Talend Reports Fourth Quarter and Fiscal Year 2017 Financial Results

54 VIEWS

-Record total quarterly revenue of $41.5 million, an increase of 36%
year-over-year

-Quarterly subscription revenue of $35.2 million, an increase of 40%
year-over-year

REDWOOD CITY, Calif.–(BUSINESS WIRE)–Talend
(NASDAQ:
TLND
), a global leader in cloud
and big
data
integration solutions, today released financial results for the
fourth quarter and fiscal year ended December 31, 2017.

“We closed the year with record fourth quarter subscription revenue of
$35.2 million, up 40% year-over-year,” said Mike Tuchen, Talend CEO.
“Cloud subscription revenue increased more than 100% year-over-year, as
we continue to see cloud adoption accelerate. Subscription revenue in
the Asia-Pacific region grew over 100% for the third quarter in a row as
we continue to focus on expansion in international and emerging markets.
During the year, we significantly strengthened our cloud capabilities,
including multi-cloud support to help our customers execute their cloud
transition. As we enter 2018, we believe the success we are experiencing
with enterprise adoption demonstrates our ability to capture an
increasing share of the big data and cloud integration market.”

 
Fourth Quarter and Fiscal Year 2017 Financial Highlights
(in thousands, except per share data)
       
Three Months Ended December 31, Year Ended December 31,
2016 2017 2016 2017
 
Revenue:
Total Revenue $ 30,456 $ 41,519 $ 105,984 $ 148,595
Year-over-Year % Change 45% 36% 40% 40%
 
Subscription Revenue $ 25,181 $ 35,164 $ 88,629 $ 125,898
Year-over-Year % Change 43% 40% 41% 42%
Year-over-Year % Change – on a constant currency basis 48% 34% 44% 42%
 
IFRS operating margin -21% -26% -25% -19%
Non-IFRS operating margin (1) -18% -20% -21% -14%
 
Net loss:
IFRS $ (4,543) $ (10,684) $ (24,243) $ (31,208)
Non-IFRS (2) $ (3,692) $ (8,138) $ (20,929) $ (22,673)
 
Net loss per share:
Net loss per share – basic and diluted $ (0.16) $ (0.37) $ (1.68) $ (1.08)
Non-IFRS net loss per share $ (0.13) $ (0.28) $ (1.45) $ (0.78)
 
Shares outstanding used in computing per share amounts – basic and
diluted
28,528 29,253 14,464 28,966
_________________
(1) Non-IFRS operating margin is calculated as non-IFRS
loss from operations divided by total revenue.
 

(2) Non-IFRS financial measures exclude stock-based
compensation, amortization of acquired intangibles, acquisition
related costs and costs related to our follow-on offering and
shelf-registration statement.

 

A reconciliation of IFRS to non-IFRS financial measures is provided in
the financial tables below. An explanation of these measures is also
included below, under the heading Non-IFRS Financial Measures.

Recent Business Highlights

We witnessed an extremely strong quarter on the partner front. In the
fourth quarter we:

  • Collaborated with leading System Integrator Capgemini to embed
    Talend’s on-demand training courses into their learning system, which
    will help increase the number of trained Talend consultants in the
    marketplace
  • Teamed with Amazon and Cognizant on a quick-start solution to
    streamline the deployment of Cloud Data Lakes on AWS
  • Achieved Microsoft Gold Cloud Competency & Co-Sell Partner Status
    underscoring Talend’s expertise on the Microsoft Azure platform and
    the compatibility of our solutions
  • Announced the winners of 2017 Talend Data Masters Awards at Talend
    Connect user conference. Recipients included AIG, Johnson Controls,
    Paddy Power-Betfair, and Save the Children UK, each of which is using
    Talend solutions to innovate in their business

Financial Outlook

Talend’s outlook assumes similar business conditions and foreign
exchange rates as of January 31, 2018, and is inclusive of the Restlet
acquisition which closed on November 8, 2017.

Our guidance is based on the new IFRS 15 revenue recognition standard
that is effective for Talend beginning January 1, 2018 and will be
adopted on a modified retrospective approach. See the section titled
“New Revenue Recognition Standard Under IFRS 15” below.

