Thank you. This is Lisa Laukkanen Investor Relations for Talend and I'm pleased to welcome you to Talend's first quarter 2019 conference call.

With me on the call today are Talend's CEO, Mike Tuchen; 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 performance 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 initiative, 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 that 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 the 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 as otherwise specifically stated, the 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've provided a reconciliation of historical 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 of use of technologies, products, services, or vendors.

And now let me turn the call over to Mike Tuchen, Talend's CEO.

Thanks Lisa and thank you all for joining us today. We're pleased to start the year with solid first quarter results and strong cloud momentum.

Our success comes from both new customers adopting our data integration platform and existing customers extending their use both of which are being fueled by the ongoing market shift to the cloud. We achieved a record total revenue of $57.8 million in the quarter, up 24% year-over-year.

Some additional highlights in the quarter include; our subscription revenue grew 26% year-over-year or 31% on a constant currency basis; Talend Cloud our SaaS offering grew over 100% year-over-year for the 11th consecutive quarter and represented 36% of new ARR for the first quarter, up from 14% just two quarters ago. We're well underway to having half of new ARR come from cloud by Q4 this year.

Annualized recurring revenue totaled $205.1 million and grew 28% year-over-year or 34% on a constant currency basis. For the second year in a row, Talend was recognized by Gartner as a Leader in the Magic Quadrant for Data Quality Tools.

And we recently introduced Pipeline Designer an application in Talend Cloud that enabled customers to build data pipelines smarter and faster with the next-generation design environment. Companies are becoming increasingly data-driven to improve their decision-making and enhance business performance.

To truly enable their business teams with data, companies must solve two problems at the same time; speed and trust. These elements are essential and mutually reinforcing.

Companies need to enable everyone to solve data problems in minutes. They need to take advantage of the latest innovations in data processing and machine learning technology and at the same time; they also need to be able to trust their data which is the foundation of their business decisions.

This spring, we elevated our corporate messaging to focus on these two essential elements; speed of delivery and trust. We've launched a new corporate website and in conjunction with our spring 2019 release the Talend Data Fabric, we introduced Pipeline Designer.

Adding Pipeline Designer to Talend Cloud enables data engineers and developers to quickly and easily design modern data pipelines that can scale with the latest cloud technologies and empower companies to process and analyze data in real-time. Pipeline Designer sets a new standard in terms of user experience and architecture.

The app is 100% web-based, which enabled users to get started in minutes and can also scale up to support the largest data problems including real-time, hybrid, and multi-cloud scenarios. We designed the app for ease of use to appeal to a broad base of potential users ranging from data engineers to data scientists and analysts.

We'll continuously upgrade the product in the coming months including adding support for pay-as-you-go pricing. Pipeline Designer is intended to be a natural extension for Stitch customers who joined from our frictionless channel.

It will create another seamless way for cloud customers to quickly on board with Talend and will become an important part of our overall land-and-expand strategy. These additions to Talend Cloud with the spring 2019 release of Talend Data Fabric reflect our continued focus on innovation and cloud adoption.

Cloud is increasingly becoming the deployment model of choice for data integration, driven by the adoption of cloud analytics and cloud data warehouses. The majority of organizations considering a Big Data project choose to deploy in the cloud because it's easier to use, more cost-effective more flexible and scalable elastically.

Although, we're still in the early innings of the industry-wide cloud adoption, we believe that over time data integration will be managed primarily through the cloud. Demonstrating the cloud opportunity, Talend Cloud continue to grow over 100% in the first quarter and surpassed premise big data as the largest contributor to new ARR for the first time.

In the first quarter, cloud accounted for 36% of new ARR up from 25% in Q4 and 14% in Q3. We're seeing larger companies adopt the cloud and the deal sizes are now in line with our overall average deal sizes.

While most of our existing customers are on-premise today, there's been an increasing conversation about migrations of their existing customers and most of our conversations with new customers are centered on Talend Cloud. With that let me walk you through a few customer success stories.

We saw a healthy mix of new wins and strong expansions in the first quarter. We also saw existing customers start using Talend for new use cases.

In Q1, we secured an agreement with one of the largest U.S. life insurers.

