Record quarterly revenue of $66.9 million
Cloud ARR of $53.9 million, up 179% year over year

REDWOOD CITY, Calif., Feb. 13, 2020 (GLOBE NEWSWIRE) --  Talend (NASDAQ: TLND), a global leader in cloud data integration and data integrity, today announced financial results for the fourth quarter and fiscal year ended December 31, 2019.

Fourth Quarter 2019 Financial Results:

  • Total revenue of $66.9 million, up 20% year-over-year
  • Annual Recurring Revenue (“ARR”) of $243.1 million, up 23% year-over-year on an actual and constant currency basis
  • Cloud ARR of $53.9 million, up 179% year-over-year on an actual and constant currency basis
  • Cloud represented 50% of new ARR in the fourth quarter
  • Subscription revenue of $59.1 million, up 22% year-over-year or 23% on a constant currency basis
  • GAAP operating loss of $10.1 million
  • Non-GAAP operating loss of $1.3 million 
  • Dollar-based Net Expansion Rate of 113% on a constant currency basis

“We closed 2019 with record fourth quarter revenue of $66.9 million, up 20% year-over-year, and total ARR of $243.1 million, up 23% year-over-year,” said Christal Bemont, Chief Executive Officer.  “Our results were driven by the continued momentum in our cloud business.  We now have over 2,250 cloud customers and cloud has become the largest contributor to new ARR.  We will be making strategic investments in the business this year as we bolster our go-to-market strategy. We continue to prioritize scaling the rapidly growing cloud business, and positioning Talend for long-term growth.”

Recent Business Highlights:

  • Appointed Christal Bemont as Chief Executive Officer
  • Expanded our leadership team with the additions of a CRO, a CCO, and a CISO, and made enhancements to our sales and marketing leadership in Europe
  • Named industry veteran Elizabeth Fetter to our Board of Directors
  • Announced availability of Talend Cloud in AWS Marketplace along with achieving AWS Retail Competency and Amazon Redshift Ready designation status
  • Achieved Healthcare Insurance Portability and Accountability Act (HIPAA) compliance and certification on EU-U.S. and Swiss-U.S. Privacy Shield

Financial Guidance, assuming similar business conditions and foreign exchange rates as of January 31, 2020:

First quarter of 2020:

  • Total revenue is expected to be in the range of $64.9 million to $65.9 million.
  • Non-GAAP operating loss is expected to be in the range of $(8.6) million to $(7.6) million.
  • Non-GAAP net loss is expected to be in the range of $(9.2) million to $(8.2) million.
  • Non-GAAP net loss per share is expected to be in the range of $(0.30) to $(0.26), based on a basic and diluted weighted average share count of 31.2 million shares.

Full year 2020:

  • Total revenue is expected to be in the range of $277.0 million to $279.0 million.
  • Non-GAAP operating loss is expected to be in the range of $(43.0) million to $(41.0) million.
  • Non-GAAP net loss is expected to be in the range of $(45.5) million to $(43.5) million.
  • Non-GAAP net loss per share is expected to be in the range of $(1.44) to $(1.37), based on a basic and diluted weighted average share count of 31.7 million shares.
  • Free cash flow is expected to be in the range of $(35.0) million to $(30.0) million.

In the first quarter of 2020, the Company initiated a company-wide organizational realignment initiative in order to ensure the infrastructure is in place for future expected growth. 

Talend’s outlook assumes similar business conditions and foreign exchange rates as of January 31, 2020. 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 for which the company adjusts, such as share-based compensation, amortization of acquired intangible assets, and transaction-related expenses, the effect of which may be significant. For example, the company adjusts for share-based compensation expense, which is impacted by the company’s future hiring needs and employee retention and the future fair market value of the company’s ordinary shares, all of which are difficult to predict and are subject to frequent change.

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 February 13, 2020.

Parties in the United States and Canada can access the call by dialing (800) 353-6461, using conference code 9337861. International parties can access the call by dialing (334) 323-0501, using conference code 9337861.

