TLND - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to the Talend's Third Quarter 2019 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Lauren Sloane. Please go ahead Ma’am.

Lauren Sloane

you. Thank Sloane, to Talend, Year Talend's Call. Lauren to I'm XXXX Relations you welcome Third Investor is and for pleased Conference This Quarter Fiscal me CEO, is Adam With call and Meister. Tuchen; CFO, Talend's the on Mike today

the make statements will federal laws. within our the forward-looking of course of meaning During presentations, securities executives today's the

or other performance known and performance unknown statements to events to future actual involve Forward-looking achievements may or future our uncertainties from and by and factors materially generally relate financial that cause or those operating forward-looking these differ risks, results, contemplated statements.

and this but periods, related to future and expectations our Forward-looking presentation statements market. benefits statements financial and to, expectations not our related expectations in and business performance their and the include, initiatives regarding are regarding for limited our guidance our product strategic

Our could these expectations materialize and results in may to actual periods from and projected. cause uncertainties materially results actual not risks and are differ those subject regarding future that matters beliefs to

These available today as of forth risks statements presentation on earlier in those The fully more Securities Exchange we as date our information as Commission. are in release described that this and include the forward-looking the with well to issued the press us in those filings the based set hereof.

rely statements, as required except of You future obligation forward-looking any events on predictions not them as any by should update and we to disclaim law.

in specifically GAAP. a measures not prepared stated, that are The with on financial be financial be basis. otherwise as note substitute in on revenue to will the non-GAAP or intended or results this be non-GAAP Please accordance considered a other than for discussed to call isolation measures

services by and use most GAAP company today service a on or do measures endorse referenced of to provided selection vendor, products measures our Talend any vendors. do not are customers directly non-GAAP any or not financial in have or reconciliation historical technologies, release. press product We name comparable that financial of the advise

turn Now Tuchen, to CEO. me call the over Mike Talend’s let

Mike Tuchen

reported Thanks, you quarter Lauren, thank results. and all We joining us solid third today. for

our momentum well with growth their a strong continued execute existing new adding Talend. as use adoptions customers foundation on cloud well We of We're to expanding new cloud laying customer for as future from customers. transition both in

We will continue to believe data the continue that made the our the of cloud growth share. market market in well to business progress us drive majority and positions cloud in future integration gain we've to

total In the year-over-year. revenue record third quarter, up we million achieved XX% $XX.X of

on grew basis. from include recurring or year-over-year the XX% constant additional XX% million Some quarter a annual currency and highlights totaled revenue $XXX.X

or for our Our grew constant XXth the quarter. from subscription new year-over-year over ARR revenue XX% currency QX. coming basis. the cloud XX% set XXX% hit track well on target the grew We're offering XX% to and represented XX% year-over-year we XX% Cloud, second of quarter on ARR up of from consecutive new a in SaaS Talend in of

for through continued million capital have investing We And €XXX notes, cloud customers. innovation. growth we and total cloud X,XXX through issuance strengthened nearly now XXXX of provides which convertible our sheet balance in customers over the finally in additional

cloud to of rapidly to cloud our data our showing are and beginning land the way new the who model, sales data with their cloud for load success frictionless into pleased we're warehouse. during looking We’re our With ability simple a overall customers quarter. business journey a

data gain and strategic Fabric. the Data supporting of momentum continuing Talend cloud customers needs existing the to we're At time, same new with

data integrity modern As they complex, require projects and like customers speed both Data trust. integration Fabric suite Talend achieve increasingly integration to a and become

more excited with quarter, the about cloud customers. of than we're we QX, customers had end over had the ago. we're equally customers three a year but each We've times success we At of $XXX,XXX our in a XX highlighted new our size number the number of adding cloud cloud ARR

success become enterprise cloud size. to have deal overall larger cloud existing average demonstrates growth This our deal Talend and sizes premise cloud our new customers. customer customers, Cloud relationships, landing than cross-selling Additionally, expanding existing

seeing our us makes the about cloud incredibly business momentum The ahead. opportunity excited in we're

by Our excitement our remain fact is that business as further exponentially. our bolstered cloud the even consistent rates win scales

evolution. transition privacy Several and secular in a of trends regulation rapid cloud data growth hybrid adoption; increase and market global continue in cloud volumes, innovation data to and drive The technological explosion broad public environments and to

and these need and solution. modern complete integration the and integrity come With complexity integration trends significantly for greater a

