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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Talend Reports Third Quarter 2019 Financial Results

November 6, 2019

Record quarterly revenue of $62.6 millionTalend Cloud represented 49% of new ARR, up from 43% in the previous quarter

REDWOOD CITY, Calif., Nov. 06, 2019 (GLOBE NEWSWIRE) -- Talend (NASDAQ: TLND), a global leader in cloud data integration and data integrity, today announced financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Financial Results:

-- Annual Recurring Revenue (“ARR”) of $224.8 million, up 24% year-over-year or 27% on a constant currency basis -- Talend Cloud represented 49% of new ARR and Talend Cloud revenues grew more than 100% year-over-year for the thirteenth consecutive quarter -- Total revenue of $62.6 million, up 20% year-over-year -- Subscription revenue of $55.1 million, up 24% year-over-year or 26% on a constant currency basis -- GAAP operating loss of $13.1 million -- Non-GAAP operating loss of $2.8 million -- Dollar-based Net Expansion Rate of 114% on a constant currency basis

“We delivered another solid quarter with record revenue of $62.6 million for the third quarter of 2019,” said Mike Tuchen, Chief Executive Officer. “Our cloud business continued to build momentum as we grew our cloud customer count to over 2,000 and expanded the portion of new ARR coming from cloud to 49%. We continue to bolster our market position by delivering the latest integration tools to deliver data with speed and trust. We have expanded our relationships with cloud ecosystem partners to drive broader market adoption. Additionally, we strengthened our balance sheet through a successful convertible note offering, which will provide additional capital to make further investments in the cloud as the business continues to scale.”

Recent Business Highlights:

-- Announced the availability of Talend Cloud on Microsoft Azure -- Unveiled a new offering to help automate the migration of on-premise data to a Snowflake cloud data warehouse -- Launched a Cloud Accreditation Program for partners to increase the availability of skilled experts for cloud integration projects -- Hosted successful Talend Connect user conferences in Paris and London showcasing customers using the cloud to transform their business

Financial Guidance, assuming similar business conditions and foreign exchange rates as of October 31st, 2019:

Fourth quarter of 2019:

-- Total revenue is expected to be in the range of $65.4 million to $66.4 million. -- Non-GAAP loss from operations is expected to be in the range of $(4.5) million to $(3.5) million. -- Non-GAAP net loss is expected to be in the range of $(6.8) million to $(5.8) million. -- Non-GAAP net loss per share is expected to be in the range of $(0.22) to $(0.19). -- This is based on a basic and diluted weighted average share count of 30.9 million shares.

Full year 2019:

-- Total revenue is expected to be in the range of $246.5 million to $247.5 million. -- Non-GAAP loss from operations is expected to be in the range of $(22.6) million to $(21.6) million. -- Non-GAAP net loss is expected to be in the range of $(25.4) million to $(24.4) million. -- Non-GAAP net loss per share is expected to be in the range of $(0.83) to $(0.80). -- This is based on a basic and diluted weighted average share count of 30.6 million shares.

Talend’s outlook assumes similar business conditions and foreign exchange rates as of October 31, 2019. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the future costs and expenses that the company adjusts for.

These statements are forward-looking and actual results may differ materially. Refer to the section under the heading “Forward-Looking Statements” below for information on the factors that could cause our actual results to differ materially. An explanation of non-GAAP financial measures and key business metrics is included below under the heading “Non-GAAP Financial Measures and Key Business Metrics”.

Conference Call Information:

Talend will host a conference call and live webcast for analysts and investors at 4:30 p.m. Eastern Time on November 6, 2019.

Parties in the United States and Canada can access the call by dialing (800) 367-2403, using conference code 7834434. International parties can access the call by dialing (334) 777-6978, using conference code 7834434.

The webcast will be accessible on Talend’s investor relations website at http://investor.talend.com for one year. A telephonic replay of the conference call will be available through November 11, 2019. To access the replay, parties in the United States and Canada should call (888) 203-1112 and enter conference code 7834434. International parties should call (719) 457-0820 and enter conference code 7834434.

Non-GAAP Financial Measures and Key Business Metrics:

Our condensed consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release contains financial measures that are not calculated in accordance with GAAP. Our management evaluates and makes operating decisions using various performance measures. In addition to our GAAP results, we also present non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss, and non-GAAP net loss per share. These non-GAAP results should not be considered as an alternative to gross profit, operating expenses, operating loss, net loss, net loss per share, or any other performance measure derived in accordance with GAAP. We present these non-GAAP results because we consider them to be important supplemental measures of our performance. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our fiscal third quarter 2019 results included in this press release.