The win reinforced our core value proposition for large enterprises enabling them to leverage the full power of the cloud to deliver trusted data at the speeds required for modern business. The firm is moving to AWS and Talend Cloud as part of an organization-wide modernization effort.

One of their first projects will be the support and update of their web portal to make them more responsive and customer-friendly. The company is also applying Talend's data quality and data catalog capabilities to improve data integrity throughout the organization.

This major win is in conjunction with our consulting partner Accenture. During the quarter, one of the top three automobile manufacturers in the world selected Talend Cloud to bring sales data from its dealer network into its cloud area data lake.

Talend is driving speed and accuracy for advanced analytics by their data science and business analyst teams. We also won a number of new agreements internationally to help companies move to the cloud.

In APAC, Talend landed a cloud agreement with a major national tourist board. The board is using AWS to merge diverse data source into a single hub.

The aim is to increase this customer base by creating a rich digital platform that allows tourism businesses and consumers to bring easy access to relevant information about the country and its travel software services. Talend earned the business based on breadth of capability and tactical depth including its ability to build high-performance smart data pipeline leveraging technologies such as Spark machine learning to process data automatically.

In addition to new customer wins, we've continued to expand in a number of our existing accounts as part of our land-and-expand strategy. In Q1, we expanded our relationship with a leading movie studio.

This expansion is another strong example of our ability to deliver a unique combination of data speed and trust. The entertainment company's latest use case is to optimize customer satisfaction and reduce returns using theater data.

In a proof of concept test, the studio used Talend Cloud to load and pin historical data in a variety of formats into their new Snowflake data warehouse. Previously it took 13 weeks and Talend enabled the team to complete the task in five days.

In Europe, we secured new business with an existing customer, a major television broadcasting company who is moving to the cloud with Talend to speed analytics. The company reduced the time it takes to deliver TV viewer reports from 12 hours to less than one hour by moving from an on-premise infrastructure to Azure and Talend Cloud.

We continue to strengthen our relationships with our ecosystem partners. Earlier this week we are pleased to announce that we'll be bringing Talend Cloud to Azure in Q3 marking another key development in our move to the cloud.

This initiative benefits all companies who selected Azure by providing better performance and additional options for modern data integration on that platform. Talend Cloud and Azure will help extend our relationship with the Microsoft team, while helping customers more easily collect, govern, transform and share trusted data.

We also announced plans to support Delta Lake a new open-source project from Databricks. Talend Cloud will seamlessly integrate data to and from Delta Lake leveraging its data consistency, ACID compliance, time travel versioning and reprocessing.

Our market-leading support will strengthen our relationship with Databricks and bring reliability and transactional consistency to data lakes for the first time. And finally, during Q1, we announced that Gartner had once again recognized Talend as a leader in the Magic Quadrant for Data Quality Tools.

This is the second consecutive time that we had position in the leader’s quadrant and we're delighted by how much we improved our position based on Gartner's assessment of Talend's completeness of vision and ability to execute. We believe the place validates our vision to deliver trusted data with our unique approach where data quality and governance are built into the suite and managed throughout the data value chain.

Combined with our introduction of Pipeline Designer, this reinforces Talend's unique ability to deliver trusted data at the speed of business. We've demonstrated strong progress towards our goal of exiting 2019 with half of new ARR in the cloud and continue to see the opportunity expand ahead of us.

Our focus remains on continuing investment in both go-to-market and R&D to sustain our cloud momentum. Given the tractions, we're seeing with larger customers, we've accelerated additional investment at cloud operations to support this customer base.

Adam will walk through the details, but we've decided to burn a small amount of free cash flow this year for these initiatives. We continue to focus on overall efficiency of growth and believe this is the right strategy to position Talend for long-term success as a leader in cloud data integration and integrity.

Let me now turn the call over to Adam. He'll discuss our Q1 financial results in more detail and provide our outlook.

Thank you, Mike. Today I will review our financial results for the first quarter 2019 as well as provide our outlook for the second quarter and fiscal year 2019.

As a reminder, we are reporting Q1 financial results under U.S. GAAP as required when we became a domestic filer on January 1, 2019.

We are pleased with our first quarter results. Annualized recurring revenue was $205.1 million as of March 31, 2019 and grew 28% year-over-year or 34% year-over-year on a constant currency basis.

