The current pandemic conditions are driving accelerated digital transformation across organizations. IDC expects more than $1 trillion to be invested in data-related transformation initiatives. Data science and analytics platform provider Alteryx’s (NYSE: AYX) easy-to-use platform is helping accelerate digital transformation journeys for the organizations.
For the third quarter, Alteryx’s revenue grew 25% to $129.7 million, beating analyst estimates of $119.12 million. GAAP net income of $4.4 million, was also significantly better than GAAP net loss of $(6.2) million a year ago. Adjusted net income of $27.1 million or $0.39 per diluted share grew from $16.4 million or $0.24 per diluted share a year ago. It was also significantly better than the market estimate of $0.14 per share.
Alteryx ended the quarter with 6,955 customers, up 24%, with 241 net new customers. It achieved a dollar-based net expansion rate of 124%. ARR grew 38% to over $449.5 million.
For the fourth quarter, Alteryx expects revenues of $146-$150 million with an adjusted net income of $0.27-$0.31 per share. For the full year 2020, it expects revenue of $481-$485 million with a net income of $0.60-$0.65 per share. The market was looking for $148.4 million for the quarter with a net income of $0.30 per share and revenues of $483.2 million for the year with a net income of $0.62 per share.
Alteryx’s Growing Partnership with Adobe
During the quarter, Alteryx announced a partnership with Adobe to provide marketers access to new analytics and data science solutions through Adobe Exchange. Alteryx’s Analytic Process Automation (APA) integrates analytics, data science, and process automation in a self-service platform that makes it easier for marketers to answer any question from Adobe Experience Cloud applications and Adobe Experience Platform.
Alteryx and Adobe already boast of hundreds of joint customers. As part of the recent partnership, it has launched a new Marketing Analytics Starter Kit for Adobe, that offers a ready-to-use, drag-and-drop solution to accelerate reporting, analytics, and data science insights to help increase marketing ROI. Alteryx’s solution will help automate actions and provide deep integration to operational applications, such as experience management, customer relationship management (CRM), human capital management (HCM), and robotic process automation (RPA) systems to drive faster, data-driven business outcomes.
Alteryx APA includes over 260 drag-and-drop automation building blocks that are useful in analytics and data science outcomes. When combined with Adobe Experience Platform, the tool becomes a very powerful marketing analytics engine that can leverage customer insights to derive better results across the organization.
Alteryx’s PaaS Strategy: Platform or API
Alteryx’s APA platform is accessed by just under 7,000 organizations globally. It helps democratize data across an organization, automate business processes, and upskill people by providing deep analytical insights using diverse data sources.
Alteryx’s PaaS Strategy: Developer Community
Alteryx has been driving the adoption of its platform through partnerships. Earlier this year, it entered into a five-year partnership with PwC U.S. that allowed PwC to leverage Alteryx’s data science, analytics, and process automation platform as part of its consulting and digital solutions. The recent tie-up with Adobe is another such example.
Alteryx does not have an ISV ecosystem on its PaaS yet. I strongly believe that to be the next step for its PaaS strategy.
Alteryx’s PaaS Strategy: Marketplace and Metrics
Alteryx doesn’t have a marketplace of products from developers yet. However, in an earnings call earlier this year, it had talked about a potential marketplace for third parties to monetize assets to the growing audience of Alteryx users.
In the recent earnings call, Alteryx’s management highlighted that they believe the total addressable market for their solution to be almost $49 billion. Given its current revenue outlook of less than $500 million for the year, that translates to a penetration of just under 1%. That clearly is a big market opportunity that Alteryx needs to tap into. Expanding its PaaS strategy can be a faster way to address this gap.
It is currently trading at $113.44 with a market cap of $7.55 billion. It hit a 52-week high of $185.75 in July 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