Q4 2020 Talend SA Earnings Call
Please standby everyone we're about to begin.
Good day and welcome to the talent fourth quarter FY 2020 earnings call.
The conference is being recorded.
At this time I'd like to turn the conference over to Tamara each of them right.
Please go ahead Sir.
Thank you.
This is the Mark Drumright, Vice President Treasurer head of Investor Relations for talent.
I'm pleased to welcome you get the talents fourth quarter fiscal year 2020 conference call.
With me on the call today are talented CEO, Chris the bema.
The F O Adam Meister.
During the course of todays presentation, 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 and uncertainty.
Along with the other factors that may cause our actual results performance or achievements to differ materially from the contemplated by these forward looking statements.
Yeah.
But we're looking statements in this presentation include but.
But are not limited to the statements related to our business and financial performance.
Expectation and guidance for future periods.
Our prospects for future growth and our transformation to a high growth cloud company.
Yeah.
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 that was issued earlier today.
As well of those more fully described in our filings with the Securities and Exchange Commission.
The forward looking statements in this presentation of based on information avail.
Available to us as of the day here.
You should not rely on them as predictions of future events.
We disclaim any obligation to update any forward looking statements.
Except as required by law.
Please note the other than revenue.
Or otherwise specifically stated the.
The financial measures to be discussed on this call will be on the 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.
You can find the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our press release and Investor presentation.
Each of which are posted on our Investor Relations website.
Telling the customers that are referenced by name today do not endorse any vendor product or service and do not advise our company on selection of use of technology.
Products services or vendors.
Let me now turn the call over the cliff there'll be milestones of Yep.
Hey, Marty welcome starts Q4 in fiscal year 'twenty to the earnings call. The hope, you're all safe and well and we appreciate you joining today's call.
Before diving into a few highlights I'd like to take a moment to thank the talented team for their perseverance and dedication of our business and relentless commitment to enabling and supporting our customers.
'twenty 'twenty prevented the series of unprecedented event it created a level of uncertainty like we've never experienced the board. However.
The collective effort of our employees and partners was unwavering.
We put our customers first and help ensure that we achieve every one of the goals we set out at the business at the beginning of the year the.
The work time effort and sacrifices of our employees and partners are deeply appreciate it.
Having spent the last year of working with our customers and gaining an understanding of the market and more certain of the number of the unique and vital role tally play in changing the way the world makes the decision.
It's never been more obvious the data is critical to the business and the broader society.
But as we've seen play out on a global stage simply collecting and storing more data doesn't guarantee success the.
The truth is data is only valuable if you can have absolute confidence in it if you can trust it.
Good day, most companies don't have the ability to meaningfully measure monitor and improve.
The overall health of the data and.
And it's exposing them to significant risk of <unk>.
Of course that increases each and every day with every new source of data and it's turning data from an asset into a significant liability.
Our well isn't the data ecosystem is to ensure the data remains an asset that can be talked about we use the solve meaningful business problems.
Over the last 15 years talent has developed a unique mix of critical capabilities across the data collection integration quality governance, and sharing that are central and foundational to establishing truck.
More recently, we also introduced the talent trust score the industry. The first approach to providing an adequate way to quantify the reliability of the dataset.
This is why I'm, even more passionate and absolute about the future of pallet.
From the space in 'twenty and 'twenty, one we will continue to streamline and automate our core capabilities used to deliver clean compete and uncompromising data throughout the enterprise. We will also continue to build upon our trucks for the help companies overcome the challenges that arise when they can't easily measure monitor and improve overall day to help.
Now turning to our execution as I shared almost one year ago today, I had high expectations and ambitions for talent future building a world class go to market organization was the key endeavor in 2020.
So outlined how we are going to instrument of business to support the growth in scale, we are targeting as well as extend our leadership in the cloud data ecosystem. I told you that we wouldn't have a customer first orientation that would divest of 100 million club business by the end of the year.
Not only did we execute successfully in each of these area. We did it without missing a beat even when we were faced with the past year's difficulties.
I'm extremely pleased to tell you that by taking these actions. We finished 2020 strong we ended the year with the $108 5 million in cloud are are exceeding the target of 100 million. We laid out this time last year.
