Anaplan, Inc.
Q1 2021 Earnings Call Transcript

Published: 26 May 2020

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the Anaplan First Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a courtesy to others, we ask that each participant limit themselves to one question. Please be advised that today's conference is being recorded.

[Edelita Tichepco:]

Good morning. Thank you for joining us on today's conference call to discuss Anaplan's first quarter fiscal year 2021 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 second quarter, 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 file with the SEC, including the Form 8-K filed today 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 statements. 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 be current or accurate. 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. And with that, I'll now turn it over to Frank Calderoni.

[Frank Calderoni:]

Thank you, Edelita. Good morning and thank you for joining us today. As I discussed last quarter, we had several changes in our sales leadership, including the departure of our Chief Revenue Officer and the introduction of new talent in the Americas, which impacted our fourth quarter performance. Our top priority in the first quarter was to focus on improving sales execution and performance, specifically related to optimizing pipeline around opportunities and customers who have the highest propensity . While we have made good progress in our sales execution, such as driving stability across the teams, retaining key talent and focusing our efforts with larger enterprise customers, we still have more to do and we have great confidence in our sales team.

[Dave Morton:]

Thank you, Frank, and good morning, everyone. Anaplan's first quarter top line results were impacted by COVID-19 and our ability to close new business deal pipeline and expand existing customers. These challenging business conditions negatively affected our multi-quarter top line net new ACV and remaining performance obligation momentum and calculated billings growth. Due to the ratable nature of our SaaS revenue model, we saw lesser impact to our F Q1 revenue results. Total revenue for the first quarter was $104 million, up 37% year-over-year. Within this, subscription revenues grew 44% and comprised 90% of total revenue. Service revenues were $10 million, down from $11 million in the first quarter last year. Calculated billings for the first quarter were $96 million, up 10% year-over-year. RPO exiting the first quarter was $647 million, up 37% over last year. The portion of RPO that is expected to be recognized as revenue over the next 12 months is $330 million, up 20% over last year. The number of customers with greater than $250,000 in ARR was 367 this quarter, up 32% year-over-year. Our dollar-based net expansion rate or NRR was 117% this quarter. Historically this has been above 120%. This reflects, the lower percentage of booked deals coming from expands this quarter, as well as churn resulting from one major account where there was a change of control due to M&A. Turning to our profitability metrics. Total non-GAAP gross margin for F Q1 was 78%, up five percentage point’s year-over-year. Within this subscription gross margins were 85%, up 117 basis points year-over-year and services gross margins were approximately 10%, up 310 basis points year-over-year. Total non-GAAP operating expenses for the first quarter were $94 million, up from $75 million in the prior year, primarily for go-to-market investments.

[Raimo Lenschow:]

Hey. Thank you. Thanks for taking my question and hope you all stay healthy. The question I had Frank, was on the sales reorg situation, like, if you go through this process, it's kind of always a journey. It's not like a one-off situation or one-off things. Like, if you take the analogy of like, a baseball game like where are we in that, or do you think you are in that kind of getting it back fully on track and being fully kind of optimized where you want to be? Thank you.

[Frank Calderoni:]

Raimo, thanks for your question. So I would say that I would agree with you. It's a journey. And as I said a few minutes ago, I think we're making real good progress as we work through this past quarter. The key thing that we've been focused on right now across the go-to-market team is really driving stability, especially in Americas. I know we highlighted that last quarter. We've been able to retain the key talent continue to focus their efforts on really the laser focus on some of the enterprise customers that I talked about, and really optimizing pipeline. I mean some of the things that if you think about from an execution perspective, which is going to enable us to be successful in the short-term and long-term, it's really making sure that we can focus around the opportunities right now as well as in the future that works well for Anaplan. And as we said it's mostly looking at enterprise, transformational, data modernization. It's where our platform has a sweet spot. And we're making those strides from that perspective working not only with our own team but also with partners and having that alignment kind of work together. So, it takes time. I feel good about where we are. Is this an ideal thing right now? No, but it's part of the maturing of an organization and really a maturing of the company. I mean if you think back last year we were growing in excess of 50%. And just keeping up with that and making sure that we can make the investment in our people and our process to know that we have the ability to go after the opportunity that's out there which I strongly feel very confident in it's important. So, I think we're making good progress. I don't want to pick an inning or so but really good progress. We're going to continue that going into the current quarter. We've had quite a few activities already underway again like I said with various efforts around pipeline. As I mentioned, we're seeing good results. We saw pipeline generation increase over the past four to six weeks which again is an indication of how well everyone is getting aligned but also from the perspective of the opportunity that we see out there. It -- some of it is not -- some of it is immediate, but more of it is as we think about later in the year and so that's a good sign.

