thinking of ways, so working with ways with them and we've done some POCs to think about how they can better protect from a forecasting perspective, and bringing in some of these AI, ML type of capabilities as I mentioned with Amazon Forecast. We've worked with some other technology partners to be able to do that and we'll continue to do that. One of the things that we've done as a result of the -- let's say the POCs that we've had with customers, is it requires certain skill, right? From a data scientist perspective. And so as we look out the landscape, there are a lot of companies that are working on AI ML and so we don't intend to be specifically in that business.

But we do see the alignment into our platform. We want our platform to capture whatever technology is best for our customers. Bringing in Mintigo, we were very impressed with the talent that the team has. They're based in Israel, as we said on the call.

And they've got a team in several places in the U.S. as well. And that talent is the area that we are most interested in. Bringing the team on, accelerates our ability [Audio gap] with the POCs but extends the amount of AI-enabled opportunities that we work with our customers on.

So that was the primary objective for doing that. They have been focused in the sales and marketing areas, we're focused clearly much broader when we think about our portfolio. So we want to leverage their skill, the data scientist skill so that we can do more on behalf of our customers from an AI enablement within our platform.

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Got it. Very helpful color there and it's very clear with the strategy. I guess Dave, my follow-up for you is, looking just at free cash flow, I kind of double checked my number there, looks like you guys generated positive free cash flow for the first time in history of the company. So walk me through, are we at the point now where you can balance hyper growth and positive free cash flow or whether some kind of onetime items that you had a benefit there that we should not think about that going forward?

Dave Morton -- Chief Financial Officer

Yes. Look, we're still on an investment mode, and so I don't want to false side any expectations will be free cash flow positive from here on out. With that said, we're very judicious and good stewards of the investments we're making. We did have very good working capital management this past quarter and will continue to do so.

But with that said, we're still investing in all the opportunities as Frank and I had narrated on this morning.

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Got it. Very clear. Thank you.

Operator

Your next question comes from the line of Richard Davis from Canaccord. Please go ahead.

Richard Davis -- Canaccord Genuity -- Analyst

Hey, thanks. Just one comment. So it sounds like Mintigo, I just want to make sure I get that straight, it's kind of like an on-ramp to help your customers ingest more data, so that's one. And then the second one is, on kind of your sales go to motion.

You guys are really good at FP&A, that's oftentimes where you land. But have you -- how do you think about kind of evolving the go-to-market sales motion? Right now, at this point, if I'm a salesman and I get the client, am I also in charge of doing the upsell or the cross-sell into sales ops and supply chain? Or is this something that I handoff to the customer success team? And/or how do you see that evolving?

Frank Calderoni -- Chief Executive Officer

Sure. So as far as the -- first, I wouldn't say it's a data ramp as far as Mintigo. Look at Mintigo as a group of very talented engineers that are going to be added on to our team for us to do more than what we've currently been doing to really accelerate the ability to bring AI into our platform for our customers. More so, I wouldn't look more than what we just said.

As it relates to -- its not getting into anything with Big Data or anything associated with that. It's to get a core group of engineers that are helping us from a data science standpoint do more than what we've currently been able to do so we can faster ramp some of these capabilities that our customers are working with us on. As far as the land and expand, the sales team that we continue to expand or grow I should say rather than kind of get into that is responsible for the land. There out there hunting for new opportunities with customers.

They also manage the account and so they also are part of if you want to call it the honeycomb or the connected planning journey with those customers. They partner with our customer success team. So the customer success team is assigned a certain account. They work with those customers.

They work with the COEs that I mentioned before or the master Anaplanners that are within the customers that we continue to encourage our customers to invest in. And they continue to map out that journey and that honeycomb on a day-to-day basis, they align with the AE, the account executive, and they both work on the expands as appropriate for the customer. And then just layering on that, you also have a partner. So if a partner is working on, let's say, a transformational project, finance transmission, supply chain transformation, they are working with the customer with their consultancy to think about the longer-term journey and we kind of align in with that with the AE and the BP on the customer's sell side to make sure that we have a seamless roadmap on behalf of the customer.

Richard Davis -- Canaccord Genuity -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Terry Tillman from SunTrust Robinson. Please go ahead.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Yes. Thanks for taking my questions. I guess, first, yes, the user conference, it was great. Now the weather was a little hot, but yes, one of the things I enjoyed was just hearing from...

Frank Calderoni -- Chief Executive Officer

Hot is good, hot is good, especially in San Francisco. Sorry, I'm sorry.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Yes. No, it's OK. But I'm curious with the partner ecosystem, how often are they actually building IT or building third -- or apps that they can go monetize, like the Deloitte example. And I wanted to then touch on that specifically with assortment planning.