Microsoft time our complex Talend of is aspects the the data that the Fabric, unified and chain. In data the on at Azure value and Microsoft with optimized cloud Talend shortens for Data solve with announced data with of forefront for trust environment market Cloud some most to of native quality Talend the availability advance the Azure support integration the capabilities platform of services. QX, the we

Snowflake to initiatives We cloud. stage continued to solution announced Both customers automate also our from of part their in on-premise helping at migrations every a are of data commitment journey. the warehouses cloud to

the go-to-market a as we down in slow R&D we business. resources increasingly continued our focus the cloud the overall see and As cloud, market opportunity on and shifts our to premise

focused overall As mentioned now cloud. reached in half the where customers point the of our our are on the of large new the past, cloud. I've customer majority the is in engagement We've

to aren't others a the migrate the will cloud migrating in premise existing will easier By cloud the to pilot have of yet. these Talend customers a the using premise small believe majority number to vast to customers customers years. coming who of using the cloud we our than far and our Talend, starting that pass We're

the wins quarter. a strong third new in healthy of mix expansions and We saw

solve data stories, company most to years you will customer problem. this customer next that in manufacturer this a exciting Let is silo multinational the An me from issues faced largest around new world. which strategic tire its technology the trend. walk illustrate through The success initiates few QX and operational span a five project who

our financial, manufacturing data and They'll chain, a capabilities combine They're Talend Lake R&D types data, in including single and a cloud. supply companies data like platform into evaluated Informatica have of The big manufacture governance quality, data, for building Data AWS. and environment. ERP, and selected different Oracle many

the implemented compliance. single business customer will of to provide regulatory source everything fully with engagement truth to Data the from a When help Lake entire

for Another one new customer U.S. largest Talend of the win is and institutions. oldest financial

using broader As organization part savings is initiative of Acxiom of customer and the out a environment cost into SX. within Snowflake own data their migrating AWS,

several cloud closely the data SI multi-cloud wins joint continued quality of as Working our illustrates companies strength well win evaluate options Talend success selected new and partners This in as referrals. a based Capgemini our embedded and support customer partner Infosys the on with to technology with our capabilities.

Fortune move in Friday, Lowe's Companies and its XX of issued a biggest CIO company's for directive the of expanded prepare to revenue footprint year. home to applications Lowe's the with cloud. Lowe's infrastructure will flexibility Black its generating a XX% event The of the improvement cloud Talend company the QX.

Talend and in to data multi-cloud sales, increased a over Cloud, applications, selected environment, Microsoft chain, and was data open Google running reasons, a support Azure support ability platform. Cloud competitors our foundation, like needs. IoT, cases modern API several for support multi-cloud offering, investment including integration to source our its to With governance implement Informatica and financial Lowe's supply use variety and of Talend plans

to in company the and and warehouse medical Talend the them and a based databases away of to looking single serving in the hybrid cloud cloud financial company academic, enable government services Another data into The recognize research, of feed They cloud would sector benefits and customer from to a platform multiple Amazon Cloud Fortune environments. will data. big a a were legacy in cloud number sectors. that embrace XXX move QX is technologies integrating

use provides and their flexibility new adopt a the They perfectly and and new address that platform agility fit cases cases of use felt the Talend’s technologies extensibility in to future. with desired

in of was and also largest in U.S. over Cloud the billion $X contractors one annual selected revenue. the with Talend commercial by civil

part As for their system cloud HANA warehouse construction transition cloud the SAP its for and to broader data is analytics. its using company ERP of migrating to

they the immediate Dell blend because stood Talend solutions MuleSoft, competition together to The after and solve company's including can integration we the data and company alternative ERP selected construction Informatica Talend cases out supports considering including application Boomi. their new from shift analysis IoT. the application use from challenges, advanced the selectively upcoming their integration understanding where also their cataloging critical to data data impact Talend system. most and can

well QX highlight month. user AstraZeneca, L'Oreal, last world Another was from main conference which featured We event keynotes stories, leader very including stage The strong took cosmetics. from our from featured Talend of biopharmaceutical received. and the Paris customers, and company, Connect, in global were presentations the annual place which mix London partners and customer a in

eventually reporting financial catalog wide last the they use data and the into improving cases with us provider where integration their entire their they AWS. expanded system data dramatically journey over about their started their spoke making and enterprise AstraZeneca across organization, business as several to other by moved years then Talend strategic

