AYX reported

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1

Repost from my board
https://boards.fool.com/q1-2019-er-34196789.aspx

Q1 2019 ER
https://seekingalpha.com/pr/17495993-alteryx-announces-first……

They beat guidance, no surprise, but “lower” than their usual butt-kicking, at “just” 51% y/y.
This is now on ASC606. Expansion rate solid. 35% growth y/y in customers seems solid.

Their Q2 guidance calls for 50% y/y growth on the high-side…which is a very good sign, imo, as they should at least beat by a bit. Most companies sandbag in the 30-40% range at best.

Already called y/y growth for 2018 to 2019 full year at 42% on high-end or $360m, which is another good sign, as I assume a beat will occur. I think they will finish between $380-400m.

Here are their numbers:
First Quarter 2019 Financial Highlights

Revenue: Revenue for the first quarter of 2019 was $76.0 million, an increase of 51%, compared to revenue of $50.3 million in the first quarter of 2018.
Gross Profit: GAAP gross profit for the first quarter of 2019 was $68.0 million, or a GAAP gross margin of 89%, compared to GAAP gross profit of $45.3 million, or a GAAP gross margin of 90%, in the first quarter of 2018. Non-GAAP gross profit for the first quarter of 2019 was $68.8 million, or a non-GAAP gross margin of 90%, compared to non-GAAP gross profit of $45.9 million, or a non-GAAP gross margin of 91%, in the first quarter of 2018.
Income (Loss) from Operations: GAAP loss from operations for the first quarter of 2019 was $(4.4) million, compared to a GAAP income from operations of $2.7 million for the first quarter of 2018. Non-GAAP income from operations for the first quarter of 2019 was $1.4 million compared to non-GAAP income from operations of $7.2 million for the first quarter of 2018.
Net Income: GAAP net income attributable to common stockholders for the first quarter of 2019 was $5.9 million, compared to a GAAP net income attributable to common stockholders of $4.9 million for the first quarter of 2018. GAAP net income per diluted share for the first quarter of 2019 was $0.09, based on 67.5 million GAAP weighted-average diluted shares outstanding, compared to GAAP net income per diluted share of $0.08, based on 63.5 million GAAP weighted-average diluted shares outstanding for the first quarter of 2018.

Non-GAAP net income for the first quarter of 2019 was $3.0 million, compared to non-GAAP net income of $6.2 million for the first quarter of 2018. Non-GAAP net income per diluted share for the first quarter of 2019 was $0.04, based on 67.5 million non-GAAP weighted-average diluted shares outstanding, compared to a non-GAAP net income per diluted share of $0.10, based on 63.5 million non-GAAP weighted-average diluted shares outstanding for the first quarter of 2018.
Balance Sheet and Cash Flow: As of March 31, 2019, we had cash, cash equivalents, and short-term and long-term investments of $461.3 million, compared with $426.2 million as of December 31, 2018. Cash provided by operating activities for the first quarter of 2019 was $16.0 million compared to cash provided by operating activities of $12.1 million in the same period last year. As of March 31, 2019, we had an aggregate transaction price of $214.0 million, allocated to unsatisfied performance obligations related primarily to post-contract support, cloud-based offerings, and subscriptions to third-party syndicated data, compared to $223.1 million as of December 31, 2018.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures and Operating Measures.”

First Quarter 2019 and Recent Business Highlights

Ended the first quarter of 2019 with 4,973 customers, a 35% increase from the first quarter of 2018. Added 277 net new customers in the first quarter of 2019.
Achieved dollar-based net expansion rate (annual contract value based) of 134% for the first quarter of 2019.
Acquired ClearStory Data Inc., an enterprise-scale, continuous intelligence analytics solution for complex and unstructured data.
Expanded our international presence with new office launch events in Japan and Dubai.
Financial Outlook

As of May 1, 2019, guidance for the second quarter 2019 and full year 2019 is as follows:

Second Quarter 2019 Guidance:
Revenue is expected to be in the range of $74.0 million to $77.0 million, an increase of 44% to 50% year-over-year.
Non-GAAP loss from operations is expected to be in the range of $(4.0) million to $(7.0) million.
Non-GAAP net loss per share is expected to be in the range of $(0.04) to $(0.09) based on approximately 62.5 million non-GAAP weighted-average basic and diluted shares outstanding.
Full Year 2019 Guidance:
Revenue is now expected to be in the range of $355.0 million to $360.0 million, an increase of 40% to 42% year-over-year.
Non-GAAP income from operations is now expected to be in the range of $30.0 million to $35.0 million.
Non-GAAP net income per share is now expected to be in the range of $0.38 to $0.45 based on approximately 68.0 million non-GAAP weighted-average diluted shares outstanding and an effective tax rate of 20%.

Dreamer

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Dreamer:

“Revenue: Revenue for the first quarter of 2019 was $76.0 million, an increase of 51%, compared to revenue of $50.3 million in the first quarter of 2018.”

