When I first saw Talend’s report, I was very unhappy with the 39% growth, especially given the amount of money they’re still losing. But after listening to the call, I am actually considering buying more shares.
First, I was confused. Dollar based expansion rate was 124%. Enterprise customers were up to 427 (up 47%!!!) How did revenue only grow 39%???
I think it’s likely that this is another masked-growth situation. Talend has a legacy on-prem business (including Hadoop) that is slowing down, especially in North America. But Talend also has the cloud, which is growing at 100%+.
From the prepared remarks:
Cloud and big data solutions delivered a combined subsection revenue growth of 69% year-over-year.
Our big data and cloud products now together represent our largest product category and make up approximately 50% of our subscription revenue in the second quarter.
Later in answer to a question, Mike said:
…overall growth rate was 39% and we told you that half of business is big data and cloud, and that’s growing 69%, you can do some math and come to the conclusion that roughly about 34.5% of the 39% growth came from big data and cloud. And so the other 4.5% growth came from everything else. And that’s just math in my head, that you can do from the other numbers that we released. And so I think – but I think it also does answer your question.
That pretty much says it all. “Everything else” is a big drag right now, but in the next few quarters, big data and cloud (esp cloud with its triple digit growth rates) will become much more than 50% of all revenue, and overall growth rate will skyrocket.
Yep, I’ve convinced myself. This is the time to buy. I’m increasing my Talend position.
Bear