CLDR - Earnings call transcript Q4 2018

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Operator

Good afternoon. My name is Chantal and I will be your conference operator today. Welcome to the Cloudera Fourth Quarter Fiscal Year 2018 Quarterly Results Conference Call. All participant lines have been placed in a listen-only mode to prevent background noise. After the speakers’ remarks, there will be an opportunity to ask questions. this being note Please Instructions] conference recorded. is [Operator

VP, and your Investor host is Kevin, Development Cook, Kevin begin Your Relations. Corporate you conference. may

Kevin Cook

fourth call. Chantal. welcome you, afternoon quarter Cloudera’s fiscal Thank XXXX Good conference to and

release We will results Chief me market and the Chief be Executive with Frankola, Officer; today. Cloudera Financial Tom Co-Founder, Jim issued Chairman Strategy our From and announced close are after in discussing press Officer. Reilly, Mike Chief Olson, Officer;

quarterly the filed with includes the an was of December and the the ended our from the explanation Form on rate, XXXX period could and statements this call, are XX-Q Risk Generally, on forward-looking anticipate, filings this words events we identified and the of release cause risk regarding press for These results course forward-looking materially performance detailed with also events. which the company. statements. actual future on call. in on those expect, net factors differ intend These conference forward-looking actual X, the in make in in materially the SEC. by statements from cause fully could under future the risk caution other that more our words these financial results the future Factors press described believe, report those to our are important During other such as of XX, forward-looking quarterly October Form to Cloudera’s statements quarterly consider SEC release and our that you material that to We will report in are and subject the differ of XXXX. to caption expansion XX-Q factors denote use uncertainties are risks statements and

financial During intangible we GAAP amortization expense compensation present and this non-GAAP assets. Non-GAAP of and acquired will exclude measures. measures stock-based both call,

issuance the and of common preferred addition, non-GAAP that stock assumes we conversion count stock weighted our the considered all a date performance. of results IPO for, our measures issued on when common encourage These a share consider to not analyzing are stock weighted from, if to or the our isolation in GAAP Cloudera’s to In occurred the superior be effectiveness. you substitute provide measures impact non-GAAP into average as and of intended we in

and ASCXXX. Additionally, standard we commentary our under accounting today the existing are guidance provide

information information, the to complete most comparable non-GAAP For to has and of reconciliation figures fourth our as press Global refer Form a furnished fiscal regarding list, our The our the financial a XXXX X-K. results. of been press part measures, release GAAP those directly please quarter XXXX release regarding quantitative updates SEC today’s to also

as In are this a the date. be assumptions result We reasonable Reilly. information X, date to no call addition, April on that as please Tom of turn to and new we over events. obligation future that statements based undertake of is this I forward-looking to the statements update believe conference any now make will these XXXX or of today we that note call

Tom Reilly

year being and for discuss today you with quarter Thank our Thank Kevin. you, us fiscal XXXX everyone. fourth full Hello to results.

delivered a completed a a our X and open with reporting and first acquisition the team. fiscal significant Cloudera also source In are accomplishments considerable introduced innovations We our for quarters few QX product offerings, to year community major technological and finished to of solid as our company, proprietary a strategic products. public and we

remains company and significant our opportunity for market. Our focus ahead the at

before gain competitive increasingly digital In and are our competitiveness of these have next several to The connected are beginning. from customers in And the of our work they enterprises are world, enhance transformation embarking this our of couldn’t cost analytics already just learning availability storage world. able take just the sizes time call spending advantage. market. begun phases is do cloud, and compute Cloudera will we with be today’s advantages machine today’s dynamics journey public simply to Cloudera’s perform public of Enterprises of expanding vast well-positioned these to their benefiting shape. discussing in and thereby for Our machine unique growth all and artificial amounts on cloud. new intelligence low learning, to in is the

like was would our summarize year-over-year $XXX.X the of quarter to I for quickly fourth so, growth million Revenue financial representing results. First XX%.

growth $XX.X of revenue XX%. software subscription generated we year-over-year of million importantly, More representing

than In ARR consistent large XX our growth million, platform the of in cases now adoption revenue. than to customers revenue. than quarter million subscription net enterprises customers sizable annual class collectively our and of graduated represented greater $X recurring XXXX the software more added The addition, customers half of in our of new greater This of group XX the we software with land by consumption use $X and we and model. contributing Global expand a drives comprises

at rate strong expense net XXX%. be continues to QX for Our

full we the of million XXXX, For revenue year XX%. representing of reported growth year-over-year fiscal $XXX.X

rate added a As Global XX% in net prior than grew XXX software subscription periods our year-over-year new high XXXX during objective. customers to our revenue, faster XXXX, total $XXX revenue exceeding fiscal margin at annual million. We

XX%. model. only revenue expenses Finally, while pleased the we been grew at our grew demonstrated leverage has are Annual in XX%,

to Co-Founder the Now have that will outlook reflect and discuss our opportunity. more innovation Strategy on and Chief the Mike Olson, capture produced we Officer market

Mike Olson

Thanks There hyper-connected through Enterprises most industry that resource. Tom. data going underpin every become this In are world’s three fundamental transformation. valuable world, digital in and a trends change. a are digital the has

warehouse like vast cumbersome types of and of analyze – The connected world. and the is technologies traditional platforms, our data capture increasingly generated by moving first amounts re-architecting our can’t beyond data which simply legacy expensive

applying new AI machine insights and insights. get second those to that The before on learning powerful is to acting then and data techniques possible never

choice digital the public enterprises the of the it to third for of backdrop advantage agility pursuit positioned cloud, flexibility the partner that of this The offers. is is taking and adoption of in Against Cloudera be transformation.

bit and a start, are trends in of warehouse disrupting To we through market. these more traditional go Let’s successfully the detail. data each our differentiation three

build For organizations in been analytics has impossible all many data. it integrated across to making years the data locked silos