Our non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss, and non-GAAP net loss per share are exclusive of certain items to facilitate management’s review of the comparability of our core operating results on a period to period basis because such items are not related to our ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to providing meaningful supplemental information regarding operating performance, these measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

a. Share-based compensation expense. We excluded from our non-GAAP results the expense related to equity-based compensation plans as they represent expenses that do not require cash settlement from us. b. Amortization of acquired intangible assets. We excluded from our non-GAAP results the intangible assets amortization expense resulting from our past acquisitions. These non-cash charges are not considered by management to reflect the core cash-generating performance of the business and therefore are excluded from our non-GAAP results. c. Transaction-related expenses. We excluded from our non-GAAP results the expenses which are related to recent acquisitions, debt discount and debt issuance costs. These expenses are unrelated to our ongoing operations and we do not expect them to occur in the ordinary course of business. We believe that excluding these transaction-related expenses provides more meaningful comparisons of the financial results to our historical operations and forward-looking guidance.

In addition, we calculate and present the following non-GAAP financial measures and key business metrics:

a. Free cash flow is defined as net cash from (used in) operating activities less cash used in investing activities for acquisition of property and equipment. We believe the disclosure of free cash flow provides useful information to understanding and evaluating our core operating performance and trends. b. Subscription revenue growth on a constant currency basis represents subscription revenue adjusted to exclude foreign currency effects. Subscription revenue on a constant currency basis is calculated by applying the average monthly currency rates for each month in the comparative period to the corresponding month in the current period. We believe the disclosure of subscription revenue in constant currency provides useful supplementary information to investors considering potential significant fluctuations in currency rates. c. Annual recurring revenue (“ARR”) is defined as the annualized recurring value of all active contracts at the end of a reporting period. ARR includes subscriptions for use of installed software products and SaaS offerings, which includes Stitch, and excludes original equipment manufacturer (“OEM”) sales. Both multi-year contracts and contracts with terms less than one year are annualized by dividing the total committed contract value by the number of months in the subscription term and then multiplying by twelve. d. Dollar-based net expansion rate is calculated by dividing our recurring customer revenue by our base revenue. We define base revenue as the subscription revenue we recognized from all customers during the four quarters ended one year prior to the date of measurement. We define our recurring customer revenue as the subscription revenue we recognized during the four quarters ended on the date of measurement from the same customer base included in our measure of base revenue, including revenue resulting from additional sales to those customers. The analysis excludes revenue derived from our OEM sales.

Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” ”would,” “likely,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our anticipated operating results for the 2019 fourth quarter and fiscal year, our expectations regarding our ability to continue to bolster our market position and our prospects for future growth. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to inherent risks, uncertainties and changes in circumstance that are difficult or impossible to predict. Consequently, you should not rely on these forward-looking statements. Actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements as a result of such uncertainties, risks, and changes in circumstances, including, without limitation, risks and uncertainties related to our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase of our existing products and new products, including conversion of leads to sales; our ability to successfully transition to the cloud; the impact of the transition to cloud on our professional services revenue; our ability to retain and increase sales to existing customers and generate new customers; market demand for data integration solutions, particularly our cloud and on-premise big data integration solutions; interruptions or performance problems associated with our technology and infrastructure; competition from other products and services; the sufficiency of our cash and cash equivalents, to meet our cash needs; the unpredictability and length of our sales cycle; our ability to deliver high-quality customer support; any security incidents or breaches or perceptions of security incidents or breaches; our ability to hire, train, and retain highly skilled and qualified employees, including senior-level managers, engineers, and our ability to expand and train our sales force; the performance of our channel partners; our success in sustaining and expanding our international business; our ability to generate significant volumes of sales leads from digital marketing efforts; the seasonality of our business; our ability to protect our intellectual property, including trade secrets and copyrights; costs resulting from any claim of infringement or other violations by us of another party’s intellectual property rights; our ability to comply with government laws and regulations; natural and man-made disasters; and general market, political, economic and business conditions, including the fluctuation of foreign currency exchange rates and softening economic and uncertain geopolitical conditions in Europe.

