CLDR - Earnings call transcript Q2 2021

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Operator

Good afternoon, my name is Jason and I will be your conference operator today. Welcome to the Cloudera Second Quarter Fiscal 2021 Quarterly Results Conference Call. All participants’ 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. [Operator Instructions] Please note, this conference is being recorded and your host is Mr. Corporate Investor Finance, VP, Cook, Development Relations. and Kevin conference. you may your begin Kevin,

Kevin Cook

afternoon Thank results XXXX fiscal you, conference and to operator. Good welcome Cloudera's second quarter call. financial

issued announced will our We the close results discussing press be release after market today. in

Rob remarks as today's investor which accessibility President conference Marketing Frankola, today's well Bearden, with as We combination materials release, press call. website, supplemental with quarterly prepared Officer; greater also Arun Executive on and From and me Chief have provide Officer; in Chief Financial our Hollison, Chief posted Cloudera's Murthy, relations additional are Product Officer. Cloudera and Chief information Mick to Jim Officer;

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

our if amortization will are During charges, acquired to financial income GAAP GAAP superior results a real all in of These operating stock‑based present analyzing intangible expense, references you non-GAAP compensation measures. intended to consider non‑GAAP to Non‑GAAP this substitute estate not non‑GAAP and when and isolation impairment assets, measures operating financial considered for, any. non-cash measures encourage are from, measures All to we exclude to or income. be extraordinary call and performance. we both Cloudera’s

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

global our to and business today or time beyond customers requirements of macroeconomic future we to to changes we and COVID-XX, that the and are that related its other distancing rapidly, assumptions based reasonable of conditions. related in these as new modify update to impact control limited and events. impact undertake matters no facts to the believe conference those In on our our XXXX, on relate as related information mitigation economic other to a make could We the in changing future, which Significant as be will partners forward‑looking a guidance. frames statements whole. on of and us impacts whether but will addition, economy and including assumptions COVID-XX XX, or the not COVID-XX cause the result the factors, are COVID-XX environment please on of based assumptions The date that our know and as guidance our statements based to social of obligation including severity for and today this date, of we Many this of note to provide on any is them Those today. the on is these as forward-looking be operating. the are September we call to we that assumptions

CEO. Bearden, Rob Now,

Rob Bearden

Thank Thank to our Good for second results. XXXX you, us afternoon, you quarter Kevin. everyone. fiscal discuss joining

last we so share key do best operating will your we information to call, and our As separate quarter’s questions. locations from are with respond to

We quarter than buying and the Platform to XX% reaching of these our $XXmillion. of Cloudera planned, of Operating of organic expectations. also who private Revenue and representing an million update ARR customers the progress QX trends, which of greater increased on The customers million, exceeded Total who This ARR we up and continued Non-GAAP in customer outcome impressively at performance, $XXX conclusion in especially quarter, results grew public behavior reflects a number exceed our in outperform course and growth. operational Beginning the excellent recurring Subscription in Income $X $XXX year-over-year results, highlight of Annualized Revenue gratifying, will with stronger discuss was than market Each revenue many goals. QX generate financial quarterly quick million, provide and quarter cloud. of financial again was was to and total $XXX second great was Data $XXX,XXX X,XXX. was toXXX, on is XX% million execution. number year-over-year. The

not believe critical cases. more quarter, resilient most enterprise than transformation immune caused business economic by software companies. our our offerings support use discussed digital downturn initiatives is to and COVID-XX, believe because is we are the we true We As last mission this but we

pandemic. is whenever delivering engaging sales business and services been By and contrast, our professional supporting consulting our quarter. has implementation revenue training from responded been consulting team in-line services possible our with virtual has the by but impacted in quickly services, and addition, customers The down last organization In forecasts effective remotely. by

Public with and had result. than build more the Turning in significant now We number to of bookings doubled the quarter our new Cloud a similarly and new innovation momentum to customers CDP product strong CDP offerings. The continues adoption. customer for

cloud Enterprise CDP infrastructure Cloud shared availability Private separates for of providing and experience, ease-of-use, playing is an data, Public are Cloud AI. architectures, an scale data With is data revenue governance for Private for in solutions clouds Cloud greater strategy. architecture analytic and immediate CDP environments. Cloud our as any Data security of of a primarily and multiple major multi-cloud reception and of context clouds, Public compute These is recognized participating while public cost, growing time. market workloads the creating in Although role brings Edge create the private CDP fastest for segment that by lifecycle we customers. Together, encouraged data modest, essential we Cloud modern data from Cloud’s a to It CDP experience we advantage Private across CDP creating our public strategic our discrete August currently value security are benefit enablement and a cloud-native maintaining And allow CDP through uses offerings Cloud end user our services differentiated architecture will powerful are Cloud use over in to Cloud. its in lies milestone hybrid data takes announced spans agility, enterprises Public CDP that hybrid a services. storage and performance, we uniquely, In full and the Data and And, Private and news. that general to hybrid consumption. and us and SDX, consistent that the market optimize from and private the more of the expect efficient to solution. big CDP, cases. demand to persistent Enterprise supports the the

workload cost to this Utilizing and security that while The manner key the directing workloads enterprise-grade advantages, can pane ownership. strategy. to the the CDP, cost workloads Data considerable validated agile performance expect is environment and from Enterprise and And is highly ability Cloud, Private gain our of private use customers of one benefit governance, analysts simplicity this what With Cloud an a govern security to of industry from of benefits any and total they to the independent and to superior cost in cloud the lock-in, addition also enterprises’ vendor from predictable secure holistically optimize require and customers elasticity our directing manage lower is target cloud us, of to CDP that this public of ease customers experience interoperability single glass. have their cloud. -- In and it and ability differentiating. be the between services unparalleled seamlessly without scalability Public advanced and public and