[Raimo Lenschow:]

Okay, perfect. Thank you.

[Operator:]

Your next question comes from Alex Zukin of RBC Capital Markets. Your line is open.

[Alex Zukin:]

Hey guys. Good morning and thanks for taking my questions. Frank, maybe, can you talk about what exactly did you see later in the quarter from both kind of a velocity of existing deal execution and new pipeline creation? And what are some of the underlying assumptions around some of those deal delays that inform the billings growth guidance for the second quarter?

[Frank Calderoni:]

So, as I mentioned, it's sort of like when everyone kind of went into lockdown toward the middle of the quarter and as we got into April is where we started to get some of the headwinds with really customers across the board initially from the perspective of just pausing to figure out where things were going for them. And then secondly, as they were making certain decisions some top-down decisions coming from CEO, CFO, even Boards, there was directives that were put down where first of all, new projects were pretty much put on hold and decisions on those projects were being deferred. And that was fairly consistent across all geographies and that was within the first few weeks of really the lockdown. So, we're kind of seeing through that. So, we had to work through all that. As I said some industries clearly were more heavily weighted than others, but we tended this quarter which we do see at the beginning of Q1 more about -- we normally see kind of a 50/50 split in pipeline between new and expand. This pipeline coming into the quarter was more heavily weighted towards new accounts. Of course new accounts require a more extensive review and approval within companies. So, that was a bit more of the impact. But the good news if I would say this is that none of the projects have been lost. We're continuing to work through some of them. They've been -- as some have been rescheduled into Q2. Others are still on pause for further decision as companies are working through the COVID situation. So, we'll continue to work through that. But at the same time in April and even in the several weeks in May, which is as we continue to work on pipeline generation new projects as well as expand projects have been coming into the pipeline. And our focus now since we know as we look at Q2 and Q3 we have a higher propensity to close expand deals. Our pipeline in Q2 is much more oriented towards expansion rather than new and so that's helping. And we've also done quite a bit of work with our planning AI technology to really look at those customers let's say that have more chance of working through projects. And so we're spending more time with those customers. Some of them have to do with more COVID related like on the front line. Some of them have to do with working with certain government agencies and we've got a program to put in place from that perspective which you've seen some traction. And then others are just focusing on companies and industries that are less susceptible to some of the initial COVID challenges that all of us have seen over the past two months.

[Alex Zukin:]

Perfect. And maybe just one follow-up for Dave. Can you talk about -- I think there were some -- if you look at billings from a cash flow perspective, they were a little higher than they appeared on the balance sheet. And I'm curious if you could just go through what the major differences were there any FX adjustments? And how should we think about cash flow billings for the second quarter if there's going to be a difference there as well?

[Dave Morton:]

Yes. Thanks Alex. We got a minor tailwind from some of the FX, which is not anything different than we've experienced in the past with some of the headwinds coming into previous quarters so that will always play a point or two. As we think about coming into this next quarter and our specific guide, we're keeping things relatively flat in regards to FX and just really focusing on the key operational activity at hand as kind of what Frank oriented around.

[Alex Zukin:]

Got it. Thanks guys. Stay safe.

[Operator:]

Your next question comes from Heather Bellini of Goldman Sachs. Your line is open.

[Heather Bellini:]

Great. Thanks Frank and Dave for taking the question. Appreciate it. Frank, one question was, you mentioned a control -- change in control due to M&A as impacting your net expansion rate. I'm just wondering if you could share with us what it would have been excluding that if that's something that you could talk about? And then also just kind of following-up on Alex's question. The first month of the quarter just kind of how are close rates tracking versus what they might typically be in a first month of a quarter? And just anything you could tell us about the conservatism and your close rate assumptions for this quarter as well. Thank you.

