CLDR - Earnings call transcript Q2 2019

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Operator

Good afternoon. My name is Sheryl, and I will be your conference operator today. Welcome to the Cloudera Second Quarter Fiscal 2019 Quarterly Results Conference Call. All participant lines have been placed in a listen-only mode to prevent any 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

second call. Sheryl. 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;

statements cause call, Generally, other this words subject events differ materially we identified of actual believe, and words regarding anticipate, forward-looking are course denote forward-looking performance company. from those forward-looking future expect, the make to the by the in these financial future future intend, During such We and as events. the of risks and will statements could results These are the material of statements. to that actual that caution factors use statements you differ this the factors those important call. materially release risk to could consider described the risk XX-K, statements These filings press in press results quarterly conference from XX-Question, fully release and and the Form the to on are in forward-looking cause under Risk report in with other the our our SEC. report and on detailed our Factors Form annual in caption more our that uncertainties

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

or our measures Cloudera's for results, XXXX. not to isolation you intended when addition, encourage substitute from, in we non-GAAP are all superior measures performance. consider GAAP In These be non-GAAP share to a analyzing we average for, fiscal provide and to weighted considered count a

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

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

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

Now, call I'll Tom. turn the to over

Tom Reilly

discuss Hello XXXX quarter to results. everyone. you us our Thank fiscal joining for second

in our fully performance pleased we're goals making in the It forward As to with our I shortly, our execution will being QX, continued customers quarter, quarter, implemented. go-to-market delivering our in initiatives of success we detail financial all in and are see and to the strong for in encouraging and by is I substantial and sustained our market. look am our made of many partners. changes in progress the results validated product as improvement initiatives, accomplishing

negative In our demand software of addition, set. our quarter operating year-over-year. flow to million, the is cash cash positive Operating was second million, growth market remain intact, was and revenue bringing Total million. XX%. revenue secular XX% $XX tailwinds the in across year-over-year grew Subscription $XXX flow for representing solution $X strong year-to-date

target existing These One customers sum than the by QX. our conclusion XXX the expectations beginning revenue reflect our transition quarter, is market customers happiest with of measures increased greater of in XX and new $XXX,XXX, total annual above of ARR. I'm the $XXX,XXX our that of of plans very than for XXX,XXX with and recurring of graduating exceeding of business best ARR the customers our to model. this briefly. at Recapping support with a more number transition our customers We

in investments transformative have We areas. made two

technology advances in we're update provide spend each refined our go-to-market second, expand on investing net costs analytics, a and expansion to I'll cloud learning, and acquisition customer to First, sustain an machine rates. high differentiated and moment in And moats. model we have our area. reduce in to to competitive innovative

the Let we're level, our that more that and with progress me on exhibiting target market in and of discipline target existing type named begin our representative of focusing Recall our go-to-market approximately At this made market. very characteristics We customers. the highest best prospects X,XXX we expansion strategy. good refined display to accounts quarter. consumption our

market, managers have reorganized focus expansions who exclusively roles, two are exclusively account encouraging. largest in field our early we success. Next, new driving customers who selling our on around indicators and target new customers and land their The our those

Justice. resulted suggest than intelligence, more new we in and seven we domestically customers, across including agencies, and increase Oil, quarter the enforcement, sector, Zealand, we our manufacturing, five Bank, XX% Ministère customer banking Abu exceeding execution we public a positive our a past call internationally but intelligence, eight success the was the rates our XXX%. reflected this In both revenue. customer net Waikai reported of QX initial deal in Dhabi Impressively, including renewal Baroda, of illustrating than have software to of of net these and customers, On rate Energias] journey, to cases focus Bank. the acquired front, here, of quarter. [ph]. and we civilian bookings now that our important financial continue our advanced new our in annual all Statistics [ph] We representing focus expansion recent infrastructure. force up-and-coming are QX respect and and services, is New and discipline [Zions] targeting and typical moving Bank cloud customers customers energy than analytics, quarter. our customer in use customers. QX Husky added reorganization. new revenue, law Tata for $X higher Power, strong public customers XX XX above sales expansion acquisition half value defense expected Also, of trend often recurring and XX adding higher have on expansion into from existing expansion for a won million soon space, averages more artificial de is better With on most la Steel, In In in-quarter machine to including It including Leonardo. It results [Gulf Many Saipem, customers vertical, land-and-expand added and a In size the learning, impact and a acquisition France's towards transactions target that notable too were customers, greater the in translated strategy. Islamic employing market customer

assessing this Cloudera's has banks analytic and repairs. of With New use cyber Technik across to of improve operational spending the safety, use and Cloudera identification Australia data in unplanned Cloudera platform supporting Today, using malicious. Lufthansa one business Zealand, efficiencies. They example, maintenance the For world's run reduce services. learning airlines Technik behavior, to prevent their using Lufthansa to Lufthansa on anomalous run being providers workloads expanded with the costly modification of began to on security, and And using of improve civilian ANZ of for flight is analyze Microsoft Internet Bank, more the were XXX% one likelihood from machine new for aircraft have over is case of its and software and largest years. issues, maintenance their leading bank for machine capabilities and they since learning previously. several Things they're Cloudera predict help than is analytics integrate Azure.