OpenShift’s to in comes enablement. directed are XXX or believe of platform. to responses cloud. on-premises on Consistent of sales on-premises which among trends, IBM reception CDP drive indicate a have there new are organization repatriated that already Public in is Pulse move been been Vendor This our and that joint the new significant trained Hosting Enterprise, enterprises balance up opens of the a field on IBM we XXXX they Cloud specialized designed the For very To clouds but new run workloads of availability these will Among workloads and enterprises repatriating report to public cloud with Cloud select And Red Voice workloads Red our for our actively kick-off use Hat XXXX well advent with and workloads, private we workloads with encouraging on be additional greater the CDP went environments. offerings first Cloud, in full vision. Red Hat Cloud private cases in cloud for and expected customers QX implementations our be key customers public XX% using CDP cloud, Public example, CDP has of models, will Managed event in and to did In existing with existing IDC to implemented And motion with be repatriation. workloads through June We CDP introduced Private has that for indicates be & Private applications to the and run base, of cloud performance, installed it Cloud planned industry on and Cloud on and today. workloads Cloud Since terms, more engaging we so XX% is base Hat IT the and interest customer the similarly, demand fiscal move some container of new XX% will The preview and public on to extremely hybrid Services, on enterprise penetrated private that usage. about simple CDP of a appears virtual Survey sure, top CDP selective partnerships. focus from of workloads the far. Data the hybrid enterprises Private now migrating use is Cloud Evaluations to XX% primarily it the Research’s year Cloud customer customer Private Private for most CDP sales cost and various believe infrastructure, security, Kubernetes with study those modestly some base. cloud only being Enterprise reasons focus and CDP as public plan to Cloud, to

be of base expected fuels cloud In any IAS storage addition our and consumption, partnerships bundle merely the and software to will these revenue run to we plan $X that enables potential Azure future, to start. $X Likewise, for every our Cloud dollar with estimate CDP development to Private hyper in revenue the scale not our OpenShift platforms. cloud revenue does cloud And our for CDP Red to drive compute increased customer make container cloud focus to alliance the on our is that customer partners jointly with the interactions drives Cloud already customers, Infrastructure-as-a-Service is This multiple and marketing platform, Hat data them. alternative Red Google. with of since is We generate by the earned is among Private the to technologies. portable providers AWS, clouds and designed Hat of us public available in enterprise public OpenShift across it Cloudera.

and migration workload makes customers’ is driving we Most last we’ve with To billing expand of existing on Platform. recently, we’ve to AWS infrastructure agreed multi-year collaboration cloud strategic we agreement Azure AWS. and thereby developed As offering migration, expanded call, streamlining integrated have CDP procurement with AWS discussed available partnerships through and This our spend our Cloud partnership Microsoft use quarter’s Google costs. adoption Marketplace, commitments. playbook jointly annual mitigate AWS credits to ease a and on

playing are So customers. developments with now let’s these actual quickly discuss how out

data growing of customer first study America. in a sets. is companies partner logistics is operators case challenge associated one hubs rapidly increasing and of a North and largest of Our new the the of Their mobility network volume and

scale, As in existing to they They security, a with and Europe, superior regulations. PII operations governance. and Public Cloud because comply global entity GDPR cloud warehouse replaced with offers with needed data CDP their it also

data of both provider engineering, struggling ingest, global cloud external is Public data the patchwork need streaming, and their enabling reinsurance, rapidly services, eliminating support intelligence This a data of to costly example applications propensity-to-buy for a They analytics needed and response next Our was and to CDP chose integrated data services. Cloud on-going lifecycle, its third-party risk, evolving needs. customer services. retirement, leading products. integration They and of health for internal-use business with rapid

corporate had range patient, Our clinical to next customer biopharmaceutical broad of large company mandate applications is a their move therapeutic, -- cloud. a trial public the they to and

dynamics. and SDX customer attributes with products which As case an now regulated and governance These consistent observed of with data risk, solution, studies organizations many customer cloud to multiple also comprehensive The standalone avoiding cloud and bolt-on have lifecycle deal Cloud flexibility cloud toward the the They’ve market multiple cloud data unintentional the chose clouds. and point with are functions, integrated entity, operate for security. They CDP security its together lock-in prefer cost, and trend Public means enterprise that point public rather support governance. any any products than on are security is anywhere, paramount. uncertainty requirements to provider. who used research analyst need data data one to enterprise industry cloud cobbling This

private business first leadership to time. is on and our the and reviews a management of to opportunity in I my period progress the make in have It impressed as the hybrid accomplish, want but with we and solutions significant, Jim I doubt, I be could we market am clear I team role January, multi-cloud to to is to imagined short Chief embracing two of Executive that our but that a was such would take assume reflect part Before excited No happy genuinely demanding this more have enterprises the with want a numbers, never and that quarters CEO Cloudera. organization. cloud. moment of

the have meets the now of needs and well, our executing We’re customers. target product-set that

to generate In customers enable Enterprise the achieve revised we growth. begun And will our while Hollison been substantial that increase operating to we our for has addition, change committed on costs. we initiatives manage Cloud a the that leading vision digital and our velocity can transformation us customer demonstrated faster believe margin the and sales to in remaining cash We’ve high revenue has lower operating prospective acquisition with progress Data targets, way Mick to margins. for And us forecast towards engage Jim our detail these and we’ve fiscal higher revenue as will continued moment, as XXXX a result. flow

than as of I or last and I by on Cloudera’s months, with them customers six encouraged more positioning. with my many the Over interactions course been have as five and partners about possible. the excited ever hands am

So Jim, us through as you please the financials. take

Jim Frankola

million, Note, wins press can result one a becoming trend, in These and year. investor the does materials X%year-over-year. and driven of $XXX increase direct consistently revenue of bookings Subscription of recurring XX%year-over-year. we of quarter fiscal non-paying release another quarter Thanks ARR made revenue bookings. in the Annualized Rob, a subscribers. an we trends hello in the on growth by information a and business Cloudera’s Also, revenue Total changes on an all measures. was $XXX users supplemental was found The everyone. reflecting QX make in record relations software increase was be strong QX outstanding on did QX million, stability $XXX both in outperformance quarter, the not were earlier website. execution was today’s expansion but up for for have new million, increased XX%year-over-year. was distribution regarding the definitions or

indicated, at XXX QX Rob than who we to with or of grown ARR customers increased quarter. X,XXX of $XXX have ARR. started from We more $Xmillion As than customers to greater concluded last XXX representing