The cloud ear are grew 101 per cent year over year of 95 per cent on a constant currency basis, driven largely by the landing new cloud customers and expanding cloud into the installed base.
We also work closely with our customers to partner with them as they transition the along their journey to cloud.
I'm also excited to report that we added over 3000 cloud customers during fiscal year 2020 more than double that of fiscal year 2019.
We ended the year with over 4250 clubs customers laying a strong foundation for 2021.
Now, let's take a minute to recap the progress made this year along with some key updates.
Our leadership team has grown and evolved over the last year and it reflects the vision I have the talent when I came on board when I joined I immediately strengthened our executive team with the appointment of Ann Christel of brand of Chief revenue Officer.
Jamie Kiser, as the chief customer officer, and enhanced our sales and marketing leadership in Europe by adding the new and the MGM and head of marketing.
During the year, we expand the Jimmy as you all to include Chief operating Officer, and we hired Krishna Tomorrow of C. G O.
Christian of becoming part of our team is the pivotal part of our leadership strategy. He has the vision and experience to build from our strong foundation and drive the product that will fall the set of fundamental market challenges around data help that simply have never been addressed the.
This team brings a wealth of experience in each of the respective disciplines and as you might it around the customer first mentality their experience provided the skills for us to begin the work necessary in our key growth areas to allow us to build the business that strives to deliver strategic business value, which is the foundation for long term sustainable growth.
In the second half of 2020, we began preparing our go to market strategy for 'twenty and 'twenty. One we were laser focused on creating efficiencies of our business. Additionally, we increased the effectiveness of our interaction to ensure every conversation and the message was targeted to the exact the audience and tailored to reinforce the.
Strategic business value calling per byte.
Beginning on January 1st we've centered the organization around the four distinct market segments.
Small business mid size of business, good enterprise and strategic enterprise accounts.
Additionally, we dedicated teams the specifics and drive new logo acquisition and client expansion.
The ability to ensure speed repeatability and predictability both of our customers as well as far of business, what's critical and our decision at the segment and create dedicated new business and client teams.
The strategy represents the growth and potential we see in numerous market segments that need our capabilities to uniquely address critical business decisions with data.
The entire organization is aligned across the strategy, which incorporates product marketing customer success and operations.
We continue to work with our customers to address individual data projects or needs within a single department. However, this past year, we know the organization towards turning to tally as the strategic solution provider, but the key to their entire data infrastructure we.
We see a growing opportunity per tower to be aligned with key business objectives of the C suite not just the CIO of from the CEO and the rest of the business. Let me share with you of recent customer wins illustrate with the evolution.
And the exciting new cloud one of US last quarter was with Walker of bank.
Hundreds of three year old regional bank based in Seattle with more than 200 branches and eight western states.
In 2019, the bank embarked upon a seven year journey to pivot from a traditional brick and mortar bank to a digital first commercial bank.
The bank will rely on talent data fabric to build the data hub on AWS and snowflake that will help drive decisions around the operations marketing and reporting.
This information will be used of credit customer 360 that provides the frictionless customer experience across all interactions and devices and also increases engagement.
In Q4, we also on the business of China ex a global Health Research network trying net exports of real world data collected from hospitals, all over the world into the hands of various pharma and health care clients to celebrate clinical research.
The state of growing exponentially and business expanding the organizations like talent with of course, the stringent data quality and governance requirements.
Tri net exports standard and global electronic patient data on talent data fabric, the simplify its cloud data infrastructure and steel to meet the increasing demands of the business.
Another new club logo in Q4 was with one of the largest net companies in the world. The company wanted to continue to improve the supply chain, what can I think the value of delivering the right products on time to the global network of retail and distribution channel.
The company of using the trust the data from talent to better manage cost and the inventories by getting accurate information about its most profitable skus in each region.
Working closely with the Accenture the companies like the talent over competitors like IBM and Informatica. They found our needed multi class the port for Azure and Google.
Lastly, I want to tell you about com of popular meditation App come live and die by its users being able to find the most relevant content for them. So it relies on real time user behavior patterns. The surface of the content get users most want at any given time.
Being able to analyze that data in seconds and turn that into use of safety recommendation takes the complex data infrastructure and of course, it has to be right by using stitch com was able to create a solution with AWS.
Seamlessly manage if the data in real time pretty deeply personalized experiences for their customers.
