Company Quick10K Filing
Talend
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 31 $1,168
10-Q 2019-11-08 Quarter: 2019-09-30
10-Q 2019-08-09 Quarter: 2019-06-30
10-Q 2019-05-10 Quarter: 2019-03-31
10-K 2019-02-28 Annual: 2018-12-31
20-F 2018-03-05 Annual: 2017-12-31
20-F 2017-03-07 Annual: 2016-12-31
8-K 2020-02-13 Earnings, Exhibits
8-K 2020-02-11 Amend Bylaw, Exhibits
8-K 2020-01-08 Earnings, Officers, Regulation FD, Exhibits
8-K 2020-01-02 Officers, Exhibits
8-K 2019-11-06 Earnings, Exhibits
8-K 2019-10-30 Amend Bylaw, Exhibits
8-K 2019-09-13 Enter Agreement, Off-BS Arrangement, Sale of Shares, Exhibits
8-K 2019-09-13 Enter Agreement, Off-BS Arrangement, Sale of Shares, Exhibits
8-K 2019-09-04 Enter Agreement, Leave Agreement, Sale of Shares, Amend Bylaw, Other Events, Exhibits
8-K 2019-08-22 Officers, Amend Bylaw, Exhibits
8-K 2019-08-07 Earnings, Exhibits
8-K 2019-08-02 Officers, Amend Bylaw, Exhibits
8-K 2019-06-26 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-05-08 Earnings, Exhibits
8-K 2019-02-14 Earnings, Exhibits
8-K 2019-02-14 Enter Agreement, Off-BS Arrangement
8-K 2019-01-02 Earnings, Officers, Exhibits
8-K 2019-01-01 Regulation FD
TLND 2019-09-30
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 tlnd-20190930ex3118278a5.htm
EX-31.2 tlnd-20190930ex31219ca69.htm
EX-32.1 tlnd-20190930ex32151eb14.htm
EX-10.5 tlnd-20190930ex105b36508.htm
EX-10.6 tlnd-20190930ex1063bd307.htm

Talend Earnings 2019-09-30

TLND 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
INST 1,471 391 235 235 161 -56 -43 1,443 68% -33.3 -14%
MSTR 1,460 900 397 487 386 28 40 1,197 79% 29.8 3%
XNET 1,211 455 111 0 0 0 0 1,089 0%
CBLK 1,177 400 223 235 179 -70 -62 1,118 76% -17.9 -18%
TLND 1,168 225 214 118 87 -36 -32 1,137 74% -35.7 -16%
UPLD 1,120 658 425 184 125 -16 2 1,317 68% 647.9 -2%
SCWX 1,066 1,021 353 533 284 -34 -1 948 53% -813.0 -3%
MTLS 1,063 313 0 0 0 0 1,063 0%
DDD 998 878 340 654 299 -64 4 926 46% 239.8 -7%
BNFT 855 335 354 273 140 -54 -33 716 51% -21.4 -16%

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ___ to ___

Commission File Number 001-37825

Talend S.A.

(Exact name of registrant as specified in its charter)

France

Not Applicable

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

9, rue Pages

Suresnes, France

92150

(Address of principal executive offices)

(Zip Code)

+33 (0) 1 46 25 06 00

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

American Depositary Shares, each representing one
ordinary share, nominal value €0.08 per share

Ordinary shares, nominal value €0.08 per share*

TLND

The NASDAQ Stock Market LLC

The NASDAQ Stock Market LLC*

* Not for trading, but only in connection with the listing of the American Depositary Shares on the NASDAQ Stock Market LLC.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No  

As of November 1, 2019, the registrant had 30,799,561 ordinary shares, nominal value of €0.08 per share, outstanding.

Table of Contents

TALEND S.A.