Historical a reconciled the otherwise in As today. expenses are GAAP of issued all the results are note unless operating review that, results press statement release non-GAAP to I on income remainder basis. the earlier stated, results references and to non-GAAP

Total the of amortization up impairment second margin in as non-GAAP by a continuing of million margin year driven the and was assets, operating representing lines cash process for improvements structure. points stock-based XX%, in management. compared to P&L post-merger a subscription XX income any last last year. flow Our expense QX $X.XX and XX%, of expenses to QX in measures merger second share compared share improvement non-cash Overall, operating quarter, for of lower was QX year. XXXX $XXX flow substantial reduction for well $X.XX operating period. benefited on-going quarter Expense good expense quarter, improvement revenue last across million in Diluted initiatives. estate Total to the by These Cash year-ago per XX% second in from charges. fiscal were strong second an as cost for to $XX of all was exclude driven operating extraordinary of compensation, QX of top-line the from per expenses margin earnings and evident the total toward of and synergies, a million. growth, XX% were XX% were percentage in collections XX%, revenue gross was the of real XXXX. quarter, were compared XX% of Operating intangible compared trend operating quarter loss fiscal M&A-related gross the $XX QX of total a of of as second

contract exited liabilities, year-over-year. QX up contract from of up million other grew expenditures and beginning the year, cash deferred provided which liabilities, RPO at at providing $XXX million and RPO disclaimers $X conclusion conclude regarding will QX. XX% Now, the which with of of at by initial were in million cash, subject revenue cash, Total second in fiscal turning $XXX to guidance $XXX year-over-year. $XXX was guidance the forward-looking QX information. XX% were the Capital quarter. to sheet, the securities, balance restricted call the I and we marketable quarter. fiscal million for end comprise million, Current for updated the equivalents, the is the

between We due services $XXX approximately last $XXX to a associated QX in in in the approximately range professional QX, by expect driven representing projected recession. rates to up is X% difference global year, to QX Similar subscription is total year-over-year. with the slowing growth revenue of $XXX and of XX% which pandemic million, the $XXX million revenue growth to revenue, be primarily and compared to million,

at Specifically, remain bottom-line we until took revenue This and primary flattening to of levels actions in anticipated; is QX was expect operating to economy cost structure services or QX the to adjust our close we income Non-GAAP our QX appropriately. services recovers. revenue metric.

is We $XX projected range to million income be third quarter roughlyXX% the million, to to $X.XX $X.XX. for operating to per Earnings $XX the be revenue. in of for or QX share of expect

fiscal be representing total in XX% For we of million the range to subscription growth, approximately between $XXX and $XXX year-over-year. revenue year approximately million revenue expect up million, XXXX, $XXX million, X% to $XXX with

raising higher of a are forecasts outlook originally than based QX. is and it the our the through we impact macro-economic Although on planned, coronavirus are these of prolonging updated

million, of to Earnings to $X.XX. to of XXXX for for the We be $X.XX expect revenue. $XXX in XX% operating fiscal fiscal $XXX is income range share be XXXX per or to projected roughly million

much the cost outlook we operating than of achieved QX efficiencies. strong year, the the is anticipated. well natural margin income new remainder as from function operational projected more as evident and and and operating is for leverage, have scale quickly discipline objectives This our a As results of our

quarters. improvements Rob fromQX be forecasts. such, increases not remainder XXXX, but prior the I’ll expected next it Operating for with operating to With to the remarks. expect gradually to margin As levels do increase for some margins of concluding turn are dramatic to-date sustainable anticipate fiscal we two that, in-line for the over

Rob Bearden

Thanks, Jim.

their the for Although on with Hortonworks. part Cloudera. Enterprise a many QX the Data We’ve our merger the for of I place it have availability field as I ways execution fine and also working of want strong Data pursuing appreciation limitations now continued Cloud elements well today on for the effort Private organization the beginning advance And Cloud our our always, build We can to engineering a express so customers work. you out. our Enterprise thank as have want product they foundational part new transition sincere of reflects of feels Having and partners, the product and was to acknowledge an strategy and quarter as with on since innovation hard of teams. been CDP begin faced my all And in to very for as to new the it on support. significantly their Cloud in a like customers. the company, community tremendous

and Operator, Hollison, Let’s Murthy And Arun pause Mick here the Q&A. a available Officer for Marketing and take Product as some Q&A. begin questions. are please Chief reminder, Chief Officer

Operator

of [Operator Your Securities. Instructions] the of JMP line from comes Walravens question first Pat

open. is line Your

Pat Walravens

Oh Thank very you great. much and congratulations.

So help for comps question us I you. which and is separating can so there about products months. that? compute so important paid do And be much is data each attention storage? to – of What few architecturally in Rob, just you next going your have one the to of

Rob Bearden

Sure, great.

and is the organization Arun gives get and that compute. is to platform cloud. customers cost elasticity to better exactly really of and the that separate that so what to lowers that's better experiences all the as a the able on I’m isolation important that it color SLAs. apply be like CDP what's an data in the ability XXX% IT And architecture much hybrid total gives about to it that the to the a of come one, is it private and reason have does actually going it's enable So gives little drives in that does it. deliver SaaS ability storage you ownership. us our much And And ability tenants give a just But important a to moment that more manage

you want to to add Arun, that? So

Arun Murthy

bit on-prem on way we're Rob, are Rob. obviously are compute and on-prem going storage, the more customers and what pushing hardware independently. with they their past, that scale seeing a cloud And Absolutely. tons consistent they clouds, customers cloud, Specifically, don't is them the technically, in the also the of to what and really do now just, storage pay further, used both -- under storage which separates in they're had buy and both compute Thanks compute buying or Pat. to allows and for as Thanks getting is architecture, public to to right? bulk private equally. public questions this for our needs have we servers,

