Talend SA (NASDAQ:TLND) expects revenue for 4Q2018 to fall below initial guidance. Notably, the firm had expected the net between $56.6 million and $57.4 million. However, revised guidance indicates a lower range of between $55.4 million and $55.8 million. Interestingly, the firm cites a decline in demand for professional services.
Demand for professional cloud services declining
In particular, Talend expects revenue from the professional services to be in the range of $7.1 million to $7.2 million. In contrast, regular subscriptions for cloud services were positive, and the firm expects revenue from the sector to grow. Notably, Talend expects year-over-year revenue growth to increase upwards by 38%. This is quite an improvement given that Q4 2017 registered a 37% increase.
Despite the downward revision in the total revenue for Q4 2018, the company noted improvements in the cloud momentum. Notably, the proprietary Talend Cloud contributed to the tune of between 24% and 25% of ARR in the quarter. Annual recurring revenue (ARR) represents the number of the subscribers netted in the period and then annualized.
According to Talend, the estimates released for the fourth quarter include revenue from Stitch, a recent acquisition. The definitive agreement to acquire Stitch was informed by the need for Talend to “accelerate its cloud momentum.”
Talend is a strong performer in Strategic iPaaS
Notably, the firm will leverage Stitch’s flexible service that is easy to use. Further, Stitch provides one of the most popular means of moving data between cloud data warehouses and other sources. Therefore, Talend expects a solid strategy is going forward as facilitated by a sales motion that is frictionless.
Interestingly, such strategic moves have put Talend on notice where the industry is recognizing its solid performance. Notably, Forrester Research recognized the firm as a “strong performer” in Hybrid Integration Platforms and Strategic iPaaS (integration platform as a service).
“Forrester recognized that Talend’s integration platform as a service covers a wide variety of integration scenarios in both the cloud and on-premises in a single iPaaS environment. Forrester also pointed out that Talend’s “pricing model is a predictable by-the-user subscription model, while most iPaaS competitors use a consumption model,” Forrester Research’s report reads in part.