Our or are lakes instead is secure traditional application be Cloudera the same Experience, the analysis. on allow run these warehouses platform, then them the analyze and enterprise go that analytic framework controls. for our re-platforming, What SQL copy workloads. valuable SDX edge both for data need to a under different for capturing to customers deliver on customers process, governance SQL extraordinarily SDX the platform, SDX. doing jobs exactly Shared types same Apache different data is performance regulatory a the data platform jobs. to allows makes and and and Impala is any of delivers and warehouse that data to analytics, governance legacy learning We cutting of able once genuinely stream and and data, data serving to building processing management and critical to capability access it’s across also perform customers players. eliminates modern to processing to or same cost same types Data multifunction text data, to security disruptive machine further our at But consistent enforcement of move possible all same workloads. data

We risk. complexity and are moving cost,

are artificial advantage of or of because rapid is no transformation to large digital new the standards and in trend these best capabilities definitions, second learning machine clear there take industry advance Many intelligence. enterprises The market practices. struggling are

and team on acquisitions using collaboratively to including years. deploy has result, to of We Fast we across product open developers data Data brought Workbench the Senstar Sens a machine science. to Science the become in learning deep in acquired positioned to the applications machine platform and customers popular scale most More applied world learning have learning the Data is framework real past the algorithms Cloudera take becoming latest acquired in leading company Workbench, made the we development. through and To solve advantage self-service source an AI on lifecycle machine science a the that important Science IP enables machine As set learning learning an I/O recently, Forward leading that we specifically research for languages state-of-the-art and data algorithms. industry two a the build, data the capabilities, scientists enterprise lead, expertise. learning innovator application ourselves machine enterprise problems. Labs, obtain of and full focus The solve helping programming X innovation help

IoT machine workloads enormously learning. Lastly, from benefit

Over specifically use designed large the as source contributed past of one-of-a-kind X we Kudu. than availability last to its years, first cases more enterprise, community. we open store a Kudu year developed Apache IoT source enterprises of year, Kudu. adopted And part Cloudera XXX data for have open general the in is it

embrace the for The of public third is cloud. trend digital transformation

provides. hardware. infrastructure is to want they compute. workloads transient that able analytic the They or large customers They storage from allowing anywhere choose. run to of Cloudera on cloud take and scale by were buying without advantage benefit public lots large workloads adoption of run enterprises cloud to flexibility bursty capitalizing Our

for offering. advancements multifunction cloud in Our and of with to to year Altus one the private made public analytic and needs native capabilities large and cloud. location. multi-cloud any any meet and clouds to our centers services. public and uniquely significant platform-as-a-service any want their more is to from speed, They workload in their AWS fiscal on Cloudera centers introduction data enabling on both enterprise and elasticity Azure own maintain Altus Altus public analytics. run typically the running delivers on convenience, the them data hybrid ease-of-use among clients in cloud family, In XXXX, own engineering we allow major to our approach. clouds operate their the a than cloud expected data applications and business move We workloads

introduce in cloud to offerings and continue expect to We in Altus we innovate the future. new

next will time updates. insight automate to We we platform-as-a-service to these their platform the transformed call. more to a analytical that and review fulfill for turn recognized to deployment enterprise, in the and years now management well that substantially priorities other investment and in I early differentiated We in us including positioned customers intend in XXXX of Tom the it our This and deliver acquisitions. a applications allowing fiscal growth. offerings phase digitally areas, machine offerings, and real cloud data into promise importance to has invested Ultimately, to for and of a modern operations of and decision-making work. learning on concentrate these handle resulted strategic ago. we future processing For analytics on

Tom Reilly

Mike. you, Thank

past We transformation. really all innovation product are year. customer’s our and digital of this business is their in our our success But very by achievements proud defined

most cases. company transformation. digital every Data Every its broad of industries One of elements of dozens of hundreds core is every industry transformed, every this journey or powerful in and but some platform of coming is across the applicability some being the well our disrupted. use the industries is transform just in along being are at years are risk ministries industry must and beginning, in

is players are telcos the gain competitors existing being data away subscribers. by over-the-top ones. by example, sources reduce In support characterized churn. insight on focused They industry creating revenue efforts for and promotions, protecting is intense For and to each new by telecommunications response, enhance other’s to disrupted and take to are leveraging customer

using outcomes. market life One business and platform precision To faster applications development learning need enabled benefiting to transformed genomic their competitive and churn drug and cases being of keep X% Telekom they to customers, XX%. our techniques. machine have learning like in These Use affordable, with drugs population patient from health, machine research medicine, product and fraud Healthcare modern streamlined Deutsche are analytic remain XX% machine innovate, from to companies Deutsche and improve also Telekom, to revenue data. get from learning. loss are aggressively reduce transforming is sciences by our

the while GSK’s clinical our sentiment Today, wallet In in banking and cross-selling people of fraud creating a legal of cases course and money For this and in connect market focused data customers variety type units It world costs of service, management grow significant Board on in the to risk. risk digital over all share laundering, review transformation firm such clear including complete researchers our services financial any reduced the complex these with services. recommendations At instance, of and trial taking their the and insights risk document months major of improved best XX%. in XX in time TD Bank capture retail revenue clinical have customer protect of increased our on data customer GlaxoSmithKline as increasing and customer all is has focused Factoring XXXx, and transaction the And initiatives for its level, up by platform concerns. are level software minutes, banking, businesses, ordinarily all of product analysis prevention, analysis analysis use terms, multiple performed our revenue. accelerating the increased and across functions, use by would any place approximately analysis. data are regulatory accelerating in including minutes. order for the institutions empowers At and XX translate and years example, corporate X take are Using their million actual lowering of selling, business next data simplest grow trials. and we data order mapping, to themselves familiar processing products into to In corporate a the to to for experience value. conformity GSK platform, work. trial to offer,

we greatest have what Global by labeled exists in these large enterprise cases, of the opportunity that we XXXX. the the demonstrated the segment use market As understand

