Talend S.A. (TLND) Q4 2019 Earnings Call Transcript

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Talend S.A. (NASDAQ: TLND)
Q4 2019 Earnings Call
Feb 13, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Talend Fourth Quarter 2019 Earnings Call. Today’s conference is being recorded. At this time, it is my pleasure to turn the conference over to Lisa Laukkanen. Please go ahead ma’am.

Lisa LaukkanenInvestor Relations Contact

Thank you. This is Lisa Laukkanen, Investor Relations for Talend, and I’m pleased to welcome you to Talend’s fourth quarter and fiscal year 2019 conference call. With me on the call today are Talend’s CEO Christal Bemont and CFO, Adam Meister. During the course of today’s presentations, our executives will make forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those contemplated by these forward-looking statements.

Forward-looking statements in this presentation include, but are not limited to statements related to our business and financial performance and expectations and guidance for future periods, our expectations regarding our strategic product initiatives and their related benefits and our expectations regarding the market. Our expectations and beliefs regarding these matters may not materialize and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof. You should not rely on them as predictions of future events and we disclaim any obligation to update any forward-looking statements except as required by law. Please note that other than revenue or otherwise specifically stated, financial measures to be discussed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

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

And now let me turn the call over to Christal Bemont, Talend’s CEO.

Christal BemontChief Executive Officer

Thanks, Lisa. Welcome everyone to our call today and thank you for joining us. I’m excited to be here today to share with you Talend’s fourth quarter and fiscal year 2019 results and offer some initial observations based on my first five weeks with Talend. It’s been an incredible and busy five weeks. I’ve been focused on diving deeply into the business and getting to know the employees who have all contributed to growing Talend into the company it is today. We’re spending time with the team to understand the priorities and the opportunities and to drive success into the business.

Our employees are at the heart of our business and central to our success, and I’ve been impressed by the team and their conviction for Talend. In my prior role as Chief Revenue Officer at SAP Concur, I was responsible for leading worldwide sales, and I had the privilege of helping define, expand and execute our routes to market in a cloud-focused environment. In doing so, I learned how critical it is for a company to continually evolve as the market shifts, and specifically to cloud, how critical it is to embrace a discipline of scale and to provide sustainable growth. As Concur grew to be a multi-billion dollar company, it was on the back of cloud applications and similarly Talend has the opportunity through cloud data integration. Also the role of data became imperative to help companies build their systems and differentiate their products. That’s why I’m excited about the opportunity to be here at Talent. And in front of us lies an amazing opportunity as Talend moves to the cloud, not only providing growth for our business, but it also allows us to meet our clients on their journey to the cloud.

I’ll share more on my perspectives on the business and the market in a moment, but first let me provide some highlights from 2019 fourth quarter and year. In the fourth quarter, we achieved record total revenue of $66.9 million, up 20% year-over-year. For the fiscal year, we achieved record total revenue of $248 million, up 21% from $204.3 million in fiscal year 2018. We ended 2019 with annual recurring revenue of $243.1 million, up 23% year-over-year.

As of today, we are introducing a new metric, Cloud ARR. I am pleased to report Cloud ARR totaled $53.9 million as of December 31, 2019 and grew 179% year-over-year. Cloud represented 50% of new ARR for the fourth quarter, achieving the goal we established in our Q3 2018 call. We view Cloud ARR is the best way for our investors to understand the opportunity and progress of our company. It demonstrates our significant scale and successful shift to the cloud. We now have over 2,250 cloud customers and a total of 4,250 customers. The results of fourth quarter and year are a testament to the successful transition to the cloud and validation that cloud is the catalyst for Talend’s next phase of growth.

We are laser focused on ending 2020 with over $100 million in Cloud ARR, nearly doubling our Cloud ARR by the end of 2020 by winning new accounts, expanding cloud into the installed base and helping premise customers begin their cloud data journeys. We set this goal to hold ourselves accountable and to provide a benchmark to our investors to help measure our progress as we now disclose Cloud ARR on a quarterly basis. This is a tremendous value driver for the company and we will continue to prioritize scaling the rapidly growing cloud business in 2020 and beyond.