Now, what itself. they expansion do layer, compute and for storage compute is, workloads especially platform, with storage us the now advent it’s and scale on from of to the allow independently for faster Kubernetes, of or it the allows layer better whether a

about and we've that has to with security what why have why important. compute it's that's had see been whether us SDX, that between back and on-prem us. for been fundamentally in storage on, we But cloud, storage fundamentally so And so compute of if has to to private much governance So glue the or public right -- having critical clouds. is act sort making level again, sure the is separation that you a with deal of SDX, talk coming is consistent SDX and or

Pat Walravens

like that's great. then feel seems Jim, is. Yes, how it of And I subscription, your XX%? you. CRPO about Because guidance thank I the just Awesome, growth [ph] do below what revenue know, rate it's you

way some is that? should about there is we something is or pushing So on think there was there that that

Jim Frankola

the up have in provisions and feel RPO provisions, include general, points and balance sign RPO, XX% the Yes, sheet beyond termination good eight, our exclude first that when about movements. does we years where have year. ago, we is do CRPO I customers we contracts of some around had termination oldest contracts some the that signed about nine, the ten contract, not

for our So growth normalize is rate for if quarter. we higher growth the that rate than our CRPO actually

I'm get with is sheet fine into where balance the you the when So, details, going. perfectly

Pat Walravens

very Thank all for much Thank three you. perfect. you of Okay, you.

Jim Frankola

Thanks for joining the call.

Operator

question comes from Winslow next from Wells Phil of the Fargo. Your line

open. line Your is

Phil Winslow

is, a It I from sort demands sort out also has the HDP different delivering to cloud worlds. and just the both new new guess, as question. the of UI. I big you of shout as you about also call takes my of the mean these the private a A jumping for -- UI, edition guys, of a to obviously about out taking and you CDP CDH for call thanks and CDH the have you and Hey CDP. I customers. Ron that And question Arun obviously existing a best ACP feedback the components customers or Rob, and to conversations anything question components have what's legacy to with obviously

Rob Bearden

and start it then color. I’ll you Arun pick and Yes, can up add some

to it And applies So The benefits feedback the kind engaged what current their, current well environment points they the through the extraordinarily design get, the this one, just environment moving looks very CDP feedbacks like legacy and going their that how roadmap also conducted been go to in to we're at workshops from we're And customer what of what get. seeing point great transition most XXX the environments. sure their they to going But large be. on to the kind will we've very CDP. consistently had positive. what gone to making them look and We've partners of astounding. with take of environment, to adopters like, leverage we've over has is with CDP. The base, those interest are been and early over been, been our the customers, updates very delivering on

add want investment. to you’ve by with encouraged obviously to [Indiscernible] very here. that, very Arun, we're you So very engaged the

Arun Murthy

is fundamentally delivering separation we Kubernetes the storage fundamental our But invest CDP, every right. of completely example, customer in like especially thing Part With over cloud stand compute way couple of performance. with guarantees minutes adds on tenant the can like now can Sure. fundamentally, they deeper, Rob. had and and for reason a with CDP. that to every lot and team get embraced of isolation they instances consistently, thanks on they change of shared, have a cloud. up we infrastructure. the bit of this and private the the the cloud that we public about right? little engage new sort sign a the lot to every, is Thanks, for warehouse, private CDP isolated, question, in technologies that talked gone In we've Subtenant we've entire can And a sub customers Phil. Obviously, UI. And we of product. past, now virtual The kudos do of the both customers and can, get you for for customer, said, large private up and a cloud, with strict terms value so a goes

their fundamentally the what use, administrative So They has will, come has is of entire lot now kind SaaS the demand in and it's changed. new operational them don't they experience it user use is, or get the, saw translates CDP if whether And brand right? can cloud, tenants, -- experience. sort private Obviously, we it's experience. product, right. that into provide and of which fundamentally completely then UI, And and work But with we the experiences, ease other cloud, done. it's get fundamentally, public you of the a need know, them they interference around when the experience that customers delivered into more -- So more you on-prem, helps. and it's a a happened a appealing magical, the

Rob Bearden

to strategic this our is -- that's really that differentiator just to with And We're doing to delivered cloud really been What very us getting that's deliver. And enabler to it would wrap very, been part. we're data the use is that big get for enablement it's the in been on it's I that capability, company point think foundational customers and the ease have only really the on asking that delivering the just, they're important quite to. multi been trying up frankly, today. that. would that's software that architecture but world adoption enterprise the still this of the a I really enterprise And hybrid here. I And the

Phil Winslow

some Got it? flows. me love one follow just Thanks, I guys. And up quick obviously. data then

flow? a on don’t hopefully you give So just tell why an us you update data

Rob Bearden

to hybrid able it's pieces learning Especially management able but point and fastest we management, models product take to segments architecture, on, under as it, apply a move one action the able what of out customers been to to pull for. machine origination, into growing prescriptive take the seeing [Indiscernible] the benefit then Yes, have in as or events of happens and half be change that data to that's this value again, of it. from bring be time. in bring to suite. team continues data then great strong. being are are from but And our in under take macro real time analytics all bring just rest. prescriptive action asking analytical the our the really our And fad adoptions deliver the And And real customers very streaming and

adoption, So, customer touch you acceptance, a and market Arun, acceptance a of want to technical standpoint? from and sort base from

Arun Murthy

And absolutely. Yes, right. of sort again, talked we edge-to-AI, about the

And huge legacy of uniquely both your helps the frankly, of really that was for is to it data companies it cross start are us data across, right of sort aware, that when sells brought progress for you've both further at going flow there. origination, had basis, to the piece been together, as Dataflow, We and two make we opportunity the on the sides of fundamental legacy sets customers. something we ML we've a been and, with able positioned Phil point and

Rob Bearden

Yes.

of data. data They want put the entire that. have lifecycle don't for they in able to be data to manage to streamings, wrap be able would Enterprise want point to I just manage Data at that around streaming underlying enablement that so and the customers lifecycle point, to And leveraging our this together architecture, want Cloud, in to an what entire up enterprise want they solutions,

a seeing to so across such enterprises, that's that. base they move large why our customer an in embracement managing And we're underpinning framings end-to-end data lifecycle, as towards because

Phil Winslow

Got it. Awesome, thanks guys.