While our enterprises resources at we market. technology we we to journeys deal adopting revenue. expansion is additions net our much It sizes, Global technology surpassed know annual times past and market transformation Recognizing that entities the because focus sales our different the outside initial new rates valuable at rates. important in their right various the I time. use customers commencing ultimately are fiscal right industries hurts objectives different on this Gaining recurring at from digital our in expected target analyze we pursuing still our for too customer outside activity. selling that customers own XXXX resources year,

As we all we the making we learned past enter few that have in quarters us for to changes are take fiscal of success. stock we and XXXX, strategic position greater

the of one in XXXX For example, attractive in determining our is as only Global size case customers. the customer most factor

data many use propensity propensity IT data customer vertical, spend, to case, scientists, expand, ideal so industry defined by of buy, is attributes Our target spend including and legacy on. to number

technology efforts for target a and faster which greatest using XXXX, our our As grow have the generate we subset This enable sooner. near-term to refined our optimize market a will us cash to Global us result of to market to allows the go return.

an adoption. leading have for cloud revolution managers expansion customer market making important the support described expansion of and customer improved are to rate. market that I a three of like to implemented general shift organizational we these to on have to segmentation, disrupting addition are the and number learning with effective. fuels priorities existing initiatives of new focus, would assure market, objectives. evidenced now targeted our To customer corporate organization machine areas. and legacy go number how resources drive the trends changes field in public acquisition Constant as analytics and in three added of align data we insight XXX% the these high gains expand capitalizing on to of and can the excellent to also Mike examples organization make by and we each our refinements our model our In goals changes customers land refinement net more our focus These quality

to growth Our newly Vice President, GMs the who oversee businesses. high appointed Senior report these

sales commenced the and to as investments to a addition In initiatives, reorganization computing skills, the on these in market for learning we segmentation and part analytic specialization. global product, we search making have introducing specialists leader changes in are new work drive new Furthermore, field database dedicated machine adding a experts. cloud and in go of field formal to

large cusp markets At age, are as development, multiple stage its we fiscal of disrupting at of market extending creating As our sectors a in this technological and a and on the focused early enduring plan opportunity. beyond one we position recognized and we the XXXX are have biggest that data we for the revolution most players.

strategy expect exemplary to data-driven our on be by should us an business You refining data. continually based

category the have We leads.

to Cloudera have undertaken continue widening is especially We prospects. that machine modes, we and strengthened well-positioned We that the changes have differentiated in competitive have believe have the cloud. grow we our technology to analytics in learning

few detailed I Jim? would to with then have will remarks. a like provide I Now, conclude and financial Jim a update

Jim Frankola

everyone. Hello,

year-over-year. solid breakeven. and steady million, XX% indicated, was strong both representing of in Tom revenue QX from an million grew fiscal total, the and growing management expense In XXXX operating and our QX cash quarter, QX Subscription ‘XX. fourth XX% software revenue had we from exhibiting $XXX.X As for International Subscription discipline investment revenue flow to QX $XX.X was XX% ‘XX over last for year. of QX year. of growth revenue, toward revenue last in nicely a equals up XX% increase software XX% climb

expansion XXX%. rate average rate churn For and basis the factors quarters. QX, dollar net net for was a expansion four Recall that prior expansion on our retention

Tom software collectively XX in contribute million, four we our the with customers In Subscription XX revenue now $XXX revenue of fiscal XX% up quarter and recurring our in million software the customers the fiscal was highlighted, quarters prior total, As of increase was million, half XX have annual for of $X than at software just XXXX of XXXX. These from XX% year-over-year. revenue ago. excess year grew more over time an IPO revenue XX% for subscription growth revenue. representing International year-over-year. $XXX fiscal

XX added total XXXX in for and net QX the year. new XXX Finally, we in Global customers

expenses was income review unless I the issued results to the GAAP note XXX reconciled stated, than higher subscription are earlier margin period. points gross references otherwise non-GAAP XX% the on results of QX, results basis. the Historical As ago in In and are today. statement, release to a that remainder basis year press over operating all non-GAAP

was Services ‘XX. gross year For higher was versus fiscal margin XXX margin for XX% year, gross subscription over points a quarter year XX% the the XX% than full ago. basis

for gross services versus XX% XX% was For fiscal ‘XX. margin fiscal XXXX,

support and to when project due These margin Total to year variability incurred. at expansion sometimes gross revenue basis more revenue revenue, subscription high differences have organization. Services well and variability. timing while as As is lead customer are are efficiency services growing sold quarter-to-quarter as of a recognition margins subscription software to of or of technical margin a XXX the nature the time gross increased for expense faster compared software the Cloudera’s agreements. compared timing due same continued deferred cost ago. degree XX% revenue points revenue services to margin XX%, substantial revenue and to the than up our work subscription they services services is often of subscription was as QX as than

Turning the expenses, to revenue. significant was $XX of expense, and improvement ago which revenue was operating for the year-over-year most in This XX% compares sales million quarter XX% marketing year or in the fourth to period. of

the sales approximately was year, For point reduction to XX% X,XXX full expense and compared revenue and fiscal ‘XX. of basis marketing

operating mentioned, the As to building have deep Tom understanding effectively. been have success to of customer deliver and $XX Overall, operating to loss approximately an resources support able $XX million. what basis This we QX operating of X,XXX it been takes had improvement to million is margin of more in cost compared ago representing points that the loss of was we when quarter a negative year success XX%. drive an

per in $X.XX share outstanding of fourth to fiscal compared on $X.XX fiscal year, XXX of representing the loss year. in loss quarter weighted loss net shares net share per fiscal million operating a margin the a margin was to prior of XX% average as compared negative ‘XX. operating operating million a the fourth based For of the for quarter XX% Non-GAAP $XX negative was

a today’s Please loss compensation expense per compared average regarding fiscal outstanding. the loss information fiscal release $X.XX XXX for historical million $X.XX shares ‘XX. additional per on forward-looking in was based and for non-GAAP press historical of stock and ‘XX tables based shares share to review weighted outstanding For share