I have 42.821M for Q1 2018. From where does the difference come from?

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I have 42.821M for Q1 2018. From where does the difference come from?

Your number is from the old accounting standard ASC605.

AYX is now reporting using ASC606.

🆁🅶🅱
wordlessly watching, he waits by the window and wonders…

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If I understand how 606 works, the slowdown in revenue is worse than it appears. Under 606, they recognize more of a contract upfront (or are they adjusting 1q18 to 606 as well-I don’t think so).
David

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If I understand how 606 works, the slowdown in revenue is worse than it appears. Under 606, they recognize more of a contract upfront (or are they adjusting 1q18 to 606 as well-I don’t think so).
David

They are comparing 606 to 606 moving forward. They re-did the numbers for 2018 to make it easier to track.

Repost from my board: https://discussion.fool.com/found-the-606-supplemental-buried-on…
Found the 606 supplemental buried on IR site.
Gives me a better understanding of the y/y numbers under the new accounting standard.

Q1 2018
605 was $42.8m
606 is $50.3m

Q2 2018
605 was $46.8m
606 was $51.5m

Q3 2018
605 was $54.2m
606 is $62.6m

Q4 2018
605 was $60.5m
606 is $89.1m

Total year 2018
605 was $204.3m
606 is $253.6m

Q1 2019 (just announced today)
606 is $76m

Q2 2019 forecast from today’s ER
606 is $77m (I used the high-end number AYX gave)

Some online seem concerned about the lack of sequential growth, even if AYX hits their $77m number at 50% y/y growth. But if you simply look at the 606 adjusted numbers for Q1 and Q2 of 2018, you see they were very flat.

Then, if we go back to the CC from last ER in Q4, they explained the beginning of year or Q1 would likely capture more of the new year deals due to how 606 is calculated.

https://seekingalpha.com/article/4245057-alteryx-ayx-ceo-dea……

Under ASC 606, we recognize revenue at the latter of the date we close a deal or the subscription start date. We have a large percentage of contracts that expire on December 31 with renewal start dates of January 1. This results in the upfront portion of these Q4 deals being recognized in revenue in Q1. This seasonality is evident in our 2018 ASC 606 quarterly results. For reference, we have provided more details on our historical 2018 results under ASC 606 in supplemental materials posted on the investor section of our website.

Dreamer

ps…after I wrote this, I realized Ethan had a similar post after the last ER in late Feb.
https://discussion.fool.com/ayx-asc-606-and-q4-34146055.aspx

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<I? If I understand how 606 works, the slowdown in revenue is worse than it appears. Under 606, they recognize more of a contract upfront (or are they adjusting 1q18 to 606 as well-I don’t think so).

The revenue for Q1 2018 under ASC606 was $50.329M. Under ASC605 it was $42.821M. You can find these figures in the “Historical Financials” on their IR website:

https://investor.alteryx.com/financials/quarterly-earnings/d…

Click on Q4 2018 and you can download the file.

So for Q1 2019 they had $76.0M in revenue under ASC606 so the 51% growth rate is an apples to apples comparison (both ASC606).

Chris

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7

If I understand how 606 works, the slowdown in revenue is worse than it appears. Under 606, they recognize more of a contract upfront (or are they adjusting 1q18 to 606 as well-I don’t think so).

The revenue for Q1 2018 under ASC606 was $50.329M. Under ASC605 it was $42.821M. You can find these figures in the “Historical Financials” on their IR website:

https://investor.alteryx.com/financials/quarterly-earnings/d…

Click on Q4 2018 and you can download the file.

So for Q1 2019 they had $76.0M in revenue under ASC606 so the 51% growth rate is an apples to apples comparison (both ASC606).

Chris

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Thank you both

9

This is my first (and probably last) attempt at an insightful post on this board. I reacted to AYX’s earnings report much differently than most here and those in the AH market. Specifically, I was excited because I thought the guidance showed accelerating revenue. Below is a table I keep for the SaaS stocks I own since guidance can be accurate for some companies (Zen) and a joke for others (AYX). Based on AYX’s guidance for next quarter + their typical beat, I see revenues accelerating. For the below table I took all numbers from AYX’s investor relations site and I have compared apples to apples in regards to 605 vs 606 thanks to AYX’s supply of those numbers when they made the switch. I have even included both 605 and 606 in the below table in the years where it was necessary to compare previous years under 605 (like 2018 Q1 reported earnings vs 2017 Q1 reported earnings) while also comparing later years under 606 (like 2019 Q1 reported earnings vs 2018 Q1 reported earnings). Since this is one of the only times my newby self has had a differing opinion from those on this board, I thought I would share my math so you all could help me figure out if I am doing something wrong.


