As we approach the ALTERYX (AYX) earnings call in one week (after U.S. market close, August 6, 2020, link here: https://investor.alteryx.com ), I am hard pressed to make a quantified assessment of AYX’s Q2’20 revenue, so much uncertainty around their revenue. They definitely are not what many call a COVID Stock as they are seeing headwinds that many of the companies we follow are not seeing. But AYX has called their quarter and have the results. I thought it would be fun to look at some data to see if there’s anything that might give us a qualified idea on their Q2 revenue.
Let’s start by reviewing their last four quarters
Q2’19 revenue: $82.0M, up 59% YoY (big beat, upper end of forecast = $77M)
Q3’19 revenue: $103.4M, up 65%, YoY. (big beat, upper end = $91M)
Q4’19 revenue: $156.5M, up 75%, YoY. (huge beat, upper end = $131M by almost 20%)
Q1’20 revenue: $108.8M, up 43% YoY. (very, very modest beat: upper end = $108M)
Q2’20 revenue (forecast): $91.0M to $95M, an increase of 10% to 15% YoY.
Several on this board have added excellent posts on AYX, substantiated by data, including Muji. Below I look at a few scenarios with some supporting data.
Reasons for rev beat
• Job listings at AYX increasing
o 21% month-over-month uptick in Fortune 500 job postings for Alteryx skills in the last 30 days, based on a proprietary JobsTracker analysis. Link: https://thefly.com/landingPageNews.php?id=3133824
o Perhaps signaling a potential move to cloud-based product (as a SaaS service, or perhaps still self-managed like Alteryx Server (Muji)
Reasons for rev meet
• Renewal of revenue to Q2’19 levels
o CFO: “Although we saw a fairly abrupt slowdown in March, we did see activity in April of 2020 fairly consistent with the level of activity we saw in April 2019. So conversations with customers became more productive, we saw new logos around the same level we had seen in April…. So there was a resumption in business activity in April, in spite of the abrupt slowdown that we experienced in March.”
Reasons for rev miss
• Heavy impact from reduced spend in pandemic, expected through Q2-Q3, esp Int’l. (Muji) Europe saw increasing infection rates generally over the entirety of Q2.
• Delayed payments
o CFO: “We’ve had [a small number of] customers with outstanding invoices who have reached out and asked for accommodations, which we’ve generally provided. So we’re working with customers specifically in what we’ve defined as impacted verticals – travel, hospitality, manufacturing, retail, etc. – we will work with them on a payment program that will meet their business needs given the impact they may have had.
• When business is slowing, revenue recognition model causes situation to look more like increased headwinds than other subscription models (AYX takes larger portion of bookings upfront)
• COVID impacting some of ALX’s verticals.
o AYX works with some of the industries most impacted including travel and leisure (casinos: https://www.youtube.com/watch?v=dV0LqDuilZI, around the 5:10 mark)
So it’s a mixed bag. While March sales slowed, revenue returned to a level resembling Q2’19 in April '20, but significant hiring in the last month may be foretelling (21% month over month is significant!). My best guess is they have a modest beat brewing, modestly beating the upper end of the estimate (e.g. ~$97M).