Data recently adopted Science In of addition, to accelerate machine they've new Workbench learning delivery Cloudera the applications.

XXX expanded campaigns. effective built represents increase and a largest develop world's use expansion consumer ANZ's more case quarter's their Electronics marketing of base payments companies, to in IT Samsung initial annual interactions a This their one electronics Cloudera. have of in using customer America, degree number ways They XX% customer in a to of Cloudera. personalized order and the view

most organization payments has their tripled expansion, recent their this With than more Cloudera. to annual

data. the accomplish is of and strategy the of to to data solely striving customers get out Our this first are in focus adoption. intelligence versus machine managing our on organization that by learning needs We artificial leading insight

are industry customer shared market, success case customers reinforcing in are importance disrupting I search in studies in our market; in all warehouse helping investments our for is the rules, our customer adoption. also machine highlighted the pleased and the we third, our data in were capabilities sales Second, analytics, concluded trends. by key cloud, The that journey target we pleased I learning, and our and am driven capitalize cloud a driving the very of selling our leader. with am journey. to have I that refined these new our announce we

This the date our start an will finalized. operational being and has and is further to be opportunity. match execute experience We the the business executive scale market our to go-to-market strategic shortly transition announcement as making

discuss will product Chairman, Chief new Now, Mike Officer Olson, Co-Founder, announcements. and our some Mike? exciting Strategy

Mike Olson

everyone. Tom. Thanks, Hello

Cloudera use offloading on Data significant Cloudera a XM. warehouse copies. Choice major three Nevertheless, product Data made same on with one development Insights machine you particular. our and top or and Impala workloads our to big release, has mostly have on Workload Apache data big learning and warehouse well the work traditional progress Experience data a focus of the of intelligence popular made SQL know, Workload on Manager represent customers of Peer high broad Customers didn't platform. organic recent for customers but data SQL Altus cutting-edge Gartner self-service able to our the in As Data they the be from the and the selected analytic Cloudera the are workloads. great as run cases Warehouse, announcements on as forward introductions the improvements We platform, in of success and we analytics we delivered data our and warehouse SQL performance, It's to and customers may Warehouse the enable analytics concentrated several We've perform process. us X.X Cloudera as Survey substantial years same business vendors. platform as announcements was in five This scale business. industry August, one in making helping Warehouse, leap deal performance most and had with been without expressly workloads engine. With for These

Impala, SQL for years our with We have coupled and into deliberate hybrid experience us. more $XX analytics the data move strategy market, obvious than investment multi-cloud five with an a that choice warehouse and makes billion supporting

warehouse we data data Cloudera a are analytics. for is what modern self-service introducing. Here's warehouse

of On data exploding this it of and why It's that of performance notes. and least query me Let a native Things. sub-second an modern the of daily systems data of by hundreds petabyte define cloud to at workloads, in order XX hundreds magnitude. can of scale Internet manage metrics, important it's deliver reports, thousands computer each world these legacy of and architecture on warehouse beats

multi-cloud for scale, collaborate Our cloud is business either Cloudera transient theirs. of Cloudera choice, expanding and and object critical designed data enterprises on delivered a and Microsoft simply generation for data only enterprise in its and works; with warehouses governance, data, flexibility is on-demand how data Altus warehousing. Hybrid as helps where simplifying workloads, for easier needed Warehouse. This shared Traditional work for warehouse cloud or with the our and cloud new the with and availability Warehouse or eliminates with cloud on it's offerings and need Web and agility, It secure have experiment and data enterprise a people Amazon warehouse in whether that lineage modern demanded provides privacy. data normal analytics data is warehouse cloud hybrid Data it real-time warehouses Services. copy and maintains Altus governance redundancy IT, workloads. that further data the performance compliance, hybrid warehouse their security Azure the typically new to in is performance Data on-premises making generation agility, optimize and more data weren't and deliver deliver. into the hybrid. secure and proprietary Hybrid enabled service, to to hybrid for it first a warehouse for cloud one public business enables and it's and by modern also Cloudera works, The data We warehouses people self-service data public enterprise to on-premises. elasticity works professionals. data choice, and sets cloud all by available cloud stores, governance history Cloudera analytics first data people