One rigorously that result approximately per can and company one month shave trial, AstraZeneca is develops Using saving estimates its AstraZeneca $X this from expansion Talend tests year. the drugs. it streamlining how from billion clinical

its Another great innovation IoT marketing Lake company data story more variety to and XX is L'oreal from departments, research The a on Azure. million L'Oreal. Data of entries we've heard is day Microsoft processing per and Talend, at using than With Talend Connect power was scientific sources.

new order in product cutting regulations. edge while collected, maintaining to is data maximum and secured data to protect innovation compliance This and analysis drive shared safeguards run with privacy insurance and

continues to build Our the cloud transition momentum. to

their to then most land allow and them quality into and data problems. quickly in governance data is cloud strategy by to solving to Stitch load data warehouse our customers Our customers minutes with important expand new cloud

on succeed enterprise and hybrid solving speed moves this sales, combination of R&D to complex cloud. We well call multi-cloud expand, and and we're both trust. fast positioned enterprise by land the followed the scenarios focus a to With most unique increasingly across as market the

the satisfaction in cloud that In customers as higher full see result scales we on-premise driver after a migrate meaningful of of expect and cloud the cloud. to their growth take across they our existing parallel, expansion can we’ll opportunities becomes they will advantage to cloud which higher the moved and so business, our business rates the ahead business. for expanding We net us our help

we're growing business, cloud business particularly over As our quarters, last rapidly scaling our as few slows. you've prioritizing, the premise seen

largest years. expect cloud driver Our which new ARR current of the strategy becomes coming total our of revenue achieve ARR, first, it we so our the drive in to in largest aggressively next, quarter our and is in the component to that business

visibility our We caused see some despite it for that To business this in driver has as headwinds impacted the growth disclosing business, total saw This our give tremendous scale particularly quarter. In QX, investors and sequential of clear next our ARR. transition in of cloud the our value metrics. near-term ARR growth a in cloud into the start in broader business, our European company, premise in we we'll headwinds bookings.

of As makes call, Europe, in political in continues, our for macro year in remainder earnings QX that cautious us the region. the we the discussed and uncertainty which

Let results XXXX. me outlook to the Adam discuss turn call over to and for our the QX and financial QX now

Adam Meister

results as review third outlook I'll XXXX. Today, for fourth year provide fiscal Mike. as quarter you, our and Thank our well financial for quarter XXXX, the the

as reminder, GAAP when the of U.S. a year. reporting are filer As beginning at domestic became we this we QX a results under financial required

this result, a of point to to year-over-year the currency Cloud recurring value as year-over-year active ARR from or $XXX.X end as The of of for and the a in strong XX, Talend at all revenue contracts demand time as revenues. up define million grew differ annualized September XX% FX constant We on that ARR this measure meaningfully Annual XXXX, of contributed the the at growth. subscription or impact basis. XX% will period,

new for XX% Cloud Talend of the from QX. ARR quarter, XX% in represented up third

are mix our customers percent sustained cloud. measure cloud cloud Talend half during exiting of to will a each sales has measure overall We shift sales XXXX progress of in meaningful with Cloud premise continued will cloud reaching pleased goal the within Talend new contributors rotation ARR, the XXXX. our sales, key established our with been to to momentum new engine, this towards as success business customers of XXXX our of ARR in cloud our of marketing and entering and With This largest expansion existing cloud Cloud year. to to our be cross-sell existing our

on providing Cloud ARR to ARR we Mike's Talend provide In I our quarterly further we Talend total sequential call, begin in will guidance and regarding Cloud XXXX. ARR. the also full growth for like year will comments expand QX

ARR to QX, relative largest in to growth contributor During added the million ARR. the we overall $X.X the was sales on Europe, new quarter. It Performance sequential of last lower in for weighed quarter.

but there both Cloud in Europe quarter impacted customers existing remains customers. the IT sales expansions environment premise in the within relatively and new for momentum strong, spending particularly

XX, September in constant net dollar-based ended quarter XXX% was the currency. For expansion our XXXX, rate

bolstered ASC As to a XXXX was due during reminder, this revenue-based metric XXX.

we revenue standard. As would of year we this have the new come previously down over four-quarter anticipated the this measure reflect noted, rolling to course that fully