We define ARR as the annualized value of all active contracts, contributing to revenue at the end of a period and as a result the FX impact of this point in time measure will differ from that of subscription revenues. The strong demand for Talend Cloud contributed meaningfully to this growth.

Talend Cloud represented 36% of new ARR for the first quarter, up from 25% in Q4 and 14% in Q3. We are excited with our progress toward Talend Cloud reaching half of new ARR exiting 2019.

Our launch of Pipeline Designer and the spring 2019 release of Talend Data Fabric which Mike discussed will contribute to this momentum. Total revenue for the first quarter was $57.8 million, up 24% year-over-year.

Subscription revenue for the first quarter was $50 million, up 26% year-over-year. In constant currency, subscription revenue growth was 31% year-over-year.

The headwind from FX was larger than anticipated and the headwind to total revenue growth from professional services was slightly less than expected. Subscription revenue from Talend Cloud grew more than 100% year-over-year for the 11th consecutive quarter.

As previously noted Talend Cloud -- Stitch. The growth in subscription revenue was also impacted by the greater proportion of ratable revenues related to our larger cloud mix in the quarter.

Growth in enterprise customers defined as companies with $100000 or more of annualized subscription revenue was 32% year-over-year and reached 501 customers this quarter. The contribution of subscription revenue from enterprise customers remained stable at 67% in Q1, consistent with expectations as our near to medium-term strategy remains focusing on cloud lands.

For the quarter ended March 2019, our dollar-based net expansion rate was 118% in constant currency. Our dollar-based net expansion rate which excludes monthly customers can fluctuate quarter-over-quarter.

As we discussed previously, this revenue-based metric was bolstered during 2018 due to ASC 606 adoption and will come down gradually over the course of this year as this four-quarter rolling measure fully reflects the new revenue standard. Professional services revenue was $7.8 million for the first quarter, up 11% year-over-year.

This moderation of growth is largely related to the lower average services requirement for Talend Cloud. We like the lower services requirement of cloud because it means our cloud customers are up and running faster.

We believe our increasing cloud mix will impact professional services growth throughout 2019. Our primary strategy is to enable systems integrated partners to supplement services demand for our customers, but we will continue to also lead many of these projects and as a result professional services revenue may vary.

Accordingly, ARR growth is the best indicator of our momentum with both new and existing customers during our cloud shift. 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 and available on our website. Our total gross margin for the first quarter was 76%, compared to 77% in the same period of last year.

The continuing expansion of Talend Cloud impacted gross margins in the first quarter and will continue to impact gross margins throughout 2019 as we grow our cloud operations. Professional services gross margin was 6% this quarter.

Professional services gross margin is typically lowest in Q1 and we expect them to improve in Q2 and for the balance of the year. We expanded this team in the back half of 2018 and continue to ramp productivity of the new employees and deploy them to new engagements.

Operating expenses for the first quarter was $53.1 million, up 29% year-over-year. Sales and marketing expenses for the first quarter were $33.2 million, up 33% year-over-year.

This was primarily due to a 25% increase in sales and marketing headcount from last year, the larger majority of which were all on board at the very beginning of the quarter. R&D expenses for the quarter were $11.7 million, up 44% year-over-year.

The increase was driven by greater investment in our cloud products and operations and is particularly impacted by the inclusion of Stitch, where R&D accounted for most of the operating expense. G&A expenses for the quarter were $8.2 million, up 1% year-over-year.

We incurred an operating loss for the quarter of $9.3 million, or 16%, compared to an operating loss of $5.4 million, or 11%, in the first quarter of 2018. This is mainly due to the ratable shift from increased cloud mix as well as the impact of professional services gross margin.

Net loss for the quarter was $9.6 million, compared to a net loss of $5.3 million in the prior year period. Cash and cash equivalents totaled $29.1 million as of March 31, 2019, versus $33.7 million at the end of December.

Free cash flow for the quarter was a loss of $8.5 million, compared to free cash flow of $5.1 million for the first quarter of 2018. Free cash flow was impacted by three factors.

The first, pre-billed contract duration shortened to 1.04, consistent with our goal of minimizing discounting and co-terming contracts to simplify future renewals. Second, the quarter ending on a weekend impacted collections.

