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Software Company UpdateSeptember 20, 2019Anaplan, Inc. (PLAN)MARKET OUTPERFORMPrice: 51.00Price Target: 62.00May Have Won a Big Deal with AmazonPatrick Walravenspwalravens@jmpsecurities.com(415) 835-8943INVESTMENT HIGHLIGHTS We maintain our Market Outperform rating and 62 price target on Anaplanafter our due diligence suggests that the company may have recently closeda multi-million dollar per year deal with Amazon (AMZN, MO, 2,275, Josey)and that the opportunity to expand in that account could be multiple timesthe original contract size. An Anaplan spokesperson declined to comment on this potential transaction;however, we note that: 1) Amazon posted a job description on May 7 andMARKET DATAPrice 51.0052-Week Range: 20.37 - 60.36Shares Out. (M):153.0Market Cap ( M): 7,803.0Average Daily Vol. (000):2,167.0Source: Thomson Reuters and JMP Securities LLCupdated it 20 days ago looking for a “Sales Operations Program Manager,”2021E2022ERevenue ( M) 1Q 75.8A 101.5 128.92Q 84.5A 107.9 137.23Q 86.3 109.9 139.84Q 95.6 121.7 153.2FY 342.3 441.0 559.11Q( 0.16)A( 0.11)( 0.03)2Q( 0.12)A( 0.12)( 0.02)3Q( 0.13)( 0.11)( 0.01)4Q( 0.10)( 0.07) 0.01FY( 0.51)( 0.41)( 0.05)CY( 0.41)NANAIncentive programs, data issue resolution”; 2) at the Anaplan CPX user conferencein June, executives from Amazon and Anaplan conducted a brief demonstration ofhow the combined power of Anaplan and Amazon Forecast could address certainEPS We continue to like Anaplan’s mission of driving connected planning and expectbusiness momentum to continue because the company: 1) seems to havegreenfield opportunities with limited competition across finance, sales, and supplychain planning; 2) still has lots of room for improving sales productivity as the salesEPS estimate of ( 0.05) (consensus ( 0.17)) on revenue growth of 27%. Anaplan currently trades at a CY21 EV/revenue multiple of 13.5x, while our 62price target implies a multiple of 16.6x, an 15% premium to the peer groupmedian multiple. We believe this premium is deserved as Anaplan is expected togrow faster than the peer group and operates in a large market with relatively lowVolume (mil.)Price (USD) 70.00 60.0015 50.0010 40.00 30.005 20.000 10.00competition.FOR DISCLOSURE AND FOOTNOTE INFORMATION, REFER TO JMP FACTS AND DISCLOSURES SECTION.This report should be read in conjunction with important disclosure information, including an attestation under Regulation Analyst certification.Sep-19(consensus ( 0.45)) on revenue growth of 29%, and maintain our FY22 non-GAAP20Aug-19on revenue growth of 42%, maintain our FY21 non-GAAP EPS estimate of ( 0.41)STOCK PRICE PERFORMANCEJul-19 We maintain our FY20 non-GAAP EPS estimate of ( 0.51) (consensus ( 0.52))Jun-19on our due diligence.Dec-18(GOOGL, MO, 1,450 PT, Josey) earlier this year and now one with Amazon, basedSource: Company reports and JMP Securities LLCNov-18force ramps; and 3) seems to continue to land large deals like the one with GoogleApr-19companies before now.May-19demand-planning problems — so there has been some interaction between theMar-19Territory Planning, Quota Development, Sales Performance Management, Sales2020EJan-19platform solutions (Anaplan, similar)” to drive “core Sales Operations processes —FY JANFeb-19which included qualifications of “Experience with Sales Performance Management

Anaplan, Inc. (PLAN)JOB POSTINGFigure 1 below outlines an excerpt from the Sales Operations Program Manager job posting thatmentions “experience with Sales Performance Management platform solutions (Anaplan, similar)preferred.”FIGURE 1. Sales Operations Program Manager Job PostingSource: Amazon.jobsSeptember 20, 20192