However, also expansions XXXX the four resulted percentage change from QX during existing points European with since an the quarter. customers lower

was subscription in of now quarter during We or have trends. defined XXX with the cloud in customers customers customers with Overall, of annualized line over X,XXX as strong. our Customer quarter being the historical We additions customer enterprise nearly retention quarter more customers. were X,XXX with them ended the revenue. with XXX,XXX

with resulted quarter which that for versus adjust in offset We or required projects was line customers slight XX% as QX. around in deployments however, from see enterprise common some growth number in sequential customers within evidenced higher QX. other net Down-sells $XXX,XXX to from this by from are of down periods. the our initial expansion decline a the slightly retention Enterprise projects rate. in contributed as accounts These as in group, revenue are evolve level, Customer prior more in by steady sells than customers dollar-based XXX departments of customers did state. XX% QX subscription seats

cloud strategic accounts they cloud We've will we to decision as additional with prioritize their customers. deferring purchases result in new and a evaluate existing believe made this strategies. that own both And some

ARR. expansion our organizations. customers rates ended with the and seen over customers We've success large expect see last with QX these growth cloud cloud as the significant expanding of and customers rapid adoption amongst in large increase. we number the mentioned, to cloud of to of Mike their This or cloud, the As XXX,XXX customers cloud year demonstrates move and XX more

at end reflects ending the contracts Please of value the note this ARR-based that the period. measure of cloud

an enterprise enterprise our of because sales First, definition, total On which will QX. lag revenue in quarter-over-quarter linearity. grew customers is customer based and basis, ARR

transition As measure we'll we're focused based next ARR the to primary quarter. as customers an business, enterprise for ARR on the starting of measure

professional impact a year-over-year the line up year-over-year. FX Subscription quarter in Total our or up for XX% $XX.X XX% million, third was the revenue expectations. moderation, overall and services quarter growth currency was revenue $XX.X from with basis. third revenue on for XX% constant on growth The we're million,

consecutive in requirement than year-over-year. related year-over-year mix. the Subscription revenue well XXX% from Talend to Cloud project lower services increase of Professional due Talend revenue cloud grew can revenue more an services third timing professional as million to was XXth This for quarter, Cloud. Professional $X.X the as quarter. for services largely fluctuate X% moderation average is

the believe both of shift our of XX% with is revenue during are customers subscription quarter. mix towards pleased growth ARR total the accounted for revenue cloud and We continued existing for Regardless, we which with momentum shifts. best the our indicator new

Total region grew macro revenue year-over-year QX. Europe, backdrop. economic in mentioned I seen our we the X% from softening As in demand earlier, have given EMEA

the EMEA outlook to continue on take a near-term. for We cautious

our would be profit website. I to Investor that profitability and earnings reconciliation release posted all be portion unless today, the loss in out results. moving and going which non-GAAP non-GAAP our found can press forward to Relations metrics like is Before discussing specified, between on results full of are I A point and expense otherwise issued GAAP will items,

same our grow. which economies Our Professional compared up period was reached business scale continues services total margin was XX% of gross in XX%, margin quarter, margin of for XX% gross last to gross reflects cloud to the year. Subscription this third as greater quarter. XX% quarter XX%, from the last

expenses lower change quarter the sales to year-over-year. of up XX% made XX% year for were of new up last quarter align end million, the year. and the the to the Sales year. marketing $XX.X reflects QX focus expenses starts Operating over year for growth were This the during hiring $XX.X million, third at to we beginning

million, $XX XX% the up expenses were quarter for year-over-year. R&D

were million our particularly expenses of This in drive investment drive to prior of accounted the by inclusion products It's of most our efficiency R&D the XX% in to operations. for the focus of or reflects G&A the continue period. where operating business. quarter the revenue versus XX% and we in $X.X revenue As for Stitch impacted expense. cloud ongoing also

operating vesting million for million from to guidance versus well a reflects including an of $X.X expense incurred $X savings of efforts benefits RSU drive X%, some related doubtful reduced loss or non-cash an X% accounts. quarter the loss to efficiency to the compared performance as We during of in QX reduction allowance third for as and tax quarter or The operating initial in XXXX.

million, of as $X.X prior June. cash period. loss loss of year totaled for Cash in million the $XXX million the equivalents quarter at of was versus end the to net XXXX XX, September compared Net $XX.X a $X.X and million

in convertible closed We Our now with the in net we position includes this cash business proceeds have $XXX to the from long-term capital. million notes offering additional in invest flexibility September.