management warehouse. visibility and guided with and I'm troubleshooting migrate, Warehouse require. provides SQL Altus sorry, market disrupt The warehouse their intent offer Workload our force. workloads do we've analyze, and for uptime solution, affords and utilization. data the to on So, Altus warehouse as upsell our very is analytic self-service XM workload XM, over This to efficiently our is data full Data delivers running the to for Cloudera that customers modern service the and represents entire workload technology. big the revenue life value stated, through own Data -- intelligent doing Last an capability a risk, opportunity an week, workloads improving announced resource solution warehouse and Workload Warehouse Workload management more. with best accompany cycle. Together and and years. data for our cloud sales these is a tuning offerings though Data earlier, This optimize, customers for reducing Cloudera we Warehouse, Traditional data providers XM on need must our been workload portion featured analytics the of SKU performance a real-time I vendors. analysis performance up Tom new visibility said modern Cloudera scale platform, and industry. speeding for It control migration they

development All machine a demand that designed begin means for and data happening enterprises mark artificial upgrade are rapidly and legacy outgrowing is gain technology. migration more warehouses. data learning and as of is their we this that now as ensure data solutions intelligence data exploding to IoT customers to legacy This their share warehouse

Our modern this and directly market forward shift. questions to major our look your and tailored on to offerings well-timed opportunity. compete solutions this I are on in

Jim results. review will First financial though, the Jim?

Jim Frankola

an revenue growth In of everyone. XX% XX% Hello the initiatives was revenue in strong over $XX transition million, the This across board, million representing ago software from a Subscription We year XX% concerning our quarter, Mike. especially XXXX. revenue the of QX represented increase was year-over-year. the XX% key had plan. Thanks, second fiscal period. of up of $XXX quarter total, for

share QX and early detail Given provide but want than suggests transition the we that is we've additional complete, more we of typically some go-to-market progress. The transition, to positive not indicators taken do, steps.

revenue of ARR, XX or bringing of annual plus have of XX% in recurring customers per total customer. dollar either first-half Million software customers We In another more be the this representing started significant customers to $XXX,XXX grown grown steadily have our the the in year, milestone. have represent revenue. XXX to class, than

more As of representing of QX, million we $X with had XX revenue, annual revenue. customers of XX% than software recurring

versus our the customers increase of refined also are in growth approximately average at We a on $XX,XXX, In focus historical new seeing started new target heightened of ARR. customer of an $XX,XXX market. showing benefits QX, XX%,

on Tom to these was unit as customers in towards and attractive along targeted both our XXX% net advance mentioned, Finally, to rates, acquire the rate reflect expansion increased measures renewal increasingly improved QX better success. Collectively, than the focus customers journey due best and economics. customer ability expected

highlight results non-GAAP I steady references are the making of As terms and the GAAP a otherwise income statement, to in to that expenses previous are in the results operational efficiencies. operating we like to remainder earlier I note all basis. stated, on non-GAAP Historical the today. unless would of issued are review release reconciled results progress

to these the seeing a applied go-to-market by and year with to from are other processes, flow, our This of to technology our increased confidence nearly driven XX% specifically QX dimension. path gross support expenses up was appropriate Together our results benefits in ago. expense functions. last of improved cash every XX% positive We to margin operating was margin year. organization, and our XX%, gross controls, margins compared XX% subscription Total in being for

in compares year total marketing was from and $XX XX% expenses, was the for revenue. a to of to period. for substantial revenue second XX period. XX% XX% shares improvement XX%. second than of in $XX information of million loss or and release weighted ago G&A expense ago. the of or per regarding XX% year As financial total compensation in total was or stock-based quarter $XX operating forward-looking sales the was shares a to for million was was quarter million second million Development operating year-ago to the XXXX. million of Research XXX operating quarter improved on of XX% percentage tables the This Please quarter share from and revenue, the loss share more the based second today's compared Overall outstanding. revenue and year. historical $X.XX Loss in XX% expense of points per total QX, of last average improved quarter $XX outstanding, negative representing second margin statement press review $X.XX additional a compared This revenue a the of fiscal for in

cash. with the restricted for negative quarter million. Now, flow this turning was sheet $X cash flow the year of securities, first-half compared $XX flow, the to cash of positive fiscal in cash, $XX to fiscal a equivalents, million Through the in we balance as million, first-half negative and cash million was Operating QX cash exited and 'XX. marketable second $XXX operating

Cloudera's of Capital $XXX in XX% highest providing the year-over-year. reminder, Total up deferred for at and collections with fiscal revenue cash XX% second I end a the quarter, QX, was quarter. by million was for XXXX. guidance the As expenditures conclude revenue fiscal deferred initial $X $XXX million will up Short-term year-over-year. updated and flows are million, guidance in were fiscal seasonal, QX QX.