Operator

question from Gadey next from Barclays. comes line the Pree of Your

Your line is open.

Pree Gadey

strong the again. on congrats guys, numbers Hey

So, quarters I to two want good ask execution. of

at level? the drivers guidance. better of hoping public through kind through churn, guess, CDP, better-than-expected of fundamental Whether its the the increased walk I was guys You of cloud. drivers what's I happening optimism? the walk could from expansion you of kind

Rob Bearden

and Jim this start, if going okay. together. I'll Sure. are that's I take to Jim,

Jim Frankola

Yes.

Rob Bearden

we moving by great recently. been organizations evidenced as the have our team well the a the done do before about sales been the methodology very of to them to well offerings. the across job that a great customer on job releases, the able support very kickoff pre-sell line really were accelerating through is level And each a our every erodes defining that model. How been and good time knew Hollison execute get to of motion sorted well our And has across numbers. then, financial kickoff just coverage of in product plan a into professional focusing showing The working very pipeline, pandemic really on speaks remotely the and of What we the business transformation I Appreciate team grasp Its into think, team extraordinary the great of a did, and joining driving with shutdown journey So, team base Had thanks able really sales our is. happened. coming for And We a to then today. building engagement, occasion very, a the operationalized phenomenal Private call. our deliver remote sales team plan, our we global customer environment and execute what service in been to could from the really been And digital our the continue how were base, coverage it marketing year. our management execution. CDP Obviously your of the granular did that able sales business. business and execution, digital since fortunate every very Jim against. the forced good had high very, leading. model to just having in, on that Engineering kickoff, CDP. model sales a line out that us our very, across world-class discipline the granularly. had really team Mick job in through the

we mentioned, I As done over XXX workshop.

And numbers, showing tech. tearing into through in the so, up and the innovation we base release but showing just got strong in also up around customer momentum quality certainly the the that

fall to they fall operationalized financial a and every that of operating They've So I discipline how of and management lot through but been plans, granular things very all underneath not think impressed, individual up proud only very of business its number an down and execution contributor. strong the team.

about So Jim the had side. we want you especially the financial talk on mode, some that levers on of expense do

Jim Frankola

And the top Yes. line. focus I'll on

our obviously line or to to of CDP product the yet Private CDP new success our been First, announcement. new from And including Cloud, note its the existing came Cloud the X.x, on much has important this year contribution Public that back earlier. predominantly isn't date out that release there CDP

all we're So, what greater groups. our to note very yes, customer important we're upside. expansion. And that We're we're churn. key specifically, reduced those is, Its seeing of seeing are in seeing seeing

do we've So to talked about fact you in well -- with we large enterprises. very

are pandemic financial in telecom, You've growth this still plus million public-sector year-to-date more than more to downward, year. segments Drilling that well than grown dollar that seen in accounts. our we we're doing of all services, in We've last year did very those. the resilient

So, think very well-positioned. we we're

coupled And actions to flow. line improvement our translated margin to we've then this resilient. has we're said, obviously not top year cash an earlier with the we're but bottom-line economic Rob that and all expense taken improvement acceleration As were of very that effects, immune

Pree Gadey

the which point guide? anything subscription for revenue a Beside Great. a guide there is on QX company. assumes else conservatism QX just is I to deceleration And a the The out quarter-over-quarter, guidance. Thank you. guess, quick subscription question atypical pretty on

Jim Frankola

Yes.

we certainly quarter-over-quarter. ARR. But ARR we guide to sequentially expect So, be don't up

a streams. So what's on non-recurring is revenue going in decline our

we is we work ramping have of So our have merger, amount engineering, there do recurring strategically been what you the down post non there.

product XXX% our open The to second source. line thing is we're moving

that quarter a both ARR those part Once given As any it decreases. it will in that's factors normalizes again, that grow expect out upfront sequentially. recognize on quarter-over-quarter because I slight do amount we we drags why basis. And focus to revenue and of be the on of ARR

Pree Gadey

Thank you.

Operator

Your open. line next Bennett of Chad question comes line from from is Craig-Hallum the Your

Chad Bennett

very metal Great. whether IBM, Red or partner, When within Hat. that think you to are it's opportunity -- mean, that job for moving in early here. terms your are in about private bare Or perspective, metal again customer of it, of current private cloud top cloud? -- cloud how incremental quarter incremental excitement commentary Maybe would I would the shifting primarily provide workloads experience? IBM opportunity like the Cloudera private a just I be private tough flexibility to just I But And the opportunity, understand are you on that is your base think cloud to these base do within Rob, in guess, from bare and from Any assume for private I your potential public secondarily to I about workloads for on environment. there? incremental the around, can cloud? just your it's and cloud. be, all seems all Nice be around

Rob Bearden

Sure, absolutely.

it bidirectional an private that today. of great the -- pane what And of company a private storage is that hybrid glass private it We're efficiencies enterprise that the rehash single time. been is, fundamental and efficiencies of it private to with separating environment flexibility software the multi-cloud. and that basis lot manage to reason, that delivered But as that workloads and fundamental on the enables and the the only and to manage is brings. And And and security our by the the it interest has architectural So, all framework cloud that cloud it deliver common data can particular generally. a around with hybrid Arun issue compute. brings a hit that -- brings cloud governance of private world across drives. architecture, that. efficiencies real that to drivers a excitement there's implementation in there's that sort and the of one

customer our legacy not our we to up also Hat base, and OpenShift then opens -- that workload base, adopted in because more primary know, customer Red platform. is but you so, is And opportunities as kubernetes the goes only IBM many the

community. And and OpenShift that so app the value that their well base customer the beyond OpenShift the their layer that for layer data fits can we extraordinarily create can and with become we

private Red now to select move sets that our also And seeing of to are environment, represents our ability new the and legacy more base customer bring as to consistent But then cloud, And obviously us. to IBM Hortonworks to well. incremental to then, customer workloads today XX% we're probably that Cloudera the on-prem customer Hat TAM largely cloud. remains net move, of is base it what some from the workloads them the for and will which on public expansion so, wants very data add base an public And cloud. the that then the gives opportunity is

IBM, private a seeing the lot expanding a is, our and thing the and TAM customers customers value traditional we're the and creating for So old Hat with legacy hybrid we're more Red important great more our perception, than platforms.