The forward-looking statements contained in this press release are also subject to other risks and uncertainties, and the foregoing list of factors is not exclusive. Additional risks and uncertainties that could affect our financial and operating results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in our most recent filings with the Securities and Exchange Commission, including our most recent reports on Form 10-K filed with the SEC on February 28, 2019 and our most recently filed quarterly report on Form 10-Q. Our SEC filings are available on the Investor Relations section of our website at http://investor.talend.com and the SEC’s website at www.sec.gov. The forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not undertake, and specifically disclaim, any obligation to update any forward-looking statements provided to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law.

About Talend

Talend ( NASDAQ: TLND ), a leader in cloud data integration and data integrity, enables companies to transform by delivering trusted data at the speed of business. Talend Data Fabric offers a single suite of apps that shortens the time to trusted data by solving some of the most complex aspects of the data value chain. Users can collect data across systems, govern it to ensure proper use, transform it to new formats and improve quality, and share it with internal and external stakeholders.

Over 3,500 organizations across the globe choose Talend to rely on trusted data to make business decisions with confidence. Talend has been recognized as a leader in its field by leading analyst firms and industry publications including Forbes, InfoWorld and SD Times.

For more information, please visit  www.talend.com  and follow us on Twitter: @Talend.

Investor Contact:Lisa Laukkanen or Lauren Sloane The Blueshirt Group for Talend ir@talend.com 415-217-2632

Media Contact:Chris TaylorVice President, Corporate Communications Ctaylor@Talend.com 650-268-502

TALEND S.A. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 2019 2018 2019 2018 ----------- ---------- ----------- ----------- Revenue Subscriptions $ 55,141 $ 44,631 $ 158,079 $ 126,444 Professional services 7,484 7,434 22,975 22,189 - ------- - - ------ - - ------- - - ------- - Total revenue 62,625 52,065 181,054 148,633 Cost of revenue Subscriptions 7,976 5,756 23,782 16,683 Professional services 6,772 7,237 21,925 19,432 - ------- - - ------ - - ------- - - ------- - Total cost of revenue 14,748 12,993 45,707 36,115 Gross profit 47,877 39,072 135,347 112,518 Operating expenses Sales and marketing 33,277 28,365 102,582 82,339 Research and development 15,552 9,930 46,987 29,801 General and administrative 12,163 10,179 34,191 28,791 - ------- - - ------ - - ------- - - ------- - Total operating expenses 60,992 48,474 183,760 140,931 - ------- - - ------ - - ------- - - ------- - Loss from operations (13,115 ) (9,402 ) (48,413 ) (28,413 ) Other income (expense), net (235 ) 132 (826 ) 341 - ------- - - ------ - - ------- - - ------- - Loss before benefit (provision) for income taxes (13,350 ) (9,270 ) (49,239 ) (28,072 ) Benefit (provision) for income taxes (9 ) 21 (48 ) (31 ) - ------- - - ------ - - ------- - - ------- - Net loss $ (13,359 ) $ (9,249 ) $ (49,287 ) $ (28,103 ) - ------- - - ------ - - ------- - - ------- - Net loss per share attributable to ordinary shareholders: Basic and diluted net loss per share $ (0.44 ) $ (0.31 ) $ (1.62 ) $ (0.94 ) Weighted-average shares outstanding used to compute net 30,648 29,964 30,453 29,750 loss per share attributable to ordinary shareholders:

