K. Liu's Week in Review
Happy New Year! The new year also marks a new beginning at Talend (TLND) as the company appointed Christal Bemont as CEO, succeeding Mike Tuchen, who has held the reins for the past six years. Ms. Bemont joins Talend from SAP Concur where she served as Chief Revenue Officer. Also joining Talend from SAP Concur are Ann-Christel Graham and Jamie Kiser, who will serve as Chief Revenue Officer and Chief Customer Officer, respectively. Moreover, the company has installed new sales and marketing leadership in Europe where Muriel Raffatin recently joined as Head of EMEA Marketing, and Gareth Vincent will soon be coming on board as General Manager of EMEA. The leadership transition comes as the company looks to scale from approximately $250 million in revenue at present to $1 billion. Of note, Talend had been on the hunt for a Chief Revenue Officer and potential successor to Mr. Tuchen, hence the outreach to Ms. Bemont. Ultimately, the Board concluded that she was ready to step in as CEO immediately. Perhaps to assuage concerns that the changes could reflect other challenges, Talend also announced preliminary Q4 ’19 revenue of $66.5-$67.0 million, exceeding the company’s original guidance and consensus.
EXFO (EXFO) was the only company slated to report results this week, but of course ‘tis the season for pre-announcements. For its part, EXFO delivered Q1 ’20 revenue and adjusted EBITDA ahead of expectations, reflecting continued strength in the company’s Test and Measurement business. Bookings disappointed, however, declining approximately 14% Y/Y due to a difficult comp and the push-out of several maintenance renewals. That said, management indicated that over $2.5 million in Service Assurance, Systems and Services (SASS) orders were secured subsequent to quarter-end, and EXFO remains on track to achieve its prior FY ’20 guidance. Preliminary Q4 ’19 results from A10 Networks (ATEN) reflected revenue above guidance and consensus. Details pertaining to the outperformance were limited, and A10 also disclosed that EVP of Sales, Chris White, has resigned. Tufin (TUFN) also pre-announced Q4 ’19 results, which unfortunately fell short of expectations. Revenue missed both guidance and consensus owing mostly to delays in securing larger perpetual license deals in North America. Per management, the post-mortem suggests the deals were not lost to competitors and have simply moved into the pipeline for 2020. Potential fixes to the company’s sales execution processes are still being considered and will include the creation of a VP of Sales Operations function.
On the M&A front, several smaller tuck-in deals with undisclosed terms were completed this week. Appian (APPN) entered the robotic process automation (RPA) market with the acquisition of Novayre Solutions SL, developer of the Jidoka RPA platform. The move is notable given Appian’s prior vendor agnostic approach to RPA, although the company indicated that its low-code automation platform will enable organizations to manage robotic workforces from all of the major RPA vendors. Altair (ALTR) bolstered its portfolio of software solutions addressing the use of high-frequency electromagnetics with the acquisition of newFASANT. Coupa (COUP) sought to enhance its Travel and Expense offering through the acquisition of Yapta, which aids users in securing optimal travel-related prices. Lastly Mimecast (MIME) acquired Segasec to further its vision of Email Security 3.0 and enable customers to defend against phishing and other impersonation attacks.
Both Autodesk (ADSK) and MongoDB (MDB) raised capital this week with the former pricing $500 million aggregate principal amount of 2.850% notes due 2030 and the latter pricing an upsized $1.0 billion offering of 0.25% convertible senior notes due 2026 at an initial conversion price representing a nearly 51% premium to the close price prior to the announcement of the planned offering. Autodesk plans to use the proceeds from its raise for general corporate purposes, including the repayment of $450 million aggregate principal amount of 3.125% notes due June 15, 2020. MongoDB has earmarked a portion of its raise for the cost of capped call transactions as well as the repurchase of $210 million aggregate principal amount of its 0.75% convertible senior notes due 2024.
Other executive moves this week included the resignation of Guidewire Software’s (GWRE) Chief Financial Officer, Curtis Smith, for personal reasons. Mr. Smith will transition to a consulting role following the filing of the company’s 10-Q for its current fiscal quarter, and a search for his successor is underway. Adobe (ADBE) named Informatica’s former CEO, Anil Chakravarthy, as Executive Vice President and General Manager, Digital Experience. Another former Informatica executive, Sally Jenkins, joined Elastic (ESTC) as Chief Marketing Officer. At RADCOM (RDCM), Hilik Itman, who has been with the company for over two decades and most recently served as the company’s Vice President of R&D, was promoted to Chief Operating Officer. Recall that RADCOM’s prior COO was promoted to CEO in November 2019. Several companies also announced new leadership in international markets, including Avalara (AVLR), which named Salim Ali as Senior Vice President of International; Commvault (CVLT), which appointed Marco Fanizzi as Vice President of EMEA and Callum Eade as Vice President of APJ; and Yext (YEXT), which appointed Norihiro Shimogaki as President and COO of Yext Japan.