Customer stories like these highlight the value of talent bring like underscoring the significance of data to the most important business strategies I hear of these types of stories every day about how talented it's helping the companies make facet of it.
Take important actions needed to thrive in today's business condition. It is becoming increasingly clear that talent is evolving from a company. The enterprise runs of data through two.
To accompany the enterprises run their businesses on.
Covid has made clear the companies can no longer afford can put digital transformation on the back burner or call. It a nice to have so much cash to survive today and digital transformation only works. If you have the data and you can trust to make the right decisions for your business.
Our focus on data trust and day to help sort of the pivotal role in providing value to our customers.
The same value proposition is also strengthening our place in the ecosystem in December we expanded our partnership with snowflake, enabling their users to launch of Cowen data fabric trial directly from within snowflake customer to constantly make decisions with data that is complete and uncompromised, which they can now see and measure with talent.
Industry first trust score.
Working together, we extended our joint customer base to over thousands of customers, including organizations such as the Aqua Hotel one of the part in three months.
No one likes the euro per stagnant notes the what Kelly brings to the table is helping the customer make sure. They are trusting the date of their C, which is of critical part of digital transformation. This partnership help the triple our business the snowflake in 2020.
Also in 2020, we had incredible success and we saw improvements across the board with explosive cloud growth sales efficiency and an industry first trust measure are focused on trust visibility and control becomes even more critical and a cloud first environment, but trucks as part of our DNA. So this leaves.
Of uniquely positioned to deliver a value to our customers.
It also ensures that we continue to deliver innovative products to support them.
In this we've laid the foundation for the next phase of our transformation as a company our results for the quarter and the here are a culmination of our execution against our 2020 targets well, we're just getting started.
In 2021, we intend to advance our cloud offerings by increasing the use of AI to automate and simplify complex and time consuming data cat, we plan to make it easier for customers to share data with internal team as well as their customers and partners using a P. IV. In addition look for kind of like a further extend our leadership.
Shouldn't around data quality and empower more citizen users with new self serve data capabilities.
Importantly, and as I spoke about in the opening expect talent to continue to fuel our growth and elevate our importance in the data ecosystem I, establishing talent is synonymous with day to truck and helping companies begin to accurately measure monitor and improve overall day to help.
And with that I'll turn the call over to Adam.
Thank you Crystal and good afternoon, everyone.
Like the echo of crystals, thanks to our employees for their contributions during the fiscal year.
Strong into 2020 wouldn't of impossible without their hard work and dedication.
There are four themes that I want to emphasize the day as I discuss our Q4 and towards the 'twenty results and share our outlook for Q1 and 2021.
First we delivered consistent execution throughout 2020, excuse me our guidance each quarter and ending the year above the goals we've set pre COVID-19.
Second our efforts over 'twenty and 'twenty are now beginning to translate into operating performance.
So.
The foundation will drive growth acceleration and efficiency gains in 2021.
Fourth we will continue to invest and build for long term growth and scale.
We ended 2020 with 100 of $8 5 million of cloud era.
Many of our goal of 100 million cloud era of all grew 101% year over year or 95% on a constant currency basis.
Cloud is now nearly 40% of our business.
The library of $5 3 million or there are two quality in Q4, bringing the total to $14 6 million per the year.
This clearly shows the the majority of our growth in quality of came from new logos and expansion.
We added over 2000, new cloud customers in 2020, and now have over 4250 cloud customers in total.
So are all grew to $288 7 million as of December 31, 2020.
All of 19% year over year or 15% on the constant currency basis total revenue for the fourth quarter was $78 9 million up 17% year over year subscription revenue for the fourth quarter was 71 8 million up 20% year over year or 17% on the constant currency basis.
Total revenue for the full year was 200 of $87 5 million up 16% year over year.
Revenue for the year was $259 5 million of 20% year over year.
We continue to win the larger scale deals with enterprise customers, particularly of quell.
Ended the quarter with 678 customers of that 100000 or more of they are all up from 642 at the end of Q3.
These customers represent 67 per cent of our total aero.
Our dollar based net expansion rate for the period was 107% in constant currency compared to 107% last quarter. This metric is revenue based and as a result does have some structural headwind as the low to our business towards the cloud due to the fully ratable recognition of those revenues.