Third, we also shortened days payable during Q1. Cash inflows from financing totaled $3.9 million in Q1, largely due to employee participation in our stock purchase plan.

We targeted roughly cash flow breakeven for the full year of 2019, but as Mike mentioned, we now anticipate we will burn a small amount, roughly $5 million for the year, given the factors I mentioned earlier and as we continue our investment in our cloud strategy. We believe it's important to invest against the significant opportunity we're seeing in the market and the trade-off of some modest cash burn for the year is the right decision for the business.

We remain comfortable with our cash position from an operating perspective. We also put in place a $30 million revolving credit facility in February for added flexibility.

The key terms of this were filed with the SEC on February 14 and the new agreement will be filed with our 10-Q this quarter. Now for Q2 and 2019 fiscal year guidance.

Please note that going forward we will provide only non-GAAP guidance. The impact of share price fluctuations on stock-based compensation inherently limits the precision of GAAP estimates, which we believe is not helpful for investors.

We will provide color on GAAP versus non-GAAP trends where actual results is necessary. Our guidance assumes similar business conditions and foreign exchange rates as on April 30, 2019.

For the second quarter of 2019 total revenue is expected to be in the range of $58.8 million to $59.8 million. Non-GAAP loss from operations is expected to be in the range of $10.1 million to $9.1 million.

Non-GAAP net loss is expected to be in the range of $10.6 million to $9.6 million. Non-GAAP net loss per share is expected to be in the range of $0.35 to $0.31 per share.

This is based on the basic and diluted weighted average share count of 30.5 million shares. At this early point in the year and given the rapid progress we've seen in our cloud shift, we believe it's prudent to maintain our top line outlook for the full year 2019.

As we discussed in our last call, a faster cloud shift will dampen revenue growth given the greater proportion of fully ratable revenues. Given the outperformance in Q1 and our guidance for Q2, this should result in overall revenue seasonality similar to last year.

We are updating guidance for the full year 2019 as follows. Total revenue is still expected to be in the range of $248 million to $250 million.

Non-GAAP loss from operations is expected to be in the range of $29.3 million to $27.3 million. Non-GAAP net loss is expected to be in the range of, $31 million to $29 million.

Non-GAAP net loss per share is expected to be in the range of $1.01 to $0.95. This is based on the basic and diluted weighted average share count of 30.6 million shares.

We've increased our full year operating expenses versus our initial guidance by $2 million, partly due to our faster progress towards our goal of exiting 2019 with half of new ARR from the cloud, as well as investments we believe are important to support this shift. This is consistent with my earlier comments about free cash flow.

To summarize, our total ARR growth of 34% on a constant currency basis, demonstrates our strong continued momentum. We're excited about the opportunities this year and particularly exiting 2019 with Talend Cloud as the largest contributor to the new business.

We believe our market leadership, strong customer and ecosystem relationships and continued innovation will enable us to continue our momentum throughout 2019 and over the long-term. Let me turn the call back over to Mike, for some final remarks.

Thank you, Adam. 2019 is off to a strong start, as we maintain our focus on driving cloud adoption.

Our market leadership positions as well to take advantage of the industry shift to the cloud. As we look to the rest of the year, we'll remain focused on driving our continued purchase to the cloud, to enable our customers to meet the demand of ever increasing data volumes, with speed, and trust.

With that, Adam, and I would be happy to take your questions, Operator?

Hey! Adam.

This is David on for Raimo today. Thanks for taking my question.

And just first one a little bit more high level for Mike. And I'll have a follow-up with Adam on the numbers.

Mike as we think of Talend Cloud and Stitch which sit at completely opposite end of the cloud integration market, can you help us understand the different drivers or vectors of growth here, both in regards of the use cases they are used for but also whether there is some replacement from legacy on-prem technologies there?

Yeah. What's really going on is there's an overall shift to the cloud, from premise right?

And you're seeing that across the entire ecosystem, not just in the data world, but really all of IT is in a long-term secular shift to the cloud. And so, what's happening to companies that are adopting cloud data warehouses is, the very first thing if you think about that just from a time line progression, the very first thing they'll do is, just start loading data in.

And that's what Stitch does you can literally be live in minutes. Then, as they start building their data warehouse incrementally, normally what happens is they start saying, "Well I'd like to start doing some cleaning and blending and transformation.