Talend is a recognized leader in data integration and data integrity, and the company is at a critical juncture as it continues to scale its cloud business. Talend is at an inflection point, but so is the world’s relationship with data. Data is at the center of every company strategy as a competitive advantage for companies to reimagine their own roles in solving problems. Talend helps ensure all of our customers’ data is clean, compliant and accessible across their organizations, so they can maximize its value as a competitive advantage and draw new deeper insights into their businesses. As a firm believer in the importance of reliable data driving business outcomes, I’m thrilled about the opportunities to scale the business and extend Talend’s leadership in cloud data integration and data integrity. To build upon the company’s foundation and pave the path to $1 billion in revenue, we need to win in the cloud data market. We will continue to make progress on this journey with our focus on our go-to-market strategy that drives better effectiveness of our field teams and more efficiencies in the processes and systems to enable scale and velocity in our business. These will be forced multipliers for our growing sales teams. The first step in bolstering this growth strategy was the appointment of Ann-Christel Graham as our Chief Revenue Officer. As we deploy this strategy, it’s critical that every decision we make is guided by a customer-first mindset. Jamie Kiser, our Chief Customer Officer, will be instrumental in enhancing the strong customer-first culture that already exist here at Talend. Both of these skilled individuals have experience in leading multi-billion dollar businesses, building world-class teams and they bring extensive cloud backgrounds to Talend. We’ve also enhanced our sales and marketing leadership in Europe by adding a new GM. of EMEA and a new Head of EMEA Marketing. We experienced headwinds in 2019. But we see the potential for our new leadership team to improve performance. Additionally, we recently announced the appointment of Anne Hardy to newly created position of Chief Information Security Officer. Anne will be instrumental in driving our security strategy and her addition to the team is critical as we continue to mature our cloud offering and grow our business across the globe.

We are building the right team with the right mindset in place to be $1 billion ready. With the strength of our cloud business and the new leadership, we will move swiftly to implement enhancements and changes that build on a solid foundation, enhancing our position in the market and prepare us for a strong future. As an example of the steps we’re taking to expand our routes to market, we announced in Q4 the availability of Talend Cloud in AWS marketplace. Along with achieving AWS retail competency and Amazon Redshift Ready designation status, we also recently achieved HIPAA and data shield compliance, opening up additional areas to win in the cloud. With the focus on solving the most complex hybrid and multi-cloud scenarios, we increasingly have focused our R&D and go-to-market resources on the cloud opportunity. As expected in 2019, we saw a slowdown in our premise business. This part of our business continues to be stable from a retention perspective and is an important asset to us as we migrate customers to the cloud. We continue to believe the vast majority of our on-premise customers will migrate to the cloud in coming years, so they can take full advantage of the cloud across their business. It is early days on migrations, but we’re encouraged by the opportunity for our customers to expand when moving to the cloud. We see this as a tremendous vote of confidence in Talend as customers reaffirm their partnership with us in the cloud. We believe migration to Talend Cloud will be a natural step for our customers as they shift to new stack technologies and their data integration and data governance needs become increasingly complex. Our customer growth was fueled by continued strength in Talend Cloud as well as the contribution from the frictionless motion brought from Stitch as it facilitates Talend winning customers of all sizes. Stitch enables us to capture more market share and sets us up for scale with our growth as a continued part of our growth strategy moving forward.