fiscal the and flow, securities operating Now in improvement marketable flow we $XXX at quarter deferred expenditures fiscal improvement all turning million $XX year were continued was This revenue. fiscal short-term cash of at ago period. of cash is and of negative year million a QX million year $X cash negative substantial XX% QX revenue. and the balance were Operating cash sheet quarter million revenue XX% fiscal the last operating efficiencies, will to quarter. flow restricted of for for of over $XX million revenue up cash $XXX to expenditures end cash, million with $XX flow by when in each $XXX was end Capital which for – from the up of negative flow cash year-over-year. conclude XX% initial ‘XX. fourth was providing QX. fourth the $XXX in was for million the exited million, $XX was for negative is I XXXX. the and the million operating or as Demonstrating Total operating equivalents, Capital in deferred guidance cash down compared

understand important we on is offer with take ensure prospects highest transition we strategy the As consume those to to and to into and software. propensity leadership refined the customers guidance, it that focus go-to-market our buy our account and to

Although in we short the initiated growth. company’s long-term potentially the sustained posture have for producing to these run results uneven enhance changes

$X.XX revenue on total is $XX approximately XX% shares $XX million, $XXX be of to approximately per average to QX net between representing With range Non-GAAP in to be and share $XXX QX year. projected compared XX% loss weighted subscription last based growth outstanding. $X.XX the year-over-year. up of revenue software XXX expect million to approximately million We million to million

between expect to growth. For fiscal approximately million year revenue $XXX $XXX million XXXX, representing and total we XX% be

year-over-year. $XXX subscription the have range software revenue We in million XX% up $XXX million, approximately to of

year based $X.XX Non-GAAP margin driven as to be the gross by to per net expect expand for basis average in points loss $X.XX ‘XX. on is XXX same XXX share the We shares million to outstanding. approximately weighted factors by fiscal projected

year’s of the QX to with year ‘XX. of quarter cash and the of Seasonally, cash time and for fiscal flow be year improvements the in QX leasehold QX expenditures ‘XX be of expect with in fiscal in positive $XX operating to should XXXX in be operating fiscal to breakeven expect expect we fiscal and the flow of first million to QX full flow cash QX by million. we XXXX. IPO, for the negative Capital the $XX the approximately We positive Consistent half the most we million of around objectives operating primarily for ‘XX occurring $XX losses year. current be in established fiscal driven the at occurring

to with the Finally, revenue at short-term growing turn roughly to year grow will for deferred Tom. XX% at XX%. revenue we expect roughly back I deferred it

Tom Reilly

Thank you, Jim.

all Our of changes have refined including go-to-market guidance we and time discussed these view transition sales reflects and of realistic required the for our a effect. leadership strategy actions to take

is explode we macro customers high markets will respect wholly use to to relying benefiting data market. still business The evolving that industry. on us our and development. makes the investments conviction have Our well cloud just our more driving market forces positioned with and a reshaping on It AI beginning model will easier Most grow. and and analyze their early them of Data Internet journey. our and cases learning to business. Things the to the made is data rapidly and in disruptive have accessible are continue every enterprises transformation the are and journeys. is our lead digital Machine In

Q&A your We our we employees, remain to to portion the begin course our thank of our can the are of our developer you call. Operator, and all. team community, and partners eager get please our investors, The customers, grateful I to questions.

Operator

[Operator Your Sanjit from first Singh with comes Morgan Instructions] question Stanley.

Your is line open.

Sanjit Singh

fiscal a nice on ‘XX. for and you congrats Thank year the questions taking

the near that’s dig also ‘XX. likely I that are about revenue that rate of is it to just billings the would what am about get like also trying then specifically the in a I would and rapid to understand, in essentially and term hit growth terms we I assumptions in and we the so line? slowdown the current strong talk I guidance seems cause to So, the year some year assumptions understand ‘XX into such so being talking fiscal in cut that of wanted are when growth the net what subscription fiscal pretty the half is in Jim, – revenue subscription dynamics expansion the takes was bottle, guess used

Tom Reilly

Yes, software the if at a two growth pickup from come percentage the points me new comes let look the year, the that from pieces. When fiscal Several from majority customers into year. we in piece. growth will expansion of break we vast

So, most due making expansion expect uneven of what perspective and results the in We first that to is do the year is the that some is are them we the field. reflected to rate, in is transitions guidance. that part into fiscal produce change the factoring ‘XX that of in

Sanjit Singh

came was approach? base toggle the at expanding of in of you the looked just go-to-market there sort customer of is was rate was And when or that the that that at – like the of timing it. Got certain changes, wasn’t you the a that any your metrics sort of the terms cohorts, projected customer mix there other larger out there causing of sort of in terms

Tom Reilly

The business fundamentally is Yes. helping.

was XXX%. growing drill rate and largest still XXX Our are that, the that and our at for down cohorts expansion we customers net that represent into cohorts our as oldest QX roughly

are softness the year. next as in well the half at eventually So year, that as expansion first in look bookings What is land-and-expand expect that which QX to reflect the into of revenue is late impact first will we half changes we for billings we working. and for the putting some model our in thought we really bookings the

Sanjit Singh

it. it will very there. I you leave guys. Got much Thank

Operator

from question comes with Murphy Your JPMorgan. next Mark

open. Your line is

Mark Murphy

Yes, thank you.

would up would I actually end expansion think natural trajectory have a to is see would That seems revenue rate? go-to-market some have guidance new of be changes that is reconcile. to the that XXX% customers Jim your then going ‘XX revenue strategy seem to net as I and it more level, discrepancy am as that pointed that, the we to rate ‘XX I XXX%, at fiscal trying natural time the I And below look at your what would – the rate you to main of trying material reconcile? on could driver I to think effect that be quite bookings, the are expansion and am for we well net of it’s the on not expansion in out, primary on that for healthy the be the that end you that closer on larger do curious think the time. total kind very remains that just but you some effect So, could do to been instance I think doesn’t guidance am or for the in so rate, because lower that’s substantially sub by the fiscal have are the cadence growth XX%?

