According to a Market Reports report published earlier this year, the global data visualization market is estimated to grow 9.5% annually to $7.76 billion by 2023 from $4.51 billion in 2017. Tableau (NYSE: DATA) is a leading player in the market, but the company is leaving a lot of money on the table by not pursuing a developer ecosystem strategy more aggressively.
Tableau’s revenues grew 15% over the year to $282.5 million, missing the Street’s forecast of $286.8 million. GAAP net loss was $88.9 million, or $1.04 per diluted common share, compared to a GAAP net loss of $46.5 million, or $0.57 per diluted common share a year ago. On an adjusted basis, net income was $2 million, or $0.02 per share, compared to a $5.8 million, or $0.07 per share a year ago. The market had forecast a loss of $0.01 per share for the quarter.
By segment, license revenues grew 8% over the year to $117.55 million and maintenance and services revenues grew 20% to $164.91 million for the quarter.
During the quarter, Tableau’s total annual recurring revenue grew 41% to $902 million, compared with $641.9 million a year ago. Subscription annual recurring revenue increased 115% to $510.1 million.
For the current quarter, Tableau forecast revenues of $313-$328 million with an EPS of $0.22-$0.33. The market was looking for revenues of $324.9 million and an EPS of $0.32 for the quarter. Tableau forecast revenues of $1.34-$1.40 billion for the year with an EPS of $1.58-$1.85. The Street had also forecast revenues of $1.36 billion for the year with an EPS of $1.72.
Tableau’s Product Upgrades
Tableau continues to drive growth to its platform through several product upgrades and innovations. The two big features released recently were the release of its natural language capabilities Ask Data and its new data management add-on Tableau Prep Conductor. Ask Data leverages natural language processing capabilities to allow users to ask data questions in plain language and instantly get a visual response in Tableau. This new capability will simplify the ability to interpret data for users irrespective of their skill set. The service will allow for follow-on questions as well so that the user can dig deeper into the problem and share the insights with their organization to drive increased business efficiency. Ask Data is another way in which Tableau is making data analytics more intuitive, visual, and simple.
Tableau realizes that with the growing number of people interacting with data to take decisions, it becomes imperative to provide data that is ready for analysis. As part of this focus, it released the Tableau Prep Builder last year that helped customers combine, shape, and clean their data. It enhanced that service with the release of Tableau Prep Conductor this year. Tableau Prep Conductor will allow customers to automatically manage prep flows. It includes new data scheduling, learning, and management features to ensure that data is always clean and ready for analysis. Prep Conductor is fully integrated with the Tableau platform to ensure secure access to the data based on pre-defined permissions.
Tableau plans to continue to build on its data management add-on capabilities. Later this year, it will be including additional data cataloging capabilities that will offer its customers greater visibility into their data, provide enhanced governance, and facilitate discovery of data for analysis.
Tableau runs a developer program that simplifies the ability to customize, integrate, and extend the Tableau platform to fit the needs of an organization. Through its tools and APIs, developers can integrate, customize, automate, and extend Tableau to fit their specific development needs. The latest feature for the developers is an Extension Gallery that is currently in beta stage and allows developers to create dashboard extensions so end users can interact directly with data in third-party applications, without leaving Tableau. Developers can also create connectors to data sources that are not currently supported by Tableau, including websites and custom applications. They can programmatically eliminate tedious content management tasks, provide ability to use statistical models, integrate and visualize the data from R, Python, and Matlab models in Tableau, and make their Tableau content available anywhere.
But Tableau does not yet offer an app marketplace where users can leverage other third party developed apps for their purposes. As I said before SaaS companies need to follow a PaaS strategy to achieve that next level of growth. A PaaS strategy will open Tableau’s platform to developers and entrepreneurs who can help build out applications that complement Tableau’s use-cases. By opening the platform, adjacent products will be built on Tableau’s ecosystems without taxing its P&L. It would expand market reach and help up-sell to existing customers. Additionally, these developer communities soon translate to an active pool of potential acquisition targets that are a lot easier to integrate.
Its stock is trading at $125.81 with a market capitalization of $10.5 billion. It had climbed to a 52-week high of $136.92 earlier this year. It has recovered from the 52-week low of $90.29 that it was trading at nearly a year ago.