Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-K (Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37825 Talend S.A.(Exact name of Registrant as specified in its charter) FranceNot Applicable(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification no.) 9, rue Pages92150 Suresnes, France(Address of principal executive offices) +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 Name of each exchange on which registeredAmerican Depositary Shares, each representing one ordinary share, nominal value €0.08 pershareOrdinary shares, nominal value €0.08 per share* The NASDAQ Stock Market LLCThe 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. Securities registered or to be registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No ☒ 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 suchshorter 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) duringthe preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitiveproxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ 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 definitions of “largeaccelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): 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 standardsprovided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of ordinary shares held by non-affiliates of the Registrant on June 30, 2018, the last business day of the Registrant’s most recently completed second fiscal quarter, based onthe closing price for the Registrant’s American Depositary Shares as reported on the NASDAQ Stock Market, was approximately $1.7 billion. Ordinary shares held by each executive officer, director, andholder of 5% or more of the outstanding ordinary shares have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusivedetermination for other purposes. As of February 25, 2019, the Registrant had 30,305,390 ordinary shares, nominal value €0.08 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Information required in response to Part III of Form 10-K (Items 10, 11, 12, 13 and 14) is hereby incorporated by reference to portions of the Registrant's Proxy Statement for the Annual Meeting ofShareholders to be held in 2019. The Proxy Statement will be filed by the Registrant with the Securities and Exchange Commission no later than 120 days after the end of the Registrant's fiscal yearended December 31, 2018. Table of ContentsTABLE OF CONTENTS Page Introduction 1 Special Note Regarding Forward-Looking Statements 1 PART I Item 1. Business3Item 1A. Risk Factors14Item 1B. Unresolved Staff Comments49Item 2. Properties49Item 3. Legal Proceedings49Item 4. Mine Safety Disclosures50 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities50Item 6. Selected Financial Data51Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations53Item 7A. Quantitative and Qualitative Disclosures About Market Risk70Item 8. Financial Statements and Supplementary Data70Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure112Item 9A. Controls and Procedures112Item 9B. Other Information113 PART III Item 10. Directors, Executive Officers and Corporate Governance113Item 11. Executive Compensation113Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters113Item 13. Certain Relationships and Related Transactions, and Director Independence113Item 14. Principal Accountant Fees and Services113 PART IV Item 15. Exhibits and Financial Statement Schedules114Item 16. Form 10-K Summary119 SIGNATURES 120 Table of ContentsINTRODUCTION The audited consolidated financial statements included herein have been presented in U.S. dollars and prepared inaccordance with generally accepted accounting principles in the United States (“GAAP”). For Talend S.A. and oursubsidiaries that use a functional currency that is not U.S. dollars, the assets and liabilities have been translated at the closingexchange rate as of the relevant balance sheet date, while the income and expenses have been translated at the averageexchange rate for the month in which the transaction occurred. The resulting exchange differences are recognized in ourconsolidated statement of comprehensive loss. All references in this Annual Report on Form 10-K, or Annual Report, to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars,”and “USD” mean U.S. dollars and all references to “€”, “EUR” and “euros” mean Euros, unless otherwise noted. Certaininformation in this Annual Report is expressed in Euros. We make no representation that the Euro or U.S. dollar amountsreferred to in this Annual Report could have been converted into U.S. dollars or Euros, as the case may be, at any particularrate or at all. See “Item 1A. Risk Factors—We are exposed to fluctuations in currency exchange rates, which could negativelyaffect our financial condition and results of operations”. As used in this Annual Report, the term “ADSs” refers to the American Depositary Shares, each representing oneordinary share, nominal value €0.08 per share, of Talend S.A. As used in this Annual 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. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, or the Annual Report, includes forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Actof 1934, as amended, the Exchange Act, that relate to future events or our future financial performance and involve knownand unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance orachievements to differ materially from any future results, levels of activity, performance or achievements expressed orimplied by these forward-looking statements. Words such as, but not limited to, “may”, “believe”, “can”, “intend”,“potential”, “designed to”, “expect”, “anticipate”, “estimate”, “predict”, “intend”, “plan”, “targets”, “projects”, “likely”,“will”, “would”, “could”, “should”, “contemplate”, or the negative of these and similar expressions or phrases identifyforward-looking statements. We have based these forward-looking statements largely on our current expectations and futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy andfinancial needs. Forward-looking statements include, but are not limited to, statements about: ·Our future financial performance, including our revenue, cost of revenue, gross profit or gross margin, operatingexpenses, ability to generate positive cash flow and ability to achieve and maintain profitability; ·the sufficiency of our cash and cash equivalents to meet our liquidity needs; ·our ability to increase the number of new subscription customers, particularly enterprise customers; ·our ability to manage our business model transition to cloud-based products and a customer-centric sales model; ·our ability to renew and extend existing customer deployments, and to transition existing customers to our cloudofferings; ·our ability to optimize the pricing for our subscription offerings; ·the growth in the usage of Talend Data Fabric; ·our ability to innovate and develop the various open source projects that will enhance the capabilities of TalendOpen Studio; ·our ability to provide superior subscription offerings and professional services; ·our ability to successfully introduce new product offerings; 1 Table of Contents·our ability to successfully expand in our existing markets and into new domestic and international markets; ·our ability to effectively manage our growth and future expenses; ·our ability to maintain, protect and enhance our intellectual property; ·general economic conditions that may adversely affect either our customers’ ability or willingness to purchase newor additional subscriptions, delay a prospective customer’s purchasing decision, reduce the value of newsubscriptions or affect customer retention; ·anticipated trends, growth rates and challenges in our business and in the markets in which we operate, includingthe continued adoption of big data technologies, industry pricing and competitors’ offerings; ·our ability to comply with modified or new laws and regulations applying to our business, including those relatingto copyright, privacy, and data protection; ·the attraction and retention of qualified employees and key personnel, particularly with respect to our sales andmarketing team; ·the potential benefits of strategic collaboration agreements and our ability to enter into and maintain establishedstrategic collaborations; ·developments relating to our competitors and our industry; and ·other risks and uncertainties, including those listed in “Item 1A. Risk Factors”. We caution you that the foregoing list may not contain all of the forward-looking statements made in this AnnualReport. You should refer to the section of this Annual Report titled “Item 1A. Risk Factors” and those discussed in otherreports and documents we file with the SEC. For a discussion of important factors that may cause our actual results to differmaterially from those expressed or implied by our forward-looking statements. You should read thoroughly this Annual Report and the documents that we refer to herein with the understanding thatour actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements. Other sections of this Annual Report include additional factors whichcould adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New riskfactors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess theimpact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forward-looking statements. Furthermore, if any one or more of the assumptionsunderlying the market data turns out to be incorrect, actual results may differ from the projections based on theseassumptions. You should not place undue reliance on these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statementsmade in this Annual Report relate only to events or information as of the date on which the statements are made in thisAnnual Report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise, except as required by law. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.These statements are based upon information available to us as of the date of this Annual Report, and while we believe suchinformation forms a reasonable basis for such statements, such information may be limited or incomplete, and our statementsshould not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially availablerelevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon thesestatements.2 Table of Contents PART I Item 1. BusinessCompany OverviewOur mission is to enable every organization to realize the power of their data with trust and speed. The suite of apps inTalend Data Fabric integrates data and applications in real time across cloud and big data environments, as well as traditionalsystems, allowing organizations to develop a unified view of their business and customers across organizational andtechnology silos. We are a recognized leader in the market. In July 2018, Gartner continued to identify us as a Leader in itsreport titled Magic Quadrant for Data Integration Tools. In October 2017, Gartner also named Talend a leader in its reporttitled Magic Quadrant for Data Quality Tools and in June 2018 Forrester named Talend a leader in its report titled TheForrester Wave: Big Data Fabric Wave, Q2 2018. We are a key enabler of the data-driven enterprise where data is astrategic asset powering business. Talend Data Fabric allows customers in any industry to improve business performance byusing their data to create new insights and to automate business processes. Our customers rely on our software to betterunderstand their customers, offer new apps and services, and improve operations with predictive maintenance.The amount of data available for decision making is increasing dramatically, and the technology to analyze and act onthat data is becoming more capable and ubiquitous. The growing capabilities of cloud data warehouses have created apowerful and easy-to-use alternative to on-premise infrastructure that is accelerating the shift of data to the cloud andexpanding the availability of big data and machine learning technologies to organizations of all sizes. At the same time, theincreasing pace of business is driving the need for more real-time data processing and the need to make data-driven decisionsthroughout organizations, creating demand for self-service business and analytical applications. Data infrastructure hasbegun to shift to cloud platforms to enhance agility, elasticity, scalability, and time-to-value. As a result, organizationsrequire agile, real-time data integration and integrity solutions that support their evolving needs.Talend Data Fabric provides a comprehensive, flexible solution to address IT integration needs across industries. Itworks seamlessly across on-premise and cloud environments to connect both traditional and big data environments.Organizations can quickly integrate all forms of data across systems and applications at scale, with significantly improvedperformance and lower total cost of ownership than traditional data integration approaches. Talend Data Fabric interoperatesand natively integrates with cloud data platforms such as Amazon AWS, Azure, Google, and Databricks, while includingextensive support for cloud data warehouses such as Amazon Redshift, Microsoft Azure Data Warehouse, Google BigQuery,and Snowflake. Our flexible architecture enables us to rapidly adopt new technologies as they emerge and support evolvingcloud environments so that our customers can maximize the value of their data investments. Our technology allows ourcustomers to manage both batch and real-time data processing and incorporate machine learning to leverage data for theautomation of operational workflows. Our flexible cloud architecture allows organizations to operate in a cloud-basedenvironment, in their on-premise datacenter, in private clouds, or in any hybrid combination.Industry Overview We are in the early stages of four disruptive trends that are reshaping the IT industry: ·The amount and availability of data is increasing significantly; ·Cloud platforms from Amazon, Google and Microsoft are increasing IT agility and expanding the accessibility ofenterprise-grade technologies for organizations of all sizes; ·Big data technologies such as Hadoop, Spark, and NoSQL are dramatically lowering the cost to store and managedata and add new real-time processing capabilities across public and private cloud environments as well as on-premise deployments; and ·Changes in buying behavior favor frictionless sales and consumption-based pricing which enable faster access todata than ever before for a broader population of both IT and business users. 3 TM Table of ContentsThese trends are creating an increasing number of new opportunities for organizations to be data driven. It is now, morethan ever, critical for organizations to have an IT strategy that enables them to leverage data to support their businessinitiatives. To do this, IT teams must be able to work with new data platforms and fluidly address high volume, IoT, self-service and real-time scenarios. The Data-Driven Imperative The growing adoption of cloud-based IT infrastructure, proliferation of mobile and IoT devices, and accessibility ofbusiness applications is producing massive quantities of new data for organizations. This data provides little insight whenstored in organizational or technology silos, but becomes highly valuable when combined with existing customer, productand partner data. The proliferation of digital information provides new opportunities for organizations to leverage data to enhance theirbusiness, making its effective and strategic use a key competitive advantage. As leading organizations move the competitivebar upwards with innovative uses of data, other organizations risk falling behind if they do not also invest in solutions thatleverage their data assets effectively. In a business environment where data is available and actionable, data-driven decisionmaking is now a competitive necessity. Cloud Adoption Becomes Mainstream IT infrastructure is undergoing a shift as organizations extend their infrastructure with cloud-based solutions. Thetraditional information technology framework of standalone hardware running on-premise software, which is deployed andmaintained by IT departments, is shifting rapidly toward a virtualized, cloud-based infrastructure that reduces upfrontinvestment, ongoing maintenance and support costs, and increases agility. Increasingly, companies are shifting their datainfrastructure to the cloud. This new IT paradigm empowers organizations to adapt their compute and storage resources to meet their needs in realtime, reducing their footprint and streamlining costs. Generational Shift to New Data Technologies Technologies such as Hadoop, Spark, Spark Streaming, and NoSQL enable organizations to manage and process fargreater amounts of data in real time and at significantly lower costs. These big data technologies support cloud platformssuch as Amazon Elastic MapReduce, Microsoft Azure HD Insight, and Google Cloud Dataproc or Dataflow. These newtechnologies initially start as complementing the traditional relational database technology in widespread use today byadding new capabilities to deal with the far larger data volumes, more varied types of data, and real-time processing. Organizations will operate in a hybrid, multi-cloud mode for years to come where new projects are increasingly builtwith next-generation big data technologies and deployed in cloud environments, and existing applications will continue torun on traditional databases. 4 Table of ContentsDemand for Self-Service Technology The proliferation of data, coupled with its strategic importance, has significantly increased business users’ demand fortools to access the data themselves. These tools are often limited by the data they can access. Data and analytics teamsstruggle to respond to this urgent need due to their over-reliance on IT-centric tools for finding, cataloging and transformingrelevant data, and making it accessible to the growing number of distributed users in the enterprise, both inside and outsideof centralized data and analytics teams. Due to this, organizations report that they spend more than 60% of their time in datapreparation, leaving little time for actual analysis. This has led to demand for a new wave of self-service tools that allow bothIT and business users to collect, govern, transform, and share data more quickly than before. Data science teams, in particular, are dramatically retooling the analytics workflow. Much of their activities are onlypossible in the cloud, with spin up/down Spark clusters for data processing, including deep learning and machine learningcapabilities required by data science projects. Data scientists are driving demand for data catalogs, which automaticallydiscover data and provide lineage and other useful information about the data. Other aspects of the data science/machinelearning workflow are coming into focus to enable an end-to-end process from raw data through machine learning modelsoperating in production. Analytics and data teams rely on Data Engineers to automate and improve the quality and reduce the cycle time of dataanalytics. The skillset and needs of these engineers require much more self-service tools and a mix of coding, scripting, andmore traditional data integration tools. Our Opportunity We believe our apps address the markets for Data Integration and Integrity Software, Master Data Management, andIntegration and Orchestration Middleware, which IDC estimates combined were $17 billion in 2016 and are forecasted toreach $23 billion in 2020. IDC forecasts the data integration and integrity market to grow from $6.0 billion in 2017 to $9.8billion in 2022. We believe that these markets will further expand as a portion of spend on hand-coded integrations willtransition to software-based integration solutions given the time consuming and expensive process of manual integrationscoupled with the scarcity of personnel with the requisite technical skills. The transformative change in IT infrastructure is driving a dramatic shift to cloud platforms to address infrastructure anddata warehousing needs. This is driving rapid growth in cloud integration. According to IDC, the market for Cloud DataIntegration and Integrity Software is forecast to reach $2.3 billion by 2022, representing a 30% CAGR from 2018. Thissignificant growth rates represent the rapid expansion and pace of change in the markets underlying our opportunity. Our Solution Talend Data Fabric is a modern solution designed to meet the integration and integrity needs of both developers anddata scientists. It is offered as both a SaaS or premise offering, and works seamlessly across a customer’s on-premise, cloudand hybrid environments to integrate data in real time from both traditional and big data environments. The benefits of oursolution include: ·Integrated cloud solution. We provide a single integration and integrity solution that is available as a SaaSoffering or as an on-premise license that can be deployed on-premise, in the cloud, or across hybrid environments.Organizations have access to identical architecture and functionality across all potential use cases. Talend givesorganizations the ability to scale cloud resources up and down when necessary, allowing customers to takeadvantage of the elasticity and cost savings of cloud platforms. ·Designed for modern data technologies. Our solution was purpose-built to work with modern data architectures,allowing organizations to integrate their data seamlessly in any environment. Our product architecture uses ametadata driven abstraction that allows the generation of code that runs natively in Spark, Snowflake, and the threekey cloud platforms (Amazon, Microsoft, Google) to take full advantage of the scale and speed of big data andcloud technologies. 5 Table of Contents·Powerful real-time integration and machine learning. We enable organizations to unlock the value of their datato create real-time, predictive insights. Customers can use a single design environment to create intelligent dataflows with machine learning algorithms that can process both batch and real-time streaming data to automate thedelivery of insights. ·Self-service functionality. Our solution enables anyone in IT or a business role to access, clean, enrich, integrate,and search for data with an easy-to-use, web-based user interface. This empowers users to conduct more datapreparation on their own, without waiting for IT resources. Through our self-service data catalog, users cancentrally locate all the information pertinent to data they wish to use for analytics or data science modeling. Thedata catalog aggregates information including provenance, location, quality, privacy, ownership, and lineage ofthe data throughout an organization. ·Rapid deployment and agility. We have simplified the complexities of connecting cloud, big data, and traditionalarchitectures across cloud and on-premise environments. Since developers use a single solution for all of theirintegration needs, they can move quickly from one data integration project to another without learning ordeploying additional solutions. This both accelerates development and reduces cost and complexity of dataintegration. Customers can seamlessly add new Talend Data Fabric apps, dramatically reducing the time to deploynew capabilities. ·Robust governance and management capabilities. Our solution provides organizations with powerful governanceand management capabilities for their data assets. Our solution can manage the largest volumes of data, whilemasking sensitive data such as credit card or social security numbers. We provide visibility into data flows, lineageand stewardship that continuously updates as developers change integrations. Talend Data Fabric We deliver apps for data integration, big data integration, application integration, cloud integration, data catalog, APIdesign and testing, master data management (MDM), and self-service data preparation as a part of Talend Data Fabric. Ourapps are designed for data in the cloud and on-premise, integrating applications in real time, and work with a wide range ofdatabases, data warehouses, file formats, and applications including Marketo, NetSuite, salesforce.com, and SAP. While ourcustomers often gain experience with our apps through our open source versions, we generate revenue when customerspurchase subscriptions to the commercial version of any of our apps. Our commercial apps are enhanced versions of the free open source versions of our offerings and include additionalcapabilities which are critical for enterprise deployment, such as: ·Collaboration: maximize productivity by enabling teams to share metadata and flows; ·Scheduling: run an integration flow on a repeating schedule; ·High Availability: maximize uptime through technical clustering features; ·Monitoring: track events, requests, unexpected faults and system management decisions; ·Distributed Scale-Out: dynamically expand and contract compute in response to demand; ·Governance: embed compliance and security rules for tracking and auditing of internal data; ·API services: create, test and implement APIs to build re-usable and shareable data assets; and ·Technical Support: includes response time SLAs, plus phone, email and web support. Talend Data Fabric combines all of our integration and integrity apps into a single solution with a commondevelopment and management environment to solve complex IT integration challenges. The solution enables users to shiftbetween capabilities without learning additional tools, interfaces, and programming paradigms. Talend Data Fabric isseamlessly compatible and interoperable across cloud, on-premise and hybrid environments. Talend Data Fabric6 Table of Contentsincreases productivity by allowing developers to use the same integration apps to address a wide variety of integration andintegrity challenges across big data, the cloud, IoT and traditional data sources. Talend Data Fabric includes the following apps: ·Data Integration. Talend Data Integration allows customers to easily integrate, transform, and blend data from awide variety of data sources. Our code generation architecture uses a visual interface to create high performanceJava or SQL code. The solution contains over one thousand connectors to databases, flat files, cloud-basedapplications, and many other types of data. Talend Data Integration includes optional data quality features toprofile, cleanse, anonymize, and mask data. These optional data quality features provide data de-duplication,validation, standardization, and enrichment that create high-quality, clean, and reliable data for access, reporting,and analytics. Talend Data Integration can be sold and deployed as a standalone app. ·Cloud Integration. Talend Cloud is an Integration Platform-as-a-Service that enables customers to access and runTalend Data Fabric apps as a service to integrate both their cloud and on-premise systems. It works seamlessly withTalend Studio so that the same integration flows built to run in Talend Big Data Integration or Talend DataIntegration can easily be run in the cloud, for example, on Amazon Web Services, Google Compute Engine orMicrosoft Azure. Talend Cloud allows customers to take advantage of the elasticity of modern cloud platforms bybeing able to spin up and spin down computing resources as needed. · Big Data Integration. Talend Big Data Integration provides the same features and functionality as Talend DataIntegration, in addition to specialized support for big data platforms. Our solution generates native code for modernbig data systems to run real-time, large-scale data processing. It integrates with Apache Hadoop, Apache Spark,NoSQL databases either on-premise or in the cloud. The solution delivers large-scale, high performance in-memoryprocessing by generating native Spark and Spark Streaming code, thus leveraging the full capabilities of the bigdata environment. Talend’s support for Spark and Spark Streaming gives it up to five times faster performance thanMapReduce, according to our internal performance calculations, support for machine learning algorithms, and real-time processing of data streams. End-to-end big data integration workflows can be integrated with EMR, AmazonRedshift, Microsoft Azure HDInsight, Google Dataproc or Dataflow, or Databricks systems to support IoT and otherbusiness intelligence projects. ·Application Integration. Talend Application Integration enables organizations to integrate applications, servicesand APIs without coding, simplifies complex mapping challenges, and delivers and enforces enterprise securityrules. Our solution provides a high-speed services backbone and enables building a service-oriented architecture toconnect, mediate, and manage services in real time. The solution is built on extensible7 Table of Contentsopen source Enterprise Service Bus and data integration technology. Our built-in data mapper is intuitive andallows the manipulation of complex, legacy and vertical industry data formats with a graphical tool. TalendApplication Integration is sold as a bundle with either Talend Data Integration or Talend Big Data Integration. ·Data Catalog. Talend Data Catalog enables business and IT users to search, find, and access any data from acrosstheir enterprise. Talend Data Catalog automatically crawls, profiles, organizes, links, and enriches data from anydata source, third-party integration tool, and analytics tools. Data Catalog centralizes all information about theprovenance and data linage of data with over 100 connectors to extract metadata from source systems, including allmajor databases, data warehouses, and new data platforms such as Spark, NoSQL databases, and other catalogs.Talend Data Catalog leverages technology from third-party partners. Talend Data Catalog automatically classifiesand identifies the quality of data based on built-in data dictionary and quality services, thereby reducing the timefor new data sources to be onboarded to users. ·API Services. Talend API Services provides full API development lifecycle support that extends from design, test,documentation, implementation to deployment. Our visual API Designer and team collaboration tools make it easyto define a contract-first API with consumers. Users can automatically simulate and test the API using live previewand generate API reference documentation for consumers to integrate. Talend API Services combines continuousintegration capabilities and the ability to deploy web services modules as containerized microservices throughvisual tools, allowing teams to quickly deliver and deploy new applications and services. Developers can selectfrom over 900+ pre-built components and connectors to natively connect databases, flat files, cloud-basedapplications, including mapping components for complex data formats such as EBCDIC files, XML, JSON, andEDI. ·Master Data Management. Talend Master Data Management enables customers to build a consistent, 360-degreeview of their customers, products, employees, and partners. It does this by allowing customers to cleanse, transform,and link data from multiple systems together and maintain a consistent record of their most important data. TalendMaster Data Management includes a wide range of data quality features and a data stewardship console to manageexceptions in master data as they arrive. Once a 360-degree view is built, it can be shared with the relevant businessusers, inform new types of analytics, or provide clean, trusted data in real time as new transactions are generated.Unlike many other MDM apps, Talend Master Data Management allows customers to start small and then expandtheir master data management projects over time. Talend Master Data Management is sold as a bundle that includesTalend Application Integration and either Talend Data Integration or Talend Big Data Integration. ·Data Preparation. Talend Data Preparation allows anyone in IT or a business role to access, blend, clean andenrich data with an Excel-like, easy-to-use point-and-click user interface. This empowers users to solve their datapreparation challenges on their own without waiting for IT resources. The commercial version of Talend DataPreparation works seamlessly with Talend Big Data Integration, Talend Data Integration, and Talend Cloud suchthat IT and business users can create a data preparation process and share it with an IT developer to embed it into amore complex data integration flow. This allows IT organizations to accelerate data warehousing projects bypartnering with business users that are experts in the data being processed. Talend Data Preparation is sold as anoptional component within Talend Data Fabric apps. ·Stitch Data Loader. Stitch Data Loader is a cloud-based data ingestion engine designed to quickly and efficientlyconnect a multitude of SaaS applications to cloud data warehouse systems including Snowflake, Amazon WebServices, Microsoft Azure SQL Database, and Google BigQuery. Stitch Data Loader is designed for frictionlessadoption, enabling customers to discover, try, and purchase the solution without the involvement of salespersonnel. This sales motion enables customers to start realizing value quickly from their cloud data warehouse andprovides a high-volume landing strategy to then upsell and cross sell additional apps and capabilities. Open Source Apps We offer five Talend Open Studio branded app offerings as well as Talend Data Preparation Free Desktop which are allfree, open source versions of our apps. These apps are 100% open source and are freely downloadable from the Talendwebsite or other online communities. Our open source apps have been downloaded more than three million times. Our opensource apps are designed to meet all of the requirements of a single user and are unlimited with respect8 Table of Contentsto duration of use, processing power, number of integration flows that can be designed using the app, and number and typesof data sources that can be accessed using the app. However, once multiple users within the same organization start using ouropen source apps, they tend to need the enhanced features that are only included in our subscription offerings. Each opensource app can be deployed independently of the others to provide users with ultimate flexibility. Our Growth Strategy Key drivers for our growth strategy include: ·Maintain our technology leadership. We intend to continue to invest in Talend Data Fabric and innovate anddevelop new features, functionality and app modules as our markets advance. ·Grow our customer base. We plan to grow our base of customers by continuing to expand our sales organization,develop our channel relationships and convert open source users into paying customers. As of December 31, 2018,we had over 3,000 total customers and 472 enterprise customers that generate an annualized subscription revenueof over $100,000. ·Further expand within our existing customer base. Our customers typically make an initial purchase for a specificand immediate need and then subsequently expand their use cases. Our acquisition of Stitch, Inc. further enhancesour go-to-market reach with a cloud application available for self-service purchase which we believe reducesfriction for customers and provides a basis for targeted expansions over time. ·Expand our ecosystem of partners. We will continue to invest in and grow our strong ecosystem of partnersspanning big data vendors, cloud platform and application providers, analytical software providers, commercialuse/OEM partners, systems integrators and VARs. ·Continue to grow internationally. We have a presence in the United States, Germany, France, Canada, the UnitedKingdom, Ireland, Spain, Italy, Australia, Singapore, the Netherlands, Sweden, Switzerland, China, India, andJapan. We will continue to invest in further expanding our footprint in international markets. ·Cultivate our open source community. We will continue to release open source versions of our app to increase ourexposure among developers and enhance our community to develop additional components and connectors for ourintegration solution, some of which we will commercialize. Customers We have a broad, global customer base that includes AstraZeneca, HP, Citi, General Electric and Lenovo and spans abroad range of industries, including financial services, technology, telecommunications, healthcare, manufacturing, andretail. As of December 31, 2018, we had over 3,000 paying subscription customers across more than 60 countries and avariety of industries. We define a customer as a paid licensor of our technology, either directly from Talend or through anauthorized reseller. We exclude users of our technology through OEM partnerships. We also exclude users who havedownloaded the Open Source versions of our apps but have not entered into a commercial relationship with us and fromwhom we do not derive any recurring revenue. Marketing Our marketing organization is responsible for increasing the awareness of Talend’s solution, fostering the Talendcommunity, generating demand, gathering market feedback and enabling our field sales team to effectively sell our solution.The open source and free trial editions of our apps are key drivers of awareness and initial usage. Our open source apps haveseeded the market and lead to Talend Data Fabric adoption by many of our current paying customers. When decidingwhether to purchase our apps, our customers primarily learn from our open source apps, Talend community, white papers,webinars and third-party research before engaging with our sales team. It is a key mission of the marketing organization tosupport and accelerate this learning process. The marketing organization includes the following functions: web marketing,community marketing, marketing communications, field marketing and product management and marketing. 9 Table of ContentsSales We sell our software and services through both a direct sales force and indirect channel partners. As of December 31,2018, we had a direct sales presence in 16 countries across North America, Europe and Asia. For indirect channels, we utilizeresellers, referral partners and implementation partners to increase our overall sales opportunities. We also offer our StitchData Loader offering via a self-service e-commerce platform which typically does not require the involvement of salespersonnel or partners. Our sales efforts are built on a land-and-expand sales model. To facilitate market adoption, we offer a free open sourceversion of our app with community registration. These registrations become leads for our marketing and sales organization todevelop and close. After an initial deployment, organizations often purchase more subscriptions or expand usage toadditional modules from Talend Data Fabric. We sell our apps to organizations of all sizes and the majority of our sales are through our direct sales force. Our directsales force includes an inside sales team which is closely aligned with an outside sales team. In many countries we also sellthrough a VAR channel and we get referrals from a variety of partners including system integrators. We have a global team ofindirect channel managers responsible for these relationships. Post-sale, our customers are managed by a dedicated customer success organization. Our customer success team isresponsible for driving successful deployments, maintaining customer relationships, renewing existing contracts andidentifying expansion opportunities within existing customers. Our business is subject to seasonal trends. See “Risk Factors—The seasonality of our business can create variance in ourquarterly bookings, subscription revenue and cash flows from operations” for additional information. Channels and Alliances Talend maintains strategic relationships with a variety of partners that we view as a playing a critical role in our growthand success. These partners jointly develop, market, sell, recommend and/or implement our solution. Our partners include: ·Technology Alliances. We work with big data, cloud application and analytical software vendors to provideintegration solutions to their customers. We work with Amazon Web Services, Microsoft, Google, Snowflake,Databricks and Cloudera among others. ·Value Added Resellers. Our network of resellers extends our sales and marketing efforts across Europe, the MiddleEast and Asia-Pacific. Many of our VARs also bring deep vertical market knowledge and implementation expertise. ·Systems Integrators. We have partnered with over 100 systems integrators worldwide, including Accenture,Cognizant, Capgemini, Deloitte Consulting, Wipro and Virtusa, among others. ·Commercial Use/OEM. Over 30 technology and services companies embed or distribute Talend software as part oftheir go to market offering. We provide these companies with a limited-use license of certain Talend apps and theypay us royalties or annual subscription fees. Research and Development Our research and development team is globally distributed in France, Germany and China. We take pride in our abilityto attract and retain the best talent to our team and to create a challenging yet fulfilling environment where engineers canthrive, solving complex problems and finding innovative ways to address current and future data integration, data processingand data governance challenges. We follow agile development methodologies, work with the latest technologies and havecreated a modern, state of the art, flexible and automated software development process that has allowed us to deliver high-quality apps and adapt to market changes and new requirements quickly. Talend has deep roots in the open source community. We believe our open source approach helps us maintain greatertransparency, create better software and have happier customers. We have an open source core app that anyone10 Table of Contentscan download, improve, enrich, or extend and we are very engaged with the open source community to get feedback toimprove our apps. In addition to our own in-house developed open source projects, we employ open source committers tokey shared projects from the Apache Software Foundation such as Apache Beam, ActiveMQ, Camel, CXF, Karaf and Syncopethat are used in our own technology stack but also in many other enterprise software apps. Backlog Backlog represents the consideration amount of revenues we expect to recognize in the future from contracts withcustomers that we believe to be firm and are in progress. Backlog is a measure not defined by generally accepted accountingprinciples and may not be indicative of future operating results. Our methodology for determining backlog may not becomparable to methodologies used by other companies in determining their backlog amounts. The timing of our invoices toour customers is a negotiated term and thus varies among our support subscription agreements. For multi-year agreements, itis common for us to invoice an initial amount at contract signing followed by subsequent annual invoices. At any point inthe contract term, there can be amounts that we have not yet been contractually able to invoice. Until such time as theseamounts are invoiced, we do not recognize them as revenue, deferred revenue or elsewhere in our consolidated financialstatements. The change in backlog that results from changes in the average non-cancelable term of our support subscriptionarrangements may not be an indicator of the likelihood of renewal or expected future revenue and therefore we do not utilizebacklog as a key management metric internally and do not believe that it is a meaningful measurement of our future revenue.The backlog values we disclose include anticipated revenues associated with: (1) the original contract amounts; (2) changeto the term of the contract for which we have received written confirmations from the applicable customers; and (3) change tothe term of the contract for which we expect to receive confirmations in the ordinary course of business. Our totalbacklog was $20.3 million and $32.1 million as of December 31, 2017 and 2018, respectively. Of the December 31, 2018backlog, we expect to recognize revenue of $9.0 million in 2019 and $23.1 million thereafter. Competition The market for our apps is highly competitive, quickly evolving and subject to rapid changes in technology, whichmay expand the alternatives available to our customers for their data integration and integrity requirements. Our currentprimary competitors generally fall into four categories: ·Diversified technology companies that offer data integration solutions, including: IBM, Microsoft, Oracle and SAP; ·Pure-play data integration vendors, including: Ab Initio, Informatica and Tibco; ·Early-stage, niche data integration technologies; and ·Hand-coded, custom data integration solutions built internally by organizations that we target as potentialcustomers. We believe that we are well-positioned in the marketplace relative to our competitors. We are differentiated fromtraditional vendors by our advanced technology and rapid innovation, both of which are driven by our open source apps andemerging niche vendors cannot match the scale of our app breadth or go-to-market capabilities. Many of our existing competitors have and some of our potential competitors could have, substantial competitiveadvantages such as: ·Greater name recognition and longer operating histories; ·Larger sales and marketing budgets and resources; ·Broader distribution and established relationships with distribution partners and customers; ·Greater customer support resources; ·Greater resources to make acquisitions;11 Table of Contents ·Lower labor and development costs; ·Larger and more mature intellectual property portfolios; and ·Substantially greater financial, technical and other resources. We expect competition to increase as other established and emerging companies enter the data integration softwaremarket, as customer requirements evolve and as new products and technologies are introduced. We believe that the principalfactors that drive our competitive edge in our market include: ·App features, architecture reliability, performance and effectiveness; ·Name and reputation of the vendor or competitive offering; ·Vision for the market and app roadmap, as well as pace of innovation; ·Interoperability with numerous cloud and big data solutions vendors; ·Integration with leading cloud and on-premise systems; ·Automation capabilities; ·Ability to adapt development, sales and marketing to the open source software model; ·Strength of sales and marketing efforts; ·Strategic partnerships with major enterprise software and infrastructure providers; ·Quality of support; ·Demonstrated return on investment through time-to-value and total cost of ownership; and ·Ease-of-use and efficiency during deployment. Intellectual Property We rely on a combination of trademarks, copyrights, contractual restrictions and other intellectual property laws andconfidentiality procedures to establish and protect our proprietary rights. We generally require our employees andconsultants to execute invention assignment agreements with us that protect our intellectual property rights. Intellectual property laws, together with our efforts to protect our proprietary rights, provide only limited protection andany of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. The lawsof certain countries do not protect proprietary rights to the same extent as the laws of France and the United States and,therefore, in certain jurisdictions, we may be unable to protect our proprietary technology. Further, agreements with ouremployees and consultants may be breached and we may not have adequate remedies to redress any breach. Further, to theextent that our employees or consultants use intellectual property owned by others in their work for us, disputes may arise asto the rights in related or resulting know-how and inventions. As of December 31, 2018, we had two pending patent applications and no issued patents. We own and use registeredand unregistered trademarks on or in connection with our apps and services in numerous jurisdictions. In addition, we havealso registered numerous internet domain names. 12 Table of ContentsSegment and Geographic Information We operate as a single operating and reportable segment. Information about geographic revenue is described in Note 8 toour consolidated financial statements, which appears in Part II, Item 8 – “Financial Statements and Supplementary Data.Employees Our employee base has grown from 679 employees as of December 31, 2016 to 886 employees as of December 31, 2017and to 1,136 employees as of December 31, 2018. We plan to continue to expand our non-U.S. presence to address the needsof our global customers as well as to acquire customers in new geographies and to invest in sales training to continue toattract and retain large enterprise customers. We also plan to continue to invest in new product development. Corporate Information We were organized as a société par actions simplifiée, or S.A.S., under the laws of France on September 19, 2005 andsubsequently converted into a société anonyme, or S.A., on April 14, 2006. We are registered with the French Commerce andCompanies Register under the number 484 175 252 RCS Nanterre. Our registered office is located at 9, rue Pages, 92150Suresnes, France. Our telephone number at this address is +33 (0) 1 46 25 06 00. Our main place of business in the UnitedStates is located at 800 Bridge Parkway, Redwood City, CA 94065. Our telephone number at this address is (650) 539-3200.Our website is www.talend.com. Information contained on our website is not part of this Annual Report. Our agent for serviceof process in the United States is our wholly owned subsidiary, Talend, Inc., a Delaware corporation, located at 800 BridgeParkway, Redwood City, CA 94065. Available Information A copy of this Annual Report on Form 10-K and copies of previously filed Annual Reports on Form 20-F, CurrentReports on Form 6-K and Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934, as amended, or the Exchange Act, are available, free of charge, on our investor relationswebsite as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities andExchange Commission, or the SEC. Additionally, our website, located at www.talend.com, also provides notifications ofnews or announcements regarding our financial performance, including press releases, public conference calls and webcasts.Information contained on our website is not incorporated by reference into this Annual Report on Form 10-K or our otherfilings with the SEC. The SEC also maintains a website that contains our SEC filings. The address of the site is www.sec.gov. Investors and others should note that we announce material financial information to our investors using our investorrelations website, SEC filings, press releases, public conference calls and webcasts. We use these channels as well as socialmedia to communicate with the public about our company, our products and services and other matters. It is possible that theinformation we post on social media could be deemed to be material information. Therefore, we encourage investors, themedia and others interested in our company to review the information we post on the social media channels listed on ourinvestor relations website. 13 Table of Contents Item 1A. Risk Factors You should carefully consider the risks and uncertainties described below and all other information contained in thisAnnual Report and in our public filings with the Securities and Exchange Commission. The risks and uncertaintiesdescribed below are not the only ones facing us. Other events that we do not currently anticipate or that we currently deemimmaterial also may affect our results of operations, cash flows and financial condition. This Annual Report also containsforward-looking information that involves risks and uncertainties. Our actual results could differ materially from thoseanticipated in these forward-looking statements as a result of many factors, including the risks described below andelsewhere in this Annual Report. See “Special Note Regarding Forward-Looking Statements” above. Risks Related to Our Business and Industry We have a history of losses and may not be able to achieve profitability or positive cash flows on a consistent basis. If wecannot achieve profitability or positive cash flows, our business, financial condition and results of operations may suffer. We have incurred losses in all years since our inception. We incurred a net loss of $24.2 million in the year endedDecember 31, 2016, $31.2 million in the year ended December 31, 2017 and $40.4 million in the year ended December 31,2018. As a result, we had accumulated losses of $224.3 million as of December 31, 2018. We anticipate that our operatingexpenses will increase substantially in the foreseeable future as we continue to enhance our product and service offerings,broaden our installed customer base, expand our sales channels, expand our operations, hire additional employees andcontinue to develop our technology. These efforts may prove more expensive than we currently anticipate, and we may notsucceed in increasing our revenue sufficiently, or at all, to offset these higher expenses. Revenue growth may slow or revenuemay decline for a number of possible reasons, including slowing demand for our products or services, increasing competition,a decrease in the growth of our overall market, failure to acquire large enterprise customers, or a failure to capitalize ongrowth opportunities. Any failure to increase our revenue as we grow our business could prevent us from achievingprofitability or maintaining or increasing cash flow on a consistent basis. If we are unable to meet these risks and challengesas we encounter them, our business, financial condition and results of operations may suffer. Our business and operations have experienced rapid growth, and if we do not appropriately manage any future growth orare unable to improve our systems and processes, our business, financial condition, results of operations and prospects willbe adversely affected. We have experienced rapid growth and increased demand for our products over the last few years. You should notconsider our revenue growth in recent periods as indicative of our future performance. While we have recently experiencedsignificant revenue growth, we may not achieve similar revenue growth in future periods. Our employee headcount andnumber of customers have increased significantly, and we expect to continue to grow our headcount significantly over thenext year. For example, our employee base has grown from 679 employees as of December 31, 2016 to 886 employees as ofDecember 31, 2017 to 1,136 employees as of December 31, 2018. The growth and expansion of our business and productofferings places a continuous significant strain on our management, operational and financial resources. As we have grown,we have managed more complex deployments of our subscriptions with large enterprise customers, and our growth strategy isdependent upon increased sales to these large enterprise customers. We must continue to improve and expand ourinformation technology and financial infrastructure, our operating and administrative systems, and our ability to manageheadcount, capital and processes in an efficient manner to manage our growth to date and any future growth effectively. We may not be able to scale improvements successfully to our product offering or implement our other systems,processes and controls in an efficient or timely manner or in a manner that does not negatively affect our results ofoperations. In addition, our existing systems, processes and controls may not prevent or detect all errors, omissions or fraud.We may experience difficulties in managing improvements to our systems, processes and controls or in connection withthird-party software, which could disrupt existing customer relationships, cause us to lose customers, limit us to smallerdeployments of our products, or increase our technical support costs. Our failure to improve our systems, processes andcontrols, or their failure to operate in the intended manner, may result in our inability to manage the growth of our businessand to forecast our revenue, forecast our expenses and earnings accurately, or to prevent certain losses. For example, we areimplementing certain new enterprise management systems and any failure to implement these systems may disrupt ouroperations and our operating expenses could increase. Additionally, our14 Table of Contentsproductivity and the quality of our products and services may be adversely affected if we do not integrate and train our newemployees quickly and effectively. Any future growth would add complexity to our organization and require effectivecoordination throughout our organization. Failure to manage any future growth effectively could result in increased costs,negatively affect our customers’ satisfaction with our products and services and harm our results of operations. If we are unable to increase sales of our solution to new customers and sell additional products to our existing customers,our future revenue and results of operations will be harmed. Our future success depends, in part, on our ability to sell our subscriptions to new customers, particularly largeenterprise customers, and to expand the deployment of our platform with existing customers by selling additionalsubscriptions. This may require increasingly sophisticated and costly sales efforts to differentiate our offerings from those ofour competitors that may not result in additional sales. In addition, the rate at which our customers purchase additionalsubscriptions depends on a number of factors, including the perceived need for additional data integration products,evolving sales strategies as well as general economic conditions. Even if we are able to convince a potential customer of thebenefits of big data integration capabilities, they may choose to adopt our competitors’ offerings instead. If our efforts to selladditional subscriptions to our customers are not successful, our business may suffer.The market for our big data and cloud integration products is relatively new, unproven and evolving, and our futuresuccess depends on the growth and expansion of such market and our ability to adapt and respond effectively to anevolving market. The market for big data and cloud integration is relatively new, rapidly evolving and unproven. Our future success willdepend in large part on our big data and cloud integration solutions’ ability to penetrate the existing market for dataintegration and management platforms, as well as the continued growth and expansion of the market for data integration andmanagement platforms. It is difficult to predict subscription customer adoption and renewals, subscription customers’demand for our offerings, the size, growth rate and expansion of these markets, the entry of competitive products or thesuccess of existing competitive products. If we do not correctly anticipate changes in these markets or are unable to respondquickly and effectively to changes in these markets, our business may be harmed. Our ability to penetrate the existing marketand any expansion of the market depends on a number of factors, including the cost, performance and perceived valueassociated with our offerings, as well as subscription customers’ willingness to adopt an alternative approach to dataintegration and management platforms. Additionally, demand for our big data and cloud integration products will depend inlarge part on the adoption and scale-out deployments of Hadoop and other big data technologies. Furthermore, manypotential subscription customers have made significant investments in hand coding or legacy ETL software and may beunwilling to invest in a new solution. If the market for big data integration and management platforms fails to grow orcontinues to decrease in size, or if we fail to adapt to any changes in the industry, our business would be harmed. If we fail to successfully manage our business model transition to cloud-based products and a customer-centric salesmodel, our results of operations could be negatively impacted. To address the industry transition to cloud-based technologies and the decrease in big data application adoption, wehave accelerated the development of our cloud offerings. We expect the shift to a customer-centric sales model will helpdrive increased subscriptions by providing us with competitive insights during the sales process and more flexible