Jim Frankola

Yes.

them there if is don’t me of all cover different of back. couple pull pieces I So,

So, year about our about XX%. now, is for expansion is over guidance when can have net between you up XXX% The up X and revenue way has it at we bifurcate XX% looked ranged software that revenue guidance the our year-over-year the XXX%. and is the years rate roughly past

we term year that’s some We that the degree the at in and XXX%. are get as the the have to we at our that the forward at range. end field range, that longer adding where then low with of literally into looking traditionally changes lower models we are fiscal we looking making built end ‘XX of of are revenue associated XXX new modeling customers, are close it’s you And very

looking XXX our or XXX, Regarding to larger working to drive net to are into customers that of sell expansion still internally our ability more. we and XXX, are accounts, behavior large rate the at

but run potential field prudent want be So, changes. the disruption the the associated reflect the are and market, long with to we we on optimistic of

Mark Murphy

little you Okay. up that so assumption more a expansion end And that for could fiscal in XXX assuming range is rate to – I guess just ‘XX, that XXX%, as XXX% say this year could up mean reasonable I a in a end are follow-up, directly us?

Jim Frankola

yes. is answer The

clearly, So year. starting we the just off are fiscal

Our rate be. operating we up in expansion chalk to results the that QX, to obviously it’s whatever and forth year the cause and will rate QX for directly QX, going be the so over growth

Mark Murphy

how shed sales something comment that as can of you Tom, when am just too and ask to along pursuing become was you well more XXXX Global something did effect to if the wanted did experienced maybe what and I Okay. terms it of in light much I expanded and and apparent those made the it that resources on lines customers wondering manifest? you outside a you

Tom Reilly

I be specific QX to a will Mark, on provide our little Yes. color that. more use results I more will and

we know land and expand. are you As a

spend to in work. the are opportunities expansion to expand. our best want we model The will time our and salespersons going to existing want therefore mix we customers that lands each of a where always new to organized Our show for territory our versus challenged for been we And what in investment, expansions. do new way customers had land are the they is their have attributes and right of

So QX in look at if we landing. did well you

our customer customers which best our new the we we noticed one spend enough that opportunities. market. aren’t those have But outside And It our we customers about pursued investment the their with customers of target talk step exceeded don’t And I other to focused new And landed. We to didn’t many like reps too go was pleased very reflect QX in time always that is would are those the on outside long-term. is but the we GXK GXK, expansion I frankly think disclose, annual further we customers these opportunities on we what will market. target. opportunistically for land expansion then which going

the is what going re-segmentation. that Global to we revenue and size changes defined doing some forward will I about Within are their of of who being to we we we be which what revenues are them are to the sellers market. are of and much talked customer even are is we best to or are not disciplined rewarding just moment going share And more XXXX. with a take size doing. segmenting by in that outside XXXX selling So revenue Global who you total further

Second, we introducing are roles. new two

introducing our in costs new individuals are on a acquisition customers, market These hunter. We we solely disciplined. pursuing rewarded our improve quality and new our target increase win the and should very increase of are These competitive are customers rates. our logo guys

new our are analytics machine introducing And learning, finally drive that our high are areas growth specialists would are on solely I long-term landing these much you Hopefully mentioned our fit probably our it gives dedicated effort working more field that the outside We when color with little and introducing dynamic of cloud expanded we some customers specialists. new that too of in expansions. we have reps, market largest on also new new a expansion probably kind our who then focus customers customers target around don’t profile.

Mark Murphy

Thank you.

Operator

line America/Merrill Your Lynch. next the Kash of of with from comes Bank Rangan question

is line Your open.

Kash Rangan

what long be that a the incoming question details tweaks make as granted well on along that the might for or is right would market for that the to to little bit further worldwide going think you be if a your find Thank do operations identified is strategy, the to got curious go and much. you management team. not they additional head settle it you if I have sales are is approach just a the How take right replacement of and Thank before much them of focused to as only that’s all you you very to certainty so what what finally the field going head more seems Tom transitions just me? for

Tom Reilly

Kash, so is job fast. to I to my would – like time really say my hiring take have I

well search, is have We underway. open it

the company. to to bring right is focus our Our to the stage next take us leader of

the Our take building to we did $XXX roughly is platforms have This up that leader and now transition tremendous look our us beyond. we a plus broader out to to internationally, million last billion taking million of a leader $XXX $X part to company expanding us job planned. and

are third of Cloudera. We in phase our

private Phase kind selling Cloudera, are company of. IT with which If were X out into in we we a when of are we just you transitioning were

a sold that on machine focused are into Phase CIOs. we exploit have In we our platform We that analytic effectively customers X, to helping platform learning applications. and

selling And business and digital of to executives way we we broadening work so C-suites. as towards the CEOs to transformation our to are now of true selling line

only are the digital one this my leader message pleased people in priority. our but to I focus in transformation. the to brand not and It’s Cloudera segmentation, am we on lead extending our has this the tremendous and CIO transformation. beyond digital the position going the is just very transition recognized to with So, new to candidates. line business unique of the number

will finalize priority. it, don’t want I it’s a So, top set to but when expectations we

Kash Rangan

kind best great businesses understand very at wishes often all that’s all good Tom, this this? a leader the adding we team for because understand selling for as wishes job, about my requires it’s we the got the is candidate scaling good that’s the products, best on finding these the best fit, that point, story of right maybe Cloudera management so

Tom Reilly

Kash thank you.

Operator

comes Your Pritchard the from with Walter line next question of Citi.

Your line is open.