The webcast will be accessible on Talend’s investor relations website at https://investor.talend.com for one year. A telephonic replay of the conference call will be available through February 18, 2020. To access the replay, parties in the United States and Canada should call (888) 203-1112 and enter conference code 9337861. International parties should call +1 (719) 457-0820 and enter conference code 9337861.

Non-GAAP Financial Measures and Key Business Metrics:

Our 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 fourth quarter and full year 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.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. The definitions of our non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may utilize metrics that are not similar to ours. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.

In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

  1. 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.
  2. 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.
  3. Transaction-related expenses. We excluded from our non-GAAP results the expenses which are related to recent acquisitions. 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. We also excluded from our non-GAAP results the debt discount and debt issuance costs resulting from issuance of the 1.75% Convertible Senior Notes due September 1, 2024. These transaction-related expenses are non-cash charges and are not considered by management to reflect the core cash-generating performance of the business and therefore are excluded from our non-GAAP results.

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

  1. Free cash flow is a non-GAAP measure 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.
  2. Subscription revenue growth on a constant currency basis is a non-GAAP measure that 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.
  3. Annual recurring revenue (“ARR”) is a key metric 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. We believe the disclosure of ARR provides greater clarity into our results given it is not affected by the shift from premise to cloud, accounting changes, or contract duration.
  4. Cloud Annual Recurring Revenue (“Cloud ARR”) is a key metric that represents the annualized recurring value of all active cloud-based subscription contracts at the end of a reporting period. Cloud ARR includes subscriptions for use of SaaS offerings 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. We believe the disclosure of Cloud ARR provides greater clarity into our results given it is not affected by accounting changes or contract duration.
  5. Dollar-based net expansion rate is a key metric 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. We believe the disclosure of dollar-based net expansion rate provides useful information to investors seeking to understand our ability to maintain and grow our relationships with our existing customers.

Please refer to our investor deck on our investor relations website at https://investor.talend.com, which contains certain historical information, including historical Cloud ARR figures and the number of customers with ARR of $0.1 million or more as of certain dates.

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, the quotations of management, our anticipated operating results for the 2020 first 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; our ability to successfully manage our leadership transition; 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, patents 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, including pandemics; and general market, political, economic and business conditions, including the fluctuation of foreign currency exchange rates and weak 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 recently filed reports on Form 10-K and Form 10-Q and subsequent filings. Our SEC filings are available on the Investor Relations section of our website at https://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 4,250 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 Taylor
Vice President, Corporate Communications
Ctaylor@Talend.com
650-268-5024

             
TALEND S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
             
  Three Months Ended December 31,  Year Ended December 31, 
  2019  2018  2019  2018 
Revenue            
Subscriptions $ 59,086  $ 48,443  $ 217,165  $ 174,887 
Professional services   7,839    7,247    30,814    29,436 
Total revenue   66,925    55,690    247,979    204,323 
Cost of revenue            
Subscriptions   8,474    6,411    32,256    23,094 
Professional services   6,699    6,968    28,624    26,400 
Total cost of revenue   15,173    13,379    60,880    49,494 
Gross profit   51,752    42,311    187,099    154,829 
Operating expenses            
Sales and marketing   35,567    31,311    138,149    113,650 
Research and development   16,030    12,558    63,017    42,359 
General and administrative   10,282    11,566    44,473    40,357 
Total operating expenses   61,879    55,435    245,639    196,366 
Loss from operations   (10,127)   (13,124)   (58,540)   (41,537)
Interest income (expense), net   (1,681)   105    (2,540)   646 
Other income (expense), net   (289)   409    (256)   209 
Loss before provision for income taxes   (12,097)   (12,610)   (61,336)   (40,682)
Benefit (provision) for income taxes   (101)   354    (149)   323 
Net loss $ (12,198) $ (12,256) $ (61,485) $ (40,359)
             
Net loss per share attributable to ordinary shareholders:            
Basic and diluted net loss per share $ (0.39) $ (0.41) $ (2.01) $ (1.35)
             
Weighted-average shares outstanding used to compute net
loss per share attributable to ordinary shareholders:
   30,886    30,111    30,563    29,841 


       
TALEND S.A.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except per share data)
 