We were pleased to see net expansion stabilize in Q4 cloud net expansion remains well above the overall average.
Professional services revenue was $7 2 million for Q4 of $28 million for the full year the.
Personal services revenue declined 9% year over year consistent with all the continued shift towards cloud, which generally requires less than professional services.
Before moving the profit and loss of items I'd like to point out that unless otherwise specified all expense and profitability metrics discussed today are non-GAAP basis of 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.
For the fourth quarter total gross volume was 81% subscription gross margins go Q1 87 per cent.
The scripts and gross margin were made at 87 per cent for the full year in line with 2019.
We expect a modest impact of subscription gross margin of the cloud business growth.
Special services gross margin was 44 for sales this quarter benefiting from better utilization of remote work environment Q4 is typically the highest margin quarter from professional services.
The start discussing training the sales efficiency each quarter.
We monitor sales of pushing things through our customer acquisition costs with the following customer acquisition cost as our non-GAAP sales and marketing expenses divided by the change in total are for the period effectively the amount required to generate a dollar of net new business.
Given typical seasonality we would use this metric on a trailing four quarter basis to monitor the overall trends.
In FY 'twenty for the back.
Back into a 3.2 down from the peak of three point thought of as of Q2.
We're particularly pleased with the trend in the.
For the 20.
During our Investor Day conference in the fall we described for the 20th day review of investment per gallon.
One significant investment with developing the go to market strategy that better aligns our sales motions with customer needs.
Crystal mentioned, we've rolled out of four segments strategy small business the size business enterprise and strategic enterprise accounts, we are furthest book as much of the team the Hunter and farmer roles. These changes went into effect of this journey with the structure will drive greater effectiveness and each sales motion enabling us.
The maintained strong new logo growth sell new cloud era of law into all of existing customer base and improve net expansions overpowered.
The changes our cloud strategy for existing premise customers will prioritize cross selling cloud rather than specifically focusing on the integrations shooting cloud is the new initiatives in the scenarios will create a more efficient pull of migrations over time.
As a result, we're not dependent on as large of migration impact on cloud are all in 2041 is our sellers' prioritize this cross sell strategy.
And we continue to progress towards profitability, we incurred an operating loss for the quarter of $1 4 million or two per cent of revenue.
For fiscal year 2020, we incurred an operating loss of $16 3 million or six per cent compared to an operating loss of $19 4 million or 8% from 2019.
We outperformed our guidance due to strong sales execution and careful management of expenses throughout the end of the year.
Free cash flow was negative $4 1 million of for Q4 of negative $32 seven months of the full year in line with all the original expectations cash.
Cash and cash equivalents were out of it.
The 53 million of as of December 31 of <unk>.
For the quarter benefiting from normal course of options exercised in the U S. P P activity as well as foreign currency benefit.
Shifting to our outlook.
We're pleased with our performance versus guidance with all of execution throughout 2020.
With the leadership team now fully ramped and greater stability as the impact of Covid subsides, we expect to operate in the tighter precision in 2021.
Consistent with last year, we will be providing guidance on an annual basis, the cloud era and free cash flow. It will provide both quarterly and annual guidance on total revenue and non-GAAP loss from operations.
We will not update of our quality of all types of each quarter.
Our guidance assumes current business conditions and foreign exchange rates as of January 31, 2021.
We expect the end 2021 with 160 million of cloud are all represented 47% year over year growth, including $5 million to $10 million of migrations. We expect this continued cloud momentum to drive an acceleration of our total are all of us in the second half of this year as cloud approaches half of the area.
All the exiting 2021.
So are our growth acceleration will be gradual as with further rotate the business to cloud driven by an improvement in sales efficiency in the second half of 'twenty 'twenty, one as measured by the cash metric I discussed earlier.
We expect free cash flow to be between negative 15, and 20 million instead of full year.
We remain committed to reaching cash flow breakeven on the sustained basis between the end of 2021 and the first half of 2022.
Before turning to our revenue guidance range.
Nope.
Professional services will remain a drag on the overall revenue growth from 2021.
Acceleration of subscription revenue growth will lag the acceleration of total.
Yes.
Q4, 'twenty of subscription revenue included some multiyear premise benefit, which we don't expect to reoccur in Q1 of 21.