Walter Pritchard

turnover so on QX just expecting Kash’s what and disruption the I since turnover, guess what of are you of questionnaire, of thanks. haven’t so they Hi, personnel in Actually end in a rep you that layers this a from did transition far experience out? during worked that sort terms and management follow-up

Tom Reilly

the salesforce to we works. to in So every it’s you – industry attrition year when not and unexpected most in when you new QX a your the with first that’s have always not are how QX you attrition, unique so go start us, seeing any off, or spikes as from that’s a attrition

in raises spikes or anything any had haven’t concerns. that that We

strong very of transition each are and through that QX despite transition on – we in our a extremely We through everyone and executing theaters our are our beyond. team we have the focused very going have we leaders operations well sales leadership and is

Walter Pritchard

on focusing a components there those you you expansion question do expect was to that’s basis a do on as customer is with Altus mentioned you a churn, that that the follow-up are to in expect a is impacting And rates get then net in three the subset from are of Mark churn the rate, and on headwind maybe and one more you focusing of to you so that about something are perspective, of what you before asking that on just expansion what is you metric? fiscal ‘XX

Tom Reilly

in a with the on disciplined on understanding lot non-target use being more just from trying are more focusing so target to now right in cases is little by of our and the that we remains timing We market who prioritize regulatory that is where the cases by those early use in And A first use enterprise industry will we the of year. customers sizes do and right cases our experienced customers reduced Walter, churn color. of lot do cases XXXX fastest. our these customers adopting Yes, use we all platforms. is we on What are of believe churn. benefit Global

that the and forward. on So be churn we going in focus place we just want quite and putting right to customers some so of frankly discipline that’s will the out them in

Walter Pritchard

smaller metrics but we pressure doesn’t shouldn’t sounds expect should meaningfully give So we that impact that it number see some expect on that relates you churn? to should XXXX if as some it metrics, revenue it with because the it – necessarily like sounds like metric that of even customers Global pressure

Tom Reilly

we at What drive will customers of land have customers XX we higher we churn sure expansions. quarter in remain the and in past, our and should and Walter, every that roughly perfectly. therefore quantity first those – are less feeds is same are so new consistent off, see better if have we goal are our landing No, as should making new we every XXish doing hopefully model even quarter, it quality will

Walter Pritchard

Okay. Thank you.

Tom Reilly

you. Thank

Operator

Your line with from Bank. next Deutsche of the Karl comes question Keirstead

Your line is open.

Karl Keirstead

Thank you issue, might XX% for focus end Jim, get for would the one own maybe the focus. are but much. assuming about prompted deceleration we growth? the think the that the down I for Tom on guidance quite or ‘XX, question slightly, on that Cloudera line very about one XX% but one talk revenue fiscal this ‘XX there lack isn’t so Jim, of significant you what much. if XX% things some rivals it’s beyond in growth growth, could fiscal XX% the Maybe why much your this would ‘XX, only subscription end DR I deteriorated, but less then growth come is just a one what to use wondering old you maybe don’t new you DR could is and your less emergence is have am you address fiscal where this market maybe a I cases your becoming in decel severe revenue are sales fiscal that maybe sales of any market Tom so on isn’t the [ph] actually shifts is the in demand so Thank in relevant, if subscription from goes that very And to understand ‘XX of

Tom Reilly

I am to address didn’t latter me. question you glad

ahead, the market. So point fundamentally remarks believe through reason in Karl and transformation every so The the going digital at enterprise we opportunity question is on thanks future. our market for focused in some happening broad much the is about prepared the we the this that

for algorithms, we introduced. it trying intelligence the but between appetite learning their By disclosing Here what that warehouses, enterprises focus is very Science trying these these IT proof options has a large for growth new here executing the general to understand is to areas that IT Data it. to by shop legacy rapid now who introducing scientists they into enterprise ever and is artificial are become on large, is In in to have while line are the trying of are that our like point, the do technologies of data what numbers that. happening. how we the and in data re-platforming They that it’s they Data analytics product, source against managers be is machine early. our every to our understand they the are, fastest is very workbench are of the actual evidenced we happen well-positioned lakes challenge it as and in of not what project and Machine open means, business. growing Cloudera learn are product large bridge of adoption are learning,

to we we when about want industry. talk learning, our And in that machine so lead strategy

Forward our gives not to us unique in research our with acquisition on We technology, Fast with preeminent leadership. the position are Labs planet Labs thought only help in there. team of Forward the The Cloudera a applied customers Fast but

the for tailwind is turning us. that be area. So tremendous then a finally, to growth out is cloud the And

security offerings to in focus While it their customers offering, better governance guys you how cloud large time who each importantly on out hybrid we I we competitors enterprises, around where house multi-cloud of the are capability would public more all the the Amazon. like integrated figured value that and features our the than own is say in our stay multi-function have has win our value find house new to and introduces can’t and Amazon enterprise market our approach, cloud

are better Our better products operated on own and Amazon integrated than Amazon’s offerings.

ago. So unlike what it shape takes the cloud we the move did X years are seeing to

to see I expectation nothing No high think is there do need just concern So on for be a that to market demand. have end changes us for market. how we be gives the we very us me or high competitive about I market. growth we company. And in attack that facile landscape this

Karl Keirstead

you, Thank it. Tom. Got

Jim Frankola

easy I question. the So get

generates where will which deal deferred then it, So say model revenue. then we clearly the book revenue, have is bill we works Karl, a recognized we I what

long you should themselves, any period deferred may that. there metrics that so bookings revenue should So revenue it impact growth lags growth. In all the match growth, given billings lag. matches have match the growth, matches In and run timing the is

revenue our ended So XX%. very just software specifically growth year was the for

to will bit say to see take of XX%, and the revenue in uneven may There building you a the then the you revenue into bookings less in, it is was your – the total this deferred and is fact if in revenue year with current callbacks, I quite we What and the Our clearly see the bit little make revenue of I is model correlated and do in XX% the address we the the if growth can the can frankly year then that XX% heading XX%. year, time so deferred think want put of maybe XX% into assumptions in into sense. growth, us you model. see the you is when growth first gap revenue next half a more