pricingapproaches. During this transition, revenue, orders, gross margin, net income (loss), earnings (loss) per share, deferredrevenue, and cash flow from operations will be impacted as more revenue is recognized ratably rather than up front. Inaddition, we will need to increase our volume of subscriptions in order to achieve our financial objections, as customerstypically purchase smaller initial subscriptions of cloud-based offerings. This transition may give rise to a number of risks,and if we do not successfully execute this transition, our business and future operating results could be adversely affected. Our ability to achieve our financial objectives is subject to risks and uncertainties. Continued development of existingcloud offerings as well as new cloud offerings requires a considerable investment of technical, financial, legal, and salesresources, and a scalable organization. Market acceptance of such offerings is affected by a variety of factors, including butnot limited to: security, reliability, performance, current license terms, customer preference, social/community engagement,customer concerns with entrusting a third-party to store and manage their data, public concerns regarding privacy and dataprotection and the enactment of restrictive laws or regulations. Whether our15 Table of Contentsbusiness model transition will prove successful and will accomplish our business and financial objectives is subject tonumerous uncertainties, including but not limited to: customer demand, attach and renewal rates, channel acceptance, ourability to further develop and scale infrastructure, our ability to include functionality and usability in such offerings thataddress customer requirements, competitive offerings, particularly from low end cloud competition, tax and accountingimplications, pricing, and our costs. In addition, the metrics we use to gauge the status of our business model transition mayevolve over the course of the transition as significant trends emerge. If we are unable to successfully establish these newofferings and navigate our business model transition in light of the foregoing risks and uncertainties, our results of operationscould be negatively impacted. Even if we successfully implement this transition, new customers and existing customers maynot purchase subscriptions for our new or redeveloped cloud offerings. If we are not successful in executing our strategy to increase sales of our solution to new and existing large enterprisecustomers, our operating results may suffer. Our growth strategy is dependent in large part upon increasing sales of our solution to new and existing large enterprisecustomers, particularly when such sales result in large orders for our solution. Sales to these large enterprise customersinvolve risks that may not be present (or that are present to a lesser extent) with sales to smaller customers, which can act as adisincentive to our sales team to pursue these larger customers. These risks include: ·Competition from companies that traditionally target larger enterprises and that may have pre-existingrelationships or purchase commitments from such customers; ·Increased purchasing power and leverage held by large enterprise customers in negotiating contractualarrangements with us; ·More stringent requirements in our support services, including demand for quicker support response times andpenalties for any failure to meet support requirements; and ·Longer sales cycles and the associated risk that substantial time and resources may be spent on a potential customerthat elects not to purchase our solutions. Large organizations often undertake a significant evaluation process that results in a lengthy sales cycle. Although werely on our channel partners for a portion of our sales, our sales representatives typically engage in direct interaction with ourprospective customers as well as our distributors and resellers. We typically provide evaluation products to these customersand may spend substantial time, effort and money in our sales efforts to these prospective customers. In addition, productpurchases by large organizations are frequently subject to budget constraints, multiple approvals and unanticipatedadministrative, processing and other delays. Finally, large organizations typically have longer implementation cycles,require greater product functionality and scalability, require a broader range of services, demand that vendors take on a largershare of risks, require acceptance provisions that can lead to a delay in revenue recognition and expect greater paymentflexibility. If we fail to realize an expected sale from a large customer in a particular quarter or at all, our business andoperating results could be adversely affected. All of these factors can add further risk to business conducted with thesecustomers. Our sales cycle can be long and unpredictable, particularly with respect to sales through our channel partners or sales toenterprise customers, and our sales efforts require considerable time and expense. Our results of operations may fluctuate, in part, because of the resource-intensive nature of our sales efforts, the lengthand variability of the sales cycle of our subscription offerings and the difficulty in making short-term adjustments to ouroperating expenses. Our results of operations depend in large part on sales to larger subscription customers and increasingsales to existing customers. The length of our sales cycle, from initial contact with our sales team to contractually committingto our subscription offerings, generally averages seven and a half months, but can vary substantially from customer tocustomer based on deal complexity as well as whether a sale is made directly by us or through a channel partner. Particularlyfor larger enterprise customers, the sales cycle can be longer and require additional resources as these customers mayundertake an evaluation process and we may spend substantial time, effort and money in these sales efforts. Additionally,product purchases by larger organizations are frequently subject to budget constraints, multiple approvals and unanticipatedadministrative, processing and other delays. Larger enterprise customers may also have longer implementation cycles andrequire greater product functionality or support. Our sales cycle can extend to more than a year for some customers. It isdifficult to predict exactly when, or even if, we will make16 Table of Contentsa sale to a potential customer or if we can increase sales to our existing customers. As a result, large individual sales have, insome cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. The loss or delay of one ormore large transactions in a quarter could affect our cash flows and results of operations for that quarter and our revenue forany future quarters. Because a substantial proportion of our expenses are relatively fixed in the short term, our results ofoperations will suffer if we are unable to convert large enterprise customers and our revenue falls below our expectations in aparticular quarter, which could cause the price of the ADSs to decline.If our existing customers terminate or do not renew their subscriptions, it could have an adverse effect on our business andresults of operations. We expect to derive a significant portion of our revenue from renewals of existing subscription agreements. For the yearended December 31, 2018, over half of our subscription bookings were generated from the renewals of existing subscriptionagreements or from the transition of our current customers to our cloud offering. As a result, achieving a high renewal rate ofour subscription agreements will be critical to our business. Our existing customers that purchase our subscription serviceshave no contractual obligation to renew their contracts after the completion of their initial subscription term, which istypically one year, and some customers may have a right to terminate during the subscription term. As a result, we may notaccurately predict future revenue from existing customers. Our customers’ renewal rates may decline or fluctuate, andtermination rates may increase or fluctuate, as a result of a number of factors, including their satisfaction with our platformand our customer support, our products’ ability to integrate with new and changing technologies, the frequency and severityof subscription outages, our product uptime or latency, and the pricing of our, or competing, products. If our customers renewtheir subscriptions, they may renew for shorter subscription terms or on other terms that are less economically beneficial tous. We have limited historical data with respect to rates of customer terminations or renewals, so we may not accuratelypredict future renewal trends. We cannot be certain that our customers will renew their subscriptions. If our customersterminate or do not renew their subscriptions, or renew on less favorable terms, our revenue may grow more slowly thanexpected or decline and our dollar-based net expansion rate, a key metric we use to track the growth of our business, maydecline.We rely significantly on revenue from subscriptions, which may decline and, because we recognize a significant portion ofrevenue from subscriptions over the term of the relevant subscription period, downturns or upturns in sales are notimmediately reflected in full in our results of operations. Subscription revenue accounts for a significant portion of our revenue, comprising 84% of total revenue in the yearended December 31, 2016, 85% in the year ended December 31, 2017 and 86% in the year ended December 31, 2018. Salesof new or renewal subscription contracts may decline and fluctuate as a result of a number of factors, including customers’level of satisfaction with our products, the prices of our products, the prices of products affected by our competitors andreductions in our customers’ spending levels. If our sales of new or renewal subscription contracts decline, our total revenueand revenue growth rate may decline and our business will suffer. Under ASC 606, the new revenue recognition standard, adopted by us on January 1, 2018, the support and maintenanceelement of subscription arrangements represent a series of performance obligations that are delivered over time and arerecognized over time, while the software license element, which is a much smaller portion of the subscription arrangement,represent a separate performance obligation and is recognized upfront when the license key is delivered to the customer. SeeNote 2 to our accompanying consolidated financial statements for information about ASC 606.As a result, a significant portion of the subscription revenue we report each quarter continues to be recognition ofdeferred revenue from subscription contracts entered into during previous fiscal quarters. Consequently, a decline in new orrenewed subscription contracts in any one fiscal quarter will not be fully or immediately reflected in revenue in that fiscalquarter but will negatively affect our revenue in future fiscal quarters. Accordingly, the effect of significant downturns in newor renewed sales of our subscriptions is not reflected in full in our results of operations until future periods. Also, it is difficultfor us to increase our subscription revenue rapidly through additional sales in any period, as the support and maintenanceelement of the revenue from new and renewal subscription contracts must be recognized over the applicable period. 17 Table of ContentsWe also pre-bill subscription orders and offer larger discounts to customers willing to pre-pay for longer, multi-yearsubscription contracts. Since 2014, we have decreased the average pre-billed duration of our subscriptions, which hasdirectly reduced billing while decreasing the average discount related to longer-duration contracts.One of our marketing strategies is to offer free open source and trial versions of our products, and we may not be able torealize the benefits of this strategy. We are dependent upon lead generation strategies, including our marketing strategy of offering free open source andtrial versions of our products, to generate sales opportunities. These strategies may not be successful in continuing togenerate sufficient sales opportunities necessary to increase our revenue. Many users never convert from the free open sourceor trial versions to the paid versions of our products. To the extent that users do not become, or we are unable to successfullyattract, paying customers, we will not realize the intended benefits of these marketing strategies and our ability to grow ourrevenue will be adversely affected.Our future success depends in large part on the growth of the market for big data applications and an increase in the desireto ingest, store and process big data, and we cannot be sure that the market for big data applications will grow as expectedor, even if such growth occurs, that our business will grow at similar rates, or at all.Our ability to increase the adoption of Talend Big Data Integration, increase sales of related support subscriptions andprofessional services depends on the increased adoption of big data services and applications by enterprises. While webelieve that big data services and applications can offer a compelling value proposition to many enterprises, the broadadoption of big data applications and services also presents challenges to enterprises, including developing the internalexpertise and infrastructure to manage big data applications and services effectively, coordinating multiple data sources,defining a big data strategy that delivers an appropriate return on investment and implementing an information technologyinfrastructure and architecture that enables the efficient deployment of big data solutions. Accordingly, our expectationsregarding the potential for future growth in the market for big data applications and services, and the third-party growthestimates for this market are subject to significant uncertainty. Market demand for on-premise big data systems andapplications has slowed recently, due in part to the rapid advance of big data capabilities from cloud platform providers. Ifthe market for big data applications and services does not grow as expected or continues to decline, our business prospectsmay be adversely affected. Even if the market for big data applications and services increases, we cannot be sure that ourbusiness will grow at a similar rate, or at all.We face intense competition in our market, especially from larger, well-established companies, and we may lack sufficientfinancial or other resources to maintain or improve our competitive position. The market for our products is highly competitive, quickly evolving and subject to rapid changes in technology, whichmay expand the alternatives to our customers for their data integration requirements. Our current primary competitorsgenerally fall into four categories. ·Diversified technology companies that offer data integration solutions, including: IBM, Microsoft, Oracle and SAP;·Pure-play data integration vendors, including: Ab Initio, SAS, Informatica and Tibco;·Early-stage, niche data integration technologies; and·Hand-coded, custom data integration solutions built internally by organizations that we target as potentialcustomers. Many of our existing competitors have, and some of our potential competitors could have, substantial competitiveadvantages such as: ·Greater name recognition and longer operating histories;·Larger sales and marketing budgets and resources;·Broader distribution and established relationships with distribution partners and customers;·Greater customer support resources;·Greater resources to make acquisitions;·Lower labor and development costs;·Larger and more mature intellectual property portfolios; and18 Table of Contents·Substantially greater financial, technical and other resources.Additionally, certain of our current strategic partners, such as Cloudera and Amazon Web Services may develop andoffer their own data integration solutions. Such competitors may be more likely to promote and sell their own solutions overour products. Further, such competitors may cease their relationships with us, and ultimately be able to transition customersonto their competing solutions, which could materially and adversely affect our revenues and growth. In addition, some of our larger competitors have substantially broader and more diverse product offerings and leveragetheir relationships based on other products or incorporate functionality into existing products to gain business in a mannerthat discourages users from purchasing our products, including through selling at zero or negative margins, productbundling, or closed technology platforms. Potential customers may also prefer to purchase from their existing suppliers ratherthan a new supplier regardless of product performance or features. These larger competitors often have broader market focusand may therefore not be as susceptible to downturns in a particular market. Many of our smaller competitors that specializein niche data integration technologies may introduce new products which are disruptive to our solution. Conditions in ourmarket could change rapidly and significantly as a result of technological advancements, partnering by our competitors, orcontinuing market consolidation. New start-up companies that innovate and large competitors that are making significantinvestments in research and development may invent similar or superior products and technologies that compete with ourproducts and technology. Our current and potential competitors may also establish cooperative relationships amongthemselves or with third parties that may further enhance their resources. While we endeavor to engage customers on ourstandard form agreements, in order to successfully engage larger customers in a highly competitive environment we may berequired to negotiate our standard terms or transact on our customers’ forms, which may result in accepting more onerousterms and obligations, and greater liability exposure, than we do in our standard forms. Some of our competitors have made or could make acquisitions of businesses that may allow them to offer more directlycompetitive and comprehensive solutions than they had previously offered. As a result of such acquisitions, our current orpotential competitors might be able to adapt more quickly to new technologies and customer needs, devote greater resourcesto the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage ofacquisitions or other opportunities more readily, or develop and expand their product offerings more quickly than we do.Due to various reasons, organizations may be more willing to add solutions incrementally to their existing data managementinfrastructure from competitors than to replace it with our solution. These competitive pressures in our market or our failureto compete effectively may result in price reductions, fewer orders, reduced revenue and gross margins and loss of marketshare. Any failure to meet and address these factors could seriously harm our business and results of operations.Because of the characteristics of open source software, there are few technological barriers to entry into the open sourcemarket by new competitors and it may be relatively easy for competitors, some of whom may have greater resources thanwe have, to enter our markets and compete with us. One of the characteristics of open source software is that anyone may obtain access to the source code for our opensource products and then modify and redistribute the existing open source software and use it to compete in the marketplace.Such competition can develop without the degree of overhead and lead time required by traditional proprietary softwarecompanies. It is possible for competitors to develop their own software, including software based on Talend Open Studio,potentially reducing the demand for our solution and putting price pressure on our subscription offerings. We cannotguarantee that we will be able to compete successfully against current and future competitors or that competitive pressure orthe availability of new open source software will not result in price reductions, reduced operating margins and loss of marketshare, any one of which could harm our business, financial condition, results of operations and cash flows.We may be unable to predict the future course of open source technology development, which could reduce the marketappeal of our offerings, damage our reputation and adversely affect our business, financial condition, results of operationsand cash flows. We do not exercise control over many aspects of the development of open source technology. Different groups of opensource software programmers compete with one another to develop new technology. Typically, the technology19 Table of Contentsdeveloped by one group will become more widely used than that developed by others. If we acquire or adopt new technologyand incorporate it into our offerings but competing technology becomes more widely used or accepted, the market appeal ofour offerings may be reduced, which could harm our reputation, diminish our brands and adversely affect our business,financial condition, results of operations and cash flows.If we do not accurately predict, prepare for, and respond promptly to the rapidly evolving technological and marketdevelopments and changing customer needs in our market, our competitive position and prospects will be harmed. The market for our products is characterized by continuing rapid technological development, the emergence of newtechnologies, evolving industry standards, changing customer needs and frequent new product introductions andenhancements. The introduction of products by our direct competitors or others incorporating new technologies, theemergence of new industry standards, or changes in customer requirements could render our existing products obsolete,unmarketable, or less competitive. In addition, industry-wide adoption or increased use of hand-coding, open sourcestandards or other uniform open standards across heterogeneous applications could minimize the importance of theintegration functionality of our products and materially adversely affect the competitiveness and market acceptance of ourproducts. Furthermore, the standards on which we choose to develop new products or enhancements may not allow us tocompete effectively for business opportunities. Our success depends upon our ability to enhance existing products, respond to changing customer requirements anddevelop and introduce, in a timely manner, new products that keep pace with technological and competitive developmentsand emerging industry standards. For example, many of our customers have transitioned to cloud computing environments,which has accelerated the development of our cloud offerings. We have in the past experienced delays in releasing newproducts and product enhancements and may experience similar delays in the future. We may also pursue marketingstrategies that focus on certain products or features over other offerings, and decisions to deploy our limited resourcestowards particular goals that do not meet a positive market response will harm our operating results. As a result, in the past,some of our customers deferred purchasing our products until the next upgrade was released. Additionally, the success of newproduct introductions depends on a number of factors including, but not limited to, timely and successful productdevelopment, market acceptance, our ability to manage the risks associated with new product releases, our ability tosuccessfully plan and execute on a sales strategy for our new products, the availability of software components for newproducts, the effective management of development and other spending in connection with anticipated demand for newproducts, the availability of newly developed products and the risk that new products may have bugs, errors or other defectsor deficiencies in the early stages of introduction. Future delays or problems in the installation or implementation of our newreleases may cause customers to forgo purchases of our products and purchase those of our competitors instead. Additionally,even if we are able to develop new products and product enhancements, we cannot ensure that they will achieve marketacceptance.Our debt agreements contain certain restrictions that may limit our ability to operate our business.The terms of the Loan and Security Agreement our subsidiaries, Talend, Inc., Talend USA, INC. and Stitch, Inc., enteredinto with Square 1 Bank, a division of Pacific Western Bank, or Square 1, on February 14, 2019, or the Loan Agreement, andthe related collateral documents with Square 1 contain or will contain once entered into in accordance with our post-closingobligations, and any future indebtedness would likely contain, a number of restrictive covenants that impose significantoperating and financial restrictions on us, including restrictions on our ability, and the ability of our subsidiaries, to takeactions that may be in our best interests, including, among others, disposing of assets, consummating change of controltransactions, mergers or acquisitions, incurring additional indebtedness, granting liens on our assets, and declaring andpaying dividends. The Loan Agreement requires us to satisfy specified financial covenants, including a minimum annualizedrecurring revenue covenant and a minimum cash flow covenant. Our ability to meet those financial covenants can be affectedby events beyond our control, and we may not be able to meet those covenants in the future. A breach of any of thesecovenants or the occurrence of other events specified in the Loan Agreement and/or the related collateral documents couldresult in an event of default under the Loan Agreement. Upon the occurrence of an event of default, Square 1 could elect todeclare all amounts outstanding under the Loan Agreement to be immediately due and payable and terminate allcommitments to extend further credit. If we were unable to repay those amounts, Square 1 could proceed against thecollateral granted to them to secure such indebtedness. We are required to pledge, and certain of our subsidiaries havepledged or will pledge, substantially all of our respective assets20 Table of Contentsas collateral under the loan documents. If Square 1 accelerates the repayment of borrowings, if any, we may not havesufficient funds to repay our existing debt. Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest innew products could reduce our ability to compete and could harm our business. We expect that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for theforeseeable future. However, we may need to raise additional funds in the future, and we may not be able to obtain additionaldebt or equity financing on favorable terms, if at all. If we raise additional equity financing, our shareholders may experiencesignificant dilution of their ownership interests and the per share value of our ordinary shares could decline. Furthermore, ifwe engage in debt financing, the holders of debt would have priority over the holders of ADSs and underlying ordinaryshares, and we may be required to accept terms that restrict our ability to incur additional indebtedness. We may also berequired to take other actions that would otherwise be in the interests of the debt holders and force us to maintain specifiedliquidity or other ratios, any of which could harm our business, results of operations and financial condition. If we needadditional capital and cannot raise it on acceptable terms, we may not be able to, among other things: ·Develop or enhance our products and professional services;·Continue to expand our sales and marketing and research and development organizations;·Acquire complementary technologies, products or businesses;·Expand operations in the United States or internationally;·Hire, train and retain employees; or·Respond to competitive pressures or unanticipated working capital requirements. Our failure to have sufficient capital to do any of these things could seriously harm our business, financial conditionand results of operations.We may acquire other businesses which could require significant management attention, disrupt our business, diluteshareholder value and adversely affect our results of operations. As part of our business strategy, we may acquire or make investments in complementary companies, products, ortechnologies. For example, in November 2018 we acquired Stitch, Inc. However, our ability as an organization to acquire andintegrate other companies, products, or technologies in a successful manner is unproven. Our ability to successfully acquireother companies, products and technologies depends, in part, on our ability to attract and retain highly skilled personnel. Ifwe are unable to attract and retain qualified personnel, we may be unable to take advantage of opportunities to makebeneficial acquisitions or investments. The identification of suitable acquisition candidates is difficult, and we may not beable to complete such acquisitions on favorable terms, if at all. If we do complete future acquisitions, we may not ultimatelystrengthen our competitive position or achieve our goals and business strategy, we may be subject to claims or liabilitiesassumed from an acquired company, product, or technology, and any acquisitions we complete could be viewed negativelyby our customers, investors and securities analysts. In addition, if we are unsuccessful at integrating recent and futureacquisitions, or the technologies associated with such acquisitions, into our company, the revenue and results of operationsof the combined company could be adversely affected. Any integration process may require significant time and resources,which may disrupt our ongoing business and divert management’s attention, and we may not be able to manage theintegration process successfully.21 Table of ContentsWe may not successfully evaluate or utilize the acquired technology or personnel, realize anticipated synergies fromthe acquisition, or accurately forecast the financial impact of an acquisition transaction and integration of such acquisition,including accounting charges. We may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for anyfuture acquisitions, each of which could adversely affect our financial condition or the market price of the ADSs. The sale ofequity or issuance of equity-linked debt to finance any future acquisitions could result in dilution to our shareholders. Theincurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictionsthat would impede our ability to manage our operations. The occurrence of any of these risks could harm our business, resultsof operations and financial condition. Our relatively limited operating history makes it difficult to evaluate our current business and prospects and may increasethe risks associated with your investment.We were founded in 2005, launched our first product in 2006 and began offering our platform on a subscription basis in2007. Our relatively limited operating history makes it difficult to evaluate our current business and our future prospects,including our ability to plan for and model future growth. We have encountered and will continue to encounter risks anddifficulties frequently experienced by rapidly growing companies in constantly evolving industries, including changingcustomer preferences, competing offerings and pricing, evolving sales strategies and other risks described in this AnnualReport. If we do not address these risks successfully, our business and results of operations will be adversely affected, and themarket price of our ADSs could decline. Further, we have limited historical financial data and we operate in a rapidlyevolving market. As such, any predictions about our future revenue and expenses may not be as accurate as they would be ifwe had a longer operating history or operated in a more predictable market.Delivering certain of our products via the cloud increases our expenses and may pose other challenges to our business. We offer and sell our products via both the cloud and on premise using the customer’s own infrastructure. Our cloudoffering enables quick setup and subscription pricing. Historically, our products were developed in the context of the on-premise offering, and we have less operating experience offering and selling our products via our cloud offering. Although amajority of our revenue has historically been generated from customers using our on-premise products, we believe that overtime more customers will move to the cloud offering. As more of our customers transition to the cloud, we may be subject toadditional contractual obligations with respect to privacy, security and data protection, and data security, as well ascompetitive pressures and higher operating costs, any of which may harm our business. If our cloud offering does not developas quickly as we expect, or if we are unable to continue to scale our systems to meet the requirements of a large cloudoffering, our business may be harmed. We are directing a significant portion of our financial and operating resources toimplement a robust cloud offering for our products and to transition our existing customers to our cloud offerings, but even ifwe continue to make these investments, we may be unsuccessful in growing or implementing our cloud offeringcompetitively, and our business, results of operations and financial condition could be harmed.We derived a substantial portion of our subscription revenue in the year ended December 31, 2018 from our Talend BigData Integration and Talend Cloud solutions and failure of these solutions to satisfy customer demands or to achieveincreased market acceptance would harm our business, results of operations, financial condition and growth prospects. We derived a substantial portion of our subscription revenue in the year ended December 31, 2018 and expect tocontinue to derive a significant portion of our subscription revenue from our Talend Big Data Integration and Talend Cloudsolutions. Demand for Talend Big Data Integration and Talend Cloud is affected by a number of factors, many of which arebeyond our control, including market acceptance of our solutions by referenceable accounts for existing and new use cases,the timing of development and release of new products by our competitors and additional capabilities and functionality byus, technological change and growth or contraction in the market in which we compete, including the adoption of big datatechnologies. We expect the proliferation of data to lead to an increase in the IT integration needs of our customers, andTalend Big Data Integration and Talend Cloud may not be able to perform to meet those demands. If we are unable tocontinue to meet our subscription customer requirements, to achieve more widespread market acceptance of Talend Big DataIntegration and Talend Cloud, or to increase demand for these solutions, our business, results of operations, financialcondition and prospects will be harmed.22 Table of ContentsThe sales prices of our products may decrease, which may reduce our gross profits and adversely affect our financialresults. The sales prices for our subscription offerings and professional services may decline for a variety of reasons, includingcompetitive pricing pressures, discounts, a change in our mix of subscription offerings and professional services and theirrespective margins, introduction of new pricing models such as on-demand pricing or new sales models, anticipation of theintroduction of new subscription offerings or professional services, or promotional programs. Competition continues toincrease in the market segments in which we participate, and we expect competition to further increase in the future, therebyleading to increased pricing pressures. Larger competitors with more diverse product and service offerings may reduce theprice of products or services that compete with ours or may bundle them with other products and services. Additionally,currency fluctuations in certain countries and regions may negatively impact actual prices that channel partners andcustomers are willing to pay in those countries and regions. We cannot assure you that we will be successful in developingand introducing new subscription offerings with enhanced functionality on a timely basis, or that any such new subscriptionofferings, if introduced, will enable us to maintain our prices and gross profits at levels that will allow us to achieve andmaintain profitability.Incorrect implementation or use of our software could result in customer dissatisfaction and negatively affect our business,operations, financial results and growth prospects. Our platform is designed to be operated in a self-service manner by our customers who subscribe to our cloud-basedsolution. In addition, our platform may be deployed in large scale, complex IT environments of our customers. Our customersand channel partners require training and experience in the proper use of and the variety of benefits that can be derived fromour platform to maximize its potential. If our platform is not implemented or used correctly or as intended, inadequateperformance or security vulnerabilities may result. Because our customers rely on our software to manage a wide range ofoperations, the incorrect implementation or use of our software or our failure to train customers on how to use our softwareproductively may result in customer dissatisfaction, negative publicity and may adversely affect our reputation and brand.Failure by us to provide these training and implementation services to our customers would result in lost opportunities forfollow-on sales to these customers and adoption of our platform by new customers and adversely affect our business andgrowth prospects. In cases where our platform has been deployed on-premise within a customer’s IT environment, if we or our customersare unable to configure or implement our software properly, or unable to do so in a timely manner, customer perceptions ofour platform may be impaired, our reputation and brand may suffer, and customers may choose not to increase their use of ourplatform or to discontinue its use. In addition, our on-premise solution imposes server load and data storage requirements forimplementation. If our customers do not have the server load capacity or the storage capacity required, they may not be ableto implement and use our platform effectively and, therefore, may choose to discontinue their use of our platform or notincrease their use.Our ability to increase sales of our solution is highly dependent on the quality of our customer support, and our failure tooffer high quality support would have an adverse effect on our business, reputation and results of operations. After our products are deployed within our customers’ IT environments, our customers depend on our technical supportservices, as well as the support of our channel partners, including value added resellers, to resolve issues relating to ourproducts. Our channel partners often provide similar technical support for third parties’ products and may therefore havefewer resources to dedicate to the support of our products. If we or our channel partners do not succeed in helping ourcustomers quickly resolve post-deployment issues or provide effective ongoing support, our ability to sell additionalsubscriptions to existing customers would be adversely affected and our reputation with potential customers could bedamaged. Many larger enterprise and government entity customers have more complex IT environments and require higherlevels of support than smaller customers. If we or our channel partners fail to meet the requirements of these enterprisecustomers, it may be more difficult to grow sales with enterprise customers. Additionally, if our channel partners do not effectively provide support to the satisfaction of our customers, we may berequired to provide direct support to such customers, which would require us to hire additional personnel and to invest inadditional resources. It can take several months to recruit, hire and train qualified technical support employees. We may notbe able to hire such resources fast enough to keep up with unexpected demand, particularly if the sales of23 Table of Contentsour products exceed our internal forecasts. To the extent that we or our channel partners are unsuccessful in hiring, trainingand retaining adequate support resources, our and our channel partners’ ability to provide adequate and timely support to ourcustomers, and our customers’ satisfaction with our products and services, will be adversely affected. Additionally, to theextent that we may need to rely on our sales engineers to provide post-sales support while we are ramping our supportresources, our sales productivity will be negatively affected, which would harm our revenue. Our or our channel partners’failure to provide and maintain high-quality support services would have an adverse effect on our business, financialcondition and results of operations.A significant defect, security vulnerability, error or performance failure in our software could cause us to lose revenue andexpose us to liability. The software and professional services we offer are inherently complex and, despite extensive testing and qualitycontrol, have in the past and may in the future contain defects or errors or not perform as contemplated, especially when firstintroduced. These defects, security vulnerabilities, errors or performance failures could cause damage to our reputation, lossof customers or revenue, product returns, order cancellations, service terminations, or lack of market acceptance of oursoftware. As the use of our solution, including products that were recently acquired or developed, expands to more sensitive,secure, or mission critical uses by our customers, we may be subject to increased scrutiny, potential reputational risk, orpotential liability should our software fail to perform as contemplated in such deployments. We have in the past and may inthe future need to issue corrective releases of our software to fix these defects, errors or performance failures, which couldrequire us to allocate significant research and development and customer support resources to address these problems. Our standard form agreements with our customers typically contain provisions intended to limit both the types ofclaims for which we would be liable and the maximum amount of our liability. However, some of our customers require us toaccept contract terms that do not include the same limitations. Additionally, any limitation of liability provisions that maybe contained in our license agreements may not be effective as a result of existing or future national, federal, state, or locallaws or ordinances or unfavorable judicial decisions. Although we have not experienced any liability claims to date, the saleand support of our products entail the risk of such claims, which could be substantial in light of the use of our products inenterprise-wide environments. In addition, our insurance against this liability may not be adequate to cover a potential claim.Interruptions or performance problems associated with our technology and infrastructure, such as security incidents, andour reliance on technologies from third parties, may adversely affect our business operations and financial results. Our website and internal technology infrastructure may experience performance issues due to a variety of factors,including infrastructure changes, human or software errors, website or third-party hosting disruptions or capacity constraintsdue to a number of potential causes, including technical failures, natural disasters or fraud or security incidents. Our use anddistribution of open source software may increase this risk. If our website is unavailable or our users are unable to downloadour tools or order subscription offerings or professional services within a reasonable amount of time or at all, our businesscould be harmed.Further, we expect to continue to make significant investments to maintain and improve website performance and toenable rapid releases of new features and applications for Talend Data Fabric and Talend Open Studio. To the extent that wedo not effectively upgrade our systems as needed and continually develop our technology to accommodate actual andanticipated changes in technology, our business and results of operations may be harmed.In addition, we rely on cloud technologies from third parties in order to operate critical functions of our business,including financial management services, relationship management services and lead generation management services. Wealso host our Talend Cloud services on third-party cloud platforms. If these services become unavailable due to extendedoutages or interruptions or because they are no longer available on commercially reasonable terms or prices, our expensescould increase, our ability to manage our finances could be interrupted, our processes for managing sales of our subscriptionofferings and professional services and supporting our customers could be impaired, and our ability to generate and managesales leads could be weakened until equivalent services, if available, are identified, obtained and implemented, all of whichcould harm our business and results of operations.24 Table of ContentsIf our security measures are breached or unauthorized access to private or proprietary data is otherwise obtained, oursoftware may be perceived as not being secure, customers may reduce the use of or stop using our products, and we mayincur significant liabilities.Similarly, while we have taken measures to protect the confidential information that we have access to, includingconfidential information we may obtain through customer usage of our cloud-based services, any security breach, includingthose resulting from a cybersecurity attack, phishing attack, or any unauthorized access, unauthorized usage, virus or similarbreach or disruption could result in the loss of confidential information, damage to our reputation, litigation, regulatoryinvestigations or other liabilities. These attacks may come from individual hackers, criminal groups, and state-sponsoredorganizations. Any compromise of our security or any unauthorized access to or breaches of the security of our or ourvendors’ systems, or of our product offerings, as a result of third-party action, employee error, defect or bug in our products,malfeasance or otherwise and, as a result, someone obtains unauthorized access to our confidential information or personalinformation or the confidential information or personal information of our customer, could result in the loss of data or theloss or corruption of, or unauthorized access to or acquisition of, intellectual property or trade secrets or other data, loss ofbusiness, reputational damage, regulatory investigations and orders, litigation, indemnity obligations, damages for contractbreach, penalties for violation of applicable laws, regulations, or contractual obligations, and significant costs, fees and othermonetary payments for remediation. Even the perception of inadequate security may damage our reputation and negativelyimpact our ability to win new customers and retain existing customers. Further, we could be required to expend significantcapital and other resources to address any data security incident or breach. We engage third-party vendors and service providers to store and otherwise process some of our and our customers’data, including sensitive and personal information. Our vendors and service providers may also be the targets of cyberattacks,malicious software, phishing schemes, and fraud. Our ability to monitor our vendors and service providers’ data security islimited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorizedaccess to, misuse, disclosure, loss or destruction of our and our customers’ data, including sensitive and personal information.Techniques used to sabotage or obtain unauthorized access to systems or networks are constantly evolving and, in someinstances, are not identified until launched against a target. We and our service providers may be unable to anticipate thesetechniques, react in a timely manner, or implement adequate preventative measures.Further, we cannot assure that any limitations of liability provisions in our customer and user agreements, contractswith third-party vendors and service providers or other contracts would be enforceable or adequate or would otherwiseprotect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matter. While our insurance policies include liability coverage for certain of these matters, if we experienced awidespread security breach or other incident that impacted a significant number of our customers to whom we owe indemnityobligations, we could be subject to indemnity claims or other damages that exceed our insurance coverage. We also cannotbe certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, thatinsurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not denycoverage as to any future claim. The successful assertion of one or more large claims against us that exceed availableinsurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition oflarge deductible or co-insurance requirements, could have a material adverse effect on our business, including our financialcondition, operating results, and reputation.The competitive position of our product offerings depends in part on their ability to operate with third-party products andservices and our customers’ existing infrastructure. The competitive position of our product offering depends in part on their ability to operate with products and servicesof third parties, including companies that offer big data solutions, cloud-based solutions, software services and infrastructure,and our products must be continuously modified and enhanced to adapt to changes in hardware, software, networking,browser and database technologies. In the future, one or more technology companies, whether our partners or otherwise, maychoose not to support the operation of their software, software services and infrastructure with our product offerings. Inaddition, to the extent that a third-party were to develop software or services that compete with ours, that provider maychoose not to support our product offering. We intend to facilitate the compatibility of our solution with various third-partysoftware, big data solutions, cloud-based solutions, software services and infrastructure25 Table of Contentsofferings by maintaining and expanding our business and technical relationships. If we are not successful in achieving thisgoal, our business, financial condition and results of operations may suffer. Additionally, our products must interoperate with our customers’ existing infrastructure, which often have differentspecifications, deploy products from multiple vendors, and contain multiple generations of products that have been addedover time. As a result, when problems occur, it may be difficult to identify the sources of these problems. If we find errors inthe existing software that create integration errors or problems in our customers’ IT environments, as we have in the past, wemay have to issue software updates as part of our normal maintenance process. Any delays in identifying the sources ofproblems or in providing necessary modifications to our software could have a negative impact on our reputation and ourcustomers’ satisfaction with our products and services, and our ability to sell products and services could be adverselyaffected. In addition, governments and other customers may require our products to comply with certain security or othercertifications and standards.We depend on our executive officers and other key employees, and the loss of one or more of these employees or aninability to attract and retain highly skilled employees could harm our business. Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. The loss ofthe services of any of our key personnel, the inability to attract or retain qualified personnel, or delays in hiring requiredpersonnel, particularly in finance, engineering and sales, may seriously harm our business, financial condition and results ofoperations. Although we have entered into employment offer letters with our key personnel, these agreements have nospecific duration and constitute at-will employment. We are also substantially dependent on the continued service of ourexisting engineering personnel because of the complexity of our platform. Any failure to hire, train and adequately incentivize our sales personnel could negatively affect our growth. If our salesmodel is not successful, or if new sales models we adopt are not successful, our business could be adversely affected. Inaddition, any failure of our management and sales personnel to develop and implement sales strategies for our new productofferings, such as our Talend Catalog offering, could harm our ability to successfully introduce new products. Further, theinability of our recently hired sales personnel to effectively ramp up to target productivity levels could negatively affect ouroperating margins. In addition, if we are not effective in managing any leadership transition in our sales organization, ourbusiness could be adversely affected and our results of operations and financial condition could be harmed. Competition for highly skilled personnel is often intense, especially in the San Francisco Bay Area, the UnitedKingdom and France, where we have substantial presence and need for highly skilled personnel. Additionally, the industry inwhich we operate generally experiences high employee attrition. We may not be successful in attracting, integrating, orretaining qualified personnel to fulfill our current or future needs. Also, to the extent we hire personnel from competitors, wemay be subject to allegations that they have been improperly solicited, that they have divulged proprietary or otherconfidential information, or that their former employers own their inventions or other work product. Our future performance also depends on the continued services and continuing contributions of our senior managementto execute on our business plan and to identify and pursue new opportunities and product innovations. The loss of servicesof senior management could significantly delay or prevent the achievement of our development and strategic objectives,which could adversely affect our business, financial condition and results of operations. Our employees do not have employment arrangements that require them to continue to work or us for any specifiedperiod, and therefore, they could terminate their employment with us at any time. We do not maintain key person lifeinsurance policies on any of our employees. The loss of one or more of our key employees could seriously harm our business.If we do not effectively expand and train our sales force, we may be unable to add new customers or increase sales to ourexisting customers and our business will be adversely affected. We continue to be substantially dependent on our sales force to obtain new customers and to drive additional usage andsales among our existing customers. We believe that there is significant competition for sales personnel, including enterprisesales representatives and sales engineers, with the skills and technical knowledge that we require. In26 Table of Contentsparticular, there is significant demand for sales engineers with big data and cloud-based software expertise. Our ability toachieve significant revenue growth will depend, in large part, on our success in recruiting, training and retaining sufficientnumbers of sales personnel to support our growth. For example, attrition and changing sales team leadership have resultedand may continue to result in slower than expected growth in those geographies. New hires require significant training andmay take significant time before they achieve full productivity before we can continue to scale our sales efforts. Our recenthires and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficientnumbers of qualified individuals in the markets where we do business or plan to do business. In addition, as we continue togrow rapidly, a large percentage of our sales force will have relatively little experience working with us, our subscriptionofferings and our business model. If we are unable to hire and train sufficient numbers of effective sales personnel, or oursales personnel are not successful in obtaining new customers or increasing sales to our existing customer base, our businesswill be harmed.Employment laws in some of the countries in which we operate are stringent, which could restrict our ability to react tomarket changes and cause us to incur higher expenses. As of December 31, 2018, we had 1,136 full-time employees, of whom approximately 35% were located in the UnitedStates, 29% were located in France, 8% were located in China and 8% were located in Germany. In some of the countries inwhich we operate, employment laws may grant significant job protection to certain employees, including rights ontermination of employment and setting maximum number of hours and days per week a particular employee is permitted towork. In addition, in certain countries in which we operate, we are often required to consult and seek the advice of employeerepresentatives and unions. These laws, coupled with the requirement to consult with any relevant employee representativesand unions, could affect our ability to react to market changes and the needs of our business and cause us to incur higherexpenses.Any unauthorized, and potentially improper, actions of our sales or other personnel could adversely affect our business,results of operations and financial condition. The recognition of our revenue depends on, among other things, the terms negotiated in our contracts with ourcustomers. Our sales or other personnel may act outside of their authority and negotiate additional terms without ourknowledge. We have implemented policies to help prevent and discourage such conduct, but there can be no assurance thatsuch policies will be followed. For instance, in the event that our sales personnel negotiate terms that do not appear in thecontract and of which we are unaware, whether such additional terms are written or verbal, we could be prevented fromrecognizing revenue in accordance with our plans. Furthermore, depending on when we learn of unauthorized actions and thesize of the transactions involved, we may have to restate revenue for a previously reported period, which would seriouslyharm our business, results of operations and financial condition.We rely on channel partners to execute a portion of our sales; if our channel partners fail to perform, our ability to sell oursolution will be limited, and, if we fail to optimize our channel partner model going forward, our results of operations willbe harmed. A portion of our revenue is generated by sales through our channel partners, especially in international markets. As wegrow our business into new and existing international markets, we expect that our reliance on channel partners to generatesales will also grow. We provide our channel partners with specific training and programs to assist them in selling ourproducts, but there can be no assurance that these steps will be effective. In addition, our channel partners may beunsuccessful in marketing, selling and supporting our products. If we are unable to develop and maintain effective salesincentive programs for our channel partners, we may not be able to incentivize these partners to sell our products tocustomers and, in particular, to large enterprises. These partners may also market, sell, and support products and services thatare competitive with ours and may devote more resources to the marketing, sales and support of such competitive products.These partners may have incentives to promote our competitors’ products to the detriment of our own or may cease sellingour products altogether. Our agreements with our channel partners may generally be terminated for any reason by either partywith advance notice prior to each annual renewal date. We cannot assure you that we will retain these channel partners or thatwe will be able to secure additional or replacement channel partners. The loss of one or more of our significant channelpartners or a decline in the number or size of orders from any of them could harm our results of operations. In addition, anynew channel partner requires extensive training and may take several months or more to achieve productivity. Our channelpartner sales structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of ourchannel partners misrepresents the functionality of27 Table of Contentsour products or services to customers or violates laws or our corporate policies. If we fail to effectively manage our existingsales channels, if our channel partners are unsuccessful in fulfilling the orders for our products, or if we are unable to enterinto arrangements with, and retain a sufficient number of, high quality channel partners in each of the regions in which wesell products and services and keep them motivated to sell our products, our ability to sell our products and results ofoperations will be harmed.If we are unable to maintain successful relationships with our strategic partners, our business operations, financial resultsand growth prospects could be adversely affected. In addition to our direct sales force and channel partners, we maintain strategic relationships with a variety of strategicpartners, including systems integrators and big data, cloud application and analytical software vendors, to jointly market andsell our subscription offerings. We expect that sales through our strategic partners will continue to grow as a proportion ofour revenue for the foreseeable future. Our agreements with our strategic partners are generally non-exclusive, meaning our strategic partners may offercustomers the products and services of several different companies, including products and services that compete with ours,or may themselves be or become competitors. If our strategic partners do not effectively market and sell our subscriptionofferings, choose to use greater efforts to market and sell their own products and services or those of our competitors, or fail tomeet the needs of our customers, our ability to grow our business and sell our subscription offerings may be harmed. Ourstrategic partners may cease marketing our subscription offerings with limited or no notice and with little or no penalty. Theloss of a substantial number of our strategic partners, our possible inability to replace them, or the failure to recruit additionalstrategic partners could harm our results of operations. Our ability to achieve revenue growth in the future will depend in part on our success in maintaining successfulrelationships with our strategic partners, and in helping our partners enhance their ability to market and sell our subscriptionofferings. If we are unable to maintain our relationships with these strategic partners, our business, results of operations,financial condition or cash flows could be harmed.If we are not successful in sustaining and expanding our international business, we may incur additional losses and ourrevenue growth could be harmed.Our future results depend, in part, on our ability to sustain and expand our penetration of the international markets inwhich we currently operate and to expand into additional international markets. We depend on direct sales and our channelpartner relationships to sell our subscription offerings and professional services in international markets. Our ability toexpand internationally will depend upon our ability to deliver functionality and foreign language translations that reflect theneeds of the international clients that we target. Our ability to expand internationally involves various risks, including theneed to invest significant resources in such expansion, and the possibility that returns on such investments will not beachieved in the near future or at all in these less familiar competitive environments. We may also choose to conduct ourinternational business through strategic alliances. If we are unable to identify strategic alliance partners or negotiatefavorable alliance terms, our international growth may be harmed. In addition, we have incurred and may continue to incursignificant expenses in advance of generating material revenue as we attempt to establish our presence in particularinternational markets. Sustaining and expanding our international business will also require significant attention from our management andwill require us to add additional management and other resources in these new markets. Our ability to expand our business,attract talented employees and enter into channel partnerships in an increasing number of international markets requiresconsiderable management attention and resources and is subject to the particular challenges of supporting a rapidly growingbusiness in an environment of multiple languages, cultures, customs, legal systems, alternative dispute systems, regulatorysystems, commercial infrastructures and technology infrastructure. If we are unable to grow our international operations in atimely and effective manner, we may incur additional losses and our revenue growth could be harmed.28 Table of ContentsOur business is substantially dependent on sales leads from digital marketing efforts and if we are unable to generatesignificant volumes of such leads, traffic to our websites and our revenue may decrease. We utilize digital marketing channels, such as paid and free online search, display advertising, email and social media,in order to direct potential customers interested in our solution to our websites and generate sales leads. Many of thesepotential customers find our websites by searching for data integration solutions through Internet search engines, particularlyGoogle. A critical factor in attracting potential customers to our websites is how prominently our websites are displayed inresponse to search inquiries. If we are listed less prominently or fail to appear in search result listings for any reason, visits toour websites by customers and potential customers could decline significantly and we may not be able to replace this traffic.Furthermore, if the costs associated with our digital marketing channels increase, we may be required to increase our salesand marketing expenses, which may not be offset by additional revenue, and our business and results of operations could beadversely affected.If we are not able to maintain and enhance our brand, our business and results of operations may be adversely affected. We believe that the brand identities that we have developed have contributed significantly to the success of ourbusiness. We also believe that maintaining and enhancing our brands is important to expanding our customer base andattracting talented employees. In order to maintain and enhance our brands, we may be required to make further investmentsthat may not be successful. Maintaining our brands will depend in part on our ability to remain a leader in data integrationand management technology and our ability to continue to provide high-quality offerings. If we fail to promote and maintainour brands, or if we incur excessive costs in doing so, our business, financial condition, results of operations and cash flowsmay be harmed.Reliance on sales at the end of the quarter could cause our revenue for the applicable period to fall below expected levels. As a result of customer buying patterns, we have historically received a substantial portion of subscriptions during thelast month or later of each fiscal quarter. If expected sales at the end of any fiscal quarter is delayed for any reason, includingthe failure of anticipated purchase orders to materialize, our inability to release new products on schedule, any failure of oursystems related to order review and processing, or any delays in order fulfillment based on trade compliance requirements,our cash flows and results of operations for that quarter, and our revenue for subsequent periods could fall below ourexpectations and the estimates of analysts, which could adversely impact our business and results of operations and cause adecline in the market price of the ADSs.The seasonality of our business can create variance in our quarterly bookings, subscription revenue and cash flows fromoperations. We operate on a December 31 fiscal year end and believe that there are seasonal factors which may cause us toexperience lower levels of sales in our first fiscal quarter ending March 31 as compared with other quarters. We believe thatthis seasonality results from a number of factors, including:·Companies using their IT budget at the end of the calendar year resulting in higher sales activity in the quarterending December 31;·Sales personnel being compensated on annual plans and finalizing sales transactions in the quarter endingDecember 31, thereby exhausting most of their sales pipeline for the quarter ending March 31; and·Recruiting sales personnel primarily in the first and second quarters, which leads to greater sales productivity in thesecond half of the fiscal year. Additionally, to the extent we experience lower new customer bookings in earlier quarters, the resulting reducedsubscription revenue may not be reflected in our operating results until subsequent quarters. We believe that these seasonaltrends have been masked in recent periods due to our growth, but we anticipate that they may be more pronounced in futureperiods. 29 Table of ContentsOur future quarterly results may fluctuate significantly, which could adversely affect the trading price of our ADSs. Our results of operations, including the levels of our revenue, cost of revenue, gross margin, operating expenses, cashflow and deferred revenue, have fluctuated from quarter-to-quarter in the past and may continue to vary significantly in thefuture so that period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our financialresults in any one quarter should not be relied upon as indicative of future performance. Our quarterly financial results mayfluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may ormay not fully reflect the underlying performance of our business. Because the timing and amount of our revenue is difficultto forecast and because our operating costs and expenses are relatively fixed in the short term, if our revenue does not meetour expectations, we are unlikely to be able to adjust our spending to levels commensurate with our revenue. As a result, theeffect of revenue shortfalls on our results of operations may be more accentuated, and these and other fluctuations inquarterly results may negatively affect the market price of our ADSs. Factors that may cause fluctuations in our quarterly financial results include, but are not limited to, those listed below: ·Our ability to attract and retain new customers;·The addition or loss of enterprise customers;·Our ability to successfully expand our business domestically and internationally;·Our ability to gain new channel partners and retain existing channel partners;·Fluctuations in the growth rate of the overall market that our solution addresses;·Fluctuations in the mix of our revenue;·The amount of contract revenue that we recognize ratably as the proportion of our business represented by cloudincreases;·The amount and timing of operating expenses related to the maintenance and expansion of our business andoperations, including continued investments in sales and marketing, research and development and general andadministrative resources;·Network outages or performance degradation of our cloud service;·Information security breaches and incidents;·General economic, industry and market conditions;·Customer renewal rates;·Increases or decreases in the number of elements of our subscription offerings or pricing changes upon any renewalsof customer agreements;·Changes in our pricing policies or those of our competitors;·The budgeting cycles and purchasing practices of customers;·Decisions by potential customers to purchase alternative solutions from larger, more established vendors, includingfrom their primary software vendors;·Decisions by potential customers to develop in-house solutions as alternatives to our platform;·Insolvency or credit difficulties confronting our customers, which could adversely affect their ability to purchase orpay for our software and services;·Delays in our ability to fulfill our customers’ orders;·Seasonal variations in sales of our solution;·The cost and potential outcomes of future litigation or other disputes;·Future accounting pronouncements or changes in our accounting policies;·Our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure andany new legislation or regulatory developments;·Fluctuations in share-based compensation expense;·Fluctuations in foreign currency exchange rates;·The timing and success of new products and service introductions by us or our competitors or any other change inthe competitive dynamics of our industry, including consolidation among competitors, customers or strategicpartners;·The timing of expenses related to the development or acquisition of technologies or businesses and potential futurecharges for impairment of goodwill from acquired companies; and·Other risk factors described in this Annual Report.30 Table of ContentsOur current research and development efforts may not produce successful products or features that result in significantrevenue, cost savings or other benefits in the near future, if at all. Developing our products and related enhancements is expensive. Our investments in research and development may notresult in significant design improvements, marketable products or features, or may result in products that are more expensivethan anticipated. Additionally, we may not achieve the cost savings or the anticipated performance improvements we expect,and we may take longer to generate revenue, or generate less revenue, than we anticipate. Our future plans include significantinvestments in research and development and related product opportunities. We believe that we must continue to dedicate asignificant amount of resources to our research and development efforts to maintain our competitive position. However, wemay not receive significant revenue from these investments in the near future, if at all, or these investments may not yield theexpected benefits, either of which could adversely affect our business and results of operations.Failure to protect our proprietary technology and intellectual property rights could substantially harm our business andresults of operations. Our success depends to a significant degree on our ability to protect our proprietary technology, methodologies, know-how and our brand. We rely on a combination of trademarks, copyrights, contractual restrictions and other intellectualproperty laws and confidentiality procedures to establish and protect our proprietary rights. However, the steps we take toprotect our intellectual property may be inadequate. We will not be able to protect our intellectual property if we are unableto enforce our rights or if we do not detect unauthorized use of our intellectual property. If we fail to protect our intellectualproperty rights adequately, our competitors may gain access to our technology and our business may be harmed. In addition,defending our intellectual property rights might entail significant expense. Any patents, trademarks, or other intellectualproperty rights that we have or may obtain may be challenged by others or invalidated through administrative process orlitigation. As of December 31, 2018, we had two pending patent applications and no issued patents. If we decide to seekfurther patent protection in the future, we may be unable to obtain any patent protection for our technology. In addition, anypatents issued in the future may not provide us with competitive advantages or may be successfully challenged by thirdparties. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual propertyrights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our products and useinformation that we regard as proprietary to create products and services that compete with ours. Effective patent, trademark,copyright and trade secret protection may not be available to us in every country in which our products are available. Wemay be unable to prevent third parties from acquiring domain names or trademarks that are similar to, infringe upon, ordiminish the value of our trademarks and other proprietary rights. The laws of some foreign countries may not be asprotective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectualproperty rights may be inadequate. As we expand our international activities, our exposure to unauthorized copying and useof our products and proprietary information will likely increase. Accordingly, despite our efforts, we may be unable toprevent third parties from infringing upon or misappropriating our intellectual property.We enter into confidentiality and invention assignment agreements with our employees and consultants and enter intoconfidentiality agreements with other parties. No assurance can be given that these agreements will be effective incontrolling access to and distribution of our proprietary information. Further, these agreements may not prevent ourcompetitors from independently developing technologies that are substantially equivalent or superior to our products. In order to protect our intellectual property rights, we may be required to spend significant resources to monitor andprotect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rightsand to protect our trade secrets. Litigation brought to protect and enforce our intellectual property rights could be costly,time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectualproperty. Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims andcountersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect ourproprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of ourmanagement’s attention and resources, could delay further sales or the implementation of our products, impair thefunctionality of our products, delay introductions of new products, result in our substituting inferior or more costlytechnologies into our products, or injure our reputation.31 Table of ContentsWe could incur substantial costs as a result of any claim of infringement or other violations by us of another party’sintellectual property rights. In recent years, there has been significant litigation involving patents, copyrights, trademarks, trade secrets and otherintellectual property rights in the software industry. Companies providing software are increasingly bringing and becomingsubject to suits alleging violations of proprietary rights, particularly patent infringement, misappropriation or otherviolations, and to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectualproperty infringement, misappropriation or other claims. As of December 31, 2018, we had two pending patent applicationsand no issued patents. As a result, we do not currently have a patent portfolio, which could prevent us from deterring patentinfringement claims through our own patent portfolio, and our competitors and others may now and in the future havesignificantly larger and more mature patent portfolios than we have. The risk of patent litigation has been amplified by theincrease in the number of a type of patent holder, which we refer to as a non-practicing entity, whose sole business is to assertsuch claims and against whom our own intellectual property portfolio may provide little deterrent value. We could incursubstantial costs in prosecuting or defending any intellectual property litigation. If we sue to enforce our rights or are sued bya third-party that claims that we or our solution violates its intellectual property rights, the litigation could be expensive andcould divert our management resources. Any intellectual property litigation to which we might become a party, or for whichwe are required to provide indemnification, may require us to do one or more of the following: ·Cease selling or using products that incorporate the intellectual property that we allegedly infringe;·Make substantial payments for legal fees, settlement payments or other costs or damages;·Obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or·Redesign the allegedly infringing products to avoid infringement, which could be costly, time-consuming orimpossible. If we are required to make substantial payments or undertake any of the other actions noted above as a result of anyintellectual property infringement or other claims against us or any obligation to indemnify our customers for such claims,such payments or actions could harm our business.Our use of open source software could negatively affect our ability to sell our solution and subject us to possiblelitigation. A portion of our technologies incorporate open source software, and we expect to continue to incorporate open sourcesoftware in our solution in the future. Few of the licenses applicable to open source software have been interpreted by courts,and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions orrestrictions on our ability to commercialize our products. Moreover, we cannot assure you that we have not incorporatedadditional open source software in our software in a manner that is inconsistent with the terms of the applicable license or ourcurrent policies and procedures. If we fail to comply with these licenses, we may be subject to certain requirements, includingrequirements that we offer our solutions that incorporate the open source software for no cost, that we make available sourcecode for modifications or derivative works we create based upon, incorporating or using the open source software and that welicense such modifications or derivative works under the terms of applicable open source licenses. If an author or other third-party that distributes such open source software were to allege that we had not complied with the conditions of one or moreof these licenses, we could be required to incur significant legal expenses defending against such allegations and could besubject to significant damages, enjoined from the sale of our solutions that contained the open source software and requiredto comply with onerous conditions or restrictions on these solutions, which could disrupt the distribution and sale of thesesolutions. In addition, there have been claims challenging the ownership rights in of open source software against companiesthat incorporate open source software into their products, and the licensors of such open source software provide nowarranties or indemnities with respect to such claims. In any of these events, we and our customers could be required to seeklicenses from third parties in order to continue offering our products, and to re-engineer our products or discontinue the saleof our products in the event re-engineering cannot be accomplished on a timely basis. We and our customers may also besubject to suits by parties claiming infringement due to the reliance by our solutions on certain open source software, andsuch litigation could be costly for us to defend or subject us to an injunction. Any of the foregoing could require us to devoteadditional research and development resources to re-engineer our solutions, could result in customer dissatisfaction, and mayadversely affect our business, results of operations and financial condition.32 Table of ContentsWe may be the subject of litigation which, if adversely determined, could harm our business and operating results.Our business is subject to regulation by various federal, state, local and foreign governmental agencies, includingagencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety,environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws and tax lawsand regulations. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions,mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages and civil and criminal penalties orinjunctions. We are, and may in the future be, subject to legal claims arising in the normal course of business, includingpatent, copyright, trade secret, commercial, product liability, employment, class action, whistleblower and other litigationand claims. An unfavorable outcome on any litigation matter could require that we pay substantial damages. In addition, wemay decide to settle any litigation, which could cause us to incur significant costs. The outcome of litigation and other claims or lawsuits is intrinsically uncertain. Management’s view of the litigationmight also change in the future. Actual outcomes of litigation and other claims or lawsuits could differ from the assessmentsmade by management in prior periods, which are the basis for our accounting for these litigations and claims under GAAP. Asettlement or an unfavorable outcome on any litigation matter could have a material adverse effect on our business, operatingresults, reputation, financial position or cash flows. In addition, responding to any action will likely result in a significantdiversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctionscould harm our business, operating results and financial condition. Our actual or perceived failure to protect personal information adequately could have an adverse effect on our business. A wide variety of provincial, state, national and international laws and regulations, including the European Union’sGeneral Data Protection Regulation, or GDPR, apply to the collection, use, retention, protection, disclosure, transfer andother processing of personal data. These data protection and privacy-related laws and regulations are evolving and beingtested in courts and may result in ever-increasing regulatory and public scrutiny as well as escalating levels of enforcementand sanctions. For example, administrative fines of under the GDPR can be as great as 20 million Euros or four percent ofannual global turnover, whichever is highest. Any actual or perceived loss, improper retention or misuse of certaininformation or any actual or alleged violations of laws and regulations relating to privacy, data protection and data security,and any relevant claims, could result in regulatory investigations, enforcement actions, private litigation or otherproceedings against us, with related consequences potentially including fines, imprisonment of company officials and publiccensure, consent decrees or other orders that may hamper our ability to conduct business or adapt our business, claims fordamages by customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation toexisting customers and prospective customers), any of which could have an adverse effect on our operations, financialperformance and business. Evolving and changing definitions of personal data and personal information, within theEuropean Union, the United States and elsewhere, especially relating to classification of IP addresses, machine identification,location data and other information, may limit or inhibit our ability to operate or expand our business, including limitingstrategic partnerships that may involve the sharing of data. Any perception of privacy, data protection, or data securityconcerns or an inability to comply with applicable laws, regulations, policies, industry standards, contractual obligations orother legal obligations, even if unfounded, may result in additional cost and liability to us, harm our reputation and inhibitadoption of our products by current and future customers, and adversely affect our business, financial condition andoperating results. We have implemented and maintain security measures intended to protect personal data and personally identifiableinformation within our control. However, our security measures, and those of our vendors, remain vulnerable to variousthreats posed by hackers and criminals as well as employee error, misconduct or inadvertent mistakes. If our securitymeasures, or those of our vendors, are overcome and any personal data or personally identifiable information that we collector store becomes subject to unauthorized access or acquisition, or loss or misuse, we may be required to comply with costlyand burdensome breach notification obligations and may otherwise incur substantial costs in connection with remediatingand otherwise responding to any such incident. Additionally, if any security incident occurs or is perceived to have occurred,we may be subject to investigations, enforcement actions and private lawsuits. Any actual or perceived data security incidentalso is likely to generate negative publicity and have a negative effect on our business. We expect to incur significant costsin an effort to detect and prevent security breaches and other security-related incidents, and we may face increased costs forthese matters in the event of an actual or perceived security breach or other security-related incident.33 Table of Contents Furthermore, while our insurance policies include liability coverage for certain liabilities that we may incur inconnection with any security breach or other security incident, we could be subject to damages or other liabilities thatexceed our insurance coverage. We cannot be certain that our insurance coverage will be adequate for liabilities actuallyincurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer willnot deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceedavailable insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or theimposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, includingour financial condition, operating results, and reputation.In connection with the operation of our business, we collect, store, transfer and otherwise process certain personal dataand personally identifiable information. As a result, our business is subject to a variety of federal, state, foreigngovernment and industry regulations, as well as self-regulation, related to privacy, data security and data protection. Privacy, data protection and security have become significant issues in the United States, Europe and in otherjurisdictions where we offer our products. The regulatory frameworks for privacy, data protection and information securityissues worldwide are rapidly evolving and are likely to remain uncertain for the foreseeable future. Federal, state, or foreigngovernment bodies or agencies have in the past adopted, and may in the future adopt, new laws and regulations or may makeamendments to existing laws and regulations affecting data protection, data privacy and/or information security and/orregulating the use of the Internet as a commercial medium. Industry organizations also regularly adopt and advocate for newstandards in these areas. If we fail to comply with any of these laws or standards, we may be subject to investigations,enforcement actions, civil litigation, fines and other penalties, all of which may generate negative publicity and have anegative impact on our business. In the United States, we may be subject to investigation and/or enforcement actions brought by federal agencies andstate attorneys general and consumer protection agencies. We publicly post notices and other documentation regarding ourpractices concerning the processing, use and disclosure of personally identifiable information and other data. Although weendeavor to comply with our published notices and documentation, we may at times fail to do so or be alleged to have failedto do so. The publication of our privacy notices and other documentation that provide promises and assurances aboutprivacy, data protection, and data security can subject us to potential state and federal action if they are found to bedeceptive, unfair, or misrepresentative of our actual practices. Additionally, on June 28, 2018, California enacted the California Consumer Privacy Act, or CCPA, that will, amongother things, require covered companies to provide new disclosures to California consumers, and afford such consumers newabilities to opt-out of certain sales of personal information, when it goes into effect on January 1, 2020. The CCPA wasamended on September 23, 2018, and it remains unclear whether any further modifications will be made to this legislation orhow it will be interpreted. We cannot yet predict the impact of the CCPA on our business or operations, but it may require usto modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.Internationally, virtually every jurisdiction in which we operate has established its own data security, privacy and dataprotection legal frameworks with which we or our customers must comply. In the European Union, the GDPR replaced priorEuropean Union data protection law as of May 25, 2018. The GDPR imposes additional obligations and risk upon ourbusiness and increases substantially the penalties to which we could be subject in the event of any non-compliance.Administrative fines under the GDPR can be as great as 20 million Euros or four percent of annual global turnover, whicheveris highest. We have incurred substantial expense in complying with the obligations imposed by the GDPR and we may berequired to make significant changes in our business operations in connection with compliance with the GDPR, all of whichmay adversely affect our revenue and our business overall. Additionally, because the GDPR contains a number of obligationsthat differ from previously-effective data protection legislation in the European Union, and because the GDPR’s enforcementhistory is limited, we are unable to predict how certain obligations under the GDPR may be applied to us. Despite our effortsto attempt to comply with the GDPR, a regulator may determine that we have not done so and subject us to fines and publiccensure, which could harm our company.Among other requirements, the GDPR regulates transfers of personal data outside of the European Economic Area orEEA, to third countries that have not been found to provide adequate protection to such personal data, including the UnitedStates. We have undertaken certain efforts to conform transfers of personal data from the EEA to the United34 Table of ContentsStates and other jurisdictions based on our understanding of current regulatory obligations and the guidance of dataprotection authorities, including the use of standard contractual clauses approved by the European Commission. Despite this,we may be unsuccessful in transferring such data from the EEA in a manner that conforms to data protection requirements inthe EEA, in particular as a result of continued legal and legislative activity within the European Union that has challenged orcalled into question multiple means of data transfers to countries that have not been found to provide adequate protection forpersonal data.Owing to this regulatory environment and sentiment regarding international data transfers, we may also experiencehesitancy, reluctance, or refusal by European or multi-national customers to continue to use our platform. We may find itnecessary or appropriate to establish systems to maintain personal data originating from certain countries or regions withinthose regions. This may involve substantial expense and may cause us to need to divert resources from other aspects of ourbusiness, all of which may adversely affect our business.In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards that may legally or contractually apply to us. One example of such a self-regulatory standard is thePayment Card Industry Data Security Standard, or PCI DSS, which relates to the processing of payment card information. Inthe event we fail to comply with the PCI DSS, fines and other penalties could result, and we may suffer reputational harm anddamage to our business. We may also agree to contractual obligations to comply with other obligations relating to privacy ordata security, such as particular standards for information security measures. We expect that there will continue to be changesin interpretations of existing laws and regulations, or new proposed laws and regulations concerning privacy, data protectionand information security. We cannot yet determine the impact these laws and regulations may have on our business, but weanticipate that they could impair our or our customers’ ability to collect, use or disclose information relating to consumers,which could decrease demand for our platform, increase our costs and impair our ability to maintain and grow our customerbase and increase our revenue. Because the interpretation and application of many laws and regulations relating to privacy, data protection andinformation security, along with mandatory industry standards, are uncertain, it is possible that these laws, regulations andstandards, or contractual obligations to which we are or may become subject, may be interpreted and applied in a manner thatis inconsistent with our existing data management practices or the features of our products, and we could face fines, lawsuitsand other claims and penalties, and we could find it necessary or appropriate to fundamentally change our products, or ourpractices, which could have an adverse effect on our business. Any inability to adequately address privacy, data protectionand data security concerns, even if unfounded, or comply with applicable privacy, data protection and data security laws,regulations, policies or other obligations, could result in additional cost and liability to us, damage our reputation, inhibitsales and adversely affect our business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws,regulations and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reducethe overall demand for, our products. Privacy, data protection and data security concerns, whether valid or not valid, mayinhibit market adoption of our products, particularly in certain industries and foreign countries. If we are not able to adjust tochanging laws, regulations and standards in these areas, our business may be harmed. We are subject to governmental export and import controls and economic sanctions that could impair our ability tocompete in international markets or subject us to liability if we violate these controls.Our business activities are subject to U.S. export controls, specifically the Export Administration Regulations, andeconomic sanctions enforced by the Office of Foreign Assets Control. Because our products use encryption, certain of ourproducts are subject to U.S. export controls and may be exported from the United States only with the required export licenseor through an export license exception. Obtaining the necessary export license for a particular sale may be time-consumingand may result in the delay or loss of sales opportunities. Furthermore, U.S. export control laws and economic sanctionsprohibit the shipment of certain products and services to countries, governments and persons targeted by U.S. sanctions. Theinclusion of one of our foreign customers on any U.S. Government sanctioned persons list, including but not limited to theU.S. Department of Commerce’s List of Denied Persons and the U.S. Department of Treasury’s List of Specially DesignatedNationals and Blocked Persons List, may also be material to our business. We take precautions to prevent our products andservices from being exported in violation of these laws and, we have advised our channel partners and distributors that theymust also comply with the laws when working with the Company.35 Table of ContentsAny failure to comply with the U.S. export requirements, U.S. customs regulations, U.S. economic sanctions, or otherlaws could result in the imposition of penalties against the Company or individuals responsible for any such violations. Thepenalties may include substantial civil and criminal fines, incarceration for responsible employees and managers, thepossible loss of export or import privileges and reputational harm. In addition, various countries regulate the import of certain encryption technology, including through import permitand license requirements, and have enacted laws that could limit our ability to distribute our products or could limit ourcustomers’ ability to implement our products in those countries. Changes in our products or changes in export and importregulations may create delays in the introduction of our products into international markets, prevent our customers withinternational operations from deploying our products globally or, in some cases, prevent or delay the export or import of ourproducts to certain countries, governments, or persons altogether. Any change in export or import regulations, economicsanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries,governments, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or ourdecreased ability to export or sell our products to, existing or potential customers with international operations. Anydecreased use of our products or limitation on our ability to export to or sell our products in international markets wouldlikely adversely affect our business, financial condition and results of operations. Our international operations and expansion expose us to several risks. During the years ended December 31, 2016 and 2017 and 2018, total revenue generated outside of France and theAmericas was 36.1%, 38.2% and 41.2% of our total revenue, respectively. Our primary research and development operationsare located in France, China and Germany. In addition, we currently have international offices outside of France, China,Germany and the United States, which focus primarily on selling and implementing our solution in those regions. In thefuture, we may expand to other international locations. Our current international operations and future initiatives willinvolve a variety of risks, including: ·Unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or othertrade restrictions;·Government trade restrictions, including those which may impose restrictions, including prohibitions, on theexportation, re-exportation, sale, shipment or other transfer of programming, technology, components and/orservices to foreign persons;·Changes in diplomatic and trade relationships, including new tariffs, trade protections measures, import or exportlicensing requirements, trade embargoes and other trade barriers;·Tariffs imposed by the U.S. government on goods from other countries and tariffs imposed by other countries onU.S. goods, including the tariffs recently implemented and additional tariffs that have been proposed by the U.S.government on various imports from China, Canada, Mexico and the E.U. and by the governments of thesejurisdictions on certain U.S. goods, and any other possible tariffs that may be imposed on services such as ours, thescope and duration of which, if implemented, remains uncertain;·Different labor regulations, especially in the European Union, where labor laws are generally more advantageous toemployees as compared to the United States, including deemed hourly wage and overtime regulations in theselocations;·Exposure to many onerous and potentially inconsistent privacy, data protection and data security laws andregulations, particularly in the European Union;·Changes in a specific country’s or region’s political or economic conditions;·Deterioration of political relations between the U.S. and France, the United Kingdom, Germany and Japan, whichcould have a material adverse effect on our sales and operations in these countries;·Challenges inherent to efficiently managing an increased number of employees over large geographic distances,including the need to implement appropriate systems, policies, benefits and compliance programs;·Risks resulting from changes in currency exchange rates and the implementation of exchange controls, includingrestrictions promulgated by the Office of Foreign Assets Control of the U.S. Department of the Treasury and othersimilar trade protection regulations and measures in the United States or in other jurisdictions;·Reduced ability to timely collect amounts owed to us by our clients in countries where our recourse may be morelimited;·Limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needsof our operations in other countries;36 Table of Contents·Limited or unfavorable intellectual property protection;·Exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign CorruptPractices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions; and·Restrictions on repatriation of earnings.Furthermore, weak domestic or global economic conditions, fear or anticipation of such conditions, or uncertainty howthe U.S. or foreign governments will act with respect to tariffs, international trade agreements and policies, could adverselyaffect our business, financial condition, results of operations and prospects in a number of ways, including lower prices forour products, reduced sales and lower or no growth. For example, the global macroeconomic environment could benegatively affected by, among other things, instability in global economic markets resulting from increased U.S. trade tariffsand trade disputes between the U.S. and other countries, instability in the global credit markets, the impact and uncertaintyregarding global central bank monetary policy, rising interest rates and increased inflation, including the recent rise in U.S.interest rates, the instability in the geopolitical environment as a result of the United Kingdom “Brexit” decision to withdrawfrom the European Union, economic challenges in China and ongoing U.S. and foreign governmental debt concerns. Suchchallenges have caused, and are likely to continue to cause, uncertainty and instability in local economies and in globalfinancial markets, particularly if any future sovereign debt defaults or significant bank failures or defaults occur. Marketuncertainty and instability in Europe or Asia could intensify or spread further, particularly if ongoing stabilization effortsprove insufficient. Continuing or worsening economic instability could adversely affect sales of our products. Continuedturmoil in the geopolitical environment in many parts of the world may also affect the overall demand for our products. Aprolonged period of economic uncertainty or a downturn may also significantly affect financing markets, the availability ofcapital and the terms and conditions of financing arrangements, including the overall cost of financing. Circumstances mayarise in which we need, or desire, to raise additional capital, and such capital may not be available on commerciallyreasonable terms, or at all.We have limited experience in marketing, selling and supporting our solution outside of France, the United Kingdom,the United States, Germany and Japan. If we invest substantial time and resources to expand our international operations andare unable to do so successfully and in a timely manner, our business and results of operations will suffer. Additionally, operating in international markets also requires significant management attention and financial resources.We cannot be certain that the investment and additional resources required in establishing operations in other countries willproduce desired levels of revenue or profitability. We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition andresults of operations. A portion of our subscription agreements and operating expenses are incurred outside the United States anddenominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates,particularly changes in the Euro. The strengthening of the U.S. dollar increases the real cost of our products to our customersoutside of the United States, leading to delays in the purchase of our products and the lengthening of our sales cycle. If theU.S. dollar continues to strengthen, this could adversely affect our financial condition and results of operations. In addition,increased international sales in the future, including through our channel partners and other partnerships, may result ingreater foreign currency denominated sales, increasing our foreign currency risk. Moreover, operating expenses incurredoutside the United States and denominated in foreign currencies are increasing and are subject to fluctuations due to changesin foreign currency exchange rates. If we are not able to successfully hedge against the risks associated with currencyfluctuations, our financial condition and results of operations could be adversely affected. To date, we have not entered intoany hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enterinto hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited andwe may not be able to successfully hedge our exposure, which could adversely affect our financial condition and results ofoperations. 37 Table of ContentsExposure to United Kingdom political developments, including the outcome of the United Kingdom referendum onmembership in the European Union, could have a material adverse effect on us.On June 23, 2016, a referendum was held on the United Kingdom’s membership in the European Union, the outcome ofwhich was a vote in favor of leaving the European Union. The United Kingdom’s vote to leave the European Union createsan uncertain political and economic environment in the United Kingdom and potentially across other European Unionmember states, for the foreseeable future, including during any period while the terms of any UK exit from the EuropeanUnion are being negotiated.Article 50 of the Treaty of the European Union, or Article 50, allows a member state to decide to withdraw from theEuropean Union in accordance with its own constitutional requirements. On March 29, 2017, the UK government deliveredthe Article 50 notice to the European Council. This has started a period of up to two years of negotiations for the UnitedKingdom to exit from the European Union, although this period can be extended with the unanimous agreement of theEuropean Council. Without any such extension (and assuming that the terms of withdrawal have not already been agreed),the United Kingdom’s membership in the European Union would end automatically on the expiration of that two-yearperiod.The delivery of the Article 50 notice means that the long-term nature of the United Kingdom’s relationship with theEuropean Union is unclear and that there is considerable uncertainty as to when any such relationship will be agreed andimplemented. In the interim, there is a risk of instability for both the United Kingdom and the European Union, as well asglobally, which could adversely affect our results, financial condition and prospects. There is also a risk of the United Kingdom’s exit from the European Union being affected without mutually acceptableterms being agreed and that any terms of such exit could adversely affect our operating results, financial condition andprospects. The political and economic instability created by the United Kingdom’s vote to leave the European Union has causedand may continue to cause significant volatility in global financial markets and the value of the Pound Sterling currency orother currencies, including the Euro. We are exposed to the economic, market and fiscal conditions in the United Kingdomand the European Union and to changes in any of these conditions. Depending on the terms reached regarding any exit fromthe European Union, it is possible that there may be adverse practical and/or operational implications on our business. A significant amount of the regulatory regime that applies to us in the United Kingdom is derived from European Uniondirectives and regulations. For so long as the United Kingdom remains a member of the European Union, those sources oflegislation will (unless otherwise repealed or amended) remain in effect. However, the United Kingdom exit may change thelegal and regulatory framework within which we operate in the United Kingdom. For example, the outcome of the referendumhas created uncertainty with regard to the regulation of data protection in the United Kingdom. The GDPR became fullyeffective on May 25, 2018. Additionally, the United Kingdom implemented a Data Protection Act, effective May 25, 2018,that substantially implemented the GDPR. Given the timelines set out above, the GDPR has become applicable to the UnitedKingdom prior to the United Kingdom ceasing to be a member of the European Union. However, it is unclear how dataprotection in the United Kingdom will be regulated in the medium term, and how data transfers to and from the UnitedKingdom will be regulated after the United Kingdom ceases to be a member of the European Union. Consequently, no assurance can be given as to the impact of the referendum outcome and, in particular, no assurancecan be given that our operating results, financial condition and prospects would not be adversely impacted by the result. 38 Table of ContentsBecause we conduct substantial operations in China, risks associated with economic, political and social events in Chinacould negatively affect our business and results of operations. We operate a research and development center in Beijing, China and may plan to continue to increase our presence inChina. Our operations in China are subject to a number of risks relating to China’s economic and political systems,including: ·A government-controlled foreign exchange rate and limitations on the convertibility of the Chinese Renminbi;·Uncertainty regarding the validity, enforceability and scope of protection for intellectual property rights and thepractical difficulties of enforcing such rights;·Ability to secure our business proprietary information located in China from unauthorized acquisition;·Extensive government regulation;·Changing governmental policies relating to tax benefits available to foreign-owned businesses;·A relatively uncertain legal system; and·Instability related to continued economic, political and social reform. Any actions and policies adopted by the government of the People’s Republic of China, particularly with regard tointellectual property rights, or any prolonged slowdown in China’s economy, could have an adverse effect on our business,results of operations and financial condition. Further, at various times during recent years, the United States and China have had disagreements over political andeconomic issues. Controversies may arise in the future between these two countries. Any political or trade controversybetween the United States and China could adversely affect the U.S. and French economies and materially and adverselyaffect the market price of our ADSs, our business, financial position and financial performance. Our business could be negatively impacted by changes in the United States political environment. There is significant ongoing uncertainty with respect to potential legislation, regulation and government policy at thefederal level, as well as the state and local levels in the United States. Any such changes could significantly impact ourbusiness as well as the markets in which we compete. Specific legislative and regulatory proposals discussed during electioncampaigns and more recently that might materially impact us include, but are not limited to, changes to import and exportregulations, income tax regulations and the U.S. federal tax code and public company reporting requirements. To the extentchanges in the political environment have a negative impact on us or on our markets, our business, results of operation andfinancial condition could be materially and adversely impacted in the future. Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws, including the U.S. Foreign CorruptPractices Act of 1977, as amended, or the FCPA, and similar laws associated with our activities outside of the UnitedStates could subject us to penalties and other adverse consequences.We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USAPATRIOT Act, the United Kingdom Bribery Act of 2010 and possibly other anti-corruption, anti-bribery and anti-moneylaundering laws in countries in which we conduct activities. We face significant risks if we fail to comply with the FCPA andother anti-corruption and anti-bribery laws that prohibit companies and their employees and third-party intermediaries fromauthorizing, promising, offering or providing, directly or indirectly, improper payments or benefits to foreign governmentofficials, political parties or candidates, employees of public international organizations and private-sector recipients for acorrupt purpose of obtaining or retaining business, directing business to any person, or securing any advantage. In manyforeign countries, particularly in countries with developing economies, it may be a local custom that businesses engage inpractices that are prohibited by the FCPA or other applicable laws and regulations. In addition, we use various third-partyintermediaries to sell our solutions and conduct our business abroad. We, our channel partners, and our other third-partyintermediaries may have direct or indirect interactions with officials and employees of government agencies or state-ownedor affiliated entities and we may be held liable for the corrupt or other illegal activities of these third-party intermediaries, ouremployees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. Wecontinue to implement our FCPA/anti-corruption compliance program and cannot assure you that all of our employees andagents, as well as those companies to which we outsource certain of our business operations, will not take actions in violationof our policies and applicable law, for which we may be ultimately held responsible.39 Table of ContentsAny violation of the FCPA, other applicable anti-bribery, anti-corruption laws and anti-money laundering laws couldresult in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civilsanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, which could have amaterial and adverse effect on our reputation, business, results of operations and prospects. In addition, responding to anyenforcement action may result in a materially significant diversion of management’s attention and resources and significantdefense costs and other professional fees. A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges andrisks. Sales to government entities are subject to a number of risks. Selling to government entities can be highly competitive,expensive and time-consuming, often requiring significant upfront time and expense without any assurance that these effortswill generate a sale. Government certification requirements for products like ours may change, thereby restricting our abilityto sell into the U.S. federal government, U.S. state government, or foreign government sectors until we have attained therevised certification. Government demand and payment for our subscription offerings and professional services may beaffected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affectingpublic sector demand for our subscription offerings and professional services. Governmental entities often require contract terms that differ from our standard arrangements, including terms that canlead to those customers obtaining broader rights in our products than would be standard. Government entities may havestatutory, contractual, or other legal rights to terminate contracts with our distributors and resellers for convenience or due toa default, and any such termination may adversely affect our future results of operations. Governments routinely investigateand audit government contractors’ administrative processes, and any unfavorable audit could result in the governmentrefusing to continue buying our subscription offerings, a reduction of revenue, or fines or civil or criminal liability if theaudit uncovers improper or illegal activities, which could adversely affect our results of operations in a material way. We are exposed to the credit risk of some of our distributors, resellers and customers and to credit exposure in weakenedmarkets, which could result in material losses. We have programs in place that are designed to monitor and mitigate credit risks of some of our distributors, resellersand customers, and our credit exposure in weakened markets. However, we cannot assure you these programs will be effectivein reducing our credit risks, especially as we expand our business internationally. If we are unable to adequately control theserisks, our business, results of operations and financial condition could be harmed. Unanticipated changes in effective tax rates, adverse outcomes resulting from examination of our income or other taxreturns, and other aspects of our international operations and structure could expose us to greater than anticipated taxliabilities. We are subject to income taxes in France, the United States and other jurisdictions, and our income tax obligations arebased in part on our corporate structure and intercompany arrangements, including the manner in which we develop, valueand use our intellectual property and the valuations of our intercompany transactions. Our effective tax rate could beadversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses as a result of acquisitions, the valuation of deferred tax assets and liabilities, and changes in federal,state, or international tax laws and accounting principles. The tax laws applicable to our business are subject to interpretationand certain jurisdictions may aggressively interpret their laws in an effort to raise additional tax revenue. It is not uncommonfor taxing authorities in different countries to have conflicting views with respect to, among other things, the manner inwhich the arm’s length standard is applied for transfer pricing purposes, the valuation of intellectual property, or the taxtreatment of SaaS-based companies, which could increase our worldwide effective tax rate and harm our financial positionand results of operations. It is possible that tax authorities may disagree with certain positions we have taken or may determine that the manner in which we operate our business does not achieve our intended tax consequences and any adverseoutcome of such a review or audit could have a negative effect on our financial position and results of operations. Further,the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment bymanagement, and there are transactions where the ultimate tax determination is uncertain. Although we believe that ourestimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our condensed consolidatedfinancial statements and may materially affect our financial results in the period or periods for which such determination ismade.40 Table of Contents On December 22, 2017, legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act, was enacted andsignificantly changed U.S. federal tax law. It includes several key tax provisions, including a reduction of the U.S. federalstatutory tax rate to 21%, limitations on the use of net operating loss carryforwards and changes to the treatment of certaintax deductions which may affect our tax obligations in the future. If we attain profitability, these changes may materiallyimpact the value and usability of our deferred tax assets and liabilities, which may impact our results of operations.Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, valueadded or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affectour financial results. The various jurisdictions in which we have sales and operations have different rules and regulations governing salesand use, value added, and similar taxes, and these rules and regulations are subject to varying interpretations that changeover time. Certain jurisdictions in which we did not collect such taxes may assert that such taxes are applicable, which couldresult in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future. Any taxassessments, penalties and interest, or future requirements may adversely affect our results of operations. Moreover,imposition of such taxes on us going forward will effectively increase the cost of our products to our customers and mightadversely affect our ability to retain existing customers or to gain new customers in the areas in which such taxes areimposed. Our ability to use our accumulated gross tax losses to offset future taxable income may be subject to certain limitations. As of December 31, 2018, we had accumulated gross tax losses in various jurisdictions of $229.9 million, which may beutilized against future income taxes. Limitations imposed by the applicable jurisdictions on our ability to utilizeaccumulated gross tax losses could cause income taxes to be paid earlier than would be paid if such limitations were not ineffect and could cause such accumulated gross tax losses to expire unused, in each case reducing or eliminating the benefit ofsuch accumulated gross tax losses. Furthermore, we may not be able to generate sufficient taxable income to utilize ouraccumulated gross tax losses before they expire. If any of these events occur, we may not derive some or all of the expectedbenefits from our accumulated gross tax losses. Our failure to maintain certain tax benefits applicable to French technology companies may adversely affect our results ofoperations. As a French technology company, we have benefited from certain tax advantages, including, for example, the Frenchresearch tax credit (crédit d’impôt recherche), or CIR. The CIR is a French tax credit aimed at stimulating research anddevelopment. The CIR can be offset against French corporate income tax due and the portion in excess (if any) may berefunded at the end of a three fiscal-year period, subject to certain conditions. The CIR is reflected as an offset to our researchand development expense. It is calculated based on our claimed amount of eligible research and development expendituresin France and represented $0.6 million for 2017, and $0.5 million for 2018. The French tax authority with the assistance ofthe Research and Technology Ministry may audit each research and development program in respect of which a CIR benefithas been claimed and assess whether such program qualifies in their view for the CIR benefit, in accordance with the Frenchtax code (Code général des impôts) and the relevant official guidelines. If the French tax authority determines that ourresearch and development programs do not meet the requirements for the CIR benefit, or that certain CIR rules wereinconsistently applied, we could be liable for additional corporate tax, and penalties and interest related thereto, which couldhave a significant impact on our results of operations and future cash flows. Furthermore, if the French Parliament decides toeliminate, or reduce the scope or the rate of, the CIR benefit, either of which it could decide to do at any time, our results ofoperations could be adversely affected. Prolonged economic uncertainties or downturns could harm our business.Current or future economic downturns, fear or anticipation of such conditions, or uncertainty how the U.S. or foreigngovernments will act with respect to tariffs, international trade agreements and policies, could harm our business and resultsof operations, cause a decrease in corporate spending on enterprise software in general and slow down the rate of growth ofour business. The U.S. and global macroeconomic environment could be negatively affected by, among other things, financial and credit market fluctuations, the impact and uncertainty regarding global central bank monetary41 Table of Contentspolicy, rising interest rates and increased inflation, changes in international trade relationships and trade disputes between the U.S. and other countries, instability in the geopolitical environment as a result of the United Kingdom “Brexit” decisionto withdraw from the European Union, economic challenges in China, and terrorist attacks in the United States, Europe orelsewhere. A prolonged period of economic uncertainty or a downturn may also significantly affect financing markets, theavailability of capital and the terms and conditions of financing arrangements, including the overall cost of financing.Circumstances may arise in which we need, or desire, to raise additional capital, and such capital may not be available oncommercially reasonable terms, or at all. General worldwide economic conditions have experienced, and in the future may experience, a significant downturn.These conditions make it extremely difficult for our customers and us to forecast and plan future business activitiesaccurately, and they could cause our customers to reevaluate their decision to purchase our products, which could delay andlengthen our sales cycles or result in cancellations of planned purchases. Furthermore, during challenging economic timesour customers may face issues in gaining timely access to sufficient credit, which could impair their ability to make timelypayments to us. If that were to occur, we may be required to increase our allowance for doubtful accounts, which would harmour results of operations. We have a significant number of customers in the financial services, technology,telecommunications, healthcare, manufacturing and retail industries. A substantial downturn in any of these industries maycause firms to react to worsening conditions by reducing their capital expenditures in general or by specifically reducingtheir spending on information technology. Customers in these industries may delay or cancel information technologyprojects or seek to lower their costs by renegotiating vendor contracts. To the extent purchases of our offerings are perceivedby customers and potential customers to be discretionary, our revenue may be disproportionately affected by delays orreductions in general information technology spending. Also, subscription customers may choose to develop or utilize in-house support capabilities as an alternative to purchasing our subscription offerings. Moreover, competitors may respond tomarket conditions by lowering prices of subscription offerings. In addition, the increased pace of consolidation in certainindustries may result in reduced overall spending on our subscription offerings. We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally orwithin any particular industry. If the economic conditions of the general economy or industries in which we operate worsenfrom present levels, our business, results of operations, financial condition and cash flows could be harmed. Catastrophic events, or man-made problems such as terrorism, may disrupt our business. A significant natural disaster, such as an earthquake, fire, flood, or significant power outage could have an adverseimpact on our business, results of operations and financial condition. Our functional corporate headquarters are located in theSan Francisco Bay Area, a region known for seismic activity. In the event our or our channel providers abilities are hinderedby any of the events discussed above, sales could be delayed, resulting in missed financial targets, such as revenue, for aparticular quarter. In addition, acts of terrorism and other geo-political unrest could cause disruptions in our business or thebusiness of our channel partners, customers or the economy as a whole. Any disruption in the business of our channelpartners or customers that affects sales at the end of a fiscal quarter could have a significant adverse impact on our futurequarterly results. All of the aforementioned risks may be further increased if the disaster recovery plans for us and oursuppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customerorders, or the delay in the deployment of our products, our business, financial condition and results of operations would beadversely affected. If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove tobe incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in adecline in the trading price of the ADSs. The preparation of financial statements in conformity with GAAP requires management to make estimates andassumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base ourestimates on historical experience and on various other assumptions that we believe to be reasonable under thecircumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities,equity, revenue and expenses that are not readily apparent from other sources. Our results of operations may be adverselyaffected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause ourresults of operations to fall below our publicly announced guidance or the expectations of securities analysts and investors,resulting in a decline in the market price of the ADSs. Significant assumptions and estimates used in preparing ourconsolidated financial statements include those related to revenue recognition (including allocation of42 Table of Contentsthe transaction price to separate performance obligations), the amortization period for contract acquisition costs, fair valueof acquired intangible assets, goodwill impairment test and measurement of share-based compensation. As of January 1,2019, are no longer a foreign private issuer and therefore have prepared the financial statements in this Annual Report inconformity with GAAP. Our reported financial results may be adversely affected by changes in accounting principles generally accepted in theUnited States. As a of January 1, 2019, we are no longer a foreign private issuer and therefore have begun preparing our financialstatements in conformity with GAAP. GAAP is subject to interpretation by the Financial Accounting Standards Board, orFASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in theseprinciples or interpretations could have a significant effect on our reported financial results and could affect the reporting oftransactions completed before the announcement of a change. For example, the adoption of ASC 606 in 2018, as discussed inNote 2 to our accompanying consolidated financial statements, has had and continues to have a significant impact on ourfinancial results. Further, the interpretation of these new standards may continue to evolve as other public companies adoptthe new guidance and the standard setters issue new interpretative guidance related to these rules. New accountingpronouncements, changes in accounting principles, and changes in the interpretation of these rules have occurred in the pastand are expected to occur in the future, which could adversely affect our financial results. Any difficulties in implementingthese pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatorydiscipline and harm investors’ confidence in us. Risks Related to Ownership of Our Ordinary Shares and ADSs The market price for our ADSs has been and may be volatile or may decline. The stock markets, and securities of technology companies in particular, have experienced extreme price and volumefluctuations that have affected and continue to affect the market prices of equity securities of many technology companies.Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operatingperformance of those companies. In the past, shareholders have instituted securities class action litigation following periodsof market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divertresources and the attention of management from our business and adversely affect our business. Furthermore, the market priceof our ADSs has fluctuated and may continue to fluctuate significantly in response to numerous factors, many of which arebeyond our control, including: ·Actual or anticipated fluctuations in our revenue and other results of operations;·The financial projections we may provide to the public, any changes in these projections or our failure to meetthese projections;·Failure of securities analysts to initiate or maintain coverage of us and our securities, changes in financial estimatesby any securities analysts who follow our company, or our failure to meet these estimates or the expectations ofinvestors;·Announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships,joint ventures or capital commitments;·Changes in operating performance and stock market valuations of subscription model companies or othertechnology companies, or those in our industry in particular;·Lawsuits threatened or filed against us; and·Other events or factors, including those resulting from war, incidents of terrorism or responses to these events.Substantial future sales or perceived potential sales of our ADSs, ordinary shares or other equity securities in the publicmarket could cause the price of our ADSs to decline significantly. Sales of our ADSs, ordinary shares or other equity securities in the public market, or the perception that these salescould occur, could cause the market price of our ADSs to decline significantly. In addition, holders of up to 2,112,895 shares of our ordinary shares and ADSs, or 7.0% of our total ordinary shares andADSs, based on ordinary shares and ADSs outstanding as of December 31, 2018, are entitled to rights with respect toregistration of our ordinary shares pursuant to a shareholder agreement. If these holders of our ordinary shares, by43 Table of Contentsexercising their registration rights, sell a large number of ADSs, they could adversely affect the market price for our ADSs.Furthermore, if we file a registration statement for the purposes of selling additional ADSs to raise capital and are required toinclude ADSs held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may beimpaired. We may issue ordinary shares or securities convertible into our ordinary shares from time to time in connection with afinancing, acquisition, investment or otherwise. Any such issuance could result in substantial dilution to our existing holdersand could cause the market price of our ADSs to decline significantly.If securities analysts do not publish research or reports about our business, or if they publish negative reports about ourbusiness, the price of the ADSs could decline. The trading market for the ADSs, to some extent, depends on the research and reports that securities or industry analystspublish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover usshould downgrade our shares or change their opinion of the ADSs, industry sector, or products, the market price for the ADSswould likely decline. If one or more of these analysts should cease coverage of our Company or fail to regularly publishreports on us, we could lose visibility in the financial markets, which could cause the price of our ADSs or trading volume todecline.The loss of our foreign private issuer status and emerging growth company status and the requirements of being a publiccompany in the United States may strain our resources, divert management’s attention and affect our ability to attract andretain executive management and qualified board members. As of January 1, 2019, we are no longer a foreign private issuer. The regulatory and compliance costs to us under U.S.securities laws as a U.S. domestic issuer may be significantly more than costs we incurred as a foreign private issuer. As ofJanuary 1, 2019, we are required to file periodic reports on Form 10-Q, current reports on Form 8-K, and registrationstatements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than theforms available to a foreign private issuer. We are required under current SEC rules to prepare our financial statements inaccordance with GAAP, rather than IFRS, and modify certain of our policies to comply with corporate governance practicesassociated with U.S. domestic issuers. Such conversion of our financial statements to GAAP has and will continue to involvesignificant time and cost. In addition, we are no longer able to rely upon exemptions from certain corporate governancerequirements of the NASDAQ Stock Market, or NASDAQ, that are available to foreign private issuers and are subject to the procedural requirements related to the solicitation of proxies consents and authorizations applicable to a security registeredunder the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. Our officers and directors arealso subject to the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related ruleswith respect to their purchases and sales of our securities. We also no longer qualified as an “emerging growth company” as defined in the JOBS Act as of December 31, 2018,because we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates. We arerequired to comply with the applicable provisions of Section 404, which requires that we implement additional corporategovernance practices and comply with reporting requirements, such as requiring our independent auditors to attest to, andreport on, management’s assessment of its internal controls. Losing our emerging growth company status also requires us tohold a say-on-pay vote and a say-on-frequency vote at our 2019 annual meeting of shareholders. As a result, we expect thatour loss of our foreign private issuer status and “emerging growth company” status will require additional attention frommanagement and may further strain our resources and cause us to incur additional legal, accounting and other expenses. Additionally, as a public company in the United States, we have incurred and will continue to incur legal, accountingand other expenses that we did not previously incur. We are subject to the Exchange Act, including certain of the reportingrequirements thereunder, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, thelisting requirements of the NASDAQ, enhanced legal and regulatory regimes and heightened standards relating to corporategovernance and disclosure for public companies, and other applicable securities rules and regulations. Compliance withthese rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly and increases demand on our systems and resources. Being a public company in the United States and aFrench private company also has an impact on disclosure of information and require44 Table of Contentscompliance with two sets of applicable rules. This could result in uncertainty regarding compliance matters and higher costsnecessitated by legal analysis of dual legal regimes, ongoing revisions to disclosure and adherence to heightenedgovernance practices. If we fail to establish or maintain an effective system of internal controls, we may be unable to accurately report ourfinancial results or prevent fraud, and investor confidence and the market price of the ADSs may, therefore, be adverselyaffected. As a public company in the United States, we are required to maintain internal control over financial reporting and toreport any material weaknesses in such internal control. In addition, we are required to provide a report by management onthe effectiveness of our internal control over financial reporting pursuant to Section 404. This process is time-consuming,costly and complicated. In addition, our independent registered public accounting firm is required to attest to theeffectiveness of our internal controls over financial reporting. If we have a material weakness in our internal controls overfinancial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated, themarket price of the ADSs could decline and we could be subject to sanctions or investigations by the SEC or other regulatoryauthorities, which would require additional financial and management resources.Share ownership is concentrated in the hands of our principal shareholders and management, who are able to exercise adirect or indirect controlling influence on us. Our executive officers, directors, current five percent or greater shareholders and affiliated entities together beneficiallyown 9.2% of our ordinary shares and ADSs outstanding as of December 31, 2018. As a result, these shareholders, actingtogether, have significant influence over all matters that require approval by our shareholders, including the election ofdirectors and approval of significant corporate transactions. Corporate action might be taken even if other shareholdersoppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of ourcompany that other shareholders may view as beneficial. We have entered into a shareholder agreement, or the Shareholder Agreement, with entities affiliated with BaldertonCapital, Bpifrance Investissement, Galileo Partners, Idinvest Partners and Silver Lake Sumeru, which we refer to herein as ourMajor Shareholders. The Shareholder Agreement contains specific rights, obligations and agreements of these parties asholders of our ordinary shares or equity securities representing our ordinary shares (including the ADSs).In addition, the Shareholder Agreement contains provisions related to the composition of our board of directors.Pursuant to the Shareholder Agreement, entities affiliated with Bpifrance Investissement are entitled to nominate one memberof our board of directors. The current director nominated by affiliates of Bpifrance Investissement under the ShareholderAgreement is Thierry Sommelet. As a result, based on their ownership of our voting power and the approval rights in theShareholder Agreement, our Major Shareholders currently have the ability to elect one of the nine members of our board ofdirectors, and thereby to influence our management and affairs. Holders of our ADSs do not directly hold our ordinary shares. As an ADS holder, you are not treated as one of our shareholders and you do not have ordinary shareholder rights.French law governs shareholder rights. The depositary, JPMorgan Chase Bank, N.A., is the holder of the ordinary sharesunderlying your ADSs. As a holder of ADSs, you have ADS holder rights. The deposit agreement among us, the depositaryand you, as an ADS holder, and all other persons directly and indirectly holding ADSs, sets out ADS holder rights, as well asthe rights and obligations of the depositary. You may not be able to exercise your right to vote the ordinary shares underlying your ADSs. Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only inaccordance with the provisions of the deposit agreement and not as a direct shareholder. The deposit agreement providesthat, upon receipt of notice of any meeting of holders of our ordinary shares, the depositary will fix a record date for thedetermination of ADS holders who shall be entitled to give instructions for the exercise of voting rights. Upon timely receiptof notice from us, if we so request, the depositary shall distribute to the holders as of the record date (1) the notice of themeeting or solicitation of consent or proxy sent by us and (2) a statement as to the manner in which instructions may begiven by the holders.45 Table of Contents You may instruct the depositary to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able toexercise your right to vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may notknow about the meeting far enough in advance to withdraw those ordinary shares. If we ask for your instructions, thedepositary, upon timely notice from us, will notify you of the upcoming vote and arrange to deliver our voting materials toyou. We cannot guarantee you that you will receive the voting materials in time to ensure that you can instruct thedepositary to vote your ordinary shares or to withdraw your ordinary shares so that you can vote them yourself. If thedepositary does not receive timely voting instructions from you, it may give a proxy to a person designated by us to vote theordinary shares underlying your ADSs in accordance with the recommendation of our board of directors. In addition, thedepositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying outvoting instructions. This means that you may not be able to exercise your right to vote, and there may be nothing you can doif the ordinary shares underlying your ADSs are not voted as you requested.You may be subject to limitations on the transfer of your ADSs and the withdrawal of the underlying ordinary shares. Your ADSs, which may be evidenced by American Depositary Receipts, or ADRs, are transferable on the books of thedepositary. However, the depositary may close its books at any time or from time to time when it deems expedient inconnection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of your ADSsgenerally when our books or the books of the depositary are closed, or at any time if we or the depositary think it is advisableto do so because of any requirement of law, government or governmental body, or under any provision of the depositagreement, or for any other reason subject to your right to cancel your ADSs and withdraw the underlying ordinary shares.Temporary delays in the cancellation of your ADSs and withdrawal of the underlying ordinary shares may arise because thedepositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares is blocked topermit voting at a shareholders’ meeting or we are paying a dividend on our ordinary shares. In addition, you may not be ableto cancel your ADSs and withdraw the underlying ordinary shares when you owe money for fees, taxes and similar chargesand when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply toADSs or to the withdrawal of ordinary shares or other deposited securities. For example, if changes are made to tax laws, oursecurities may then be subject to French or other applicable taxes. Risks Related to Investing in a French Company Our By-laws and French corporate law contain provisions that may delay or discourage a takeover attempt. Provisions contained in our By-laws, and the corporate laws of France, the country in which we are incorporated, couldmake it more difficult for a third-party to acquire us, even if doing so might be beneficial to our shareholders. In addition,provisions of French law and our By-laws impose various procedural and other requirements, which could make it moredifficult for shareholders to effect certain corporate actions. These provisions include the following: ·Provisions of French law allowing the owner of 95% of the share capital or voting rights of a public company toforce out the minority shareholders following a tender offer made to all shareholders are only applicable tocompanies listed on the main French stock exchange and will therefore not be applicable to us unless we dual-listin France;·A merger (i.e., in a French law context, a stock-for-stock exchange after which our company would be dissolvedwithout being liquidated into the acquiring entity and our shareholders would become shareholders of theacquiring entity) of our company into a company incorporated in the European Union would require the approvalof our board of directors as well as a two-thirds majority of the votes held by the shareholders present, representedby proxy or voting by mail at the relevant meeting;·A merger of our company into a company incorporated outside of the European Union would require theunanimous approval of our shareholders;·Under French law, a cash merger is treated as a share purchase and would require the consent of each participatingshareholder;·Our shareholders have granted and may grant in the future our board of directors broad authorizations to increaseour share capital or to issue additional ordinary shares or other securities (for example, warrants) to ourshareholders, the public or qualified investors, including as a possible defense following the launching of a tenderoffer for our shares;46 Table of Contents·Our shareholders have preferential subscription rights proportional to their shareholding in our company on theissuance by us of any additional shares or securities giving the right, immediately or in the future, to new shares forcash or a set-off of cash debts, which rights may only be waived by the extraordinary general meeting (by a two-thirds majority vote) of our shareholders or on an individual basis by each shareholder;·Our board of directors has the right to appoint directors to fill a vacancy created by the resignation or death of adirector, subject to the approval by the shareholders of such appointment at the next shareholders’ meeting, whichprevents shareholders from having the sole right to fill vacancies on our board of directors;·Our board of directors can only be convened by its chairman or, when no board meeting has been held for morethan two consecutive months, by directors representing at least one-third of the total number of directors;·Our board of directors meetings can only be regularly held if at least half of the directors attend either physically orby way of videoconference or teleconference enabling the directors’ identification and ensuring their effectiveparticipation in the board of directors’ decisions;·Under French law, a non-French resident as well as any French entity controlled by non-French residents may haveto file a declaration for statistical purposes with the Bank of France (Banque de France) following the date ofcertain direct or indirect investments in us;·Approval of at least a majority of the votes held by shareholders present, represented by a proxy, or voting by mailat the relevant ordinary shareholders’ general meeting is required to remove directors with or without cause;·Advance notice is required for nominations to the board of directors or for proposing matters to be acted upon at ashareholders’ meeting, except that a vote to remove and replace a director can be proposed at any shareholders’meeting without notice;·Pursuant to French law, our By-laws, including the sections relating to the number of directors and election andremoval of a director from office, may only be modified by a resolution adopted by a two-thirds majority vote ofour shareholders present, represented by a proxy or voting by mail at the meeting; and·Our shares take the form of bearer securities or registered securities, if applicable legislation so permits, accordingto the shareholder's choice. Issued shares are registered in individual accounts opened by us or any authorizedintermediary (depending on the form of such shares), in the name of each shareholder and kept according to theterms and conditions laid down by the legal and regulatory provisions. Your right as a holder of ADSs to participate in any future preferential subscription rights or to elect to receive dividendsin shares may be limited, which may cause dilution to your holdings. According to French law, if we issue additional shares or securities for cash giving right, immediately or in the future, tonew shares, current shareholders will have preferential subscription rights for these securities proportionally to theirshareholding in our company unless they waive those rights at an extraordinary meeting of our shareholders (by a two-thirdsmajority vote) or individually by each shareholder. However, our ADS holders in the United States will not be entitled toexercise or sell such rights unless we register the rights and the securities to which the rights relate under the Securities Act oran exemption from the registration requirements is available. In addition, the deposit agreement provides that the depositarywill not make rights available to you unless the distribution to ADS holders of both the rights and any related securities areeither registered under the Securities Act or exempted from registration under the Securities Act. Further, if we offer holders ofour ordinary shares the option to receive dividends in either cash or shares, under the deposit agreement the depositary mayrequire satisfactory assurances from us that extending the offer to holders of ADSs does not require registration of anysecurities under the Securities Act before making the option available to holders of ADSs. We are under no obligation to filea registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to bedeclared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act.Accordingly, ADS holders may be unable to participate in our rights offerings or to elect to receive dividends in shares andmay experience dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised or notdistributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receiveno value for these rights.U.S. investors may have difficulty enforcing civil liabilities against our company and directors and the experts named inour annual report. Certain members of our board of directors and certain of our subsidiaries and certain experts named in this AnnualReport, are non-residents of the United States, and all of or a substantial portion of our assets and the assets of such personsare located outside the United States. As a result, it may not be possible to serve process on such persons or us in47 Table of Contentsthe United States or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of thesecurities laws of the United States.Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the UnitedStates. Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriateforums in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of thejurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to beapplicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process,and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides. Inparticular, there is some doubt as to whether French courts would recognize and enforce certain civil liabilities under U.S.securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awardsof punitive damages in actions brought in the United States or elsewhere may be unenforceable in France. An award formonetary damages under the U.S. securities laws would be considered punitive if it does not seek to compensate the claimantfor loss or damage suffered but is intended to punish the defendant. French law provides that a shareholder, or a group ofshareholders, may initiate a legal action to seek indemnification from the directors of a corporation in the corporation’sinterest if it fails to bring such legal action itself. If so, any damages awarded by the court are paid to the corporation and anylegal fees relating to such action are borne by the relevant shareholder or the group of shareholders.The enforceability of any judgment in France will depend on the particular facts of the case as well as the laws andtreaties in effect at the time. The United States and France do not currently have a treaty providing for recognition andenforcement of judgments (other than arbitration awards) in civil and commercial matters.We do not currently intend to pay dividends on our securities, and, consequently, your ability to achieve a return on yourinvestment depends on appreciation in the price of the ADSs. In addition, French law and certain negative covenants maylimit the amount of dividends we are able to distribute.We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so for theforeseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likelyto receive any dividends on your ADSs for the foreseeable future and the success of an investment in ADSs will depend uponany future appreciation in its value. Consequently, investors may need to sell all or part of their holdings of ADSs after priceappreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guaranteethat the ADSs will appreciate in value or even maintain the price at which our shareholders have purchased the ADSs.Investors seeking cash dividends should not purchase the ADSs. Further, under French law, the determination of whether we have been sufficiently profitable to pay dividends is madeon the basis of our statutory financial statements prepared and presented in accordance with French generally acceptedaccounting principles. In addition, payment of dividends may subject us to additional taxes under French law. Therefore, wemay be more restricted in our ability to declare dividends than companies not based in France. Further, we are restricted frompaying dividends on our securities by certain negative covenants contained in the Loan Agreement. In addition, exchange rate fluctuations may affect the amount of Euros that we are able to distribute, and the amount inU.S. dollars that our shareholders receive upon the payment of cash dividends or other distributions we declare and pay inEuros, if any. These factors could harm the value of the ADSs, and, in turn, the U.S. dollar proceeds that holders receive fromthe sale of the ADSs.U.S. holders of ADSs may suffer adverse tax consequences if we are characterized as a passive foreign investmentcompany. A non-U.S. corporation will be considered a passive foreign investment company, or PFIC, for U.S. federal income taxpurposes, any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% ofthe value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets thatproduce or are held for the production of passive income. Based on the value and composition of our assets, although not freefrom doubt, we do not believe we were a PFIC for the taxable year ended December 31, 2018, and we do not expect to be aPFIC in the current taxable year or the foreseeable future. Since a separate factual determination as to whether we are or havebecome a PFIC must be made each year (after the close of such year), we cannot assure you48 Table of Contentsthat we will not be or become a PFIC in the current year or any future taxable year. If we are a PFIC for any taxable yearduring which a U.S. holder holds ADSs, the U.S. holder may be subject to adverse tax consequences, including (1) thetreatment of all or a portion of any gain on disposition as ordinary income, (2) the application of an interest charge withrespect to such gain and certain dividends and (3) compliance with certain reporting requirements. Each U.S. holder isstrongly urged to consult its tax advisor regarding the application of these rules and the availability of any potentialelections. If a United States person is treated as owning at least 10% of our ADSs, such person may be subject to adverse U.S. federalincome tax consequences. If a United States person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or votingpower of our ADSs, such person may be treated as a “United States shareholder” with respect to each “controlled foreigncorporation” in our group (if any). Because our group includes one or more U.S. subsidiaries, certain of our non-U.S.subsidiaries could be treated as controlled foreign corporations (regardless of whether or not we are treated as a controlledforeign corporation). A United States shareholder of a controlled foreign corporation may be required to report annually andinclude in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” andinvestments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. Failure tocomply with such reporting requirements could result in adverse tax effects for United States shareholders and potentiallysignificant monetary penalties. An individual that is a United States shareholder with respect to a controlled foreigncorporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a UnitedStates shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist investors in determiningwhether any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or furnish to any United Statesshareholders information that may be necessary to comply with the aforementioned obligations. A United States investorshould consult its advisors regarding the potential application of these rules to an investment in our ADSs.The rights of shareholders in companies subject to French corporate law differ in material respects from the rights ofshareholders of corporations incorporated in the United States. We are a French company with limited liability. Our corporate affairs are governed by our By-laws and by the lawsgoverning companies incorporated in France. The rights of shareholders and the responsibilities of members of our board ofdirectors are in many ways different from the rights and obligations of shareholders in companies governed by the laws ofU.S. jurisdictions. For example, in the performance of its duties, our board is required by French law to consider the interestsof our company, its shareholders, its employees and other stakeholders, rather than solely our shareholders and/or creditors. Itis possible that some of these parties will have interests that are different from, or in addition to, your interests as ashareholder. Item 1B. Unresolved Staff Comments None. Item 2. Properties We lease approximately 50,000 square feet of office space in Redwood City, California for which the lease expires in2027. We also lease approximately 18,000 square feet of office space in Suresnes, France for which the lease expires in 2023and approximately 28,000 square feet in Nantes, France for which the lease expires in 2028. We also lease office spacearound the world for our employees, including elsewhere in the United States, China, Germany, the United Kingdom, Japanand India. We anticipate leasing additional office space in the future as we continue to grow and enter new geographies. We donot foresee problems in finding readily available additional space on commercially reasonable terms, but expect to incuradditional office lease expenses in connection with our growth. Item 3. Legal Proceedings From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary courseof our business. We are not presently a party to any legal proceedings that in the opinion of our management, if49 Table of Contentsdetermined adversely to us, would have a material adverse effect on our business, financial condition, results of operations orcash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs,diversion of management resources and other factors. Item 4. Mine Safety Disclosures None. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities Market Information for Ordinary Shares Our ADSs are listed on the NASDAQ Global Market under the symbol “TLND”. Holders of Record As of December 31, 2018, there were 36 holders of record in the United States, which represent 75% of our ordinaryshares. Because many of our shares are held by brokers and other institutions on behalf of stockholders, we are unable toestimate the total number of stockholders represented by these record holders. Dividend Policy We have never declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cashdividends for the foreseeable future, if at all. Further, we are restricted from paying dividends on our securities by certainnegative covenants contained in the Loan Agreement. We currently intend to retain all available funds and any futureearnings for use in the operation of our business. Any future determination to pay dividends on our ordinary shares will be atthe discretion of our board of directors and will depend upon, among other factors, our financial condition, operating results,current and anticipated cash needs, plans for expansion and other factors that our board of directors may deem relevant. Securities Authorized for Issuance under Equity Compensation Plan The information required by this item will be included in our Proxy Statement for the 2019 Annual Meeting ofStockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2018, and is incorporated hereinby reference. Purchases of Equity Securities by the Issuer None. Stock Performance Graph The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposesof Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to beincorporated by reference into any of our filings under the Securities Act. The graph below compares the cumulative total stockholder return on our ADSs or ordinary shares with the cumulativetotal return on the NASDAQ Composite and NASDAQ Computer and Data Processing Services Index. The graph assumes$100 was invested at the market close on July 29, 2016 which was our initial trading day, in our ADSs or ordinary shares.Data for the NASDAQ Composite Index and the NASDAQ Computer and Data Processing Services50 Table of ContentsIndex assume reinvestment of any dividends. Our offering price of our ADSs in our initial public offering (IPO) was $18.00per share. Item 6. Selected Financial Data We derived the selected consolidated statements of operations data for the years ended December 31, 2016, 2017 and2018 and selected consolidated statements of financial position data as of December 31, 2017 and 2018 from our auditedconsolidated financial statements included elsewhere in this Annual Report and which have been prepared in accordancewith U.S. GAAP. We derived the selected consolidated statements of operations data for the years ended December 31, 2014and 2015 and the selected consolidated statements of financial position data as of December 31, 2014, 2015 and 2016, fromconsolidated financial statements and notes thereto which are not included in this Annual Report. Our historical resultspresented below are not necessarily indicative of financial results to be achieved in future periods. You should read thefollowing summary consolidated financial data in conjunction with “Item 7. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” and our consolidated financial statements and related notes includedelsewhere in this Annual Report. 51 Table of ContentsConsolidated Statement of Operations Data: Year Ended December 31, 2014 2015 2016 2017 2018 (in thousands, except per share amounts)Operations: Total Revenue $62,581 $75,960 $105,984 148,595 $204,323Gross profit 46,423 57,252 80,416 114,436 154,829Operating expenses 69,179 78,697 106,408 143,173 196,367Loss from operations (22,756) (21,445) (25,992) (28,737) (41,538)Net loss for the year (22,521) (22,006) (24,243) (31,208) (40,359) Net loss per share attributable to ordinaryshareholders: Basic and diluted net loss per share $(6.09) $(5.79) $(1.68) (1.08) $(1.35) Weighted-average shares outstanding used tocompute net loss per share attributable toordinary shareholders: Shares used in basic and diluted net loss pershare 3,696 3,803 14,464 28,966 29,841 Consolidated Statement of Financial Position Data: Year Ended December 31, 2015 2016 2017 2018 (in thousands) Cash and cash equivalents $6,930 $91,023 $87,024 $33,740Total assets 48,061 144,651 172,798 219,124Debt 10,142 149 1,195 884Total liabilities 100,544 126,626 173,908 194,686Ordinary shares 2,450 2,980 3,059 3,128Additional paid-in capital 94,931 194,992 201,536 245,016Total shareholders’ equity (deficit) (52,483) 18,025 (1,110) 24,43952 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our financial condition and results of operations should be read in conjunction with ourconsolidated financial statements, related notes and other financial information included elsewhere in this Annual Report.The following discussion contains forward-looking statements, including, without limitation, our expectations andstatements regarding our outlook and future revenue, expenses, results of operations, liquidity, plans, strategies andobjectives of management and any assumptions underlying any of the foregoing. Our actual results could differ materiallyfrom those discussed in the forward-looking statements. Our forward-looking statements and factors that might cause futureactual results to differ materially from our recent results or those projected in the forward-looking statements include, butare not limited to, those discussed in “Special Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors”. Overview Our mission is to enable every organization to realize the power of their data with trust and speed. We are a key enablerof the data-driven enterprise where data is a strategic asset powering business. Talend Data Fabric allows customers in anyindustry to improve business performance by using their data to create new insights and to automate business processes. Ourcustomers rely on our software to better understand their customers, offer new apps and services, and improve operations withpredictive maintenance. Our employee base has grown from 679 employees as of December 31, 2016 to 886 employees as of December 31,2017, and 1,136 employees as of December 31, 2018. We plan to continue to expand our non-U.S. presence to address theneeds of our global customers as well as to acquire customers in new geographies. We also plan to continue to invest in newproduct development. Our open source approach is a key component of our go-to-market strategy. We have been able to rapidly expandawareness and usage of our products through our free open source versions. This enables developers and users to downloadand try the free version of our products, creating sales leads for our more feature-rich commercial solutions. Users of our opensource products often catalyze adoption of our commercial solutions by their organizations, primarily to benefit fromenterprise-grade features that include the scaling out of our offering to a larger set of users, among others. Following an initialdeployment of our paid subscription products, organizations often purchase more subscriptions or expand usage toadditional products from our fully integrated suite after realizing the benefits of additional features or scale. We sell ourproduct offerings as subscriptions based primarily on the number of users of our platform. We generate the majority of our revenue from subscriptions of our commercial solutions. We primarily sell annualcontracts billed in advance. Our subscription offering includes enterprise-grade features and capabilities to scale oursolutions across production environments and customer infrastructures. These product features and capabilities includescheduling, management and monitoring of data integration flows, collaboration across a team of users and technicalsupport. We also provide professional services to implement our solutions. Our subscription revenue represents a significantportion of our revenue, growing from 84% of our total revenue in the year ended December 31, 2016, to 85% in the yearended December 31, 2017, to 86% in the year ended December 31, 2018. 53 Table of ContentsOur financial results include: ·Total revenue increased from $106.0 million for 2016 to $148.6 million for 2017 to $204.3 million for 2018; ·Subscription revenue increased from $88.6 million for 2016 to $125.9 million for 2017 to $174.9 million for 2018; ·Subscription revenue grew 39% year-over-year for 2018; and ·Net loss was $24.2 million for 2016, $31.2 million for 2017 and $40.4 million for 2018. We intend to generate profits based on increased sales of our solutions to new and existing customers, including by thecontinued conversion of free open source users to paid users. We currently anticipate that at some point in the future we willbe able to increase revenues at a greater rate than increases in our operating expenses. However, there can be no assurancethat we will achieve or maintain profitability on a consistent basis, that we will increase our sales to new and existingcustomers, or that our operating expenses will increase at a lower rate than our revenue may grow. Key Factors Affecting Our Performance Expansion within Existing Customers. Our business model relies on rapidly and efficiently landing new customersand expanding our relationship with these customers over time. We have designed our apps for ease-of-use and with strongintegrations between apps to encourage broad adoption within organizations. As customers gain awareness of our solutionsand as their data integration and integrity requirements evolve, they may recognize additional use cases for our software andexpand their use of our solutions accordingly, and our growth strategy is dependent on our ability to demonstrate the valueof these additional apps to our customers. We believe this provides us with substantial operating leverage because the costsof additional sales within existing customers are significantly less than costs of sales to new customers. Our future revenuegrowth and profitability rely on customers continuing to expand user and app adoption within their organizations. Adoption of Modern Data Technologies. We believe our cloud and big data integration capabilities are a keycompetitive differentiator and driver of new customer adoptions. We expect that as organizations adopt and scale outdeployments of modern data technologies such as cloud data warehouses, machine learning, and big data processing, theywill continue to use Talend to facilitate the integration of these big data technologies within their IT environments. Thecontinued shift to cloud is driving rapid growth in cloud integration. The adoption and usage of Talend Cloud and TalendStitch Data Loader drives demand for other Talend Data Fabric apps. The continued adoption of big data technologies, andour ability to differentiate between our app offerings and those of our competitors, in both functionality and pricing, iscritical to our continued revenue growth. Average Subscription Contract Duration. We primarily sell annual contracts, although we have some contracts thatextend for multiple years. The average contract duration impacts our cash flows because we bill and collect payment for thefull term in advance. Prior to 2014, we incentivized our sales force to pursue multi-year contracts paid in advance, whichgenerally carry larger discounts on average relative to annual contracts. We changed our sales strategy in 2014 to focus to agreater degree on annual contracts as our business began to demonstrate greater operating leverage. As a result, our averagecontract term has shortened and we generate a smaller proportion of our deferred revenue as long-term. Although this resultsin lower subscription billings relative to multi-year pre-payments in a given period, it increases the annualized value of oursubscriptions. Going forward, we intend to continue to enter into multi-year contracts with annual payment schedules. Forthe twelve-month periods ended December 31, 2017 and 2018, subscription sales, excluding monthly contracts, had anaverage pre-billed duration of 1.3 years and 1.1 years, respectively. Open Source Strategy. Our open source strategy consists of providing free open source versions of our apps, fosteringa community of users and developers and selling commercial versions of our solutions. This strategy creates awareness andgenerates leads within organizations that may purchase a commercial version of our apps and thereby generates subscriptionrevenue. Our open source developer community helps lower our research and development costs by contributing componentsand connectors, testing beta versions of our apps, identifying enhancements and providing free advice to other communitymembers. To evaluate our open source strategy, we periodically review data points such as the volume of downloads of ouropen source apps, the number of open source users that are members of our open54 Table of Contentssource community and the approximate number of leads that are generated from users of our open source apps. Given that ouropen source users register with us voluntarily, we do not use a conversion rate to evaluate our strategy. We believe thecontinued adoption of open source software by organizations as well as the vitality of our open source community is acritical part of our performance. Investment in Sales and Marketing. We continue to focus on long-term growth and expect to continue to investaggressively in sales and marketing to grow our customer base and expand within existing customers. We also expect toincrease investments in sales and marketing in markets outside of France and the United States. As we continue to focus onnew customer acquisition, we will need to devote additional time and effort to the new customer sales cycle, which requiresmore time, education and effort than expanding our relationship with existing customers. Any investments that we make insales and marketing will occur in advance of our experiencing benefits from such investments, as new sales hires take time tofully ramp. The success of these efforts will also be affected by our ability to hire and retain sales personnel, and attrition ofthese employees may slow our efforts. As a result, it may be difficult for us to determine if we are efficiently allocating ourresources in these areas. Increasing new customer bookings, particularly among large enterprise customers, is key to ourgrowth strategy, and we also anticipate continuing to invest in expanding our international operations and increasing salesof Talend Big Data Integration and Talend Cloud. Sales to large enterprise customers have reflected larger deal sizes andhave been one of the principal drivers of our revenue growth. However, sales to large enterprise customers involve risks thatmay not be present with sales to smaller customers, including increased competition from companies that traditionally targetlarger enterprise customers and a longer sales cycle. These factors result in less visibility and create difficulties in assessingdeal cyclicality for these customers. Foreign Currency Exchange Risk. A portion of our subscription agreements and operating expenses are incurredoutside the United States and denominated in foreign currencies and are subject to fluctuations due to changes in foreigncurrency exchange rates, particularly changes in the Euro. Because our reporting currency is the U.S. dollar, the impact offoreign currency exchange on our business is primarily material to our financial reporting, and less to the ongoing operationsof our business, as our cash inflows generally exceed our expenses in a given currency, creating a partial hedge. We believethat as the portion of U.S. business increases relative to our global business, the impact of foreign currency exchange on ourfinancial reporting will be reduced. As our international operations grow, we will continue to reassess our approach tomanaging the risks relating to fluctuations in currency rates. Key Business Metrics We review a number of metrics to evaluate our business, measure our performance, identify trends affecting ourbusiness, formulate business plans and make strategic decisions. These key business metrics include the following: Annualized Recurring Revenue Annual Recurring Revenue (“ARR”) represents the annualized recurring value of all active contracts at the end of areporting period. ARR includes subscriptions for use of premise-based products and SaaS offerings and excludes originalequipment manufacturer ("OEM") sales. Both multi-year contracts and contracts with terms less than one year are annualizedby dividing the total committed contract value by the number of months in the subscription term and then multiplied bytwelve. As of December 31, 2018, ARR was $198.1 million, representing growth of 33% from December 31, 2017. Stitchaccounted for 2% of ARR as of December 31, 2018. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measurespresented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended tobe combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reportingperiod used in calculating ARR may or may not be extended or renewed by our customers. Subscription Revenue Growth Rate Subscription revenue is primarily derived from the sale of subscription-based license agreements to our customers. Thegrowth of our subscription revenue reflects our ability to renew subscriptions with our existing customers, expand the sales ofexisting and new products within our existing customer base and sell our products to new customers. We believe subscriptionrevenue growth is an important performance metric because it reflects the adoption of our software. 55 Table of ContentsDue to the significant portion of our customers who are invoiced in non-U.S. Dollar denominated currencies, we alsocalculate our subscription revenue growth rate on a constant currency basis, thereby removing the effect of currencyfluctuation on our results of operations. The table below shows our subscription revenue growth rate on both an actual and constant currency basis for eachquarter in the years ended December 31, 2017 and December 31, 2018, calculated against the corresponding quarter in theprior year, as well as the years ended December 31, 2016, 2017 and 2018. We calculate revenue on a constant currency basisby applying the average monthly currency rate for each month in the comparative period to the corresponding month in thecurrent period. Year Ended December 31, Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2016 2017 2018 2017 2017 2017 2017 2018 2018 2018 2018 Actual FXrates 41% 42% 39% 43% 43% 44% 40% 44% 39% 36% 38%ConstantCurrency 44% 42% 37% 47% 46% 41% 34% 35% 34% 36% 40% Number of Customers Above a Certain Subscription Revenue Threshold We believe our ability to increase the number of customers above a certain subscription revenue threshold over time isan indicator of our ability to penetrate large enterprise customers. We track our performance in this area by measuring thenumber of customers which generates an annualized subscription revenue of $0.1 million or above, calculated bymultiplying the total subscription revenue from a customer in the given quarter by four. As we continue to expand the sales of existing and new products within our existing customer base, we expect more ofour existing customers will cross the $0.1 million threshold. However, this may be offset if we do not successfully renewsubscriptions with our existing customers. The following table summarizes on a quarterly basis the number of customers above $0.1 million of annualizedsubscription revenue since March 31, 2017. Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, 2017 2017 2017 2017 2018 2018 2018 2018Customers count 260 291 335 353 380 427 444 472 Dollar-Based Net Expansion Rate Our ability to generate and increase revenue is dependent on our ability to maintain and grow our relationships with ourexisting customers. We believe our ability to retain customers and expand their subscription revenue over time is anindicator of the stability of our revenue base and the long-term value of our customer relationships. We track our performancein this area by measuring our dollar-based net expansion rate. Our dollar-based net expansion rate increases when customersexpand their number of subscribed users or use additional Talend Data Fabric components. Our dollar-based net expansionrate is reduced when customers reduce their number of subscribed users, use fewer Talend Data Fabric components, or ceaseto be customers. We calculate our dollar-based net expansion rate by dividing our recurring customer revenue by our base revenue. Wedefine base revenue as the subscription revenue we recognized from all customers during the four quarters ended one yearprior to the date of measurement. We define our recurring customer revenue as the subscription revenue we recognized duringthe four quarters ended on the date of measurement from the same customer base included in our measure of base revenue,including revenue resulting from additional sales to those customers. This analysis excludes revenue derived from our OEMsales. We expect our dollar-based net expansion rate to potentially decline as we scale our business, particularly as wecontinue to focus on increasing sales of our cloud-based solutions to new customers. The dollar-based net expansion rate willalso face a potential decline as the benefit from the adoption of ASC 606 will not repeat in 2019. 56 Table of ContentsThe following table summarizes our quarterly dollar-based net expansion rate since January 1, 2017 on both an actualand constant currency basis. Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, Dollar-basednetexpansionrate 2017 2017 2017 2017 2018 2018 2018 2018 Actual FX rates 123% 121% 121% 125% 124% 125% 123% 122%ConstantCurrency 125% 125% 123% 125% 121% 119% 118% 120% Free Cash Flow To provide additional information regarding our financial results, we use free cash flow, a financial measure notcalculated in accordance with GAAP, within this Annual Report. We define free cash flow as net cash (used in) fromoperating activities less net cash used in investing activities for purchases of property and equipment and intangible assets,except for those acquired as part of a business combination. We have included free cash flow in this Annual Report because itis a key measure used by our management and board of directors to understand and evaluate our core operating performanceand trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. We believe thatfree cash flow provides useful information in understanding and evaluating our results of operations in the same manner asour management and board of directors. Although free cash flow measures are frequently used by investors and securitiesanalysts in their evaluation of companies, free cash flow measures each have limitations as an analytical tool, and you shouldnot consider them in isolation or as a substitute for analysis of our cash flows as reported under GAAP. Free cash flow asdefined by us may not be comparable to similar measures used by other companies. The table below shows our free cash flowfor each of the years ended December 31, 2016, 2017 and 2018, and a reconciliation to the most directly comparable GAAPmeasure for such period. Year Ended December 31, 2016 2017 2018 (in thousands)Net cash (used in) from operating activities $3,373 $(2,321) $3,231Less: Acquisition of property & equipment 1,417 2,224 5,006Free Cash Flow $1,956 $(4,545) $(1,775) Key Components of Results of Operations Revenue We primarily derive our revenue from the sale of subscriptions and professional services engagements. Subscription revenue. Subscription revenue consists of fees earned from arrangements to provide customers with theright to use our commercial software either in a cloud-based infrastructure that we provide or installed within the customer’sown environment. Our subscriptions include unspecified future updates, upgrades and enhancements and technical productsupport. Subscription fees are based primarily on the number of users of our software and to a lesser extent the processingpower required to operate the software. Our subscription-based arrangements generally have a minimum contractual term ofone year and are invoiced in advance for the full subscription term. Subscription fees are generally non-refundable regardlessof the actual use of the service. Professional services revenue. Professional services revenue consists of fees earned for consulting engagements relatedto the deployment and configuration of our product offering, training customers and associated expenses. Theseengagements are generally provided by our own team of specialized consultants or by third-party consultants to whom wecontract on a periodic basis. Consulting engagements consist of time-based arrangements for which the revenue is recognizedusing a time and material basis. Training revenue results from contracts to provide educational services to customers andpartners regarding the use of our technologies and is recognized as delivered. We expect our professional services revenuewill grow at a slower rate than our subscription revenue as we work with more systems integrators, who assist our customerswith the implementation of our solutions. 57 Table of ContentsCost of Revenue Cost of subscription revenue. Cost of subscription revenue consists primarily of employee-related costs, includingsalaries and bonuses, sales commissions, share-based payment expense and employee benefit costs associated with ourcustomer support organization. It also includes expenses related to hosting and operating our cloud infrastructure, license ofthird-party intellectual property and related overhead. We use a third-party cloud platform provider to provide our cloudsolution. We allocate overhead such as information technology infrastructure, rent and occupancy charges in each expensecategory based on headcount in that category. As such, general overhead expenses are reflected in cost of subscriptionrevenue and operating expense categories. We intend to continue to invest additional resources in our cloud-based offering and services. We expect that the costof hosting fees to provide our cloud-based offering will increase over time as we sell more of our cloud integration products.The timing of these expenses will affect our cost of subscription revenue in the affected periods. Cost of professional services revenue. Cost of professional services revenue consists primarily of personnel costs foremployees including salaries and bonuses, sales commissions, share-based payment expense and employee benefit costs andfees to external consultants associated with our professional service contracts, travel costs and allocated shared costs. Weallocate overhead such as information technology infrastructure, rent and occupancy charges in each expense category basedon headcount in that category. As such, general overhead expenses are reflected in the cost of professional services revenueand operating expense categories. Gross Profit and Gross Margin Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of totalrevenue. We expect that our gross margin may fluctuate from period to period as a result of changes in the mix of oursubscription and professional services revenue. Over time, we expect revenue from our cloud integration business to grow asa percentage of our total revenue. As a result, the cost of hosting fees to third-party cloud infrastructure providers, as apercentage of revenue will increase, which may affect our gross margin. Operating Expenses Our operating expenses are classified as sales and marketing, research and development and general and administrative.For each functional category, the largest component is employee and labor-related expenses, which include salaries andbonuses, sales commissions, share-based payment expense, employee benefit costs and contractor costs. We allocateoverhead such as information technology infrastructure, rent and occupancy charges in each expense category based onheadcount in that category. Sales and marketing. Sales and marketing expenses consist primarily of salaries, sales commissions and relatedexpenses, including share-based payment expense, for our sales and marketing employees, marketing programs and relatedoverhead. Our sales and marketing employees include quota carrying headcount, sales administration, sales engineering,marketing and management. Marketing programs consist of advertising, promotional events, corporate communications,brand building, product marketing activities such as online lead generation, and developing sales strategies that emphasizeparticular products or services. We plan to continue to invest in sales and marketing by expanding our global promotional activities, building brandawareness, attracting new customers and sponsoring additional marketing events. The timing of these events, such as ourannual sales kickoff, will affect our sales and marketing costs in a particular quarter. We also plan to invest in training andretention of our sales team. Research and development. Research and development expenses consist primarily of salaries and related expenses,including share-based payment expense, contractor software development costs and related overhead, as well as amortizationof acquired developed technology, less any research and development subsidies. We continue to focus our research anddevelopment efforts on building new products, adding new features and services, increasing functionality and enhancing ourintegration cloud infrastructure. We expect that, in the future, research and development expenses will increase in absolute dollars as we invest inbuilding the necessary employee and system infrastructure required to enhance existing and support development of new,technologies and the integration of acquired businesses and technologies.58 Table of Contents General and administrative. General and administrative expenses consist of salaries and related expenses, includingshare-based payment expense, for finance, legal, human resources and management information systems personnel, as well asexternal legal, accounting and other professional fees, other corporate expenses and related overhead. We will continue to incur additional expenses associated with being a publicly traded company, including higher legal,corporate insurance and accounting costs as well as costs of achieving and maintaining compliance with other publiccompany regulations. We expect that in the future, general and administrative expenses will increase as we invest in ourinfrastructure and we incur additional employee related costs and professional fees related to the growth of our business. Critical Accounting Policies and Estimates We prepare our financial statements in conformity with generally accepted accounting principles in the United States ofAmerica, or GAAP. The preparation of the consolidated financial statements in accordance with GAAP requires us to makejudgments, estimates and assumptions that affect the reported amounts of assets, liabilities, contingent liabilities, revenuesand expenses. We base our judgments and estimates on historical experience and various other factors we believe to bereasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Actual results may differ fromthese estimates under different assumptions and conditions and may materially affect the financial results or the financialposition reported in future periods. While our significant accounting policies are more fully described in the notes to the consolidated financial statements,the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are theaccounting policies we believe are the most critical to aid in fully understanding and evaluating our financial condition andresults of operations. Revenue Recognition We primarily derive revenue from two sources: subscription revenue which is comprised of direct or indirect sales ofsubscription-based license agreements for Talend technologies; and related professional services revenue. Subscription revenue Subscriptions for our on-premise licenses include both a right to use the underlying software and a right to receivetechnical support and fixes and updates to the software, on a when-and-if available basis, during the subscription term. Wehave concluded that the rights to use the software, which is recognized at the outset of the arrangement, and to receivetechnical support and software fixes and updates, which is recognized over the term of the arrangement, are separateperformance obligations. We have concluded that the right to use the software generally represents approximately 10% of thevalue of the contract and the remainder is allocated to the right to receive technical support and software fixes and updates.Subscriptions for our cloud-based offerings represent the right of access to our software as a service for which revenue isrecognized ratably over the term of the arrangement. Subscriptions have a contractual term of one to three years and aregenerally billed annually in advance and are non-cancelable. We sell subscriptions to customers either directly or indirectly through non-exclusive value-added channel partners andresellers (collectively, “resellers”). Resellers market, sell and provide us products and support services to end-users and we donot have the ability or the contractual right to establish pricing between resellers and end users Professional services revenue We offer professional services which include consulting and training and associated expenses. Consulting servicesinclude implementation support to our customers during subscription setup and consist of time-based arrangements for whichthe revenue is recognized as the services are rendered. Training revenue results from contracts to provide educational servicesto customers and partners regarding the use of our technologies and is recognized as training is delivered. 59 Table of ContentsContracts with multiple performance obligations We may enter into transactions that contain multiple performance obligations where a subscription and consulting andtraining services are sold together. For these contracts, we account for individual performance obligations separately if theyare distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling pricebasis. We are able to determine reliably the standalone selling price of a consulting or training service component based onhistorical pricing for the component or a similar component that has been sold on a standalone basis. The transaction priceallocated to each performance obligation is recognized as revenue when each performance obligation is satisfied. Contract acquisition costs Contract acquisition costs consist of sales commissions earned by our sales force and are considered incremental andrecoverable costs of obtaining a contract with a customer. The majority of these costs are deferred and then amortized on astraight-line basis over a period of benefit, which we have determined to be five years based on historical patterns of renewalsand forecasted life of tour licensed technology.Business Combinations and GoodwillWe allocate the fair value of purchase consideration in a business combination to tangible assets, liabilities assumed andintangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over thefair values of these identifiable assets and liabilities is allocated to goodwill. The allocation of the purchase considerationrequires management to make significant estimates and assumptions, especially with respect to intangible assets. Theseestimates can include, but are not limited to, future expected cash flows from acquired customers and acquired technologyfrom a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based uponassumptions believed to be reasonable but which are inherently uncertain and unpredictable, and, as a result, actual resultsmay differ from estimates. During the measurement period, which is up to one year from the acquisition date, we may recordadjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.We assess goodwill for impairment at least annually and whenever events or changes in circumstances indicate that thecarrying value of the asset may not be recoverable. When conducting the annual goodwill impairment assessment, we firstassess qualitative factors, to determine whether it is necessary to perform the two-step goodwill impairment test. If determinedto be necessary, the two-step impairment test shall be used to identify potential goodwill impairment and measure theamount of a goodwill impairment loss to be recognized, if any Share-Based Payments We recognize share-based payment expense beginning in the period of grant based on the fair value of the award at thegrant date, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of therespective award. The estimation of share awards that will ultimately vest requires judgement, especially awards with non-marketperformance conditions. Share‑based payment expense is recorded based on awards that are ultimately expected to vest, andsuch expense was reduced for estimated forfeitures. When estimating forfeitures, we considered voluntary terminationbehaviors as well as trends of the actual option forfeitures. Determining the fair value of share-based awards at the grant date requires judgment. We use the Black-Scholes option-pricing model to determine the fair value of share options, employee warrants (BSPCE) and warrant (BSA). The determinationof the grant date fair value of options using an option-pricing model is affected by our estimated ordinary share fair value aswell as assumptions regarding a number of other complex and subjective variables. These variables include the expectedterm of the options, our expected share price volatility, risk-free interest rates and expected dividends, which are estimated asfollows: ·Expected term. We determine the expected term based on the average period the share awards are expected toremain outstanding. 60 Table of Contents·Expected volatility. We consider historical volatility of our share price since the initial public offering and alsoconsider the historical volatility of similar entities following a comparable period in their lives. ·Risk-free rate. The risk-free interest rate represents the implied yield currently available on zero-coupongovernment issued securities over the expected term of the award. ·Dividend yield. We have never declared or paid any cash dividends and do not presently plan to pay cashdividends in the foreseeable future. Consequently, we use an expected dividend yield of zero. Accounting standards issued not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires the recognition of lease assetsand lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC Topic840 Leases. The guidance is effective for our fiscal year beginning January 1, 2019. Early adoption is permitted. We willadopt the new standard in the first quarter of fiscal 2019. Upon adoption, we will recognize right-of-use assets and operatinglease liabilities on our consolidated balance sheets, which will increase our total assets and total liabilities. We are assessingthe final impact of ASU 2016-02 on our consolidated financial statements but we expect that the adoption will result inrecognition of approximately $41.0 million (before discounting impact) right-of-use asset and a roughly equal amountof operating lease liability as a result of substantially all operating leases existing as of the adoption date being capitalizedalong with the associated obligations. The $41.0 million represents the total undiscounted future lease obligations atDecember 31, 2018 and the final impact will be discounted. Results of Operations The following table sets forth our results of operations for the periods indicated. The period-to-period comparison offinancial results is not necessarily indicative of financial results to be achieved in future periods. Year Ended December 31, 2016 2017 2018 (in thousands)Consolidated statements of operations Revenue Subscriptions $88,629 $125,898 $174,887Professional services 17,355 22,697 29,436Total revenue 105,984 148,595 204,323Cost of revenue (1) Subscriptions 12,278 16,367 23,094Professional services 13,290 17,792 26,400Total cost of revenue 25,568 34,159 49,494Gross profit 80,416 114,436 154,829Operating expenses (1) Sales and marketing 67,580 86,892 113,650Research and development 19,251 26,835 42,359General and administrative 19,577 29,446 40,357Total operating expenses 106,408 143,173 196,366Loss from operations (25,992) (28,737) (41,537)Other income 2,603 701 911Other expense (791) (2,848) (56)Loss before income tax (expense) benefit (24,180) (30,884) (40,682)Income tax (expense) benefit (63) (324) 323Net loss for the year $(24,243) $(31,208) $(40,359)Amounts include share-based payment and amortization of acquired intangibles expense, as follows: 61 (1) Table of Contents Year Ended December 31, 2016 2017 2018 (in thousands)Cost of revenue - subscriptions $74 $315 $1,432Cost of revenue - professional services 84 207 1,024Sales and marketing 917 2,271 7,198Research and development 674 1,613 7,693General and administrative 1,565 2,441 6,011Total share-based payment and amortization of acquired intangibles expense $3,314 $6,847 $23,358 The following table sets forth our results of operations data for each of the periods indicated as a percentage of totalrevenue. Year Ended December 31, 2016 2017 2018 Revenue Subscriptions 84% 85% 86%Professional services 16% 15% 14%Total revenue 100% 100% 100%Total cost of revenue 24% 23% 24%Gross profit 76% 77% 76%Operating expenses Sales and marketing 64% 58% 56%Research and development 18% 18% 21%General and administrative 18% 20% 20%Total operating expenses 100% 96% 97%Loss from operations (24)%(19)%(21)%Other income 2% —% —%Other expense (1)% (2) —%Loss before income tax (expense) benefit (23)%(21)%(21)%Income tax (expense) benefit —% —% —%Net loss for the year (23)%(21)%(21)% Years Ended December 31, 2017 and 2018 Revenue Year Ended December 31, 2017 2018 $ Change % Change (in thousands) Subscriptions $125,898 $174,887 $48,989 39%Professional services 22,697 29,436 6,739 30%Total revenue $148,595 $204,323 $55,728 38% Total revenue increased $55.7 million, or 38%, in the year ended December 31, 2018 compared to the year endedDecember 31, 2017. Growth in total revenue was attributable to increased demand for our products from both new andexisting customers. The growth in total revenue was attributable primarily to the sale of subscriptions and to a lesser extentthe growth of professional services revenue. Subscription revenue increased $49.0 million, or 39%, for the year ended December 31, 2018 compared to the yearended December 31, 2017. The increase in subscription revenue was primarily attributable to strong demand for TalendCloud and Talend Big Data Integration. Revenue from Talend Cloud grew by over 100% in the year ended December 31,2018 compared to the prior period. The adoption of ASC 606 contributed to the increase in subscription revenue ofapproximately $4.5 million, as we recognized the license element of our subscription arrangements upfront, upon delivery ofthe license key. 62 Table of ContentsProfessional services revenue grew by $6.7 million, or 30% for the year ended December 31, 2018 compared to the yearended December 31, 2017. The increase in professional services revenue was mainly due to increased demand from NorthAmerican customers. Subscription revenues by geography were as follows for the years ended December 31, 2017 and 2018: Year Ended December 31, 2017 2018 $ Change % Change (in thousands) Americas $61,273 $81,632 $20,359 33%EMEA 58,739 80,291 21,552 37%Asia Pacific 5,886 12,964 7,078 120%Total subscription revenue $125,898 $174,887 $48,989 39% Cost of Revenue Year Ended December 31, 2017 2018 $ Change % Change (in thousands) Cost of subscription $16,367 $23,094 $6,727 41%Cost of professional services 17,792 26,400 8,608 48%Total cost of revenue $34,159 $49,494 $15,335 45%Gross Profit $114,436 $154,829 $40,393 35%Gross Margin 77% 76%% Total cost of revenue increased $15.3 million, or 45%, in the year ended December 31, 2018 compared to the yearended December 31, 2017. The increase in total cost of revenue was driven by an increase in the cost of subscription revenueof $6.7 million, or 41%, in the year ended December 31, 2018 compared to the prior period. We increased our headcountduring the period to meet the higher demand for support from our customers, resulting in increased compensation expense foremployees and contractors of $5.2 million. Between December 31, 2017 and December 31, 2018, the support team headcountincreased by 32% to 123 employees. The increase in the cost of subscription revenue was also driven by an increase in third-party licensing fees and hosting costs for our Talend Cloud for a total of $0.3 million. Cost of professional services revenue increased $8.6 million, or 48%, as we increased our team size and the use ofcontractors to support increased demand for our professional services. Between December 31, 2017 and December 31, 2018,the professional services team headcount increased by 51% to 128 employees, resulting in increased employee compensationand related expenses of $5.2 million for the year ended December 31, 2018. Additionally, cost of professional services wasdriven by an increase in sub-contractor expenses and travel and entertainment costs of $2.9 million for the year endedDecember 31, 2018. Sales and Marketing Year Ended December 31, 2017 2018 $ Change % Change (in thousands) Sales and Marketing $86,892 $113,650 $26,758 31% Sales and marketing expenses increased $26.8 million, or 31%, in the year ended December 31, 2018 compared to theyear ended December 31, 2017. The increase was primarily due to a $21.0 million increase in employee compensationexpenses, related to increased headcount. Between December 31, 2017 and December 31, 2018, our sales and marketingheadcount increased by 26% to 459 employees. In addition, to support our continued growth, spending on marketingprograms increased by $2.0 million in the year ended December 31, 2018 compared to the year ended December 31, 2017.Sales and marketing expense was also driven by an increase of $1.9 million in travel and entertainment costs. These expenseswere partially offset by a benefit of $4.4 million in capitalized commission expenses due to the adoption of ASC 606 in2018. 63 Table of ContentsResearch and Development Year Ended December 31, 2017 2018 $ Change % Change (in thousands) Research and Development $26,835 $42,359 $15,524 58% Research and development expenses increased $15.5 million, or 58%, in the year ended December 31, 2018 comparedto the year ended December 31, 2017. The increase was primarily due to a $11.7 million increase in employee compensationexpenses, related to increased headcount. Between December 31, 2017 and December 31, 2018, our research anddevelopment headcount increased by 16% to 277 employees. In addition, research and development expenses increased by$1.5 million related additional amortization expense from our November 2017 acquisition of Restlet S.A. and our November2018 acquisition of Stitch Inc. General and Administrative Year Ended December 31, 2017 2018 $ Change % Change (in thousands) General and Administrative $29,446 $40,357 $10,911 37% General and administrative expenses increased $10.9 million, or 37%, in the year ended December 31, 2018, comparedto the year ended December 31, 2017. The increase was primarily due to an increase of $8.5 million in employeecompensation expenses. Between December 31, 2017 and December 31, 2018, our general and administrative headcountincreased by 29% to 133 employees as we added personnel to support our growth. In addition, our professional and outsideconsulting services increased by $1.5 million related to our follow-on offering and acquisition of Stitch Inc. BetweenDecember 31, 2017 and December 31, 2018, our amortization of intangible assets increased by $0.4 million. Years Ended December 31, 2016 and 2017 Revenue Year Ended December 31, 2016 2017 $ Change % Change (in thousands) Subscriptions $88,629 $125,898 $37,269 42%Professional services 17,355 22,697 5,342 31%Total revenue $105,984 $148,595 $42,611 40% Total revenue increased $42.6 million, or 40%, in the year ended December 31, 2017 compared to the year endedDecember 31, 2016. Growth in total revenue was attributable to increased demand for our products from both new andexisting customers. The growth in total revenue was attributable primarily to the sale of subscriptions and to a lesser extentthe growth of professional services revenue. Subscription revenue increased $37.3 million, or 42%, for the year ended December 31, 2017 compared to the yearended December 31, 2016. The increase in subscription revenue was primarily attributable to strong demand for TalendCloud and Talend Big Data Integration, which combined grew by 100% in the year ended December 31, 2017 compared tothe prior period. The increase in revenue was further driven by strong demand from North America where we have invested ingreater sales capacity and Asia Pacific where we continued to scale out this expanding territory. Professional services revenuegrew by $5.3 million, or 31% for the year ended December 31, 2017 compared to the year ended December 31, 2016. Theincrease in professional services revenue was mainly due to increased demand from North American customers. 64 Table of ContentsSubscription revenues by geography were as follows for the years ended December 31, 2016 and 2017: Year Ended December 31, 2016 2017 $ Change % Change (in thousands) Americas $41,682 $61,273 $19,591 47%EMEA 44,586 58,739 14,153 32%Asia Pacific 2,361 5,886 3,525 149%Total subscription revenue $88,629 $125,898 $37,269 42% Cost of Revenue Year Ended December 31, 2016 2017 $ Change % Change (in thousands) Cost of subscription $12,278 $16,367 $4,089 33%Cost of professional services 13,290 17,792 4,502 34%Total cost of revenue $25,568 $34,159 $8,591 34%Gross Profit $80,416 $114,436 $34,020 42%Gross Margin 76% 77%% Total cost of revenue increased $8.6 million, or 34%, in the year ended December 31, 2017 compared to the year endedDecember 31, 2016. The increase in total cost of revenue was driven by an increase in the cost of subscription revenue of$4.1 million, or 33%, in the year ended December 31, 2017 compared to the prior period. We increased our headcount duringthe period to meet the higher demand for support from our customers, resulting in increased compensation expense foremployees and contractors of $3.0 million. Between December 31, 2016 and December 31, 2017, the support team headcountincreased by 34% to 95 employees. The increase in the cost of subscription revenue was also driven by an increase in third-party licensing fees and hosting costs for our Talend Cloud for a total of $0.6 million. Cost of professional services revenue increased $4.5 million, or 34%, as we increased our team size and the use ofcontractors to support increased demand for our professional services, particularly in North America. Between December 31,2016 and December 31, 2017, the professional services team headcount increased by 35% to 85 employees. Sales and Marketing Year Ended December 31, 2016 2017 $ Change % Change (in thousands) Sales and Marketing $67,580 $86,892 $19,312 29% Sales and marketing expenses increased $19.3 million, or 29%, in the year ended December 31, 2017 compared to theyear ended December 31, 2016. The increase was primarily due to $13.0 million increase in employee compensationexpenses, related to increased headcount. Between December 31, 2016 and December 31, 2017, our sales and marketingheadcount increased by 33% to 365 employees. In addition, to support our continued growth, spending on marketingprograms increased by $3.0 million in the year ended December 31, 2017 compared to the year ended December 31, 2016.Sales and marketing expense was also driven by an increase of $1.3 million in travel and entertainment costs. Research and Development Year Ended December 31, 2016 2017 $ Change % Change (in thousands) Research and Development $19,251 $26,835 $7,584 39% Research and development expenses increased $7.6 million, or 39%, in the year ended December 31, 2017 compared tothe year ended December 31, 2016. The increase was primarily due to a $6.5 million increase in employee65 Table of Contentscompensation expenses, related to increased headcount. Between December 31, 2016 and December 31, 2017, our researchand development headcount increased by 27% to 238 employees including 16 new employees from our acquisition ofRestlet SAS. General and Administrative Year Ended December 31, 2016 2017 $ Change % Change (in thousands) General and Administrative $19,577 $29,446 $9,869 50% General and administrative expenses increased $9.9 million, or 50%, in the year ended December 31, 2017, compared tothe year ended December 31, 2016. The increase was primarily due to an increase of $4.3 million in employee compensationexpenses. Between December 31, 2016 and December 31, 2017, our general and administrative headcount increased by 23%to 103 employees as we added personnel to support our growth and the additional requirements of being a public reportingcompany. Between December 31, 2016 and December 31, 2017, our professional and outside services increased by $4.0million, of which $1.4 million were expenses related to our follow-on offering and filing of a registration statement on FormF-3 and $0.3 million in costs related to our acquisition of Restlet SAS. Quarterly Results of Operations The following unaudited quarterly results of operations data for each of the eight quarters ended December 31, 2018have been prepared on a basis consistent with our audited consolidated annual financial statements and include, inmanagement’s opinion, all normal recurring adjustments necessary for the presentation of the results of operations data forthese periods, in accordance with GAAP. Our quarterly results of operations will vary in the future. These quarterly results ofoperations are not necessarily indicative of our results of operations for a full year or any future period. The followingquarterly financial data should be read in conjunction with our consolidated financial statements, related notes and otherfinancial information included elsewhere in this Annual Report. Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, 2017 2017 2017 2017 2018 2018 2018 2018 (in thousands)Revenue Subscriptions $27,539 $30,280 $32,915 $35,164 $39,786 $42,027 $44,631 $48,443Professionalservices 5,326 5,533 5,483 6,355 7,027 7,728 7,434 7,247Total revenue 32,865 35,813 38,398 41,519 46,813 49,755 52,065 55,690Cost of revenue (1) Subscriptions 3,661 3,970 3,979 4,757 5,368 5,559 5,756 6,411Professionalservices 4,317 4,185 4,293 4,997 5,881 6,314 7,237 6,968Total cost ofrevenue 7,977 8,155 8,272 9,754 11,249 11,873 12,993 13,379Gross profit 24,887 27,658 30,126 31,765 35,564 37,882 39,072 42,311Operating expenses(1) Sales andmarketing 19,734 20,820 20,778 25,560 26,142 27,832 28,365 31,311Research anddevelopment 5,655 6,447 6,534 8,199 9,729 10,142 9,930 12,558General andadministrative 6,549 6,891 7,295 8,711 9,874 8,738 10,179 11,566Total operatingexpenses 31,939 34,158 34,607 42,470 45,745 46,712 48,474 55,435Loss fromoperations (7,052) (6,500) (4,481) (10,705) (10,181) (8,830) (9,402) (13,124)Other income(expense) (341) (1,228) (831) 253 77 132 132 514Income tax (26) (26) (40) (232) (11) (41) 21 354Net loss for theperiod $(7,418) $(7,754) $(5,352) $(10,684) $(10,115) $(8,739) $(9,249) $(12,256)(1)Includes share-based payment and amortization of acquired intangibles expense as follows: 66 Table of Contents Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, 2017 2017 2017 2017 2018 2018 2018 2018 (in thousands) Cost of revenue -subscriptions $21 $72 $133 $89 $177 $315 $433 $507Cost of revenue -professionalservices 14 38 80 74 104 183 327 410Sales and marketing 363 663 668 577 1,181 1,523 1,968 2,526Research anddevelopment 196 343 335 739 1,596 1,747 1,855 2,495General andadministrative 505 812 780 345 1,481 1,419 1,377 1,734Total share-basedpayment andamortization ofacquired intangiblesexpense $1,099 $1,928 $1,996 $1,824 $4,539 $5,186 $5,960 $7,672 The following table sets forth our results of operations data for each of the periods indicated as a percentage of totalrevenue. Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, 2017 2017 2017 2017 2018 2018 2018 2018 Revenue Subscriptions 84% 85% 86% 85% 85% 84% 86% 87%Professionalservices 16% 15% 14% 15% 15% 16% 14% 13%Total revenue 100% 100% 100% 100% 100% 100% 100% 100%Cost of revenue Subscriptions 11% 11% 10% 11% 11% 11% 11% 12%Professionalservices 13% 12% 11% 12% 13% 13% 14% 13%Total cost ofrevenue 24% 23% 21% 23% 24% 24% 25% 25%Gross profit 76% 77% 79% 77% 76% 76% 75% 75%Operatingexpenses Sales andmarketing 60% 58% 54% 62% 56% 56% 54% 56%Research anddevelopment 17% 18% 17% 20% 21% 20% 19% 23%General andadministrative 20% 19% 19% 21% 21% 18% 20% 21%Total operatingexpenses 97% 95% 90% 103% 98% 94% 93% 100%Loss fromoperations (21)% (18)% (11)% (26)% (22)% (18)% (18)% (25)%Other income(expense) (1)% (3)% (2)% 1% —% —% —% 1%Income tax —% —% —% (1)% —% —% —% 1%Net loss for theperiod (22)% (21)% (13)% (26)% (22)% (18)% (18)% (23)% Quarterly Revenue Trends Our quarterly subscription revenue increased in each period presented due to increased sales to new and existingcustomers. Our professional services revenue fluctuates from quarter to quarter based on a number of factors, includingcomplexity and length of new customer engagements and the decision of our customers to work with independent third-partysystems integrators. Our overall strategy is to focus on growing our subscription revenue while working more closely withsystems integrators. 67 Table of ContentsOur total gross margin has remained relatively consistent over all periods presented, with the fluctuations primarily dueto the mix of subscription and professional services revenues in our total revenue. Our cost of subscription revenue increasedslightly as a percentage of revenue in the fourth quarter of 2018 due to growth in our cloud operations. Research and development, sales and marketing, and general and administrative expenses generally increased, inabsolute dollars, sequentially over the periods as we increased our headcount to support continued investment in ourproducts. The increase in personnel costs was related to increases in headcount, along with higher share-based paymentexpense. Research and development expenses grew as a percentage of revenue as we expanded our engineering team tofurther support the development of our cloud offerings. Sales and marketing expenses generally are higher in the quartersending December 31 as it is the quarter where we seasonally sell the most and thereby have higher commission expenses. Ourgeneral and administrative expenses generally increased sequentially in fiscal 2018 due to increased headcount as a result ofcontinued overall growth. Liquidity and Capital Resources Year Ended December 31, 2016 2017 2018 (in thousands)Cash (used in) from operating activities $3,373 $(2,321) $3,231Cash used in investing activities (1,417) (11,413) (64,499)Cash from financing activities 82,335 6,519 8,616Net increase (decrease) in cash and cash equivalents $84,291 $(7,215) $(52,652) Through December 31, 2018, we have financed our operations primarily through cash received from customers forsubscriptions of our software and professional services, as well as equity financings. As of December 31, 2018, we had $33.7 million of cash and cash equivalents. We believe that our current cash and cash equivalents will be sufficient to meetour working capital and capital expenditure requirements for at least the next 12 months. Also, subsequent to fiscal year-end2018, we have entered into a revolving credit facility with Square 1 Bank, see the Subsequent Event footnote, Note 19 . Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of ourspending to support our operating expenses. In the event that additional financing is required from outside sources, we maynot be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital whendesired, our business, results of operations and financial condition would be adversely affected. Operating Activities During the year ended December 31, 2018, operating activities provided $3.2 million in cash as a result of a net loss of$40.4 million, adjusted by non-cash charges of $24.9 million and a $18.7 million favorable impact from changes in workingcapital. The net increase in our working capital was primarily the result of $26.0 million increase in deferred revenue as aresult of increased sales of subscriptions, a $11.6 million increase in accounts payable and accrued expenses mainly due toincreased accruals for paid time off and commissions and bonuses during the year. In addition to the net increase in ouroperating liabilities, there was a $12.4 million increase in accounts receivable in the year ended December 31, 2018 due toincreased sales of our product offerings. During the year ended December 31, 2017, operating activities used $2.3 million in cash as a result of a net loss of $31.2 million, adjusted by non-cash charges of $10.1 million and a $18.4 million favorable impact from changes in workingcapital. The net decrease in our working capital was primarily the result of $29.1 million increase in deferred revenue as aresult of increased sales of subscriptions, a $7.6 million increase in accounts payable and accrued expenses mainly due toincreased accruals for paid time off and commissions and bonuses during the year. In addition to the net increase in ouroperating liabilities, there was a $16.5 million increase in accounts receivable in the year ended December 31, 2017 due toincreased sales of our product offerings. During the year ended December 31, 2016, operating activities provided $3.4 million in cash as a result of a net loss of$24.2 million, adjusted by non-cash charges of $2.1 million and a $25.6 million favorable impact from changes in workingcapital. The net decrease in our working capital was primarily the result of $32.8 million increase in deferred revenue as aresult of increased sales of subscriptions, a $6.6 million increase in trade and other payables mainly due to increased accrualsfor commissions and bonuses during the year. In addition to the net increase in our operating68 Table of Contentsliabilities, there was a $14.1 million increase in trade and other receivables in the year ended December 31, 2016 due toincreased sales of our product offerings. Investing Activities Cash used in investing activities during the years ended December 31, 2016, 2017 and 2018 was $1.4 million, $11.4million, and $64.5 million, respectively. Investing activities for the year ended December 31, 2016 consist primarily ofcapital expenditures to purchase furniture and equipment to support additional office space as well as miscellaneous ITequipment for our employees. Investing activities for the year ended December 31, 2017 consists primarily of cashconsideration paid for our acquisition of Restlet SAS. Investing activities for the year ended December 31, 2018 consistsprimarily of cash consideration paid for our acquisition of Stitch, Inc. Financing Activities Cash from financing activities for the years ended December 31, 2016, 2017, and 2018 was $82.3 million, $6.5 million,and $8.6 million, respectively. Financing proceeds for the year ended December 31, 2016 consisted primarily from $91.3million of net proceeds from our initial public offering received in the third quarter of 2016. Financing proceeds for the yearended December 31, 2017 was driven by $6.7 million of proceeds from the exercise of employee stock awards. Financingproceeds for the year ended December 31, 2018 was driven by $8.9 million of proceeds from the exercise of employee stockawards and cash received from the employee stock purchase plan. Deferred revenue and backlog Our deferred revenue, which consists of billed but unrecognized revenue, was $140.2 million and $150.1 million as ofDecember 31, 2017 and 2018, respectively. Our total backlog, which we define as including both cancelable and non-cancelable portions of our supportsubscription customer agreements that we have not yet billed, was $20.3 million and $32.1 million as of December 31, 2017and 2018, respectively. Of the December 31, 2018 backlog, we expect to recognize revenue of $9.0 million in 2019 and$23.1 million thereafter. Research and Development, Patents and Licenses, etc. We invest substantial resources in research and development to enhance our data integration, data processing and datagovernance solutions. Our research and development team is globally distributed in France, Germany and China. We expectto continue to expand the capabilities of our Talend Data Fabric platform in the future and to invest significantly incontinued research and development efforts. In the years ended December 31, 2016, 2017 and 2018, our research anddevelopment expenses were $19.3 million, $26.8 million and $42.4 million, respectively. As of December 31, 2018, we had two pending patent applications and no issued patents. Off-balance Sheet Arrangements During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships,such as entities often referred to as structured finance or special purpose entities, which would have been established for thepurpose of facilitating off balance sheet arrangements or other contractually narrow or limited purposes. 69 Table of ContentsTabular Disclosure of Contractual Obligations Our contractual obligations consist of leases for office space. The leases have varying terms, escalation clauses andrenewal rights. On renewal, the terms of the leases are renegotiated. As of December 31, 2018, the future undiscounted non-cancelable minimum lease payments under these obligations were as follows: Payments Due By Period Less than 1 - 3 3 - 5 More than Total 1 year Years Years 5 YearsDebt obligations $884 $208 $424 $224 $28Operating lease obligations 40,800 5,286 11,349 9,334 14,831Total $41,684 $5,494 $11,773 $9,558 $14,859 Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exchange Risk Our results of operations and cash flows are subject to fluctuations as a result of changes in foreign currency exchangerates. Our sales contracts are generally denominated in the local currency of the entity with which they are contracted. Ouroperating expenses are generally denominated in the local currencies of the countries where our operations are located. Mostof our expenses are incurred in Euros and United States dollars. Fluctuations in foreign currencies impact the amount of totalassets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translationof these amounts into U.S. dollars. As the U.S. dollar fluctuates against certain international currencies, the amounts ofrevenue and deferred revenue that we report in U.S. dollars for foreign subsidiaries that transact in international currenciesmay also fluctuate relative to what we would have reported using a constant currency rate. For the year ended December 31, 2018 approximately 57% of our revenue and approximately 63% of aggregate cost ofsales and operating expenses were generated in currencies other than U.S. dollars. For the year ended December 31, 2017,approximately 55% of our revenue and approximately 61% of aggregate cost of sales and operating expenses were generatedin currencies other than U.S. dollars. We have not entered into derivatives or hedging transactions, as our exposure to foreigncurrency exchange rates has historically been partially hedged as our Euro denominated inflows have covered our Eurodenominated expenses and our USD denominated inflows have covered our USD denominated expenses. However, we mayenter into derivative or hedging transactions in the future if our exposure to foreign currency should become moresignificant. A hypothetical 10% increase or decrease in the foreign exchange rate of the Euro to the US Dollar would lead to acorresponding increase or decrease of the consolidated net loss to the Company by approximately $2.4 million. Interest Rate Risk We had cash and cash equivalents of $91.0 million, $87.0 million, and $33.7 million at December 31, 2016, 2017 and2018, respectively. The carrying amount of our cash equivalents reasonably approximates fair value, as a result of the shortmaturities of investment instruments used. The primary objective of our investment activities is the preservation of capital,and we do not enter into investments for trading or speculative purposes. Short-term and long-term investments we hold arein the form of term deposits with fixed interest rates, thereby limiting their exposure related to interest rate fluctuations. Ahypothetical 10% increase in interest rates during the year ended December 31, 2018 would not have had a material impacton our financial statements. Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition, or results of operations. Item 8. Financial Statements and Supplementary Data 70 Table of ContentsTalend S.A.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Annual Financial Statements for the Years Ended December 31, 2016, 2017 and 2018: Report of Independent Registered Public Accounting Firm 72Consolidated Statements of Financial Position as of December 31, 2017 and 2018 75Consolidated Statements of Operations for the Years Ended December 31, 2016, 2017 and 2018 76Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2016, 2017 and 2018 77Consolidated Statements of Changes in Equity (Deficit) for the Years Ended December 31, 2016, 2017 and 2018 78Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2017 and 2018 79Notes to the Consolidated Financial Statements 80 71 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of DirectorsTalend S.A.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial position of Talend S.A. and subsidiaries (theCompany) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive loss,changes in equity (deficit), and cash flows for each of the years in the three‑year period ended December 31, 2018, and therelated notes and financial statement schedule presented in Item 15 (collectively, the consolidated financial statements). Inour opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in thethree‑year period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission, and our report dated February 28, 2019 expressed an unqualified opinion on the effectiveness of theCompany’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 2(c) to the consolidated financial statements, the Group has changed its method of accounting forrevenue recognition in 2018, due to the adoption of ASC Topic 606, Revenue from Contracts with Customers, as amended. Basis for Opinion. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these consolidated financial statements based on our audits. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the consolidated financial statements are free of materialmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of materialmisstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respondto those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Webelieve that our audits provide a reasonable basis for our opinion. We have served as the Company’s auditor since 2006. Paris La Défense, France February 28, 2019 KPMG S.A. /s/ Jacques Pierre Jacques PierrePartner72 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of DirectorsTalend S.A.: Opinion on the Internal Control Over Financial Reporting We have audited Talend S.A. and subsidiaries’ (the Company) internal control over financial reporting as of December 31,2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee ofSponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the consolidated statements of financial position of the Company as of December 31, 2018 and 2017, and therelated consolidated statements of operations, comprehensive loss, changes in equity (deficit), and cash flows for each of theyears in the three-year period ended December 31, 2018 and related notes and financial statement schedule presented in Item15 (collectively, the consolidated financial statements), and our report dated February 28, 2019 expressed an unqualifiedopinion on those consolidated financial statements. The Company acquired Stitch Inc. in November 2018, and management excluded from its assessment of the effectiveness ofthe Company’s internal control over financial reporting as of December 31, 2018, Stitch Inc.’s internal control over financialreporting associated with total assets of $2.3 million (excluding goodwill and intangibles which are included within thescope of the assessment) and total revenues of $0.6 million included in the consolidated financial statements of theCompany as of and for the year ended December 31, 2018. Our audit of internal control over financial reporting of theCompany also excluded an evaluation of the internal control over financial reporting of Stitch Inc. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sAnnual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’sinternal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained inall material respects. Our audit of internal control over financial reporting included obtaining an understanding of internalcontrol over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. Our audit also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for ouropinion. Definition and Limitations of Internal Control Over Financial Reporting 73 Table of ContentsA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance with authorizations of management anddirectors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Paris La Défense, France February 28, 2019 KPMG S.A. /s/ Jacques Pierre Jacques PierrePartner74 Table of ContentsTALEND S.A.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) As of December 31, 2017 2018ASSETS Current assets: Cash and cash equivalents $87,024 $33,740Accounts receivables, net of allowance for doubtful accounts of $1,409 and $1,882 as ofDecember 31, 2017 and 2018, respectively 57,129 67,531Contract acquisition costs — 9,563Other current assets 8,311 9,825Total current assets 152,464 120,659Non-current assets: Contract acquisition costs — 19,390Property and equipment, net 3,473 6,335Goodwill 6,196 49,659Intangible assets, net 7,528 19,420Other non-current assets 3,137 3,661Total non-current assets 20,334 98,465Total assets $172,798 $219,124LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $4,203 $5,760Accrued expenses and other current liabilities 27,504 36,475Contract liabilities - deferred revenue, current 118,601 124,416Short-term debt 1,188 208Total current liabilities 151,496 166,859Non-current liabilities: Deferred income taxes — 469Other non-current liabilities 787 950Contract liabilities - deferred revenue, non-current 21,618 25,731Long-term debt 7 676Total non-current liabilities 22,412 27,826Total liabilities 173,908 194,685Commitments and contingencies (Note 17) STOCKHOLDERS' EQUITY (DEFICIT) Ordinary shares, par value €0.08 per share; 29,439,767 and 30,158,374 shares authorized,issued and outstanding at December 31, 2017 and 2018, respectively 3,059 3,128Additional paid-in capital 215,390 244,878Accumulated other comprehensive income 672 607Other reserves 49 138Accumulated losses (220,280) (224,312)Total stockholders’ equity (deficit) (1,110) 24,439Total liabilities and stockholders’ equity (deficit) $172,798 $219,124 The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 75 Table of ContentsTALEND S.A.CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31, 2016 2017 2018Revenue Subscriptions $88,629 $125,898 $174,887Professional services 17,355 22,697 29,436Total revenue 105,984 148,595 204,323Cost of revenue Subscriptions 12,278 16,367 23,094Professional services 13,290 17,792 26,400Total cost of revenue 25,568 34,159 49,494Gross profit 80,416 114,436 154,829Operating expenses Sales and marketing 67,580 86,892 113,650Research and development 19,251 26,835 42,359General and administrative 19,577 29,446 40,357Total operating expenses 106,408 143,173 196,366Loss from operations (25,992) (28,737) (41,537)Other income (expense), net 1,812 (2,147) 855Loss before income tax expense (24,180) (30,884) (40,682)Income tax (expense) benefit (63) (324) 323Net loss for the year $(24,243) $(31,208) $(40,359) Net loss per share attributable to ordinary shareholders: Basic and diluted net loss per share $(1.68) $(1.08) $(1.35) Weighted-average shares outstanding used to compute net loss per shareattributable to ordinary shareholders: 14,464 28,966 29,841 The above consolidated statements of operations should be read in conjunction with the accompanying notes. 