       
  December 31,  December 31, 
  2019  2018 
ASSETS      
Current assets:      
Cash and cash equivalents * $ 177,075  $ 34,104 
Accounts receivable, net of allowance for doubtful accounts   80,896    67,531 
Contract acquisition costs   11,301    9,563 
Other current assets *   11,888    9,461 
Total current assets   281,160    120,659 
Non-current assets:      
Contract acquisition costs   23,237    19,390 
Operating lease right-of-use assets **   27,821    — 
Property and equipment, net   5,348    6,335 
Goodwill   49,744    49,659 
Intangible assets, net   14,018    19,420 
Other non-current assets   4,382    3,661 
Total non-current assets   124,550    98,465 
Total assets $ 405,710  $ 219,124 
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable $ 4,439  $ 5,760 
Accrued expenses and other current liabilities   41,182    36,475 
Contract liabilities - deferred revenue, current *   150,402    127,065 
Operating lease liabilities, current **   5,047    — 
Short-term debt   227    208 
Total current liabilities   201,297    169,508 
Non-current liabilities:      
Deferred income taxes   768    469 
Other non-current liabilities   1,137    950 
Contract liabilities - deferred revenue, non-current *   18,912    23,082 
Operating lease liabilities, non-current **   24,252    — 
Long-term debt   130,490    676 
Total non-current liabilities   175,559    25,177 
Total liabilities   376,856    194,685 
       
STOCKHOLDERS' EQUITY      
Ordinary shares, par value €0.08 per share; 31,017,268 and 30,158,374 shares
authorized, issued and outstanding, respectively
   3,205    3,128 
Additional paid-in capital   309,988    244,878 
Accumulated other comprehensive income   1,336    607 
Other reserves   207    138 
Accumulated losses   (285,882)   (224,312)
Total stockholders’ equity   28,854    24,439 
Total liabilities and stockholders’ equity $ 405,710  $ 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 and deferred revenue between short term and long term.
(**) Effective January 1, 2019, the Company adopted ASC 842, Leases, using modified retrospective approach.


       
TALEND S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
       
  Year Ended December 31, 
  2019  2018 
Cash flows from operating activities:      
Net loss for the period $ (61,485) $ (40,359)
Adjustments to reconcile net loss to net cash (used in) from operating activities:      
Depreciation   2,779    2,034 
Amortization of intangible assets   5,295    2,521 
Amortization of debt discount and issuance costs   1,534    — 
Unrealized loss foreign exchange   617    134 
Interest accrued   806    — 
Share-based compensation   33,792    20,837 
Deferred income taxes   —    (327)
Income tax for the period   149    (323)
Changes in operating assets and liabilities:      
Accounts receivable   (13,623)   (12,387)
Operating leases   (85)   — 
Other assets   (8,380)   (6,569)
Accounts payable   (1,286)   1,643 
Accrued expenses and other current liabilities   5,758    9,987 
Contract liabilities - deferred revenue   19,586    26,040 
Net cash (used) from in operating activities   (14,543)   3,231 
Cash flows from investing activities:      
Acquisition of property and equipment   (2,191)   (5,006)
Cash consideration for business acquisition, net of cash acquired   —    (59,493)
Net cash used in investing activities   (2,191)   (64,499)
Cash flows from financing activities:      
Proceeds from issuance of convertible senior notes, net of issuance costs   147,498    — 
Proceeds from issuance of ordinary shares related to exercise of stock awards   5,805    7,053 
Proceeds from issuance of ordinary shares related to employee stock purchase plan   4,738    1,805 
Repayment of borrowings   (203)   (242)
Net cash from financing activities   157,838    8,616 
Net increase (decrease) in cash and cash equivalents   141,104    (52,652)
Cash and cash equivalents at beginning of the period*   34,104    87,388 
Effect of exchange rate changes on cash and cash equivalents   1,867    (632)
Cash and cash equivalents at end of the period $ 177,075  $ 34,104 
       
(*) 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 December 31,  Year Ended December 31, 
  2019  2018  2019  2018 
Reconciliation of GAAP gross profit to non-GAAP gross profit:            
GAAP gross profit: $ 51,752  $ 42,311  $ 187,099  $ 154,829 
             