How meaningful is that now because they were actually talking at the analyst event about the excitement they saw with that?

Frank Calderoni -- Chief Executive Officer

Yes. So now that these partners Deloitte, Accenture, Wipro, even some of the others as well, they're investing in Anaplan in their Anaplan practice as far as bringing on like consultancy experience around Anaplan's platform. What they're now trying to do so they can enhance their go-to-market but also go out and reach for new customers, new clients, but also offer existing customers examples of where they can do more with Anaplan is they are creating solutions. I would say in the last 6 months alone, the large partners have developed unique solutions that they go-to-market with, not just one or two, they're in the point of offering three, four, or five.

They continue -- we just had a quarterly business review of one of the partners last week, and they talked about how they're using their in-house consultancy practice to bring customers or clients in to showcase some of those solutions and talk to them about implementing those solutions. So that's continuing to expand. Some of them are available on our app hub, probably the less sophisticated ones, and others become more generally available or they may be more specific to a particular partner based on their proprietary IP or anything else that may come into the equation from that standpoint. So a good traction.

We continue to see that advancing as we think about the next couple of quarters.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Yes. I just had a quick follow-up, that with your chief growth officer addition, like is there any low-hanging fruit or any kind of early initial kind of initiatives he may be focused on? And which you think about as it relates going into next year?

Frank Calderoni -- Chief Executive Officer

Just the whole -- everything that we've been working on from the standpoint of growth, that's why we called in a chief growth officer continue to drive the expands with existing customers and look for ways of expanding the territory in some of the greenfield opportunities that we have in all geographies. And that's Mark comes in, he does a lot of outreach. He's very good at that, he listens, and he's starting to calibrate right now kind of the path forward, which is perfect.

Operator

Your next question comes from the line of Kirk Materne from Evercore ISI. Please go ahead.

Kirk Materne -- Evercore ISI -- Analyst

Yes. Thanks very much and congrats on the quarter. Frank, I was wondering could you just -- or maybe Dave, could you guys just talk a little bit about the makeup of sort of where the lands are coming from sort of a functional perspective, whether it's sales, finance? And if that's changing at all, meaning I'll be curious to see if you're gaining traction in any sort of new area whether it might be supply chain. Just -- I know you're not going to provide anything quantitatively, but maybe qualitatively, if you can walk us through what you're seeing on that front?

Frank Calderoni -- Chief Executive Officer

So if you step back and look at overall, we're about 60% financed and then 40% outside of finance. That's an average. I would probably say it's inching up, meaning the 40% is probably getting a little larger. And the reason for that is, we're seeing a significant number of opportunities.

I mentioned on the call earlier that supply chain continues to be an area of interest of our customers. Last quarter, I mentioned supply chain across cosmetic industry customers, across spirit industry customers has been significant, we're now saying that expand into other industries as well, CPG and so forth. We have -- if I think back over the past quarter and I look at areas where we've made some further investment in talent, I would have to say it's in supply chain. Working on these opportunities, we tend to work with partners that have expertise in supply chain and we've also added to our own bench of supply chain experts and I have to say, we've been very successful in the last couple of weeks, attracting some really good talent to kind of work on this.

So I'd say supply chain. The other area that I mentioned in more broadly is workforce planning. Because when you think about -- most companies now are dealing with managing their resources more efficiently. They have large numbers of resources, if you look at some of the cost metrics, they're trying to drive efficiency.

And so therefore there's much more attention to workforce planning across the enterprise. I think in the past, workforce planning has been something that was looked at within, let's say, finance or within HR. Now it's been looked at in all parts of the business and so workforce planning used cases that we've seen across different industries have kind of expand looking at how best do I leverage my resources from a portfolio standpoint across the enterprise. And so we're very helpful in working with partners and customers along that path.

Kirk Materne -- Evercore ISI -- Analyst

Any sort of touch on this and it maybe ducktails on it a little bit with Terry's earlier question about partners. But when you partner up with a big SI, are you partnering from a functional perspective or is it more across your product suite, meaning is a big partner coming in and partnering with you really from a financials perspective and then expanding from there? Or I guess how is that evolving too because it's multidimensional in some respects. I was just kind of curious how that's working.

Frank Calderoni -- Chief Executive Officer

Yes. So the larger partners like a Deloitte or Accenture are going to work with us across the enterprise. They're very strong in the transformational projects that stand multifunction. When you start getting into, let's say, some of the boutique firms, they tend to have a specialty in a specific area, some have specialties in finance and so we'll work with them on that.