Given currency movements over the last year, that's ex will provide the revenue growth tailwind of approximately 5% in Q1 and 30% for the full year based on the rates today.
Lastly, cloud ill or is the single best measure of our growth and progress.
For the first quarter of 2021 total revenue is expected to be in the range of 77 5 million to $78 5 million.
Non-GAAP loss from operations is expected to be in the range of the 8 million to $7 million.
For fiscal year 2021, total revenue is expected to be in the range of 327 to 349 of them now.
Non-GAAP loss from operations is expected to be in the range of 26 to 24 of them.
Our Q1 in 2021 guidance the net income and EPS is included in the press release and Investor presentation, We issued today and available on our website.
We're excited to launch of the 'twenty 'twenty, one building on last year's momentum.
Energizing to see the investments we have put in throughout the year begin to take shape and towards the towards the one we're closely watching the effect of go to market changes were delivered at the beginning of this year and there is still much work and the opportunity ahead of US we will continue to transform the business for scale and sustainable growth to deliver on the expectations of our customers.
Employees partners and our shareholders.
Is that we will open the call to questions operator.
Thank you.
If you'd like to ask a question. Please signal us by pressing star one on your telephone keypad.
When I speak of sound today. Please make sure your mute function is turned off how long of a signal to reach us.
Once again that stock line to ask a question.
Well pause for just the free from it.
Yeah.
Well take our first question from Jack Andrews with Needham. Please go ahead.
Well good afternoon versus the kind of question.
I guess no of course for the Crystal I wanted to better understand you talked about the news you're your goal youre moving towards the strategic solutions provider for the C suite. So I wonder if you could maybe just help frame us of a bit more.
How are you getting how many C level type of conversations are you having them. How are you able to get in front of them is this are you able to leverage partners for these types of conversations or are your direct sales efforts paying off the is there any sort of context about how you are rebuilding thats one of them overtime.
Sure Good afternoon, Jack how are you.
We opened our [laughter] great. Yeah, we've got a series of of things that as we evolve the conversation I think that are going on to the important to point out. The first one is outside of what we're doing we see the market itself evolving in terms of the needs and the utilization.
And the participation of users across the entire business showing up in things like citizens integrators and analyst and data sciences. So we see the the market itself evolving beyond the conversations which are really important that we have today with I T and moving across the entire business. In addition to that we've talked.
The date of health and the trust score in particular and that is an area, where we really see that rolling out to the entire business and something that an entire organization has you know of importance around in terms of how they measure of the overall health of their business or line of business and then making sure that they have visibility to those conversations.
Are taking place in both of those tranches to make sure that we can support the weight of the <unk>.
Business is evolving and the needs of the users at the business level as well as at the C suite level. So these are things that we are continuing to evolve and we think that we're gonna take hold and be even more strategic over time.
Right. That's the way just as a follow up question what else about Snowflake I guess congratulations on this.
Most of the customer milestone.
I know you've been working with Snowflake, the long time, I remember a joint press releases back two or three years ago between traveling of the snowflake. So could you just help us understand what specifically has been able to do to reach this milestone and how can you continue to gain share within the broader snowflake customer base.
Yeah, We've got we're really proud of the our relationship with Snowflake and as we are with our entire ecosystem of partners. It's important as we look at how we provide strategic value in a combined way to our customers I think we're starting to really hit our stride in particular with the way that we not only show up per snowflake in particular.
To provide a place in moving the customers to the cloud, but just taking it one step further and looking at what we have going on in terms of the the trade of talent Trust score and making that available I think snowflake when they look at what they're trying to do is make sure that there's good quality data that customers can use in the meaningful way there.
Strategy is aligned with ours very much in that same pattern. So we look at it as an opportunity to really start to align to provide more strategic value in a collaborative way. So we're looking forward to what we can do with them and our joint combination of value.
Great that's actually of the congratulations on the results.
Thanks Sacha.
All of those kind of Chad Bennett with Craig Hallum.
Oh, great. Thanks for taking my questions and then Saddam old job on the quarter and year end of.
So just just a few questions from me so just.
Maybe first for Crystal just on the go to market changes that I think Hugh you mentioned were instituted earlier. This year you know the Hunter farmer model. So.
