the latest in earnings

[ok its too long, broken into 2 parts - summary and earnings reports]

the latest in earnings
Feb/Mar 2020

I have been posting these more in real time as earnings have released, and seems popular enough to keep doing it that way. But weirdly the company I thought would be most popular got the least recs (Zoom), but perhaps because the market was in freefall right after I posted it. Even though I posted many of these before, information keeps trickling in, so there are links here that are new (like Starrob’s CC & Q&A recaps for OKTA, and how ESTC got Fedramp approval).

Besides the companies I own or just owned, I took a peek at several high-performing growth companies that are at the “leveraging operations” stage, from my watch list as well as from some of the portfolios here. I most like COUP (accelerating revenue) and NET (accelerating revenue, right as a new & highly relevant product line arises). WORK (Slack) is pretty interesting too, and ZS may get a rebound. DOCU is riding a huge trend right now in contactless agreement handling. I’ll pass on FSLY, WDAY, PAYC, VEEV. FSLY stays on my watch list to see if the mid-30s to mid-40s jump in rev growth in 1Q was a blip or sustainable new level, but I fear the answer is no, especially as its customers may have recession issues.

Prior reports:

Nov/Dec 2019: https://discussion.fool.com/the-latest-in-earnings-34388629.aspx…
Aug/Sep 2019: https://discussion.fool.com/the-latest-in-earnings-34329275.aspx…
May/Jun 2019: https://discussion.fool.com/the-latest-in-earnings-34231103.aspx…
Feb/Mar 2019: https://discussion.fool.com/the-latest-in-earnings-34161547.aspx…
Oct/Nov 2018: https://discussion.fool.com/earnings-boil-downs-thus-far-3406063…

NOTE on my NOTES below: ^^ is “accelerating”, and !! is an especially important/impressive bit IMHO.

Holdings:


AYX     18% 
OKTA    17%
CRWD    15% ... increased 
ZM      11% ... added in Feb & done well
NET     11% ... added in Feb & done well
DDOG    10%
ROKU     7%
MDB      5% ... significantly lowered, to sell
COUP     4% ... added in Feb
SMAR     0% ... sold
TTD      0% ... sold
ZS       0% ... sold

Summary:

I love looking at all the quarterly stats together in this condensed summary at the top of my recaps. I am sorting by rev growth now, which makes my tiers, esp the cream of the crop, stand out. So I divided these companies into 3 tiers - top tier (>75%, tier 2 (>40%), tier 3 (<40%). (See my prior post on how I use tiers: https://discussion.fool.com/graceful-landings-34426354.aspx ) One change though – top tier companies are executing so well, I consider tier 1 to now be >75% (was >50%), and overall “hypergrowth” to be >40%.

Of course, a large caveat – lots of these companies announced these earnings numbers before the panic set in with the global pandemic. I just posted about my thoughts on each of these companies and their immediate prospects in my “Tremors” post before this. So execution in this current reality may differ significantly from last few quarters. Companies that I think will be benefiting from all the work-from-home are marked with a *.

Tier 1: Top Tier Hypergrowth ------

*CRWD = rev +89% ^^, sub rev +90% !!, opex +98%, $NER >120%, custs +116% ^^
DDOG = rev +85% !!, opex +71%, custs +36%, $NER >130%
*ZM = rev +78%, RPO +94% !!, op inc +292% !!, FCF +367% !!, opex +80%, custs +61%
AYX = rev +76% ^^, intl +84% ^^, op inc +93% !!, opex +67%, $NER 130%, custs +30%

… Top 4 are all growing >75%. Compared to the strong companies in tier 3 means these are growing MORE THAN DOUBLE those strong companies in the mid-30%s! And even better if it has profitability now (only DDOG doesn’t), and will maintain heavy usage through this pandemic.

Tier 2: Solid Hypergrowth ------

ESTC = rev +61%, sub rev +63% (all CCURR), opex +65%, $NER >130%
*NET = rev +51% ^^, opex +44%, custs +34%
SMAR = rev +51%, sub rev +53%, custs >100K +138%, $NER 135% !!
*COUP = rev +49%, sub rev +46%, op inc +454%, FCF +197%, opex +35%
ROKU = rev +49%, platform rev +71%, opex +68%, active accts +36%, stream hrs +60%
*WORK = rev +49%, custs +25%, $NER 132%
*OKTA = rev +45%, sub rev +46%, RPO +66%, FCF +277%, opex +50%, custs +30%
MDB = rev +44%, sub rev +46%, Atlas +80%, opex +55%, custs +27%
FSLY = rev +44% ^^, custs 288, $NER 136%

… Great set of companies but markedly less growth than tier 1. Most of these have growth slightly dropping over time, but NET and COUP are rising. A recent purchase is NET, which has accelerating growth, but also just released a whole new product line for Zero Trust & SWG (Zscaler clone). ESTC and SMAR have >50% growth, but I put them in tier 2 due to rising opex that is consistently growing faster than rev. With FSLY, it jumped from mid-30%s to mid-40%s growth in 1 quarter, but I would like to see proof that it is a new sustained level – but they are going through leadership change at an extremely non-ideal time, AND I don’t think a wide swath of its customer base will handle this stay-at-home recession well, as I see lots of retail and travel apps as customers (see my Tremors post for more).

Tier 3: Solid Growth & Profits ------

*ZS = rev +36%, RPO +32%, op inc +11%, $NER 116%
TTD = rev +35%, inc +40%, opex +47%
TWLO = org rev +36%, $NER 124%
*TEAM = rev +37%, sub rev +50%, cffo +67%, opex +19%
*DOCU = rev +38%, op inc +200%, opex +19%, custs +24%
VEEV = rev +34%, sub rev +33%, inc +20%, custs +20%, sub ARR 121%
WDAY = rev +24%, sub rev +25%, inc +26%
PAYC = rev +29%, inc +43% !!

… I’m not in any of these now (now out of TTD). DOCU has me most interested, as operations are being leveraged to crank up its profitability, it has big goals with its new Agreement platform which is sure to benefit from the contactless world we now live in. ZS’s potential to rebound has me intrigued, as its product is sure to be in high demand right now, but given its sales woes, I prefer to see proof that it is executing. TEAM’s sub rev is doing well, while cash flows are surging and opex costs are extremely well contained. VEEV’s growth rate accelerated in Q4 over the FY, but I have no idea how recession would impact them.

The View from Today:

However, last Q may not be next Q given the near global stay-at-home going on right now. Let’s review these companies again, but looking at companies through my tier lens plus taking into account what I think the impact is from the pandemic and recession (see my Tremors post just before this: https://discussion.fool.com/Message.aspx?mid=34452726 ).