TABLE OF CONTENTS

PART I.    FINANCIAL INFORMATION

Item 1.      Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Statements of Financial Position as of September 30, 2019 and December 31, 2018

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2019 and 2018

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018

Notes to the Condensed Consolidated Financial Statements

Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

27 

Item 3.      Quantitative and Qualitative Disclosures About Market Risk

38 

Item 4.      Controls and Procedures

39 

PART II.  OTHER INFORMATION

40 

Item 1.      Legal Proceedings

40 

Item 1A.   Risk Factors

41 

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds

83 

Item 3.      Defaults Upon Senior Securities

83 

Item 4.      Mine Safety Disclosures

83 

Item 5.      Other Information

83 

Item 6.      Exhibits

84 

Signatures

86 

2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands, except per share data)

(unaudited)

September 30, 

December 31, 

    

2019

    

2018

ASSETS

Current assets:

Cash and cash equivalents

$

171,964

 

$

34,104

Accounts receivable, net of allowance for doubtful accounts of $2,602 and $1,882, respectively

 

51,890

 

 

67,531

Contract acquisition costs

10,317

9,563

Other current assets

 

10,240

 

 

9,461

Total current assets

 

244,411

 

120,659

Non-current assets:

Contract acquisition costs

20,419

19,390

Operating lease right-of-use assets

26,430

Property and equipment, net

 

5,669

 

 

6,335

Goodwill

 

49,599

 

 

49,659

Intangible assets, net

 

15,236

 

 

19,420

Other non-current assets

 

4,384

 

 

3,661

Total non-current assets

 

121,737

 

98,465

Total assets

$

366,148

$

219,124

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

6,206

 

$

5,760

Accrued expenses and other current liabilities

32,218

36,475

Contract liabilities - deferred revenue, current

 

124,169

 

127,065

Operating lease liabilities, current

4,264

Short-term debt

 

199

 

 

208

Total current liabilities

 

167,056

 

169,508

Non-current liabilities:

Deferred income taxes

469

469

Other non-current liabilities

 

966

 

 

950

Contract liabilities - deferred revenue, non-current

 

15,352

 

23,082

Operating lease liabilities, non-current

23,636

Long-term debt

 

126,356

 

 

676

Total non-current liabilities

 

166,779

 

25,177

Total liabilities

 

333,835

 

194,685

Commitments and contingencies (Note 10)

STOCKHOLDERS' EQUITY

Ordinary shares, par value €0.08 per share; 30,782,240 and 30,158,374 shares authorized, issued and outstanding, respectively

 

3,185

 

 

3,128

Additional paid-in capital

 

300,954

 

244,878

Accumulated other comprehensive income

 

1,651

 

607

Other reserves

 

207

 

138

Accumulated losses

 

(273,684)

 

(224,312)

Total stockholders’ equity

 

32,313

 

24,439

Total liabilities and stockholders’ equity

$

366,148

$

219,124

The above condensed consolidated statements of financial position should be read in conjunction with the accompanying notes.

3

Table of Contents

TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2019

    

2018

    

2019

    

2018

Revenue

 

  

 

  

 

  

 

  

Subscriptions

$

55,141

$

44,631

$

158,079

$

126,444

Professional services

 

7,484

 

7,434

 

22,975

 

22,189

Total revenue

 

62,625

 

52,065

 

181,054

 

148,633

Cost of revenue

 

  

 

  

 

  

 

  

Subscriptions

 

7,976

 

5,756

 

23,782

 

16,683

Professional services

 

6,772

 

7,237

 

21,925

 

19,432

Total cost of revenue

 

14,748

 

12,993

 

45,707

 

36,115

Gross profit

 

47,877

 

39,072

 

135,347

 

112,518

Operating expenses

 

  

 

  

 

  

 

  

Sales and marketing

 

33,277

 

28,365

 

102,582

 

82,339

Research and development

 

15,552

 

9,930

 

46,987

 

29,801

General and administrative

 

12,163

 

10,179

 

34,191

 

28,791

Total operating expenses

 

60,992

 

48,474

 

183,760

 

140,931

Loss from operations

 

(13,115)

 

(9,402)

 

(48,413)

 

(28,413)

Other income (expense), net

 

(235)

 

132

 

(826)

 

341

Loss before benefit (provision) for income taxes

 

(13,350)

 

(9,270)

 

(49,239)

 

(28,072)

Benefit (provision) for income taxes

 

(9)

 

21

 

(48)

 

(31)

Net loss

$

(13,359)

$

(9,249)

$

(49,287)

$

(28,103)

Net loss per share attributable to ordinary shareholders:

 

  

 

  

 

  

 

  

Basic and diluted net loss per share

$

(0.44)

$

(0.31)

$

(1.62)

$

(0.94)

Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders:

 

30,648

 

29,964

 

30,453

 

29,750

The above condensed consolidated statements of operations should be read in conjunction with the accompanying notes.

