Talend Investor Relations Presentation August 25, 2016 2016 Talend SA 1
This presentation and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements as to future results of operations and financial position, planned products and services, business strategy, our long-term model and plans and objectives of management for future operations of Talend S.A. and its subsidiaries ( Talend or the Company ) are forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Additional risks and uncertainties that could affect the Company can be found in the Company s quarterly report on Form 6-K filed with the SEC on August 25, 2016, and other filings that the Company makes with the SEC from time to time. You can locate these reports though our website at http://investors.talend.com or on the SEC website at www.sec.gov. In some cases, you can identify forward-looking statements by terms such as anticipate, believe, continues, contemplate, could, estimate, expect, explore intend, likely, may, plan, potential, predict, project, should, target, will or would or the negative of these terms or other similar words. These statements are only predictions. Talend has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Also, these forward-looking statements represent the Company s estimates and assumptions only as of the date of this presentation. The Company assumes neither the obligation to update any forward-looking statements after the date of this presentation nor the responsibility for the accuracy and completeness of the forward-looking statements. This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of its future performance and the future performance of the industries in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by Talend. The Company prepares its financial statements in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board, or IFRS. There have been and there may in the future certain significant differences between IFRS and U.S. GAAP, including but not limited to differences related to revenue recognition, share-based compensation expense, income tax, impairment of long-lived assets and earnings per share. In addition to the IFRS financials, this presentation includes certain non-ifrs financial measures. The non-ifrs measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with IFRS. There are a number of limitations related to the use of these non-ifrs financial measures versus their nearest IFRS equivalents. Other companies may calculate non-ifrs financial measures differently or may use other measures to evaluate their performance. For example, the Company defines free cash flow as net cash used in operating activities less net cash used in investing activities for purchases of property and equipment and intangible assets. Free cash flow as defined by the Company may not be comparable to other similar measures used by other companies, which could reduce the usefulness of free cash flow as a comparative measure. Talend urges you to review the reconciliation of Talend s non-ifrs financial measures to the most directly comparable IFRS financial measures set forth in the appendices to the presentation, and not to rely on any single financial measure to evaluate Talend s business. 2
Mike Tuchen Chief Executive Officer 3
Our Mission Enable every organization to harness the power of their data 4
Cloud Big Data Data Fabric On-Premise Traditional Data 5
Investment Highlights Data integration platform designed for Big Data and Cloud $16B TAM not well served by incumbents Leveraging open source to drive development and adoption Global customer base with demonstrated upsell traction $89M 40% 84% -1% Total Revenue, TTM Y/Y Subscription Revenue Growth Subscription Revenue 1H16 Free Cash Flow Margin 1 Note: all metrics based on Q2 16. 1 FCF defined as Cash Flow from Operations minus Capital Expenditures; see Appendix C for reconciliation. 6
360-Degree View of the Customer Land and Expand 7
What We Believe: Market Changes Data Explosion Cloud Self-Service Real-Time 2x Every Two Years 1 $141B Public Cloud Spend by 2019 2 80% Time Preparing Data 3 82% Adopting Real-Time 4 1. Global data created and copied annually to reach 44 trillion gigabytes by 2020. Source: IDC, 7th Annual IDC Digital Universe Study. April 2015. 2. Worldwide Public IT Cloud Services Revenue in 2019. Source: IDC, Worldwide and Regional Public IT Cloud Services Forecast, 2015-2019. December 2015. 3. Data scientists spend up to 80% of their time preparing data for analysis. Source: Sagence Consulting, What is Really Missing in Big Data ROI? February 2015. 4. 82% of organizations are in some phase of adopting real-time analytics or planning to within the next 12 months. Source: IDC, CloudView Survey 2016: Real-Time Analytics Adoption to Grow Rapidly, Especially for IoT, March 2016. 8
