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Talend (TLND +0.00%) announced first-quarter 2019 results late Wednesday that were technically mixed relative to guidance provided by the cloud integration solutions leader three months ago. But that doesn't mean the company is disappointed with its performance.
To the contrary, Talend's relative strength is being masked in its headline numbers by an acceleration in recurring revenue. So, let's take a closer look at how Talend kicked off the new year and what shareholders should be watching in the coming quarters.
IMAGE SOURCE: GETTY IMAGES.
Metric |
Q1 2019 |
Q1 2018 |
Year-Over-Year Growth |
---|---|---|---|
Revenue |
$57.8 million |
$46.8 million |
23.5% |
GAAP net income (loss) |
($17.6 million) |
($10.1 million) |
N/A |
GAAP net income (loss) per diluted share |
($0.58) |
($0.34) |
N/A |
GAAP = generally accepted accounting principles. Data source: Talend.
Talend CEO Miche Tuchen noted this was Talend's highest-ever first-quarter revenue performance, adding:
Our results were driven by our continued cloud momentum with Talend Cloud once again growing at over 100%. We strengthened our cloud offering with the recent introduction of Pipeline Designer, which will add to our frictionless channel and ability to land and expand in accounts. During the quarter, we were also recognized by Gartner as a leader in the Magic Quadrant for Data Quality Tools for the second consecutive time, which we view as strong validation of our ability to deliver trusted data.
For the second quarter, Talend expects revenue ranging from $58.8 million to $59.8 million, which should translate to an adjusted net loss per share of $0.35 to $0.31.
Thus -- and despite its top-line outperformance in Q1 -- Talend reiterated its previous guidance for full-year 2019 revenue ranging from $248 million to $250 million, while also lowering its earnings outlook to call for an adjusted net loss per share of $1.01 to $0.95 (down from its old target range for a per-share loss of $0.94 to $0.88).
During the subsequent conference call, CFO Adam Meister explained that a faster-than-expected shift to recurring sales through Talend Cloud will "dampen" the company's reported revenue growth. And Talend is increasing its expected operating expense target for this year by $2 million relative to its previous guidance, Meister added, "partly due to our faster progress toward our goal of exiting 2019 with half of new ARR from the cloud, as well as investments we believe are important to support this shift."
After starting today's trading session in the red, that explains why Talend shares are now trading up around 5% on the news. I think long-term investors should be more than happy with Talend's position today.