They And to adopt get possible. quickly so there as that's want it. they want to why as

Chad Bennett

and a quarter, RPO real Great. your year-over-year ton I in just secondly, on just again new, you commentary, customers. And Jim, beat in any weren't Fair from then know the going for see. public about both I this great your think is growth new beat the quick but you point. in that? Can ARR are expansion you year both into maybe this the ARR Jim. But to quarter, -- seeing was net cloud what net talked indicated commentary and bookings. color which new we accelerated that drove expecting

Jim Frankola

Yes.

and point net new interesting. expanding relatively at small very and customers what we're was since pleased dollars quarter drove Those we're are them. are that. seeing pretty - this cloud this the new landing We public with actually The

from paywall of benefits So that in licensing churn. saw ago. was quarters we we made changes And reduced to several the terms and first that

I the non-paying the using were users decided were them customers, and call to over about large some quarter, where to they to had software non-pay What shouldn't that with -- want customers, our that And this we customer. the saw self thought who wins customers existing saw would saw as very customers and value deciding us. understanding as emphasize don't be what software. and creating it. roadmap stay become supporting, cost the We I So we're significant using

for we add new customers. So versus wins this point, up saves the at as the

saves. QX, of we changes coming the than As licensing to in customers due on board we've now had have more new paywall

surprising long the time. we're Not that story will new of be a So But period piece quarter. repeat. it how will for a the that net confident was it this of long add sure

Chad Bennett

That's hear. on to Congrats quarter. kudos and the really good

Jim Frankola

Thank you, Chad.

Rob Bearden

joining for Appreciate the Thanks call. it.

Operator

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

Your line is open.

Unidentified Analyst

on other I Hi. CDP a was of model for companies about my It's to It's mixed Conan you touched results question. that [ph] migration for you in could taking been bag customers talk if prepared Jack. wondering Thank more of bit you from remarks, that the have a your Rob. migrated.

your So migration how sales of percentage migration dedicated And versus about thinking should ramp? what we net will to new? base be be

Rob Bearden

Sure.

start to How want that, you that? I I'll Arun, up. So on then about follow and talk can it about --

Arun Murthy

Yes.

have we make Obviously, for Thanks. designed together, came When been this path of that in we of the signs very for carefully we to sure we today, stages to this with Private customers see CDP. sort are sure. been the had sets get but the -- and we've thoughtfully cognizant both companies thanks this, and a And early SAP CDH the two question. encouraging. market, of early For of. in CDP very is the and had the we something Hey,

very them, they of of really right? the right value and can get services with excited up, the to base, the new aggressively. of really, all really are fast that can to CDP space, over a get actually CDH getting course, give multi-tenancy experiences SDX legacy in SaaS take CDP get we and then sets customers but for form And has but can get designed -- stand instances of and that talked about about, fields advantage private obviously scripted, very, we a approach net value capabilities storage, why they isolation, back them professional with separation of to bases, can of. so Private has terms to Furthermore, Kubernetes starting that's cloud before, SDX. both In similar as we And We they next take and all newer [ph] more compute call factor what an customer we them where SAP and on this. on and fairly our

a -- went did actually this through and customers we'd five we way we've which was [ph] run, to the department well we was incredibly design this. So chose started also who XX program,

on-prem kind One on-prem, early value, think, unheard cloud. feedback something the just Private XX doing expect right? great on was, We public in of. validation. did get Back second that and and I cloud, a the to of CDP stand customer. private you, under of private we on-prem able the this. it And that But the in was We're side especially its minutes was regards in of up house, Rob. were to like the They cloud

Rob Bearden

Jack, And out. round Yes. just to that

workshops of public the next multiple much, it's year the those some percentage at to cloud. round to customer the over with the CDP out So, I we to take base. year hybrid vast a those then majority this XXX as -- across mentioned, will and existing me, private. actually to-date And much point of cloud then a over data may And cloud, went back workloads, on-prem and to then number directly run architecture the excuse smaller our private move enable actually leveraging public put go

on-premise private So, the directly hybrid adoption we're cloud. seeing migration -- legacy that to the of biggest the directly generally, to going

Unidentified Analyst

little talk time. private for more versus in private these license? That lead any public bit Are a margins a lot impact public to gross about you. the of you, and products and sense. there fundamental scale can makes differences on margins And between over Thank Jim, the gross on-prem as differences that you of

Rob Bearden

the will experiences environment. have a a higher use, The private products, UI. point, mature that margins. homogeneous easier It's the this and they believe more simpler lead to we public to At offerings as gross especially are

that there as gross margin net they will to So add we develop. be believe a

Unidentified Analyst

you. Thank

Operator

comes Your DA from next question Davidson. Jaluria of from Rishi the line

is Your line open.

Unidentified Analyst

for the Phil Rishi Thanks question. Jaluria. is Brigbe taking This Hi. for [ph]

an in you looking this quarter. you increased there? And on update hiring how that, driver in it So Can the expand talk environment? looks can at just like stock-based was about comp to you're the on then give us what

Rob Bearden

to want that? you take do Jim,

Jim Frankola

quarter, you had two executive actually thought in of the Okay. did employees hiring. We've comp take stock-based take declined changes. making were of number this Between stock-based in merger the companies. the terms can story I I'll the a sure the things macro there some. is comp, And retained. some in we

I the will think I think future. see in a in a and than than was of comp QX dilution expect on so terms QX foreseeable you'll less QX, peak less for trend I stock-based is stock-based And be decline QX. QX comp. actually both QX and

Unidentified Analyst

Yes, perfectly. And then go -- I'm ahead, sorry.