Let me walk you through a few customer success stories. Our customer wins demonstrate our commitment to Talend as companies continue their data journeys. A significant Q4 win for Talend was with a major US-based broadcasting and media organization. We won the business based on our end-to-end cloud-native data suite approach with built-in data quality, governance and lineage and our ability to run seamlessly in a hybrid multi-cloud environment. This company will use Talend to integrate data from multiple sources, including Vertica and Teradata as well as applications hosted on AWS and Google Cloud. This company is also turning to Talend to enable the California Consumer Privacy Act compliance and to establish better governance practices and organize data assets in a simple, easy-to-digest format. With data protection regulations such as CCPA and GDPR on the rise across the globe, we see data governance and data privacy compliance as one area of opportunity for us to capture increasing share of the market. We also saw continued momentum in APAC region in the fourth quarter with new customers like Nissan Motor Company. We were selected because Talend is the only platform that could help Nissan create a single view of its data in the cloud. The auto manufacturer wants to create a vehicle 360, providing value to operators and analysts by integrating all sales, production, shipping, inventory and maintenance data of Nissan vehicles. Additionally, the company expanded its footprint with Talend within the quarter by adding data catalog capabilities. As a result, Nissan will build a vehicle cloud data warehouse that provides a single source of truth where all data is consolidated and easily accessed by and analyze customers’ needs, market trends, campaigns, production management and logistics.

The next success story in EMEA is a great example of customer expanding the use of Talend over time. Over the last year, a major French utility company used Talend to enrich, migrate and create a unified CRM application from 18 separate instances of sales force operating across the business. This action increased sales efficiency and saved the company money. In Q4, the company added Talend’s data governance capabilities to help users with the critical task of maintaining data quality within the new CRM applications. It’s an exciting time at Talend and I’m thrilled to be here. We’re already hard at work, driving the next phase of growth and continue to capitalize on the market shift to the cloud.

In the past few weeks, we’ve already identified many areas where we can capitalize on as well as the opportunities to improve and mature in order to move at a faster clip and lay the proper foundation for growth. We will be making strategic investments in the business this year as we bolster our go-to-market strategy in order to improve sales efficiency and effectiveness. The new leadership we have onboard will bring fresh ideas and valuable strategies to the company. With any transition comes calculated risk and while some of the changes we’re making will begin to show near-term progress, we also know that building a sustainable growth engine will take time to bear fruit.

We are taking the time to properly assess and implement changes, and therefore we want to be prudent in our growth outlook for the year. We are prioritizing and implementing the necessary changes to lay the foundation to scale for long-term growth. I look forward to giving you an update on my initial findings after my first 90 days in my role and an update on my key strategic initiatives for the company in our next earnings call.

And now, I will turn the call to Adam to review financials and provide outlook for the Q1 and fiscal year 2020.

Adam MeisterChief Financial Officer

Thank you, Christal. Today, I’ll review our financial results for the fourth quarter and fiscal year 2019, as well as provide our outlook for the first quarter and fiscal year 2020. Annual recurring revenue or ARR grew to $243.1 million as of December 31, 2019, up 23% year-over-year on an actual and constant currency basis. We define ARR as the annualized value of all active contracts at the end of the period. I’ll also remind everyone that Q4 was the first quarter we’re lapping the inclusion of Stitch for year-over-year comparisons. We are also excited to provide Cloud ARR today, which represents all active cloud-based subscription contracts. We ended the year with $53.9 million of Cloud ARR. This compares to $41.1 million as of the end of Q3 2019 and $19.3 million at the end of 2018, representing 179% year-over-year growth. We’ve included a five-quarter look back of Cloud ARR in the presentation posted on the Investor Relations portion of our website.

Cloud represented 50% of new ARR for the fourth quarter, achieving the goal we set in November of 2018. This percent mix has been a key measure of our sales and marketing rotation to the cloud during this year. Our measure of success for 2020 will be overall Cloud ARR. New cloud customers, continued expansion within existing cloud customers and the cross-sell to existing premise customers will each be meaningful contributors to growth. We’re pleased with the retention and continued expansion of existing customers. For the quarter ending December 31, 2019, our dollar-based net expansion rate was 113% in constant currency. As discussed throughout last year, we expected this to decrease 1 percentage points to 2 percentage points each quarter during 2019 as it fully reflected the transition to ASC 606. We now have more than 4,250 total customers. Over 2,250 of which are in the cloud. We ended the quarter with 593 customers at $100,000 or more of ARR compared to 540 customers in Q3 of 2019. Enterprise customers represented 66% annualized recurring revenue in Q4 versus 65% in Q3.