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

$XXX is shares $X.XX of projected outstanding. loss million be approximately XXXX, $XXX on Net XXX per year-over-year. revenue and approximately the $X.XX be software XX% share to based weighted average million, With up growth. million to representing total to million, to expect For XX% we million range fiscal $XXX year in between subscription $XXX

operating expect call approximately with I cash well. to flow will XXXX, year now to We to negative concluding flow at be the of $XX IPO, full-year and some the expect our we fiscal million. we fiscal as objectives Tom the Consistent XXXX return established operating cash for QX in the be for time the for remarks. positive

Tom Reilly

market Jim. a the with many that Thank we are executing good are we It path I quarter, and more initiatives capture Cloudera to our go-to-market of focused and machine remains increasingly learning, increasingly am or moving goals. very workloads achieved analytic on we on product intelligence, in strategy. the you, the right long-term our cloud. team artificial our The confident and was as to the of reflected positions in exceeded opportunity

optimal prepared Q&A you grateful of employees, our our customers, the further performance and warehouse we being course with as analytic proper product forward downtime, focus improving our The What's QX's public for call. As to of portion cloud-native a of utilization lifecycle investors. our that. we're new we the have data performance, I begin to just everyone workloads. continued of across warehouse look the to as and on-premises innovation seek Thank deployments our and updating data more, architecture differentiating offerings set industry. exciting. potential large of With and our and community, indicates, Service we the we cloud for The team partners, market. is ensuring implementations, I particularly offering are all. for next reducing our this and to with you. modern we complete by believe the remain a doing that Platform Thank Workload of phase right Operator, infrastructure very to disrupt solutions are developer XM the three

Operator

Raymond Michael from Our line [Operator ahead. Please question comes of first of Instructions] James. Turits go the

is Your open. line

Michael Turits

strong you around. like see for Jim, a bit and little getting can were expanding to we so then drill you're that bit below one, if on down you can little And ways how efficiencies adding a got and customers, accomplishing quarter OpEx questions, be our which follow-up. great. customers and model, did I've talk Hey, a a in you operational referred would guys. all Looks very -- Two

Jim Frankola

were We've In the us amount much board. of to and see in we starting to we When using Yes. a of see and and as the we're that margins our support on customers the to we well terms the identified we're behaviors of changes. over successful, customers, on help maintenance. go aligned need as both versus customers. the support of the these at up. drove greatest we more focusing line, focusing data having customers The changes, to provide to support efficiencies are sales operational the across of technology effects that, were from inside come expanding the them where the proactive that that new what technical do customers sort expansion out what pretty our successful of go-to-market that lot programs a sales have company we predictive also support When big with the approach in looked calls place we increase, collecting describe of make thereby driving those area,

We ability are terms in in and our seeing the of benefits of of those organizational customers. terms and structure changes cost expand to our both renew

Michael Turits

of were And rates, against in competing discussed customers, how relatively terms know you offerings in whether [indiscernible]? how don't quarter then, quantify you us what terms the fact, and for again, the just like you there. you're progress or if Tom, competing of native of there you're I is can qualitatively it's win the number cloud, total last in new the cloud

Tom Reilly

you, Thank Michael.

roughly hybrid in skills. we our more XX% moved of rates every improve with competitive customers working a as fashion. to builds seeing So these have sales competing we're the of Today our most cloud, quarter, cloud. we our and are customers are have passing that the the win in often workloads force Invariably

capabilities using on-premise, using a they're our in fashion. it often and they're multi-cloud the public in So cloud,

features deliver leveraging We We that. multifunction. do require in hybrid that enterprises Our in enterprise we fashion. cloud. SDX, And fashion, a give differentiators in competitive that importantly, multi-cloud the large just are a

workloads Azure, whether warehouse on we with and capabilities shared Warehouse, on back move data customers to our against can can doing Data data Now they're bring or machine and Amazon prem. capabilities they Altus that learning

Michael Turits

Tom. Thanks, Great.