Karl Keirstead

it. got you, Okay, Jim. Thank

Operator

of the from James. Turits Your with line question comes Raymond Michael next

line open. Your is

Michael Turits

If you implied, about guide I seems of at didn’t in all $XX the that pretty calculate about consensus, were to cuts to consensus the than a to but instructions, this cash It’s guide bottom decline implies for like coming I by guys. is obviously some year. steep the flow relative it billings guide didn’t it to line. it have Hi, know $XX kind it billings it million to make from keep will less to you million

to XXXX? coming flow manage on So, how of pivot and back lawsuit in seemingly do being for back how plan kind from casual you cash do you that if then will you to

Jim Frankola

levers in that to Yes, fiscal fiscal had started financial cash to at were XXXX our of million standpoint. ‘XX. that from out things To burn of out disposal. with number put mechanical year we year in with flow positive so there get in a perspective, We we a cash and let path had $XXX me restart

and was our that investments. of nature current Part investments both the is leveraging sales Some in of and of marketing. past that understanding R&D

what So billings are the yet for fiscal the what has going over less in still to are that confident in flow past XXXX ago. happened fiscal year we penciled cash positive our year a year somewhat had is to than we we very ‘XX year get are

we expanding of On of grasp have certain customers. other spending, a spending hand, our especially with associated the the better

see still in and the $XX and initiatives together we to pieces those get of And to and the all what cloud. are burn the fiscal to that invest ‘XX year cash $XX us put we confident field machine So, million to learning is positive in flow you have in cash continue to analytics in that guidance XXXX. million discussed terms invest in allows

well-balanced. that think everything we have we So,

Michael Turits

Tom, as will these weighing be sales the of and more all get through to when essentially to question start of things one we and think in you I start do follow-up growth? productive your see taking are estimate ramp place, would should guess and that reacceleration just you in that we changes be, the changes force

Tom Reilly

Yes.

planned be as that our we prudent guidance, with know, to we to you As question. want have respect

like from underway just we hiring to in specialists new the second will the leader are field, a changes we our but the these but of not come think still some up of start half training on bunch and are will hopefully have are out. benefiting Some specialists ready, in them changes too of I these implement, far we

So, And second the getting the users challenges as the powerful that in the of also our these unique and for of on changes address X both we business company see applications. we but benefits of stuff are some I the line start transition broader these saw, the will us half. focusing we the right think with to to Phase

Michael Turits

Thanks, Tom.

Tom Reilly

you, Thank Michael.

Operator

comes question next from Your line McDowell the with of Greg JMP Securities.

is Your line open.

Greg McDowell

this very next more Great, one the sure with am week turning and will little I have thank hear of you to the we cash model and flow much. a model Jim, discussed IPO Analyst last if to we wanted about bit should in we and takes how was the the ‘XX. Day, think and puts of question the you time FY I is the and but long-term as positive the the quick at in differently for long-term effectively timeframe at discuss think changes the maybe model alluded it hour, long-term same about I you for the

other wondering So, maybe the talk was changes? that I components and can light of modeling the of long-term with in puts Thanks. the some sounds takes of consistent, about but if we

Jim Frankola

more do a Yes, because time our at very is I Day. on Greg level we right for will sure. And will lot Analyst this what just high be will I at spending a it now, cover

effective drive million and we well more. sales side frankly are selling. invest the on our effective Tom years customers X, that various understand of use in been $X.X our the better use at expansion very have our still through ability alluded is own is to expansion So, or really to getting cost we just in are of in have with of quite where our even to first stages I’d selling of $X through terms or X, that more journey their data really, us million sales using X or past case, second the we even than The year, for through path that doing expected resources behavior case, had to reps as acquisition, of say we been customers

we change wanted other we this factors us of these different the each improvements. frankly where motion and cost higher have but acquiring found obviously that customers in that the can we was and optimizing how really field for the which quite was customers is one acquire customers year. we led last doing better we to thought that the do expansion to hand, And expanding make our understanding to is than of one that well, even one were On sales of to more then need which make are motions, we the sure acquisition the we even sales really substantial it

in to news the highlight new the So year. model over that’s past the

Greg McDowell

helpful. That’s Thank you.

Operator

comes Andrews line Your next Jack from Needham. question with the of

Your line is open.

Jack Andrews

Good a was days. a afternoon. topic of it’s I hot I little wondering Thanks for the clearly specifically learning, more around my if topic of bit down could mean, discussion we taking question. machine these drill

at learning this cases a harness to much do as there mean need talking embed really into I power guess with much technology the around business machine customers, do is this your point? I pent-up this mean, guess and to or I So, processes you you use how versus evangelizing how I demand

Mike Olson

Mike Tom you wallflower. want Olson it’s take question of on. and to Machine may thank plenty learning, the rage, loss excitement. I hype, to want the and Jack, will all of I the for pile giving

real to value problems and in ever than on ML giving understanding which large going them by business in data people treatments more all worth using which enterprise for loans early. patients predicting also fixing In fact, serious better advising applied business fail scoring and business our and are clients we decisions in are driven but recommending techniques to and weighing new problems, before, to make how risk being see machines

of areas. all to We choose don’t repeatable with operationalize know those work is to apply how ones their don’t technique, brand that algorithms The problems. how have which real cases business use those algorithms the to and and in challenge enterprises customer got understand new

have Thanks got to of Data Workbench. we technical Science So, capabilities. a lot

brings year and Forward deep Fast Labs Our expertise to problems. in in investment last also algorithms on them real in applying the business

interest offerings Tom of shared, our and those plenty product in Both in Science growing company’s seeing of as means. fastest that are about an is we are excited Workbench very the history Data what We uptake.

data you adoption for for have for as we learning, as established that have significantly each a forward. cloud analytic GMs, and see X We big one database, warehouse heard driver traditional going disruption machine very

Tom Reilly

Telco talk it machine for Mike you not learning, the that end about to just pile to learning laundering. self of focused use trying machine driving to is all the is significant, reduction. Financial is answer on them cases need to make Jack, but vehicles is to were on, services talk autonomous safe do through about vehicles. is do solve. touched to uniquely medicine. the on every we way trying to appetite They ML. Healthcare problems, need or auto do but money churn solve the can these precision manufacturer any

acquisition lead is us. Fast of Forward customers why for of was So, an and to and our our there such these that’s differentiations as part our our important pivot cases become one Labs experts in use