So lets look at those same companies in a broader view than the latest numbers…

Tier 1: Top Tier Hypergrowth ------

CRWD = rising tier 1, plus now has strong gains from stay-at-home; has very strong cash flow and is at edge of profitability; exploding cust growth

ZM = rising tier 1, plus now insane gains from stay-at-home; has very strong cash flow and profitability; exploding cust growth

DDOG = steady tier 1; likely shrinking enterprise budgets but app economy is going strong – and this is a required service over infrastructure and services; just swung into positive profitability and cash flow; strong cust growth

AYX = rising tier 1; unknown effect from pandemic but likely shrinking spend; very profitable; strong cust growth

Tier 2: Solid Hypergrowth ------

NET = tier 2 rising to tier 1, plus now has likely gains from stay-at-home (esp the slew of enterprises that need it’s new Zero Trust / SWG product); not yet profitable but strong improvement; strong cust growth

ESTC = steady tier 2; nowhere near profitable and has costs growing slightly above rev; strong cust growth

SMAR = steady tier 2, likely affected by reduced spend; moving wrong direction on profitability; current custs spending more and more

COUP = rising tier 2, plus likely benefit due to heavy focus by companies on spend mgmt; exploding profitability and cash flow

MDB = sinking tier 2; heading towards profitability, but costs are growing slightly above rev; decent cust growth

OKTA = steady tier 2, plus likely strong gains from stay-at-home; has very strong cash flow and is at edge of profitability; strong cust growth & larger deals

ROKU = steady tier 2 with platform rev at top tier hypergrowth; dripped back towards being unprofitable as costs rose with int’l moves; strong player device & accounts growth, and streaming hours growth is likely to accelerate with all the stay-at-home; ad spend likely to decrease however, but should remain top dog through it all

WORK = rapidly sinking tier 1 to tier 2, but will strongly benefit from massive shift into working remotely; cash flows swung positive, and heading towards profitability; strong margins; strong cust growth

FSLY = rising tier 3 to tier 2, but I foresee some its customers (retail & travel) scaling back heavily; not moving towards profitability; pretty crummy margins for SaaS

Tier 3: Solid Growth & Profits ------

ZS = rapidly declining tier 1 to tier 3, but now likely has strong gains from stay-at-home; profitable but declining in having to deal with sales issues & revamp; now has direct competitor in NET

TTD = rapidly declining tier 2 to tier 3; profitable; likely impacted by decreased spend but may be offset somewhat by the surge in Connected TV (where it is a leader)

TWLO = rapidly declining tier 1 to tier 3; unknown affect from pandemic but communications is probably vital; teeters on the edge of profitability

TEAM = steady tier 3; strong cash flow and profitability

DOCU = steady tier 3, plus strong gains from stay-at-home; strong profitability; all new platform that is ideal for contactless transactions

VEEV = rising tier 3 with growth accelerating; decent profitability

WDAY = low tier 3; decent profitability; vital service so likely okay through pandemic but new custs disappearing

PAYC = low tier 3; profitability increasing; vital service so likely okay through pandemic but new custs disappearing

EARNINGS REPORTS IN PART 2 >>>>>

-muji
long many of these

90 Likes

======================
CRWD - Q420

pre earnings

User comments: https://discussion.fool.com/crowdstrike-user-experience-34392725…
User comments: https://discussion.fool.com/a-bit-more-from-the-same-author-i-th…

PR: https://ir.crowdstrike.com/news-releases/news-release-detail…
Supplemental numbers: https://ir.crowdstrike.com/static-files/4747d3dd-3208-4636-9…
Saul take: https://discussion.fool.com/crowdstrike-my-take-on-results-34446…
Nilvest take: https://discussion.fool.com/fcf-50m-was-mind-boggling-for-this-c…
Vinegar on pandemic impact: https://discussion.fool.com/crwd-possibly-benefitting-from-covid…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/03/19/cr…
CC notes (Edyboom): https://discussion.fool.com/4056/great-earnings-conference-notes…

Revenue 152.1M +89% ^^ +100bps seq

  • Sub Rev 138.5M +90% !!
    ARR 600.5M +92% !!, +20% seq ^^
    Adj Gross Margin 73% +600bps
  • Adj Sub GM 77% +700bps, +100bps seq
    Adj Op Loss -6.7M (vs -28.0M)
    … margin -4.4% (vs -34.8%), +860bps seq !!!
    Adj Loss -3.9M (vs -28.0M) !!
    … margin -2.6% (vs -32.2%) !!!
    Adj EPS -0.02 (vs -0.60) !!
    Opex 118.4M +98%
    CFFO 66.1M (vs 15.8M) !!
    FCF 50.7M (vs -0.1M) !!
    … margin 33.3% !!!, +2770bps seq !!!
    Cash 912.1M
    Custs 5431 +116% ^^, +400bps seq
    $NER >120%

FY20:
Revenue 481.4M +93%

  • Sub Rev 436.3M +99%
    Adj Op Loss 65.6M (vs -115.8M)
    Adj Loss 62.6M (vs -119M)
    Adj EPS -0.42 (vs -2.65)
    CFFO 99.9M (vs -23.0M)
    FCF 12.5M (vs -65.6M)

CEO: “… regardless of the spending environment cybersecurity is not a discretionary purchase for organizations. Cybersecurity is mission critical to both the public and private sector. Endpoint or workload security is also essential to protecting a remote workforce. While the impact to the macroeconomy from the coronavirus is unfolding in real time, we know it is forcing companies to conduct business differently and rapidly shift to a remote workforce. With our cloud native platform, our lightweight agent that is easily deployed at scale and our frictionless go-to-market engine, CrowdStrike is uniquely positioned to meet their cybersecurity needs. … we are seeing strong success with our strategy to land bigger with more modules and we are also seeing an acceleration in new logo business which further accelerated in Q4 as the dynamics in the competitive landscape shifted in our favor. We view these two trends as positive developments and very healthy long-term indicators for our business, but they have a natural trade-off on expansions in the near term. … In Q4 we continued to recognize operating leverage in our SaaS model and the benefits of scale, even as we increased investments in our global reach and cloud platform.”

My stance: Wow. Top line growth is holding steady at this level, and even bumped up +100bps from last Q. Margins moving extremely quickly to positive. Such an impressive Q, I had to add an extra “!” for those margin gains. Customer growth is ACCELERATING (112% last Q to 116% this Q). This is clearly a stock with a tailwind, with the massive number of people working remotely having all those devices in the field needing protection (along with ZS, NET, OKTA for protecting network traffic).

I may have broken my ! key on this report.