I guess do you feel like just from the cross sell upsell opportunity into the base that there was just the opportunity there that I just I just assume naturally.
You easy for me to say you'd be able to cross sell and up sell into your base on from base with your cloud products, but do you feel like there was you were kind of missing opportunities. There in the past couple of years as the company has transitioned and do you think this will actually.
You know I assume you do because you're doing it but accelerate that the net retention number as soon as the back half of the year.
Hmm well, it's it's really good question, but I think it's twofold. The first of all when we think about what we're trying to do with the business. It's about driving efficiencies. So you think about lining up the resources and how you can really drive for you just sort of.
Certain profiles of individuals that are maybe more of a hunter or farmer as well as trading of repetitive and predictable kind of patterns that allow us to really get of what I call. The flywheel going so that those are yeah. That's certainly one part of the strategy of is making sure that we can also bring our Greenville tour of reps in terms of the fact that they.
Can a benefit from waking up every day and having the repeatable process and so we think that it's good for our customers in terms of being able to have unique conversations with them that are in our installed base as well as bringing net new logos in the door. It's good for our business from an efficiency standpoint, and it allows us to really be I believe more effective.
Some of the tailoring that message and bring you the crop. So it really is about just honing skills and really driving operating operational efficiencies and you know and you know really increasing the effectiveness over all of which of those conversations we're having.
Got it makes sense and then maybe one quick follow up a clarification for Adam just Adam you you reiterated you know for four of Reacceleration I believe in an overall ear or in the second half of the year basically what you guys set of at the analyst day, a few months back, but if you find it.
Just wanted to make sure kind of we're understanding this correctly I mean, you just put up here our growth of 19%.
And I believe a few months back.
At least we were conceptually talking about mid teens era of overall of our growth accelerating.
Up to 20.
In the second half of the year now that we're in the upper teens, you guys have exceeded your expectations and air growth.
Does that imply overall ear of growth you know kind of a low twenty's and the second not to get too cute on this but also you know it's kind of the same question on subscription you know it's great to see the overall Rev Guide increase.
From where you had it.
But you just put up of 20%. So she can plot of subscription quarter. You know on the high end of the guide implies a mid teens subscription growth for this year any more kind of color there.
Sure happy to so first of all of them.
Welcome to the the call first and foremost.
So we we were really pleased with where Q4 landed in Q3 of us as well.
The.
We consistency in growth between Q3, and Q4 of it really shows that the.
You know the the glide path from here from 'twenty one.
<unk> is the one that's pretty clear for us into the industry we hope.
We do look at the business on on both of them actual growth basis, but all of the constant currency basis as well.
As I think about just how much FX.
FX was moved over the course of 2020, we want to make sure investors kind of look through the you can kind of understand irrespective of where current uses all of the other line trajectory looks like.
So.
I've seen this year.
The 19% total growth of 15% on the constant currency basis think about that as the baseline for how we think about acceleration and we'll continue to report on the calls in person visits throughout the year.
On the second part of your question just around the subscription revenue.
So obviously of a lot of them.
Subscription revenue growth trend will follow there all of about a quarter of two and so it really looks at that influx of in total are our.
And the wait a little bit for the one that's going to show up in subscription.
Alright, Thanks, again nice job.
So it'll take Tyler Radke with Citi.
Hey, Thanks, and hope the you broke the doing well Crystal I wanted to ask you about the.
New logos that we saw in the quarter. It looked like you added over 1000 cloud.
Cloud customers and perhaps total customers I guess first of all what would you kind of attribute the.
The acceleration of new logos to in terms of go to market motion and maybe help us give us give us a sense for is this mainly mid market customers that you're seeing and how how do you kind of go out to those customers and expand them in 2021.
I think it's good to hear from Tyler. We are I think this is kind of pointing to where we see opportunity in the future with the this year and how we've set things up from a go to market standpoint are not not to put aside the let's say of Q.
Q4 is where youll start to see more of a pop for a you know a bigger cheat the bigger population of new logos, but I believe that what we're really see going forward is when you start to look at certainly more units will come from small business. The mid market. Some of that comes from our you now are kind of.
Digital or product line and some of it'll come from just the execution on how we start to focus and really start to lean into those names, but I think what you'll what youll start to see is that those will start to pay off I would say probably more over the back half of the year in 'twenty one of as we really get those motions cone.