The Problem CLOUD DEVICES CUSTOMERS & SUPPLIERS ON-PREMISE 9
The Solution CLOUD DEVICES Data Fabric CUSTOMERS & SUPPLIERS ON-PREMISE 10
The Solution DATA INTEGRATION DATA PREPARATION BIG DATA INTEGRATION Data Fabric CLOUD INTEGRATION MASTER DATA MANAGEMENT APPLICATION INTEGRATION 11
Unique Open Source Go-To-Market Strategy Developer Adoption Free Products and Trials 270,000+ Person Online Community Over 300,000 Downloads / Year Qualified Leads Inside Sales Closes Smaller Deals ~$20k Deals Outside Sales Larger Deals and Upsells $70k+ Deals Outbound Marketing 12
Total Available Market System Integration Services Spend $16B 2 Integration Software Spend $374B 1 1. International Forrester Research, Data Corporation: The Global Worldwide Tech Market Quarterly Outlook For Cloud 2016 IT to Infrastructure 2017. January Tracker, 2016. Q2 2015; Worldwide Data Integration and Access Software Forecast, 2015-2019, June 2015; and 2. Worldwide International Master Data Corporation: Data Management Worldwide Competitive Quarterly Forecast, Cloud IT 2015-2019, Infrastructure October Tracker, 2015. Q2 2015 ; Worldwide Data Integration and Integrity Software Forecast, 2016 2020. June 2016; and Worldwide Master Data Management Competitive Forecast, 2015-2019. October 2015. 13
Integration Software Landscape $16B 1 Integration Software Spend Small Startups 1. International Data Corporation: Worldwide Quarterly Cloud IT Infrastructure Tracker, Q2 2015 ; Worldwide Data Integration and Integrity Software Forecast, 2016 2020. June 2016; and Worldwide Master Data Management Competitive Forecast, 2015-2019. October 2015. 14
Positioned as a Leader in Gartner Magic Quadrant 2016 Magic Quadrant for Data Integration Tools According to Gartner, Inc. Enterprises pursuing frictionless sharing of data are increasingly favoring tools that are flexible in that they can be designed once for delivery across multiple platforms, mixed architectural and broad deployment without significant rework. Magic Quadrant for Data Integration Tools Mark A. Beyer, Eric Thoo, Ehtisham Zaidi, Rick Greenwald August 2016 This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from http://bit.ly/2bfvcmv. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 15
Our Unique Differentiators Runs natively on big data and in the cloud Adaptable and extensible architecture One comprehensive platform User-based subscription pricing model 16
LEGACY SOLUTIONS BIG DATA CLOUD Up to 7x Faster Adaptable Unlimited Scale 17
1,300+ Paying Subscription Customers Financial Services IT Services Manufacturing Retail and Consumer Goods Travel and Energy Technology and Media 18
Large and Growing Ecosystem Big Data Open Source Community System Integrators 270,000 Active Members 2M+ Downloads Cloud Platforms 19
Multiple Vectors for Growth Expand Internationally Expand Ecosystem Launch New Products Land and Expand Grow with Hyper Growth Markets 20
Strong, Experienced Leadership Team Laurent Bride Chief Technology Officer Brad Stratton SVP of Sales Mike Tuchen Chief Executive Officer Nello Franco SVP of Customer Success Ashley Stirrup Chief Marketing Officer Thomas Tuchscherer CFO and VP of Corp Dev Barb Cadigan SVP People 21
Thomas Tuchscherer Chief Financial Officer 22
Financial Highlights Significant Cloud and Big Data Growth Land and Expand Go-To-Market Model Highly Predictable Business Improving Operating Leverage 100+% Big Data plus Cloud Growth 124% Net Expansion 1 84% Subscription -1% Free Cash Flow Margin 1H16 2 Note: Metrics for the three months ended June 30, 2016. 1 Dollar-based net expansion rate reflects constant currency adjustment. 2 Free cash flow for 1H2016 = ($0.3) million 23
Accelerating Subscription Growth Quarterly Subscription Revenue Growth Constant Currency Actual Currency Improving Revenue Scale and Mix 36-38% Professional Services Subscription Y/Y Growth Total Revenue Guidance 32% 19% 42% 41% 27% 29% 40% 32% 42% 40% 40% 40% $53 $15 $38 18% $63 $13 $49 21% $103-105 $76 $13 $63 $23 $25 $26 27 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 2013 2014 2015 2016 Q1'16 Q2'16 Q3'16 Subscription Mix 72% 79% 83% N/A 83% 84% N/A Note: $ in millions; Quarterly Subscription Revenue Growth reflects year-over-year growth rates; FY2016 and Q3 2016 revenue guidance as provided on our August 25 th 2016 earnings call. 24