======================
MDB - Q420

PR: https://investors.mongodb.com/file/Index?KeyFile=403323280
Fool take (Vena): https://www.fool.com/premium/coverage/investing/2020/03/17/m…
Bear sold: https://discussion.fool.com/sold-mdb-34441638.aspx
Lieberman sold: https://discussion.fool.com/i-sold-as-well-sold-most-my-shares-a…
sarksnz notes: https://discussion.fool.com/mdb-q4-2020-cc-notes-34442836.aspx
mekong thoughts: https://discussion.fool.com/mdb-thougths-and-recent-moves-344424…
gmcnatt on COVID-19 comments: https://discussion.fool.com/a-few-comments-during-the-call-i-fou…
mekong tidbit on CTO leaving: https://discussion.fool.com/i-sold-due-to-the-co-founder-steppin…
Diablito take: https://discussion.fool.com/mdb-a-little-perspective-34444154.as…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/03/17/mo…
CC recap (Starrob): https://discussion.fool.com/4056/mongodb-q4-2020-prepared-remark…

Revenue 123.5M +44%

  • Sub Rev 117.8M +46%
    – Atlas +80%
    … 41% of total +900bps, +100bps seq
  • Svcs 5.7M
    Adj Op Loss -12M (vs -9.7M)
    … margin -9.7% (vs -11.3%)
    Adj Loss -14.5M (vs -9.1M)
    Adj EPS -0.25 (vs -0.17)
    Gross Margin 74% +300bps, +200bps seq
    Opex 129.6M +55%
    CFFO -8.6M
    FCF -10.9M (vs -12.6M)
    … margin -8.8% (vs -14.7%)
    Cash 987M
    Empl ~2000
    Custs 17k +27% +7% seq
  • Custs >100K 751 +35%
  • Custs >1M 62 +59%
  • Atlas custs 15.4k +35%
    ARR >120%

FY20:
Revenue 421.7M +58%

  • Sub Rev 399.8M +61%
    Adj Op Loss -53.7M
    Adj Loss -55.9M (vs -52.2M)
    FCF -35M (vs -48.8M)
  • one large multi-year deal for Enterprise Advanced from Fortune 50 cust drove $3.5M of out-performance
  • CTO/co-founder is leaving role and board in July, for “a new challenge” – see his goodbye blog post https://www.mongodb.com/blog/post/hasta-la-vista
  • CTO duties had already been distributed to underlings, likely hiring replacement from within
  • Atlas now over $200M run rate
  • new “Modernization Toolkit” w/ SI partners (Informatica and Hitachi), in order to help enterprises migrate off legacy databases
  • added new BoD member, CTO of Grab (SE Asia Uber+Eats like app), ex-AWS Databases & ex-Oracle
  • no impact seen yet, but are anticipating a 15-25M impact in FY21 from pandemic

My stance: We’ve gone from sub rev of +71% to +56% to +46% in 3Qs, so the deceleration trend continues. It’s also clear in comparing FY20 to just Q4 (+61% slowing to +46%). I am concerned about the massive deceleration of Atlas growth, which went from +250% to +185% to now just +85% this Q, more than halving! Cust growth has seemingly dropped from +92% to +27% seq, but that is due to lapping when mLab customers got folded in. On the plus side, customers continue to spend more, and margins are slowly creeping the right direction, but it’s too slow – Opex growth remains high and now overwhelms top-line growth, and will remain high as they build out sales around Atlas, esp globally. CTO/Co-founder leaving is also not good news, as it seems he’s ready for something new. However, as mekong highlighted, his critical duties had already been distributed amongst his underlings and sounds like mgmt knew this this change was coming and have planned appropriately.

I had previously decreased my position in MDB and TTD earlier this year, by >50% on each, to invest into NET (Cloudflare) and have some cash. I am likely to decrease these positions further as we continue to navigate these choppy waters due to pandemic and its effects. I still really like this company and it will assuredly continue to growth and get to profitability, but think there are better, more immediate rebound plays out there after the massive market drop, that are still at hypergrowth stage in the near term. Like ESTC and ZS, I will continue to have MDB on watchlist to see how it plays out, and possibly re-enter if Atlas growth ramps back up post-pandemic, or we start seeing an uptick due to their new search products (Atlas Data Lake & Search) and their edge computing platform using Realm/Stitch over Atlas.

======================
NET - Q419

PR: https://cloudflare.net/files/doc_financials/2019/q4/NET-Q419…
Slides: https://cloudflare.net/files/doc_downloads/Presentations/202…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/14/cl…

Revenue 83.9M +51% ^^
Gross Margins 78.7% +180bps
Adj Op Loss -18.3M (vs -15.9M)
… margin -21.8% (vs -28.7%) +690bps
Adj EPS -0.06 (vs -0.18)
Opex 84.3M +44%
FCF -23.5M
… margin -28% (vs -52%) +2400bps !!
Cash 636.9M
Empl 1270
Custs 2.6M +34%, +12% seq !!

  • Paid Custs 82K +22%, +8 seq
    – Custs >100K 550 +76% !!
    $NER 112.1% +160bps
  • announced Cloudflare for Teams (CfT) for Zero Trust & SWG [akin to Zscaler ZIA+ZPA, see my tech deep dive]
  • acquired S2 Systems for remote browser isolation (to integrate into CfT)
  • opening new offices in Europe & Asia

See my tech deep dive: https://discussion.fool.com/cloudflare-net-deep-dive-34417701.as…

My stance: I started a position in NET right before the pandemic and market panic hit, and it’s been outperforming, missing out on the huge drops happening across SaaS stocks. I like NET overall more than FSLY – larger revenue that is growing faster, way better gross margins, improving op & FCF margins. Add in that they are moving into new markets (increasing TAM hugely), and have a massive pool of untapped free customers. $NER is very muted however with NET, the only thing FSLY wins hands down. [They talked a bit about it in Q419 CC call Q&A if you want more detail. CFO stated he felt it was a lagging indicator.]

======================
COUP - Q420

PR: https://investors.coupa.com/news-releases/news-release-detai…
MajorFool take on margins: https://discussion.fool.com/cgall-agreed-this-was-a-fantastic-re…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/03/16/co…

Revenue 111.5M +49%

  • Sub Rev 98.6M +46%
    Adj Op Inc 13.3M +454%
    … margin 11.9% (vs 3.2%) !! +870bps
    Adj Inc 15.0M +341% !!
    Adj EPS 0.21 (vs 0.05)
    Adj Gross Margin 73%
  • Adj Sub GM 81.2%
    CFFO 22.3M +134%
    FCF 20.2M +197%
    … margin 18.1% (vs 9.1%) !! +903bps
    Opex 87.2M +35%

FY20:
Revenue 389.7M +50%
-Sub Rev 345.3M +48%
Adj Op Inc 31.9M
… margin 8.2%
Adj Inc 36.6M
CFFO 68.2M
FCF 56.2M

My platform dive: https://discussion.fool.com/coupa-coup-platform-dive-34442085.as…
BroadwayDan deep dive: https://discussion.fool.com/coupa-our-board39s-hidden-gem-344430…

Coupa Q120 Business Spend Index (BSI)
Summary: https://investors.coupa.com/news-releases/news-release-detai…
Report & interactive charts: https://www.coupa.com/thecoupaBSI/

My stance: I started a position earlier this year from Smartsheets proceeds, as a “safer play” compared to some of the other hypergrowth names around here. I liked what my tech dive ultimately showed me… that Coupa has positioned itself nicely as not only an enterprise tool for business ops (spend mgmt), but also as an invaluable CONNECTIVE NETWORK of suppliers and partners for its customers. I believe they are going to leverage this network in more directions from here. The pandemic seems a bit of neutral to slightly positive - it may make new customers slow to trickle, but existing customers will continue to leverage Coupa into more savings as it helps them focus on containing their expenses and watching their operations continuously. But as a ultimately a biz ops tool (however vital it seems to be), I do keep this position smaller than other holdings, especially during this crisis.