Mergers and Acquisitions
Altair Acquires newFASANT, Further Expanding High-Frequency Electromagnetics Portfolio
Altair (ALTR) has acquired newFASANT, which offers technology in computational and high-frequency electromagnetics that addresses problems such as antenna design and placement, radar cross section analysis, automotive V2V/ADAS, and infrared/thermal signatures.
The combination of newFASANT’s software portfolio with Altair Feko solidifies the company’s leadership in high-frequency electromagnetics used to support advanced digital communications.
Appian Acquires Robotic Process Automation (RPA) Company
Appian (APPN) has acquired Novayre Solutions SL, developer of the Jidoka RPA platform.
With the acquisition, Appian will offer a single comprehensive automation platform combining low-code development and RPA, enable organizations to manage robotic workforces from major RPA vendors, and deliver cloud RPA and Java RPA.
Coupa Acquires Travel Price Optimization Leader Yapta
Coupa (COUP) has acquired Yapta, which monitors airfare and hotel prices in real time and alerts customers to price drops.
As part of the Travel and Expense offering within Coupa’s Business Spend Management platform, Yapta will offer price assurance capabilities by tracking airline and hotel reservation prices and instantly rebooking at the lowest available price.
Mimecast (MIME) has acquired Segasec, a digital threat protection provider enabling customers to defend against phishing and impersonation attacks.
Integration of Segasec with Mimecast’s email and web security services builds on the company’s Email Security 3.0 approach.
Earnings Releases
A10 Networks (ATEN) pre-announced Q4 ’19 revenue of $59.0-$60.0 million, above its prior guidance for $55.0-$59.0 million and consensus of $54.0 million.
Expectations for adjusted EBITDA and non-GAAP EPS, which were originally guided to $5.4-$8.2 million and $0.04-$0.08, respectively, were not updated in the preannouncement.
The company also announced the resignation of its EVP of Sales, Chris White, effective January 17, 2020.
EXFO reports first quarter results for fiscal 2020
EXFO (EXFO) reported Q1 ’20 revenue and adjusted EBITDA above expectations and reaffirmed guidance for FY ’20.
Sales of $73.6 million (+6.3% Y/Y) were slightly ahead of the midpoint of management’s $70.0-$75.0 million guidance and the Street’s $73.0 million. Adjusted EBITDA was $7.5 million (10.3% margin), above consensus of $4.9 million. Non-IFRS EPS of $0.03 fell short of guidance of $0.05-$0.09 and consensus of $0.04.
Key metrics: bookings of $69.9 million (-13.9% Y/Y), including $55.0 million (-14.0% Y/Y) in test and measurement bookings and $15.0 million (-12.6% Y/Y) in service assurance, systems and services (SASS) bookings; book-to-bill ratio of 0.95.
Sales growth in the quarter was driven by strong demand for optical test solutions in the Asia Pacific region, increased appetite for 400 gig test equipment, and high-end lab solutions, but bookings declined due to a difficult year-ago comp in which service providers had unprecedented levels of year-end spending and the push-out of several maintenance renewals.
Management noted that three SASS orders valued at over $2.5 million were secured in the first week of December, which would have boosted bookings had they closed a few days earlier.
Guidance for Q2 includes sales of $66.0-$71.0 million and non-IFRS EPS of $(0.04)-$0.00, falling short of Street expectations for $75.3 million in sales and $0.07 in non-IFRS EPS.
Management continues to anticipate mid-single digit revenue growth and adjusted EBITDA of $33.0 million for FY ’20.
Tufin (TUFN) pre-announced Q4 ’19 revenue and non-GAAP operating income expectations for $29.5-$30.1 million and $(2.6)-$(1.1) million, below guidance for $34.0-$38.0 million in revenue and $0-$3.0 million in non-GAAP operating income.
Consensus estimates included revenue of $36.0 million and non-GAAP operating income of $1.7 million.
The shortfall was attributed to delays in the closure of a number of transactions, primarily in North America, that remain in the pipeline for 2020.
Tufin booked its first deal for both Orca and Iris, a positive milestone for its cloud business.
