As usual, I’m 100% open to being shown any flaws in my thinking.
While I see no flaws in your thinking, I think things look a bit better than you do.
Basically, they said that they did observe an abrupt and significant change in customer buying behavior in March as many of our customers and prospects around the globe responded to shelter in place directive and the realities of rapidly changing macroeconomic conditions.
They also said that In April, we saw new business activity resume and was consistent with activity levels in April 2019. We view this as an indication that data and analytics remains critical even in challenging time.
We know that they typically guide low enough so that they can easily beat. Lately, they’ve beaten guidance by a lot. I believe that they have been surprised by the amount of business they did in the most recent September and December quarters.
Here are the historical guidance numbers
Guide Mar Jun Sep Dec
2017 29.3 32.1 35.8
2018 39.5 43.5 49.5 56.5
2019 70.5 75.5 89.5 129.5
2020 106.5 93.0
Here are the historical revenue numbers:
Rev Mar Jun Sep Dec Tot
2016 18.4 20.0 22.5 25.0 85.8
2017 28.5 30.3 34.2 38.6 131.6
2018 50.3 51.5 62.6 89.2 253.6
2019 76.0 82.0 103.4 156.5 417.9
2020 108.8
Here are the percentage beat numbers:
%Beat Mar Jun Sep Dec
2017 4% 7% 8%
2018 8% 8% 9% 7%
2019 8% 9% **16% 21%**
2020 2%
The number of customers is growing nicely, up 30% YoY, which is the same as the past 2 quarters (although trending down over the past few years), despite the big slowdown in March business:
#Cust Mar Jun Sep Dec
2016 1,574 1,833 2,050 2,323
2017 2,565 2,823 3,054 3,392
2018 3,673 3,940 4,315 4,696
2019 4,973 5,278 5,613 6,087
2020 6,443
Grth Mar Jun Sep Dec
2017 63% 54% 49% 46%
2018 43% 40% 41% 38%
2019 35% 34% 30% 30%
2020 30%
Also, adjusted gross margin is holding up nicely as well, staying above 90%:
AGM Mar Jun Sep Dec
2016 79% 81% 82% 83%
2017 84% 84% 86% 85%
2018 91% 91% 92% 93%
2019 90% 91% 92% 93%
2020 91%
The way I see it is that prior to the most recent quarter, business has grown much more rapidly than the company expected, even considering the sandbagging. COVID-19 & WFH started getting serious at the end of February and into March, which made March a terrible month. Despite this, April has shown to be consistent with 2019 numbers. The March quarter was still a beat over the original conservative guidance, although the last month (March) of the quarter is the month with the most business getting done. Alteryx, seeing somewhat of a return to 2019 figures in April, shouldn’t have such a shock (like in March) and should do okay through June. There will probably be some slipped March business happening this quarter providing a small plus. Maybe this is why April looks good.
The customer count is increasing nicely, margins are steady and the story management has provided on the earnings call is good and conservative. Users love the product, there is still no real competition and the TAM is huge and getting bigger. Who knows how much bigger it can get as they develop new products and go after individual verticals with specific solutions?
Alteryx’s quarterly results did not reveal any problems with its long term prospects. Once the economy normalizes, Alteryx sales growth should reaccelerate.
Following Tinker’s recent epiphany to do nothing during the crisis has been good for me with all of my holdings. The only modification I made to this policy was buying more shares on the way down.
DJ