[Frank Calderoni:]

Sure. Sure. So I'll take the second part first and then I'll come back to the question on NRR, and maybe Dave can kind of jump in on that as well. So, Heather, as far as the first half of the quarter, as I mentioned, we came into the quarter strong. Of course, we had our kick off at the beginning of February, so everyone was really excited about what we laid out for the year. I think also we had a couple of -- we came in with a good pipeline for the quarter so that really helped. And as I said, more heavily skewed towards new, but a good pipeline of both new and expand. And then we also had some of the deals from Q4 that were kind of coming into the quarter as well. So, February had a combination of all that. We did close some deals from Q4. I would say, we closed about 25% of the deals from the first -- from the fourth quarter in the month of February, which was healthy. Second, we started to move on some of the expand business and that worked out well. And I think also we got a good start with our partners. So they were really energized and also very forthright in working with us in not only teeing up, but also closing some opportunities. So it was a good month, and actually the month of February was better than the February last year. We actually had growth in business close rates in the month of February on a year-on-year basis and really kind of going to kind of March as well.

[Heather Bellini:]

Yes. And I'm sorry, Frank, I was more referring to kind of if you could share with us the first month of May -- first month of this quarter.

[Frank Calderoni:]

Oh, I'm sorry. I'm sorry.

[Heather Bellini:]

No, sorry, about that. I wasn't clear.

[Frank Calderoni:]

Oh, my misunderstanding. So, May is looking -- as I said we're building pipeline generation so that was in April and May. That's continuing through the first three weeks of May, and we've also had deal closures. So I would say May right now is looking okay. I mean, we're -- from a May perspective, I'm feeling good about the traction with the understanding of the backdrop of COVID, right? So I'm using that as a guideline. And I'm seeing a bit more of, let's say, stability from April. And I would say, as I said, we're seeing pipeline generation build and that pipeline generation again for this quarter as well as future quarters. Dave, do you want to jump into the NRR?

[Dave Morton:]

Yes. The NRR, we called out that one item due to really a change of control and it's unfortunate that it happened. And clearly a lot of our churn in the past as we've always articulated has come from side events such as that. On a normalized rate if you excluded that item, NRR would have been closer to 120%.

[Heather Bellini:]

Great. Thank you.

[Operator:]

Your next question comes from Bruce Bracelin of Piper Sandler. Your line is open.

[Brent Bracelin:]

Hi. This is Brent. Thank you for taking the call here. I guess Frank just wanted to drill down into kind of optimizing the pipeline. If you could just kind of walk through the changes to go-to-market, specifically around maybe the direct field sales just given travel restrictions. Any color on the pivot you're making on the direct sales side just given the mature environment would certainly be helpful. Thanks.

[Frank Calderoni:]

Sure. So like all companies middle of the quarter for us, we did have a pivot in working from home, dealing with the lockdown around the globe. I would say, I was very pleased with how our team was able to respond pretty quickly. The good news about the Anaplan platform is that we're able to work with customers remotely, one through the selling cycles as well – and even part of the implementation. So from that perspective in the quarter the selling motions as well as the implementation with ourselves and with our partners, we were able to pivot pretty quickly and be able to do that remotely. One of the things that came up – of course, it's not always ideal. One of the benefits that we have from an Anaplan perspective is our whiteboarding when we're selling and usually doing that with a team including Anaplan a partner as well as with various members at the customer. Doing that remotely is a little bit more challenging but we're working through that. The other thing is that we did a significant outreach to our customers in the month of April, really just to, first of all understand and appreciate what they were facing around COVID and not so much even selling but just engagement and offering help. That's kind of where some of our programs on Anaplan Helps, some of the hackathon work that we did, where we tried to make models available in certain situations free of charge. We did spend a good amount of time in April and we're still doing that this month in helping customers modify some of their models to meet some of their near-term needs, especially as it relates to cash management, zero-based budgeting. These are some of the things that we're working with existing customers and then we're also teaming up with new customers in the current environment. These opportunities with existing customers tend to be more free of charge. For new customers they tend to be smaller in nature but it allows us to start to plant some of the seeds. From an execution perspective, again it's the discipline and focus around the types of customers in certain industries, in certain environments that we pivoted to as well and allowing us to spend more time, more effort in using our time most effectively, as it relates to prospecting new as well as expand opportunities. And as I said, that's tended to work quite well for us over the past number of weeks.

