Alteryx – some numbers for those of us who may have been rattled by the short who posted so nicely and innocently, just because of his concern for “some pretty nice folks trying to understand their companies and compound their savings”. What total b—s—!
He warned us about cheaper competitors such as KNIME which is a FREE and open-source platform, is the top right leader in the Gartner Magic Quadrant for Data Science, and can run on AWS and Azure. It has a FREE desktop version (vs. AYX’s $5,195/user/year Designer), and its Server offering has pricing options dramatically below AYX list prices.
Sounds pretty scary, doesn’t it!
He also warned us about Microsoft Advanced Data Prep, which is not what Alteryx does primarily, of course, and about Tableau Prep, which has proved to be of no consequence, and again, not what Alteryx does. Both are cheaper than Alteryx. Let’s see:
Alteryx’s revenue percentage growth looks like this:
**2016: 57 67** **2017: 61 50 55 55** **2018: 50 54**
That looks solid as a rock to me. That’s competing against those cheaper and even free opponents.
Well then, let’s look for the effect of competition on their gross margins. Their adjusted gross margin last quarter was 90%, up from 84% a year ago. 90% gross margins! It sure doesn’t look as if they’ve had to reduce prices to compete!.
How about deferred revenue? Their deferred revenue at the end of the year the last four years, in millions of dollars, has gone: 29, 44, 71, 114…. Take a good look at that!
Do their customers like what they are getting, or is Alteryx having a lot of turnover? Well their dollar based net retention rate has been over 130% for the last seven quarters. Before that it was in the 120’s, so it’s improved with age and size. Doesn’t look like too many customers are leaving to try out cheaper alternatives.
Are they getting new customers? Their number of customers, which was 3940 at the end of June, is more than quadruple the 961 customers that they had three years ago, at the end of the same quarter. Quadruple in three years!
And for a little more reassurance, the number of shares grew only 4% from a year ago, which is remarkable for one of these super fast growing companies.
Oh, and they are Operating Cash Flow positive. Actually $25.3 million positive in the last twelve months, which is not an insignificant amount for them, but 15.5% of their trailing revenue.
Boy, are they having trouble competing against those cheaper alternatives!