the focused around on quarter. opportunity million, a integration in business and this cloud the the be data quarter in in to we and and flow the continued us Europe believe negative growth was investments products given ARR our position the will are for strategy cloud leader Free our lower Innovation. sequential go-to-market strategic $XX.X dynamics shaping cash We

than free will expect the burn that a million be discussed million for prior full call. cash the we We higher in flow year $XX few our

for year QX now turn full XXXX. to I'll outlook and our

XXXX. foreign As a exchange XX, our assumes guidance as conditions reminder, rates of similar October and business

expected quarter to $XX.X the of million. to range total million is $XX.X XXXX, fourth revenue the For be in

be based to of $X.XX basic operations range million be million million and the in to range million. million. of per from $X.X $X.X to of share expected average $X.X share is to loss in net to count on is diluted the is $X.XX. loss shares. $X.X of loss be Non-GAAP Non-GAAP expected This in a expected weighted the to net Non-GAAP is XX.X range

to million full the updating $X.XX expected This operations net in is the million to is revenue range be in net basic to of expected as to a on for year to be weighted to Total $XXX.X $X.XX. is is $XX.X Non-GAAP $XX.X million. be based loss count follows. to of We're $XXX.X expected of million. share million. million share in from range the XX.X $XX.X the XXXX of loss is expected to per range be average shares. million in guidance range of Non-GAAP loss diluted the $XX.X and Non-GAAP

progress are market strategy and our the We and made ecosystem excited durable the Talend innovation with Cloud largest to about in the We cloud our is will leadership, customer strong to XXXX and over long-term. growth we enable to drive remain that confident us have relationships exit advancing new contributor business. to continue expect cloud-first

Let call turn for me back comments. over the final Mike to some

Mike Tuchen

We're Thank with you, made progress pleased Adam. year-to-date. we've the

our transition advantage momentum on take to with well strong the the adding to customers. well We’re cloud. new We're executing positioned cloud of and shift cloud market

happy that, your With Operator? questions. to would I Adam take be and

Operator

[Operator Instructions] you. And Blair from question Bhavan & Company. comes Suri William our Thank with first

David Griffin

Griffin Great. for Bhavan. this for is on Hey Thanks guys, David questions. taking the

new and So five that here over ARR. bit the quarter ago, from going first nearly considerably is over XX% than I two customers XX% the little less ARR In quarters today. past Cloud, obviously Talend scaled wanted business touch and of X,XXX a to of year new X,XXX on pretty

in good – the kind kind you if what expansion characteristics you're cloud it'd could terms think a unpack helpful of customers. be seeing of I of So of

added rates what I how to at it here quarters was on-premise looked customers you the expansion you you've rates scale? And give the say with on those business have the saw like. comparable that four big sense data when can expansion some guess, of specifically, us the past compared over, the

Mike Tuchen

for I'll I'll So it the of second Adam and part that. start to hand

maturity increasingly cloud market see Our a it demand the really of our our materially moving to rest been the they're have increasing offering year I also exciting nice cloud the the the – of for than overall business. not the last where the actually as and cloud. point but have, It's our business, higher really our clip expansions increasing over at expansions we to to in demonstrates it for just that the is market think the now

scale going great if at how In compares Adam… big terms question. data but have the data it a to back equivalent to I'm we an is there, not sure of

Adam Meister

And cloud in last scale. Hey than the big The higher expansion David, in dynamic include a base take were way it is last not from for Part to it's quarters little any is expansion hear customer what's at over within up that probably just small good we're to with cohorts. that really cloud. from is cloud starting us And We're from years. to line this the we you. now in off. picked data frankly of are the starting the seeing driving couple was expansion for framing doesn't that that couple conversions where those premise actually of numbers the actual the

If in, that higher. it you be added even would

David Griffin

Got but then about to we a fourth about about as couple And little guess, then things any you're that start migration there, or next obviously little think even enter the been revelations. days should positive that. activity migration think it. year, trending? we A migrate it's talk whether we migrations of I of more early still progressing you the about very to early That's maybe number a mention related can quarter unexpected starting as customers. those small the side how are bit first, and did we think to And you helpful. equation, of challenges bit how there’s a here

that could like really the there product the seems bulk out a just really we're incremental in kind cloud the transition that then broader market It on delivering innovation And your seeing cloud. of implies play in migration you little time could think a that it in Is way a XXXX. about right think momentum? take build to in maybe more trend that do big bit to uptick for it be the activity of or focus

Mike Tuchen

more and be up, now into mix make bring the right the and a over scalable customers slowly X,XXX more us. to to is remember, half high of very ramping for repeatable so that looking need several years, The about it this premise motion. and a XXXX, it we be next Because way the we'll we're will have during motion partners at it first into velocity

that be goal first to program going half year. with the for our overall building partners the So primary of is

ramp half the You'll in end higher towards and And XX the in second volume early up be start of to some really and see really going we into of us migrations steam. do year want next XX, should to full you and see ticking towards an really the following year.