76 Table of ContentsTALEND S.A.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Year Ended December 31, 2016 2017 2018 Net loss for the year $(24,243) $(31,208) $(40,359)Other comprehensive loss Foreign currency translation adjustment (463) (879) (65)Tax effect on foreign exchange differences — — —Total comprehensive loss for the year $(24,706) $(32,087) $(40,424) The above consolidated statements of comprehensive loss should be read in conjunction with the accompanying notes. 77 Table of ContentsTALEND S.A.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (in thousands, except share data) Accumulated Additional other Ordinary shares paid-in comprehensive Other Accumulated Total Shares Amount capital income reserves loss equityBalance at January 1, 2016 3,905,110 $2,450 $99,511 $2,014 $8,371 $(164,829) $(52,483)Comprehensive loss: Net loss for the year — — — — — (24,243) (24,243)Other comprehensive loss — — — (463) — — (463)Total comprehensive loss for the year — — — (463) — (24,243) (24,706)Issuance of ordinary shares upon initial publicoffering, net of offering costs and underwriterscommissions and discounts 5,706,852 510 90,818 — — — 91,328Conversion of preferred shares to ordinary atclosing of IPO 18,732,416 — — — — — —Exercise of stock awards 212,775 20 872 — — — 892Release of other reserves upon the completion ofinitial public offering — — 8,371 — (8,371) — —Stock-based compensation — — 2,994 — — — 2,994Balance at December 31, 2016 28,557,153 $2,980 $202,566 $1,551 $ — $(189,072) $18,025Comprehensive loss: Net loss for the year — — — — — (31,208) (31,208)Other comprehensive loss — — — (879) — — (879)Total comprehensive loss for the year — — — (879) — (31,208) (32,087)Restricted stock units reserve — — (49) — 49 — —Exercise of stock awards 882,614 79 6,593 — — — 6,672Stock-based compensation — — 6,280 — — — 6,280Balance at December 31, 2017 29,439,767 $3,059 $215,390 $672 $49 $(220,280) $(1,110)Adjustment on initial application of ASC 606, netof tax — — — — — 36,327 36,327Restated balance at January 1, 2018 29,439,767 3,059 215,390 672 49 (183,953) 35,217Comprehensive loss: Net loss for the year — — — — — (40,359) (40,359)Other comprehensive loss — — — (65) — — (65)Total comprehensive loss for the year — — — (65) — (40,359) (40,424)Restricted stock units reserve — — (138) — 89 — (49)Shares issued from restricted stock unit vesting 92,228 8 (8) — — — —Exercise of stock awards 576,901 57 6,996 — — — 7,053Issuance of ordinary shares in connection withemployee stock purchase plan 49,478 4 1,801 — — — 1,805Stock-based compensation — — 20,837 — — — 20,837Balance at December 31, 2018 30,158,374 $3,128 $244,878 $607 $138 $(224,312) $24,439 The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 78 Table of ContentsTALEND S.A.CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2016 2017 2018Cash flows from operating activities: Net loss for the year $(24,243) $(31,208) $(40,359)Adjustments to reconcile net loss to net cash from operating activities: Depreciation 1,193 1,527 2,034Amortization of intangible assets 314 567 2,521Unrealized (gain) loss foreign exchange (2,486) 1,751 134Non-cash finance costs 85 — —Share-based compensation 2,994 6,280 20,837Deferred income taxes — — (327)Income tax for the year 63 324 (323)Changes in operating assets and liabilities: Accounts receivable (12,545) (16,533) (12,387)Other assets (1,524) (1,747) (6,569)Accounts payable, accrued expenses and other current liabilities 6,753 7,629 11,630Contract liabilities - deferred revenue 32,769 29,089 26,040Net cash (used in) from operating activities 3,373 (2,321) 3,231Cash flows from investing activities: Acquisition of property and equipment (1,417) (2,224) (5,006)Cash consideration for business acquisition, net of cash acquired — (9,189) (59,493)Net cash used in investing activities (1,417) (11,413) (64,499)Cash flows from financing activities: Proceeds from issuance of ordinary shares upon initial public offering, net ofoffering costs and underwriters commissions and discounts 91,818 — —Proceeds from issuance of ordinary shares related to exercise of stock awards 926 6,672 7,053Proceeds from issuance of ordinary shares related to employee stock purchase plan — — 1,805Proceeds from borrowings 2,000 — —Repayment of borrowings (12,142) (153) (242)Prepayment fee under Square 1 loan (267) — —Net cash from financing activities 82,335 6,519 8,616Net increase (decrease) in cash and cash equivalents 84,291 (7,215) (52,652)Cash and cash equivalents at beginning of the year 6,930 91,023 87,024Effect of exchange rate changes on cash and cash equivalents (198) 3,216 (632)Cash and cash equivalents at end of year $91,023 $87,024 $33,740 Supplemental disclosures Cash paid for income taxes $172 $158 $302Cash paid for interest $461 $ 7 $ 7 The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. 79 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.Organization and description of business The Company is incorporated in France with its main office in Redwood City, California. Talend's software platform,Talend Data Fabric, integrates data and applications in real-time across modern big data and cloud environments, as well astraditional systems, allowing organizations to develop a unified view of their business and customers. 2.Summary of significant accounting policies The significant accounting policies adopted in the preparation of these consolidated financial statements are set outbelow. These accounting policies have been consistently applied to all years presented, unless otherwise stated. (a)Basis of presentation and consolidation The consolidated financial statements as of and for the year ended December 31, 2018 have been prepared inaccordance with generally accepted accounting principles in the United States of America (“GAAP”) and include theaccounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have beeneliminated in consolidation. The financial statements of the subsidiaries are prepared for the same reporting period as theCompany, using consistent accounting policies. (b)Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimatesand assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant itemssubject to such estimates include, but are not limited to, revenue recognition (including allocation of the transaction price toseparate performance obligations), the amortization period for contract acquisition costs, fair value of acquired intangibleassets and goodwill and share‑based compensation expense. These estimates and assumptions are based on management’sbest estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience andother factors; however, actual results could differ significantly from these estimates. (c)Recently adopted accounting standards In March 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 2014-09, Revenue from Contractswith Customers (codified in ASC 606), and added ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers,to codify the guidance on other assets and deferred costs relating to contracts with customers (collectively, the “standard”),along with consequential amendments to existing standards. The standard was subsequently amended in March, April andMay 2016 and supersedes virtually all revenue recognition guidance in US GAAP. The standard’s core principle is that anentity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligationsin the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the separate performance obligationsin the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities mustdisclose sufficient qualitative and quantitative information to enable users of the financial statements to understand thenature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative andquantitative disclosures are also required. The Group has adopted the standard on January 1, 2018 on a modifiedretrospective method and applied the new standard only to contracts that were not completed contracts as of January 1, 2018. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting(Topic 718), which simplifies the accounting for share-based payment transactions, including accounting for income80 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) taxes, forfeitures, and classification in the statement of cash flows. As of January 1, 2018, we adopted the applicableprovisions of ASU No. 2016-09 as follows: ·The guidance requires excess tax benefits and tax deficiencies to be recorded as income tax benefit or expense inthe statement of operations when the awards vest or are settled, and eliminates the requirement to reclassify cashflows related to excess tax benefits from operating activities to financing activities on the statement of cash flows.We adopted the guidance prospectively effective January 1, 2018. The Company had no amounts previouslyrecorded to additional paid-in capital related to windfall tax benefits prior to January 1, 2018. ·The guidance eliminates the requirement that excess tax benefits must be realized (through a reduction in incometaxes payable) before companies can recognize them. We have applied the modified retrospective transitionmethod upon adoption. The Company has never recorded unrecognized excess tax as a deferred tax asset, as a resultno cumulative-effect adjustment to accumulated deficit was required as of January 1, 2018. (d)Accounting standards issued not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires the recognition of lease assetsand lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC Topic840 Leases. In 2018, the FASB issued ASU 2018-10, 2018-11 and 2018-20, providing, among other things, codificationimprovements, the optional transition method, the treatment of sales and similar taxes as lease cost by policy elections, therequirement to exclude certain variable payments from consideration and the allocation of certain variable paymentsbetween lease and non-lease components. The standard is effective for interim and annual reporting periods beginning afterDecember 15, 2018, with early adoption permitted. The Group will adopt the standard in the first quarter of 2019, utilizingthe optional transition method for adoption, which allows entities to continue to apply the legacy guidance in ASC840, Leases, including disclosure requirements, in the comparative periods presented in the year of adoption. Upon adoption,we will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets, which will increaseour total assets and total liabilities. We are assessing the final impact of ASU 2016-02 on our consolidated financialstatements but we expect that the adoption will result in recognition of approximately $41.0 million (before discountingimpact) right-of-use asset and a roughly equal amount of operating lease liability as a result of substantially all operatingleases existing as of the adoption date being capitalized along with the associated obligations. The $41.0 million representsthe total undiscounted future lease obligations at December 31, 2018 and the final impact will be discounted.In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which modifies thegoodwill impairment test and requires an entity to write down the carrying value of goodwill for the amount by which thecarrying amount of a reporting unit exceeds its fair value. The standard is effective for interim and annual reporting periodsbeginning after December 15, 2019, with early adoption permitted. The Group is currently evaluating the effect ASU 2017-04 will have on the consolidated financial statements and related disclosures.In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), Improvements toNonemployee Share-based Payments. This ASU expands the scope of Topic 718 to include share-based payment transactionsfor acquiring goods and services from non-employees. The effective date for the standard is for interim periods in fiscal yearsbeginning after December 15, 2018, with early adoption permitted, but no earlier than the adoption date of Topic 606. Thenew guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initialapplication. The Group is currently evaluating the effect ASU 2018-07 will have on the consolidated financial statementsand related disclosures but does not expect it to have a material impact. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). Theupdated guidance improves the disclosure requirements on fair value measurements. The updated guidance is effective forfiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted,further, an entity is permitted to early adopt any removed or modified disclosure requirements, and delay adoption of theadditional disclosure. The Company is currently evaluating the effect ASU 2018-13 will have on the consolidated financialstatements and related disclosures. 81 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a ServiceContract. This guidance requires companies to apply the internal-use software guidance in ASC 350-40 to implementationcosts incurred in a hosting arrangement that is a service contract to determine whether to capitalize certain implementationcosts or expense them as incurred. The updated guidance is effective for fiscal years, and interim periods within those fiscalyears, beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effectASU 2018-15 will have on the consolidated financial statements and related disclosures. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying theInteraction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in acollaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. In addition, ASU2018-18 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue fromcontracts with customers if the counterparty is not a customer for that transaction. This guidance will be effective for theCompany beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effectASU 2018-18 will have on the consolidated financial statements and related disclosures.There have been no other recent accounting pronouncements or changes in accounting pronouncements that would besignificant, or potentially significant, to the Group. (e)Revenue recognition The Group primarily derives revenue from contracts with customers, as follows: ·subscription-based licenses to Talend technologies, sold either directly or indirectly to customers; and ·related professional services revenue. The Group accounts for revenue in accordance with ASC 606, which the Company adopted on January 1, 2018 usingthe modified retrospective method. The Group recognizes revenue when control over performance obligations transfers tocustomers, in amounts that reflect the consideration the Group expects to be entitled to in exchange for those services. Subscriptions Subscriptions for our on-premise licenses include both a right to use the underlying software and a right to receivetechnical support and fixes and updates to the software, on a when-and-if available basis, during the subscription term. TheGroup has concluded that the rights to use the software, which is recognized upon delivery of the license key, and to receivetechnical support and software fixes and updates, which is recognized over the term of the arrangement, are separateperformance obligations. Subscriptions for our cloud-based offerings represent the right of access to our software as a servicefor which revenue is recognized ratably over the term of the arrangement. Subscriptions have a contractual term of one tothree years and are generally billed annually in advance and are non-cancelable. For the fiscal years ended December 31,2017 and 2018, new subscription sales had an average pre-billed duration of 1.3 and 1.1 years, respectively. The Group sells subscriptions to customers either directly or indirectly through non-exclusive value-added channelpartners and resellers (collectively, “resellers”). Resellers market, sell and provide the Group’s products and support servicesto end-users and the Group does not have the ability or the contractual right to establish pricing between resellers and endusers. Revenue through resellers follows the same revenue recognition as applied for subscriptions and technical support andfixes and updates to software as discussed in the paragraph above. Professional services The Group offers professional services which include consulting and training and associated expenses. Consultingservices include implementation support to our customers during subscription setup and consist of time-based arrangementsfor which the revenue is recognized as the services are rendered. Training revenue results from contracts to82 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) provide educational services to customers and partners regarding the use of the Group technologies and is recognized astraining is delivered. Identification of the performance obligations in the contract The Group has concluded that all performance obligations are distinct as follows: ·The intellectual property (IP) rights and support and maintenance are distinct performance obligations as the Groupdoes not provide a significant service of integrating the IP rights and support and maintenance into a bundle ofgoods or services that represent a combined output. Neither the IP rights nor the support and maintenance aresignificantly modified or customized by the other, and the IP rights and support and maintenance are not highlyinterdependent or highly interrelated. The Group would be able to fulfill its promise by transferring each of the IPrights and support and maintenance independently. ·The updates provided as part of the support and maintenance included in the subscription are not critical tocustomers’ ability to continue to derive benefits from the IP in the absence of such updates. The subscriptionprovides customers a right to use the Group’s IP as customers can direct the use of and obtain substantially all of theremaining benefits from a license at the point in time the license is granted. Allocation of the transaction price to the performance obligations in the contract As required by the standard, the Group allocates the transaction price to separate performance obligations on a relativestandalone selling prices basis, and has determined (or estimated, as applicable) standalone selling prices as follows: ·For performance obligations related to the right to use the software included in a subscription and right to receivesupport, fixes and updates to the software, on a when-and-if available basis, during the subscription term, the Grouphas developed a model to allocate the subscription price to these performance obligations as stand-alone sellingprices are not directly observable. The subscription price is allocated in proportion to the costs incurred ingenerating such revenue, taking into consideration a margin rate deemed reflective of market conditions evolvingover time. The model also takes into consideration the estimated technology useful life. ·Professional services – based on prices charged when these services are sold on a standalone basis. Revenue is recognized when, or as, the Group satisfies a performance obligation ·Right to use the software included in a subscription – when the license key is delivered to the customer. ·Right to receive support, fixes and updates to the software, on a when-and-if available basis is recognized ratablyover the subscription term. The Group has concluded that support services are a stand-ready obligation to providesupport to customers when-and-as needed throughout the support period. Promises to provide unspecified updates,upgrades and enhancements during the subscription term should similarly be viewed as stand-ready obligationsgiven the historical frequency of maintenance releases provided to customers during the subscription term. ·Professional services – as services are rendered. ·Additionally, the Group occasionally enters into arrangements to embed its proprietary software or other generatedcode into a third-party application or service in exchange for sales- or usage-based royalties. As licensees do notgenerally report and pay royalties owed for sales/usage in any given quarter until after conclusion of that quarter,the Group recognizes royalty revenue based on estimates of licensees’ sales/usage in the quarter, with a bookingeach quarter and a royalty estimate true up recorded in the following quarter as a separate booking. 83 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Contracts with multiple performance obligations The Group may enter into transactions that contain multiple performance obligations where a subscription andconsulting and training services are sold together. For these contracts, the Group accounts for individual performanceobligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on arelative standalone selling price basis. The Group is able to determine reliably the standalone selling price of a consulting or training service componentbased on historical pricing for the component or a similar component that has been sold on a standalone basis. Thetransaction price allocated to each performance obligation is recognized as revenue when the services performanceobligation is satisfied. Contract acquisition costs Contract acquisition costs consist of sales commissions earned by the Group’s sales force and are consideredincremental and recoverable costs of obtaining a contract with a customer. The majority of these costs are deferred and thenamortized on a straight-line basis over a period of benefit that the Group has determined to be five years based on historicalpatterns of renewals and forecasted life of the Group’s licensed technology. Amortization expense is included in Sales andmarketing expenses in the accompanying consolidated statements of operations. Contract liabilities - deferred revenue Deferred revenue predominantly consists of the portion of the subscription price allocated to support and maintenanceservices that will be recognized ratably over the remaining subscription term, and prepaid but unused consulting and trainingservices. Impact of adoption of ASC 606 on the Group’s financial statements Historical financial results for reporting periods prior to 2018 have not been retroactively restated and are presentedunder ASC 605. The Group has adopted ASC 606 on a modified retrospective method and the cumulative effect of thechanges made to the Group’s consolidated January 1, 2018 statement of financial position for the adoption of ASC 606 wereas follows (in thousands): Consolidated Statement of Financial Position Balance at December 31, 2017 Adjustments due Balance at under previousGAAP to ASC 606 January 1, 2018Assets Contract acquisition costs $ — $25,181 $25,181 Liabilities Contract liabilities - deferred revenue 140,219 (12,159) 128,060 Equity Accumulated losses $(220,280) $36,555 $(183,725) The adoption adjustment above to accumulated loss contains a foreign currency translation adjustment amount of $228thousand, related to prior period activity booked to the statement of operations but adjusted at January 1, 2018, while theadoption adjustment to accumulated loss on the consolidated statement of changes in equity (deficit) does not contain theforeign currency impact, both adjustments are presented net of tax of $0.8 million.84 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on ourconsolidated statement of operations and consolidated statement of financial position was as follows (in thousands): Consolidated Statement of Operations For the year ended December 31, 2018 Balance Without Adoption of Effect of Change As Reported ASC 606 Higher/(Lower)Revenue Subscriptions $174,887 $170,419 $4,468 Operating expenses Sales and marketing 113,650 118,085 (4,435) Income tax benefit 323 138 185Net loss for the year $(40,359) $(49,447) $9,088 Consolidated Statement of Financial Position As of December 31, 2018 Effect of Change Higher/(Lower) Balance Without Adoption impact Impact of Adoption of to openingbalance applying ASC606 As Reported ASC 606 at January 1,2018 for the periodAssets Contract acquisition costs $28,953 $ — $25,181$3,772 Liabilities Contract liabilities - deferred revenue 150,147 166,774 (12,159) (4,468) Equity Accumulated losses $(224,312) $(211,420) $36,555$(49,447) Disclosures Related to our Contracts with Customers Sales commissions earned by the Group’s sales force are considered incremental and recoverable costs of obtaining acontract with a customer. The Group recognizes these incremental costs of obtaining a subscription contract with a customerif the Group expects the benefit of those costs to be longer than one year. The Group amortizes the majority of theincremental sales commission costs to obtain a subscription contract on a straight-line basis over a period of benefit that wehave determined to be five years. The Group recognizes these sales commissions as contract acquisition costs on thestatement of financial position. Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amountsrelated to the Group’s contracts with customers. The Group may record assets for amounts related to performance obligationsthat are satisfied but not yet billed and/or collected. These assets would be recorded as contract assets rather than receivableswhen receipt of the consideration is conditional on something other than the passage of time. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. Theseliabilities are classified as current and non-current contract liabilities – deferred revenue in the statement of financialposition. 85 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Under ASC 606, contracts with customers are reflected in the consolidated balance sheets. The following table reflectsthe Group’s accounts receivables, contract acquisition costs and contract liabilities – deferred revenue (in thousands). ·Accounts receivable, net represents amounts billed to customers in accordance with contract terms for whichpayment has not yet been received. It is presented net of the allowance for doubtful accounts as part of currentassets.·Contract assets – are unbilled revenue, represent timing difference between the satisfaction of performanceobligations by the Group and the invoicing and collection of related amounts.·Contract acquisition costs include deferred sales commissions.·Contract liabilities – deferred revenue represents amounts received as consideration from the Group’scustomers in advance of performance on a portion of the contract as of the end of the reporting period. UnderASC 606, this balance represents our contract liabilities. December 31, 2017 December 31, 2018Assets Accounts receivables, net $57,129 $67,531Contract assets - unbilled revenue 782 941Contract acquisition costs - current — 9,563Contract acquisition costs - non-current — 19,390Total contract assets $57,911 $97,424 Liabilities Contract liabilities - deferred revenue - current 118,601 124,416Contract liabilities - deferred revenue - non-current 21,618 25,731Total contract liabilities $140,219 $150,147 Significant changes in the contract acquisition costs and the contract liabilities balances during the period are asfollows (in thousands): Contract assets- Contract Contract liabilities- unbilled revenue acquisition costs deferred revenueBalances at January 1, 2018 $782 $25,181 $128,060Transferred to receivable from unbilled revenue recognized at thebeginning of the period (628) Increase due to new unbilled revenue 787 Additional contract acquisition costs deferred — 12,692 —Amortization of deferred contract acquisition costs — (8,920) —Performance obligations satisfied during the period that were included inthe contract liability balance at the beginning of the period — — (105,038)Increases due to invoicing prior to satisfaction of performanceobligations, net of amounts recognized as revenue during the period — — 127,125Balances at December 31, 2018 $941 $28,953 $150,147 As of December 31, 2018, $9.6 million of the Group’s contract acquisition costs are expected to be amortized within thenext 12 months and therefore are included in current assets. The remaining amount of Group’s contract acquisition costs areincluded in non-current assets. There were no impairments of assets related to Group’s contract acquisition costs during theyear-ended December 31, 2018. Remaining Performance Obligations Our contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date.As of December 31, 2018, $182.2 million of deferred revenue and backlog is expected to be recognized from remainingperformance obligations for subscription contracts in the amount of approximately $133.4 million over the86 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) next 12 months and approximately $48.8 million thereafter. Revenue from remaining performance obligations forprofessional services contracts as of December 31, 2018 was not material. Disaggregation of Revenues See Note 8 “Revenues by geographic region” for details regarding disclosures on the disaggregation of revenues. (f)Business combinations Business combinations are accounted for using the acquisition method whereby acquired companies are included in theconsolidated financial statements from their acquisition date. The consideration transferred in a business combination ismeasured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred to the Groupand liabilities assumed by the Group. If contingent consideration is identified in an acquisition, it is recorded at fair value determined on the acquisition dateusing a discounted cash flow model. Subsequently, contingent consideration that is classified as equity is not re-measuredwhile other contingent consideration is re-measured to fair value at each reporting period with gains or losses recorded inprofit and loss. The Group elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fairvalue, or at its proportionate share of the recognized amount of the identifiable net assets, at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, which are incurred by theGroup in connection with a business combination are expensed as incurred and recorded in general and administrativeexpenses. The Group measures goodwill as the consideration transferred plus the recognized amount of any non-controllinginterest in the acquired entity, less the net recognized amount (generally fair value) of the identifiable assets acquired andliabilities assumed, all measured as of the acquisition date. Management’s estimates of fair value are based upon assumptionsbelieved to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ fromestimates. During the measurement period, which is not to exceed one year from the acquisition date, we may recordadjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion ofthe measurement period, any subsequent adjustments are recorded to earnings. Goodwill is subsequently measured at costless accumulated impairment losses. If the net of the acquisition date amounts of the identifiable assets acquired andliabilities assumed exceeds the sum of the consideration transferred plus the amount of any non-controlling interests in theacquired entity, the excess is recognized in the consolidated statements of operations as a bargain purchase gain. (g)Foreign currency Functional and presentation currency The functional currency for the Company is the Euro; however, these consolidated financial statements are presented inU.S. dollars, which is the Company's reporting currency. Assets and liabilities that are not denominated in the functionalcurrency are remeasured into the functional currency with any related gain or loss recorded in earnings. The Companytranslates assets and liabilities of its non-U.S. dollar functional currency foreign operations into the U.S. dollar reportingcurrency at exchange rates in effect at the balance sheet date. The Company translates income and expense items of suchforeign operations into the U.S. dollar reporting currency at average exchange rates for the period. Accumulated translationadjustments are reported in stockholders’ equity, as a component of accumulated other comprehensive income (loss). Foreign currency transactions Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currencyspot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated87 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. Foreign currencydifferences arising on translation are generally recognized in the consolidated statements of operations. Long-term monetary assets held by the Company in a foreign subsidiary for which settlement is neither planned oranticipated to occur in the foreseeable future are a part of the entity’s net investment in a foreign operation. Accordingly,pursuant to ASC 830, exchange differences on these items are recorded in other comprehensive income until the investment’sdisposal or disqualification. Translation from functional to presentation currency Assets and liabilities of the Company and its subsidiaries are translated from their functional currency into the U.S.dollar presentation currency at the rate of exchange prevailing at the reporting date and their statements of operations aretranslated at average exchange rates. The average rate is determined by taking the average of the month-end closing rates,unless such method results in a material distortion. The exchange differences arising on translation to the presentation currency for consolidation are recognized in othercomprehensive income (loss) and accumulated in the foreign currency translation reserve. (h)Financial instruments (i)Non-derivative financial assets The Group has the following non-derivative financial assets: deposits, trade receivables and certain other receivablesand cash and cash equivalents. The Group initially recognizes non-derivative financial assets on the date that they are originated. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market.Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initialrecognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairmentlosses. A valuation allowance for trade receivables is recognized if the recoverable amount is less than the carrying amount. Loans and receivables comprise deposits, trade receivables and certain other receivables. Cash and cash equivalents Cash and cash equivalents comprised of cash at banks and highly liquid deposits with original maturities of less thanthree months that are readily convertible into a known amount of cash and are subject to insignificant risk of changes invalue. (ii)Non-derivative financial liabilities The Group has the following non-derivative financial liabilities: borrowings and trade and other payables. The Groupinitially recognizes non-derivative financial liabilities on the date that they are originated. Such financial liabilities arerecognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition thesefinancial liabilities are measured at amortized cost using the effective interest method. Advances for research and development projects are obtained by BPI France and are reimbursable should the project besuccessful (see Note 15). These interest free rate advances are initially accounted for a fair value by88 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) discounting future cash flows at a market interest rate. Subsequent to initial recognition, they are measured at amortized costusing the effective interest method. The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Thedifference between the carrying amount of the financial liability derecognized and the consideration paid and payable isrecognized in the consolidated statements of operations. (i)Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash,cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with financial institutions thatmanagement believes are financially sound and have minimal credit risk exposure although the balances will exceed insuredlimits. The Company generally does not require collateral or other security in support of accounts receivable. Allowances areprovided for individual accounts receivable when the Company becomes aware of a customer’s inability to meet its financialobligations, such as in the case of bankruptcy, deterioration in the customer’s operating results or change in financialposition. Actual credit losses may differ from the Company's estimates. As of December 31, 2018, no customer represented10% or more of the Company's gross accounts receivable. (j)Share capital Preferred shares The Company’s preferred shares were classified as equity as they were non-redeemable, convertible into a fixed numberof ordinary shares, and any dividends were discretionary. Dividends thereon are recognized as distributions within equityupon approval by the Company’s shareholders. All preferred shares were converted into ordinary shares upon the closing of the Company’s IPO in August 2016. Ordinary shares Ordinary shares are classified as equity. (k)Property and equipment Property and equipment are stated at net of accumulated depreciation. Historical cost includes expenditures directlyattributable to the acquisition of the assets. Purchased software that is an integral part of the functionality of the relatedequipment is capitalized as part of that equipment. Depreciation is recognized in the consolidated statements of operationson a straight-line basis over the estimated useful lives of the assets, or in the case of leasehold improvements and certainleased equipment, over the lease term if shorter, since this most closely reflects the expected pattern of consumption of thefuture economic benefits embodied in the asset. The estimated useful lives for each asset class are as follows: ·leasehold improvements: remainder of lease term ·computer equipment: 3 years ·fixtures and fittings: 3 to 10 years Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carryingamount of an asset may not be recoverable. 89 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (l)Goodwill, intangible assets and impairment assessments Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible andintangible assets acquired and is evaluated annually, in the fourth quarter, for impairment, or more frequently ifcircumstances exist that indicate that impairment may exist. When conducting the annual goodwill impairment assessment,the Group first assesses qualitative factors, to determine whether it is necessary to perform the two-step goodwill impairmenttest. If determined to be necessary, the two-step impairment test shall be used to identify potential goodwill impairment andmeasure the amount of a goodwill impairment loss to be recognized, if any. Intangible assets include acquired customer relationships and acquired developed technology. Intangibles acquiredthrough a business combination are recognized separately from goodwill, initially at fair value on the acquisition date.Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulatedamortization and accumulated impairment losses, on the same basis as intangible assets acquired separately. Intangible assetsare reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset maynot be recoverable. There were no impairments of goodwill or intangible assets during the years ended December 31, 2016 , 2017 or 2018. The useful lives of intangible assets are assessed to be either finite or indefinite. All of our intangible assets have finiteuseful lives and amortization is recognized in the consolidated statements of operations on a straight-line basis over theestimated useful lives of intangible assets, from the date that they are available for use, since this most closely reflects theexpected pattern of consumption of the future economic benefits embodied in the asset. The amortization expense onintangible assets with finite lives is recognized in the consolidated statements of operations in the expense category,consistent with the function of the intangible asset. The estimated useful lives for each intangible asset class are as follows: Customer relationships 2yearsAcquired developed technology 5years Amortization methods, useful lives and residual values are reviewed at each year end and adjusted if appropriate. (m)Employee benefits plans Defined contribution plan A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into aseparate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions todefined contribution plans are recognized as an employee benefit expense in the consolidated statements of operations in theperiods during which services are rendered by employees. For the fiscal years ended December 31, 2016, 2017 and 2018, theGroup made contributions of $1.7 million, $2.2 million and $3.0 million to various contribution plans. Share-based payments Employees, executives and board members of the Group receive remuneration in the form of share-based payments,whereby they render services as consideration for equity instruments which are considered equity-settled transactions. Thecost of equity-settled transactions are recognized, together with a corresponding increase in equity, by reference to the fairvalue determined at the grant date of the share-based awards, over the period in which the performance and/or serviceconditions are fulfilled, ending on the date on which the beneficiary becomes fully entitled to the award (the "vesting date").The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects theextent to which the vesting period has lapsed and the Group's best estimate of the number of equity instruments that willultimately vest. Share-based awards are expensed based on a graded vesting method, over the vesting period as the awardsvest in tranches over the vesting period. 90 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Determining the fair value of the share-based awards at the grant date requires judgment. The Company calculated thefair value of each option award on the grant date using a Black-Scholes option pricing model. The Black-Scholes modelrequires the estimation of a number of variables, including, the expected volatility, expected term, risk-free interest rate anddividend yield. The estimation of share awards that will ultimately vest requires judgment, especially awards with non-marketperformance conditions, and to the extent actual results or updated estimates differ from current estimates, such amounts willbe recorded as a cumulative adjustment in the period the estimates are revised. Actual results, and future changes inestimates, may differ substantially from current estimates. If an equity-settled award is cancelled, as a result of forfeiture when the vesting conditions are not satisfied, it is treatedas if it had been forfeited on the date of cancellation, and any expense previously recognized for unvested shares isimmediately reversed. (n)Government assistance The Research Tax Credit (Crédit d'Impôt Recherche, or "CIR") is a French tax incentive to stimulate research anddevelopment conducted in France. Entities that demonstrate that their research expenditures meet the required CIR criteriaare able to offset the income tax to be paid. If taxes due are not sufficient to cover the full amount of tax credit at the end ofthe three year period, the difference is repaid in cash to the entity by the authorities. The CIR is calculated based on theclaimed volume of eligible research and development expenditures. (o)Other income and expense Other income and expense mainly include: ·interest income recognized in the consolidated statements of operations, using the effective interest method; ·Interest expense on borrowings that are recognized in the consolidated statements of operations, using the effectiveinterest method; and ·net foreign exchange gains and losses. (p)Income tax Income tax expense comprises current income tax and deferred tax. The Company records income taxes using the assetand liability method which requires the recognition of deferred tax assets and liabilities for the expected future taxconsequences of events that have been recognized in the Company’s consolidated financial statements or tax returns, and foroperating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted taxrates that will be in effect for the years in which those tax assets and liabilities are expected to be realized or settled. Inestimating future tax consequences, generally all expected future events other than enactments or changes in the tax law orrates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expectedto be realized. All deferred income taxes are classified as long-term in our consolidated balance sheets. (q)Software development costs The Group expenses software development costs, including costs to develop software products or the softwarecomponent of products to be sold, leased, or marketed to external users, before technological feasibility is reached.Technological feasibility is typically reached shortly before the release of such products and as a result, development coststhat meet the criteria for capitalization were not material for the periods presented. The Group may in the future capitalize certain development costs incurred in connection with internal use software.Any costs incurred in the preliminary stages of development would be expensed as incurred. Once an application has reachedthe development stage, internal and external costs, if direct and incremental, could be capitalized91 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of allsubstantial testing. Maintenance costs are expensed as incurred. The Group has assessed the conditions for recognition of aninternally generated asset from software development activities and concluded that up to now all criteria were not fulfilled;therefore, no research and development costs have been capitalized. (r)Advertising costs Advertising costs are expensed as incurred and are classified as sales and marketing expense. The Group has incurredadvertising expense of $0.1 million during the year ended December 31, 2018 and less than $0.1 million for both the yearsended December 31, 2016 and 2017. (s)Off-balance sheet arrangements The Company has no off-balance sheet arrangements other than those disclosed as operating leases in Note 19,"Commitments and Contingencies". 3.Fair value measurement The Group reports assets and liabilities recorded at fair value on the Group’s consolidated balance sheets based uponthe level of judgment associated with inputs used to measure their fair value. Hierarchical levels that are directly related tothe amount of judgement associated with the inputs to the valuation of these assets or liabilities ·Level 1: observable quoted prices (unadjusted) in active markets for identical financial assets or liabilities. ·Level 2: inputs other than quoted prices (other than level 1) in active markets, that are observable either directly(i.e. as prices) or indirectly (i.e. derived from prices). ·Level 3: unobservable inputs that are supported by little or no market data, and may require significantmanagement judgment or estimation. The fair value measurement level within the fair value hierarchy for a particular asset or liability is based on the lowestlevel of any input that is significant to the fair value measurement. Valuation techniques maximize the use of observableinputs and minimize the use of unobservable inputs. Financial instruments not measured at fair value on the Company's consolidated statement of financial position, butwhich require disclosure of their fair values include: cash and cash equivalents, accounts receivables and certain otherreceivables, deposits, accounts and certain other payables and debt. For cash and cash equivalents, accounts receivables and certain other receivables, accounts and certain other payables,their fair value is deemed to approximate their carrying amount due to the short-term nature of these balances and arecategorized as Level 1. For deposits, as they are not significant, the difference between their fair value and their carrying amount is not deemedsignificant. For debt, their fair value was categorized as Level 2 and was estimated based on a discounted cash flow method using amarket interest rate for similar debt. There has been no transfer between levels of the fair value hierarchy during the years ended December 31, 2017 or2018. 92 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4.Cash and cash equivalents and other assets and liabilities Cash and cash equivalents Cash and cash equivalents consisted of the following (in thousands): As of December 31, 2017 2018Cash at banks $36,099 $32,437Cash equivalents 50,925 1,303Total cash and cash equivalents $87,024 $33,740 At December 31, 2018, cash equivalents consist of money market securities. At December 31, 2018, the total cash andcash equivalents denominated in currencies other than the U.S. Dollar amount to $27.7 million, including $10.6 milliondenominated in Euros. Other current and non-current assets Prepaid expenses and other current assets consisted of the following (in thousands): As of December 31, 2017 2018Royalties $747 $1,464Software subscriptions 1,699 2,067Research tax credit 1,023 612Unbilled revenue 782 941Prepaid rent 27 149Prepaid insurance 477 568Prepaid sales and marketing events 504 1,996Other assets 3,052 2,028Total other current assets $8,311 $9,825 Other assets primarily relate to loans and advances to employees and various deposits. Other non-current assets consisted of the following (in thousands): As of December 31, 2017 2018Research tax credit $2,002 $2,214Deposits 845 793Royalties 197 587Other non-current assets 93 67Total other non-current assets $3,137 $3,661 93 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Accrued expenses and other liabilities Accrued expenses and other liabilities consisted of the following (in thousands): As of December 31, 2017 2018Accrued compensation and benefits $14,670 $21,343VAT payable 4,873 5,051Other taxes 455 698Contingent liabilities 1,145 408Other current liabilities 6,361 8,975Accrued expenses and other liabilities $27,504 $36,475 The contingent liabilities include severance provisions and estimated legal expenses for disputes with formeremployees. Other current liabilities primarily relate to accrued expenses incurred in the ordinary course of business. 5.Property and equipment The cost and accumulated depreciation of property and equipment are as follows (in thousands): December31, December31, 2017 2018Computer equipment and software $5,313 $6,778Fixtures and fittings 1,227 1,925Leashold improvements 2,584 4,823Property and equipment, gross 9,124 13,526Less: accumulated depreciation and amortization (5,651) (7,191)Property and equipment, net $3,473 $6,335 Depreciation expense related to property and equipment during the years ended December 31, 2016, 2017 and 2018was $1.2 million, $1.5 million and $2.0 million, respectively 6.Goodwill and intangible assets Goodwill Goodwill consisted of the following (in thousands): Balance at January 1, 2017 $2,912Additions from acquisitions 2,876Effect of change in exchange rates 408Balance at December 31, 2017 6,196Additions from acquisitions 43,435Effect of change in exchange rates 28Balance at December 31, 2018 $49,659 94 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Intangible assets Intangible assets as of December 31, 2018 included the following (in thousands): December 31, 2018 GrossCarryingAmount AccumulatedDepreciation Net Weighted AverageRemaining UsefulLifeCustomer relationships $5,009 $(1,984) $3,025 2 yearsDeveloped technology 20,087 (3,692) 16,395 5 yearsTotal $25,096 $(5,676) $19,420 Intangible assets as of December 31, 2017, included the following (in thousands): December 31, 2017 GrossCarryingAmount AccumulatedDepreciation Net Weighted AverageRemaining UsefulLifeCustomer relationships $1,793 $(1,427) $366 1 yearsDeveloped technology 9,114 (2,012) 7,102 4 yearsIPR&D technology 1,003 (943) 60 1 yearTotal $11,910 $(4,382) $7,528 7.Revenues by geographic region Disaggregation of Revenue We sell our subscription contracts and related services in several primary geographical markets. The following table setsforth the Group's total revenue by region for the periods indicated. The revenues by geographic region were determinedbased on the country where the sale took place. Year Ended December 31, 2016 2017 2018 (in thousands)Americas $47,188 $70,671 $93,186EMEA 55,422 71,015 96,806Asia Pacific 3,374 6,909 14,331 $105,984 $148,595 $204,323 Revenues from the Company’s country of domicile, based on sales that took place in France, totaled $20.1million, $25.1 million and $33.6 million for the years ended December 31, 2016, 2017 and 2018, respectively. 8.Income tax The following table presents domestic and foreign components loss before income tax expense (in thousands): Year Ended December 31, 2016 2017 2018France $(14,435) $(18,811) $(9,450)International (9,745) (12,073) (31,232)Loss before income tax expense $(24,180) $(30,884) $(40,682)95 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the (provision) benefit for income taxes were as follows (in thousands): Year Ended December 31, 2016 2017 2018Current: France $ — $ — $ — International (63) (324) (311)Total current (63) (324) (311)Deferred: France — — — International — — 634Total deferred — — 634Income tax (expense) benefit $(63) $(324) $323 The following table provides a reconciliation of the income tax expense calculated at the French statutory tax rate tothe income tax expense (in thousands). Year Ended December 31, 2016 2017 2018Loss before income tax expense $(24,180) $(30,884) $(40,682)Expected tax benefit at France’s statutory income tax rate of 33.33% plus 1.1%surcharge in fiscal 2016 and 2017 and 33.33% in fiscal 2018 8,325 10,633 13,559Effect of different tax rates of subsidiaries operating in countries other than France (105) 2,154 (3,237)Non-deductible expenses (428) 231 (1,714)Effective change in tax rates (6,428) (13,056) (319)Share-based compensation (688) 1,741 (851)Change in valuation allowance (802) (2,261) (7,842)Other items, net 63 234 727Income tax (expense) benefit $(63) $(324) $323 The components of deferred tax assets (liabilities) are as follows (in thousands): Year Ended December 31, 2017 2018Deferred tax assets: Accruals and reserves $2,624 $1,072Net operating loss carryforwards 52,279 59,793Share-based compensation 1,017 2,702Other 980 2,316Total deferred tax assets 56,900 65,883Less: valuation allowance (54,796) (53,158)Net deferred tax assets 2,104 12,725Deferred tax liability: Intangibles (2,104) (6,032)Deferred revenue — (132)Deferred compensation — (7,031)Total deferred tax liabilities (2,104) (13,195)Total net deferred tax assets (liabilities) $ — $(470) Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing andamount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believesthat it is more likely than not that its France and international deferred tax assets will not be realized as of December 31,2018. Accordingly, the Company has recorded a valuation allowance on such deferred tax assets. The96 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) valuation allowance decreased by $1.6 million for the year ended December 31, 2018. The decrease in valuation allowancefor 2018 is primarily related to the deferred tax liabilities recognized related to the intangibles from the Stitch acquisition(recognized through goodwill) and the adoption of ASC 606 (recognized through equity), which were offset by an increase indeferred tax assets related to net operating loss carryovers. The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it ismore-likely-than-not that some portion of the deferred tax assets will not be realized. The Company considers all availablepositive and negative evidence, including earnings history and results of recent operations, scheduled reversals of deferredtax liabilities, projected future taxable income and tax planning strategies. If the Company determines that it would be ableto realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the deferred tax assetvaluation allowance will be made, which would reduce the provision for income taxes. As of December 31, 2018, the Company had net operating loss carryforwards for French income tax return purposes ofapproximately $150.5 million, which can be carried forward indefinitely. The Company had net operating loss carryforwardsfor U.S. federal income tax return purposes of approximately $43.0. million, which expire at various dates beginning in theyear 2028, if not utilized. The Company also had net operating loss carryforwards for U.S. federal income tax return purposesof approximately $13.0 million, which can be carried forward indefinitely. The Company had net operating losscarryforwards of approximately $27.0 million for California income tax return purposes, which expire at various datesbeginning in the year 2028, if not utilized, and approximately $35.9 million for other U.S. state income tax return purposeswhich expire at various dates beginning in the year 2022, if not utilized. The Company had net operating loss carryforwardsof approximately $21.7 million for foreign income tax return purposes, which can be carried forward indefinitely andapproximately $1.6 million for foreign income tax return purposes, which expire at various dates beginning in the year 2020,if not utilized. As of December 31, 2018, the Company had research and development credit carryforwards for U.S. federal income taxreturn purposes of approximately $1.1 million, which expire at various dates beginning in the year 2030, if not utilized. TheCompany had research and development credit carryforwards for U.S. state income tax return purposes of approximately $0.7million, which can be carried forward indefinitely Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due tothe ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similarstate provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. As of December 31, 2018, the Company had approximately $1.1 million in total unrecognized tax benefits. Areconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2017 2018Unrecognized tax benefits balance at beginning of year $125 $566Gross increase for tax positions of prior year — —Gross decrease for tax positions of prior year — —Gross increase for tax positions of current year 441 518Settlements — —Gross unrecognized tax benefits at year end $566 $1,084 If the $1.1 million of unrecognized tax benefits as of December 31, 2018 is recognized, it would not decrease theeffective tax rate in the period in which each of the benefits is recognized because the entire amount would be offset by thereversal of related deferred tax assets, which has a valuation allowance in place. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As ofDecember 31, 2018 and 2017, penalties and interest were immaterial. The Company files income tax returns in France as well as many foreign jurisdictions. The tax years 2005 to 2018remain open to examination by the various jurisdictions in which the Company is subject to tax. Fiscal years outside the97 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years whichhave been carried forward and may be audited in subsequent years when utilized. The Company is subject to the continuous examination of income tax returns by various worldwide taxing authorities.The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine theadequacy of the provision for income taxes. The Company believes that adequate amounts have been reserved for anyadjustments that may ultimately result from these examinations and does not anticipate a significant impact to the grossunrecognized tax benefits within the next 12 months related to these years. 9.Accounts receivables The Group's accounts receivables consisted of the following (in thousands): As of December 31, 2017 2018Accounts receivables $58,538 $69,413Less: Allowance for doubtful accounts (1,409) (1,882)Accounts receivable, net $57,129 $67,531 The movements in the allowance for doubtful accounts of receivables were as follows (in thousands): As of December 31, 2016 2017 2018Balance at beginning of year $503 $664 $1,409Charge for the year 173 674 517Write-off of receivable — — —Effect of change in exchange rates (12) 71 (44)Allowance for doubtful accounts $664 $1,409 $1,882 As of December 31, 2017 and 2018, the aging analysis of net trade receivables that were not impaired is as follows (inthousands): Neither past due Total nor impaired Past due but not impaired < 30 days 30 - 90 days > 90 daysAt December 31, 2018 67,531 59,951 4,829 2,543 208At December 31, 2017 57,129 52,096 3,926 972 135 At December 31, 2017 and 2018 the past due balances totaled 9% and 11%, respectively, of the total net tradereceivable (net of allowance for doubtful accounts). The related balances are not considered to be impaired. 