Talend SA today reported earnings results in line with analyst estimates and said its cloud business is growing at a rate that exceeds even its most optimistic forecasts.

That prompted the data integration firm to raise its third-quarter and full-year revenue guidance modestly. But the revised full-year profitability figures came in slightly under analyst estimates, sparking nearly a 7 percent selloff in its shares in after-hours trading.

Talend’s fiscal second-quarter loss of 12 cents per share matched analysts’ forecasts. Revenues were slightly better than analysts expected, rising 39 percent, to $49.8 million.

Talend also said it sees third-quarter revenues coming in at between $51.6 million and $52.6 million, which is in line with Wall Street forecasts. The full-year earnings guidance of a loss of 52 to 45 cents was slightly below analyst expectations.

In an interview following Talend’s earnings call, Chief Executive Mike Tuchen brushed off the drop in the share price, noting that it was based on “superlow volume.” Talend shares trade at a modest average rate of about 140,000 per day.

He chalked up the reduced estimate for earnings before interest, taxes, depreciation and amortization to the company’s plans to spend more on sales and marketing, particularly to enterprises and businesses outside the U.S. The company grew its employee headcount nearly 30 percent to 989 people over the past year.

The major reason is to take advantage of growth in sales of cloud subscriptions, which have more than doubled each of the past eight quarters. “The cloud is just exploding,” Tuchen said. “It’s the bullet train right now.” Combined cloud and big data subscription revenues grew 69 percent year-over-year, exceeding even internal forecasts.

“We set what we thought was an aggressive growth target in Q1 and beat it, then beat our stretch goal in Q2,” Tuchen said. At the same time, “we see on-prem as less of a contributor” to growth.

Image: Gartner/Talend

That’s a trend that Talend believes plays to its strong point in competition with integration stalwart Informatica Corp., which he said is the only other cloud-based integration vendor to appear in the prized upper-right corner of Gartner Inc.’s most recent data integration Magic Quadrant (pictured). “For complex cloud scenarios, there really are only two players: us and Informatica,” he said. “And for self-service, we’re the default.”

Over the past two years, discussions with customers have shifted from whether to move workloads to the cloud to how much capacity to move, the CEO said. “Almost no customers saying their going to remain solely on-prem,” he said. “That’s a sea change.”

It’s one that Talend believes it’s uniquely well-suited to serve because of a product architecture that doesn’t require the use of a runtime module. The company’s licensing model has also always been subscription-based, meaning that it’s encountering none of the sales friction commonly involved in moving from large onetime license fees to subscriptions. “For sales reps, it’s a really easy transition,” Tuchen said.

And the rapid growth of interest serverless computing may be another windfall, since Talend’s architecture also lends itself well to event-driven execution, he said. “Rather than customers having to rent out a processing engine for a year in advance, we just spin up the integration engine and run it,” he said. “Informatica’s bloated runtime isn’t going serverless any time soon.”

Photo: Talend/Twitter