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Cloud Stocks: Alteryx Bounces Back Despite Low Outlook

Posted on Tuesday, May 26th 2020

Data science and analytics platform provider Alteryx (NYSE: AYX) early this month reported a strong quarter with revenue growth of 43%, but it swung to a loss and missed analyst earnings estimates. The company also experienced a sudden and significant change in customer behavior in March due to the COVID-19 situation. As a result, its quarterly outlook was disappointing, and its stock slid before recovering to pre-earnings levels.

Alteryx’s Financials

For the first quarter, Alteryx’s revenue grew 43% to $108.8 million. GAAP gross profit was $95.8 million, or a GAAP gross margin of 88%, compared to GAAP gross profit of $68.0 million, or a GAAP gross margin of 89% a year ago. GAAP net loss was $(15.5) million, compared to GAAP net income of $5.9 million for the first quarter of 2019. Non-GAAP net loss was $(6.5) million or $(0.10) per diluted share compared to non GAAP net income of $3 million or $0.04 per share. Analysts expected loss of $(0.08) per share on revenue of $105.8 million.

Its operating expenses were $102.6 million compared to $67.3 million a year ago. The increase in operating expenses is mainly due to increase in its overall head count level. Q1 operating expenses also included $6 million of one-time and seasonal expenses primarily related to its annual Global Kickoff meeting held in February and costs associated with rescheduling its US and EMEA user conferences.

For the second quarter, revenue is expected to be in the range of $91 million to $95 million or a growth range of 10%-15%. Non-GAAP net loss per share is expected to be in the range of $(0.12) to $(0.18). Analysts expect loss of $0.09 per share on revenue of $105.5 million.

Due to the macroeconomic uncertainty related to the coronavirus, Alteryx withdrew its previous 2020 guidance of revenues of $555-$565 million with an adjusted net income of $0.80-$0.90 per share.

Alteryx’s Customer Growth

Since it went public in 2017, Alteryx’s customer count has almost tripled from 2,300 to 6,443 customers. It added 356 net new customers in Q1, up 30% q-o-q, and achieved a dollar-based net expansion rate of 128%. Prominent customers include Royal Bank of Canada, tech communication specialist Vodafone, pharmaceutical giant Pfizer, Royal Caribbean Cruise Lines, Copa Airlines, Choice Hotels, and Chevron USA.  

About 37% of the companies in the Global 2000 are on its client list. About one-third of Alteryx’s ARR is from its Global 2000 customers. About 25% of its ARR is from customers in the heavily impacted travel and hospitality, manufacturing, and retail segments. About 6% of its ARR is from small to medium-size businesses within these highly impacted verticals.

In these uncertain times, leveraging a data and analytics culture can help make better decisions to survive. A hospital leveraged Alteryx to quickly adapt their supply chain, to source additional personal protective equipment for their frontline workers and first responders, and build a predictive model to understand the need for ICU beds.

In another example, an existing public sector client purchased additional Alteryx licenses to analyze and measure the effectiveness of the multi-billion-dollar aid program announced in March.

Alteryx’s New Offerings

To provide additional support for its partners and customers, Alteryx launched a Virtual Solution Center, giving customers the ability to connect directly with a solutions expert. A few hundred customers have already leveraged this offering.

To create solutions to improve people’s lives, it is launching the Advancing Data and Analytics Potential Together (ADAPT) program. ADAPT is a free resource to help upskill unemployed or furloughed people. Under this program, the company provides free software licenses, access to the Alteryx Community Learning Path, software certification, and even nanodegrees in business analytics in collaboration with Udacity.

Early this month, Alteryx unveiled its enhanced analytic process automation (APA) platform, which unifies analytics, data science and business process automation in one, end-to-end platform. By bringing data, processes and people together in a converged approach, the Alteryx APA Platform enables high-impact business outcomes and rapid upskilling of people across the organization. Alteryx plans to leverage AI capabilities of Feature Labs, which it acquired in Q4.

Acquisitions have been a critical element of Alteryx’s strategy and in a recent interview, the company said that it will continue to be important in its ongoing strategy. As of March 31, 2020, it had cash, cash equivalents, and short-term and long-term investments of $991.9 million, compared to $974.9 million as of December 31, 2019.

Alteryx has been featured for the seventh consecutive time in Gartner Magic Quadrant For Data Science And Machine-Learning Platforms. In the 2020 Magic Quadrant, it has been recognized as a leader along with SAS, TIBCO, MathWorks, Databricks, and Dataiku. It was recognized as a challenger last year.

Gartner MQ for DSML

This is an excellent company with a reasonably well-defined path to $1 billion in revenue, a milestone that few companies reach. Alteryx’s stock is currently trading at $148.6, over ten times its 2017 IPO list price of $14. It hit a 52-week high of $160.11 in February this year. It hit a 52-week low of $75.17 following the COVID-19 crash in March.

This segment is a part in the series : Cloud Stocks


. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
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. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Alarm.com Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
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. Atlassian Gears Up for Growth, Unfazed by Covid-19
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. ServiceNow Steady in Turbulent Seas
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. HubSpot Lowers Outlook Amidst Virus Concerns
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. BlackLine Looks Solid At The Face of Covid-19
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. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
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