Back at our Q4 with the you really proud of like out inside of the of where we landed and we think that's the really big part of of how were starting to structure. The the you know.
Reaching the footprint across the customer base, but then grabbing those net new logos that'll come from all the way across small business the enterprise.
Yeah.
Great. Thank you and and Adam of follow up for you just on the net expansion rate.
It looked like it stabilized here this.
This quarter being consistent with last quarter.
We're kind of reached the low point there.
I know you didn't use the the work down sales this quarter, which is which is nice to hear so just curious on your thoughts the culture.
Of that that metrics moving forward.
Yeah. Thanks for the question, it's a lot of good to hear from the we were really happy to see that stabilize in Q4.
Particularly given the other interest of the accounting kind of mechanical headwinds that we've talked about the over the last couple of quarters. The pressures down. So I think you can you can look at that as really an indication that debt.
The momentum with existing customers is strong the the expansion within the cloud customers. As we've continued to say is much better than the overall, that's normally for the starting to get the bigger level of starting to contribute to the overall total I'm not going to call bottom yet we still have to get through some of the sales changes that we're talking to.
Because the theres really come into effect strongly.
The.
The cloud the party clearly the little bit on Covid and kind of the overhang on the I T spending but.
I think we want to give that a quarter or two but.
But what I can say is you know I feel like.
The the trends we've seen over the last of <unk>.
Couple of quarters.
Really the slope of that has changed and I think we're going to operate within a point or two of where we're at right now of course.
So cautiously optimistic alright, thanks, so much.
Yeah.
Next we'll move to pre J D with Barclays.
Hey, guys good afternoon.
I wanted to ask a little bit more about the snowflake metrics that you guys provided the business tripled.
The fiscal 'twenty.
Is there any metrics you can share with us in terms of the.
The amount of revenue or are those types of snowflake or.
It was something like the conversion of the breweries.
Product that you have.
The two two of food products.
The paper, it's good to hear from the I'll take that one we're not going to get into the specifics on all of these kind of revenue.
MS Grey zone with a with any particular partner we have seen you know still quite a lot of traction of the market.
Obviously, the tripling getting to be of pretty significant portion of overall Saudi are like.
There's a lot of success the AWS and it was you'll continue the oven.
The the partnership with all of them very important as we keep pushing forward on this overall day to shift to the cloud. So we'll keep working hand in glove with those guys on opportunities as Christal mentioned, we really think that there's just the.
Very interesting backdrop, where the the customer demand around.
Expectations on cloud warehousing really is going to of wall to wall conversation very quickly.
And as Snowflake at AWS and all of these players start to counter of that that conversation. There is a more urgent need for the integration and governance solution in conjunction.
I think it's very exciting for us and we've been kind of calling for a while but the.
The quality of division of market will naturally fall a little bit the cloud data warehousing market.
As of the growth of its always the snowflake over the last years.
Very consistent.
Consistent evidence of debt and as we see opportunities coming true near the beginning of this year, we're excited with where that's going to go.
Yeah.
But as the.
What's the.
The question around titles of basketball here from <unk>.
How close is the other.
The stitch and you're at the time of the data fabric sales are working together.
Let's go to the idea of Oh these type of.
Customers that you have that are on such or the deals.
So to the data fabric product as well.
Yeah, I'll take that one type range and good to hear from you. We see a combination of use cases, we see Fitch as certainly something that support of land in some cases, where if you think about across the entire organization you may and we believe have different use cases that are depending on who the users are.
And in terms of the constituents within the organization what their needs are and we also see it as a land and the net new logo that then expand to needs that they may have over time that are more complex and could we see both of those playing out and we have customers that are are leveraging the power and data fabric as well as sachin and both of those ways.
We think of it from one of the things that makes us unique for sure to be able to what we call meet our customers, where they're at but I think more importantly, it's our ability to make sure that as we're working with our customers and they maybe need to start in one place that we can you know we can grow with them and that's really important to us from a sustainability long term.
You know growth company that you know that we see that we have straight alignment on.
Great. Thank you guys.
Okay.
Next well move to Mark Murphy with JP Morgan.
Hi, Good afternoon. This is Matt Coss on behalf of Mark Murphy.