I need to get a better feel for how Coupa prices its services, but I know it’s not consumption based (on amount of spend). This was a interesting tidbit from CEO during Q&A: “Our theory for the entire time has been to sit on try to – try to sit on the exact same side of the table with our customers. We don’t charge a transactional fee for the amount of spend that they’re running through the system. Sometimes, we’ve been criticized for that, but at the same rate the value proposition is much more than a percentage of spend, it is the ability to control that spend, its the ability to route that spend to preferential suppliers, it is the ability to route that spent to non-risky suppliers, its ability to stop that spend from happening on a mobile phone by clicking reject with the click of a button. So we think that a cloud-based platform like ours that is offered in a values-as-a-service subscription approach for customers is a very, very thoughtful way for them to get this visibility, control, and agility that many of them didn’t even know they needed until they are faced with times where they realized they don’t have it. And because of that it’s our belief that given uncertain times these areas become a greater priority.

======================
OKTA - Q420

PR: https://investor.okta.com/news-releases/news-release-details…
PR slides: https://investor.okta.com/static-files/7958b289-f0da-41c5-9e…
Fool take (Bowman): https://www.fool.com/amp/investing/2020/03/07/okta-remains-o…
CC transcript: https://www.fool.com/amp/earnings/call-transcripts/2020/03/0…
CC recap (Starrob): https://discussion.fool.com/4056/okta-q4-2020-prepared-remarks-3…
CC Q&A (Starrob): https://discussion.fool.com/4056/okta-q4-2020-earnings-question-…
Saul on op highlights: https://discussion.fool.com/it-doesn39t-look-as-though-the-okta-…
Stocknovice historical numbers : https://discussion.fool.com/i-like-the-report-but-i-struggle-wit…

Revenue 167.3M +45%

  • Sub Rev 158.5M +46%
    – Intl Rev +52% ^^ +1500bps seq !!
    … 16% of total
    RPO 1.2B +66% !!
  • Current RPO 592M +54% ^^
    Billings 225M +42%
    Adj Gross Margins 77.6% +120bps
  • Sub Gross Margins 82.0% -40bps
    Adj Op Loss -5.6M (vs -4.9M)
    … margin -3.3% (vs -4.3%)
    Adj EPS -0.01 (vs -0.04)
    Opex 167.3M +49.7%
    CFFO 24.8M +146%
    FCF 18.1M +277% !!
    … margin 10.8% (vs 4.1%) +670bps ^^
    Cash 1.4B
    Custs 7950 +30%
  • Custs >100K 1467 +41%
    Empl 2200 +44%
    $NER 119% -100bps, +200bps seq
  • strong RPO growth due to increase in larger enterprise custs w larger contracts for longer periods
  • contracts >1M +80%, with avg term 4Yr (+50% over overall avg term)
  • $NER has been dropping last few Q (due to bigger initial deals) but jumped back up this Q on stronger cust upsell
  • per COO, 73% custs expect to expand spend, 0% expect to decrease
  • new custs Autodesk, Global 2000 power co for 100k empl/partners, Euro film/tv co for 8m custs
  • new partnerships w Netflix and Disney+ for auth login
  • Oktane conf 3/30-4/2 will now be virtual; sure to have new products announced
  • already increasing FY21 guidance from last Q
  • will continue to invest in Int’l sales
    expansion in FY21; guiding for positive cashflow but continued losses due to investment (with >1/2 of losses due to facility expansion alone)

CC Q&A tidbit: If you look at the best of breed, I mean of our customers and we have many, many large deployments of Office 365, right? Organizations like Hitachi that roll out hundreds and thousands of employees of Office 365 in three months using Okta. But over 75% of our Office 365 customers are using another collaboration best of breed applications. So Zoom or Slack or something like that. And what that really means is that, the future is this, hybrid, multi-cloud, lots of applications, heterogeneous environment. And you need to have the ability to connect deeply and broadly into all the technologies that people use, and not be wedded to one specific application or one stack. … Okta Access Gateway is doing very, very well. And I think having that as an embedded part of the Okta Cloud Identity suite, having that be the pre-integrated solution that we provide to allow our legacy large enterprise customers, who have legacy infrastructure to connect that in a modern way to the cloud is very differentiated.

My stance: They veered into positive FCF 2 Qs ago, a good sign countering the slowly dropping revenue growth. I continue to have a strong position in this hypergrowth company as it transitions into a cash machine. There is a lot to like from this sticky SaaS provider. Larger and larger enterprises are signing up with longer and longer terms. Customers want the new products, as shown in re-strengthening of $NER. Their new Zero Trust solution went GA last Q, new auto-scaling feature Dynamic Scale was heavily mentioned as a selling feature in new customer wins, and the next-gen of products/features are coming soon (which always debut at Oktane event, happening later this month). Even Intl is back on track, with a strong re-acceleration after dipping from 60% to 37% over last 3Qs, now jumping back to +52%. Opex still expanding as their Int’l footprint continues to scale up. Intl is still only 16% (so roughly 25.4M of 158.5M sub rev) but I expect the last year of sales facility & headcount expansion to bear fruit, and that we will continue to see Intl become a bigger and bigger slice. Stellar execution over past year, and I see signs of current products taking off as they expand their platform (and TAM) into new directions, as PAM (Server Access) and Zero Trust (App Access) help bridge systems in hybrid environs. CC Q&A bit quoted above mentioned how their new Access solutions are helping them sell into large enterprises, by allowing companies to bridge on-premise with cloud infrastructure. I cannot wait to see what is coming next down the product pipeline as they continue to leverage their Okta Cloud and Integration network into these great new directions.

Highly recommend reading the CC Q&A for a taste of all the exciting things happening in Okta’s storyline: customers are getting larger and larger; Intl is just getting started; new products are expanding platform in very compelling ways while helping them sell into larger enterprises; how customers with complex integrations are onboarding quickly.