As discussed previously, we believe this ARR-based measure is more accurate reflection of enterprise customer momentum. Using our previous revenue-based methodology, we ended the quarter with 568 enterprise customers. Total revenue for the fourth quarter was $66.9 million, up 20% year-over-year. Subscription revenue for the fourth quarter was $59.1 million, up 22% year-over-year or 23% on a constant currency basis. Total revenue for the year was $248 million, up 21% year-over-year. Subscription revenue for the year was $217.2 million, up 24% year-over-year. We’re also pleased to report that we achieved the $6 million revenue target for Stitch that we provided in our announcement of the deal in November of 2018.

Professional services revenue was $7.8 million in the fourth quarter, an increase of 8% year-over-year. Professional services revenue for the year was $30.8 million, an increase of 5% year-over-year. We’ve seen professional services slow as cloud sales have required a lower professional services attached compared to on-premise sales. Professional services are an enabler of customer success and ultimately contribute to growing our subscription base. As we’ve discussed in our last two calls, we saw softening of demand in Europe given the macroeconomic backdrop there.

Total revenue from our EMEA region grew 13% year-over-year in Q4. We continue to take a cautious outlook for EMEA for 2020. Before moving to profit and loss items, I would like to point out that unless otherwise specified, all expense and profitability metrics I will be discussing going forward are non-GAAP results. A full reconciliation between GAAP and non-GAAP results can be found in our earnings press release issued today, which is posted on the Investor Relations portion of our website.

Our total gross margin for the fourth quarter was 79% and total gross margin for 2019 was 78%. Subscription gross margin for the quarter remained at 87%. Subscription gross margin for the year was 87% compared to 88% last year. We expect a modest further impact to gross margins in 2020 as we continue scaling our cloud operations. Professional services gross margin was 21% this quarter, up from 16% last quarter. We’re pleased with the margin performance of professional services. But this quarter was particularly strong, giving tight utilization.

Operating expenses for the fourth quarter were $54.4 million, up 13% year-over-year. Operating expenses for the year were $211.8 million, up 22% year-over-year. Sales and marketing expenses for the quarter were $33 million, up 15% year-over-year. We slowed headcount growth slightly in Q4, given the anticipated leadership additions and expect to compensate for that in Q1 and Q2.

Sales and marketing expenses for 2019 were $127.9 million, up 20% year-over-year. We incurred an operating loss for the quarter of $1.3 million or 2% compared to an operating loss of $4.8 million or 9% in the fourth quarter of 2018. For fiscal year 2019, we incurred an operating loss of $19.5 million or 8%, consistent with 2018. Net loss for the quarter was $2.2 million compared to a net loss of $3.9 million in the prior year period. Net loss for the year was $20.9 million compared to a net loss of $15.5 million in 2018. Free cash flow for the quarter was $1.7 million, compared to negative $6.7 million in the prior year period.

Cash and cash equivalents ended at $177.1 million as of December 31, 2019, up $5 million from last quarter. Coming off of a strong Q4, we’re more excited than ever about the cloud opportunity. Our Cloud ARR has reached significant scale and explosive growth. We expect to end 2020 with $100 million of Cloud ARR, including roughly $15 million from cloud migrations this year. Fully rotating the business to the cloud is our most important strategic imperative, and Cloud ARR will be the best measure of our progress and success this year. We won’t be updating this guidance through the year, but we will continue to report out our progress on a quarterly basis.