Notable News
Adobe (ADBE) named Anil Chakravarthy as Executive Vice President and General Manager, Digital Experience.
Mr. Chakravarthy joins the company from Informatica, where he most recently served as Chief Executive Officer.
Autodesk Prices $500 Million Notes Offering
Autodesk (ADSK) priced an offering of $500 million aggregate principal amount of notes maturing on January 15, 2030 that will bear interest at an annual rate of 2.850%.
Net proceeds from the offering will be used for general corporate purposes, including the repayment of $450 million aggregate principal amount of its 3.125% notes due June 15, 2020.
Commvault Expands Global Leadership Team with New Regional Leads in EMEA and APJ
Commvault (CVLT) has appointed Marco Fanizzi as Vice President of EMEA and Callum Eade as Vice President of APJ.
Mr. Fanizzi joins from Dell Technologies, where he served as Vice President and General Manager of Enterprise Sales.
Mr. Eade joins from VMware, where he served as Vice President, APJ for the Software Defined Data Center business.
Elastic Appoints Sally Jenkins as Chief Marketing Officer
Elastic (ESTC) named Sally Jenkins as Chief Marketing Officer with responsibility for the company’s global marketing, brand strategy, corporate communications, product marketing, digital marketing, field marketing, and customer and partner marketing efforts.
Ms. Jenkins joins the company from Informatica, where she most recently served as Executive Vice President and Chief Marketing Officer.
Guidewire Software Announces CFO Transition
Guidewire Software (GWRE) announced the resignation of Chief Financial Officer Curtis Smith, effective after the filing of the company’s 10-Q for the quarter ending January 31, 2020, for personal reasons.
Mr. Smith will transition into a consulting role effective March 2020, and the company has initiated a search for his successor.
MongoDB Announces Pricing of Upsized $1.0 Billion Convertible Senior Notes Offering
MongoDB (MDB) priced $1.0 billion aggregate principal amount of 0.25% convertible senior notes due 2026 at an initial conversion price of $211.20 per share, a 50.6% premium to the close price prior to the announcement of the planned offering.
The offering was upsized from initial plans to offer $750.0 million aggregate principal amount of convertible senior notes.
The company has also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $150.0 million aggregate principal amount of the notes.
Net proceeds from the offering are expected to be $980.0 million (or $1.13 billion if the initial purchasers exercise their option in full), of which $80.8 million is earmarked for the cost of capped call transactions and $479.2 million for the repurchase $210.0 million aggregate principal amount of MongoDB’s 0.75% Convertible Senior Notes due 2024.
RADCOM Announces the Promotion of Hilik Itman to Chief Operating Officer
RADCOM (RDCM) has promoted Hilik Itman to Chief Operating Officer.
Mr. Itman joined RADCOM in 1997 and most recently served as the company’s Vice President of R&D; he now assumes responsibility for the company’s Customer Success, Q&A, R&D, and Professional Services teams.
Salim Ali Joins Avalara as Senior Vice President of International
Avalara (AVLR) has appointed Salim Ali as Senior Vice President of International, a role in which he will be responsible for the company’s growth and go-to-market strategies in all international markets, including EMEA, Brazil, and India.
Mr. Ali joins the company from Loyakk, a provider of customer experience and customer success offerings, where he served as Chief Executive Officer.
Talend Names Cloud Industry Leader Christal Bemont CEO
Talend (TLND) has appointed Christal Bemont as its Chief Executive Officer and a member of its Board of Directors, succeeding Mike Tuchen, who will remain on the Board.
Ms. Bemont previously served as Chief Revenue Officer at SAP Concur.
Ann-Christel Graham, formerly vice president of sales for enterprise clients at SAP Concur, also joins Talend as Chief Revenue Officer and Jamie Kiser, previously vice president, global public sector for SAP Concur, joins as Chief Customer Officer.
New sales and marketing leadership is also in place in Europe with Muriel Raffatin recently joining as Head of EMEA marketing, and Gareth Vincent joining next month as General Manager of EMEA.
In conjunction with the changes, Talend announced preliminary Q4 ’19 revenue of $66.5-$67.0 million, above guidance of $65.4-$66.4 million and consensus of $66.1 million.
Yext Appoints Norihiro Shimogaki as President and COO in Japan
Yext (YEXT) announced that Norihiro Shimogaki has joined the company as President and COO of Yext Japan, a role in which he will work with Eiji Uda, Chairman and CEO of Yext Japan, to drive the company’s strategy in Japan.
Mr. Shimogaki joins the company from Amazon Web Services, where he was most recently Director of Enterprise Sales.