And start creating standardization of my data warehouse. And that's where the rest of Talend Cloud comes in.

And of course there's room for data cataloging and a broader governance kind of story as well which are other components that we bring. And so, think of that as just a progression that companies adopt as they incrementally build the data warehouse, which is a very common phenomenon that we're seeing right now.

I mean, I would say, one of the changes that we're seeing in the cloud these days is, that, kind of incremental building approach is one that didn't used to happen on-premise. Back in the premise days, generally speaking, given how expensive it was to create a data warehouse there was a whole lot of upfront design and effort that went in before you did anything in the data warehouse at all.

And you can spend $1 million on consulting before you had a single byte in your data warehouse. These days it's flipped around.

And companies really just push to get started quickly and incrementally, and then build into the more complex scenarios over time. And that's why, I think that Stitch is that on-ramp and the rest of Talend Cloud solves the more complex problems as they emerge.

That makes sense. That makes sense.

Thanks for answering that. Adam quickly, it would be helpful if you could provide a little bit more color on, what Stitch did this quarter so maybe an ARR growth on an organic basis.

And also if you could double click on, what constant currency ARR growth looked like last quarter, so we have something to compare against? Thanks.

Yeah. Sure, David.

So we're not going to break out Stitch in each quarter going forward. We -- just to give you a little bit of color, contribution was still relatively small.

So think about it as a couple points of growth on an overall ARR number. But that's as much detail as we're going to give on kind of a quarterly basis.

We'll update you at the end of the year with overall contribution relative to our expectations. In terms of the constant currency growth for ARR last quarter, it would have been 37% versus the 33% that we reported.

So 6-point difference in this quarter versus a 4-point difference for the Q4 balance.

You got it. Thanks so much.

Hi, gentleman. It's Khanh Ngo filling in for Jack today.

I wanted to dig a little bit deeper into Stitch. So you guys talked about Stitch, so there is a frictionless degeneration.

But can you talk about the -- what you kind of need to do to kind of build up this playbook. Have you seen any positive signs of expansion so far from the strategy?

Absolutely. We're seeing a number of new customers start with Stitch.

So we're very, very bullish about the overall frictionless approach going forward. I think we're still early in our overall exploration of the frictionless channel.

We launched a product called Pipeline Designer that I mentioned a few moments ago. And we'll be introducing a pay-as-you-go pricing for that the next several months so that in the second half, we'll become another frictionless option from the company.

And so for us I think you'll see us continuing to learn and build that frictionless channel over the course of this year. And we hope going forward into the future years our -- the bet that we're making is that, it becomes a major part of our overall go-to-market strategy.

But as I said in this calendar year, it's -- we're in the early days of building that out. We're very pleased with the early progress.

Great. That makes sense.

And I want to dig a little bit it into the innovations that you guys made on cloud API, cloud data warehouse. So how should we think about Pipeline Designer Azure and kind of remote engines?

What kind of tiles can this lead to just kind of drag customers along on their cloud data warehouse journey? Are there any gaps that you're seeing in the cloud version that you're looking to shore up?

Yes. So what we're -- what Pipeline Designer brings to us is a more complete design environment that's 100% web-based and very soon to be frictionless in nature like Stitch.

And so if you go back to that progression that I mentioned where customers start by just simply loading data into a cloud data warehouse, the next thing that they want to do is start blending transforming and cleaning data. And that's the job for Pipeline Designer.

So it's designed to be that natural add-on and expansion from Stitch. So that's where we expected to see and we see that also starting out in the frictionless way and then becoming an opportunity to expand with more capability for larger enterprise customers.

Great. Thank you.

Hey, guys. Thanks for taking my question and congrats.

I wanted to touch a little bit more on your support for OAS version 3.0 just happened in April obviously here. It feels like you've taken another step towards addressing like MuleSoft's value proposition: API life cycle management, creation of reasonable API components.

Is that the right way to think about it? And then how do you think you differentiate with MuleSoft in that market?

I mean it's very early for you guys. I'm just trying to understand sort of the strategy and approach.

Wow. Okay.

So Bhavan thank you for drilling deep onto this one. So for those that haven't been following us quite as closely hopefully you guys are...

I mean I can ask you a sample question too but let's go with that...