As we enter fiscal 2020, we are focused on laying the path to become a $1 billion revenue business. First, as Christal mentioned, we are doubling down on our customer-first strategy and putting the right team in place to drive our go-to-market execution at scale. We believe the appointment of Christal and the other additions to the executive team as well as the recent hires in sales and marketing leadership in EMEA bring the right experience to lead the next phase of our growth journey. Second, we are focused on building a best-in-class cloud data integration and data integrity platform for our customers. This year, we will invest more in R&D to strengthen our cloud offering, bring new products to market and enable premise customers to seamlessly move to Talend Cloud. And finally, we intend to make additional investments in our operations and infrastructure to enable us to scale more efficiently. With these investments, we expect to consume $30 million to $35 million of free cash flow in fiscal year 2020. This target is conservative on duration and includes a few isolated impacts, including approximately $3 million of interest expense related to our convertible notes and a few million of expenses in Q1 associated with the management transition and organizational alignment. We are confident that now is the right time to make these additional investments in our go-to-market strategy, products and infrastructure to capitalize on the immense opportunity we see ahead of us. As Chirstal noted in her remarks, these initiatives will take some time to bear fruit. Our guidance reflects these expectations and the investments we intend to make. Furthermore, our growth outlook incorporates our cautious view of EMEA for the year as well as the impact of continuing toward more ratable revenue in the cloud and lower overall professional services. Specifically, professional services resulted in a few points of drag on revenue growth for 2019. And we expect that trend to continue with 2% to 3% impact to total revenue growth for 2020. We expect professional services to decline sequentially in Q1 and be down to flat for the full-year.

Given our strategic push to accelerate our transition to the cloud, coupled with the macro and structural impacts described, we are being prudent in our growth outlook for this year. Before providing guidance, I’ll summarize our key metric disclosure framework for 2020. Quarterly will provide both total and Cloud ARR and year-over-year growth on an actual and constant currency basis for each, constant currency adjusted subscription revenue growth, enterprise customers on an ARR basis and the associated contribution to total ARR and our dollar-based net expansion rate adjusted for constant currency.

I’ll now turn to our outlook for Q1 and full-year 2020. As a reminder, our guidance assumes similar business conditions and foreign exchange rates as of January 31, 2020. For the first quarter 2020, total revenue is expected to be in the range of $64.9 million to $65.9 million, non-GAAP loss from operations 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. This is based on a basic and diluted weighted average share count of 31.2 million shares. For the full-year 2020, total revenue is expected to be in the range of $277 million to $279 million, non-GAAP loss from operations is expected to be in the range of $43 million to $41 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. This is based on a basic and diluted weighted average share count of 31.7 million shares.

We’re proud of the scale, high-growth business we’ve built in the cloud and are excited about 2020 as cloud becomes a meaningful driver of long-term value to Talend and to our shareholders.

With that, we will open the call to questions. Operator?

Questions and Answers:

Operator

Thank you. [Operator Instructions] We’ll take our first question from Raimo Lenschow with Barclays.

Raimo LenschowBarclays Capital — Analyst

Hey, thanks for taking my question. Let’s start — could I — I had two questions. So first on the revenue guidance, so if I do the math like in professional services, you gave us a number, but it still seems to imply that on-premises needs to be somewhat down this year. Can you just maybe talk us through like on-premise move versus cloud move and how that will play out?

And then on the investments — the second question on the investments like Talend has the history of kind of moving toward profitability, etc., and now we’re taking the step down. Can you talk us a little bit through what’s kind of the payback period? How do we have to think about? Is this like a one-off thing, and that sets you up for like a quick snap back or is this like a longer-term thing? Just help us understand that what’s the ROI. Thank you.

Adam MeisterChief Financial Officer

Sure. Hey Raimo, it’s Adam here. So I’ll take both of those. So on the guidance, look, I think you can see very clearly from the cloud numbers that we gave for last year and what we’re guiding to for this year that cloud business really is the engine of growth for us going forward. We see the premise side of the business as a really strong base that will ultimately fuel the cloud through migrations, and that’s consistent with the roughly $50 million [Phonetic] that we think will contribute to the cloud for this year. Growth has come down in premise side over the last year and is in kind of the mid-single digits at this stage. And that’s something that we solve, play out over 2019. And we want to be prudent for where that grows in 2020 just given the market conditions and how fast we see the industry moving. The base has been very stable from a retention perspective, which will be very thoughtful given how fast market is shifting. One other thing I would just note here, we’ve got a lot of questions around it. We want to address it today. Of that premise business, we’re not really going to breakout the two pieces, but we have said in the past that the big data retention rate is slightly above the rest of premise and basically that was going to converge with the rest of the premise business. So big data was about a third of our ARR, and that retention rate is very consistent with what it’s been for the overall premise side. And so that hopefully gives you a little bit of color for how we’re thinking about the guidance and just the composition of between premise and cloud.