Rob Bearden

rest to In lessons really the has the groups of had of always decade Like the both its actually the of back right. environment, frankly, source reiterated it. groups. a you reinforced sort helpful world go the really And or we've regards learned and the this across of the spread last environment community we've world. some for so. companies, been been the But open getting of have it's to given hang hiring, interesting been if our Like

say, would for companies. much attrition like and been So I most has be attrition hiring, lesser. Hiring easier other than overall, -- has will been

Unidentified Analyst

so you Thank guys. great. It's much,

Operator

question next from from Chokshi Nehal of comes Your the line Northland.

Your line is open.

Nehal Chokshi

you. Thank

was us wondering, sense how it’s growth, about much on guys a I could X.X% how out the it -- has to about still Q-o-Q You which there. was a as Q-o-Q? difficult you of the talked impact ARR give environment

Rob Bearden

Jim?

Jim Frankola

we in a for moving at severe are to budget under look do deferring short the expansion very that customers least Yes. is, When than What say and either this I'd industries, crisis. of some and details, the we pressure a some cases, at hospitality modest, just through time have it's especially are travel in entertainment, or period percent. less manage to self-support

a percentage our Now fortunately for very small us, that's very, of business.

it, in less quarter. the call to point drag the due I'd than percentage again, impacts a So

Nehal Chokshi

quarters? And customers progress the paying you. three question expect been that pay with you've to up saw has paywall. the now over flash number to become Thank record Great. Do to And you the greater from non the past is what follow changes subscribers. than customers that, licensing and XXX a start of

Rob Bearden

ahead. go I'll Yes.

predominantly From short year, product to our early this for the and in existing business year bringing this focus model more majority successful in our adopters, a is so CDP fiscal early them, getting the standpoint, been So, line. answer customers, the has no. run, on

place start. much have for beyond, to As about and cloud public sure, that's line year we think emerging that product CDP for XXXX newcomer better fiscal be we especially a will

going customer something I the count not that's next That's to really year. see $XXX,XXX an do but be much customer So year. and the count, so total increase impact in over to going this

Nehal Chokshi

Thank you.

Operator

of question Matt next Coss from comes Your line a from JPMorgan.

is Your line open.

Matt Coss

market my Good thinking Hi. Last quarter? questions. COVID you've at CDP. you mentioned the XX% of cited any once taking rates, you about that Thank you afternoon. during to the change fully Is quarter, on possibility was in pre which what last transitioned there based growing seen for

Rob Bearden

that of growth stated the to that and the on-prem mid product a we're TAM growing environment. that where XXs. market we've back From versus rate see we No. the that into what and what as low positioned about our our -- seen We could rule we're embracing against felt that we rate. seeing And the where exactly. XX. of leg And in sort TAM public would we -- that, to get and suite talked clouds We in growth we like

seeing motion, very comfortable continue with the that a next over natural quarters, growth we're CDP, we're to on to up that as in to comfortable few very what leg rate seeing that. so, we're that going And from a and/or reception and

Matt Coss

then kind you. operating this rest go you've threshold? you sort said, share over operating intermediate as term, time. year. Thank maybe think know But And what's can of margin the dramatic Great. changes a on for can expect you refresher look don't margins you an where that we of of perhaps I in ultimately

Rob Bearden

Yes. Jim. Yes,

slightly profit the line than business around to or So, margin XX% the on to have XX%, growth we reason, XX%, that ability is that through take To as we transition at of our line below in well. first to not allows our CDP faster us XX% level hover offering leverage If have cards, grow growth our XX%. the the model, around get we once whatever says, more. bottom operating then significant and for XX% an proximation profits operating top may see extent operating

very a We're we lot think profitability. and growth in flexibility balanced there's the growth, So, ourselves for to positioning on and business be a model. of it'll approach transition

Matt Coss

Thank you.

Operator

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

is open. Your line

Mark Rende

Thanks taking question. Mark Singh. Hi. my Rende Sanjit for for on

to So I just want the ask and to you one product on guidance. maybe one on

perspective? just customers cloud are like from transitioning era guess of today to if cloud terms onto in there I the of an actual CDP? net what's currently legacy uplift platform CDP are it from workload -- with looking the adoption of any said kind ASP So differently, like workloads from Or they And the platform? is workloads? actually new using just workloads transferred, new for that associated legacy

Rob Bearden

Sanjit, question. you thank the for

in wrapped up things few there. a So

do the on is notion see we predominantly to in and private their put public. is uses been base they're cloud. CDP new public then legacy that workloads what cloud, with cloud private our vast -- majority take customer that move And public we're seeing expansion workloads very that move for plan or net with environments, existing on the So now customers workloads starting taking want plus they to that's legacy to the what consistent and to and net its new with wholesale, and

so, to that tends more on-premise cost from standpoint, is be services, to what price an go public, And than an a but from uptick see expansion point. native workloads cloud it we effective to the

question? more represents that existing of Did your hit environments, sort the native it to So cost cloud but effective on-premise than our an uplift still environment.

Mark Rende

in other on Yes. then I Very guidance. helpful. here And could maybe the sneak one

if COVID of at the last moderate I quarter. quarter, net to billion from QX I it versus through last was quarter. of new expected million, So But at back in to look of kind in $XX versus it last impact release this was look kind that ARR, kind QX about I the if continues maybe like know assumptions quarter, $XX

just -- that ARR in about context little little a with maybe kind road. the are guys So over to QX of Or of worst us? like you little put behind And the bit kind around two is of quarter COVID. thinking guidance its bumpy a still the are a of internally, bit what as product QX, well. QX And the thoughts bit I in portfolio might terms trajectory? is kind Kind vary a of of guess new your next

Rob Bearden

Jim?