Tom Reilly

Michael. you, Thank

Operator

of comes of Your Bennett ahead. go next from Craig-Hallum. Please line Chad the question

Your open. line is

Chad Bennett

quarter. then prepared Tom, said net trailing one you the Echo guess on thanks. the the higher net to follow-up; nice Great, catch expansion job right? respect four quarters, think for quick I quarter I clarification was than with did Tom, in a I remarks Maybe expansion and that in maybe your

Tom Reilly

more I'll accurately. that let Jim answer

Jim Frankola

Yes.

was of the is expected a expansion last than quarters. we an which net rate higher lower due for year, average trailing quite the in It the XXX%, but So quarter good is to four was It's measurement. execution it frankly, than last XX-month quarter.

Chad Bennett

Okay, and then maybe for follow-up, again believe for talk Tom. Tom, on or guidance. think you about, I can obviously matter, raised you -- Jim you've maybe that

are Data exciting, you're part lot how I difficult base past those a rate Can we're You the are in of what's new And the maybe for Thanks. in confident rate? much most of penetration believe changes new through or sense the the reflected us you guess? the about; kind that that, really give how How talk in introduced a a being products then of kind offerings much Warehouse go-to-market you've you products think. new I of current really are into -- of run are transition.

Tom Reilly

All Chad. right,

take is far transition, results. year. I when as see news the sooner us. good that route roughly thought. is our behind through time I bulk the our of transitions activity as the expectation the the than of announced disruptive would end transition, even four said our So the changes The quarters or full these to I've we seen And take take

over in changes have do our We we but been our in well place. customers our the with And the offerings, respect we in changes working for as Warehouse have completing years. we to I'm with shared, second-half, confident want Data Mike our analytics to have work drive by With all QX. five to

enterprises XXX large gained have that we have expertise. We roughly tremendous

Our recent CX as out integration capabilities, XM very all was introducing PaaS market. our with data service three well offerings, their in the building a and this Performance stores, ADLS, in our Workload that's has in Scale in to us cloud positioned compete work which release, our

think and with will of expertise growing great our one we this have we so higher be business many parts customers, portfolio. the of And

Chad Bennett

job, Nice Great. guys.

Operator

Greg from comes McDowell Securities. next of Your question ahead. of the go JMP Please line

is open. line Your

Greg McDowell

see And Great, to great ask I thank the made. first to you much. customer initial being specifically the wanted it's new ASP. very progress about

could I for you whether they're up Cloudera upfront think just that and it's the more in users expanding on customer -- more new little quickly. you ASPs, they're of up bit adopting guys I to platform said terms so confidence expand much, was standard a workloads using some the just of XX%. or it's hoping as drivers more or or SKUs and it is customers their going be are you why

then a just that you If on one have little touch could and bit, follow-up. I

Tom Reilly

Thank Greg. you, This is Tom.

very I'm So ACV. excited in customer the seeing new about increase the us

three there's think reasons I driving that.

only our really that target model. So market that pursuing first longer-term, refining is is in will but expand sure we are not making field land our opportunities we believe fit our into

seeing cases. building hunters customers. and logo so business we're skills the to ACVs Second, line higher starting value machine in who points. get we've learning of And beyond business new on selling they're articulating we've And account elevated around to new betters IT landing, our at focus you specific to use when line of introduced our analytic

So, focused IT very on too I and outcomes. we business many in evaluations think historically, had now the we're platform,

Greg McDowell

the follow Great. or Mike, And which ETL Cloudera expand, then progress. talked to product the one warehousing agree day, just on to offload could I you if you analyst are was or for major going at I offload. interesting as use very announcements, But for data about quick a hoping be follow-up customers, like Cloudera the some expanding bit three little

warehouse products? already existing they customers we that mean agreements. they you you these I data of offerings I agreements was how you migrate think could Cloudera type should these their help customer expand through think existing about warehouse me of do data So just solutions. using maybe mechanics for the existing base their to some the or Cloudera do hoping new use

Mike Olson

Greg, in. me let dive Yes,

running capabilities a hybrid we're or those good handle us hybrid data They off And of and long deployments. datacenters multi-cloud share and and first more capture We're the compete additional warehouse big want should large So existing they've the positioned much This larger from for share we've the of complete of We to We've isn't to accounts. us. well Think got. traditional that as to other cloud larger what new cloud. either think in evolution skills to I'll And warehouse to just they most we to able think to want on nature platform. want as run those running Data be opportunity transactional of data analytics a improved all, datacenter in an and services. are these to deployments. this of data is be have delivering warehouses their wholesale of we our capabilities. more much workloads into that well; designed market. just so adopt the big scale, on data scale legacy and collections able at of forward a of of the able those a a they move we of added hybrid And think warehousing to weren't tools data the delivering replacement them data. platform. this emerging see, to already to they too but in the capture workloads, those for allow and believe, platforms, out clouds, and point Legacy modern not IoT, move systems only among premises. was capture to customers long-term they're scale where fit time, apply be are the we'll for big workloads

Greg McDowell

Thanks.