First quarter of 2018:

  • Total revenue is expected to be in the range of $45.3 million to $46.3
    million.
  • Loss from operations is expected to be in the range of $(10.3) million
    to $(9.3) million and non-IFRS loss from operations is expected to be
    in the range of $(5.5) million to $(4.5) million, as we step up our
    recruiting efforts in sales and marketing.
  • Net loss is expected to be in the range of $(10.6) million to $(9.6)
    million and non-IFRS net loss is expected to be in the range of $(5.8)
    million to $(4.8) million.
  • Net loss per basic and diluted share is expected to be in the range of
    $(0.36) to $(0.33) and non-IFRS net loss per share is expected to be
    in the range of $(0.20) to $(0.16).
  • Basic and diluted weighted average share count of 29.4 million shares.

Full year 2018:

  • Total revenue is expected to be in the range of $200.0 million to
    $202.0 million.
  • Loss from operations is expected to be in the range of $(30.3) million
    to $(29.3) million and non-IFRS loss from operations is expected to
    improve slightly and be in the range of $(13.3) million to $(12.3)
    million.
  • Net loss is expected to be in the range of $(31.3) million to $(30.3)
    million and non-IFRS net loss is expected to be in the range of
    $(14.3) million to $(13.3) million.
  • Net loss per basic and diluted share is expected to be in the range of
    $(1.05) to $(1.01) and non-IFRS net loss per share is expected to be
    in the range of $(0.48) to $(0.44).
  • Basic and diluted weighted average share count of 29.9 million shares.

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-IFRS measures
is also included below under the heading Non-IFRS Financial Measures.

Conference Call Information

Talend will host a conference call and live webcast for analysts and
investors at 5:00 p.m. Eastern time on February 13, 2018. Parties in the
United States and Canada can access the call by dialing (800) 580-5706,
using conference code 2907855.

International parties can access the call by dialing (719) 457-2643,
using conference code 2907855.

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 Sunday, February 18, 2018. To access the replay, parties in the
United States and Canada should call (866) 375-1919 and enter conference
code 2907855. International parties should call (719) 457-0820 and enter
conference code 2907855.

New Revenue Recognition Standard Under IFRS 15

In May 2014, the IASB issued IFRS 15, Revenue from
Contracts with Customers
, which supersedes current revenue
recognition requirements. The financial information under the heading
“Financial Outlook” above is prepared in accordance with IFRS 15.

The standard will be effective for Talend for financial periods
beginning on January 1, 2018, and provides alternative approaches to
adoption. Under the new standard, and only for our on-premise and
self-hosted offering, a portion of the subscription revenue arrangement
will be recognized upfront for the value associated with the software
license element of the arrangement, which Talend believes will be
minimal in comparison to the entire arrangement, approximately 10%. The
standard will also require that we defer all incremental commission
costs to obtain customer contracts, such as sales commissions. Talend
will be required to capitalize and amortize sales commissions for
initial contracts over a period of benefit that we have determined is
approximately five years.

Non-IFRS Financial Measures

In addition to disclosing financial measures prepared in accordance with
International Financial Reporting Standards (‘‘IFRS’’) as issued by the
International Accounting Standard Board (‘‘IASB’’), this press release
and the accompanying tables contain certain non-IFRS financial measures.

Non-IFRS financial measures do not have any standardized meaning and are
therefore unlikely to be comparable to similarly titled measures
presented by other companies. Talend considers these non-IFRS financial
measures to be important because they provide useful indicators of its
performance and liquidity measures. These are key measures used by our
management and board of directors to understand and evaluate our core
operating performance and trends, to prepare and approve our annual
budget and to develop short and long-term operational plans. In
addition, investors often use similar measures to evaluate the
performance of a company. Non-IFRS financial measures are presented for
supplemental informational purposes only for understanding the company’s
operating performance. The non-IFRS financial measures should not be
considered a substitute for financial information presented in
accordance with IFRS, and may be different from non-IFRS financial
measures presented by other companies. Please see the reconciliation of
non-IFRS financial measures to the most directly comparable IFRS measure
included in this release below.

Non-IFRS gross profit is calculated by adjusting gross profit to
eliminate the impact of stock-based compensation expense and
amortization of acquired intangibles.

Non-IFRS gross margin, expressed as a percentage, is
calculated as non-IFRS gross profit divided by total revenue.

Non-IFRS loss from operations is calculated by adjusting loss
from operations to eliminate the impact of stock-based compensation
expense, amortization of acquired intangibles expense, acquisition
related expense and costs related to follow-on offering and shelf
registration statement.