Anaplan, Inc. (PLAN)AMAZON FORECASTAt Anaplan’s CPX user conference in June, two executives from Anaplan, Senior Director of ConsumerProducts and Retail Ara Gopal and Director of Product Management AI/ML Lior Gerling, as well asAWS Solutions Architect Chris King, hosted a session called: “Putting Those Insights to Use: InjectIntelligence and Predictive Capabilities into Planning.” The session focused around a demonstration ofAmazon Forecast and Anaplan. Amazon Forecast was designed to better understand how to improvetime-series forecasting across the entire Amazon business. Amazon Forecast enables customers toleverage the 20 years of experience in forecasting at Amazon with no machine learning experiencerequired, and includes five deep-learning algorithms and three traditional statistical methods. Mr. Kingcommented, “We wanted to build a service that would look to kind of bridge those gaps and allow youtake any custom data that you have — generate your own model that can actually be executed on andthen be able to integrate it with really advanced decision making technologies like those provided byAnaplan to operationalize your business more effectively.” He then shared the deep-learning algorithmsare up to 50% more performant than traditional approaches (on datasets with over 1,000 time series).The Amazon Forecast service ingests historical data of whatever a customer is trying to predict (e.g.,sales, pricing, inventory) and related data (e.g., weather, special offers, product details); it thengenerates an API that outputs a forecast which can then be leveraged by a planning solution likeAnaplan. Once the predictions have been communicated to Anaplan, the solution will consume thepredictions to better assist the Anaplan user with decision making.During the Q&A portion of the session, an attendee asked when it would make sense to use one ofthese services compared to the other, or are they complementary. Mr. Gerling responded, “We are aplatform of planning where we give [all of the] tools for our users to build the plans, [very modular],customize whatever you need our idea is to actually help you to go and to seamlessly integrate withthose solutions similar to how we seamlessly integrate with AWS and with Salesforce and Google.” Mr.Gopal added that “it also comes down to use case, for certain types of problems, certain engines tendto perform better, so you want to provide that option of you get to choose which engine you want touse.” Figure 2 below outlines the demonstration overview.FIGURE 2. Intelligent Demand PlanningSource: AnaplanSeptember 20, 20193

Anaplan, Inc. (PLAN)GARTNER MAGIC QUADRANTFigure 3 below outlines the Gartner Magic Quadrant for Sales and Operations Planning Systems ofDifferentiation from May 2019. As shown, Anaplan is included as a leader, along with: 1) SAP (SAP,MO, 150 PT); 2) OM Partners; 3) Kinaxis; 4) Arkieva; 5) JDA; 6) o9 Solutions; 7) Adexa; 8) DELMIAQuintiq; and 9) Logility.FIGURE 3. Gartner Magic Quadrant for Sales and Operations Planning Systems ofDifferentiationSource: Gartner Magic Quadrant for Sales and Operations Planning Systems of Differentiation, May 2019September 20, 20194

Anaplan, Inc. (PLAN)Anaplan’s strengths, according to Gartner, include: 1) the company’s reference customers reportedabove-average levels of overall satisfaction; 2) Anaplan scored above average in 12 of the 13 keyS&OP technology capabilities, such as global planning support, simple user interface, and projectplanning; 3) Anaplan’s vision for supply modeling, scenario planning, and collaboration are above theaverage in the market; and 4) Anaplan scored above average for financial impact and financial planningdecisions.Anaplan’s cautions, according to Gartner, include: 1) scored below average in terms of its S&OPcapability coverage and the number of customers it has for S&OP; 2) reference customers reportedbelow-average levels of satisfaction with Anaplan’s domain expertise and implementation services; 3) abelow-average geographic strategy; and 4) Anaplan’s reference customers communicated a belowaverage future buying intentions in the second year, and Gartner points to Anaplan’s recent entry intothe supply chain market.September 20, 20195

Anaplan, Inc. (PLAN)F3Q20 EXPECTATIONSFor F3Q20, we expect Anaplan to generate total revenue of 86.3M, up 39% y/y, versus the consensusof 86.2M. We look for non-GAAP operating margin of negative 19.1%, versus the consensus ofnegative 19.5%, and non-GAAP EPS of negative 0.13, in line with the consensus. We look for billingsof 100.3M, up 39% y/y, versus the consensus of 98.7M.September 20, 20196