Operator

Tyler of Your go comes next ahead. question the of from Citigroup. Radke line Please

Your line is open.

Tyler Radke

net at where already; here. apologize I'm talk peak the strong see past about I your rebound? want in calls where to to Are if And of when just of terms we're my expansion strong you you And expectation was just return we you rates there. the could question what's them. timing back to has I on asked hoping point Hi will terms bookings been disruption? in of around jumping think

Tom Reilly

is the Tom. Tyler, question. thanks for This

To acquisition transition expansion to improve been Historically rates. our is off, customer to things. XXX%. to they've first So sustained our achieve net the in drive and costs high XXX% two

very are see, for changes whole do And is transition We company disruptive these see. achieve The that our only not to transition rewarding I'm to on us. strong indicators of the have executing do. part having we're we pleased work behind to me affect. that And our results, more had transition in the that's for, early i.e. second that. quarter that's of to So but

a So doing of through that our help outcome-based results through more rates. journey, sense most implementing where work by partners. at. own we're gives QX, introducing I But expansion in is via their We're to we're services be done of and one our which the will We're our our capabilities but of those second-half. also you drive to expect those services, customers our transition our hopefully

Tyler Radke

terms And analytics, great. update you the the of are kind outlined terms is go-to-market or you a in Could revenue of that's you're machine cloud, even just around contribution? Yes, us maturity just in the new like maturity in at of where that approaches just learning, this where follow-up. of we and a --

Tom Reilly

of and broader of the our for revenue our out on artificial warehouse aggressively and third, and a XM. machine break the capitalizing science. I We're of warehouse And But warehousing, to R&D Cloudera customers Warehouse innovation call in I'm Workload warehousing, This are progress. for enterprise data to which data in the In those each prepared major three We're three dedicated significant by data don't we we're customers. intend to great areas we reflection Cloudera progress Data how intelligence. making contribution. and making Data disrupt -- bunch learning, lead service shifting insights. is our learning data machine into our helping disrupt audience, shifting in a areas. learning to Warehouse, investing managed market, market. intent cloud That's Altus and we're releases we're get data it's adoption offering Machine work large the our think large enterprises to quickly in

part then of business. the very is be our some of our will customers next with call. growing we're by that giving our the updates cloud more in probably adoption, We fastest use And excited cloud

We customers running of our moving XX% cloud cloud. into have the workloads workloads in the and

the avoid are deployments increasingly majority who want we're of and to our customers are by in environments. the value that cloud they portability. working our enterprises, Given hybrid lock-in, seeing large them And customers multi-cloud

X.X all by Cloudera well. doing scalability. these underpinned also which areas platform. extremely released So extremely, improves And we're we our core three our They're dramatically performance and

Operator

Rangan America from Bank Please of of Lynch. the of ahead. Your Kash line Merrill next go question comes

Your line is open.

Kash Rangan

are out this have and do funnel in, things there worked they that is worked long-term of am this a Thanks the particularly success update company we make unit therefore market you degree in getting certain been organization to hunter the enduring And to already that I GM been the a organization, not proposition. a in this assume broader stand you been successful order narrow sure is of the through, deeper where the revenue that needed value different that Tom, congrats narrower more talked build, a to went to us. you the of I'm force and of that A business. a broadening to billion across dedicated and and because seeing maybe traction products. move this for deep sales change sales the broad-based question on just today company. necessitated to in the is about set approach plus -- seem the and structure opportunity, to case, through had a making with a in if a the guys. Hey, you're for for respect quarters One the have GM that curious section stability customers had a would couple versus how get funnel. mainstream $X of that a I have that across -- back farmer

fundamental even Cloudera So mainstream that cause out of likes be you this point funnel maybe the so more to and is will more of Thank others? much. happening entry for market what

Tom Reilly

you, Thank Kash.