Just a quick question of few Adam from your net new cloud there are it looks like the expansion sequentially or the growth of that number.
It was the highest it's been I think we've been keeping track of what.
Was there any business that was pulled forward or any sort of large.
Feel.
Particularly large that might explain that.
And that's good to hear from you.
So I wouldn't point to anything that was particularly large the got pulled in I think I think what you're continuing to see out of them out of the and crystals of organization is just consistent strong execution in the pipeline that we have in quarter.
And we're really enthused with the progress we've made around that over the last year and now with some of the sale of the design changes that we rolled out the that's going to be the force multiplier. So I wouldn't point to anything in particular in Q4 of the would.
I would suggest the counterbalance in Q1, it is just great blocking and tackling from the sales organization.
Okay, and then on your Capex outlook are there any other.
Data center opening plans like Europe.
In December and then maybe how should we think of Capex for this year.
Yes.
The the data center Rollouts raws aren't a huge capex items our rates of is there's a little bit of you know over the investments that we're making the capacity for those but they are typical kind of of AWS or azure environments, the very flexible.
The last year, we did open the new office time of organ Covid of course, we did open the new office in in France, and the planning for a long time and so the Capex was a little elevated over the course of 2020 of it'll go down.
Down a bit from where it was reported 'twenty 'twenty one.
Alright, and I'm, sorry, if I missed this earlier.
And maybe you Didnt mentioned, it but where does cloud the air argue as a percentage of total air all of this year that's the.
One thing that you mentioned.
When you just look at the the the total mix. So just under 40% of 37 of the house right on the one of the.
There she moved to 87.
Yeah, Yeah, and do you have the ambitions for kind of where that goes sort of that mix goes for 2021.
Yeah. It was it was buried in my script of a little bit sort of I think when we exit 'twenty. One you should expect the crowd is approaching half of.
Of the business by the end of the year.
Okay. So if the other before thank you so much out of.
Mhm.
Well I Havent take our last question from Bhavan, Suri with William Blair.
Yeah.
Hi, this is per meal mill char comfort the box sorry, congratulations on the strongest of the year and the across the cloud growth.
The now that we're looking towards the potentially more normalized environment in the back half of this year. How are you factoring macro changes into your guidance and investment plans for 2021 relative to 2020 and how reliant are you in next year growth targets on an improving macro environment or should we think about that as more of an upside driver.
Okay, great to hear from you and really good question.
You know if some of my comments suggested you do see the crowds party, we think of the spending environment is starting to firm up.
It's it's I still think that will take a little while the groove dollars really start flowing.
So we've been balanced and kind of the expectation for the first half of the year and how long it will take before we see a return to force.
Kind of a normalized spending patterns.
So anything I think the faster than that you could think of could probably upside I do think the.
We just look at your of your compares the that'll be helpful as well.
And others kind of months pass throughs and the budgets are either the lower there just the more state of what we're seeing I'm not a freeze of the citizens of the way you saw them in.
Kind of Q1 of into Q2 last year.
That's helpful and can you give us a quick update on what youre seeing in the competitive landscape and how should we think about the competitiveness of internal solutions offered by the public cloud and other data service providers.
Yeah, I'll take that one and Adam if you have anything to add please do yeah look I think this is a place where we stay laser focused on the evolution of what the business problems or that's the the he's the best of like I can put it the the problem that we look to solve are the are the the future in the in the current state.
<unk> of we're moving data in and a lot of data at that is is just part of the problem and so you know when we look at the competitive landscape. There is there's a focus on that for sure, but we think it goes beyond just.
Just moving data and that's why we believe the on the other side of moving data debt. What you end up with in terms of the not just the quality of it but really elevating it above that to say how do you actually measure what good data looks like and that's something that you know what we really stand alone and we think that's where we're not only you.
Neat, but that's where we burden of strategic value to our partners and to our customers for sure. So in our you know in our estimation. There's a there is an opportunity for us to continue to lean into that to help organization, making sure that when they moved the data and they manage the data that they can really use it for the purposes that they needed it in the fall.
First place NASA will stay laser focused.
That's great to hear thank you for taking my questions.
There are no further questions and I came at this time and this now concludes today's conference. We do thank you everyone from your participation today and you may now disconnect.
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