David Griffin

helpful. here. Got good questions. on Congrats for taking it. That's another quarter And the thanks

Mike Tuchen

Thank you.

Adam Meister

Thank you.

Operator

you. Thank

comes next question Our Raimo Barclays. Lenschow from with

Raimo Lenschow

you Hey, of competition but talk kind vendors, bit on of Mike, out you follow-up lot And I of the you've Stitch started kind with what builder, a obviously the of expanding? Just et is early little of cloud how can about and private but at lot then Europe. with a versus cetera. you moment more there, evolving spots got in landscape now capabilities – seeing we in lending then the a are like had adding on pipeline side? the Like in terms kind

Mike Tuchen

hey Yes, Raimo.

the that, of the hasn't So doing high new landing solving complex job problems governance nice remain do being help the speed seamlessly that problems. as then see couple problems segmentation largely scale headed with in we right minutes. from changed in solve we entrants. and competitors a and a And complex that can still trust Stitch market the that solve their couple last quickly really your market a over and sense get customers of And problems. way and separate most the their new see that help problems Informatica the by only of customers really your land we started and are there you now quarters most much fast, that land up That immediately live of incumbents be then can the company are we large data in

speed The win trust be the level we And remarks. mentioned as they really cloud market our in rates, a as stable what unique and we've some that initially now overall I the scaled several prepared will to last over win remain think And in Those drives would nice really grew is that for so-called offering period the and of and stable years. dramatically time. remains positioning rates stabilized. our

Raimo Lenschow

space a vertical looking in ours but little haven't And where talk on Thank see more a Europe, bit less maybe geographical probably about and anything, footprint of kind Okay, on perfect. you can some there the it on have your just like seen impact then you. like frame stuff just maybe to companies and or an across? you worry, going

Mike Tuchen

are Yes. versus continuing Because is greenlight to more Probably have continues and business less segmentation strategic of drivers cloud actually customers impact macro on seeing to to we're at and business really And that read-through about the a the and continue in uncertainty verticals in look is our the face most have that premise we're grow internally the we we that in is projects about Europe tend premise where to cloud. that the fund environment. useful is of that is business even what seeing our – bunch cloud political strongly. cloud

to seen adding be as more onto it's over So that's tend projects projects, something we're of seeing more because delayable already delayable that premise whereas there, working.

we point. And so that that's the that read-through can give think I on at best this

Raimo Lenschow

Okay, perfect.

you. thank Okay,

Operator

Thank you.

Our next with question comes from Jack Andrews Needham.

Jack Andrews

was driving terms afternoon. for driving cases said, you Good have strength specific customers you on was about the tripling any use think could data growth. that if it cloud really on my specifically wondering it I color have you – metric? that more that $XXX,XXX. if think particular than you was in use little that Is I of warehouse the there's Thanks down a cases focused partners said, or you wondering question. the – been common taking example, in I any really or year-over-year I in paying just for more bit drill XX

Mike Tuchen

What a for for now. finding very very very, is us. frequent cloud volume has. us high a is It landing warehousing use case we're spot data right. That's initial that right And is

initial follow-on that things us, than use we to we're companies governance, using finding that's helping a add-on, land customer doing on, As probably around for tend problems. $XXX,XXX typically API more of opportunities just like with than be their sorts solving they're What expand, case. solve more

mentioned share We an and call first They're using API a is also the to at the Lowe's using as looking data. they're approach cloud. customer on API they well, move to as

So fall we that a has that launched expansion. using offering key of our API last part services been

a into say, going more what kind in for the absolutely more cloud warehousing account, real lot solving of their solve complexity. think I'd expand on data it as, of problem, more data but the is, cloud, there's of there underpins doing of So their probably we're we enterprise enterprise as of

Jack Andrews

Great. capital, as type is the just in be were question, about about any making And overall of there about that. or for thinking more can the more how terms investments you provide just thinking in we a color you hiring that? about additional further a you of tuck-in use Thanks follow-up then perhaps of How talked M&A cloud? Should you situations? thinking are

Adam Meister

investing to Yes. growth Really grow a capital in – the flexibility about. just lot Hey, Adam. we and us cloud. The Jack, be the of those in it’s to keep think both things keep of of gives will pace

eyes then else. our more our just anything tuck-in on marketing accelerate dollars anything really And more that that obviously, absolutely M&A, feet be keep open so roadmap the and for some of more would street, will than product we

near And M&A so have powder purposes. those in nothing really that we the this dry on for capital is sites front. There's just

Jack Andrews

taking questions. for Thanks my Great.

