Hi all, AYX just reported a massive quarter. Long story short. Their growth is accelerating, they are exuberant about their opportunities. Still see no competition or pricing pressure. The CC notes were what I jotted down so there may be minor error or interpretations.
Business Highlights.
Huge slew of new customers all over the world. Added 375, total customers at 4315, 40% increase yoy.
Large numbers of customers are significantly expanding their spend with AYX
Highest ever NPS score (they didn’t say what it was)
Significant amount of their business is from referrals (which is more or less what the customer nps is measuring)
2018.3 released. Major release for data scientists
International expansion going very well. 99% growth
Revenue and Margins
revenue increased 59% to 54.2 million , last 3 quarters in order were 54.4%, 50%, 54.6%
Gross margin 90.5, last 3 quarter 90, 88.3, 83.8
Expenses
OPEX 48.7 million up from 28.7 (see below for explanation)
Cash and Cash flow
Cash from operations, $4.6 million, up from $0.9 million
5.1 million cash flow (couldn’t hear this well on the conference call)
414 million in cash like stuff, most of that was from the convertible note they did, and 11 million from cash flow.
Net income 0.08 cents a share
Guidance
- Increase guidance to q4 56.7-57.5 (46%-49%)
-Non gap operating loss 1-2 million
-61.5 million shares
-increased year guidance to 200.5-201.5 (52-53% implied growth)
-2-3 milion operating loss
Conference call notes
Market continues to open up for ayx around the globe, investmenting all over the world to take advantage of the opportunity, Good execution , good sales model. Lots of larger expands. THey think they continue this in the future.
Ayx uses AYX platform to target customers
Public sector and healthcare are targeted specifically. (no % given)
Again reiterated they are in the “early days” “significant market opportunity” “scale the organization”, “sustainable growth”
Landing better performing cohorts.
(using ayx to find those)
Large new customer uptick. Lots of referrals (high nps )
Seeing lot of advance analyitics, 2018.3 key features for data scientists. Bridging gap between citizen data scientists and trained data scientists. Native python (which is huge)
? do they need to lower prices? Ayx doesn’t think they see any price pressure yet…they might be too cheap right now. Someday might lower prices when they have WAY higher penetrations…like 40-50%. Right now in their most penetrated markets they are in the low single digit penetration. Pricing is not an issue.
Where are we in the opex growth? They see huge land grab opportunity, so they will continue to spend to grow. THey thing they have demostrated prudent growth and will continue to do so.
Visualytics- allow people to visualize data along the process rather than at the end like tabealu etc .
30 million citizen scientists
~1 million data scientists
Newer cohorts are performing better than older cohorts did (probably why we are seeing growth accelerating)
?tableau competition - competitive landscape. Not concerned at all about competition. Very different markets between tableau and ayx. Little to no competition. Uncrowded market.
Ai an area of development. Many current AI companies will be acquired , don’t have fully formed products.
My take
This was a 10/10 quarter for alteryx. Their growth is accelerating. The investments that they did last year is paying off handsomely with international revenue up 99%!! They are using their own platform to make business decisions and it seems to be paying off handsomely. The customers they are landing now are better performing than their old customers were when they were “young” . AYX continues to see little to no competition. They say they have no pricing pressure and actually feel like they might be too cheap. In their most penetrated markets they say they only have low single digit penetrance! They don’t expect to have pricing pressure until they are in the 40-50% penetrance. So far it looks like AYX has blue skies and calm seas ahead. Their valuations has jumped up above EV/S of 20 again which is the high end of their range. They have bounced around from 12 up to 22. I’ve been a buyer when the EV/S is around 16 and below since so far the business case hasn’t changed. I’d expect they stay on the high end as long as there is no external shock. To sum it up, if you believe even a small part of what AYX is saying then they are in the beginning stages of their growth and they should be able to grow at least 10X. They will be much bigger in the future. I doubt they will be profitable to any degree in the near future as they are in full land grab mode. I’m fine with that as they have tuned their business to be basically self funding. AYX is my largest position, I’m very comfortable with that.
Best,
Ethan