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Alteryx Delivers Excellent Revenue Growth

Posted on Tuesday, Mar 24th 2020

According to a recent report, the global market for Big Data and Business Analytics is expected to grow 15% annually to $512.04 billion by 2026 from $171.39 billion in 2018. Alteryx (NYSE: AYX) is a leading player in the market that recently reported stellar quarterly results.

Alteryx’s Financials

For the fourth quarter of the year, Alteryx’s revenues grew 76% to $156.5 million, ahead of the Street’s estimates of $131 million. Net income grew from $16.5 million a year ago to $30.7 million. On an adjusted basis, net income was $0.64 per share, doubling over the year and soaring past the market’s forecast of $0.35.

Alteryx ended the quarter with 6,087 customers, growing 30% over the year. It added 474 net new customers with names like Caesars Entertainment, Canadian Pacific Railway, Emerson Electric, Halliburton, Komatsu, and Nasdaq added to the portfolio. It reported a dollar-based net expansion rate of 130%, reducing from 132% reported a year ago. Bookings grew 81% over the year to $290 million in total contract value.

It ended the year with net revenues growing 65% to $417.9 million and a net income of $27.1 million. On an adjusted basis, net income grew to $0.94 per share compared with $0.60 per share reported a year ago.

For the first quarter, revenue is expected to be in the range of $105-$108 million with a non-GAAP net loss per share of $(0.07)-$(0.11). It expects to end the current year with revenues of $555-$565 million with an adjusted net income of $0.80-$0.90.

Alteryx’s Strategic Tie-up

Besides acquisitions, Alteryx is also expanding its footprint through strategic tie-ups. It recently announced a five-year partnership with PwC U.S. As part of the agreement, PwC will leverage Alteryx’s data science, analytics, and process automation platform as part of its consulting and digital solutions. PwC will be able to advise clients in establishing strategy that can be built on the Alteryx Platform via hands-on, business-focused training, process assessment, and data design. The Global Elite Partner status will ensure that PwC will be able to implement several go-to-market initiatives and reach clients worldwide through sales and marketing activities.

Alteryx’s Acquisitions

Alteryx continues to grow through acquisitions. During the reported quarter, it expanded its machine learning capabilities through the acquisition of Feature Labs. Boston-based Feature Labs was launched out of an MIT project. Its solution is used to build tools and APIs for data science and to drive engineering automation.

Alteryx plans to leverage Feature Labs’s AI capabilities to help data scientists and business analysts gain insight and understand the factors driving their businesses. The move will also help Alteryx expand its presence in the Enterprise segment. Terms of the acquisition were not disclosed. Prior to the acquisition, Feature Labs was privately held and had raised $3 million in funding of which $1.5 million was funded as a seed round by Flybridge.

Feature Labs is best known for Featuretools, the first open source library for automated feature engineering, that was launched in 2017. Today, Feature Labs offers open-source libraries for data scientists. Its libraries have been downloaded more than 350,000 times. Other products include Tempo, a cloud-hosted service that automates prediction engineering, problem definition, and workflow to help in the development of machine learning models and MLApps that is a library of prebuilt AI-based app templates.

MLApps will help Alteryx expand its PaaS strategy. As of now, Alteryx allows third party developers to build apps, workflows, and macros in the Alteryx Public Gallery that are built using Alteryx Designer. Alteryx Designer is a platform that offers an intuitive workflow for data blending and advanced analytics. Developers can use easy drag-and-drop and code-free interface to create apps that can help understand the data in an organization. Developers can then share these apps with other users through email, social media, or its marketplace known as the Gallery. It does not, however, leverage the Gallery to promote monetization of apps for the developers.

Its stock is trading at $98.23 with a market capitalization of $6.3 billion. Alteryx is not immune to the recent stock market crash. It hit a 52-week high of $160.11 last month and a 52-week low of $75.17 nearly a year ago. The company has done well overall. After being bootstrapped initially, it had raised $163 million from investors including Insight Venture Partners, Iconiq Capital, Meritech Capital Partners, Sapphire Ventures, and Toba Capital. In 2017, Alteryx had listed at a valuation of $840 million at a list price of $14.61.

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