Non-IFRS operating margin, expressed as a percentage, is
calculated as non-IFRS loss from operations divided by total revenue.

Non-IFRS net loss is calculated by adjusting net loss to
eliminate the impact of stock-based compensation expense, amortization
of acquired intangibles expense, acquisition related expense and costs
related to follow-on offering and shelf registration statement.

Non-IFRS cost of revenue is calculated by adjusting cost of
revenue to eliminate the impact of stock-based compensation expense and
amortization of acquired intangibles.

Non-IFRS operating expenses is calculated by adjusting operating
expenses to eliminate the impact of stock-based compensation expense,
amortization of acquired intangibles expense, acquisition related
expense and costs related to follow-on offering and shelf registration
statement.

Non-IFRS sales and marketing expense is calculated by adjusting
sales and marketing expense to eliminate the impact of stock-based
compensation expense and amortization of acquired intangibles.

Non-IFRS research and development expense is calculated by
adjusting research and development expense to eliminate the impact of
stock-based compensation expense and amortization of acquired
intangibles.

Non-IFRS general and administrative expense is calculated by
adjusting general and administrative expense to eliminate the impact of
stock-based compensation expense, amortization of acquired intangibles
expense, acquisition related expense and costs related to follow-on
offering and shelf registration statement.

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 and intangible assets.

Subscription revenue growth on a constant currency basis
represents subscription revenue adjusted to exclude foreign currency
impacts. 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.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. 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,” “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 2018
first quarter and fiscal year, our expectations regarding the evolution
of our marketplace and the goals for our Talend Data Fabric, our ability
to capture an increasing share of the big data and cloud integration
market, our expectations regarding the impact of our collaborations with
partners on our market, and our belief that we are well-positioned to
capitalize on the growing trends of Hadoop, Spark, MapR Streams and
cloud adoption. 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 contemplated 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 bookings to sales;
our ability to retain existing customers and generate new customers; the
market for data integration solutions, particularly our big data and
cloud integration solutions, not continuing to develop; competition from
other products and services; and general market, political, economic and
business conditions, including the fluctuation of foreign currency
exchange rates.

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 6-K and our Form 20-F filed with the SEC
on March 7, 2017. Our SEC filings are available on the Investors section
of Talend’s 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 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) is a global leader in cloud and big data
integration solutions that helps companies turn data into a strategic
asset that delivers real-time, organization-wide insight into customers,
partners, and operations. Through its open, native, and unified
integration platform, Talend delivers the data agility required for
companies to meet the constantly evolving demands of modern business.
With Talend, companies can easily scale their data infrastructure and
rapidly adopt the latest technology innovations in cloud and big data.
Talend’s solutions support over 1500 global enterprise customers
including AstraZeneca, GE, HP Inc. and Lenovo, across a range of
industries. Talend has also been recognized as a leader in its field
multiple times by leading analyst firms, as well as several industry and
data trade publications including InfoWorld and SD Times. For more
information, please visit www.talend.com
and follow us on Twitter: @Talend.

 
TALEND S.A.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER DATA
(in thousands, except per share amounts)
 
Three Months Ended December 31, Year Ended December 31,
2016 2017 2016 2017
 
Revenue
Subscriptions $ 25,181 $ 35,164 $ 88,629 $ 125,898
Professional services 5,275   6,355   17,355   22,697  
Total revenue 30,456 41,519 105,984 148,595
Cost of revenue
Subscriptions 3,658 4,757 12,278 16,367
Professional services 3,690   4,997   13,290   17,792  
Total cost of revenue 7,348 9,754 25,568 34,159
Gross profit 23,108 31,765 80,416 114,436
Operating expenses
Sales and marketing 18,628 25,560 67,580 86,892
Research and development 5,062 8,199 19,251 26,835
General and administrative 5,776   8,711   19,577   29,446  
Total operating expenses 29,466   42,470   106,408   143,173  
Loss from operations (6,358 ) (10,705 ) (25,992 ) (28,737 )
Finance income (expense) 1,791   253   1,812   (2,147 )
Loss before income tax expense (4,567 ) (10,452 ) (24,180 ) (30,884 )
Income tax (expense) benefit 24   (232 ) (63 ) (324 )
Net loss for the period $ (4,543 ) $ (10,684 ) $ (24,243 ) $ (31,208 )
 