Mike Tuchen

Jack. Thanks

Operator

Thank you.

from comes Sachs. Merwin question Goldman Chris with Our next

Chris Merwin

just Okay, an was you doing this different wondering a we and about new think you thank about you as what talk don't – the with growth? how how were also bit talking on-prem the customer asked migration Snowflake. bit that's offering I to if of from you of there's should data a driver what mind guess, now Snowflake. automates Thanks. that you. Can before I about

Mike Tuchen

with been so has do data very lot Yes, but And them with warehouse. and see majority new with a business cloud our data warehouses. vast to-date as a we very, compelling the we them of with Snowflake business – Snowflake of net

that that data being problem some in So, the solved a for before warehouse companies are on new cloud wasn't premise. building

data all and the premise billion expectation, the over amongst and largely move warehouses every Snowflake that $XX I'd But spend us going the expectation on on shared that worth other of to of is decade. is our hand, the next to there's roughly and year say cloud

working with cloud. to move to premise warehouses so of help now we're some And the them data those

as the within nice with to of that and And opportunity coming really years. modernize Snowflake in lot a and help see expansion take infrastructure, companies take we the a relationship those growth strong of accounts capabilities. strengthened advantage their And to cloud that, see a a with new

Chris Merwin

that's being to to prepared you great. value strategic sense does some Okay, mentioned it I that being the projects. I from that solution the contemplate down-sells to from based of think customers. a you're you by delivered? extent make given And mean, I know offset in the pricing, remarks, see degree customers, but new just seeing that more

Adam Meister

Hey a Chris, it's It's fair question. Adam.

So, reiterate of that on what said the threshold. side, around down right is customers sell I it XXXk handful really

really a makes sale a over perspective, dollar it's what explains constantly so more in it solution-based that And of about But We think wasn't a probably of majority in kind sense. pricing to is from cloud at customers. something strategy use enterprise of look driver. is vast and material cases and moving time kind the packaging and of change sequential the

But I seeing any now. business near we around a trend don't that urgency it think given term particular right we're have

Chris Merwin

Great.

Okay. Thank you.

Operator

Thank you.

with comes Tyler Citi Radke Our from Group. next question

Tyler Radke

aside some questions. taking negative you think weaker think what Mike for you look seeing the maybe Hey, Question to macro expectations kind of thank to I next guess for Obviously conditions what had in that business take the a that QX business. you've year on in you, And perform on-premise for relative had how outside business. impact issues your on-premise I that you called on were of on here given and Europe, have did you're down, you expectation? macro into of, your But impacts, to out you the QX. if seen

Mike Tuchen

Well, outside business strong of the U.S. now. I'd Europe, right going really say is

into and the follow-ons premise customers. cloud new And cloud as expansions existing so as and that's to across, customers well both

the of All above.

in really Europe And the so as mentioned actually seeing a about what in business we well. in cloud weakness – the Europe. we're is going is And really

so really on-premise expansions Europe. And in concentrated is the that on

to cloud more course and of more first is add and expect QX happen the and do the, more we to say, this our more certainly that over were away that of just cloud business cloud and over really going continue on customers happy say, and migrate we've you see we several expect our move and if step and XXXX becomes years, what next to – customers. of ultimately then transition from The and to the been become back fully

that becomes of the percentage value we the was in sell. an QX itself the as longer and that in side. the But term we So, premise business as our absolute the on premise majority the a what Europe is trend and declines in in really cloud expectation all saw

Adam Meister

but response alluded just Yes. majority vast, of our add, it's this, now new Mike vast to And important to logo then, lands the his cloud. reiterate, in just I'll are

function opportunities. our fit, just customer in better sales cloud market better And readiness, so frankly a and organization better of product getting at generic getting that's and positioning

as growth contributor overall biggest with trend the the that it's And it, so, contributor to logo expanding. And to is year we we'll going keep And move already business. biggest cloud, continue. definitely into next new keep just to