4

Table of Contents

TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2019

    

2018

    

2019

    

2018

Net loss

$

(13,359)

$

(9,249)

$

(49,287)

$

(28,103)

Other comprehensive gain (loss)

 

  

 

  

 

  

 

  

Foreign currency translation adjustment

 

901

 

(61)

 

1,044

 

(90)

Total comprehensive loss

$

(12,458)

$

(9,310)

$

(48,243)

$

(28,193)

The above condensed consolidated statements of comprehensive loss should be read in conjunction with the accompanying notes.

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TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share data)

(unaudited)

Three Months Ended September 30, 2019

Accumulated

Additional

other

Ordinary shares

paid-in

comprehensive

Other

Accumulated

Total

Shares

    

Amount

    

capital

    

income

    

reserves

    

loss

    

equity

Balance at June 30, 2019

30,558,748

$

3,164

$

267,281

$

750

$

213

$

(260,325)

$

11,083

Net loss for the period

(13,359)

(13,359)

Other comprehensive loss

901

901

Equity component of 2024 Notes, net of issuance costs

20,793

20,793

Restricted stock units reserve

6

(6)

Shares issued from restricted stock unit vesting

43,017

4

(4)

Exercise of stock awards

107,997

10

1,377

1,387

Issuance of ordinary shares in connection with employee stock purchase plan

72,478

7

2,462

2,469

Share-based compensation

9,039

9,039

Balance at September 30, 2019

 

30,782,240

$

3,185

 

$

300,954

 

$

1,651

 

$

207

 

$

(273,684)

 

$

32,313

Three Months Ended September 30, 2018

Accumulated

Additional

other

Ordinary shares

paid-in

comprehensive

Other

Accumulated

Total

    

Shares

    

Amount

    

capital

    

income

    

reserves

    

loss

    

equity

Balance at June 30, 2018

 

29,881,309

$

3,103

 

$

228,751

 

$

643

 

$

114

 

$

(202,022)

 

$

30,589

Net loss for the period

(9,249)

(9,249)

Other comprehensive loss

(61)

(61)

Restricted stock units reserve

(17)

17

Shares issued from restricted stock unit vesting

10,758

1

(1)

Exercise of stock awards

133,530

12

1,692

1,704

Issuance of ordinary shares in connection with employee stock purchase plan

49,478

4

1,801

1,805

Share-based compensation

5,505

5,505

Balance at September 30, 2018

 

30,075,075

$

3,120

 

$

237,731

 

$

582

 

$

131

 

$

(211,271)

 

$

30,293

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TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(in thousands, except share data)

(unaudited)

Nine Months Ended September 30, 2019

Accumulated

Additional

other

Ordinary shares

paid-in

comprehensive

Other

Accumulated

Total

Shares

    

Amount

    

capital

    

income

    

reserves

    

loss

    

equity

Balance at January 1, 2019

30,158,374

$

3,128

$

244,878

$

607

$

138

$

(224,312)

$

24,439

Adjustment on initial application of ASC 842

(85)

(85)

Adjusted balance at January 1, 2019

30,158,374

3,128

244,878

607

138

(224,397)

24,354

Net loss for the period

(49,287)

(49,287)

Other comprehensive gain

1,044

1,044

Equity component of 2024 Notes, net of issuance costs

20,793

20,793

Restricted stock units reserve

(69)

69

Shares issued from restricted stock unit vesting

185,645

17

(17)

Exercise of stock awards

306,844

28

4,354

4,382

Issuance of ordinary shares in connection with employee stock purchase plan

131,377

12

4,730

4,742

Share-based compensation

26,285

26,285

Balance at September 30, 2019

 

30,782,240

$

3,185

 

$

300,954

 

$

1,651

 

$

207

 

$

(273,684)

 

$

32,313

Nine Months Ended September 30, 2018

Accumulated

Additional

other

Ordinary shares

paid-in

comprehensive

Other

Accumulated

Total

    

Shares

    

Amount

    

capital

    

income

    

reserves

    

loss

    

equity

Balance at January 1, 2018

 

29,439,767

$

3,059

 

$

215,390

 

$

672

 

$

49

 

$

(183,168)

 

$

36,002

Net loss for the period

(28,103)

(28,103)

Other comprehensive loss

(90)

(90)