Shares outstanding used in computing per share amounts – basic and
diluted
28,528 29,253 14,464 28,966
 
Net loss per share – basic and diluted $ (0.16 ) $ (0.37 ) $ (1.68 ) $ (1.08 )
 
 
UNAUDITED STOCK-BASED COMPENSATION AND AMORTIZATION OF ACQUIRED
INTANGIBLES EXPENSE
Total stock-based compensation and amortization of acquired
intangibles expense included in the Unaudited Consolidated
Statements of Operations is as follows:
 
Three Months Ended December 31, Year Ended December 31,
2016 2017 2016 2017
(unaudited)
Cost of revenue – subscriptions $ 12 $ 89 $ 74 $ 315
Cost of revenue – professional services 17 74 84 207
Sales and marketing 220 577 917 2,271
Research and development 166 739 674 1,613
General and administrative 436   345   1,565   2,441  
Total stock-based compensation and amortization of acquired
intangibles expense
$ 851   $ 1,824   $ 3,314   $ 6,847  
 
TALEND S.A.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
   
December 31, 2016 December 31, 2017
 
Assets
Current assets:
Cash and cash equivalents $ 91,023 $ 87,024
Trade receivables, net 38,016 57,129
Other current assets   6,559     8,311  
Total current assets 135,598 152,464
Non-current assets:
Property and equipment, net 2,543 3,473
Goodwill 2,912 6,196
Intangible assets, net 509 7,528
Other non-current assets   3,089     3,137  
Total non-current assets   9,053     20,334  
Total assets $ 144,651   $ 172,798  
Liabilities
Current liabilities:
Trade and other payables $ 21,270 $ 30,562
Provisions 759 1,145
Deferred revenue 74,119 118,601
Borrowings   143     1,188  
Total current liabilities 96,291 151,496
Non-current liabilities:
Provisions 553 787
Deferred revenue 29,776 21,618
Borrowings   6     7  
Total non-current liabilities   30,335     22,412  
Total liabilities   126,626     173,908  
Equity
Share capital 2,980 3,059
Share premium 194,992 201,536
Foreign currency translation reserve 1,551 672
Share-based payments reserve 7,574 13,854
Other reserves 49
Accumulated losses   (189,072 )   (220,280 )
Total shareholders’ equity (deficit)   18,025     (1,110 )
Total liabilities and shareholders’ equity (deficit) $ 144,651   $ 172,798  
 
TALEND S.A.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
   
Year Ended December 31,
  2016   2017  
 
Cash flows from operating activities:
Net loss for the period $ (24,243 ) $ (31,208 )
Adjustments to reconcile net loss to net cash from operating
activities:
Depreciation 1,193 1,527
Amortization of intangible assets 314 567
Unrealized (gain) loss foreign exchange (2,486 ) 1,751
Non-cash finance costs 85
Stock-based compensation 2,994 6,280
Income tax for the year 63 324
Income tax paid (172 ) (158 )
Changes in operating assets and liabilities:
Trade receivables (12,545 ) (16,533 )
Other assets (1,524 ) (1,747 )
Trade and other payables 6,648 7,178
Provisions 277 609
Deferred income   32,769     29,089  
Net cash from (used in) operating activities   3,373     (2,321 )
Cash flows from investing activities:
Acquisition of property and equipment (1,417 ) (2,224 )
Cash consideration for business acquisitions       (9,189 )
Net cash used in investing activities   (1,417 )   (11,413 )
Cash flows from financing activities:
Proceeds from issuance of ordinary shares upon initial public
offering, net of offering costs and underwriters commissions and
discounts
91,818
Proceeds from issuance of ordinary shares 926 6,672
Proceeds from borrowings 2,000
Repayment of borrowings (12,142 ) (153 )
Prepayment fee under Square 1 loan   (267 )    
Net cash from financing activities   82,335     6,519  
Net increase (decrease) in cash and cash equivalents 84,291 (7,215 )
Cash and cash equivalents at beginning of the period 6,930 91,023
Effect of exchange rate changes on cash and cash equivalents   (198 )   3,216  
Cash and cash equivalents at end of period $ 91,023   $ 87,024  
 
TALEND S.A.
IFRS to Non-IFRS Reconciliations
(In thousands)
(unaudited)
       
The following tables detail the reconciliation of IFRS financial
measures to non-IFRS financial measures included in this release:
 