TALEND S.A. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands, except per share data) (unaudited) September December 31, 30, ------------ ------------ 2019 2018 ------------ ------------ ASSETS Current assets: Cash and cash equivalents * $ 171,964 $ 34,104 Accounts receivable, net of allowance for doubtful accounts 51,890 67,531 Contract acquisition costs 10,317 9,563 Other current assets * 10,240 9,461 - -------- - - -------- - Total current assets 244,411 120,659 Non-current assets: Contract acquisition costs 20,419 19,390 Operating lease right-of-use assets ** 26,430 — Property and equipment, net 5,669 6,335 Goodwill 49,599 49,659 Intangible assets, net 15,236 19,420 Other non-current assets 4,384 3,661 - -------- - - -------- - Total non-current assets 121,737 98,465 - -------- - - -------- - Total assets $ 366,148 $ 219,124 - -------- - - -------- - LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 6,206 $ 5,760 Accrued expenses and other current liabilities 32,218 36,475 Contract liabilities - deferred revenue, current *** 124,169 127,065 Operating lease liabilities, current ** 4,264 — Short-term debt 199 208 - -------- - - -------- - Total current liabilities 167,056 169,508 Non-current liabilities: Deferred income taxes 469 469 Other non-current liabilities 966 950 Contract liabilities - deferred revenue, non-current *** 15,352 23,082 Operating lease liabilities, non-current ** 23,636 — Long-term debt 126,356 676 - -------- - - -------- - Total non-current liabilities 166,779 25,177 - -------- - - -------- - Total liabilities 333,835 194,685 - -------- - - -------- - STOCKHOLDERS’ EQUITY Ordinary shares, par value €0.08 per share; 30,782,240 and 30,158,374 shares 3,185 3,128 authorized, issued and outstanding, respectively Additional paid-in capital 300,954 244,878 Accumulated other comprehensive income 1,651 607 Other reserves 207 138 Accumulated losses (273,684 ) (224,312 ) - -------- - - -------- - Total stockholders’ equity 32,313 24,439 - -------- - - -------- - Total liabilities and stockholders’ equity $ 366,148 $ 219,124 - -------- - - -------- - (*) Balance as of December 31, 2018 has been revised to reflect an immaterial reclassification of restricted cash between cash and cash equivalents and other current assets. (**) Effective January 1, 2019, the Company adopted ASC 842, Leases, using modified retrospective approach. (***) Balance as of December 31, 2018 has been revised to reflect an immaterial reclassification of deferred revenue between short term and long term. This revision did not have any impact in any other financial statements for the periods presented.

TALEND S.A. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended September 30, ------------------------ 2019 2018 ----------- ----------- Cash flows from operating activities: Net loss for the period $ (49,287 ) $ (28,103 ) Adjustments to reconcile net loss to net cash (used in) from operating activities: Depreciation 2,082 1,424 Amortization of intangible assets 3,974 1,475 Amortization of debt discount and issuance costs 411 — Unrealized loss foreign exchange 34 160 Interest accrued 225 — Share-based compensation 26,285 14,221 Changes in operating assets and liabilities: Accounts receivable 14,908 9,092 Operating leases 40 — Other assets (6,424 ) (3,257 ) Accounts payable 1,871 (922 ) Accrued expenses and other current liabilities (2,927 ) 2,437 Contract liabilities - deferred revenue (7,606 ) 2,869 - ------- - - ------- - Net cash used in operating activities (16,414 ) (604 ) - ------- - - ------- - Cash flows from investing activities: Acquisition of property and equipment (2,064 ) (2,906 ) - ------- - - ------- - Net cash used in investing activities (2,064 ) (2,906 ) - ------- - - ------- - Cash flows from financing activities: Proceeds from issuance of convertible senior notes, net of issuance costs 149,145 — Proceeds from issuance of ordinary shares related to exercise of stock awards 4,382 6,458 Proceeds from issuance of ordinary shares related to employee stock purchase plan 4,742 1,805 Repayment of borrowings (117 ) (189 ) - ------- - - ------- - Net cash from financing activities 158,152 8,074 - ------- - - ------- - Net increase in cash and cash equivalents 139,674 4,564 Cash and cash equivalents at beginning of the period* 34,104 87,387 Effect of exchange rate changes on cash and cash equivalents (1,814 ) (1,852 ) - ------- - - ------- - Cash and cash equivalents at end of the period $ 171,964 $ 90,099 - ------- - - ------- - (*) Cash and cash equivalents balances as of December 31, 2018 and 2017 have been revised to reflect an immaterial reclassification of restricted cash between cash and cash equivalents and other current assets.