[Brent Bracelin:]

Helpful color. Thank you.

[Operator:]

Your next question comes from Taylor McGinnis of Deutsche Bank. Your line is open.

[Taylor McGinnis:]

Hi. Thanks for taking my question. Could you maybe talk about the net expansion rate that's embedded in the 2Q billings and rev guide? And how that might compare to the 117% or 120% normalized that you just mentioned in the quarter? And if there's anything that you can share on expectations for how low that net expansion rate could go near term or at least what you're seeing today.

[Dave Morton:]

Frank, I can start off and then

[Frank Calderoni:]

Yes. Sure, sure.

[Dave Morton:]

So Taylor with our billings we did it more from a bottoms-up forecast and then we took some appropriate measures for some assumed churn. The NRR will really be an output both how much expands within that specific cohort so it's not that our billings number is actually solving for specific NRR if that makes sense. So as we went off and examined and did the bottoms-up forecast that's where we came up with that solid forecast that we've provided for this specific quarter. In regards to NRR and as we think about things and this level of uncertainty, I think it's fair to say that if things were to continue as is with the shelter in place and kind of some of the prudent guidance we've given. There are some bookend cases that you could see rate going as low as 110% but that still provide some moderate levels of expand and even if you tick up a little bit of churn coming into the next quarter or two. But all things said I would see that as kind of a new floor as we continue to navigate the uncertainty that we're looking at here in the very near term.

[Frank Calderoni:]

And the more that we can as I said focus on expansion capabilities and then the higher mix of expand which is kind of where we're working on right now the better we're going to be able to kind of see more of that kind of follow-through on the NRR.

[Taylor McGinnis:]

Got it. And then, just maybe a quick follow-up because you said before that for the pipeline that the split tends to be between new business and expansion 50-50 and you said 2Q being a little bit more weighted towards expansions this quarter, any idea on how you're expecting like that split to look?

[Frank Calderoni:]

So in Q2, our focus right now is to -- is more like the balance to get back to like that 50-50 and even if we can skew it more toward expand based on again more of the challenges on bringing new business to closure that's the objective. And the pipeline that we're building or creating as we see it now over the next number of months is showing that shift.

[Taylor McGinnis:]

Great. Thank you.

[Operator:]

Your next question comes from Pat Walravens of JMP Securities. Your line is open.

[Pat Walravens:]

Great. Thank you, very much. So Frank and Dave, one of your competitors is going to be reporting tomorrow night. And given that we're going to have that sort of additional context, I would love to hear your thoughts on, if you look at your billing miss internally whatever that amount was, how much of that would you say was because of COVID-19? And how much would you say, was because the sales execution isn't where you would have wanted it to be?

[Frank Calderoni:]

It's -- Pat, it's hard to say. I mean it's sort of like this quarter coming in as I said with the backdrop of Q4 was not the ideal situation to have. We made the best of it in the early part of the quarter as I said really getting everyone to a fast start, closing transactions, but also spending the time on further focus and diligence in maturing some of our processes as we think about more of the long term as I said before. So, working through that, there was -- and as I said before we're not through that. I said this back in the February time frame when we were closing out Q4 that these take time. And so, we're working through that. And now we'll continue to get progress as we think about the next couple of quarters. But again, COVID came right on top of that. And so, we had if you want to say that double whammy from that perspective. And we work through it. Most of the deal activity as far as those decisions that were put on hold were more skewed toward COVID-related and budgets and things like that. The environment is tough, right? And being able to kind of work through it Dave mentioned earlier some of the decisions that we made within Anaplan I think were somewhat typical of a lot of companies right pull back on some of the procurement spend, some of the contracts especially new contracts so kind of working through that. But again I do want to highlight this. I mean having the ability to develop more models that are COVID specific on the front line has been very helpful the hackathon the 17 models that were developed and now are available to customers. And then also right now I've mentioned this briefly before we're leveraging -- we had a deal that closed at one of the states in the Northeast. They were working through the pandemic. We're now looking to replicate that and make that available to other states across the U.S. and see if we can get some more leverage from that. So, we're honing our efforts and this is both from a process as well as from the pandemic environment to see how we can continue to make Anaplan's platform helpful to customers. And the most important thing is drive value. If we drive value, we have a higher chance of getting through budget challenges and working through that. And that's where we're putting both the emphasis again on process as well as also mining the opportunities a bit more and highlighting those where there could be a higher propensity for them to buy Anaplan.