Tyler Radke

Great. you Adam. And a follow-up there for maybe

XXX%. we grow year-over-year percent have business that you kind have, absolute kind rate I is decline that you as And, thinking kind described. of look you of growing growth the an but obviously from So, that, of of basis large be growth continued should on-premise on about at high to given start where going constant a twenties some the we mean, a currency as that how revenue dynamic is ultimately like it mix small is sounds in on business at a ARR basis. point. that cloud the of over may mix to forward, dynamics shift that mean a rate. I just the this

Adam Meister

question. pull to this the around whole fair we it's to think Yes, conversation about back it's I how mean, migrations. important

I rotation indicator the how because we're as primary become also be of comments will really but And material to of had premise overall my dollar in ARR the just customers the cloud cloud so year, next driver. new a existing of mentioned sales cloud pretty doing not on migrations that

into visibility have so that. more And you'll

And an scaling premise of continued bridge cloud you that decline versus important so being of about as or the how of think time. we ARR the component over stability

as process point thing in QX the as to the a season, going point most business growth just the in much team, expectations our in and is important to is where I to we the to years. going XX that's XXXX for most keep still growth be thing budget over But pretty company next of anything don't this that want absolutely that as to cloud fast our management are at a and get early iterating ARR. overall where important as Frankly, Because to we can signal really possible. do as that's customers is their

Tyler Radke

Thank you.

Operator

you. Thank

JP question next Mark Our comes from Morgan. Murphy with

Pinjalim Bora

in scales of of companies seeing? what are the also Great. behalf Stitch. or question. you're few Because do this particular streaming that Thanks from different? on just wind in is services that any mentioned is an and of technology I Pinjalim what you that, know And customers alternative to rates it for or wanted are you ask there. competitive a there our does lands the about Hey, Stitch to business? view kind and that the talk Kafka about Could as you Mark. kind you maybe taking fast seeing dynamics and of I But completely

Mike Tuchen

the first second one. one the take I'll then Okay, and

see less win much And driven The self for where, works in first a process of more is evaluation question the Stitch driven is what much rates? it's side of and, competition business service it's Stitch competing head-to-head with way we're someone a sales side, else that by process. do we

way to customers. for is the business it’s new us look the so And efficient acquire way Stitch we at a to very, very

and is months them And, The linear of new Stitch. acquired customers, as The of XXXX, the cloud payback a predictable. first and extremely business about we strong. dilatable in really is being seen nine you've thousand many period

done you that's a to where think us. So very acquisition very, the – about process vehicle new logo way. the a proven But evaluation to effective for being is have in self-service given be largely it really differently

in a general. competitive rates win We see process we It's sales driven don't not don't have that because process.

play if internally want about a plug great the uses of streaming allow In Kafka, terms to Kafka use internally. think a, offering. adoption. within and you Kafka how actually of as uses really pipeline as cloud strong, We internally is and We our of we engine part that's Kafka it Kafka rest you Stitch create well, to Talend a a pipeline. seeing use streaming

customers great for runtimes, it. things that help there. Snowflake it advantage capable kind internally to I out And general almost really I see complimentary runtimes number goal any our to [indiscernible] what And is our choice we And and most don't it like entirely good is good. then doing. as machine data we a have is structured processing processing of we're as Spark and learning, streaming, unstructured for of take runtime since What we a so our, really and is like provide think we for of Kafka use things customers we use mentioned, think the Spark

in environment. all design So use really of web-based customers a our use, help goal easy those is to to

Pinjalim Bora

next one Understood, mean guess for the follow-up revenue I it very the do of it's one, that's and metric going becoming of cloud, – it a guess at? think percentage kind larger a cloud on I I helpful. and and next down, will have And year. part look you with PS as maybe CFR of further the drag could is revenue revenue year, a total business to next on right revenue year

Mike Tuchen

absolutely that's Yes, right.

towards as it going push I think to the continue to to been a related some drag subscription and be We're seen last and largely scale. cloud the be revenue. will continue overall is growth and further have would do we we're like So, on the much to as couple continue probably it's quarters. shift PS revenue, to on of that not in really to pleased conservative moderation which mix in that But,

Pinjalim Bora

you. Thank

Operator

today's we at no and thank call. gentlemen, now And may for this time. disconnect. you have this attendance Ladies participation your concludes We questions and and further you

Talend (TLND) 6 Nov 192019 Q3 Earnings call transcript