In terms of the cash flow guide, yes, a lot of this, we do think about as important investments to make this year that will allow us to build a much more scalable foundation for the business going forward. And so, Chris will walk through a couple of those and so did I. It’s about making sure we’re making the right product investments and bringing new cloud products to market, and that would obviously continue in future years as well. But there is I think a decent amount of that that we’re pushing for 2020. It’s about continuing to invest in the sales and marketing engine that we already have and continue to refine that and then I think a component that is more one-time in nature and really focus for this year is really around the operational and some of the systems investments that we want to be able to make to help us be able to frankly increase the velocity of the business over time.

Raimo LenschowBarclays Capital — Analyst

Okay, makes sense. Thank you.

Operator

Thank you. Our next question comes from David Griffin with William Blair and Company.

David GriffinWilliam Blair and Company — Analyst

Hey guys, thanks for taking the questions. Two if I could. First one for Adam. And I guess, first off, thanks for disclosing the new Cloud ARR metric. That’s really helpful. And I think we have a great go-forward disclosure framework here. As we think about modeling Cloud ARR, I think it’d be helpful if you could kind of double-click on the underlying drivers of new ARR bookings by maybe giving us a sense of what the mix of new versus expansion and upsell has looked like maybe over the past few quarters here and what type of net expansion rate has been kind of embedded into the guide.

Adam MeisterChief Financial Officer

Sure. So cloud has a couple of drivers for growth; obviously continuing to win new business, expansion within the cloud base, cross-sell of cloud into the premise base and then actually just migrating premise customers entirely. We haven’t broken out and we won’t break out any specific net expansion rates for cloud. We have said in the past that they are much higher than the overall average. That continues to be true. It is off of a smaller cohort. But that will be an important part and driver of that new cloud ARR growth. Last year, the vast majority of the Cloud ARR that we added was really from new customers, and we see that shifting to be a much more balanced mix between expansions and new for this year.

David GriffinWilliam Blair and Company — Analyst

Got it. That’s helpful. And then, last quarter you kind of noted the potential for some customers to temporarily pause or slowdown expansion activity as they kind of took some time to kick the tires on the new cloud product and evaluate their go-forward strategies, given the aggressive pivot here to SaaS. Can you just give us a little bit of an update on the extent to which you saw that play out during the quarter? What you’re hearing from customers and kind of your expectations around maybe how much of a headwind this could be in 2020?

Adam MeisterChief Financial Officer

Yeah, I think we saw that largely resolve itself in Q4 as indicated by the strong add in terms of enterprise customers, and so deal cycles for cloud are [Phonetic] materially different than deal cycles overall for us and we think that frankly as we started to have conversations with customers about what a migration looks like, it’s an opportunity to have a much more strategic conversation with them about their data journey and every customer that chooses to either buy us in the cloud or shift us in the cloud, we really look at that as a validation of our position going forward and really vote of confidence in what we’re building here.

David GriffinWilliam Blair and Company — Analyst

Got it. Thanks for taking my questions.

Operator

Thank you. Our next question comes from Tyler Radke with Citi.

Tyler RadkeCitigroup — Analyst

Hey, thank you. Good afternoon. So Adam, I was wondering if you could talk about the guide for 2020, specifically around Cloud ARR and revenue, a 12% growth. I think a lot of investors are trying to understand the kind of the long term kind of framework of reaching $1 billion with the deceleration this year. Maybe just help us understand kind of what are the moves that you’re making this year that’s causing that sharp deceleration in overall growth and then even if you look at the Cloud ARR guide with the conversions, it implies that kind of the net new and overall growth in Cloud ARR is down meaningfully from where it was in 2018 — or sorry in 2019.