[Pat Walravens:]

Okay. Thank you.

[Operator:]

Your next question comes from Kirk Materne of Evercore ISI. Your line is open.

[Kirk Materne:]

Yes. Thanks very much, and thanks for taking the questions. Frank, how have your conversations with clients maybe changed a little bit in terms of just the vertical functionality that you provide? Meaning, in terms of what's going on right now, I'd imagine more focus on budgeting helping companies save money versus maybe sales planning. I was just kind of curious. Can you give us just a sense? I imagine you might get deferred and things like that. So can you give us a sense on that and then just to maybe put a finer point on one of your earlier comments? I assume the biggest sort of bottleneck right now is clients going from pipeline to bookings is just budget approval. I just want to make sure that's kind of what you're saying. So as business confidence gets better, you feel like that bottleneck will hopefully spin out a little bit. Thanks.

[Frank Calderoni:]

Sure, sure. So I will say if I look back and I think back over the last two months, more and more of our conversations myself included in the customer outreach that I did for several weeks from my home was really to talk to finance executives, a lot of CFOs various members within finance organization, because again they were dealing with this change, this sudden change to their business and they were looking for ways of trying to pivot. And so that's where again we spend some time with them, again offering help and assistance on helping them redesign or modify some of their models to give them the ability to have more intelligence. And that's not only from my perspective, but I would say across the organization. So specific solutions on the point of liquidity, as I said before, zero-based budgeting. Part of that was also workforce, because as you would expect companies started to look at their workforce and start to figure out different things. Some were hiring very aggressively and therefore they had one dynamic, they had to deal with. And I talked to one CFO who was just couldn't keep up with the volume of the hiring, because of how things were shifting for them. And then I talked to other CFOs where they were making tough decisions related to workforce reductions. So I would say the predominant conversation has been with CFOs and finance organizations. Pivoting from that, the other side of the equation was supply chain. I was personally involved, I would say with quite a few transactions and still in this month on supply chain, visibility in supply chain again modifying being more agile in supply chain. And so again, we're able to kind of talk about the value that we can provide in supply chains to allow a much deeper analysis and a much -- a more agile process for them to get information make decisions and move on from that perspective. And actually the -- one of -- I didn't mention this deal, but one of the critical deals that we had that closed in the month of April was a technology company that was actually working through modifications in supply. And I was really pleased to see that really come together even in the midst of what was going on in April. Now your last point as far as budget approvals, yes the -- I can't say that's going to be solved everything. But I think right now that's been somewhat of the Achilles heel in most of these transactions. So as budgets start to free up and things start to relax, yes, I would expect that hurdle to be somewhat lifted. But again, we're trying right now. We're all on a situation of -- it's an unknown environment, how fast the recovery are we really into a recovery how fast that recovery will be and when companies will start to free up some of their investment dollars. We're also being again as I said prudent. We're still making investments. We've got critical hires that we're still considering and going through in the sales and engineering. But other projects from that perspective had been put on hold for us. So it's really kind of working through that balance.

[Kirk Materne:]

Thanks Frank.

[Operator:]

Your next question comes from Yun Kim of Rosenblatt Securities. Your line is open.

[Yun Kim:]

Great. Thank you. Quick question. Given the current status of the spending environment out there is there a plan to focus more on smaller and faster deployment opportunities rather than your traditional larger ones?

[Frank Calderoni:]

The answer for that is yes at the moment. I mean like I said before, we're pivoting where we can help customers. And sometimes it's modifying existing models. Sometimes it's creating new models that they can deploy within a week or two. Sometimes it's leveraging some of the 17 models that were created through our hackathon. Those opportunities just to give you an idea we kind of ballpark that. It's -- some of them can be worth anywhere from $50,000 to $150,000 so it just kind of gives you an indication of a smaller business. And we did see more of that in April and we're seeing some of that in May as well. But that's not enough to offset some of the bigger transformational deals that do take longer to close and are in the midst of budget decisions being on hold. But yes we're looking for all ways to -- and again those also plant seeds for other opportunities further down the road.