Restricted stock units reserve

(82)

82

Shares issued from restricted stock unit vesting

62,662

6

(6)

Exercise of stock awards

523,168

51

6,407

6,458

Issuance of ordinary shares in connection with employee stock purchase plan

49,478

4

1,801

1,805

Share-based compensation

14,221

14,221

Balance at September 30, 2018

 

30,075,075

$

3,120

 

$

237,731

 

$

582

 

$

131

 

$

(211,271)

 

$

30,293

The above condensed consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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TALEND S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Nine Months Ended September 30, 

    

2019

    

2018

Cash flows from operating activities:

Net loss for the period

 

$

(49,287)

 

$

(28,103)

Adjustments to reconcile net loss to net cash (used in) from operating activities:

Depreciation

2,082

1,424

Amortization of intangible assets

3,974

1,475

Amortization of debt discount and issuance costs

411

Unrealized loss foreign exchange

34

160

Interest accrued

225

Share-based compensation

26,285

14,221

Changes in operating assets and liabilities:

Accounts receivable

14,908

9,092

Operating leases

40

Other assets

(6,424)

(3,257)

Accounts payable

1,871

(922)

Accrued expenses and other current liabilities

(2,927)

2,437

Contract liabilities - deferred revenue

(7,606)

2,869

Net cash used in operating activities

(16,414)

(604)

Cash flows from investing activities:

Acquisition of property and equipment

(2,064)

(2,906)

Net cash used in investing activities

(2,064)

(2,906)

Cash flows from financing activities:

Proceeds from issuance of convertible senior notes, net of issuance costs

149,145

Proceeds from issuance of ordinary shares related to exercise of stock awards

4,382

6,458

Proceeds from issuance of ordinary shares related to employee stock purchase plan

4,742

1,805

Repayment of borrowings

(117)

(189)

Net cash from financing activities

158,152

8,074

Net increase in cash and cash equivalents

139,674

4,564

Cash and cash equivalents at beginning of the period

34,104

87,387

Effect of exchange rate changes on cash and cash equivalents

(1,814)

(1,852)

Cash and cash equivalents at end of the period

 

$

171,964

 

$

90,099

The above condensed consolidated statements of cash flows should be read in conjunction with the accompanying notes.

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1. Organization and summary of significant accounting policies

Business

Talend S.A. (“the Company”), incorporated in France in 2005, has its registered office located at 9, rue Pages, 92150 Suresnes, France. Talend’s software platform, Talend Data Fabric, integrates data and applications in real-time across modern big data and cloud environments, as well as traditional systems, allowing organizations to develop a unified view of their business and customers.

As used in this Quarterly Report, the term “the Company” refers to Talend S.A, and the terms “Talend,” “we,” “our,” “us,” and “the Group” refer to Talend S.A. and its consolidated subsidiaries, unless the context otherwise requires.

Basis of presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and reflect, in the opinion of management, all adjustments, consisting of normal recurring adjustments and accruals, necessary to present fairly the financial position of the Company as of September 30, 2019 and December 31, 2018, the results of operations, comprehensive loss and changes in equity for the three and nine months ended September 30, 2019 and September 30, 2018, and cash flows for the nine months ended September 30, 2019 and September 30, 2018. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 28, 2019. Certain prior year financial information in the statement of cash flows has been reclassified to conform with current year presentation. The Company’s results of operations, comprehensive loss and changes in equity for the three and nine months ended September 30, 2019, and cash flows for the nine months ended September 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019, or for any future period.

In addition, the Consolidated Statement of Financial Position as of December 31, 2018 has been revised to reflect an immaterial re-classification of deferred revenue between short term and long term. The revision, in the amount of $2.6 million, resulted in an increase in Contract liabilities – deferred revenue, current, and a decrease in Contract liabilities – deferred revenue, non-current, compared to amounts previously presented on the Consolidated Statement of Financial Position. The Consolidated Statement of Financial Position as of December 31, 2018 and Consolidated Statement of Cash Flows as of September 30, 2018 have also been revised to reflect an immaterial re-classification of restricted cash between cash and cash equivalents and other current assets. The revision, in the amount of $0.4 million, resulted in an increase in cash and cash equivalents and a corresponding decrease in other current assets, compared to what was previously presented.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include, but are not limited to, revenue recognition (including allocation of the transaction price to separate performance obligations), the amortization period for contract acquisition costs, fair value of acquired intangible assets and goodwill, and share-based compensation expense. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates.