======================
ZM - Q420

pre earnings

Saul on expected rev: https://discussion.fool.com/i-have-to-speak-up-about-the-asserti…
Bobby on whether new customers are free or paid: https://discussion.fool.com/zoom-had-1292-million-monthly-active…

PR: https://investors.zoom.us/news-releases/news-release-details…
Fool take (Sparks): https://www.fool.com/investing/2020/03/04/zooms-q4-earnings-…
Fool take (McKenna): https://www.fool.com/investing/2020/03/04/zoom-video-stock-d…
Buyn2Hold take: https://discussion.fool.com/4056/zoom-video-q4-earnings-34427320…
Hmc take: https://discussion.fool.com/quotimo-i-think-the-numbers-just-oka…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…
Buyn2Hold with CC highlights on coronavirus impact: https://discussion.fool.com/4056/zoom-video-earnings-webinar-344…
TomG sees many positives: https://discussion.fool.com/4056/mliss-thanks-for-asking-my-firs…

Revenue 188.3M +78%

  • Americas +77%
  • APAC+EMEA +84% (…20% of ttl)
    Deferred Rev 231M +83%
    RPO 604M +94% !!
    Adj Op Inc 38.4M +292% !!
    … margin 20.4% +1110bps !! !! !!
    Adj Gross Margin 84.2% +210bps
    Adj Inc 43.2M +332% !!
    Adj EPS 0.15
    Opex 145.2M +79.7%
    CFFO 36.6M +129%
    FCF 26.6M +367% !!
    Cash 855.2M
    Empl >2500
    Custs 81.9k +61% !!
  • Custs >100K 641 +86%
  • Custs w Zoom Phone 2.9k
    $NER >130%

FY19:
Revenue 622.7M +88%
Adj Op Inc 88.7M +487%
… margin 14.2%
Adj Inc 101.3M +514%
CFFO 151.9M +196%
FCF 113.8M +397%

  • new custs are 59% of growth, 41% is existing custs
  • reported custs are those >10 employees, represent 80% of rev +200bps
  • non-current RPO grew 120% w morE longer term deals
  • seeing usage spike due to outbreak, mostly on free side
  • has already added more new users in 2Mo of 2020 than in all of 2019
  • are proactively monitoring capacity to ensure reliability as usage scales up
  • lifted 40min free limit in China to help during outbreak
  • continue to add capacity- margins affected
  • new custs J&J, VMWare
  • 2900 custs w Zoom Phone in first year of release, logging 230M mins
  • Zoom Phone now GA in 17 countries (+11) and beta in 24 - striving for 50 by year end
  • partnering with contact center software solutions like Five9, inContact and Twilio
  • added new master agent and referral program for Zoom Phone
  • won highest rating in 2020 Gartner Peer Insights Cust Choice Award for Meeting Solutions
  • Okta report showed Zoom having 876% growth w/in Okta network over last 3yrs

My stance: I finally bit the bullet and got onboard with ZM, even with its already astronomical valuation — there are too many good trends. Unfortunately, this decision was made after most of the recent run-up … but better late than never. Way too many positives. Similar large cap range as SHOP and SQ but still growing revenue double what they are. Beyond that, they are rapidly scaling up their cash flow and profit while still having this massive hypergrowth. Great combination! Like TomG stated in his post above, easy to ultimately see the company hit 100B marketcap. Int’l expansion is major goal, now only 20% of rev. The high margins went higher — but they signaled it will drop back to low-80s w capacity additions this yr. That is a good problem to have. They’ve been strained by all the new users from this pandemic, and the mostly-free traffic they’ve generated — but we know from Zoom’s past that that massive influx of free users will only pay off going forward, as users use it more and more and ultimately convert to paying. They seem like they have a great handle on capacity and infrastructure needs. But it all boils down to how insanely profitable they are at this stage of hypergrowth. I like! Just wish I acted immediately when it finally went to top of watchlist back in December, instead of delaying til February - lesson learned.

======================
TTD - Q419

PR: http://investors.thetradedesk.com/news-releases/news-release…
Fool take (Sparks): https://www.fool.com/investing/2020/02/27/the-trade-desks-fo…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/27/th…

Revenue 215.9M +34.5%
Adj Income 71.6M +40.1% !!
Adj EPS 1.49 +36.7%
Gross Spend 3.1B +33%
Opex 163.3M +46.5%

FY19 ad growth:
Video +54%
Connected TV +137%
Audio +185% !!
Mobile Video +50%
Mobile in-app +67%

My stance: I exited majority of this position earlier this year as revenue growth has slowed down significantly, using part of the proceeds to get into Cloudflare. That was a really good move on my part, as NET is +21% while TTD is -46% since. I still think it is a fantastic business w/ a mgmt that is executing, and do think the stock will rebound quickly at some point now that income is ramping up – but at this time, I see more opportunity elsewhere, as this pandemic is sure to have an impact on ad spend. Hypergrowth had already waned here, and now this new crisis … I’ll be repositioning the remainder soon.

48 Likes

[ok make that 3 parts]

======================
ESTC - Q320

pre earnings

Saul sees growing losses: https://discussion.fool.com/thoughts-on-elastic-34394368.aspx

PR: https://s2.q4cdn.com/265747582/files/doc_financials/2020/q3/…
Fool take (Symington): https://www.fool.com/premium/coverage/investing/2020/02/27/w…
Bert take: https://tickertarget.com/sq-and-estc-standouts-in-a-difficul…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/27/el…
Sarksnz summary: https://discussion.fool.com/estc-q3-2020-cc-notes-34424281.aspx
Bear with historical numbers: https://discussion.fool.com/looks-solid-to-me-too-here-are-the-d…
Dreamer still holding: https://discussion.fool.com/estc-drop-has-been-tough-to-stomach-…
Sarknz ESTC vs MDB: https://discussion.fool.com/hey-bear-just-going-through-the-mdb-…

Revenue 113.2M +60% (+61% CCURR) ^^

  • Pro Svcs 9M +44%
  • Sub Rev 89.7M +62% (+63% CCURR)
    – SaaS Rev 25.1M +114% (+118% CURR) ^^
    … 22% of total rev
    Billings 122.9M +54% (+56% CURR)
    Deferred Rev 209.8M (+52% CURR)
    RPO 426M +40%
    Gross Margin 70.49% -68bps
    Adj Op Loss 20.2M
    … margin -17.8%
    Adj EPS -0.28 (vs -0.16)
    Opex 122.0M +64.5%
    CFFO -23.2M swung neg
    FCF -24.2M
    … margin -21.4%
    Cash 294.1M
    Custs 10.5k +45.8%, +8.25% seq
  • Custs >100K 570 +50%
    $NER >130%
  • Int’l is 44% of total
  • Accelerating growth from Q2 in total revs (+59% to +60%), SaaS (+106% to +114%), and billings (+41% to +62%)
  • Billings accelerating ()
  • Cash flows strongly negative - FCF margin went from -1.3% to -21.4% seq.
  • CRO is gone as of immediately, advising until 8/1 for replacement
  • new CMO, ex-Informatica
  • new BoD member, ex-Cisco

CEO on CRO change: "Looking ahead, I see an opportunity to bring in a seasoned go-to-market leader who has built and seen multibillion-dollar scale, as we address the large and exciting market opportunity ahead of us.

CFO on cash flow losses: "Free cash flow was negative $24.2M in Q3 compared to negative $9.9M in the same period a year ago, reflecting timing differences of certain inflows and outflows. As a reminder, we look at free cash flow and free cash flow margin primarily on an annual basis since there are both seasonal and timing effects in any quarter, making quarterly cash flow inherently lumpy."

FedRAMP approved on AWS GovCloud at Moderate level: https://www.businesswire.com/news/home/20200317005172/en/Ela…

My stance: This company is doing well, but boy howdy, the CRO sure was shown the door right quick. We aren’t being told why. Wonder if a new CRO will shake things up a bit on their go-to-market strategy? And will that be a good thing or a bad thing, as, to be fair to that now ex-CRO, it was a good quarter on the top line. Total rev and SaaS rev and billings growth have stabilized and are increasing again. Customers are growing and $NER remains >130%.