[Yun Kim:]

Okay. Great. If I can squeeze in one more. So with the free trial offers and such are you somewhat embracing the bottoms-up sales approach as well in addition to your top-down approach?

[Frank Calderoni:]

Well that's a whole different -- yes. So top-down is important when you're doing transformational data monetization projects because they require higher levels of executive approval. There's much more that goes on. It's not just buying Anaplan, but it's also sometimes the consultancy around that. When you're selling some of these other transactions or making let's say, the platform available during the trial. yes that can be at lower levels in the organization again to start to help, but also start to provide some potential prospects for the future. And as I said we mentioned on the call the amount of activity we're getting through the App Hub just interest in learning more about that has been pretty strong. And we are more than likely going to be announcing an extension of that 90-day free trial because again, we've seen it be very helpful for us and we feel that the COVID-19 is not over. And so we want to make sure that we can extend it beyond and continue to work through some of those opportunities.

[Yun Kim:]

Okay, great. Thank you so much.

[Operator:]

Your next question comes from Scott Berg of Needham.

[Scott Berg:]

Hi, Frank. Thanks for taking my question today. One for me just on partner contributions; Dave or Frank, can you maybe give us some color on partner contributions to bookings in Q1 and how that kind of fared relative to maybe what you saw in '20 -- or fiscal year '20? And then maybe what your assumptions are for partner contributions as you kind of get through the next quarter or two to bookings? Thank you.

[Frank Calderoni:]

So partner contributions from the standpoint of working with partners has been about 50% and increasing. Over this past quarter again similar to the outreach that we had with customers. I and others on the team did outreach to the partners as well, the GSIs as well as some of the others

[Operator:]

Your next question, the final question for today comes from Stan Zlotsky with Morgan Stanley. Your line is open.

[Stan Zlotsky:]

Perfect. Thank you so much for taking my question. Two questions from my end, one for Frank one for Dave. As you're redoing your, sales plan and sales hiring planning for the rest of the year, you mentioned you're still hiring in some key strategic areas. How are you thinking about your sales headcount for the rest of the year? Maybe compare it versus the double-digit expectation for revenue growth for the year. And then, a little bit of an explanation question. On billings, are you seeing changes to customers asking for concessions, or maybe changes to their billing terms going from annual -- typical annual prepayments maybe spreading those out into, maybe quarterly or semi-annual payments and if that had any headwind in the quarter, on your reported billings number? That's it for me. Thank you.

[Frank Calderoni:]

I'll take the first one. Dave, I'll let you take the concessions. So on the hiring stand again we're looking at critical hires only at the moment. And that is technical ones on the engineering side. And then on the sales side, it's specific mostly in areas where we feel that there's opportunity, let's say later in the year, that we need to make the investment now. We are now hiring under our plan for this year, just based on the environment more so than anything else, not that we see a lack of opportunity. It's more a reflection of trying to balance the spending. So we pulled that back. But again we're still doing some critical hiring in the U.S. but in other regions as well. And we'll continue to monitor that and see how -- when we feel based on that balance, we can open that up a little bit more. But again we see growth potential longer term. And we want to kind of strike that right balance, so that we don't just stop everything. And the offset of that, as I said, there's been some other procurement spends and things like that, travel and so forth that we've been able to clearly pull back on to allow us to have some investment capability, in these two critical areas.

[Dave Morton:]

And just dovetailing, on Frank's comments on some of the pullback on --from spend. You can just imagine that the various other enterprise customers that we engage with on the commercial aspect, their procurement organizations are doing just the same thing. We've had some moderate request, in regards to whether for its payment extension or split billings. But our opportunity is really selling into improving our value why we should try to keep things as close to normal with the one-year payment upfront. But there've been some limited concessions last quarter and there are some assumptions coming into this quarter as well.

[Stan Zlotsky:]

Got it. Thank you.

[Operator:]

Ladies and gentlemen, that was our final question of the day. I will now return the call to our presenters, for closing comments.

[Frank Calderoni:]

Thank you, Operator. I want to thank everyone for joining our call today. I just want to thank all of our customers, our partners and our shareholders, and our team members for the continued support. And we look forward to talking to you again next quarter. Have a great day.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.