Detailed Short Thesis on AYX

AYX is my largest position at 23%. Someone sent me this article and I’ve admittedly not read the whole thing yet… it does require a login, but it’s free.

A couple of the points of the short.

  1. Claims AYX will struggle to transition to the cloud and when that happens in the industry, AYX’s licensing model won’t work.

  2. They “fired” their accounting firm right when standards switched over to ASC 606 which slowed them to “aggressively” over state revenues

  • I don’t think this is true… I believe They switch from PWC because they became a pretty large customer… but I do remember the change seeming a little abrupt.
  1. Competitive fears with snowflake DB

Would love your thoughts… especially if you are more technically inclined.…


Also, the user who posted the report signed up the day prior to posting that and only has written 2 shorts on their board so… suspect.

As a former PwC employee, point 2 is definitely incorrect. They changed auditor because PwC may be one of their largest customers. I know that the use of Alteryx is highly encouraged across the entire network of PwC, I even had a one-day training of Alteryx at PwC (voluntary participation). I recently checked with one of my former colleagues and he told me that Alteryx is still being used for several new use cases, which previously required a lot more manual work.

As for point 3, I am not too familiar with the services offered by Snowflake. However on Gartner (…), one can see which alternatives have been considered for Alteryx and this is the top 10:

  1. Microsoft 49
  2. SAS 28 => Old legacy software, I believe AYX is gaining MS from SAS, although SAS focuses more on data scientists vs Alteryx on the “citizen” data scientist
  3. Amazon Web Services (AWS) 22
  4. Oracle 19
  5. Teradata 19 => Listed, no revenue growth at all
  6. Other… 18
  7. IBM 17
  8. KNIME 17 => open source platform, commonly cited as one of the alternatives to AYX
  9. SAP 16
    10.DataRobot 16

In fact, Snowflake is not even mentioned in the entire list as an alternative. I however have insufficient knowledge to assess independently whether Snowflake may be a threat.

As for point one, management has stated several times that there is currently little to no demand from customers to move the entire solution into the cloud. I have trust in management that they are able to understand the industry demand and also accommodate to this demand.

Disclosure: Long Alteryx approx. 23% of my portfolio (largest holding)



Welcome to the board!

Thanks for your response. Your reason is why we thought they switched from PWC but great to hear from someone with you experience.

  • Austin

Hi Austin, we dealt with this same short attack making the same claims before.

As far as transition to the cloud they are aware of the issue and seem to feel that the analysis they do is best done locally, at least for now, and maybe indefinitely. Their revenue growth acceleration the last three quarters, all under ASC606, seems to bear this out (51% to 59% to 65%!!!).

This next one is a straight out lie.

They “fired” their accounting firm right when standards switched over to ASC 606 which slowed them to “aggressively” over state revenues

Price Waterhouse was selling so much Alteryx to their other clients that they felt it had become material and to avoid any appearance of conflict of interest they bowed out, feeling that they would rather keep reselling the software than keep Alteryx as just another accounting client. They did it when they did so the new firm could handle the switch over to ASC606. And the new accounting firm is Deloitte as I remember, one of the big three, not some little hack firm. Do you think Deloitte is going to let them “aggressively overstate revenue”. What a joke.

As far as competitive fears, Alteryx is the most expensive and is still accelerating growth and taking market share (see above). What more can I say?



Hi Austin

I work for one of the big cloud vendors as a sales engineer and am pretty familiar with the landscape here. I can comment on parts one and three.

In terms of transition to the cloud, they’re part way there already. Their software can run in the cloud, albeit not as a fully managed SaaS offering. Instead of provisioning a new account and starting to use the software (aka CRM, DDOG, COUP, WDAY etc), the customer must deploy servers in the cloud (IaaS) then install the AYX software. This does mean more management for the customer and it’s not the direction it’s necessarily all going, but it doesn’t mean they aren’t at all prepared for Cloud.

What they are missing is the cloud model for billing - paying only for what you use, down to the minute or second. Although they probably will want to have that at some point, I don’t see this as a huge issue because unlike Cloud-based compute, people aren’t going to be varying the number of seats of AYX software that’s deployed to their users on a regular basis. The 1-3 year deals are good.

As it happens, AYX have many integrations into the Cloud already. Their product can orchestrate data coming from all the big players as well as from on-premise data sources. In fact, their lack of allegiance to one single cloud vendor is part of the attraction. AWS, MSFT and GOOG all have some sort of story around what AYX does using their own tools, but none of them are as good managing and blendin multi-cloud or on-premise data sets.

As far as competition with SnowFlake is concerned the only similarity between these offerings is in the delivery model. SnowFlake follows a similar model as described above where customers deploy in a more traditional way. Beyond that, they’re solving two completely different use cases. SnowFlake is is data storage software. You put your data there or in AWS Redshift, GOOG BigQuery or MSFT’s product (can’t remember the name) or you leave it on-prem in Teradata or something like that. AYX is data orchestration only. They move data around, transform it, blend data from different sources together and allow people to easily get insights from that data. AYX doesn’t actually store the data - it just does stuff with it.

I hope this helps. As a newcomer to this forum, this is my first post. I hope it wasn’t too technical and goes some way to repaying this group for all the fantastic information I’ve learned since discovering the board.



Thanks Saul. I must have missed the discussion on this specific short.

I should have searched for it, my apologies everyone

1 Like

Wow Bobby, that was so helpful thanks for the explanation and welcome to the board. Can’t wait to learn more from you.

Wow this is a wonderful example of how great this little community is.