I sold out in December, but with the promise to revisit. I made the right short term move, as I moved those funds into AYX, DDOG and CRWD which have all outperformed ESTC this YTD, even after this bump on earnings. It is at the top of my watch list, and the great performance this Q may bring me back in. The cash flow swing negative makes me pause a bit but the CFO stated that it has short term swings.

======================
ZS - Q220

PR: https://ir.zscaler.com/node/8276/pdf
Fool recap: https://www.fool.com/premium/coverage/investing/2020/02/21/w…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/21/zs…
Tedyun take: https://discussion.fool.com/4056/zs-page-2-q2-2020-earnings-8211…
Sarksnz summary: https://discussion.fool.com/zs-q2-2020-cc-notes-34419551.aspx
Texmex on sales restructuring: https://discussion.fool.com/i-also-have-a-35-position-to-add-to-…
Tinker is out: https://discussion.fool.com/not-so-tough-if-you-use-volatility-a…

Revenue 101.3M +36%
… adj w/o special sale last yr +41%
Billings 135.4M +18%, -1900bps seq
… adj w/o special sale last yr +30%
Deferred Rev 280M +36%
RPO 609M +32%
Adj Op Income 10.9M +11%
… margin 10.8% (vs 13.4%)
Adj Income 12M -3.4%
Adj EPS 0.09
Gross Margins 82% +200bps
Opex 71.9M +44%
CFFO 5.4M (vs 15.7M)
FCF -1.9M (vs 12M)
… swung neg due to 15M legal settlement w/ Symantec to end all lawsuits
Cash 385M
$NER 116% -200bps

  • 4 new products coming, releasing as GA in Q4
  • New sales initiatives
  • New Global 2000 customers coming from Crowdstrike partnership, using combined sales teams
  • Microsoft Partnership for Office 365 and Azure

Ugh. From a high of +65% 5Q ago, rev growth has gone from +61% to +53% to +48% to now +36% over TTM. Billings is sub 20%. Saul identified the trend pretty quickly, and has been scaling down since it went under 50%. I decided to see it out given their platform stickiness. But their sales to NEW customers has dropped off quite drastically, so it seems their sales issues were larger than I anticipated. I put part of the blame on the fact their platform is so difficult to on-board new customers onto, requiring a host of system integrators to assist.

But beyond the souring growth, I have also identified a major new competitive threat - Cloudflare has a new product, Cloudflare for Teams, that is an exact copy of Zscaler’s primary moat (data centers covering the globe to make the edge local to users). Cloudflare just released a product suite wrapping up a new Gateway product with their existing Access product, making a carbon copy of ZIA+ZPA.

One positive is their new product lines coming in Q4 (July). B2B is the reason I have stayed in ZS since the last Q’s poor showing. Another new product coming, ZDX, is user experience monitoring akin to Datadog’s new RUM product. But I don’t trust ZS on new products until their numbers show it. Zscaler really talked up ZPA but they never seemed to have it gain much traction with customers outside of those already using ZIA. It became mostly a complimentary product instead of a separately sold one. IF Zscaler adapts, and learns to sell ZPA and B2B independently of ZIA while also making it possible to self-install it, I could see sales ramping back up quickly. Only then would I be intrigued enough to get back in.

However, with today’s realities, I’m out, for the reasons I outlined above and summarized again here: https://discussion.fool.com/i-often-feel-that-the-best-thing-to-… . As-is, Zscaler is “hard to sell” AND “hard to integrate”. Those facts aren’t going to change fast, and that’s a problem when there is direct competition already here (Okta and Cloudflare) that is easier to purchase and easier to install.

======================
ROKU - Q419

PR: https://ir.roku.com/static-files/e7f56c0d-313e-4b32-83c0-323…
Munarriz take: https://www.fool.com/investing/2020/02/16/the-ups-and-downs-…
BreakerJohn take: https://discussion.fool.com/4056/roku-q4-2019-ticker-take-344132…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/14/ro…
CC recap (Starrob): https://discussion.fool.com/4056/roku-q4-2019-prepared-remarks-3…
CC Q&A recap (Starrob): https://discussion.fool.com/4056/roku-q4-2019-qa-34415186.aspx
Gaucho on guidance: https://discussion.fool.com/roku-thoughts-on-2020-guidance-34411…
Darth on ARPU: https://discussion.fool.com/i39m-trying-to-wrap-my-head-around-h…
Historical metrics: https://discussion.fool.com/4056/34411256.aspx
Historical financials: https://discussion.fool.com/4056/34411297.aspx

Revenue 411.2M +49%

  • Platform Rev 259.6M +71%
  • Player Rev 151.6M +22%
    … platform 63% of rev
    Gross Profit 161.6M +44%
    Op Loss -17.4M (vs 5.5M)
    … margin -4.2% (vs +5.1%) -935bps
    OpEx 179M +68%
    Gross Margins 39.3% -140bps
  • Platform GM 62.5% -970bps
  • Player GM -0.5% -290bps
    Cash 517.3M

Player units +33% ^^
Active Accts 36.9M +36%
Stream Hrs 11.7B +60% -900bps
ARPU 23.14 +29%

FY19 Totals:
Revenue 1128.9M +52%

  • Platform Rev 740.8M +78%
  • Player Rev 388.1M +19%
    Opex 560M +38%
    Stream Hrs 40.3B +68%
  • crossed the $1B rev mark
  • they are now running Player segment at 0% margin
  • “highly effective” holiday promotion strategy lead to +33% unit sales but at -10% ASP for +22% rev
  • doubled monetized video ad impressions YoY
  • new ad formats and interactivity working well
  • Disney did home screen and banner ads for Disney+ launch (see screenshot in PR)
  • expanded into Brazil w/ TV and content partnerships https://techcrunch.com/2020/01/21/roku-expands-to-brazil-lau…
  • heavy spending on initiatives thru FY19; opex +68%, or +56% w/o dataxu acq
  • will continue to invest in same 4 major initiatives in FY20
  • expect FY20 Opex of 905M; 60% of increase due to new headcount, new HQ, and dataxu acq
  • New “Are you still watching?” feature to close unwatched channels, partial roll out in Q419 (and is now fully rolled out now in Q120); causing drop in Stream Hrs growth of 10-15% but not affecting financials

Key focuses for FY19 (& now again FY20):