Land and Expand Success Dollar-Based Net Expansion Rate 119% 121% 123% 130% 129% 122% 123% 124% 123% 124% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Note: Dollar-based net expansion rate is calculated by dividing recurring customer revenue by base revenue. Base revenue is defined as the subscription revenue recognized from all customers during the four quarters ended one year prior to the date of measurement. Recurring customer revenue is defined as the subscription revenue recognized during the four quarters ended on the date of measurement from the same customer base included in the measure of base revenue, including revenue resulting from additional sales to those customers. Dollar-based net expansion rate is presented on a constant currency basis. 25
Increasing Efficiency Gross Margin 1 Free Cash Flow 2 as % of Revenue 76% 76% New Incentive Plan 74% 2013 2014 2015 1H'16 (1)% 70% (16)% (14)% 2013 2014 2015 1H'16 (27)% 1 Gross Margins are Non-IFRS, and exclude share-based payment expense. and amortization of acquired intangibles. 2 Free cash flow defined as Cash Flow from Operations minus Capital Expenditures; see Appendix C for reconciliation. 26
Long-Term Target Operating Model % of Revenue 2014 2015 Q1 16 Q2 16 Long-Term Target Model Gross Margin 74% 76% 77% 75% 79 82% Sales and Marketing Expense 68% 64% 65% 66% 34 36% Research and Development Expense 21% 19% 18% 19% 14 16% General and Administrative Expense 19% 17% 17% 17% 9 10% Operating Margin -33% -24% -23% -27% 20 22% Note: all values are Non-IFRS, and exclude share-based payment expense and amortization of acquired intangibles. 27
Investment Highlights Data integration platform designed for Big Data and Cloud $16B TAM not well served by incumbents Leveraging open source to drive development and adoption Global customer base with demonstrated upsell traction $89M 40% 84% -1% Total Revenue, TTM Y/Y Subscription Revenue Growth Subscription Revenue Free Cash Flow Margin 1H16 1 Note: all metrics based on Q2 16. 1 1H16. FCF defined as Cash Flow from Operations minus Capital Expenditures; see Appendix C for reconciliation. 28
Appendix 2016 Talend SA 29
Appendix A: Balance Sheet 31-Dec-15 30-Jun-16 Cash and cash equivalents $6,930 $8,445 Other assets 41,131 45,550 Total assets $48,061 $53,995 Deferred revenue $74,263 $87,150 Borrowings 10,142 12,213 Total liabilities $100,544 $118,249 Total shareholders equity (deficit) ($52,483) ($64,254) 30
Appendix B: IFRS to Non-IFRS Reconciliation 2013 2014 2015 Q1'16 Q2'16 Total Revenue $53,080 $62,581 $75,960 $22,756 $25,381 IFRS Gross Profit $37,185 $46,423 $57,252 $17,468 $18,983 Share-Based Payment Expense 0 28 139 32 34 Amortization of acquired intangibles 21 20 0 0 0 Non-IFRS Gross Profit $37,206 $46,471 $57,391 $17,500 $19,017 % Gross Margin 70% 74% 76% 77% 75% IFRS Sales & Market Expense $35,769 $42,851 $49,169 $14,876 $16,946 Share-Based Payment Expense 0 178 793 179 210 Amortization of acquired intangibles 99 51 0 0 0 Non-IFRS Sales & Market Expense $35,670 $42,622 $48,376 $14,697 $16,736 IFRS Research & Development Expense $9,110 $13,242 $15,075 $4,278 $4,889 Share-Based Payment Expense 0 31 302 113 94 Amortization of acquired intangibles 53 22 290 33 33 Non-IFRS Research & Development Expense $9,057 $13,189 $14,483 $4,132 $4,762 IFRS General & Administrative Expense $10,219 $13,086 $14,453 $4,259 $4,681 Share-Based Payment Expense 263 1,021 1,123 307 312 Amortization of acquired intangibles 635 599 192 47 47 Non-IFRS General & Administrative Expense $9,321 $11,466 $13,138 $3,905 $4,322 IFRS Operating Income / (Loss) ($17,913) ($22,756) ($21,445) ($5,945) ($7,533) Share-Based Payment Expense 263 1,258 2,357 631 650 Amortization of acquired intangibles 808 692 482 80 80 Non-IFRS Operating Income / (Loss) ($16,842) ($20,806) ($18,606) ($5,234) ($6,803) Note: $ in thousands. 31
Appendix C: Free Cash Flow Reconciliation 2013 2014 2015 Q1'16 Q2'16 Net cash from (used in) operating activities ($8,163) ($14,291) ($9,979) $2,212 ($1,618) Less: Acquisition of property and equipment 570 2,593 788 477 445 Free Cash Flow ($8,733) ($16,884) ($10,767) $1,735 ($2,063) Note: $ in thousands. 32