GAAP subscriptions gross profit: $ 50,612  $ 42,032  $ 184,909  $ 151,793 
Share-based compensation expense   814    507    3,115    1,432 
Non-GAAP subscriptions gross profit $ 51,426  $ 42,539  $ 188,024  $ 153,225 
             
GAAP professional services gross profit: $ 1,140  $ 279  $ 2,190  $ 3,036 
Share-based compensation expense   530    410    2,132    1,024 
Non-GAAP professional services gross profit $ 1,670  $ 689  $ 4,322  $ 4,060 
             
Non-GAAP gross profit: $ 53,096  $ 43,228  $ 192,346  $ 157,285 
             
Reconciliation of GAAP operating expenses to non-
GAAP operating expenses:
            
GAAP operating expenses: $ (61,879) $ (55,435) $ (245,639) $ (196,366)
             
GAAP sales and marketing: $ (35,567) $ (31,311) $ (138,149) $ (113,650)
Share-based compensation expense   2,564    2,526    10,227    7,198 
Non-GAAP sales and marketing $ (33,003) $ (28,785) $ (127,922) $ (106,452)
             
GAAP research and development: $ (16,030) $ (12,558) $ (63,017) $ (42,359)
Share-based compensation expense   2,255    1,766    10,353    5,808 
Amortization of acquired intangible assets   908    729    3,644    1,885 
Non-GAAP research and development $ (12,867) $ (10,063) $ (49,020) $ (34,666)
             
GAAP general and administrative: $ (10,282) $ (11,566) $ (44,473) $ (40,357)
Share-based compensation expense   1,344    1,407    7,965    5,375 
Amortization of acquired intangible assets   413    327    1,651    636 
Transaction related expenses   —   694    —   1464 
Non-GAAP general and administrative $ (8,525) $ (9,138) $ (34,857) $ (32,882)
             
Non-GAAP operating expenses: $ (54,395) $ (47,986) $ (211,799) $ (174,000)

  

  

             
TALEND S.A.
GAAP to non-GAAP Reconciliation
(in thousands, except per share data)
(unaudited)
             
             
  Three Months Ended December 31,  Year Ended December 31, 
  2019  2018  2019  2018 
Reconciliation of GAAP operating loss to non-GAAP
operating loss:
            
GAAP operating loss: $ (10,127) $ (13,124) $ (58,540) $ (41,537)
Share-based compensation expense   7,507    6,616    33,792    20,837 
Amortization of acquired intangible assets   1,321    1,056    5,295    2,521 
Transaction related expenses   —    694    —    1,464 
Non-GAAP operating loss: $ (1,299) $ (4,758) $ (19,453) $ (16,715)
             
Reconciliation of GAAP net loss to non-GAAP net loss:            
GAAP net loss: $ (12,198) $ (12,256) $ (61,485) $ (40,359)
Share-based compensation expense   7,507    6,616    33,792    20,837 
Amortization of acquired intangible assets   1,321    1,056    5,295    2,521 
Transaction related expenses   1,123    694    1,534    1,464 
Non-GAAP net loss: $ (2,247) $ (3,890) $ (20,864) $ (15,537)
             
GAAP and non-GAAP weighted-average shares outstanding   30,886    30,111    30,563    29,841 
             
GAAP loss per share: $ (0.39) $ (0.41) $ (2.01) $ (1.35)
Non-GAAP loss per share: $ (0.07) $ (0.13) $ (0.68) $ (0.52)
             
Free cash flow:            
Net cash (used in) from operating activities $ 1,871  $ 3,836  $ (14,543) $ 3,231 
Less: Acquisition of property and equipment   127    2,100    2,191    5,006 
Free cash flow $ 1,744  $ 1,736  $ (16,734) $ (1,775)


       
TALEND S.A.
Constant Currency Reconciliation
(in thousands)
(unaudited)
       
  Three Months Ended December 31, 
Constant currency reconciliation: 2019 2018
Subscription revenue as reported $ 59,086 $ 48,443
Conversion impact U.S. Dollar/other currencies   572   —
Subscription revenue on constant currency basis $ 59,658 $ 48,443