Quarter	ProjEarnings	ReportEarnings	Reported606	PYoY	RYoY	%Beat	AcctMethod
2016Q3	00000000	$22,500,000	00000000	0.00%	0.00%	0.00%	ASC605
2016Q4	00000000	$25,000,000	00000000	0.00%	0.00%	0.00%	ASC605
2017Q1	00000000	$28,500,000	00000000	0.00%	0.00%	0.00%	ASC605
2017Q2	00000000	$30,300,000	00000000	0.00%	0.00%	0.00%	ASC605
2017Q3	$32,300,000	$34,200,000	00000000	44%	52%	8%	ASC605
2017Q4	$36,000,000	$38,600,000	00000000	44%	54%	10%	ASC605
2018Q1	$40,000,000	$42,800,000	$50,330,000	40%	50%	10%	ASC605
2018Q2	$44,000,000	$46,800,000	$51,500,000	45%	54%	9%	ASC605
2018Q3	$50,000,000	$54,200,000	$62,590,000	46%	58%	12%	ASC605
2018Q4	$57,500,000	$60,500,000	$89,150,000	49%	57%	8%	ASC605
2019Q1	$72,000,000	$76,000,000	00000000	43%	51%	8%	ASC606
2019Q2	$77,000,000	00000000	00000000	50%	0.00%	0.00%	ASC606

(This table has taken me hours to figure out how to post correctly. The 0’s that are in the above table are placeholders to hopefully fix the spacing issues, so imagine those cells are blank. Also, PYOY stands for Projected Year-over-Year % increase and RYoY stands for Reported Year-over-Year % increase. Sorry if this table is confusing because of that.)

The projected earnings numbers above come from the high end projection numbers provided by AYX. The average % they beat those projections has been 9%. Based on AYX’s high end projected revenue increase of 50% for 2019 Q2 + the 9% average beat, AYX will increase revenues by 59% next quarter with approximately $81.5 million in revenues. This is the highest % increase in revenues since at least 2017 Q3.

Thank you all in advance for your help in breaking down where my numbers on AYX are wrong and thank you all for providing the knowledge you have over the last 6 or so months I have been following.

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How do you convert the revenue numbers from ASC 605 to ASC 606?

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newey,
I can add a little perspective, but I’m definitely not an expert.

From your numbers, see actual RYoY of 51% compared to previous 3 qtrs of 54%, 58% and 57%, so the most recent qtr is about 4-5% lower than previous qtrs, although not lower than Q1 2018 (50%). If that is taken as a slowing, then it could represent trouble.

As the numbers get larger, continuing to beat every time might get more difficult, so some might believe that jumping the projected growth to its highest number, might just be removing some “beat” margin.

Worst case, they don’t beat by as much and growth “slows” to low 50+ range from upper 50s range. Best case is the growth re-accelerates to upper 50s, and the stock price will jump next qtr.

Thanks for providing an opportunity for me to respond to another newbie… :slight_smile:

A cooling off period doesn’t hurt if the long term growth is still in tact.

JI.

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TJ: I did not convert. I just took the 605 and 606 numbers from AYX’s press releases. The only thing I did was change which numbers I was comparing a particular quarter to depending on whether it was reporting 605 or 606 for that quarter.

JI: I agree with your overall premise that the % beat usually slows for companies that are growing larger; however, AYX has been pretty consistent in lowballing/beating their projections. And if you look back at AYX’s projected YoY increases, 50% is the highest YoY increase they have projected since at least 2017 Q3. I guess that is one point I forgot to mention. I’m excited about the possibility of the highest % YoY increase for next quarter because this is the highest % YoY projection I have ever seen AYX give (with the caveat I do not have the numbers for more than a few years).

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How do you convert the revenue numbers from ASC 605 to ASC 606?

After having read Deloitte’s and PWC’s outlines of the changes, I wouldn’t dare to attempt such a thing.
I would depend on information from the company as companies have a choice if they want to go back and adjust all quarters.

AYX presented the ASC 606 changes here https://s22.q4cdn.com/730379107/files/doc_financials/quarter… and
Ethan1234 covered this topic for AYX in February, https://discussion.fool.com/ayx-asc-606-and-q4-34146055.aspx.

I. M.

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newey,

For the most part you appear to have a good grasp on AYX! One thing:

Based on AYX’s high end projected revenue increase of 50% for 2019 Q2 + the 9% average beat, AYX will increase revenues by 59% next quarter with approximately $81.5 million in revenues.

Actually, a 9% beat to their high-end guidance of 77m would mean 84m in revenue next quarter, which would be a 63% increase YoY.

Note to everyone: I don’t think I would stress about the 51% this quarter, or get too excited about the 63% next quarter (if that happens), or think revenue is accelerating or something. The nature of 606 is that there will be more lumpiness in revenues. Expect it.

Still, I love everything AYX is doing. If it wasn’t already a top position for me, I would rectify that immediately.

Bear

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50+% is fifty plus percent! That is good enough… quibbling over whether it’s 54 or 56 or 52 is, to me from past experience, a rounding error. Thank you for the informative, thoughtful post - AYX up 10% today and 30%+ since I bought it just in March! It will end abruptly and badly when it ends, for all these high growth stories eventually do - but, for now, the money flow is all in.

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