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Summary of significant accounting policies

Except for the accounting policies described below, there have been no changes to the Group’s significant accounting polices disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019, that have had a material impact on the Group’s condensed consolidated financial statements and related notes. Additionally, the Company entered into a convertible senior note transaction during the three months ended September 30, 2019. Please see Note 7, Debt, for further details.

Recently adopted accounting standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires the recognition of right-of-use assets and lease liabilities for those leases currently classified as operating leases under ASC Topic 840 Leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. In 2018, the FASB issued ASU 2018-10, 2018-11 and 2018-20, providing, among other things, codification improvements, the optional transition method, the treatment of sales and similar taxes as lease cost by policy elections, the requirement to exclude certain variable payments from consideration and the allocation of certain variable payments between lease and non-lease components. The standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.

The Group has adopted the standard utilizing the modified retrospective transition method, as of the effective date of ASC 842, which for the Group is January 1, 2019, with a cumulative-effect adjustment to equity. As a result, the Group recognized $27.1 million of operating lease assets and $27.7 million of operating lease liabilities. This method allows entities to continue to apply the legacy guidance in ASC 840, including disclosure requirements in the comparative periods presented in the year of adoption. Please see Note 10, Commitments and contingencies, within these financial statements for the impact of adoption and required disclosures.

Accounting standards issued not yet adopted

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use- Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard is effective for the Group’s interim and annual periods beginning January 1, 2020 and earlier adoption is permitted. This standard could be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Group will adopt this standard on a prospective basis as of January 1, 2020 and is evaluating the impact ASU 2018-15 will have on the consolidated financial statements and related disclosures.

2. Business combinations

On November 9, 2018, Talend, Inc., a wholly-owned subsidiary of the Company, acquired all of the outstanding shares of Stitch Inc., (“Stitch”), a leading cloud-based service to seamlessly load data to cloud data warehouses, for a cash payment of $59.5 million. Talend, Inc. also incurred transaction costs of approximately $0.7 million, which are included in general and administrative expense in the Group’s consolidated statements of operations for the year ended December 31, 2018. Stitch’s self-service solution for efficiently moving data from cloud applications into cloud data warehouses and Stitch’s low-touch sales strategy further enhances the Group’s alignment with cloud platforms such as Microsoft Azure, Amazon AWS, Databricks and Snowflake. In addition, the acquisition of Stitch further addresses the growing demand from data engineers and analysts for self-service cloud data integration solutions.

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The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition including measurement period adjustments through September 30, 2019 (in thousands):

    

Fair Value

Cash

$

1,625

Acquired developed technology

11,400

Customer relationships

 

3,300

Goodwill

43,635

Other assets, net

 

(57)

Deferred revenue

 

(410)

Total consideration transferred

$

59,493

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill balance is primarily attributed to the assembled workforce and expanded market share within the data integration industry, which is moving towards cloud data warehouses. The goodwill balance is not deductible for income tax purposes. The fair values assigned to tangible assets acquired, liabilities assumed and identifiable intangible assets were based on management’s estimates and assumptions.

During the second quarter of 2019, the Company adjusted the preliminary amount of the acquisition date fair value assigned to goodwill by $0.2 million to reflect measurement period adjustments related to accrued liabilities. There were no adjustments to the preliminary amounts during the third quarter of 2019.

The fair value of acquired developed technology was determined using an excess earnings method based on revenue forecasts related to the expected evolution of the technology over time. The fair value of customer relationships was determined using the with-and-without method, whereby the value of existing customer relationships is determined using two different scenarios: 1) net revenues less related costs with the customer relationships and 2) net revenues less related costs without the customer relationships. The incremental difference between the two scenarios was then used to estimate the fair value of the Stitch’s existing customer relationships. Both methods used a discounted cash flow method at the discounted rate of 13.5%.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition.

    

Fair Value

    

Useful Life
(Years)

Acquired developed technology

$

11,400

5

Customer relationships

 

3,300

2

Total intangible assets subject to amortization

$

14,700

3. Contracts with customers

Sales commissions earned by the Group’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. The Group recognizes these incremental costs of obtaining a subscription contract with a customer if the Group expects the benefit of those costs to be longer than one year. The Group amortizes the majority of the incremental sales commission costs to obtain a subscription contract on a straight-line basis over a period of benefit that the Group has determined to be five years. The Group recognizes these sales commissions as contract acquisition costs on the statement of financial position.

