Dean Stoecker, CEO, and Kevin Rubin, CFO, just finished speaking today at the 22nd Annual Needham Growth Conference.
Here is a link to the webcast:
Here is a summary of my notes from the call.
The buzzwords of the day are “Digital Transformation” - they both referenced this several times.
Dean started out by saying that Alteryx has developed its platform over many years - initially as a private company and now a public company. He is convinced that what we are witnessing today confirms that the self service data analytics space was the correct space for the company to begin focusing on many years ago. In other words this company is not an overnight success - it took many years to build the platform and create the business model. (My Take-away It reminds me that when we are constantly looking for competition to come along and knock Alteryx off its perch it should be remembered that it took a long time to create this company’s product platform.)
He went on to say he believes this self service data analytics business will have tailwinds going forward.
The company has a powerful business model which is subscription based with a selling motion of:
LAND to EXPAND to RETENTION
Dean then went on to describe what has been the company’s typical business case looking backward to what he sees beginning to happen now. In the past a customer would start with a “land” of about $10K - the cutsomer would then “limp its way to greatness”. Going from two seat licenses within one department to five to ten and growing outward within the customer’s business.
Now he is seeing “expansion” within a customer happening much more quickly. He feels 2020 and 2021 will see “Digital Transformation” replacing customers “limping their way to greatness”. I take this as him saying the sales cycle of Alteryx is accelerating with initial “land” customer departments moving quickly to departmental licenses and in some cases customers moving quickly to an enterprise licensing agreement.
Dean said that the company sees a direct path to $1 billion in annual revenue and the name of the game is execution from 2020 to 2022. He said the TAM is $15 trillion and the company, today, is only at about 1% of the TAM. So a very long runway of growth ahead.
He then went on to talk about the company’s plan to grow to between $3 billion to $5 billion. He vaguely described rolling out various vertical solutions that would be on the Alteryx platform. He talked about spinning out platform verticals but did not go into specifics. the timing for this is beginning in 2022.
Dean then discussed that companies want a self serve data analytics platform that will be used by both their data analysts (50 million total) and their data scientists (2 million total). The data scientist will be able to create specific customer needed solutions on the Alteryx platform that can be used by their data analysts. The convergence of both the data scientist and the data analyst is very important for the customer and is a big draw for Alteryx.
Alteryx realizes it does not have complete domain expertise for every segment of the customer base. So its customers in specific verticals are helping create solutions that are helping each vertical through digital transformation.
Dean said he does not see any change in the relationship with Tableau since it has been acquired by Salesforce.
He was asked and talking a bit about the company’s acquisitions. He said he was glad that ClearStory Data gave the company a location in Silicon Valley.
Kevin Rubin said he sees all the deal wins from the company and that he sees about 100 competitors although the main one is DAAS which I assume is Dassault Systemes.
Dean said that keeping the corporate culture in line with the growth potential is a key ingredient for future success.
He said he focuses on metrics like net expansion and net promoter score to measure how the company is doing.
Dean closed with his belief that we are now seeing Digital Transformation 2.0 - he feels that companies are going to focus on automating complex analytic pipelines and that corporate culture must be transformed in a digital way.
Frank - long AYX, see profile for all holdings