All right. So we don't see ourselves competing with MuleSoft very much at all.

We see ourselves very tangentially solving neighboring problems in the market by and large. What we -- what OAS 3 is it's really just the next generation of the Swagger stack.

And so for us when we bought Restlet and which is now Talend API Services, what that allows companies to do is share data, right? So our overall value prop is collect governed transform share and API services being that final point of sharing.

So if you've built a data warehouse and you want to share it with customers, partners, suppliers and so on then API services is a very natural way to do that. And in order to integrate with the latest versions of Apogee and the other cloud gateways, we needed to support the latest version of Swagger which is OAS 3.

And it brings some additional capabilities as well, but that's overall what that announcement was. And we see that really being a -- primarily solving those sharing data in analytical scenarios whereas MuleSoft is primarily about connecting together applications.

Many companies will do both I know that we share a number of companies and we're not really today in any meaningful competition with them and don't expect to be.

Got it. Thanks for the color.

Then on pricing if you look at Talend Cloud pricing, it has moved up over the past year, so not a big surprise given you've added capabilities. But just broadly what do you guys think of in terms of pricing strategy?

And so A, sort of as you think about that how do you guys think about pricing overall? And then has there been any pushback from customers?

Thanks.

Yes. So the pricing actually hasn't changed.

What's happening is we're selling larger deals which is why the ASP is moving up. So on a sort of per use -- per unit basis price has actually been level.

The way we think strategically about pricing is that we have products at different price points that solve different parts of the customer problem. And from entry products from the Stitch family, where we really want to help customers get started really quickly and not have to make a big commitment, so to be able to pay-as-you-go and very, very inexpensively.

As you solve more complex problems, we have higher price points to solve those problems, Talend Cloud being the next step in that value chain. And then other things like data catalog and so on which end up being more expensive.

And so really what we do is we look to price the offerings that we have based on the value they're providing which is pretty highly correlated into the complexity of the problem they solve for our customers.

Got it. Got it.

Thanks, guys, and nice job, there, congrats.

Thanks, Bhavan.

Hey, thank you. Good afternoon, guys.

Could you talk about what you saw in the on-premise Big Data business? Did you see any changes there?

I think in the past net new customer add has been a weak spot, but the existing customer spend is continuing to be pretty healthy. Just curious if you've seen changes there, any commentary on the trajectory of that on-prem Big Data business?

So I'd say that the same trends continue to hold. We're seeing the vast majority of new customers are buying our cloud which is why our cloud growth is so high right now.

And -- but existing customers for all our premise products including our premise big data products are continuing to buy more. And that trajectory really it remains on the same trajectory that we saw in the last several quarters.

Okay. Great.

And then, could you just talk about maybe some of the metrics and trajectory of deal sizes and expansion and how we should think about that as you go through this cloud transition? It looks like net expansion rate did dip a little bit this quarter at 118%.

I didn't hear you call out any stats on traction with large deals. And I think you've said in the past that it might take some time as you ramp the cloud products to really get back to those larger deal sizes.

Could you just kind of give us an update on what you're seeing there and how we should think about those metrics?

Yes. So Tyler the -- I'll just kind of walk through sequentially everything that you brought up.

On overall metrics, we're absolutely focused on ARR as the best metric that cuts through some of the puts and takes around the ratable shifts. So I'd encourage analysts and investors to really watch that over the course of the year.

In terms of the net expansion rate, as you mentioned, it's come down a couple of points from last quarter. That's very consistent with what we described in our last call, because there was a boost to that number associated with 606 adoption.

And so that should tick down a bit more over the course of this year as it fully reflects clean comparison with 606. And then in terms of your last point around just -- I'll turn it up some more enterprise customer and the contribution of enterprise customers to the overall that was still stable at about two-thirds of revenue.

We are pretty pleased with the growth enterprise customers just in terms of count. And as we've been mentioning, we're very focused on cloud wins that's absolutely the highest priority for us right now.

And so we're comfortable what that mix staying about where it's at with regards to the two-thirds. We did mention that cloud ASPs are now basically in line with the overall average and so we've been pleased with seeing that continue to tick upwards over the last couple of quarters.

Great. Thank you.

Hi, good afternoon. This is Matt Coss on behalf of Mark Murphy.