 

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to the Group’s contracts with customers. The Group may record assets for amounts related to performance obligations that are satisfied but not yet billed and/or collected. These assets would be recorded as contract assets rather than receivables when receipt of the consideration is conditional on something other than the passage of time.

 

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Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current and non-current contract liabilities – deferred revenue in the statement of financial position.

The following table reflects the Group’s accounts receivable, contract acquisition costs and contract liabilities – deferred revenue (in thousands):

    

September 30, 2019

    

December 31, 2018

Assets

Accounts receivable, net

$

51,890

$

67,531

Contract assets - unbilled revenue

1,448

941

Contract acquisition costs - current

10,317

9,563

Contract acquisition costs - non-current

20,419

19,390

Total contract assets

$

84,074

$

97,424

Liabilities

Contract liabilities - deferred revenue - current

124,169

127,065

Contract liabilities - deferred revenue - non-current

15,352

23,082

Total contract liabilities

$

139,521

$

150,147

Significant changes in the contract acquisition costs and the contract liabilities balances during the period are as follows (in thousands):

Contract assets -

Contract

Contract liabilities -

    

unbilled revenue

    

acquisition costs

    

deferred revenue

Balances at January 1, 2019

$

941

$

28,953

$

150,147

Transferred to accounts receivable from unbilled revenue

(3,036)

Increase due to new unbilled revenue

3,543

Additional contract acquisition costs deferred

10,365

Amortization of deferred contract acquisition costs

(8,582)

Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period

(140,828)

Increases due to invoicing prior to satisfaction of performance obligations, net of amounts recognized as revenue during the period

130,202

Balance at September 30, 2019

$

1,448

$

30,736

$

139,521

As of September 30, 2019, $10.3 million of the Group’s contract acquisition costs are expected to be amortized within the next 12 months and therefore are included in current assets. The remaining amount of Group’s contract acquisition costs are included in non-current assets. There were no impairments of assets related to Group’s contract acquisition costs during the period-ended September 30, 2019.

Remaining Performance Obligations

The Group’s contracts with customers include amounts allocated to performance obligations of $183.2 million that will be satisfied at a later date. As of September 30, 2019, $139.2 million of deferred revenue and backlog is expected to

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be recognized from remaining performance obligations over the next 12 months, and approximately $44.0 million thereafter.

Disaggregation of Revenues

The following table sets forth the Group’s total revenue by region for the periods indicated (in thousands). The revenues by geographic region were determined based on the country where the sale took place.

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2019

    

2018

    

2019

    

2018

Americas

$

29,956

$

23,477

$

84,666

$

67,020

EMEA

 

26,789

 

24,766

 

80,371

 

71,815

Asia Pacific

 

5,880

 

3,822

 

16,017

 

9,798

$

62,625

$

52,065

$

181,054

$

148,633

Revenues from the Company’s country of domicile, based on sales that took place in France, totaled $8.7 million and $8.3 million for the three months ended September 30, 2019 and 2018, respectively, and $27.1 million and $24.5 million for the nine months ended September 30, 2019 and 2018, respectively.

4. Net loss per share

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period. In periods of net income, diluted net income per share is computed by dividing net income for the period by the basic weighted-average number of shares plus any dilutive potential ordinary shares outstanding during the period. As the Company was in a loss position for the three and nine months ended September 30, 2019 and 2018, the diluted loss per share is equal to basic loss per share because the effects of potentially dilutive shares, which include shares from share-based awards and convertible senior notes, were anti-dilutive given the Company’s net loss.

During the three months ended September 30, 2019, the Company issued 1.75% Convertible Senior Notes due September 1, 2024 (see Note 7, Debt, for more details). Since the Company expects to settle the principal amount of the outstanding 1.75% Convertible Senior Notes due September 1, 2024 in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on the diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of €51.75 per share. This situation has not occurred as of September 30, 2019.

The net loss and weighted average number of shares used in the calculation of basic and diluted earnings per share are as follows (in thousands, except per share data):

Three Months Ended September 30, 

Nine Months Ended September 30,