it appears Alteryx greatly benefited from being able to recognize revenue up front for longer duration contracts and in this case, they were able to recognized 35-40% of the amount upfront.
Could this revenue recognition principle blow up in their faces in later years since they are recognizing the majority of the revenue up front due to the way they do their contracts?
The quarter to worry about that was the quarter they reported yesterday. They first reported using ASC 606 in Q4 2018. I shared your concern, thinking that now that we’re lapping this year, they might not be able to grow at 60% or 65%. Well, they grew at 75%! This quarter astounded me…no exaggeration. I was literally talking to myself out loud as I marveled at their results yesterday.
As some have pointed out, they benefited from recognizing this revenue up front, so that was kind of artificial growth a year ago. But now they grew 75% on top of that! Alteryx sales are gaining momentum.
AYX is a force of nature. It’s hard to even remember that it was available below $90 a couple months ago. If I didn’t remember it, I’m not sure I would believe it.
Bear