Cloudera, Inc. (CLDR) Q2 2021 Earnings Call
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Corrected Transcript 02-Sep-2020 Cloudera, Inc. (CLDR) Q2 2021 Earnings Call Total Pages: 25 1-877-FACTSET www.callstreet.com Copyright © 2001-2020 FactSet CallStreet, LLC Cloudera, Inc. (CLDR) Corrected Transcript Q2 2021 Earnings Call 02-Sep-2020 CORPORATE PARTICIPANTS Kevin D. Cook James W. Frankola Vice President-Corporate Development & Investor Relations, Cloudera, Chief Financial Officer, Cloudera, Inc. Inc. Arun C. Murthy Robert G. Bearden Chief Product Officer, Cloudera, Inc. President, Chief Executive Officer & Director, Cloudera, Inc. ..................................................................................................................................................................................................................................................................... OTHER PARTICIPANTS Pat Walravens R. Philip Rigby Analyst, JMP Securities LLC Analyst, D. A. Davidson & Co. Philip Winslow Nehal Sushil Chokshi Analyst, Wells Fargo Securities LLC Analyst, Northland Capital Markets Pree Gadey Matthew J. Coss Analyst, Barclays Capital, Inc. Analyst, JPMorgan Securities LLC Chad Michael Bennett Mark J. Rende Analyst, Craig-Hallum Capital Group LLC Analyst, Morgan Stanley & Co. LLC Khanh Ngo Kash Rangan Analyst, Needham & Co. LLC Analyst, BofA Securities, Inc. 2 1-877-FACTSET www.callstreet.com Copyright © 2001-2020 FactSet CallStreet, LLC Cloudera, Inc. (CLDR) Corrected Transcript Q2 2021 Earnings Call 02-Sep-2020 MANAGEMENT DISCUSSION SECTION Operator: Good afternoon. My name is Jason, and I will be your conference operator today. Welcome to the Cloudera Second Quarter Fiscal 2021 Quarterly Results Conference Call. All participant lines have been placed in a listen-only mode to prevent background noise. After the speakers' remarks, there will be an opportunity to ask questions. [Operator Instructions] Please note this conference is being recorded. Your host is Kevin Cook, VP, Finance, Corporate Development and Investor Relations. Kevin, you may begin your conference. ..................................................................................................................................................................................................................................................................... Kevin D. Cook Vice President-Corporate Development & Investor Relations, Cloudera, Inc. Thank you, operator. Good afternoon, and welcome to Cloudera's second quarter fiscal 2021 financial results conference call. We will be discussing the results announced in our press release issued after market close today. We've also posted today's prepared remarks and supplemental materials on Cloudera's Investor Relations website, which in combination with our press release, provide additional information as well as greater accessibility to today's quarterly conference call. From Cloudera with me are Rob Bearden, President and Chief Executive Officer; Jim Frankola, Chief Financial Officer; Arun Murthy, Chief Product Officer; and Mick Hollison, Chief Marketing Officer. During the course of this call, we will make forward-looking statements regarding future events and the future financial performance of the company. Generally, these statements are identified by the use of words such as expect, believe, anticipate, intend, and other words that denote future events. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements in the press release and on this conference call. These risk factors are described in our press release and are more fully detailed under the caption Risk Factors in our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. Non-GAAP financial measures excludes stock-based compensation expense, amortization of acquired intangible assets, and extraordinary noncash real estate impairment charges, if any. These non-GAAP measures are not intended to be considered in isolation from, a substitute for or superior to our GAAP results. And we encourage you to consider all measures when analyzing Cloudera's performance. All references to operating income are to non-GAAP operating income. For complete information regarding our non-GAAP financial information, the most directly comparable GAAP measures, and a quantitative reconciliation of those figures, please refer to today's press release regarding our second quarter results for fiscal 2021. The press release has also been furnished to the SEC as part of a current report on Form 8-K. In addition, please note that the date of this conference call is September 2, 2020. And any forward-looking statements that we may make today are based on assumptions that we believe to be reasonable as of this date, including those related to the impacts of COVID-19 on our business and global economic conditions. 3 1-877-FACTSET www.callstreet.com Copyright © 2001-2020 FactSet CallStreet, LLC Cloudera, Inc. (CLDR) Corrected Transcript Q2 2021 Earnings Call 02-Sep-2020 The forward-looking guidance we will provide today is based on our assumptions as to the macroeconomic environment in which we will be operating. Those assumptions are based on the facts as we know them today, many of these assumptions relate to matters that are beyond our control and changing rapidly including but not limited to the time frames for and severity of social distancing and other mitigation requirements related to COVID-19, and the impact of COVID-19 on our customers and partners and its impact on the economy as a whole. Significant changes in the future whether related to COVID-19 or other factors could cause us to modify our guidance. We undertake no obligation to update these statements as a result of new information or future events. Now, Rob Bearden, CEO. ..................................................................................................................................................................................................................................................................... Robert G. Bearden President, Chief Executive Officer & Director, Cloudera, Inc. Thank you, Kevin. Good afternoon, everyone. Thank you joining us to discuss our second quarter fiscal 2021 results. As with last quarter's call, we're operating from separate locations, so we will do our best to share key information and respond to you questions. We will provide a quick update on our quarterly performance, discuss customer buying behavior and market trends, and of course, highlight Cloudera Data Platform progress in public and private cloud. Q2 was an excellent quarter in which we continue to outperform on many of our financial and operational goals, beginning with financial results. Total revenue in the second quarter was $214 million, subscription revenue was $192 million, and non-GAAP operating income was $30 million. Each of these results exceeded expectations. Annualized recurring revenue was also stronger than planned, reaching $739 million at the conclusion of the quarter, representing 12% year-over-year organic growth. The total number of customers who exceeded $100,000 of ARR increased to 1,007. The number of customers who generate ARR greater than $1 million grew impressively again in Q2 to 172, up 25% year-over-year. This outcome is especially gratifying reflects great execution. As we discussed last quarter, we're not immune to the economic downturn caused by COVID-19, but our business is more resilient than most enterprise software companies. We believe this is true because we're offering support digital transformation initiatives and mission-critical use cases. In addition, our sales organization has been effective in engaging and supporting customers remotely. By contrast, our services business has been impacted by the pandemic. The team responded quickly by delivering virtual consulting and implementation services whenever possible. But professional services consulting and training revenue is down in line with our forecast from last quarter. Turning now to our new product offerings. Demand continues to build for CDP with significant new innovation and customer adoption. We more than doubled the number of CDP Public Cloud customers in the quarter, and had a similarly strong bookings result. Although recognized revenue is currently modest, we're encouraged by market reception to CDP Public Cloud. These offerings are differentiated as discrete services and we'll scale over time. CDP Public Cloud's immediate strategic value lies primarily in its enablement of hybrid data architectures, playing a central role in creating an enterprise data cloud for our customers. 4 1-877-FACTSET www.callstreet.com Copyright © 2001-2020 FactSet CallStreet, LLC Cloudera, Inc. (CLDR) Corrected Transcript Q2 2021 Earnings Call 02-Sep-2020 With CDP, we're participating in the fastest growing segment of the market through cloud-native services, and uniquely, we expect to benefit from demand from hybrid and multi-cloud solutions that allow enterprises to optimize the performance, cost and security of workloads and use cases. And that brings us to the big news. In August, we announced the general availability of our CDP Private Cloud Solution. CDP Private Cloud is a major milestone in