10. Business combinations Acquisition of Stitch, Inc. On November 9, 2018, the Talend, Inc., a wholly-owned subsidiary of the Company acquired all of the outstandingshares of Stitch Inc., (“Stitch”), a leading cloud-based service to seamlessly load data to cloud data warehouses, for a cashpayment of $59.5 million. Talend, Inc, also recognized transaction costs of approximately $0.7 million , which is included ingeneral and administrative expense in its 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 the Group’slow-touch sales strategy further enhances the Group’s alignment with cloud platforms such as Microsoft Azure, Amazon AWSand Snowflake. In addition, the acquisition of Stitch further addresses the growing demand from data engineers and analystfor self-service cloud data integration solutions. The Group has included the financial results of Stitch in its consolidatedfinancial statements from the date of acquisition, which have not been material to date.98 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes the estimated provisional fair values of assets acquired and liabilities assumed as of thedate of acquisition (in thousands): Fair ValueCash $1,625Acquired developed technology 11,400Customer relationships 3,300Goodwill 43,435Other assets, net 143Deferred revenue (410)Total consideration transferred $59,493 The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired wasrecorded as goodwill. The goodwill balance is primarily attributed to the assembled workforce and expanded market sharewithin the data integration industry, which is moving towards cloud data warehouses. The goodwill balance is not deductiblefor income tax purposes. The fair values assigned to tangible assets acquired, liabilities assumed and identifiable intangibleassets were based on management’s estimates and assumptions. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful livesas of the date of acquisition. Fair Value Useful Life(Years)Developed technology $11,400 5Customer relationships 3,300 2Total intangible assets subject to amortization $14,700 The following unaudited pro forma consolidated financial information presents the results of operations of the Group(in thousands, except per share amounts) as if the acquisition of Stitch had occurred at the beginning of fiscal 2017, aftergiving effect to certain purchase accounting adjustments. The pro forma financial information is presented for informationalpurposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitionhad taken place at January 1, 2017. Year Ended December 31, 2017 2018 Total revenue $150,008$207,048Net loss $(41,675)$(47,442)Basic and diluted net loss per share $1.44$1.59 Acquisition of Restlet SAS On November 8, 2017, the Company acquired all of the outstanding shares of Restlet SAS (“Restlet”), a cloud-basedApplication Programming Interface (“API”) design and testing platform, for a purchase price of €8.6 million ($10.2 million)consisting of cash and the fair value of debt assumed. The Company acquired Restlet’s Web API to complement its existingability to integrate, transform, govern, and share enterprise data. With the Restlet platform, the Company makes it easier forcustomers to take an API-first design approach to monetizing and securely sharing information in real-time with clients andbusiness partners. The Group has included the financial results of Restlet in its consolidated financial statements from thedate of acquisition. The total purchase price consideration for Restlet of €8.6 million ($10.2 million), consisted of €7.7 million ($9.0million) in cash and €1.0 million ($1.2 million) for the fair value of debt assumed. 99 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition (inthousands): Fair ValueOther current assets $55Property and equipment, net 32Intangible assets 7,535Goodwill 2,876Trade and other payables (299)Deferred revenue (28)Net assets acquired $10,171Net debt assumed (1,188)Total consideration transferred $8,983 The difference between the cash flow statement amount for cash consideration for business acquisitions of $9.2 millionand the total consideration transferred per the table of $9.0 million, is due to applying different foreign currency rates atthe time of payment versus when the initial balance sheet amounts were recorded on Talend’s books. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired wasrecorded as goodwill. The goodwill balance is primarily attributed to the assembled workforce and expanded marketopportunities when integrating Restlet’s API platform into Group’s platforms. The goodwill balance is not deductible forincome tax purposes. The fair values assigned to tangible assets acquired, liabilities assumed and identifiable intangibleassets were based on management’s estimates and assumptions. The deferred tax liabilities that would be established, primarily resulting from the difference in the book basis and taxbasis related to the identifiable intangible assets, is fully offset by the deferred tax assets on existing net operating losses. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful livesas of the date of acquisition. Fair Value Useful Life(Years)Developed technology $7,319 5Customer relationships 216 1Total intangible assets subject to amortization $7,535 11.1-for-8 reverse share split On June 1, 2016, our shareholders approved a 1-for-8 reverse split of our outstanding shares. Under French law, thereverse share split is effective on June 18, 2016. Share-related disclosures, including nominal values, subscription prices pershare, number of ordinary shares and preferred shares, and net earnings (loss) per share calculations and share-basedcompensation disclosures in Note 13, have been adjusted to reflect the 1-for-8 reverse share split up to June 18, 2016. TheCompany has rounded down for any fractional shares. 12.Share capital and reserves (a)Movements in the periods presented Ordinary and preferred share data as well as nominal value and subscription prices per share included in these financialstatements have been adjusted to reflect the 1-for-8 reverse share split that is effective on June 18, 2016. The Company hasrounded down for any fractional shares. 100 11 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents (in thousands) the movement in ordinary shares and non-redeemable convertible preferredshares: Preferred Preferred Preferred Preferred Shares Preferred Preferred Shares Preferred Preferred Preferred Total Ordinary Shares Shares Series C Shares Shares Series E Shares Shares Shares Preferred Shares Series B Series C Prime Series D Series E Prime Series F Series G Series H SharesBalance at January 1, 2016 3,905 1,365 1,375 463 3,409 1,660 254 6,808 1,542 1,856 18,732Issue of shares from initialpublic offering 5,707 — — — — — — — — — —Conversion of preferred sharesto ordinary at closing of IPO 18,732 (1,365) (1,375) (463) (3,409) (1,660) (254) (6,808) (1,542) (1,856) (18,732)Exercise of stock awards 213 — — — — — — — — — —Balance at December 31, 2016 28,557 — — — — — — — — — —Exercise of stock awards 883 — — — — — — — — — —Balance at December 31, 2017 29,440 — — — — — — — — — —Exercise of stock awards 576 — — — — — — — — — —Shares issued from restrictedstock unit vesting 92 — — — — — — — — — —Issuance of ordinary shares inconnection with employeestock purchase plan 50 — — — — — — — — — —Balance at December 31, 2018 30,158 — — — — — — — — — — At December 31, 2018, there were 30,158,374 ordinary shares outstanding, each with a nominal value of €0.08. In 2016, 2017 and 2018, the Company's board of directors acknowledged increases in share capital as a result of theissuance of 212,775, 882,614, and 576,901 ordinary shares, respectively, upon the exercise of share options, employeewarrants (BSPCE) and warrants (BSA) classified as share-based payments (See Note 13), representing a total proceeds to theCompany €0.8 million for 2016, €5.6 million for 2017, and €5.7 million for 2018 (share premium included). In 2018, theCompany’s board of directors also acknowledged increases in share capital as a result of restricted stock units vesting andemployee stock purchase plan of 92,228 and 49,478 ordinary shares, respectively. On August 3, 2016, the Company completed its IPO in which it issued and sold 5.7 million ADSs, each representing oneof the Company’s ordinary shares, including 456,852 additional ADSs pursuant to an option granted to the underwriters at apublic offering price of $18.00 per share. Upon the closing of the Company’s IPO, all then-outstanding preferred shares wereconverted into 18,732,413 ordinary shares based on a ratio of 1-for-1. Each holder of ordinary shares is entitled to one voteper ordinary share. On March 16, 2017, the Company closed a follow-on public offering of 3,783,111 ordinary shares sold by existingshareholders, including 493,449 shares sold upon full exercise of the underwriters’ option to purchase additional ordinaryshares, at a price to the public of $28.50 per share. The Company did not receive any proceeds from the sale of the ordinaryshares. The offering expenses incurred by the Company were $0.7 million and are recorded as general and administrativeexpenses. On November 17, 2017, the Company closed a follow-on public offering of 2,750,000 ordinary shares sold by existingshareholders at a price to the public of $40.00 per share. The company did not receive any proceeds from the sale of theordinary shares. The offering expenses incurred by the Company were $0.7 million and recorded as general andadministrative expense. On March 8, 2018, the Company closed a follow-on public offering of 3,916,474 ordinary shares sold by existingshareholders, at a price to the public of $48.60 per share. The Company did not receive any proceeds from the sale of theseordinary shares. The offering expenses incurred by the Company were $0.3 million and are recorded as general andadministrative expenses. (b)Ordinary shares Shares have a nominal value of €0.08. Each ordinary share is entitled to one vote. 101 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (c)Other reserves French law requires that the holders of warrants be protected against an increase in the cost of the nominal value of theCompany’s shares. A specific non-distributable reserve was set up for this purpose in June 2011 and can be used only onexercise of the warrants outstanding at that date. This reserve must remain outstanding until the last related warrant hasexpired. In compliance with French law, should the related warrants be exercised, the holder would pay the exercise priceagreed at grant date and the balance would be borne by the Company. Upon the closing of the IPO, the rights under the non-distributable reserve were cancelled and the reserve balance of $8.4 million was transferred from “other reserves” to “sharepremium” at that date. In 2018, the Company’s board of directors, acting upon delegation of the shareholders' meeting held on June 6, 2017,granted restricted stock units or free shares (actions gratuites, under French law), to employees and officers of the Group. TheCompany created a specific restricted reserve account in connection with the issuance of granted restricted stock units or freeshares equal to €120,930. Upon vesting of each of the restricted stock units or frees share pursuant to the 2016 Free SharePlan, a new share of the Company will be issued to the relevant beneficiary and, simultaneously, an amount equal to €0.08euro will be withdrawn from the above reserve to increase the share capital of the Company. (d)Preferred shares Preferred shares were created and issued with each financing round prior to the Company’s IPO. The primary preferenceelements for the various series of preferred shares related to their liquidation preference in the event of sale or liquidation ofthe Company. As discussed above, at the closing of the IPO, all outstanding preferred shares were converted to ordinaryshares and there are no preferred shares outstanding at December 31, 2016. 13.Share-based payment plans The board of directors adopted the 2017 Stock Option Plan, or the 2017 Plan, the 2016 Stock Option Plan, the 2015Stock Option Plan, the 2014 Stock Option Plan, the 2013 Stock Option Plan, the 2012 Stock Option Plan, the 2011 StockOption Plan and the 2010 Stock Option Plan (collectively, the “Stock Option Plans”). The Company grants all future stockoption and employee warrants (BSPCE) under the 2017 Plan, which was adopted by the Company’s board of directors onApril 20, 2017 and approved by its shareholders at a meeting held on June 6, 2017. The board of directors adopted the 2017-02 Free Share Plan and the 2016 Free Share Plan (collectively, the “Free SharePlans”). The Company grants all future Restricted Stock Units (RSU) under the 2017-02 Free Share Plan, which was adoptedby the Company’s board of directors on March 2, 2018, under the delegation approved by its shareholders at a meeting heldon June 6, 2017. In June 2016, the Company effected a 1-for-8 reverse split of its outstanding shares. No fractional shares were issued inconnection with the reverse share split. All share and per share amounts, have been retroactively adjusted in theseconsolidated financial statements for all periods presented to reflect the reverse share split. Further, stock options, employeewarrants (BSCPE) and BSA warrants and exercise prices of stock options and warrants relating to grants prior to June 2016,have been retroactively adjusted in these consolidated financial statements for all periods presented to reflect the reverseshare split. 102 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table illustrates the number of stock options and warrants outstanding: Number of Number of employee Number of stock options BSPCE warrants BSA warrantsBalance at January 1, 2016 2,099 492 41Granted during the year 977 130 56Exercised during the year (121) (51) (41)Forfeited during the year (126) (25) —Balance at December 31, 2016 2,828 547 56Granted during the year 203 41 32Exercised during the year (661) (222) —Forfeited during the year (88) (23) —Balance at December 31, 2017 2,282 343 88Granted during the period 2 — 53Exercised during the period (458) (108) (10)Forfeited during the period (119) (5) —Balance at December 31, 2018 1,707 229 131 At December 31, 2017 and 2018, there were a total number of stock options, employee warrants (BSPCE) and warrants(BSA) available for grant under the Company's share pool reserve of 1,698,735 and 1,721,294 options, respectively. In general, vesting of stock options and warrants occurs over four years, with 25% on the one year anniversary of thegrant and 1/16th on a quarterly basis thereafter. Options have a contractual life of ten years. Individuals must continue toprovide services to the Group in order to vest. Upon termination, all unvested options are forfeited and vested options mustgenerally be exercised within three months. All expenses related to these plans have been recorded in the consolidatedstatements of operations in the same line items as the related employee's cash-based compensation. (a)Stock options The board of directors has approved Stock Option Plans for the granting of stock options to employees outside ofFrance. The terms of the Stock Option Plans are substantially the same and at this time new share option grants may only bemade pursuant to the 2017 Plan. Stock options may be granted to any individual employed by the Group. In addition, under French law, the maximum number of shares issuable upon exercise of outstanding employee stockoptions may not exceed one-third of the outstanding share capital on a non-diluted basis as at the date of grant. 103 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A summary of stock option activity and related weighted-average exercise prices ("WAEP") and weighted-averageremaining contractual term (“WACT”) under all of the plans at December 31, 2018 are presented in the following table (inthousands, except exercise price per option): Number ofstock optionsoutstanding WAEP pershare WACT (inyears) AggregateintrinsicvalueBalance at January 1, 2016 2,099 $6.80 8.0 $6,313Granted 977 15.39 Exercised (121) 4.61 Forfeited (126) 11.06 Balance at December 31, 2016 2,828 $9.55 7.8 $35,757Granted 203 29.41 Exercised (661) 8.69 Forfeited (88) 17.08 Balance at December 31, 2017 2,282 $12.94 7.2 $59,983Granted 2 34.25 Exercised (458) 11.66 Forfeited (119) 20.83 Balance at December 31, 2018 1,707 $11.95 6.3 $42,769Vested and expected to vest at December 31, 2018 1,607 $11.53 6.2 $40,880Exercisable at December 31, 2018 1,219 $9.42 5.8 $33,587 The total intrinsic values of stock options exercised during the years ended December 31 ,2016, 2017 and 2018 were$1.9 million, $11.9 million and $12.4 million, respectively. (b)Employee warrants (BSPCE) The board of directors has been authorized by the shareholders' general meeting to grant BSPCE (“bons de souscriptionde parts de créateur d'entreprise or employee warrants”) to employees who are French tax residents as they carry favorabletax and social security treatment for French tax residents. Employee warrants (BSPCE) are a specific type of option to acquireordinary shares available to qualifying companies in France that meet certain criteria. Otherwise, employee warrants (BSPCE)function in the same manner as share options. 104 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A summary of employee warrants (BSPCE) activity and related weighted-average exercise prices ("WAEP") andweighted-average remaining contractual term (“WACT”) under all of the plans at December 31, 2018 are presented in thefollowing table (in thousands, except exercise price per warrant): Number ofemployeewarrantsoutstanding WAEP perwarrant WACT (inyears) AggregateintrinsicvalueBalance at January 1, 2016 492 $5.60 6.6 $2,041Granted 130 15.42 Exercised (51) 2.06 Forfeited (25) 10.28 Balance at December 31, 2016 547 $7.99 6.6 $7,771Granted 41 33.04 Exercised (222) 4.75 Forfeited (23) 15.03 Balance at December 31, 2017 343 $14.41 7.2 $7,910Granted — — Exercised (108) 9.41 Forfeited (5) 9.17 Balance at December 31, 2018 229 $15.49 6.7 $4,922Vested and expected to vest at December 31, 2018 208 $15.21 6.7 $4,544Exercisable at December 31, 2018 162 $13.10 6.3 $3,865 The total intrinsic values of employee warrants (BSPCE) exercised during the years ended December 31 ,2016, 2017and 2018 were $1.2 million, $4.5 million and $3.9 million, respectively. (c)Restricted Stock Units For the first time, in the second quarter of 2017, the Company granted restricted stock units (“RSU”) to certainemployees and officers under the 2016 Plan. Restricted stock units vest upon either a performance-based or only a service-based criteria. Performance-based RSU’s vest based on the satisfaction of specific non-market performance criteria and a four-yearservice period. At each vesting date, the holder of the award is issued shares of the Company’s ordinary shares. Compensationexpense from these awards is equal to the fair market value of the Company’s ordinary shares on the date of grant and isrecognized over the remaining service period based on the probable outcome of achievement of the financial metrics used inthe specific grant's performance criteria. Management’s estimate of the number of shares expected to vest is based on theanticipated achievement of the specified non-market performance criteria, which are assessed at each reporting period.Performance-based RSUs are typically granted such that they vest upon the achievement of certain software subscriptionsales targets, during a specified performance period and the completion of a four year service period. In general, service-based RSU’s vest over a four-year period, with 25% on the one year anniversary of the grant andequal quarterly installments thereafter. In the first quarter of 2018, the Company’s compensation committee modified the terms of the performance-based RSUsthat were granted in the second quarter of 2017. Based on the modification accounting guidance, as the new terms laid out bythe Company’s compensation committee changed the vesting conditions of the awards, the share-based compensationexpense was recognized beginning in the first quarter of 2018. These modification to these performance-based RSUs arereflected in the first quarter of 2018 in the table below. 105 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In the first quarter of 2018, the Company granted a total of 107,330 performance-based RSU’s, with a grant date fairvalue of $50.03 per share, to certain executive officers. Performance-based RSUs are typically granted such that they vestupon the achievement of certain software subscription sales targets, during a specified one-year performance period and thecompletion of a four-year service period. In the first quarter of 2018, the Company granted a total of 180,634 service-basedRSUs, with a weighted-average grant date fair value of $43.25 per RSU, to certain employees and executive officers. In the second quarter of 2018, the Company granted a total of 389,265 service-based RSUs, with a grant date fair valueof $48.81 per RSU, to certain employees and executive officers. In the third quarter of 2018, the Company granted a total of 116,100 service-based RSUs, with a grant date fair value of$60.86 per RSU, to certain employees and executive officers. In the fourth quarter of 2018, the Company granted a total of 151,390 service-based RSUs, with a grant date fair valueof $61.95 per RSU, to certain employees and executive officers. A summary of performance and service based RSU activity and related weighted-average grant date fair value andweighted-average remaining contractual term (“WACT”) under all of the plans at December 31, 2018 are presented in thefollowing table (in thousands, except grant date fair): Number of service- Number of performance- Weighted-average based RSUs based RSUs grant date fairvalue Balance at January 1, 2017 — — $ — Granted 523 279 36.73 Vested and released — — — Withheld for taxes — — — Forfeited (14) (279) 34.05 Balance at December 31, 2017 509 — $33.10 Granted 838 354 48.00 Vested and released (51) (41) 34.53 Withheld for taxes — — — Forfeited (86) (12) 38.46 Balance at December 31, 2018 1,210 301 $44.90 Expected to vest at December 31, 2018 730 103 $43.69 The tax benefits realized by the Company in connection with vested and released restricted stock units for the years-ended December 31, 2017 and 2018, was zero and $2.8 million, respectively. (d)Warrants (BSA) The Company's board of directors has granted warrants (otherwise known as “bons de souscription d'actions” or“warrants (BSA)”) to Company directors. In addition to any exercise price payable by a holder upon the exercise of anywarrants (BSA), pursuant to the relevant shareholders' delegation to the board, such warrants need to be subscribed for at aprice at least equal to 5% of the exercise price which represents the fair market value of the underlying ordinary shares atgrant date. In the first quarter of 2017, the Company’s board of directors granted 5,058 warrants (BSA), with an exercise price of$22.99 and grant date fair value of $9.43 per warrant. The warrants (BSA) vest from the date of grant to June 6, 2017shareholder meeting. At December 31, 2018, 5,058 warrants (BSA) are exercisable. In the second quarter of 2017, the Company’s board of directors granted 22,320 warrants (BSA), with an exercise priceof $30.87 and grant date fair value of $11.46 per warrant. The warrants (BSA) vest quarterly over a one-year period and atDecember 31, 2018, 22,320 warrants (BSA) are exercisable.106 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In the third quarter of 2017, the Company’s board of directors granted 4,790 warrants (BSA), with an exercise price of$38.37 and grant date fair value of $13.47 per warrant. The warrants (BSA) vest from quarterly over a one-year period and atDecember 31, 2018, 4,790 warrants (BSA) are exercisable. In the first quarter of 2018, the Company’s board of directors granted 38,244 warrants (BSA), with an exercise price of$48.16 and grant date fair value of $16.73 per warrant. The warrants (BSA) vest quarterly over a one-year period and atDecember 31, 2018, 26,684 warrants (BSA) are exercisable. In the fourth quarter of 2018, the Company’s board of directors granted 14,816 warrants (BSA), with an exercise price of$61.95 and grant date fair value of $21.54 per warrant. The warrants (BSA) vest quarterly over a one-year period and atDecember 31, 2018, zero warrants (BSA) are exercisable. (e)Restricted shares The Company entered into agreements with certain current executives of the Company, which allowed the executivesto purchase ordinary shares at the nominal price of €0.08. The shares are restricted in that the Company has the right torepurchase the shares back from the executives and cancel such shares during a four year vesting period in which theexecutives have service conditions to meet. The Company is able to repurchase the shares from the executives at the nominalprice of €0.08 during a vesting period. The Company's right to repurchase the shares lapses over a four year period, with 25%on the one year anniversary of the grant and either monthly or 1/16th on a quarterly basis thereafter. In June 2015, theCompany issued of 110,281 ordinary shares at par value (€0.08 per share) representing a total subscription amount equal toeight thousand Euros. At December 31, 2017 and 2018, the Company had 41,355 and 13,785 restricted shares outstanding,respectively. (f)Fair value of stock options and warrants Determining the fair value of the share-based payments at the grant date requires judgment. The Company calculatedthe fair value of each instrument on the grant date using the Black-Scholes option pricing model. The Black-Scholes modelrequires the input of highly subjective assumptions, including the expected volatility, expected term, risk-free interest rateand dividend yield. Exercise price The exercise price of the Company’s stock awards is based on the fair market value of our ordinary shares. Risk-free interest rate The risk-free interest rate represents the implied yield currently available on zero-coupon government issued securitiesover the expected term of the option. Expected term The Company determines the expected term based on the average period the share options are expected to remainoutstanding. Expected Volatility The Group considered historical volatility of the Company’s share price since the IPO and also considered the historicalvolatility of similar entities following a comparable period in their lives. Expected Dividend yield The Company has never declared or paid any cash dividends and it does not presently plan to pay cash dividends in theforeseeable future. Consequently, the Company uses an expected dividend yield of zero.107 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company estimated the following assumptions for the calculation of the fair value of the share options andwarrants: Year Ended December 31, 2016 2017 2018 Weighted average fair value of underlying shares $16.33 $27.82 $52.65 Weighted average expected volatility 44.8% 50.5% 42.0%Weighted average risk-free interest rate 0.82% 1.69% 2.63%Weighted average expected term (in years) 3.98 3.73 3.23 Dividend yield —% —% —% (g)Employee Stock Purchase Plan In the fourth quarter of 2017, the Company established the 2017 Employee Stock Purchase Plan (the “ESPP”) which isintended to qualify under Section 423 of the Internal Revenue Code of 1986. The ESPP allows eligible employeeparticipants to purchase ADSs, with each ADS representing one ordinary share of the Company, at a discount through payrolldeductions. The Company’s executive officers and all of its other employees will be allowed to participate in the ESPP. Atotal of 571,000 ADSs of the Company’s ordinary shares will be made available for sale under the ESPP. In addition, withshareholder approval, the ESPP provides for increases by the Company’s board of directors in the number of ADSs availablefor issuance under the ESPP. Under the ESPP, employees are eligible to purchase ADSs through payroll deductions of up to 15% of their eligiblecompensation, subject to any plan limitations. The ESPP has two consecutive offering periods of approximately six monthsin length during the year and the purchase price of the ADSs will be 85% of the lower of the fair value of the Company’sADSs on the first trading day of the offering period or on the last day of the offering period. Under applicable tax rules, anemployee may purchase no more than $25,000 worth ADS, valued at the start of the offering period, under the ESPP in anycalendar year. As of December 31, 2018, $1.9 million has been withheld on behalf of employees for a future purchase underthe ESPP and is recorded in accrued compensation and benefits. (h)Compensation expense Cost of revenue and operating expenses include employee stock-based compensation expense as follows (inthousands): Year Ended December 31, 2016 2017 2018Cost of revenue - subscriptions $74 $315 $1,432Cost of revenue - professional services 84 207 1,024Sales and marketing 917 2,271 7,198Research and development 542 1,263 5,808General and administrative 1,377 2,224 5,375Total share-based compensation expense $2,994 $6,280 $20,837 As of December 31, 2018, the Company had $23.2 million of total unrecognized share-based compensation expenserelating to stock options, employee warrants (BSPCE), warrants (BSA) and RSUs, which is expected to be recognized over aweighted average period of 1.8 years. 14.Net loss per share Basic earnings (loss) per share amounts are calculated by dividing net income (loss) for the period attributable toordinary shareholders of the Company by the weighted average number of all shares outstanding during the period. Diluted earnings (loss) per share amounts are calculated by dividing the net income (loss) for the period attributable toordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period plusthe weighted average number of ordinary shares that would be issued on the exercise of all108 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) dilutive share options, employee warrants (BSPCE) and warrants (BSA) as well as the vesting of all restricted stock units.Potential ordinary shares are treated as dilutive when their conversion to ordinary shares would decrease net income per shareor increase net loss per share from continuing operations. As the Company was in a loss position for the year-to-date periodsended December 31, 2016, 2017 and 2018, the diluted loss per share is equal to basic loss per share. The net loss and weighted average number of shares used in the calculation of basic and diluted earnings per share areas follows (in thousands, except per share data): Year Ended December 31, 2016 2017 2018Numerator (basic and diluted): Net loss $(24,243) $(31,208) $(40,359)Denominator (basic and diluted): Weighted-average ordinary shares outstanding 14,464 28,966 29,841 Basic and diluted net loss per share $(1.68) $(1.08) $(1.35) The following shares subject to outstanding awards were excluded from the computation of diluted net loss per sharefor the periods presented as their effect would have been antidilutive (in thousands): Year Ended December 31, 2016 2017 2018Stock options to purchase ordinary shares 2,828 2,282 1,707Employee warrants (BSPCE) to purchase ordinary shares 547 343 229Warrants (BSA) to purchase ordinary shares 56 88 130Restricted stock units — 509 1,511 15.Debt The principal balances of outstanding borrowings under lines of credit with banks and financial institutions were asfollows (in thousands): As of December 31, 2017 2018BPI France $1,056 $877Other 139 7Total $1,195 $884 Current borrowings $1,188 $208Non-current borrowings $ 7 $676 In the fourth quarter of 2017, the Company assumed $1.1 million of debt as part of the Restlet SAS acquisition (SeeNote 13), related to refundable research and development subsidies from BPI France. The debt was assumed at its fair valueand therefore at December 31, 2018, the fair value of the debt approximates its carrying value. 16.Commitments and contingencies Operating lease commitments The Group leases various offices in locations such as France, the United States, the United Kingdom and Germanyunder non-cancellable operating leases expiring within 1 to 9 years. The leases have varying terms, escalation clauses andrenewal rights. On renewal, the terms of the leases are renegotiated. The Group incurred rent expense on its109 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) operating leases of $2.8 million during the fiscal year ended December 31, 2016, $3.4 million during the fiscal year endedDecember 31, 2017 and $4.4 million during the fiscal year ended December 31, 2018, respectively. Future minimum undiscounted lease payments under operating leases are as follows (in thousands): Operating leases As of December 31, 20182019 $5,2862020 5,7572021 5,5912022 5,3202023 4,014Thereafter 14,832Total future minimum lease payments $40,800 Capital commitments As of December 31, 2018, the Company had no capital commitments to acquire fixed or other long-lived assets. Contingencies From time to time, the Group has been, and may become, involved in claims or legal proceedings which arise in theordinary course of its business. The Group provides for a reserve against such third-party contingent liabilities when a loss isprobable and can be reasonably estimated. The Group currently believes that resolving the claims and legal proceedingspending at December 31, 2018, will neither individually nor in the aggregate have a material adverse effect on the results ofoperations, cash flow or the financial position of the Group. GuaranteesAs of December 31, 2018, the Company had agreed to guarantee several business contract obligations totaling $1.3million. 17.Related party transactions There is no single investor who has the ability to control the Company. As part of the Restlet SAS acquisition, the Company assumed debt totaling $1.2 million related to advances for researchand development projects from Bpifrance to Restlet SAS. As of December 31, 2018, the debt had a carrying value of $0.9million, see Note 15. There are no other material related party transactions that require disclosures. 18. Subsequent event On February 14, 2019, Talend, Inc., Talend USA, Inc. and Stitch, Inc. (the “Borrowers”), all wholly-owned subsidiariesof the Company, entered into a revolving credit facility with Square 1 Bank, a division of Pacific Western Bank (“PWB) (the“Loan Agreement”). The Loan Agreement provides for a revolving line of credit facility, which expires February 14, 2022.Under the Loan Agreement, the Borrowers are able to borrow an aggregate principal amount of up to $30.0 million at anytime outstanding. The Loan Agreement includes customary financial covenants and restrictive covenants, in each case subject to certainexceptions, that limit the Borrower’s ability to, amount other things: sell or transfer any collateral; change its business orbecome an investment company, liquidate or dissolve or undergo a change in control; enter into mergers or consolidations;incur indebtedness; pay dividends or make distribution, except as permitted by the agreement; make investments other thanpermitted investments; or pay any subordinated debt other than permitted in the applicable subordination agreement. TheBorrowers must also comply with a financial covenant. Loans under the Loan Agreement110 Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) will bear interest at PWB’s announced prime rate. The Company and certain of its subsidiaries were required to pledge,substantially all of their respective assets as collateral under the Loan Agreement. 111 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. Item 9A Controls and Procedures Disclosure Controls and Procedures Management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”),evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2018. The term “disclosure controlsand procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other proceduresof a company that are designed to ensure that information required to be disclosed by a company in the reports that it files orsubmits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed toensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act isaccumulated and communicated to the company’s management, including its principal executive and principal financialofficers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our CEO and CFO concluded that, as of such date,our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonableassurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded,processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information isaccumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisionsregarding required disclosure. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, assuch term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an evaluation ofthe effectiveness of our internal control over financial reporting based on the framework in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Ourinternal control over financial reporting includes policies and procedures that provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external reporting purposes in accordancewith generally accepted accounting principles. We acquired Stitch Inc. in November 2018, which represented total assets of $2.3 million (excluding goodwill andintangibles which are included within the scope of the assessment) and total revenues of $0.6 million included in ourconsolidated financial statements as of and for the year ended December 31, 2018. Our management excluded Stitch Inc.from its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018. Based on the results of our evaluation, our management concluded that our internal control over financial reporting waseffective as of December 31, 2018. We reviewed the results of management’s assessment with our Audit Committee. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies or procedures maydeteriorate. Changes in Internal Control Over Financial Reporting We implemented new revenue and commission accounting modules to our existing accounting system and relatedcontrols, which allowed us to adopt and prepare our financial statements under ASC 606 on a modified retrospective basiseffective January 1, 2018. During the year ended December 31, 2018, there were no other changes in our internal controlsover financial reporting that have materially affected, or that are reasonably likely to materially affect, our internal controlover financial reporting.112 Table of Contents Inherent Limitations of Controls Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or ourinternal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how welldesigned and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that allcontrol issues and instances of fraud, if any, within the company have been detected. These inherent limitations include therealities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error ormistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or morepeople, or by management override of the controls. The design of any system of controls also is based in part upon certainassumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achievingits stated goals under all potential future conditions. Over time, controls may become inadequate because of changes inconditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitationsin a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Item 9B. Other Information Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this Item is incorporated herein by reference to our definitive proxy statement with respect toour 2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered bythis Annual Report on Form 10-K. Item 11. Executive Compensation Information required by this Item is incorporated herein by reference our definitive proxy statement with respect to our2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered bythis Annual Report on Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required by this Item is incorporated herein by reference to our definitive proxy statement with respect toour 2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered bythis Annual Report on Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this Item is incorporated herein by reference to our definitive proxy statement with respect toour 2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered bythis Annual Report on Form 10-K. Item 14. Principal Accountant Fees and Services Information required by this Item is incorporated herein by reference to our definitive proxy statement with respect toour 2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered bythis Annual Report on Form 10-K. 113 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules The following documents are filed as a part of this Annual Report on Form 10-K: (a) Financial Statements The information concerning our financial statements, and Report of Independent Registered Public Accounting Firmrequired by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Item 8, entitled“Consolidated Financial Statements and Supplementary Data.” (b) Financial Statement Schedules Talend S.A. Schedule II Valuation and Qualifying Accounts and Reserves (in thousands) Deferred tax asset valuation allowance Balance atBeginningof Year Additions- Chargedto CostandExpenses Additions- Chargedto OtherAccounts Deductions Balanceat End ofYearYear Ended December 31, 2018 $54,796 $5,222 $2,311 $(9,171) $53,158Year Ended December 31, 2017 49,959 4,837 — — 54,796Year Ended December 31, 2016 46,051 3,908 — — 49,959 All other schedules have been omitted because the required information is not present or not present in amountssufficient to require submission of the schedules, or because the information required is included in Item 8, entitled the“Consolidated Financial Statements and Supplementary Data.” (c) Exhibits Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith 3.1 By-laws (statuts) of TalendS.A. (English Translation)dated as of August 20,2018. X 4.1 Form of Deposit Agreementbetween Talend S.A. andJPMorgan Chase Bank,N.A., as depositary, andOwners and Holders of theAmerican DepositaryShares. F-1 333-212279 4.1 7/11/2016 4.2 Form of AmericanDepositary Receiptevidencing AmericanDepositary Shares (includedin Exhibit 2.1). F-1 333-212279 4.2 7/11/2016 114 Table of ContentsExhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith10.1+ Stock Option Plans—2016,2015, 2014, 2013, 2012,2011 and 2010. F-1 333-212279 10.22 7/19/2016 10.2+ Form of BSA GrantDocument (Englishtranslation). F-1 333-212279 10.23 7/27/2016 10.3+ Form of BSPCE GrantDocument (Englishtranslation). F-1 333-212279 10.24 6/28/2016 10.4+ Form of OSA GrantDocument. F-1 333-212279 10.25 6/28/2016 10.5 Lease Agreement, dated asof April 11, 2014, by andbetween Westport OfficePark, LLC and Talend, Inc. F-1 333-212279 10.3 6/28/2016 10.6 First Amendment to LeaseAgreement, dated as ofDecember 16, 2014, by andbetween Westport OfficePark, LLC and Talend, Inc. F-1 333-212279 10.4 6/28/2016 10.7 Second Amendment toLease Agreement, dated asof April 20, 2015, by andbetween Westport OfficePark, LLC and Talend, Inc. F-1 333-212279 10.5 6/28/2016 10.8 Third Amendment to LeaseAgreement, dated as ofFebruary 15, 2018, by andbetween Westport OfficePark, LLC and Talend, Inc. 20-F 001-37825 4.6 3/05/2018 10.9 English Summary of theCommercial LeaseAgreement, dated as ofFebruary 7, 2014, by andbetween Foncière MedicaleN°1 and Talend S.A. F-1 333-212279 10.6 6/28/2016 10.10 English Summary of theFirst Amendment toCommercial LeaseAgreement, dated as ofApril 14, 2014, by andbetween Foncière MedicaleN°1 and Talend S.A. F-1 333-212279 10.7 6/28/2016 115 Table of ContentsExhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith 10.11 English Summary of theSecond Amendment toCommercial LeaseAgreement, dated as ofSeptember 11, 2015, by andbetween Foncière MedicaleN°1 and Talend S.A. F-1 333-212279 10.8 6/28/2016 10.12 English Summary of theThird Amendment toCommercial LeaseAgreement, dated as ofJanuary 20, 2016, by andbetween Foncière MedicaleN°1 and Talend S.A. F-1 333-212279 10.9 6/28/2016 10.13 English Summary of theFourth Amendment toCommercial LeaseAgreement, dated as ofApril 26, 2016, by andbetween Foncière MedicaleN°1 and Talend S.A. F-1 333-212279 10.10 6/28/2016 10.14 English Summary of theFifth Amendment toCommercial LeaseAgreement, dated as ofApril 24, 2017, by andbetween Foncière MedicaleN°1 and Talend S.A. 20-F 001-37825 4.12 3/5/2018 10.15 Form of IndemnificationAgreement betweenTalend S.A. and each of itsexecutive officers anddirectors. F-1 333-212279 10.21 6/28/2016 10.16+ Executive EmploymentAgreement, datedOctober 1, 2013, by andbetween Talend, Inc. andMichael Tuchen. F-1 333-212279 10.26 6/28/2016 10.17+ Offer Letter, datedDecember 13, 2009, by andbetween Talend, Inc. andThomas Tuchscherer. F-1 333-212279 10.27 6/28/2016 116 Table of ContentsExhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith10.18+ Amendment to Offer Letter,dated February 12, 2016, byand between Talend, Inc.and Thomas Tuchscherer F-1 333-212279 10.28 6/28/2016 10.19+ Offer Letter, dated August14, 2018, by and betweenTalend, Inc. and AdamMeister. X 10.20+ Employment Agreement,dated July 3, 2014, by andbetween Talend, Inc. andLaurent Bride (Englishtranslation). F-1 333-212279 10.33 6/28/2016 10.21+ Expatriation Agreement,dated June 22, 2015, by andbetween Talend S.A. andLaurent Bride (Englishtranslation). F-1 333-212279 10.34 6/28/2016 10.22+ Transition and ReleaseAgreement, dated February7, 2018, by and betweenTalend, Inc. and ThomasTuchscherer. X 10.23+ Form of Change of Controland Severance Agreement. F-1 333-212279 10.36 7/11/2016 10.24 Shareholder Agreement,dated as of June 24, 2016,by and among Talend S.A.and certain shareholders. F-1 333-212279 10.35 6/28/2016 10.25+ 2016 Free Share Plan S-8 333-219761 4.1 8/7/2017 10.26+ Form of 2016 Time-BasedFree Share Grant Letter S-8 333-219761 4.2 8/7/2017 10.27+ Form of 2016 Performance-Based Free Share GrantLetter S-8 333-219761 4.3 8/7/2017 10.28+ 2017 Free Share Plan S-8 333-219761 4.4 8/7/2017 10.29+ Form of 2017 Time-BasedFree Share Grant Letter S-8 333-219761 4.5 8/7/2017 10.30+ Form of 2017 Performance-Based Free Share GrantLetter S-8 333-219761 4.6 8/7/2017 10.31+ Talend S.A. 2017 StockOption Plan S-8 333-219761 4.7 8/7/2017 117 Table of ContentsExhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith10.32+ Talend S.A. 2017 EmployeeStock Purchase Plan S-8 333-222359 99.1 12/29/2017 21.1 List of Subsidiaries ofTalend S.A. X 23.1 Consent of KPMG S.A.,Independent RegisteredPublic Accounting Firm. X 31.1 Certificate of ChiefExecutive Officer pursuantto Securities Exchange ActRules 13a‑14(a) and15d‑14(a) as adoptedpursuant to §302 of theSarbanes-Oxley Act of2002. X 31.2 Certificate of ChiefFinancial Officer pursuantto Securities Exchange ActRules 13a‑14(a) and15d‑14(a) as adoptedpursuant to §302 of theSarbanes-Oxley Act of2002. X 32.1 Certificate of ChiefExecutive Officer and ChiefFinancial Officer pursuantto 18 U.S.C. §1350, asadopted pursuant to §906of the Sarbanes-Oxley Actof 2002. X 118 Table of ContentsExhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith101 The following materialsfrom Talend S.A.’s AnnualReport on Form 20-F for theyear ended December 31,2017, formatted in XBRL(eXtensible BusinessReporting Language): (i)Consolidated Statement ofFinancial Position; (ii)Consolidated Statements ofOperations; (iii)Consolidated Statements ofComprehensive Loss; (iv)Consolidated Statements ofChanges in Equity(Deficit); (v) ConsolidatedStatements of Cash Flows;and (vi) Notes toConsolidated FinancialStatements. X+ Indicates management contract or compensatory plan. Item 16. Form 10-K Summary Not applicable.119 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has dulycaused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, inRedwood City, State of California, on this 28th day of February, 2019. TALEND S.A. By: /s/ Michael Tuchen Michael Tuchen Chief Executive Officer(Principal Executive Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes andappoints Michael Tuchen and Adam Meister, and each of them, as his or her true and lawful attorneys-in-fact, proxies, andagents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to thisAnnual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith,with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power andauthority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fullyfor all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtuehereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the dates indicated. Signatures Title Date/s/ Michael Tuchen Chief Executive Officer and Director February 28, 2019Michael Tuchen (Principal Executive Officer) /s/ Adam Meister Chief Financial Officer February 28, 2019Adam Meister (Principal Financial and Accounting Officer) /s/ S. Steven Singh Chairman of the Board February 28, 2019S. Steven Singh /s/ John D. Brennan Director February 28, 2019John D. Brennan /s/ Nanci Caldwell Director February 28, 2019Nanci Caldwell /s/ Nora Denzel Director February 28, 2019Nora Denzel /s/ Patrick S. Jones Director February 28, 2019Patrick S. Jones /s/ Thierry Sommelet Director February 28, 2019Thierry Sommelet 120 Table of Contents/s/ Brian Lillie Director February 28, 2019Brian Lillie /s/ Mark Nelson Director February 28, 2019Mark Nelson 121 Exhibit 3.1 TALEND Société anonyme (French public limited company) with capital of € 2,394,462.96Registered office: 9, rue Pages - 92150 Suresnes484 175 252 R.C.S. (Trade and Companies Register) Nanterre BYLAWS UPDATED ON AUGUST 20, 2018 Copy certified by the Deputy Chief Executive Officer Emmanuel Samson EUI-1200473612v7 TITLE IForm - Purpose - Company name - Registered Office - DurationArticle 1FormTalend (hereafter the "Company") was established as a société par actions simplifiée then changed intoa société anonyme on the decision of the shareholders on April 14, 2006. The Company is governed bythe provisions of Book II of the French Commercial Code and by these bylaws (the "Bylaws").Article 2NameThe name of the Company is:TALENDAll the deeds and documents issued by the Company to third parties, in particular, the letters, invoices,notices and various publications, must show the company name immediately and legibly preceded orfollowed by the words "Société Anonyme" or the initials "S.A.", the statement of share capital and theregistration number in the Trade and Companies Register.Article 3PurposeThe Company's purpose, either directly or indirectly, in particular through the intermediary ofsubsidiaries or holdings, in France and abroad, is:-the development, research, production, marketing, purchase, sale, rental, after-sales support ofsoftware and/or IT equipment;-the supply and sale of user services including in particular training, demonstration, methodology,rollout and use;-the supply and sale of IT resources whether combined or not with software or service delivery.The Company's purpose is also:-the creation, acquisition, rental, lease-management of all business assets or facilities, lease,installation, operation of all establishments;-the acquisition, use or sale of all intellectual or industrial property rights as well as any expertise inthe field of information technology;-and, more generally, investing in any enterprise or company created or to-be-created as well ascarrying out any legal, economic, financial, industrial, civil and commercial transactions, whether inmovable property or real estate, directly or indirectly relating, in whole or in part, to theaforementioned purpose or to other similar or related purposes.2 Article 4Registered Office - branchesThe registered office is located at:9, rue Pages - 92150 SuresnesIt may be transferred to any other location in the French territory upon decision of the Board ofDirectors, subject to ratification by the next General Meeting, and in any other location by decision ofan Extraordinary General Meeting.The Board of Directors may create agencies, factories and branches wherever it deems useful.Article 5 DurationThe duration of the Company is set at ninety-nine (99) years, starting from its first registration in theTrade and Companies Register, except in the case of extension or early dissolution decided byshareholders. TITLE IIShare capital - SharesArticle 6SHARE CAPITAL The share capital is set at € 2,394,462.96. It is divided into 29,930,787 ordinary shares with a par value of € 0.08 per share, fully paid up and allof the same class. Article 7Change in the share capitalThe share capital may be increased, reduced or amortized under the conditions set by law.Article 8Payment of sharesThe shares are issued and paid up under the conditions set by law.Capital calls and the date on which the corresponding sums must be paid are disclosed to shareholdersat least 15 days before the date set for each payment by registered letter with acknowledgment ofreceipt, addressed to the shareholders or by a notice in a legal announcements newspaper publishedwhere the registered office is located.The shareholder who does not make the requested additional payments for the shares on their due dateis legally and without any other formality liable to the Company for late interest calculated daily fromthe due date at the legal rate.The Company has the right, in order to obtain the payment of these amounts, of enforcement andpenalties as provided by law. 3 ARTICLE 9Type of SharesFully paid-up shares may be held in nominative or bearer form, at the shareholder’s request, subject,nonetheless, to the legal provisions relating to the form of the shares held by certain natural or legalpersons. Shares that are not fully paid-up must be held in nominative form.Shares must be registered in an account in accordance with the terms and conditions provided for bythe current legal and regulatory provisions.Ownership of shares delivered in nominative form results from them being recorded in the shareregister.Article 10 Transfer of Shares – Identification of the bearer of shares10.1Shares are freely transferable by transfer between accounts, in accordance with the currentlegal and regulatory provisions.10.2Furthermore, the Company has the right to request, in accordance with current legal andregulatory provisions, at any time and at its own expense, from any authorized body, the name, orcorporate name in the case of legal persons, nationality and address of the holders of securitiesconferring immediate or future voting rights in its own Shareholders' Meetings, as well as the number ofsecurities held by each of them and any restrictions on these securities. Article 11Rights and Obligations Governing SharesShares will be indivisible with respect to the Company.Multiple holders of undivided interests in shares will be represented at General Meetings by one of themor by a single agent; in the event of disagreement, the agent will be designated by a court of law at therequest of the co-owner who acts first.Each share entitles its holder to one vote at General Meetings of shareholders.As a result of the reverse share split approved by the Combined Shareholders’ Meeting of 1 June 2016,and until the expiry of a period of two (2) years following the start date for reverse split transactions asset by the reverse share split notice published by the Company in the BALO (Bulletin des AnnoncesLégales et Obligatoires) pursuant to the resolutions adopted by the Combined Shareholders’ Meeting of1 June 2016, any shares that are not grouped (former shares with a par value of €0.01 each), will eachgive the holder the right to one (1) vote and any grouped shares with a par value of €0.08 each, willeach give the holder the right to eight (8) votes, such that the number of votes attached to the shareswill be proportional to the share of the capital that they represent. The right to vote is held by the usufruct shareholder in Ordinary General Meetings and by the bareowner in Extraordinary General Meetings. Shareholders may, however, agree to allocate voting rights ina different manner at General Meetings, provided that the usufruct shareholder is not deprived of theright to vote on decisions concerning profits; in this case, they must bring their agreement to theCompany's attention by registered letter with a notice of receipt sent to the registered office. TheCompany will be required to respect the above agreement for any General Meeting held at least fivedays after receipt of the notice of that agreement.Even deprived of the voting right, the bare-owner of the shares will always have the right to participatein General Meetings.Each share entitles the holder thereof to a proportionate ownership right in the profits of the Companyand in the proceeds after liquidation equal to the pro rata portion of the registered capital represented bysuch share.4 Ownership of a share automatically entails compliance with the Company's Bylaws and with resolutionsduly adopted by the General Meeting of shareholders.Whenever it is necessary to own several shares in order to exercise any right, the owners of isolatedshares or a number of shares less than the required number may exercise those rights only on thecondition that they personally see to the pooling and, possibly, the purchase or sale of the necessarynumber of shares. Title IIICompany ManagementArticle 12 Board of DirectorsThe Company is managed by a Board of Directors composed of a minimum of three members and amaximum of twelve members. The directors shall be appointed by the Ordinary General Meeting of shareholders.Article 13Appointment and Revocation of DirectorsThe directors' term of office is three (3) years. A director's duties end at the conclusion of the generalmeeting that approved the financial statements of the past year that is held in the current year in whichthe term of the said director expires.Directors may be reappointed and they may be revoked at any time by decision of the Ordinary GeneralMeeting of shareholders.If a director seat becomes empty between two General Meetings, the Board of Directors may, incompliance with applicable laws and regulations, make temporary appointments. A director appointedto replace another holds the office only for the time remaining in the term of his or her predecessor.Appointments of directors made by the Board of Directors are subject to the approval of the nextOrdinary General Meeting. When there is no ratification, the rulings and the acts carried out previouslyby the Board still remain valid.A person more than 70 years old cannot be appointed director if their appointment brings the number ofBoard members over 70 years old to more than one third.If this limit is reached, the oldest director shall be considered as resigning at the end of the meeting ofthe Annual Ordinary General Meeting ruling on the financial statements of the previous year held in thecurrent year in which this one-third limit has been reached. Article 14 Organization and Deliberations of the Board of Directors1) Board meetingsThe Board of Directors meets as often as required in the interest of the Company.5 Directors are called to attend Board meetings by the Chairman. In addition, Directors representing atleast one-third of the Board members may validly call a Board meeting if no such meeting has beenheld for more than two months.Meetings of the Board of Directors are held at the registered office of the Company or at any otherplace.Advance notice for calling directors to the meetings of the Board of Directors is at least five (5) workingdays on first call and twenty-four (24) hours on second call, except, for these two cases, when thedirectors would all be present or represented.The calls for meeting may be made by any means of written communication including by simple postalor electronic mail.2)QuorumA meeting of the Board of Directors is considered valid when at least half of its members are present. 