000s, unless otherwise notedFY end Jan.RevenueSubscription revenuey/y growthsequential growth% of totalProfessional services revenuey/y growthsequential growth% of totalTotal revenuey/y growthsequential 0027%965,00026%DriversCustomers (net new)204Customers (ending)434y/y growthsequential growthCustomers (avg)332Subscription Rev. / Avg. Cust. ( 000, Annual)153y/y growthsequential growthKey metricsDeferred Revenue (net new)Deferred Revenue (ending)y/y growthsequential growthBillingsy/y growthsequential growthDollar-based net expansion rateCustomers with 250K ARR (ending)y/y growth% of total customersRPOy/y growth304,600Source: JMP Securities LLC and Company 58%674,12827%120%Anaplan, Inc. (PLAN)September 20, 2019FIGURE 4. PLAN Revenue Drivers7

000s, unless otherwise notedFY end Jan.Non-GAAPSubscription revenuey/y growthsequential growth% of totalProfessional services revenuey/y growthsequential growth% of totalTotal revenuey/y growthsequential growthCost of revenue - subscriptionCost of revenue - professional servicesTotal cost of revenueGross profit - subscriptiongross margin - subscriptionGross profit - professional servicesgross margin - professional servicesGross profit - totalgross margin - totalR&D% of revenueS&M% of revenueG&A% of revenueTotal Op-Ex% of revenueIncome from Operationsoperating marginInterest income, netOther income (expense), netPretax incomeProvision for income taxesrateNet incomeEPSShares - basicsequential growthShares - dilutedsequential %89(411)(23,615)553-2%(24,168)( 739,02251,33043,42282,393 4781,477 16%90,752 114,085 154,085127%95%92%(49,305) (32,608) (50,592) (33,355) (37,442)805121,2610%-2%-3%(50,672) (33,867) (38,703)Source: JMP Securities LLC and Company 18%17%58,97863,55065,896102%102%95%(16,955) (18,290) )(17,148) (18,578) (14,614)9076171,132-5%-3%-8%(18,055) (19,195) (15,746)( 0.18)( 0.18)( 0.13)98,606 105,370 119,0762%7%13%153,600 21(1,465)(73,955)3,209-4%(77,164)( ,20099%95%96%93%(20,090) (16,641) (16,490) 00(246)548(300)(300)(19,085) (14,754) (15,290) (12,894)1,0871,3221,3501,350-6%-9%-9%-10%(20,172) (16,076) (16,640) (14,244)( 0.16)( 0.12)( 0.13)( 0.10)122,992 129,549 132,917 136,10717%5%3%2%153,000 154,100 158,107 %5,590(298)(62,023)5,109-8%(67,132)( (15,950)( 13)-14.9%1,200(300)(15,213)1,350-9%(16,563)( 55)-14.1%1,200(300)(14,555)1,350-9%(15,905)( 13)-7.7%1,200(300)(8,513)1,350-16%(9,863)( ( 16)( 978)-1.4%1,000(300)(1,278)1,350-106%(2,628)( 83)-1.0%1,000(300)(683)1,350-198%(2,033)( 9551.3%1,000(300)2,6551,35051%1,305 ,173)-0.9%4,000(1,200)(2,373)5,400-228%(7,773)( 0.05)154,8428%173,179Anaplan, Inc. (PLAN)September 20, 2019FIGURE 5. PLAN Income Statement8

000s, unless otherwise notedFY end Jan.FY16Cash and cash equivalentsAccounts receivable, netDeferred commissions, currentPrepaid expenses and otherOtherTotal Current AssetsProperty and equipmentDeferred commissionsIntangible AssetsOperating lease right-of-use assetRestricted CashNotes receivableOtherTotal AssetsAccounts payableAccrued expensesDeferred revenue, currentOperating lease liabilities, current portionTotal Current LiabilitiesDeferred revenue, noncurrentOperating lease liabilities, net of current portionOtherTotal LiabilitiesConvertible preferred stockCommon stockAccumulated other comprehensive lossAdditional paid-in capitalAccumulated deficitTotal Stockholders' EquityTotal liabilities Stockholders' EquitySource: JMP Securities LLC and Company )304,037602,468F3QF4Q----------Anaplan, Inc. (PLAN)September 20, 2019FIGURE 6. PLAN Balance Sheet9