TALEND S.A. GAAP to non-GAAP Reconciliation (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ -------------------------- 2019 2018 2019 2018 ----------- ----------- ------------ ------------ Reconciliation of GAAP gross profit to non-GAAP gross profit: GAAP gross profit: $ 47,877 $ 39,072 $ 135,347 $ 112,518 GAAP subscriptions gross profit: $ 47,165 $ 38,875 $ 134,297 $ 109,761 Share-based compensation expense 773 433 2,301 925 - ------- - - ------- - - -------- - - -------- - Non-GAAP subscriptions gross profit $ 47,938 $ 39,308 $ 136,598 $ 110,686 - ------- - - ------- - - -------- - - -------- - GAAP professional services gross profit: $ 712 $ 197 $ 1,050 $ 2,757 Share-based compensation expense 472 327 1,602 614 - ------- - - ------- - - -------- - - -------- - Non-GAAP professional services gross profit $ 1,184 $ 524 $ 2,652 $ 3,371 - --------- - --------- - ---------- - ---------- Non-GAAP gross profit: $ 49,122 $ 39,832 $ 139,250 $ 114,057 - ------- - - ------- - - -------- - - -------- - Reconciliation of GAAP operating expenses to non-GAAP operating expenses: GAAP operating expenses: $ (60,992 ) $ (48,474 ) $ (183,760 ) $ (140,931 ) GAAP sales and marketing: $ (33,277 ) $ (28,365 ) $ (102,582 ) $ (82,339 ) Share-based compensation expense 3,030 1,968 7,663 4,672 - ------- - - ------- - - -------- - - -------- - Non-GAAP sales and marketing $ (30,247 ) $ (26,397 ) $ (94,919 ) $ (77,667 ) - ------- - - ------- - - -------- - - -------- - GAAP research and development: $ (15,552 ) $ (9,930 ) $ (46,987 ) $ (29,801 ) Share-based compensation expense 2,680 1,500 8,098 4,042 Amortization of acquired intangible assets 907 356 2,736 1,156 - ------- - - ------- - - -------- - - -------- - Non-GAAP research and development $ (11,965 ) $ (8,074 ) $ (36,153 ) $ (24,603 ) - ------- - - ------- - - -------- - - -------- - GAAP general and administrative: $ (12,163 ) $ (10,179 ) $ (34,191 ) $ (28,791 ) Share-based compensation expense 2,084 1,277 6,621 3,968 Amortization of acquired intangible assets 412 100 1,238 309 Transaction related expenses — 482 — 770 - ------- - - ------- - - -------- - - -------- - Non-GAAP general and administrative $ (9,667 ) $ (8,320 ) $ (26,332 ) $ (23,744 ) - --------- - --------- - ---------- - ---------- Non-GAAP operating expenses: $ (51,879 ) $ (42,791 ) $ (157,404 ) $ (126,014 ) - ------- - - ------- - - -------- - - -------- -

TALEND S.A. GAAP to non-GAAP Reconciliation (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 2019 2018 2019 2018 ----------- ---------- ----------- ----------- Reconciliation of GAAP operating loss to non-GAAP operating loss: GAAP operating loss: $ (13,115 ) $ (9,402 ) $ (48,413 ) $ (28,413 ) Share-based compensation expense 9,039 5,505 26,285 14,221 Amortization of acquired intangible assets 1,319 456 3,974 1,465 Transaction related expenses — 482 — 770 - ------- - - ------ - - ------- - - ------- - Non-GAAP operating loss: $ (2,757 ) $ (2,959 ) $ (18,154 ) $ (11,957 ) - ------- - - ------ - - ------- - - ------- - Reconciliation of GAAP net loss to non-GAAP net loss: GAAP net loss: $ (13,359 ) $ (9,249 ) $ (49,287 ) $ (28,103 ) Share-based compensation expense 9,039 5,505 26,285 14,221 Amortization of acquired intangible assets 1,319 456 3,974 1,465 Transaction related expenses 411 482 411 770 - ------- - - ------ - - ------- - - ------- - Non-GAAP net loss: $ (2,590 ) $ (2,806 ) $ (18,617 ) $ (11,647 ) - ------- - - ------ - - ------- - - ------- - GAAP and non-GAAP weighted-average shares outstanding 30,648 29,964 30,453 29,750 GAAP loss per share: $ (0.44 ) $ (0.31 ) $ (1.62 ) $ (0.94 ) Non-GAAP loss per share: $ (0.08 ) $ (0.09 ) $ (0.61 ) $ (0.39 ) Free cash flow: Net cash used in operating activities $ (10,790 ) $ (5,093 ) $ (16,414 ) $ (604 ) Less: Acquisition of property and equipment 520 1,558 2,064 2,906 - ------- - - ------ - - ------- - - ------- - Free cash flow $ (11,310 ) $ (6,651 ) $ (18,478 ) $ (3,510 ) - ------- - - ------ - - ------- - - ------- -

TALEND S.A. Constant Currency Reconciliation (in thousands) (unaudited) Three Months Ended September 30, -------------------------------- Constant currency reconciliation: 2019 2018 --------- --------------------- Subscription revenue as reported $ 55,141 $ 44,631 Conversion impact U.S. Dollar/other currencies 1,304 — - ------ - ------ ------------ Subscription revenue on constant currency basis $ 56,445 $ 44,631 - ------ - ------ ------------