  • OTT advertising:
  • Acquired dataxu DSP (demand side platform) for $150M, integrating it into Platform segment
  • Added new ad types - brand banners, premium signup ads, sponsor curated collections, sponsor movie w/ “limited commercial interruption”
  • Added ad interactivity - add reminders for content, subscribe to channel, integrate w/ SMS
  • Roku Channel:
  • “an always-changing selection of free movies, shows, live news, kids’ TV, and more”
  • 56M active viewers
  • in top 3 of ad-supported streaming services in the US, top 5 in Canada
  • growing faster than platform
  • 40 Premium sub channels, 55 linear channels, Kids & Family section
  • utilize ML to personalize content selections
  • integrated with billing for one-click premium subs
  • allows for new ad capabilities and sponsorships beyond 15-30s ads
  • Roku TV:
  • added more TV brands for 15 total, incl Walmart brand Onn, TCL 8-Series
  • added soundbars, multichannel wireless speakers
  • added “Roku TV Ready” program for OEMs to easily integrate audio products
  • International:
  • in US, Canada, Mexico, and now UK and Brazil
  • launched in UK in Sept w/ tv from Hisense
  • launched in Brazil in Jan w/ tv from AOC (TPV/Phillips)
  • partnership w/ Globo in Brazil for Globoplay, streaming service for local content
  • 7 new TV brands added in Mexico for total of 9
  • 1 in 4 TVs sold in Canada, 1 in 3 TVs in US

CFO in CC: “We remind you that we are not optimizing for Player gross profit given our focus on device sales as an important driver of account growth. We believe that our strategy of trading Player margin for account growth and platform revenue growth is working well… our goal for 2020 is to continue to invest our incremental gross profit back into our strategic growth opportunities…”

Tidbit from CC Q&A on appeal to advertisers/brands: “…about half of our user base doesn’t have a pay-TV package in their home. So by definition, they’re not reachable through linear television. The other half tend to be very light linear TV viewers.”

Side note: the premium services keep on coming – new service from HBO (HBO Max) coming in May for $15/mo w/ HBO+WarnerBros content. https://www.hbomax.com/

My stance: Platform rev +71%, and they had an especially strong holiday season on Player side. Slight loss in Players segment now, but I don’t care in the slightest - getting more users & usage is the critical part (+33% unit growth!). They are being adept in expanding internationally with tv & content partnerships (UK! Brazil!). Platform margins dropped due to all the initiatives in FY19 (bulk of 72%-62% drop happened 2-3Q ago and its flattened at 62% since). After the success of those initiatives, they are doing the same in FY20. I’m happy with their story - player units and active accts keep growing while ARPU rises from more ad impressions – and they have a lot of the globe yet to come. And with dataxu, they have integrated a mini-TTD for managing ad-buys for their customers, both on and off Roku platform.

Shareholder letter: We predict that by 2024 roughly half of all U.S. TV households will have cut the cord or never had traditional pay TV. … We have now entered the streaming decade when we believe consumers around the world will choose streaming as their primary way of viewing TV.”

Encouraging comment from RBC analyst: “Roku should benefit from this secular shift, especially as only 3% of TV budgets have transferred to OTT while 29% of audience is streaming videos, per Magna Global. And near-term, we see Roku benefiting directly from the Streaming Wars (eg record account adds) and from international expansion.” https://www.barrons.com/articles/roku-stock-growth-valuation…

======================
DDOG - Q419

PR: https://investors.datadoghq.com/news-releases/news-release-d…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/14/da…
CC recap (Starrob): https://discussion.fool.com/4056/datadog-q4-2019-prepared-remark…
CC recap (sarksnz): https://discussion.fool.com/ddog-q4-2019-cc-notes-34412691.aspx
Saul on FY op loss guidance: https://discussion.fool.com/full-year-2020-outlook-quotnon-gaap-…

Revenue 113.6M +84.5% !!
Adj Op Inc 7.0M
… margin 6.1% (vs -7%) +540bps seq
Adj Inc 10.1M
Adj EPS 0.03 swung pos
Opex 90.2M +71%
Adj Gross Margin 78% +300bps
CFFO 17.4M
FCF 10.9M swung pos
Cash 778M
Custs 10.5k +36%, +10.5% seq !!

  • Custs >100K 858 +89% !!
  • Custs >1M 50 +72%
    ARR
  • Enterprise ARR 230k +43%
  • Mid-market ARR 170k +54%
    $NER >130% for 10 Qs

FY19 Totals:
Revenue 362.8M +83%
Adj Op Loss -5.4M
… margin -1.5%
Adj EPS -0.01
CFFO 24.2M
FCF 0.8M

  • +1000 net new custs was a Q record
  • 60% of custs using 2+ products (vs 25% last yr), including 65% of new deals
  • 25% of custs using all 3 pillars [aka infrastructure + APM + logs] (vs 5% last yr)
  • 40% of rev growth from new custs, so I think their actual $NER is way higher than 130%
  • custs >100K drive >70% of ARR
  • new product Security Monitoring in beta
  • integrated into Azure DevOps platform
  • Network Perf Monitoring (NPM) went GA, added SNMP integration in beta
  • Real User Monitoring (RUM) went GA
  • launched Datadog Partner Network to support channel partners (MSPs, SIs, Resellers and Referral Partners), as well as outside solutions built on Datadog platform
  • enhanced APM functionality to deepen visibility into containers & serverless, and updated their AWS Lambda integration
  • enhanced their ML features
  • introduced Metrics Coorelations feature https://www.datadoghq.com/blog/metric-correlations/
  • lockup ends 3/9 https://discussion.fool.com/4056/as-pointed-out-by-someone-smart…

My stance: Current Q rev growth 85% vs FY 83% - so no sign of slowing. Adj EPS swung pos was surprise, but guidance for next Q is back to loss (likely why it sold off). New growth is strong, and further growth of existing customers is fantastic w/ a high $NER. 25% of their customers are using all 3 “pillars of observability” and rising (+2000bps!). 65% of new deals involve >1 product. This company is executing. They continue to have a huge focus on the next wave of cloud development technologies, esp serverless.

Fun fact: >70% of ARR driven by custs>100k. This cohort is grew 89% YoY.

======================
AYX - Q419

PR: https://investor.alteryx.com/news-and-events/press-releases/…
Frankdip take: https://discussion.fool.com/4056/ticker-guide-take-ayx39s-awesom…
Vena take: https://www.fool.com/investing/2020/02/17/alteryxs-results-i…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/13/al…
CC recap (Starrob): https://discussion.fool.com/4056/alteryx-q3-2019-prepared-remark…
Rhill take: https://discussion.fool.com/the-quarter-was-fantastic-no-sane-pe…
Bear on lapping 606: https://discussion.fool.com/it-appears-alteryx-greatly-benefited…
Gaucho on RPO: https://discussion.fool.com/ayx-rpos-34412514.aspx
Bobby CC bit on competition: https://discussion.fool.com/this-is-my-favorite-bit-of-the-confe…
Tinker on product trends: https://discussion.fool.com/gauchochris-and-others-are-much-bett…
Ethan on contracts pulled forward w pricing change: https://discussion.fool.com/i-just-wanted-to-add-my-voice-to-dia…
Tedyun primer & reasons to own: https://discussion.fool.com/4056/ayx-q4-2019-earnings-and-tradin…
Insights from CFO on price increase & Snowflake: https://discussion.fool.com/ayx-pull-forward-rev-due-to-price-in…