Jim Frankola

Yes.

modeled. some so, in some has the all yes, want pandemic impact other resiliency uncertain describe uncertain less that we economic in far it And guidance. once to is be had continue to this it originally the Is Is so we We business. factored will we But about clearly, a So, be there on than been talk a road bumps very will paraphrase into that environment. to prudent it expect us recovery? again the the Speaks W? V? letter environment? to economically. And of your a this very we And is have our words, the

Mark Rende

Got it. Thank you.

Operator

next question Bank comes Your America. from of the from Kash of line Rangan

is line Your open.

Kash Rangan

Jim, is, Thank gentlemen. existing at for you Hey, base, My so attractive. is very much, presumably look you that your you team, Rob, offering customer question have be when rest well. you the of as the the Kevin, and

at whether application that opportunity the standpoint, public the the in to you for this from next least the cloud. incumbents private optionality. evolution, at software got we've hybrid been migrate the platform, cloud, market has pitch got centric the generally new You've look an to it's When

they right? in way, of have So make enter think growth cloud you the the customers pure have option, native you generally that As new a existing this cloud with how you for is start the next differentiation native at don't great what we can to tranche the in decisions evolution market the guys that in new guys participate mentality, like customer -- deploy But should first versus customers. adoption, cloud as look the native of about that the in market granted to a you on-prem, a pitch or cloud the tend as some compelling phase Cloudera or next differentiation but certain if of Snowflake? -- market

Rob Bearden

Sure.

existing ability to data multi they So, that glass. are Fortune flexibly value. existing in architecture the to with migrate across the customers they very, want XXXX tier an customer to standpoint. That architecture, our looking accomplish what ability very our very very enable framework is a the truly enterprise -- what for and and from current their we'll then start to to governance enterprise phase focused common the addresses what CDP do What environment, be gives and ultimately across that's with private on-prem to the enterprise on-prem our security data CDP across data that that from architecture high with Fortune and And clouds private core workloads, squarely edge, cleanly, ML, very their want base, their with of a and that to entire through enable to warehousing with data managed base. is XXXX the cloud our That's each take cloud from core leverage architecture, manage do experiences public obviously, it giving data applied lifecycle pane engineering, enablement. and the we on, ML streaming templates do to customer data of our cloud. what and data public hybrid cloud them single -- to able manage multi is That's

data of business the and data a you user of stitch different of an enterprise disciplines glass. focus architecture, pane security capability governance enable us truly then and enterprise ability that the architecture IT back the phase now in able gives hybrid ability together lifecycle. And really then next that native to enablement. to single be service to didn't come that very the to that in point have So solutions to environment. -- I framework provide SaaS the that IT of lifecycle that have And bring overall experience end-to-end than line very in becomes it's And a solutions point cloud then on experience where to go that's specific native that that to from can the enterprise data very that win-win, and multiple a with think single those now to grade, managed gives trying all

Kash Rangan

Yes.

Rob Bearden

Kash?

Operator

open. you is read-queue for it again, as removed My up. queue. would was now. from you can apologies. your I thought please and your I again re-queue follow line done once We if hear the line please Once This

Okay, great.

Jim Frankola

Yes, Kash.

me that. for Let apologize

Kash Rangan

pure private in Thanks should the worries way answer and advantage of the vis-à-vis How a for cloud? gives valuation, no native it. Oh, no, pure all. in a the that that good there's make no were But to worth competitive case Totally for consideration platform etcetera. an likes the no, legacy, at public public, Only clarity. snowflake. if that customer hybrid, no a cloud has by architecture, we about think worries

Rob Bearden

the line a it environment, a we Keep in where departmental business Yes, enable in that if architecture and data then, to again, a able business, head-to-head to point be SaaS tends against of had hit for That's bring we it jump under typically macro in. product to lifecycle our then we'll mind, to been a its in of line is be when strategy at with been provider, that's focused has overall hybrid an entire multi-cloud on been strategy this our and the for model. management. phase, data current at

very we data enable bring specific at then to workflows will phase the be to IT to then Next business. line of how look

So Arun augment on with you to bit? that, want that a

Arun Murthy

Absolutely. Hey, guys.

see when they bill that and that right? able So solve come or on data, to try need report we to it, use customer something be the they're to precise, to understand pure be to you play, a even to take with we’ve customer we time we you working under predict need sort base for, get case right. use take case that a they real business technologies to that a sort of fundamentally what time, of What interestingly, a today, current, need data a have to first cloud the do when show of you a talking customers, is able want charging set hey, on something transform it people to just like

So it one use is about like talked or need. five it simply needs things because case just they four

So -- machine a pure ware we multiple sell learning and class experiences that have position a what great we solution, scenario we sort is we CDP sort of with world pure, we have, do of a a in have cloud solution. house we

the this. points together can And all that within is We that, that still talked that differentiator. have Jim put great fact and is case have they see, Azure. governance security of we start new are what we're Amazon of these on cloud, they is have about starting as rather sort than either and streaming see do and start together with themselves technologies, data in That early directly, put customers they're stages to end-to-end some engineering, but really use public big purely solutions why to possibilities CDP what about. excited to we But or have we're a the net can the on starting of the on And there. obviously the

Rob Bearden

wrap this. with And up Kash, I’ll just

trying to architecture opposed market those data the architecture. enterprise enable had workflows CDP It's delivered hybrid delivered strategy that of against address private, data we've that down SaaS to that start Now solution the we've us we've go line and for be the we enterprise and to and for to vision business going to enterprise much enterprise architecture. cloud and now data easier a completes as now then, with that data point

within bringing enterprise. positioning that happy we the very our to we're and very, the we're are solutions So where with

Kash Rangan

Thanks. very Wonderful. Again, clear.

Rob Bearden

catching Good Yes. up.

Operator

back time. turn further are to There this questions at call no remarks. the for I’ll closing management

Rob Bearden

appreciate and look thank next with you forward great, Have very a talking again you We much. Well, to day. you great attending all quarter. Thank you.

Operator

call. conference today's concludes That

disconnect. may You now

Cloudera (CLDR) 3 Sep 202021 Q2 Earnings call transcript