me a who to want different in accelerate You we how target, see discipline the their Right maturities their how there, let greater covered of are topics journey. we and to quite have but address market, go we bit in if we this and way. customers it can now, I

are stages six that. at services technology have We that of we maturity looking that and outcome-based and capabilities some we measure, relationships through advance and

believe we existing to customer. we more any of capabilities expand size can Now, relationships introduce also with our that the

want new capture our data with done So now warehouse customers warehouse we that. have an to to we cloud, move data workloads to as that And offerings. offering the our have

that general offerings relationship. Our grow us to cloud allow

address One cover channel our bringing and also to invest the a building are at didn't broader in to other discipline of out but in things a -- earlier allow in putting requires that us And our we cost. channel. market comments, our us place in lower cost target to support our a market to also I acquisition

are geared And cloud the in global ultimately, and we able we desire to enterprise's provide at to to better then us broader larger And designing our capturing distributors, move services the so, are be capabilities, put move in and investments our that today towards also support market our to a our market. making to channel cloud down are be cloud, workloads while a able large to right time in place in address capabilities the we market way. for our

we you targeted a through that large hope broadening sense enterprises. and looking our our is market of but the disciplined how focus gives are into I Kash, near-term through stay So to cloud, channel, at

Kash Rangan

what done understand the Completely you much appreciate that -- that, thank be I balancing completely imperative, needs I guys. to near-term long-term. yes, versus so

Operator

comes the Please question ahead. from Keirstead of Karl Deutsche line of Bank. next go Your

Your line is open.

Karl Keirstead

is is is is interested more am you what Oracle, And Netezza secondly, but likes long and for -- industry, I one data legacy of the couple for also Maybe and go the your warehouse maybe warehouse is after I so focus legacy approach like I you. disrupt a question address to that's looking One Teradata differences offerings, call there and answer the that fairly you. and IBM any by those in Thank Snowflake of think know topic I might albeit that I or this, others. vendors industry, is and to curious a of there dominated than displacement is a whether a bigger this market other on just it? the wondering opportunity just with perhaps am vulnerable Thank got be in on Mike. your then have vendors -- just that. two room is I questions couple am think on data are disrupting suited of to for big the certainly

Mike Olson

Karl. Thanks,

So the asked. I in you those order will answer

I in clearly are players Microsoft, So the decades billion strengths market. first in We bring market modern of some this some monster is the it; highlight market, there a will of and $XX Oracle, there. a all, platform, and our IBM

to of workloads, life, for modernize guys program. them any ready Netezza, a do of if into go opportunity disruption, asked want is is is as those certainly they those infrastructure, powerful those using to give there that [indiscernible] Netezza larger been whether noticed great that end right, workloads capture much have help scale enterprises that, move cloud that the analytic and and You

a We call that those Netezza at Step-Up, program we are running and precisely migrations.

and a out product; really differences Snowflake I sharp call great four entrants, new would market that and interesting you. for is great You hit also company

one, number is hybrid. Cloudera So

in Snowflake like and vendors on-prem do want Our don't. the only to customers cloud cloud run public we that, let them

look, proprietary store you copy you to have copy. or SX those want Snowflake. it buckets into public that And the data you to it if a and ADLS, up in only We cloud, in on don't like nerds, We storing got stores. are but are locked zero it's available sounds operate in where Amazon natively

multiple So fourth, your statistical them you that. We've structured do got our analyze machine at yes, than make Closely of of also lets train customers bunch using petabytes, a data, remember, data, one we're queries but they they with need want most to a to whole want don't data. their they thing of SQL do want to to data more tools. run large copies to related, aimed platform And that multi-function want learning enterprises. models, that over

enforce they've and secure, able to systems, got track need over deliver also applications, data spectrum policies but compliant, and of governed, SQL security managed across that able and not set queries, only statistical their usage, their to and experience that shared we're learning machine analytic to Our their customers workloads. capabilities be over

off step need to to way We in is to vendors lot those share. platforms. of who of larger arriving customers we're got and a So IoT offering than a our think their too the market. I a handle. legacy think we We're much see fast have at data win can strong scale going going

Karl Keirstead

Mike. answer, Got thank it; very comprehensive you,

Mike Olson

you. Thank

Operator

of JPMorgan. from comes Please Mark the line question next Murphy Your of go ahead.

line Your open. is

Unidentified Analyst

good intelligence changes machine of and Mark Can respect taking been meaningful the the market have behalf retention of companies your [ph] given making, those level and you've amenable some to or AI changes Thanks our they nail stages, talk early learning? in the any hit then, of you've in how you so Matt afternoon. been the for customers Murphy. And some Hi, seen This sure attrition separately, deployment learning your you are artificial very to on reps you approached on intelligence head Cass noticed And any with and about how rep the in artificial is have questions. plans? mistakes and machine their the learning? machine deploy with have of sales how making when comp that

Tom Reilly

second it, the us you about and Okay, two will Matt. Hey, of the Tom, get have Mike you part first forces, cover so part. take the sales answer I'll

through -- to pleased, a culture company but it's our and of have great difficult I'm very our take any is one of transparency strengths transition, lots with transition, So, and we to you're going communication.