Here is what Dean Stoecker, CEO of Alteryx had to say about Snowflake as part of the question and answer session in the last ER call on October 31, 2019:

Derrick Wood – Cowen & Company – Analyst

Great. I guess yes first for Dean. We’re hearing more analytic software companies partnering and integrating with cloud data lakes and cloud data warehouse vendors like Snowflake who’s seen a lot of growth. How are you guys positioned around companies like Snowflake? And do you see your users trying to leverage those cloud platforms in their Alteryx workflow?

Dean A. Stoecker – Chairman and Chief Executive Officer

Yes as a matter of fact Derrick we do. As you know our design time experience is on-premise and our run time experience is wherever you choose to put it. We have a fair number of server-based customers who deploy both in AWS and Azure. Many of them have leveraged Snowflake as their persistence layer of choice. Not all of them some have – it’s rare that anyone has a complete set of analytic pipelines that leverage a single data source. Most of them have many persistence layers some which reside in cloud vendor of choice. Other parts of their persistence layers reside on-premise. So it’s going to be a hybrid cloud on-prem and ultimately cloud-to-cloud world for quite some time. We actually have a strong relationship with Snowflake. And many of our customers have moved off of other platforms to go to Snowflake and we’re quite supportive of our customers who choose to do so.



1. Claims AYX will struggle to transition to the cloud and when that happens in the industry, AYX’s licensing model won’t work.

This seems to come up over and over and over again, despite it being silly. The development platform only makes sense on one’s local PC. Once one has developed the report, one can run it anywhere it makes sense to run it. Run it locally and pull data from the cloud? Sure. Run it on a remote server with remote data? Sure.

What’s missing?


Not sure if this is useful, but wanted to point out that Value Investor’s Club has 2 tiers: one tier allows users to see the write ups immediately. The 2nd tier becomes “available” to everyone else after 6 weeks or so

that writeup was published 20 Nov, but only just became visible to everyone

The way a person “joins” the first tier is by having a writeup published. VIC is Joel Greenblatt’s “club” of value investors


thank you for great explanation Bobby. very helpful…

Hi Bobby,

In some other research, several different names show up as competition to AYX.
Specially KNIME, being open source and free.

Would really appreciate your view on KNIME as well as RpaidMiner, Dataiku and


Point #2 is both wrong and offensive.

Eric (CPA and Deloitte Manager)


Attached is the AYX investor presentation for the last earnings call. If you go to slide 15, you will see how AYX thinks the competitors line up. Knime,, rapidminer, etc, only have one product at this time, whereas AYX has a whole platform and thus a big advantage. Ayx is also easy enough to use, where data workers, citizen data scientists, and data scientists can all use AYX.…



Hi Nilvest

I would love to say that I know enough to give you a feature by feature comparison of all these products, but I don’t I’m afraid. This market of having an end-to-end data management, data science and machine learning orchestration platform is so new. Very few customers are doing it so far. More are cobbling together disparate tools to put it together themselves.

If you do want a feature comparison, just type “alteryx vs” into google and it’ll find the competition comparison pages that go into plenty of detail.

I think the financials should be the best indicator of who’s ahead right now. In terms of completeness of vision and sales execution. AYX margins are insanely good - over 90% last quarter. If they really felt competitive pressure was losing them deals they have plenty to play with. Clearly they are having no trouble growing revenue.

As for the ‘open source, free option’, that’s just for the entry level product you run on your desktop or laptop. If you want the fully productionized, enterprise offering you’ll be paying.



Reply from AYX Investor relations. Very fast and to the point IMO.

My Summary:

So basically our thesis on the company is just fine if we believe that there will never be one single data source (I fully believe that)

To take that a step further – I think as more tools/platforms like Snowflake become more popular, it makes a stronger case for AYX because it shows the trend towards more tools + data prep/analysis

and in that scenario, AYX becomes even more important because I don’t think theres a tool that comes close in “thriving” in complex environments.

IR Response:

Hi Austin,

Thanks for your message and for being an AYX shareholder.

As far as the short report goes, our view is that there are a number of misperceptions/inconsistencies with it.


The rules for how we account for revenue under ASC 606 are defined by the accounting and financial regulators (FASB/SEC), and I would point out that we worked through the successful adoption of ASC 606 (and all the required 404 disclosures) with our new auditor (Deloitte). It is true that we have higher reported revenues under ASC 606, but we have been very transparent about this (we reported 2018 results under both standards).

We haven’t seen any changes in the competitive landscape (as evidenced by the strong growth rates we’ve reported year-to-date in 2019). I would also point out that Alteryx thrives in complex data environments (e.g. the greater the variety of velocity of data, the more you need a data and analytics platform like Alteryx). While Snowflake is a certainly an improvement relative to legacy data warehouses (we are implementing in here at AYX), our fundamental belief is that all the data you need for analytics will never live in one place. So Snowflake simply becomes another data source. On Tableau – they continue to be a strong partner for us, and I reiterate what I said above (we haven’t seen any changes to the competitive landscape).

I hope that helps but please advise if you have any additional questions.

Best regards,


thanks Jim, Bobby, Austin…

On the investor slide deck Jim pointed to, side 11 is very interesting… has customer comments… that line with company claims… I saw these on Gartner site as well… reviews on Gartner site worth seeing for those inclined……


I have a decent-sized position in AYX.

I asked the data scientists working on a project of mine why they didn’t choose to use Alteryx. Their answer was that Alteryx is for less technical people trying to bring in data from different sources. Since “we’re experts” they prefer to use “more technical” tools. They pointed to other groups within our company, such as Marketing, which do use Alteryx and are happy.


Hi Smorgasbord1,

Since “we’re experts” they prefer to use “more technical” tools.

Which tools do they prefer using? Are they tools that can be replaced by Alteryx? Could it be that the experts are protecting their territory by not using Alteryx or is Alteryx not good enough for their purposes?