So maybe just help us understand how much is kind of conservatism versus specific actions that you’re taking. Thank you.

Adam MeisterChief Financial Officer

Yeah, of course. So you can see from the ARR guidance that we’re giving that it results in about $46 million of new cloud; $15 million of that, you think about as migrations. If that starts to help you break down exactly how the cloud guidance is built up, that’s still we think a really significant add on the base that we have, and look if there is upside there, we frankly could see upside across any fronts, whether it’s new customers, faster migrations or just frankly upsell when customers migrate. But given the kind of capacity we have in the system right now, what’s in the pipeline and what we saw in our ability to add to cloud last year, we wanted to be fairly prudent in our expectations. And so the other implications you can see through, and I think I already mentioned in the first question is really this guidance would assume that basically all of the growth in the businesses in cloud and that’s frankly a reflection of just the strategic push we’re making and the orientation that Christal and the team are bringing to the go-to-market motions.

Christal BemontChief Executive Officer

Yeah, maybe I can jump in here as well Tyler and just draft [Phonetic] off of what Adam was just talking about, you mentioned coupling with how that gets us to $1 billion and I think it’s helpful just to provide some perspectives that while Adam is absolutely right, we’re being prudent about that journey. It really comes down to, in my experience and things that I’ve done in my prior life as CRO of Concur, is this is about investing in the right things right now because we see such a massive opportunity in front of us. And with the cutting-edge tech that we have in the — you see that we’re on fire in cloud with our growth. And now, we want to make sure that we’re taking every opportunity to put the right processes and systems in place to make sure that we can scale our business and we can have long-term profitable and sustainable growth and really get prescriptive with our motions in the field and make sure that we’re really lined up; in that we have — we’re directed at the right market opportunity and that we’re really taking advantage of the resources we have to make sure that they’re as productive as possible. And so, I believe, and we believe that this is an opportunity to really build a solid foundation to run fast at $1 billion, but we have some work to do.

Tyler RadkeCitigroup — Analyst

Great. And if I could ask a follow-up to that Christal. So I think one of the interesting things about Talend’s pricing model versus the competitors, it’s generally been kind of seat-based [Phonetic] based on a data engineer or an integration expert versus something that’s sold on a data throughput basis. And I’m just curious as you’ve thought about your goals in reaching that $1 billion and expanding the share of wallet within some of your large enterprise customers, do you find any — do you foresee the need to potentially make any changes to pricing or is it a matter of just getting more kind of integration experts on board or how do you kind of foresee that expansion within the large enterprise accounts that that you already have and maybe arguably have already been selling to for close to five years to 10 years? Just help us understand how you see the path forward to expanding those relationships. Thank you.

Christal BemontChief Executive Officer

Tyler, it’s a — the path forward could contain a number of different lanes and avenues and we’re flooring all of those. If you just simply look at even the Top 2000 or you look at the — even Top 1000 customers or companies in the industries, even if we just focus simply on the Top 1000 enterprises and we just expand our footprint in our customer base now, that’s an exceptional business and that would be a massive opportunity for us. And so looking at that in a way that, as Adam pointed out that looking at helping [Phonetic] say not only move to the cloud, but then also expanding our footprint in our existing customer base as we’ve done with AstraZeneca and a number of other customers to solve multiple problems. Just that alone has a big opportunity for us to hit $1 billion, but there is multiple opportunities all the way across our business, including from the bottom-up with Stitch. And so we’ll continue to assess those opportunities and our valuation of how fast we can get there, we will continue as well. But there is a number of different ways that we can run after that.

Operator

Thank you. And we’ll take our next question from Mark Murphy with JPMorgan.

Unidentified Participant

Hi this is Adam Bershire [Phonetic] on for Mark Murphy. With the increased focus on cloud bookings, trying to understand that a little bit better, what percent of your cloud bookings would you say related to projects with major SaaS providers, Salesforce, Workday, ServiceNow versus what percent of them relate to more modern data warehouse now like — providers like Snowflake, Bakery [Phonetic], Databricks?