we're of where have best on at what the with expect. company retaining pleased we regularly been actually our the to talent. I'm And our so, quite And communicating with transition, in success

but look average. than years, Our on we've that were are if three better attrition the higher was than IPO, a they rates are ago, attrition our year you of over rates year but had past our what a

own to their our for So disruptive change time, should change, the we're be it's that's it and very of where accounts was do where field resulting direct the our very they they and returns QX to hands force able territories when spending roughly using And in by get but sales because success. XX% and positive. best data field, comes it their the

data in So we've very been a into success. because And where is making and sell then, of warehousing. I our business their sales force their skills is think learning success investing of supportive line to around we're machine the transitions the

strong well. got we've so, as them enablement And there to help

Mike Olson

question. community. next academic places of and going Watson are that out We it's all about made really is Black This fast advantage and pleased like is part a I'm Unlike, open in more and Matt. the proud, I can because are talked but Facebook we the we're were take issue example, what's yes, Palantir, adopt research to people. about the think that just the Spark. announcements of of or hit for coming helpful. probably that's and talk We vendor we'll confusing you platform. opaque new to the on simply We so the offer your understand, data machine a customers call, moving and on Box time openness Mike is addressed, IBM lot going big an in we've Olson. to market expect open specific first they Apache is systems to This deal. machine that Hey, source learning, the algorithms that warehouse that can't second we dive to learning

much now, productive. year We also at that's you analysts -- our science ago data workbench more than aimed making more and data scientists may and a offering, introduced recall,

them those applications. So, help software tools to develop

to Finally, insights. we these strategic organizations to at under into applied our actionable ago, be brought new deliver and turn advice is a in just how that on is able year real AI the a themselves order and market is business research reorganize capability where Labs how consulting to Cloudera, going, can need techniques team and these business tools to in problems, Fast-Forward state-of-the-art

we'll spend been we lead. very market there. hard later, I but thinking on that we're again, well-positioned more think in So engaged certainly and time the We've about how probably

Unidentified Analyst

Thank you.

Operator

question from the comes Sanjit Singh Please of next Stanley. Morgan go ahead. line Your of

is line open. Your

Josh Baer

margins, few Hi, which a this Sanjit. is I on gross had Baer quarter. Josh for questions on this outperformed

efficiency? as improving margins the If looking that the points you year-over-year, and to on on in of line some keep mind review forward led anything work gross margins to could services dynamics you two subscription

Jim Frankola

was Jim. gross subscription Yes. I This factors touched the is The earlier. upon driven by margin

very comprehensively technology own organization. our use support our we So, across Cloudera within

failures customer when that and satisfaction. customer That time great at the to leads much of ahead the proactively predict will look failure. preventing lower and may a It essence, usage of also in contacting technology, to We customers' occur, leads cost.

In are lowest margins. better are makes we addition, customers their customers go-to-market sense margin profitability as of we past would quite that frankly, in the over significant low increase have in I these identifying, a are new and seen quarters. And few it to invest in have we implementing early and journey, changes, our struggling, say,

driven the areas two improvement. those have So really subscription

margin margins, and still entirely year. any about VSOE, roughly we XX%, to gross on you see accounting services that's you standard, of Movement the services ebbs last given where they due of terms In revenue recognition. have quarter flows don't were in gross we is under have will XXX they're therefore and are

no real there's margin on piece. the services gross So news

Josh Baer

impact And Thanks. any products the as adoption and will have XM new margins? increasing Workload warehouse and on data mix, gross that

Jim Frankola

that on fewer Good Individual in improvement. premises. to they margin easier a the that price or the our don't failures question. We in to essentially to higher To be trends, expect cloud, I cloud more whether products, expect on deployments in we increasing those one. much the consistent, in slightly to be trend are see the margin our much data warehouse the I in premises, of than be cloud the so over to are which gross will diagnose, same customers adopting similar extent, gross time. cloud existing change story is cloud are gross expect but the more margins

Operator

There I call to are remarks. for presenters now no closing over turn the time. at back questions the this will further

Tom Reilly

you thank Well, for us. you is time of exciting This Cloudera. us a with hour the had that for and spending for questions very all past

I right on build-out expansion rates. appreciate modes, back look high customer advantage with journey, the you both and to making sustained go-to-market forward reporting to quarter are all to lower now you today. our from a for to the our sustain to you. acquisition investments our costs, thank competitive you Thank and to time news. We net We product have understanding our even in better

Operator

today's concludes call. conference This

disconnect. now may You

Cloudera (CLDR) 5 Sep 182019 Q2 Earnings call transcript