3)DeliberationsDecisions of the Board of Directors are made on the majority of the votes of participating members,present or represented. Decisions are binding on all members of the Board of Directors, even thoseabsent or dissenting. 4)Meeting minutesThe meetings of the Board of Directors are documented in minutes prepared in a special register that isnumbered, initialled and held in the registered office of the Company, in compliance with regulatoryprovisions.5)RepresentationAny director may be represented by another director at a meeting of the Board by means of a writtenproxy.Each director can only have, during the same meeting, one single proxy received in application of theprevious sub-paragraph.These provisions are applicable to the permanent representatives of legal persons who are directors. 6)ConfidentialityAny and all directors or any person called to the meetings of the Board are held to confidentiality withrespect to the information presenting a confidential character and data considered as such by theChairman of the Board.Article 15 Powers of the Board of Directors - Committees1)PowersThe Board of Directors shall determine the focuses of the activity of the Company and oversee theirimplementation. Subject to the powers expressly granted to shareholders' meetings and limited to theCompany's purpose, the Board of Directors deliberates on all matters concerning the operation of theCompany's activities and rules on all affairs over which it has authority.In its relations with third parties, the Company is committed even by the actions of the Board ofDirectors that are not within the scope of the Company's purpose, unless it can prove that the third-partyknew6 that the action exceeded this purpose or that it could not be unaware of it in view of the circumstances,and mere publication of the Bylaws shall not be sufficient proof thereof.The Board of Directors shall carry out the controls and verifications that it deems necessary. TheChairman or the Chief Executive Officer shall provide each director with all of the documents andinformation necessary to carry out their mission.2)CommitteesThe Board may decide to create committees charged with studying the issues that itself or its Chairmansubmits to them for their examination and advisement. The Board shall determine the composition andthe responsibilities of the committees that conduct their activity under its responsibility. It shall set thecompensation of the people who compose them. Article 16 Executive Management1) Chairman of the Board of DirectorsThe Board of Directors shall choose from among its members a Chairman who must be a physicalperson, otherwise the appointment is null and void. It shall determine his or her compensation in theconditions set by law.The Chairman shall be appointed for a term that cannot exceed that of his or her director's term. He orshe may be reappointed.The Board of Directors may revoke the Chairman at any time.The Chairman of the Board cannot be more than 70 years old. If the Chairman reaches this age limitduring his or her term as Chairman, he or she is deemed to have resigned automatically from office.The term office is extended however until the next meeting of the Board of Directors during which thesuccessor will be appointed. In the case of temporary unavailability or death of the Chairman, the Board of Directors may appoint adirector for the functions of the Chairman.In the case of temporary unavailability, this appointment is made for a limited amount of time. It isrenewable. In the case of death, it is valid until the election of the new Chairman.The Chairman of the Board of Directors shall organize and manage its work, which is reported to theGeneral Meeting. It shall oversee the proper functioning of the Company's management bodies andensures, in particular, that the directors are able to carry out their mission.2) Executive ManagementExecutive management of the Company shall be assumed, under its responsibility, by the Chairman ofthe Board of Directors, or by another physical person appointed by the Board of Directors and bearingthe title of Chief Executive Officer.The Board must choose between the two forms of exercising executive management at all times and, atleast, each time the term of Chief Executive Officer expires or that of the Chairman of the Board ofDirectors when he or she also assumes the executive management of the Company.Shareholders and third parties shall be informed of this choice in the conditions defined by decree.7 The final decision of the Board of Directors on the choice of the form of exercising executivemanagement shall be carried out based on the majority of the votes of the participating members,present or represented.When the executive management of the Company is assumed by the Chairman of the Board ofDirectors, the provisions in the Bylaws relating to the Chief Executive Officer are applicable to him orher.3) Chief Executive OfficerThe Chief Executive Officer is empowered with the most extensive powers to act in all circumstances inthe name of the Company. He or she shall exercise those powers within the limits of theCompany's purpose and subject to those expressly granted by law to shareholders' meetings and to theBoard of Directors. The Chief Executive Officer represents the Company in its relations with third parties. The Company iscommitted even by the actions of the Chief Executive Officer that are not part of theCompany's purpose, unless the Company proves that the third party knew that the action exceeded thispurpose or could not be unaware of it in view of the circumstances, and mere publication of the Bylawsshall not be sufficient proof thereof.The provisions in the Bylaws or the decisions of the Board of Directors limiting the powers of the ChiefExecutive Officer are unenforceable against third parties.The Chief Executive Officer can delegate the powers belonging to him or her by law or the Bylaws orthat are delegated to him or her by the Board of Directors or the shareholders. The Board of Directors determines the compensation of the Chief Executive Officer in the conditionsset by law.The Chief Executive Officer cannot be more than 70 years old. When a Chief Executive Officer reachesthis age limit during their term of office, he or she is deemed to have resigned automatically fromoffice. The term of office is extended however until the next meeting of the Board of Directors in whichthe successor will be appointed. Subject to this provision, the Chief Executive Officer may be re-appointed.4)Delegate Chief Executive OfficersOn proposal of the Chief Executive Officer, the Board of Directors may grant authority to one or morephysical persons to assist the Chief Executive Officer with the title of Delegate Chief Executive Officer.The Delegate Chief Executive Officer(s) may be revoked at any time by the Board of Directors onproposal of the Chief Executive Officer.As approved by the Chief Executive Officer, the Board will determine the extent and the duration of thepowers given to the Delegate Chief Executive Officer. The Board shall determine his or hercompensation in the conditions set by law.With respect to third parties, the Delegate Chief Executive Officers have the same powers as the ChiefExecutive Officer; in particular the Delegate Chief Executive Officers can take part in legalproceedings.A Delegate Chief Executive Officer cannot be more than 70 years old. When a Delegate ChiefExecutive Officer reaches this age, he or she is deemed to have resigned automatically from office. Theterm of office is extended however until the next meeting of the Board of Directors during which a newDelegate Chief Executive Officer will be appointed.There cannot be more than five (5) Delegate Chief Executive Officers. 8 Article 17 Compensation of DirectorsThe General Meeting can allocate a fixed annual amount to the directors, as compensation for theiractivity, for attendance fees. The General Meeting will determine this amount without being bound byprevious decisions. The Board of Directors shall freely distribute among its members the overall amounts allocated to thedirectors in the form of attendance fees.The Board of Directors may allocate exceptional compensation for missions or mandates granted todirectors in the conditions specified by law.The directors bound to the Company by an employment contract can receive compensation for saidcontract in the conditions specified by law.The Board of Directors can authorize reimbursement of travel and movement fees and for expensesincurred by directors in the interest of the Company. Title IVAudits of the Company's Financial StatementsArticle 18 Appointment of the Statutory Auditors - IncompatibilityOne or more principal and alternate Statutory Auditors must be appointed pursuant to the current legaland regulatory provisions.The Statutory Auditors are appointed for six (6) financial periods by the Ordinary General Meeting andtheir duties expire after the Ordinary General Meeting deliberating on the financial statements of thesixth financial period.Article 19 Duties of the Statutory AuditorsThe Statutory Auditors have the duties and powers granted to them by the applicable laws andregulations.The Statutory Auditors can, at any time of the year, carry out the audits or controls that they deemnecessary.The compensation of the Statutory Auditors is determined according to procedures set by applicableregulations.They must be invited to all shareholders' meetings as well as all meetings of the Board of Directors inwhich the annual or intermediate financial statements are examined or approved.9 Title VGeneral MeetingsArticle 20General Meetings General Meetings are convened and held in the conditions set by law. When the Company wants to make a call for meeting using electronic telecommunication instead of apostal invitation, it must first obtain the agreement of the interested shareholders who will provide theirelectronic addresses. Meetings will take place at the registered office or in any other place specified in the meeting invitation. The right to participate in General Meetings is governed by current legal and regulatory provisions and,notably, is subject to the shares being registered in the name of the shareholder or the intermediaryregistered on his or her behalf, on the second (2) business day prior to the General Meeting, atmidnight (00:00) Paris time, either in the registered share accounts held by the Company, or in thebearer share accounts held by the authorized intermediary. A shareholder who is unable to personally attend the meeting may choose one of the three followingoptions, to: -give a proxy to another shareholder or to their spouse, or partner with whom they have a civilsolidarity pact; or-vote by mail; or-send a proxy to the Company without indicating a representative; in the conditions allowed by law and regulations. The Board of Directors can organize, in the conditions specified by applicable laws and regulations,participation and voting of shareholders at meetings by videoconferencing or by othertelecommunication means that allow their identification. If the Board of Directors decides to exercisethis option for a given meeting, this decision of the Board shall be reported in the meeting notice and/orinvitation. Shareholders who take part in meetings by videoconferencing or by any othertelecommunication means mentioned above, depending on the choice of the Board of Directors, aredeemed to be present with respect to quorum and majority. The meetings are chaired by the Chairman of the Board of Directors, or when absent, by the ChiefExecutive Officer, by a Delegate Chief Executive Officer who is a director, or by a director speciallyappointed for this purpose by the Board. Otherwise, the Meeting itself will choose its Chairman. The observers' duties are filled by the two members of the meeting who are present, who accept theseduties and who have the greatest number of votes. The office will designate the Secretary, who may bechosen outside of the shareholders. An attendance sheet will be kept in the conditions specified by law. The Ordinary General Meeting convening on first call can only validly deliberate when the shareholderspresent or represented hold at least one fifth of the shares with voting rights. The Ordinary General10 nd Meeting convening on second call validly deliberates regardless of the number of shareholders presentor represented. The deliberations of the Ordinary General Meeting are approved on the majority of votes of theshareholders present or represented. The Extraordinary General Meeting convening on first call only validly deliberates when theshareholders presented or represented own at least one fourth of the shares with voting rights. TheExtraordinary General Meeting convening on second call only validly deliberates when theshareholders presented or represented own at least one fifth of the shares with voting rights. The deliberations of the Extraordinary General Meeting are approved by a two-thirds majority of thevotes of the shareholders present or represented. Copies or extracts of meeting minutes are validly certified by the Chairman of the Board of Directors,by a director exercising the functions of Chief Executive Officer or by the meeting Secretary. Ordinary and Extraordinary General Meetings exercise their respective powers in the conditionsspecified by law. Title VI Company Performance Article 21Financial Year Each financial period lasts one year, starting on January 1 and ending on December 31. Article 22Profits - Legal Reserve At least five per cent (5%) of the profits of the financial period, minus any prior losses, must bewithheld and assigned to the creation of a reserve fund called the "legal reserve". This withholding nolonger applies when the amount of the legal reserve reaches one-tenth of the share capital. The distributable profit is made up of the profits of the financial period minus any prior losses and thewithholding mentioned in the previous paragraph, and increased by the retained earnings. 11 Article 23 Dividends If the financial statements of the period, approved by the General Meeting, show the existence of adistributable profit, the General Meeting shall recognize it in one or more reserve items whoseallocation or use it governs, carry it forward or distribute it in the form of dividends. After having recognized the existence of reserves that it has at its disposal, the General Meeting maydecide to distribute amounts taken from these reserves. In this case, the decision shall expressly indicatethe reserve items from which these distributions shall be taken. However, the dividends shall be takenin priority from the distributable profits of the financial period. The procedures for paying the dividends shall be set by the General Meeting or otherwise by the Boardof Directors. However, the payment of dividends must be made within a maximum time of nine (9) months after theclose of the financial period. The General Meeting deliberating on the financial statements of the financial period can give to eachshareholder, for all or part of the dividend being distributed, the option of payment either in cash or inshares. Likewise, the Ordinary General Meeting, deliberating in the conditions specified in Article L. 232-12 ofthe French Commercial Code, can give each shareholder a partial dividend payment and for all or partof the said partial dividend payment, the option of payment either in cash or in shares. The offer for payment in shares, the price and the conditions for issuing the shares as well as the requestfor payment in shares and the conditions for carrying out the capital increase are governed byapplicable laws and regulations. When a balance sheet prepared during or at the end of the financial period and certified as compliant bythe Statutory Auditor or Auditors shows that the Company, since the close of the previous financialperiod, after creation of the necessary amortizations and provisions and minus any prior losses as wellas the amounts to place in reserves in application of the law or the Bylaws and taking into account theretained earnings, has made a profit, the Board of Directors may decide to distribute partial dividendpayments before the approval of the financial statements of the period and set the amount and the dateof the allocation. The amount of these partial payments cannot exceed the amount of the profit definedin this sub-paragraph. In this case, the Board of Directors cannot make use of the option described inthe sub-paragraphs above. Title VII Dissolution - Liquidation Article 24Early Dissolution The Extraordinary General Meeting can declare the early dissolution of the Company at any time. Article 25Loss of Half of the Share Capital If, due to losses shown in the accounting documents, the shareholders' equity becomes less than half ofthe Company’s share capital, the Board of Directors must, within four months of the approval of the12 financial statements showing this loss, convene an Extraordinary General Meeting to decide whetherthere should be early dissolution of the Company. If dissolution is not declared, the capital must, at the latest by the close of the second financial yearfollowing the one in which the losses were recorded, and subject to laws relating to the minimumcapital of corporations, be reduced by an amount at least equal to the losses that were not chargedagainst the reserves, if within this period the shareholders' equity has not been restored up to a value ofat least half of the share capital. If there is no General Meeting, for example, if the meeting is not able to validly deliberate, anyinterested party may petition the courts for the dissolution of the Company. Article 26Effects of the Dissolution The Company is considered in liquidation immediately upon dissolution regardless of the cause. Itremains a legal person for the purposes of liquidation until the closing of the liquidation. Throughout the liquidation, the General Meeting holds the same powers that it had while the Companywas in existence. Shares may be traded until the closing of the liquidation. The dissolution of the Company has no impact on third parties until the date on which it is published inthe Trade and Companies Register. Article 27Appointment of Liquidators - Powers Upon expiration of the duration of the Company or in the case of early dissolution, the General Meetingshall determine the procedure for liquidation and appoint one or more liquidators whose powers it willdetermine and who will carry out their duties pursuant to applicable laws. When the liquidators areappointed, the duties of the directors, Chairman, Chief Executive Officer and Delegate Chief ExecutiveOfficers automatically end. Article 28Liquidation - Closing After settling the liabilities, the balance of the assets is firstly used to repay to shareholders the amountof the non-amortized paid-up share capital. Any surplus is split between all the shares. The shareholders are called to meet at the end of liquidation to rule upon the final account, on the finaldischarge of the management of the liquidators and the discharge of their mandate, and to record theclosing of the liquidation. The closing of the liquidation will be published in accordance with applicable laws. 13 Title VIIINotices - DisputesArticle 29Notices All notices stipulated in the Bylaws will be made by certified mail with request for proof of delivery orby extra-judicial document. At the same time, a copy of the notice must be sent to its recipient byregular mail.Article 30 DisputesAny and all disputes that could arise during the lifetime of the Company or during its liquidation,whether between the shareholders and the Company, or between the shareholders themselves,concerning the Company business, the interpretation or the execution of the Bylaws, are subject to thejurisdiction of the competent courts. - - ooOoo- - 14 Exhibit 10.19August 14, 2018 Adam MeisterSan Francisco, CA Dear Adam:I am pleased to offer you a position with Talend, Inc. (the "Company") as CFO, reporting to Mike Tuchen, CEO. You will receive anannual base salary of $350,000 USD which will be paid semi-monthly. You will also be eligible to participate in the Executive TeamBonus Plan at an on-target variable earnings of 55% of base salary to be paid annually. As an Officer of the company, you will receiveChange-In-Control and Severance benefits. The Executive Team Bonus Plan details and the CiC/Severance agreement will be providedto you under separate cover. Furthermore, we will recommend to the Board that, at the first Board meeting following the date on which you become an employee,you receive an equity grant of 51,000 shares of Restricted Stock Units (RSUs) each representing one ordinary share of Talend S.A.,subject to customary capital adjustments as may be implemented by the Company from time to time.The vesting terms of the equity will be set forth in your notice of grant, will be determined by applicable legal requirements and will besubject to your continued status as an employee with the Company on the relevant vesting dates. In all other respects, your equity grantshall be subject to the terms, definitions, and provisions of the 2017 Free Share Plan as approved by the Board and the notice of grant tobe entered into by and between you and the Company.As an employee, you will be eligible to receive employee benefits with Talend starting your first day of employment includingmedical, dental and vision insurance, paid time off, life insurance, short and long term disability insurance, and a flexible spendingaccount. Additionally, you will be eligible to make contributions to a matching 401(k) retirement savings account starting the 1 of themonth, following 60 days of employment.We are excited about your joining us and look forward to a beneficial and fruitful relationship. Nevertheless, you should be aware thatyour employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign atany time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time,with or without cause, and with or without notice.The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Yourjob offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check.For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity andeligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your dateof hire, or our employment relationship with you may be terminated.We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prioremployment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It isthe Company’s understanding that any such agreements will not prevent you from performing the duties of your position and yourepresent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engagein any other employment, occupation, consulting or other business activity directly related to the business in which the Company isnow involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict withyour obligations to the Company. st Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, andthat in performing your duties for the Company you will not in any way utilize any such information.As a Company employee, you will be expected to abide by our company rules and standards. You will be required to sign anacknowledgment that you have read and that you understand the Company’s rules of conduct which are included in the CompanyHandbook. As a condition of your employment, you will also be required to sign and comply with a Confidential Information andInvention Assignment Agreement which requires, among other provisions, the assignment of patent rights to any invention madeduring your employment at the Company, and non-disclosure of proprietary information.To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below. If you accept our offer,your first day of employment will be determined to be a mutually acceptable date. This letter, along with any agreements relating toproprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any priorrepresentations or agreements, whether written or oral. This letter, including, but not limited to, its at-will employment provision, maynot be modified or amended except by a written agreement signed by the Company Chief Executive Officer and you. This offer ofemployment will terminate if it is not accepted, signed and returned by August 17, 2018. We look forward to your favorable reply and to having you join the team. Sincerely,Barbara CadiganSVP, People Agreed to and accepted: Signature:___________________________ Printed Name:___________________________ Date:___________________________ Exhibit 10.22 February 7, 2018Thomas Tuchschererc/o Talend, Inc. Re:Transition and Release Agreement Dear Thomas: This letter sets forth the terms of the transition and release agreement (the “Agreement”) upon which Talend, Inc. (the“Company”) and you have agreed. 1.Separation Date. Your full-time employment with the Company will terminate on the earlier of the followingto occur (the “Separation Date”): (a) April 13, 2018, or (b) the date the Company terminates youremployment. 2.Transition Period Employment.a)Salary, Benefits, and 2017 Bonus. From now through the Separation Date (the “Transition Period”), youwill continue to receive your current base salary for your services. Your benefits will continue on the termsand conditions now in effect. Provided you remain employed by the Company through April 13, 2018 andmeet the other terms and conditions of the Company’s 2017 Executive Bonus Plan (the “Bonus Plan”),you will remain eligible for an annual bonus with respect to 2017, subject to and payable in accordancewith all other terms and conditions of the Bonus Plan. For clarity, the amount of such bonus, if any, shallbe determined in accordance with the terms and conditions of the Bonus Plan and any such bonus shall bepaid at such time or times as bonuses are actually paid to other participants in the Bonus Plan, but youneed not be employed by the Company through the payment date to be eligible for such bonus.b)Transition Duties. During the Transition Period, you will remain employed with the Company in yourcurrent position with all of your customary job duties, and shall provide such other services within yourareas of expertise that may be reasonably requested by the Company from time to time, including (withoutlimitation) assisting in the completion of any pending projects or business activities for which you wereresponsible and/or assisting in transitioning any such pending projects or business activities to otherpersonnel (collectively, the “Transition Duties”). You are expected to report to work on a customary workschedule through March 9, 2018. Thereafter and during the remainder of the Transition Period, you will beexpected to report to work on an as-needed basis only, approximately 2-3 days per week, for purposes ofcompleting your customary job duties as required in connection with the close of the Company’s FinancialStatements to be filed with the SEC for the year ended December 31, 2017 (“2017 Accounts”) and theassociated audit of the 2017 Accounts. You may take reasonable vacation time during the TransitionPeriod, including your anticipated vacation from April 9 through April 13, 2018, subject to yourcontinuing work obligations as set forth herein. You agree to perform your Transition Duties in good faith,to the best of your abilities, and to comply with all Company policies and procedures in effect, except asmodified herein with respect to your reporting duties from March 9, 2018 through the end of the TransitionPeriod.c)No Authority. After your Separation Date, you will have no authority to bind the Company to anycontractual obligations, whether written, oral or implied.d)Outside Activities. During the Transition Period, you may not engage in employment or consulting workoutside of the Company, without the written consent of a duly authorized officer of the Company. 3.Accrued Salary and Vacation. On the Separation Date, the Company will pay you all accrued salary (base andvariable) and any unused accrued vacation through the Separation Date, subject to standard payroll deductionsand withholdings. You are entitled to these payments regardless of whether or not you sign this Agreement. 4.Separation Date Release and Severance.a)Termination on April 13, 2018 or Earlier Termination by the Company Without Cause. If (i) you remain employed by the Company through April 13, 2018 or such earlier Separation Date on which theCompany terminates your employment without Cause; (ii) you comply fully with your obligations underthis Agreement; and (iii) on or within 21 days after the Separation Date, you sign, date and return to theCompany the Separation Date Release Agreement attached to this Agreement as Exhibit A (the“Separation Date Release”), and allow it to become effective, then the Company will pay you, asseverance, fifty-three thousand dollars, corresponding to your pro-rated variable pay as of April 13, 2018, less standard payroll deductions and withholdings (“Severance”).b)Timing of Severance. The Severance will be paid in a lump sum installment, paid on the Company’sordinary payroll dates, provided, however, that no payment will be made prior to the thirtieth (30th) dayafter the date of your Separation from Service with the Company within the meaning of TreasuryRegulation Section 1.409A-1(h) (without regard to any permissible alternative definition thereunder) (a“Separation from Service”) and on such 30th day, the Company will pay, in a lump sum, all of thepayments that would have been made under this Section in the ordinary course through such date but forthe delay imposed by this Section in order to allow the Separation Date Release to become effective, withthe balance of the payments paid thereafter on the schedule described above. For purposes of Section 409Aof the Internal Revenue Code of 1986, as amended (the “Code”), your right to receive any installmentpayments under this letter (whether severance payments, reimbursements or otherwise) shall be treated as aright to receive a series of separate payments and, accordingly, each installment payment hereunder shallat all times be considered a separate and distinct payment. Notwithstanding the foregoing, to the extentthat the Severance is reasonably determined by the Company in consultation with its tax advisors to be“non-qualified deferred compensation” under Section 409A of the Code, then if delayed commencementof any portion of such payments is required to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, the timing of the Severance upon yourSeparation from Service will be delayed as follows: on the earlier to occur of (i) the date that is six monthsand one day after the effective date of your Separation from Service, and (ii) the date of the your death(such earlier date, the “Delayed Initial Payment Date”), the Company will (A) pay to you a lump-sumamount equal to the sum of the payments upon Separation from Service that you would otherwise havereceived through the Delayed Initial Payment Date if the commencement of the payments had not beendelayed pursuant to this paragraph, and (B) commence paying the balance of the payments in accordancewith the applicable payment schedules set forth above. No interest will be due on any amounts so deferred. 5.Health Care Continuation Coverage.a)COBRA. To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and bythe Company’s current group health insurance policies, you will be eligible to continue your group healthinsurance benefits at your own expense. Later, you may be able to convert to an individual policy throughthe provider of the Company’s health insurance, if you wish.b)Payment for COBRA. Provided that you timely sign and do not revoke this Agreement and the SeparationDate Release and timely elect continued coverage under COBRA, the Company will pay your COBRApremiums necessary to continue your health insurance coverage then in effect for yourself and youreligible dependents, as and when due to the insurance carrier or COBRA administrator (as applicable),until the earliest of:i)If your employment terminates on April 13, 2018 or if the Company terminates your employmenton an earlier date without Cause: (a) December 31 2018, (b) the expiration of your eligibility forthe continuation coverage under COBRA, (such period from the termination date through theearliest of (a) through (b) in this section, the “COBRA Payment Period”);ii)However, if at any time the Company determines, in its sole discretion, that the payment of theCOBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2)of the Code or any statute or regulation of similar effect (including but not limited to the 2010Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and EducationReconciliation Act), and that payment of similar amounts on a taxable basis would not, then inlieu of providing the COBRA premiums, the Company will instead pay you on the last day ofeach remaining month of the COBRA Payment Period, a cash payment equal to the COBRApremiums for that month, subject to applicable tax withholdings (such amount, the “SpecialSeverance Payment”), for the remainder of the COBRA Payment st Period. The Company will also pay an additional payment on your behalf, directly to theapplicable taxing authorities, (the “Gross-Up Payment”) at the time of each Special SeverancePayment, in an amount equal to (i) the ordinary federal, state and local income and employmenttaxes due by you, if any, at that time (the “Taxes”) on the Special Severance Payment plus (ii) anamount sufficient to cover the iterative Taxes on the Taxes. For clarity, this Gross-Up Payment is afull gross-up (that is, calculated ad infinitum) in the amount reasonably determined by theCompany as necessary to put you in the same economic position as if you received the SpecialSeverance Payment without incurring the Taxes. You agree to cooperate and provide all necessaryassistance and information to the Company to determine the amount of the Gross-Up Payment. 6.Equity Awards.a)You were granted options to purchase shares of the Company’s common stock (“Stock Options”) andPerformance Stock Units (“PSUs” and collectively with your Stock Options, the “Equity Awards”),pursuant to the 2015 Stock Option Plan, 2016 Stock Option Plan, and the 2017 Free Share Plan (togetherthe “Plans”). You acknowledge that the table below summarizes all of your outstanding Equity Awardsthat remain unvested as of the date of this Agreement: b)Under the terms of the Plans and the agreements evidencing your Equity Awards, vesting will cease as ofthe Separation Date, with the exception of the February 6,2015 grant (“February 2015 Grant”). As perthe decision of the Talend SA board meeting dated February 7,2018, the vesting of the February 2015Grant will irrevocably continue to its term regardless of your status as a Continuing Beneficiary (asdefined in the February 2015 Grant) of the Company. Provided that you sign and do not revoke thisAgreement and the Separation Date Release within the time provided herein, and if your employmentterminates on April 13, 2018 or if the Company terminates your employment on an earlier date withoutCause: effective as of the date that is 30 days following the Separation Date, you will vest with respect to3,880 such number of Performance Stock Units, as approved by the Board of Directors Talend SA Board ofDirectors on February 7, 2018. c)Except as expressly provided in this Section 6, the Equity Awards will continue to be governed by theterms of the applicable agreements evidencing your Equity Awards and the Plans. 7.Other Compensation or Benefits. You acknowledge that payment of the Severance and COBRA premiums orSpecial Severance Payment as set forth above fulfills all of the Company’s obligations to provide youseverance benefits for a termination “without Cause” pursuant to the terms of your offer letter and anysubsequent amendments (“Offer Letter”) and the Change of Control and Severance Agreement between youand Talend, Inc. dated July 26, 2016 (together with the Offer Letter, the “Severance Agreements”), and that tothe extent this Agreement differs from the Severance Agreements with respect to the provision of any cashseverance, COBRA premium benefits, or other severance benefits (other than acceleration of equity vestingbenefits, as set forth in Section 6 above), this Agreement nevertheless supersedes the Company’s severance andother compensation obligations to you under the Severance Agreements. You further acknowledge that uponyour execution of this Agreement, the Company’s severance and other compensation obligations to you underthe Offer letter or any other agreement, plan, policy or promise shall be extinguished. You further acknowledgethat, except as expressly provided in this Agreement, you have not earned and will not receive any additionalcompensation, severance or benefits after the Separation Date, with the exception of any vested right you mayhave under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account). 8.Expense Reimbursements. You agree that, within 10 days of the Separation Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred through theSeparation Date, if any, for which you seek reimbursement. The Company will reimburse you for these expensespursuant to its regular business practice. 9.Attorneys’ Fees. The Company shall reimburse your attorneys’ fees incurred in the negotiation of thisAgreement, up to a maximum reimbursement of $5,000, subject to the submission of a summary invoice fromyour attorney, which for the avoidance of doubt shall not include any confidential or privilegedinformation. Such reimbursement shall be made in lump sum within thirty (30) days of submission of suchinvoice. 10.Return of Company Property. By no later than the close of business on the Separation Date or otherwise uponthe Company’s request, you shall return to the Company all Company documents (and all copies thereof) andother Company property in your possession or control, including, but not limited to, Company files, notes,financial and operational information, customer lists and contact information, product and servicesinformation, research and development information, drawings, records, plans, forecasts, reports, payrollinformation, spreadsheets, studies, analyses, compilations of data, proposals, agreements, sales and marketinginformation, personnel information, specifications, code, software, databases, computer-recorded information,tangible property and equipment (including, but not limited to, computers, facsimile machines, mobiletelephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kindwhich contain or embody any proprietary or confidential information of the Company and all reproductionsthereof in whole or in part and in any medium. You agree that you will make a diligent search to locate anysuch documents, property and information within the timeframe referenced above. In addition, if you have usedany personally owned computer, server, or e-mail system to receive, store, review, prepare or transmit anyconfidential or proprietary data, materials or information of the Company, then within five business days afterthe Separation Date or otherwise upon the Company’s request, you must permanently delete and expunge suchconfidential or proprietary information from those systems without retaining any reproductions (in whole or inpart). Your timely compliance with the provisions of this Section is a precondition to your receipt of theseverance benefits provided hereunder. 11.At-Will, Non-Competition and Confidentiality Agreement Obligations. You hereby acknowledge andreaffirm your continuing obligations under your At-Will, Non-Competition and Confidentiality Agreement notto use or disclose any confidential or proprietary information of the Company and comply with your post-employment restrictions. 12.Non-Disparagement. Both you and the Company (through its directors and officers) agree not to disparage theother party, and the other party’s officers, directors, employees and shareholders, in any manner likely to beharmful to them or their business, business reputation or personal reputation; provided that either you or theCompany may respond accurately and fully to any question, inquiry or request for information when requiredby legal process, notice, court order or law (including in any criminal, civil, or regulatory proceeding orinvestigation), or as necessary in any action for enforcement or claimed breach of this Agreement or any otherlegal dispute with the Company. It is understood that the Company’s obligations under this Section are limitedto its directors and executive officers. Nothing in this Agreement is intended to prohibit or restrain you in anymanner from reporting possible violations of federal law or regulation to any governmental agency or entity ormaking other disclosures that are protected under the whistleblower provisions of federal law or regulation. 13.Cooperation. During the time that you are receiving payments under this Agreement, you agree to cooperatefully with the Company in all matters relating to the transition of your work and responsibilities on behalf ofthe Company, including, but not limited to, any present, prior or subsequent relationships and the orderlytransfer of any such work and institutional knowledge to such other persons as may be designated by theCompany, by making yourself reasonably available during regular business hours. You further agree, duringand after your Separation from Service, to cooperate fully with the Company in connection with its actual orcontemplated defense, prosecution, or investigation of any claims or demands by or against third parties, orother matters arising from events, acts, or failures to act that occurred during the period of your employment bythe Company. Such cooperation includes, without limitation, making yourself available to the Company uponreasonable notice, without subpoena, to provide complete, truthful and accurate information in witness interviews, depositions, and trial testimony. The Company will reimburseyou for reasonable out-of-pocket expenses you incur in connection with any such cooperation after yourSeparation from Service (excluding forgone wages, salary, or other compensation), and will make reasonableefforts to accommodate your scheduling needs. In addition, you agree to execute all documents (if any)necessary to carry out the terms of this Agreement. 14.No Admissions. Nothing contained in this Agreement shall be construed as an admission by you or theCompany of any liability, obligation, wrongdoing or violation of law. 15.General Release of Claims. In exchange for the Transition Period employment and other considerationprovided to you by this Agreement that you are not otherwise entitled to receive, you hereby generally andcompletely release the Company and its current and former directors, officers, employees, stockholders,partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, andassigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are inany way related to events, acts, conduct, or omissions occurring prior to your signing this Agreement. Thisgeneral release includes, but is not limited to: (a) all claims arising out of or in any way related to youremployment with the Company, or the decision to terminate that employment; (b) all claims related to yourcompensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expensereimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in theCompany; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant ofgood faith and fair dealing; (e) all tort claims, including claims for fraud, defamation, emotional distress, anddischarge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims fordiscrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil RightsAct of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Family and MedicalLeave Act (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”),the California Labor Code (as amended), and the California Fair Employment and Housing Act (as amended). 16.Exceptions. You are not releasing any claim that cannot be waived under applicable state or federal law. Youare not releasing any claims for breach of this Agreement and any claims arising after the date you sign thisAgreement. You are not releasing any rights that you have to be indemnified (including any right toreimbursement of expenses) arising under applicable law, the certificate of incorporation or by-laws (or similarconstituent documents of the Company), any indemnification agreement between you and the Company, orany directors’ and officers’ liability insurance policy of the Company. Any such rights you have to beindemnified will remain in full force and effect pursuant to applicable law, the certificate of incorporation orby-laws (or similar constituent documents of the Company), any indemnification agreement between you andthe Company, or any directors’ and officers’ liability insurance policy of the Company. Nothing in thisAgreement shall prevent you from filing, cooperating with, or participating in any proceeding before theEqual Employment Opportunity Commission, the Department of Labor, or the California Department ofFair Employment and Housing, except that you acknowledge and agree that you shall not recover anymonetary benefits in connection with any such claim, charge or proceeding with regard to any claimreleased herein. 17. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and releasing any rightsyou may have under the ADEA (“ADEA Waiver”). You also acknowledge that the consideration given for theADEA Waiver is in addition to anything of value to which you were already entitled. You further acknowledgethat you have been advised by this writing, as required by the ADEA, that: (a) your ADEA Waiver does notapply to any rights or claims that arise after the date you sign this Agreement; (b) you should consult with anattorney prior to signing this Agreement; (c) you have 21 days to consider this Agreement (although you maychoose to voluntarily sign it sooner); (d) you have seven days following the date you sign this Agreement torevoke it, with such revocation to be effective only if you deliver written notice of revocation to the Companywithin the seven-day period; and (e) this Agreement will not be effective until the date upon which therevocation period has expired unexercised, which will be the eighth day after you sign this Agreement(“Effective Date”). 18.Waiver of Unknown Claims. In giving the releases set forth in this Agreement, which include claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 ofthe California Civil Code which reads as follows: “A general release does not extend to claims which thecreditor does not know or suspect to exist in his or her favor at the time of executing the release, which ifknown by him or her must have materially affected his or her settlement with the debtor.” You herebyexpressly waive and relinquish all rights and benefits under that section and any law or legal principle ofsimilar effect in any jurisdiction with respect to your release of claims herein, including but not limited to therelease of unknown and unsuspected claims. 19.Termination of Payments. In the event that you fail to comply with any of your obligations under thisAgreement, in addition to any other legal or equitable remedies it may have for such breach the Company shallhave the right to terminate any remaining payments and recover any payments previously made to you underthis Agreement. The termination of such payments in the event of such breach by you will not affect yourcontinuing obligations under this Agreement. 20.Representations. You hereby represent that, as of the date you sign this Agreement, you have been paid allcompensation owed and for all hours worked, have received all the leave and leave benefits and protections forwhich you are eligible, pursuant to the Family and Medical Leave Act or otherwise, and have not suffered anyon-the-job injury for which you have not already filed a claim. 21.General. This Agreement constitutes the complete, final and exclusive embodiment of the entire agreementbetween you and the Company with regard to this subject matter. It is entered into without reliance on anypromise or representation, written or oral, other than those expressly contained herein, and it supersedes anyother such promises, warranties or representations (including without limitation the Offer Letter, except asexpressly set forth herein). This Agreement may not be modified or amended except in a writing signed by bothyou and a duly authorized officer of the Company. This Agreement will bind the heirs, personalrepresentatives, successors and assigns of both you and the Company, and inure to the benefit of both you andthe Company, their heirs, successors and assigns. If any provision of this Agreement is determined to be invalidor unenforceable, in whole or in part, this determination will not affect any other provision of this Agreementand the provision in question will be modified by the court so as to be rendered enforceable to the fullestextent permitted by law, consistent with the intent of the parties. This Agreement will be deemed to have beenentered into and will be construed and enforced in accordance with the laws of the State of California asapplied to contracts made and to be performed entirely within California, without regard to conflicts of lawsprinciples. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Anywaiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall not be deemed to be awaiver of any successive breach or rights hereunder. This Agreement may be executed in counterparts whichshall be deemed to be part of one original, and facsimile and electronic signatures shall be equivalent tooriginal signatures. If this Agreement is acceptable to you, please sign and date below and return the original to me within 7 days. TheCompany’s offer contained herein will automatically expire if we do not receive the fully signed Agreement within thistimeframe. I wish you good luck in your future endeavors. Sincerely, TALEND, INC. By: Mike Tuchen Chief Executive Officer Exhibit A – Separation Date Release AGREED: Thomas Tuchscherer Date: EXHIBIT ASEPARATION DATE RELEASE(To be signed on or within 21 days after the Separation Date.) I understand that my position with Talend, Inc. (the “Company”) terminated effective (the “SeparationDate”). The Company has agreed that if I choose to sign this Separation Date Release Agreement (“Release”), theCompany will provide the benefits described in the Transition and Release Agreement (the “Agreement”) between meand the Company dated [date]. Capitalized terms herein, but not otherwise defined shall have the meaning ascribed tosuch terms in the Agreement. General Release. In exchange for the consideration provided to me under the Agreement that I am not otherwiseentitled to receive, I hereby generally and completely release the Company and its current and former directors, officers,employees, shareholders, partners, agents, representatives, attorneys, predecessors, successors, parent and subsidiaryentities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown,that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing thisRelease. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to myemployment with the Company, or the termination of that employment; (2) all claims related to my compensation orbenefits from the Company, including salary, bonuses, commissions, vacation pay, paid time off, expensereimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company;(3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fairdealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation ofpublic policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment,retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federalAmericans with Disabilities Act of 1990, the federal Family and Medical Leave Act (as amended), the federal AgeDiscrimination in Employment Act of 1967 (as amended) (“ADEA”), the Massachusetts Wage Act, the MassachusettsFair Employment Practice Act (as amended), the California Labor Code (as amended), and the California FairEmployment and Housing Act (as amended). Exceptions. I understand that I am not releasing any claim that cannot be waived under applicable state or federal law. Iam not releasing any claims for breach of the Agreement and any claims arising after the date I signed the Agreement. Iam not releasing any rights that I have to be indemnified (including any right to reimbursement of expenses) arisingunder applicable law, the certificate of incorporation or by-laws (or similar constituent documents of the Company), anyindemnification agreement between me and the Company, or any directors’ and officers’ liability insurance policy of theCompany. Any such rights I have to be indemnified will remain in full force and effect pursuant to applicable law, thecertificate of incorporation or by-laws (or similar constituent documents of the Company), any indemnificationagreement between me and the Company, or any directors’ and officers’ liability insurance policy of theCompany. Nothing in this Release shall prevent me from filing, cooperating with, or participating in any proceedingbefore the Equal Employment Opportunity Commission, the Department of Labor, the Massachusetts CommissionAgainst Discrimination, or the California Department of Fair Employment and Housing, except that I acknowledgeand agree that I shall not recover any monetary benefits in connection with any such claim, charge or proceedingwith regard to any claim released herein. ADEA Waiver. I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have underthe ADEA (“ADEA Waiver”). I also acknowledge that the consideration given for the ADEA Waiver is in addition toanything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, asrequired by the ADEA, that: (a) my ADEA Waiver does not apply to any rights or claims that arise after the date I signthis Release; (b) I should consult with an attorney prior to signing this Release; (c) I have twenty-one (21) days toconsider this Release (although I may choose to voluntarily sign it sooner); (d) I have seven (7) days following the date Isign this Release to revoke the ADEA Waiver; and (e) the ADEA Waiver will not be effective until the date upon whichthe revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Separation DateRelease Effective Date”). Waiver of Unknown Claims. In giving the releases set forth in this Agreement, which include claims which may beunknown to you at present, I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect toexist in his or her favor at the time of executing the release, which if known by him or her must have materiallyaffected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits underthat section and any law or legal principle of similar effect in any jurisdiction with respect to my release of claimsherein, including but not limited to the release of unknown and unsuspected claims. Representations. I hereby represent that, except for any amounts due under the Agreement, I have been paid allcompensation owed and for all hours worked, have received all the leave and leave benefits and protections for which Iam eligible, pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and have notsuffered any on-the-job injury for which I have not already filed a claim.I UNDERSTAND THAT THIS RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWNCLAIMS, EVEN THOSE UNKNOWN CLAIMS THAT, IF KNOWN BY ME, WOULD AFFECT MY DECISION TOACCEPT THIS AGREEMENT. AGREED: Thomas Tuchscherer Date Exhibit 21.1Subsidiaries of Talend SA Name of Subsidiary State or Other Jurisdiction of Incorporation Talend Australia Pty Ltd. AustraliaTalend Beijing Technology Co. Ltd. ChinaTalend (Canada) Limited CanadaTalend Germany GmbH GermanyTalend GmbH SwitzerlandTalend, Inc. United StatesTalend Italy S.r.l. ItalyTalend KK JapanTalend Limited IrelandTalend Limited United KingdomTalend Netherlands BV NetherlandsTalend Singapore Pte. Ltd. SingaporeTalend Sweden AB SwedenTalend USA, Inc. United States of AmericaTalend Spain, SL SpainTalend Data Integration Services Private Limited IndiaRestlet SAS FranceRestlet, Inc. United States of AmericaStitch, Inc. United States of America Exhibit 23.1 Consent of Independent Registered Public Accounting FirmThe Board of DirectorsTalend S.A.: We consent to the incorporation by reference in the registration statements on Form S-8 (Nos. 333-227200, 333-222359, 333-219761 and 333-212743) of Talend S.A. of our reports dated February 28, 2019, with respect to the consolidated statements offinancial position of Talend S.A. as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive loss, changes in equity (deficit), and cash flows for each of the years in the three-year period endedDecember 31, 2018, and the related notes and financial statement schedule presented in Item 15 (collectively, the consolidatedfinancial statements), and the effectiveness of internal control over financial reporting as of December 31, 2018, which reportsappear in the December 31, 2018 annual report on Form 10‑K of Talend S.A.Our report dated February 28, 2019, on the consolidated financial statements, refers to the change in Talend S.A.’s method ofaccounting for revenue recognition in 2018, due to the adoption of ASC Topic 606, Revenue from Contracts with Customers,as amended.Our report dated February 28, 2019, on the effectiveness of internal control over financial reporting as of December 31, 2018,contains an explanatory paragraph that states that Talend S.A. acquired Stitch Inc. in November 2018, and that managementexcluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31,2018, Stitch Inc.’s internal control over financial reporting associated with total assets of $2.3 million (excludinggoodwill and intangibles which are included within the scope of the assessment) and total revenues of $0.6 million included inthe consolidated financial statements of Talend S.A.as of and for the year ended December 31, 2018. Our audit of internalcontrol over financial reporting of Talend S.A. also excluded an evaluation of the internal control over financial reporting ofStitch Inc. Paris La Défense, FranceFebruary 28, 2019KPMG S.A. Jacques PierrePartner By: /s/ Michael TuchenMichael TuchenChief Executive Officer(Principal Executive Officer)Exhibit 31.1CERTIFICATION OF CHIEF EXECUTIVE OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Michael Tuchen, certify that: 1.I have reviewed this Annual Report on Form 10-K of Talend S.A.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statementswere made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the periodin which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant’s internal control over financial reporting. Date: February 28, 2019 By: /s/ Adam MeisterAdam MeisterChief Financial Officer(Principal Financial and AccountingOfficer)Exhibit 31.2CERTIFICATION OF CHIEF FINANCIAL OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Adam Meister, certify that: 1.I have reviewed this Annual Report on Form 10-K of Talend S.A.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statementswere made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the periodin which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant’s internal control over financial reporting. Date: February 28, 2019 Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002* Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), Michael Tuchen, ChiefExecutive Officer (Principal Executive Officer) of Talend S.A. (the “Company”), and Adam Meister, Chief Financial Officer(Principal Financial and Accounting Officer) of the Company, each hereby certifies that, to the best of his knowledge: 1.The Company’s Annual Report on Form 10-K for the year ended December 31, 2018, to which this Certification isattached as Exhibit 32.1 (the “Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of theExchange Act, and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company. Date: February 28, 2019 /s/ Michael Tuchen /s/ Adam MeisterMichael Tuchen Adam Meister Chief Executive Officer Chief Financial Officer (Principal Executive Officer) (Principal Financial and Accounting Officer) *This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and ExchangeCommission and is not to be incorporated by reference into any filing of Talend S.A. under the Securities Act of 1933, as amended,or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of anygeneral incorporation language contained in such filing.
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