 
Loss from operations: Three Months Ended December 31,

Year Ended December 31,

  2016     2017     2016     2017  
 
Loss from operations $ (6,358 ) $ (10,705 ) $ (25,992 ) $ (28,737 )
Stock-based compensation expense 773 1,497 2,994 6,280
Amortization of acquired intangibles 78 327 320 567
Acquisition related costs 300 300
Costs related to follow-on offering and shelf-registration statement       422         1,388  
Non-IFRS loss from operations $ (5,507 ) $ (8,159 ) $ (22,678 ) $ (20,202 )
 
Non-IFRS operating margin -18 % -20 % -21 % -14 %
 
Net loss: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Net loss $ (4,543 ) $ (10,684 ) $ (24,243 ) $ (31,208 )
Stock-based compensation expense 773 1,497 2,994 6,280
Amortization of acquired intangibles 78 327 320 567
Acquisition related costs 300 300
Costs related to follow-on offering and shelf-registration statement       422         1,388  
Non-IFRS net loss $ (3,692 ) $ (8,138 ) $ (20,929 ) $ (22,673 )
 
 
Share count:
Weighted-average shares outstanding – basic and diluted 28,528 29,253 14,464 28,966
 
Net loss per share:
Net loss per share – basic and diluted $ (0.16 ) $ (0.37 ) $ (1.68 ) $ (1.08 )
Non-IFRS net loss per share $ (0.13 ) $ (0.28 ) $ (1.45 ) $ (0.78 )
 
 
 
Gross profit: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Gross profit $ 23,108 $ 31,765 $ 80,416 $ 114,436
Stock-based compensation expense 29 163 158 522
Amortization of acquired intangibles                
Non-IFRS gross profit $ 23,137   $ 31,928   $ 80,574   $ 114,958  
 
IFRS gross margin 76 % 77 % 76 % 77 %
Non-IFRS gross margin 76 % 77 % 76 % 77 %
 
 
Cost of revenue: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Cost of revenue $ (7,348 ) $ (9,754 ) $ (25,568 ) $ (34,159 )
Stock-based compensation expense 29 163 158 522
Amortization of acquired intangibles                
Non-IFRS cost of revenue $ (7,319 ) $ (9,591 ) $ (25,410 ) $ (33,637 )
 
 
Operating expenses: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Operating expenses $ (29,466 ) $ (42,470 ) $ (106,408 ) $ (143,173 )
Stock-based compensation expense 744 1,334 2,836 5,758
Amortization of acquired intangibles 78 327 320 567
Acquisition related costs 300 300
Costs related to follow-on offering and shelf-registration statement       422         1,388  
Non-IFRS operating expenses $ (28,644 ) $ (40,087 ) $ (103,252 ) $ (135,160 )
 
 
Sales and marketing expense: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Sales and marketing expense $ (18,628 ) $ (25,560 ) $ (67,580 ) $ (86,892 )
Stock-based compensation expense 220 577 917 2,271
Amortization of acquired intangibles                
Non-IFRS sales and marketing expense $ (18,408 ) $ (24,983 ) $ (66,663 ) $ (84,621 )
 
 
Research and development expense: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
Research and development expense $ (5,062 ) $ (8,199 ) $ (19,251 ) $ (26,835 )
Stock-based compensation expense 134 491 542 1,263
Amortization of acquired intangibles   32     248     134     350  
Non-IFRS research and development expense $ (4,896 ) $ (7,460 ) $ (18,575 ) $ (25,222 )
 
 
General and administrative expense: Three Months Ended December 31, Year Ended December 31,
  2016     2017     2016     2017  
 
General and administrative expense $ (5,776 ) $ (8,711 ) $ (19,577 ) $ (29,446 )
Stock-based compensation expense 390 266 1,377 2,224
Amortization of acquired intangibles 46 79 186 217
Acquisition related costs 300 300
Costs related to follow-on offering and shelf-registration statement       422         1,388  
Non-IFRS general and administrative expense $ (5,340 ) $ (7,644 ) $ (18,014 ) $ (25,317 )
 

Contacts

Investor Contact:
The Blueshirt Group for Talend
Lisa
Laukkanen or Lauren Sloane, 650-268-5018
ir@talend.com
or
Media
Contact:

Talend
Chris Taylor, 650-268-502
Vice
President, Corporate Communications
Ctaylor@Talend.com

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