Thinking about Talend Cloud on Azure coming later this year, currently what is your view on the lead flow from Azure SQL data warehouse or Azure Data Lake store and how big could that get in terms of lead flow versus some of the other cloud data warehouses?

We're seeing a lot of interest from many of our larger enterprise customers in Azure. And so what we're -- we're actually seeing our average deal size on Azure being quite a bit higher than our average deal size in other clouds.

And partly because of the -- that enterprise interest in Azure. And the overall dynamics that we see in the market is that Microsoft has built and maintains very strong relationships with the large enterprise companies.

And that combined with their strong partner network really has an enterprise waiting to the leads and deals we work with there. And so that was one of the drivers for us to build into a native offering in the Azure cloud that would come out in Q3.

And we expect those trends to remain over time which is a larger enterprise mix on the Microsoft side relative to some of the other clouds. And there's -- what we're seeing in the -- in Azure is strong interest in Azure SQL data warehouse and their data lake and of course in Snowflake in Azure as well.

Great. Thanks.

And then one for Adam. Were there any $1 million ACV wins this quarter?

And if not, do you see some of them in your pipeline and would expect more to close this year?

Yes, there's always a handful of large transactions that sit in the pipeline. We didn't see any at this quarter.

I don't think that's necessarily a trend. It just quarter-to-quarter can vary, but we're pretty comfortable with big deal opportunities as we look out to the rest of 2019.

Yes, we're seeing as we mentioned the overall -- the ASP for Talend Cloud is now in line and part of that's reflected by we're starting to see larger deal mixes come into Talend Cloud. Nothing across any part of the portfolio eclipsed $1 million in Q1.

But again, Q1 is not a quarter that you would typically see particularly large transactions.

Fair. And then lastly how much worse has FX become versus this time last quarter?

I presume, it was a headwind to your full year guidance last quarter and how much worse has that gotten this quarter?

Yes, it's spot on. I mean from our read, it's about two percentage points change just euro to dollar, since we last gave guidance.

And so that's absolutely part of the headwind associated with our holding top line guidance flat for the year.

All right. Thank you.

Thank you. Mike for you, I was wondering if you could just provide us an update on the search for the new sales leader kind of where you're at there.

And then, Adam, could you touch base a little bit around kind of the cloud gross margins? I know that mix shift is pressuring gross margins this quarter.

Just wanted to understand is that just early days of cloud. And you would expect the gross margins to normalize at scale, so just any sort of color on large applications of cloud would be helpful?

Thanks.

Yeah. Hey!

Brent. On the sales leader search, we're seeing a number of strong candidates and very much in the middle of the search now.

We don't have any announcements to make, but we're certainly -- we look forward to making an announcement when we have a final candidate.

Yeah. And then, Brent, in terms of the cloud gross margins, we've shared that there's going to be naturally a few points of pressure on our subscription gross margins associated with cloud mix shift.

We're totally comfortable with that, because we think long-term cloud customers are going to be much stickier. So from the economics perspective, it's still the right move to make.

That was one point in, Q1 it will be a couple of additional points over the course, of the year. And I think it's too soon to tell, when that will -- when and if it will inflect.

But long term and I think that our cloud gross margin should be right in line with the best-in-class cloud businesses.

That's helpful. And then, last question for me is on ARR.

As we think about that, as the best proxy for the business. This quarter it had a 6% FX headwind.

That's a little different than the revenue FX you talked about being only 2% for the full year. Walk us through the FX headwind that you expect, to ARR for the full year.

And just why is it a little more significant, in Q1 than at least what we are modeling? Thanks.

Yes. Absolutely, so first I'll clarify, the 2% points that I mentioned in a prior question was just the FX rate change, since we gave initial guidance this year.

It's not necessarily the hit for the full year that we're expecting. In terms of the ARR FX impact, if you look back at Q1 of last year it was particularly pronounced.

The dollar strengthened quite a bit over the course of Q2, and then started to stabilize. And so we think there is still a decent amount of FX impact in Q2.

And then it should start to level off in the back half of the year. I don't think we have a precise answer on exactly it's going to be over the course of the year, but that should give you enough color to just -- to think of how it's going to narrow going -- from now into Q4?

That's helpful color. Thanks for that.

That's all I have. Thanks.