Jack Andrews

commentary. that I appreciate

Are of thinking than characteristics different impacted moving the you a seeing drilldown have quick customers and you segmentation or subscription wondering things. $X incremental these as customer Just million you groups you reached could is the forward? year plus any that reached among about if follow-up, possible that side was XX – revenue in now trends latest on if milestone have per the I have on that its the that are way historically are

Tom Reilly

Jack. Yes,

any move So, we of what the board time on look the journey. at five one And can phases and from what as from in move actions of through journey they have we those the one is projects of to underway of million at beyond through phases do actions the look and and grow to is come that a customer these they phases does the to that effectively what $X next. how we each customer them take we they

the million exactly So, but have $X all-in have that $X We how actions analysis, the many customer from and what are we a clear what our doing don’t we forward. to of And patterns. million that sub customers taken understanding moves customer we know in this graduate to I move and through to of each were class have are class journey. kind stage next of

just sales point beyond. of on not journey our and things how did the that less to initial one manage above As train a and the what’s much fact of on our typically matter to customer than that them so $XXX,XXX but get the we million $X recent transaction SKO force was the we customer from starting

Jack Andrews

taking thank you my Well, for Right. questions.

Tom Reilly

Jack. you, Thank

Operator

Your next Rishi line Jaluria with from question D.A. Davidson. comes of the

open. line Your is

Rishi Jaluria

thanks taking Hi, for guys questions. my

step go of should something is payoff how should back, Just combination revenue changes I in these strategies first Then have of accelerating want growth, of the some of that above? net rates, go-to-market expansion ASPs, the mean, to in gauge kind all of I we it changes, strategies higher one take to follow-up. and a and back the higher sales the success

Tom Reilly

Yes, Rishi, this is Tom.

the So, what the changes – of let the are changes objective making. we me take

bring having dedicated and reps reps customer. customers of improved better see a that, doing if expansion land-and-expand into higher this they lifetime we see our yet should value expand next churn our that see dedicated our do to quality the By should our initial portfolio, affect churn, that. highest expansions. know we faster ACVs, the That is expansion with because to opportunities have should to we to We off, see in in objective should rate that are we customers the also opportunity preeminent that to class of largest rate. the greatest we our one have of of First

we his So, on honing around in just really land-and-expand. optimizing are

to competing lower I by think are reps is think just hopefully see acquisition with having will can – expansions tighter new what logos, you we So, costs. And we our customer better retention, dedicated focus. this for initially also going to we better

Rishi Jaluria

segment others follow-up now? sense attractive Thanks. propensity there attractive for that of those have us than terms of you, Can Okay, verticals Cloudera you you you in to a got least consider Tom, near-term GXK what more it. it. specific consume? be that some industries right mean, most the That’s helpful. for And That’s more give to maybe for one might I mentioned at within be that are

Tom Reilly

Yes.

the we looking very well, and continue Every good. driven the of the are in cost their and the in our tell chronic financial by you to We, In have penalties services. part well and with fin-tech vertical, they services done automotive would now now seeing technology patients industry, financial is software. has new one are and be we all very hardware companies that been back to telecom manufacturer the business of out manufacturing growth been I experience. do expect technology financial trying really diseases very, are that always services competitors So, for digital really so emerging very regulators, high has verticals, continues but strong we large for very, is What to instrumenting like us. very software industry And very active pressures are over because healthcare, active. all is return seeing we

GDPR and priorities. And through so that – is of how companies is at susceptible to go a this look us. We we kind for are focus

great and we driver going for catalysts a GDPR but urgency. of kind our are these some understand trends why, – to or so So, platform is the to point at industry identify we

Rishi Jaluria

thanks. Alright,

Tom Reilly

Rishi. you, Thank

Operator

Securities. Mizuho comes Your Abhey of next Lamba the from with question line

Your open. line is

Abhey Lamba

than that not your performing happening thank guidance, the tailwinds was commentary ago that to positive lastly, ago? and is X versus market reconcile secular months time, happened, the in why underperformed what but what So, the companies thought is as drivers, all Yes, pockets expectations, helping where you there are expected the you at same your where Karl’s to happened question QX your months have in I with you you. what trying maybe did activity so? laid Tom, X clearly or market narrower the the lighter, out your what in end-markets, happened is the expansion am markets

Tom Reilly

resources. sales want we I I directly where is we made using where mistakes QX. our answer give directed and your – And really want this to question I Abhey, to think

we to overall booking QX fell of goals. peel our in So, back, short

our we sizable. larger start peel However, number, acquisition customers expansion now were you fell business, new short. expansion customer the deals with if expansion within of where more because new we that, part our And our satisfied small, are is

really more over be were and theater. can So, I Americas just specific rotated that in our we even was

that we correct how business a you guidance transparency a for and and over bookings is these Abhey can guidance. impact little our in gives Hope affects rolls so QX happened that into that what and So, miss more that subscription forth. what things here are our now that into the QX,

Abhey Lamba

Yes, that helps. Thank you.

Tom Reilly

We would I up. that time is over we little over, have knew the you a questions this but Operator, need think to went guys Alright. for good we wrap us.

journey. you want So, on for thank to your questions. this I for do your being Thanks time all today and

on early this of digital just number embarking and well-positioned. market super transformation. is the enterprises of the touch in We are drivers. on a stages are We Cloudera those

have advantages. many We competitive

We invested analytics increasing our especially cloud. and technical the market. business moats, I to of this high-growth machine are have learning in we areas are and the well capture These think

for thank in time you your future. So, and talking forward today to you look we to the

Operator

conference today’s concludes This call.

disconnect. now may You

Cloudera (CLDR) 4 Apr 182018 Q4 Earnings call transcript