Others, as I said a few minutes ago, have specialties in supply chain. And sometimes -- and I'm looking here at -- just -- I brought this in this morning as far as just looking at some of the major expands that we had the past quarter and as I look across, I start to see kind of a mixture of partners. Right? Where you'll have a larger Deloitte or Accenture doing a transformational and then you have in addition a little bit more expertise that may come from some of the boutiques. And so we do see sometimes a combination of one or two partners working together.

Kirk Materne -- Evercore ISI -- Analyst

Thanks very much.

Operator

Your next question comes from the line of Stan Zlotsky from Morgan Stanley. Please go ahead.

Hamza Fodderwala -- Morgan Stanley -- Analyst

Hi. This is Hamza Fodderwala in for Stan Zlotsky. So you mentioned the currency impact out of the U.K. earlier.

You do have about 40% of your business from -- coming internationally. Just from a fundamental macro standpoint, are you seeing any pockets of weakness in either Europe or Asia Pac, either stemming from the trade tensions or some of the recessionary fears in Europe? And the second question is, to what degree was FX a headwind to revenue growth in Q2? And your expectations for the full year?

Frank Calderoni -- Chief Executive Officer

When you look at the whole topic of digital transformation, which I think is an area of expertise for us, we have not seen any change and if I think about it in various industries or various geographies. So consistently across those industries and across those geographies, we've continued to see strength. I can't really identify any weakness as I think back over the last couple of months and I have traveled, I've been in Europe, I've been in Asia Pacific, I mentioned about my trip to Japan which I came back like on cloud nine, just understanding and appreciating what the Japanese companies, global companies are thinking about, specifically in supply chain but even more broadly than that as they aggressively trying to digitize. So no, it's -- I've seen strength in all our markets and that seems to continue based on some of the trends that we're seeing across the board.

Dave Morton -- Chief Financial Officer

Yes. And just on the FX for the top line revenue, to Frank's point, we look at it as just opportunities for the overall digital transformation. We really don't want to start narrating on a constant currency basis headwind because we actually view it as all opportunity as we continue to go forward. So I'll just say it was de minimis and the only reason we provided the other color was just to show the continued business momentum in our results for this past quarter.

Hamza Fodderwala -- Morgan Stanley -- Analyst

OK. Thank you.

Operator

We have time for one last question. Your last question comes from the line of Pat Walravens from JMP Securities. Please go ahead.

Pat Walravens -- JMP Securities -- Analyst

Great. Thank you, and congratulations. I was wondering if we could talk about how long sales cycles are maybe in the upper market versus the middle market? And then also, I'm guessing they've been shortening, but just love to hear any commentary in terms of sort of what the trajectory has been for them?

Frank Calderoni -- Chief Executive Officer

So as you continue to expand and focus on sales team and the extension that we've had over the past year, I'd say, cycles are improving as we get more talented people, as we continue to support that talent with partners, as well as with various other support teams that we have in place. I would say that a couple of steps I'd put, over half of our reps are still ramping. Let's say if I look back at the ramping reps, just some stats as far as you're showing some of the efficiency, half of them have closed deals in the quarter, so those that are still ramping and as we continue to add reps, that's a good sign as far as just showing some productivity. They don't have go through the whole ramping process in order to produce results, which is a good sign.

We're seeing a significant number of ramped reps perform this quarter, which is continuing to improve quarter after quarter. So I like the productivity improvement, it goes back to some of the stats that Dave was talking about before when we talked about RPO but also when we talked about LTV to cash. And things from that perspective. And I think as I mention now at least once or twice on the call, with Mark on board and the amount of experience that he has and similar types of ramping organizations, he's going to be another level of expertise to this.

So I'm expecting that to improve even further. So good results across the board, ramped reps, ramping reps and we continue to bring new on and we're accelerating that pace going forward.

Pat Walravens -- JMP Securities -- Analyst

That's great. Thank you.

Operator

Mr. Calderoni, I turn the call back over to you for closing remarks.

Frank Calderoni -- Chief Executive Officer

I want to thank everyone for joining the call today. We look forward to continued dialogue at various events that we have coming up and also as we report our earnings next call, next quarter. Thank you very much and appreciate your time and support.

Operator

[Operator signoff]

Duration: 53 minutes

Call participants:

Edelita Tichepco -- Vice President, Investor Relations

Frank Calderoni -- Chief Executive Officer

Dave Morton -- Chief Financial Officer

Sarah Hindlian -- Macquarie Research -- Analyst

Michael Turrin -- Deutsche Bank -- Analyst

Heather Bellini -- Goldman Sachs -- Analyst

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Richard Davis -- Canaccord Genuity -- Analyst

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Kirk Materne -- Evercore ISI -- Analyst

Hamza Fodderwala -- Morgan Stanley -- Analyst

Pat Walravens -- JMP Securities -- Analyst

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