AVX observations and comparisons

Hi everyone - (I looked for an existing AYX post and didn’t find one after looking for a few minutes…)

Looking for some feedback on Alteryx. Alteryx’s Q1’20 quarterly revenue dropped about 31% to $109M, from a Q4’19 revenue number of $157M. I read the transcript of the Q1’20 earnings call and learned the QoQ revenue decline was related to some lengthened sales cycles as customers paused spending in response to COVID-19 and the macroeconomic slowdown. AVX also experienced a moderate increase in their churn rate, most notably in Europe. Does this trend continue if the COVID dynamic persists, I wonder. The metrics I look at, for SaaS companies, are:

  1. Revenue growth, QoQ and YoY: -31% and 43% respectively for AYX. The -31% QoQ concerned me.
  2. DBNER: 128% for AYX, which is very healthy.
  3. Operating margin. Negative is okay, if it is improving year/year. (SaaS companies seem to get a nice multiplier once this goes positive. It’s like the market discounts for a negative value and then gives an accelerator once it goes positive.) For AYX in Q1’20, this was -$3.2M (non GAAP), which was down from +$1.4M (non GAAP) the year before, so not great but they spent more money in trying to expand and land customers.
  4. Gross margin. Even if operating margins are positive, the market seems to discount valuation for companies with a lower gross margins. Confusingly, TWLO gets penalized for this (non-GAAP GM% = 57%, even though revenue growth is high and operating margins have turned positive. FSLY, which has been rewarded, has a non GAAP Gross Margin % around 58%)… Anyway, AYX had an impressive ~91% (non GAAP) GM%, by my calculations.
  5. Customer growth metrics. Investors like to see growth in customer counts, particularly those with higher spend. This is where we see metrics like xx customers with more than $100k ACV, up yy% year/year. I couldn’t find the actual ARR but their customer numbers are growing.

AYX’s Gross Margin % is very strong, as is the DBNER, and the Total Available Market is ~$49 billion. (that’s the addressable annual market opportunity for Alteryx: people/companies needing help analyzing data. But the market is very unforgiving. To me, AYX isn’t as attractive as ZM, LVGO, CRWD, COUP, DDOG, FSLY, but that group of 6 companies is operating at a very high level, collectively, right now.


Hi everyone - (I looked for an existing AYX post and didn’t find one after looking for a few minutes…)

Google: site:fool.com “Saul’s Investing Discussions” Alteryx


Denny Schlesinger