Adam MeisterChief Financial Officer

Hey, it’s Adam. I’ll take that. The vast majority of our cloud business is going to be connected to more of the data warehouse of the platform side. We see that that is really where there is a logical and symbiotic relationship for for sell together. Those projects oftentimes are kind of tie it up with the broader SaaS application ecosystem. And so our connectivity is critical as a big differentiator for us. And so it’s not really one or the either but typically in a deal process, we’re going to be mostly tied to someone deciding to shift their warehousing environment.

Unidentified Participant

Okay, great. That’s interesting. And then a quick follow-up. You guys kind of called out strength in the APAC region and named an impressive win with Nissan. So like what’s the dynamic driving that strength in that region?

Adam MeisterChief Financial Officer

Yeah. So APAC has been a really fast-growing market for us. The Nissan example that Christal walked through is I think really consistent with what we’re seeing across all regions and all industries where data becomes a critical component of the business model and strategy for these businesses, and so their ability to connect what they have in legacy systems, core operational systems as well as things like SaaS applications and cloud environments to develop a cohesive view; in this case around a vehicle 360 project is, that’s a very similar dynamic that drives a lot of our deals and a lot of our value in both the analytic side as well as operational use cases.

Unidentified Participant

Great. Thank you.

Operator

Thank you. We’ll take our next question from Jack Andrews with Needham.

Jack AndrewsNeedham & Company — Analyst

Good afternoon. Thanks for taking my question. I want to start off with a question for Christal if I could. I appreciate your comments on the similarities between your previous experience at Concur as it relates to Talend in terms of cloud and data. I was wondering if you could drill down a bit more and talk about specifically the go-to-market playbook. I mean, what do you think worked well at Concur that could be specifically applied to Talend, and maybe, how is Talend different from Concur as well?

Christal BemontChief Executive Officer

Hi, Jack. I’d be happy to. So when I think about the similarities, it comes down to a couple of things. Being extremely prescriptive, I see a huge opportunity here at Talend, where we have an opportunity to look at swim lanes around how we go to market, what we choose to focus our energy on, how we line up to look at market opportunity at both the top end of the market, as I was mentioning before with our enterprise customers and addressable market as well as down-market with some of our frictionless business. And so what I’ve seen really work well is just being very decisive in what you’re going to focus on, making sure that every single one of your resources are lined up to be as productive as possible and making sure that the right systems and processes are behind them, so that you can really put the volume and the velocity through to really turn it into a massive growth engine. And I the similarities here, and the opportunities that are sitting in front of us.

Jack AndrewsNeedham & Company — Analyst

Great. Thanks for that. And then, if I could just follow up on the migration opportunity for you. Is this something that you are going to be actively encouraging and incenting your sales force to work on, or do you think that this is something that’s going to just happen naturally, and that’s how you’re arriving at this projected $15 million [Phonetic] on that front for the current year?

Christal BemontChief Executive Officer

Taking a little bit of what I just said a moment ago, we’re being prescriptive about everything and very, very intentional. So we have a dedicated group of individuals, who are working alongside our existing customers and what we’re doing is, we’re really helping them on their cloud journey. This is more than just contemplating Talend. This is really looking at all the things that look at new stack technologies and so forth, and we believe that it’s being a good partner and a good evolution of their journey to work alongside them. I think over the next couple of years, two years to three years, we really see that start to uptick even more, but we will meet our customers where they’re at, and make sure that we’re working alongside them, but we’re going to be very intentional and prescriptive about doing that.

Jack AndrewsNeedham & Company — Analyst

Got it. Thank you for taking my questions.

Christal BemontChief Executive Officer

You bet.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Lisa LaukkanenInvestor Relations Contact

Christal BemontChief Executive Officer

Adam MeisterChief Financial Officer

Raimo LenschowBarclays Capital — Analyst

David GriffinWilliam Blair and Company — Analyst

Tyler RadkeCitigroup — Analyst

Unidentified Participant

Jack AndrewsNeedham & Company — Analyst

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