Revenue 156.5M +75.5% ^^

  • Int’l 45.9M +84% ^^, +54% seq !!
    Bookings 290M +81%
    Adj Op Inc 51M +93% !!
    … margin 32.6% (vs 29.6%)
    Adj Inc 44.2M +111%
    Adj EPS 0.64 +100%
    Opex 94.8M +67%
    Adj Gross Margin 93%
    CFFO 20.7M +43%
    … margin 13.2% (vs 16.1%)
    Cash 975M
    Custs 6087 +30%
  • Global 2000 custs 71 +5% seq
    … 36% of Global 2000
    Empl 1291 +58%, +9.8% seq
    $NER 130%

FY19 Totals:
Revenue 418M +65%
Bookings 600M +70%
Adj Op Inc 75.2M
Adj Inc 64.6M

  • focus on bigger deals is paying off – deals >$1M +150% (!!), >$500K +80%
  • 2y avg contract duration
  • acquired Feature Labs for ML
  • added PwC as first Global Elite Partner, in 5y partnership
  • new Global 2000 custs incl Caesers, Canadian Pacific, Halliburton, NASDAQ
  • huge buys from Chevron, Fannie Mae, Splunk, Salesforce, Ulta, Xerox
  • new features for assisted modeling in final beta
  • recent price increase on Server product
  • INSPIRE conf now called Analyticon.

CEO Stoeker in Q&A: “we see the benefits of Alteryx in that rarely do our customers have all their data in one place. In fact, I think the motivations of the cloud vendors is to get your data into their place, and the reality is most customers aren’t going to do that. They’re going to be multi-cloud forever. They’re going to be on-premise for a very, very long time. In fact, I think a lot of the narrative that we see out there now is that the data hasn’t moved nearly as fast as people once thought it would. So having a set of partners in this ecosystem of data science and analytics, we find very, very helpful.”

Gartner MQ 2020 in Data Science and ML Platform (leader, top ability to execute): https://www.alteryx.com/third-party-content/gartner-2020-mq-…

My stance: Stellar execution. That minor criticism I had last Q has been erased – huge turnaround in Int’l numbers, +54% seq (!!). They have always talked about 2 different audiences for their products - data scientist vs “citizen data scientist” (aka the professional vs amateur). On the call they discussed a new third persona - the data engineer. I always thought a huge strength of their system was in being a data load, transform and blending tool - all before you even get to the analytics features. I expect them to continue to focus on expanding data prep tooling and focus on this newly mentioned persona. They also keep talking about moving towards automation of data prep and ML, so expect tooling to keep moving that direction as well (see FeatureLabs acq last Q). In the meantime, they keep executing. I still think they are ultimately acquired.

======================
SMAR - Q420

PR: https://investors.smartsheet.com/press-releases/press-releas…
SSI take: https://softwarestackinvesting.com/smartsheet-smar-q4-2020-e…
Bear take: https://discussion.fool.com/smar-q4-34441630.aspx
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…

Revenue 78.5M +51%

  • Sub Rev 71.1M +53%
    Billings 101.5M +58%
    Adj Op Loss 17.3M (was -8.5M)
    … margin -22.0% (vs -16.4%)
    CFFO -42k
    CFC -3.6M
    … margin -4.6% (vs +1.3%)
    Opex 93.0M +68%
    Custs 84k
  • 5K 9070 +47%

  • 50K 961 +116%

  • 100K 350 +138%
    ACV 3643 +48%
    $NER 135% !!

My stance: I sold out of my small position after last Q, since margins are moving the wrong way, and growth is back to trickling down after a brief rise. Same story this Q. While sub rev +53% is encouraging, how sticky is this company’s products? We’re about to find out next few Q! I am keeping this in my watch pile til then, but I’m expecting the continually lowering growth rates to finally hit 50%. Curtailed enterprise spend is likely to impact the part of the growth from new deals.

======================
FSLY - Q419

PR: https://investors.fastly.com/files/doc_financials/2019/q4/4Q…
Fool recap: https://www.fool.com/investing/2020/02/21/why-fastly-stock-d…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/02/21/fa…

Revenue 59M +44% ^^ +1000bps seq
Adj Op Loss -9M (vs -6M)
… margin -15.3% (vs -14.6%)
Adj EPS -0.10
Adj Gross Margin 57.6% +80bps
Enterprise custs 288
Enterprise avg spend 607K
$NER 136%

  • Went from 34% Q3 to 44% Q4
  • 68 Points of Presence (global network)
  • CEO founder is moving to Chief Architect and Executive Chairman
  • President (for past 3yr) is moving to CEO and joining BoD

======================
TEAM - Q220

Shareholder letter: https://s2.q4cdn.com/141359120/files/doc_financials/2020/Q2/…
Fool take: https://www.fool.com/premium/coverage/investing/2020/01/27/a…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…

Revenue 408.7M +37% (vs 39%)

  • Sub Rev 228.7M +50% (vs +56%)
  • Maint Rev 116.9M +20%
    Gross Margin 83.9% +60bps
    Op Inc 41.8M (vs -3.2M)
    … margin 10.2% (vs -1.1%)
    Adj EPS 0.37 +48%
    CFFO 218M +67%
    FCF 202M +65%
    … margin 49.4%
    Opex 301.1M +19.3%
    Empl 4098
    Cash 1.9B
    Custs 164.8K
  • sub rev now 56% of ttl +1900bps
  • launched Forge cloud app dev platform
  • new template features in Trello and Jira Service Desk
  • lot of cust activity before announced price chg
  • President leaving in July
  • now have free cloud editions of Jira, Service Desk, Confluence

======================
WORK - Q420

PR: https://investor.slackhq.com/news/news-details/2020/Slack-An…
FoolishErik take: https://discussion.fool.com/4056/slack-earnings-report-for-2020q…
Fool take (SunLion): https://www.fool.com/investing/2020/03/17/should-buy-slack-t…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…
Fool on pandemic impact: https://www.fool.com/investing/2020/03/13/slack-expects-coro…

Revenue 181.9M +49%
Billings 254.7M +47%
Adj Op Loss -23.1M (vs -37.5M)
… margin -12.7% (vs -30.8%) !!
Adj EPS -0.04
Adj GM 88.3% +120bps
CFFO 10.5M (vs -17.6M) swung pos
… margin 6% (vs -14%) +2000bps !!
FCF -0.8M (vs -31.1M)
… margin 0% (vs -25%) +2500bps !!
Paid Custs 110K +25%

  • Custs >100K 893 +55%
  • Custs >$1M 70 +79%
    Cash 769M
    $NER 132%

FY20:
Revenue 630.4M +57%
Billings 765.3M +48%
Adj Op Loss -130.6M
CFFO -12.4M
FCF -62M

FoolishErik’s other earnings recaps of FY20:
Q120 & Q220: https://discussion.fool.com/4056/slack39s-2020q1-and-2020q2-earn…
Q320: https://discussion.fool.com/4056/slack-earnings-report-for-2020q…

  • seeing significant uptake due to pandemic response
  • partnerships w/ Atlassian, Okta, Zoom, Box
  • ‘dramatically improved’ UI coming soon
  • 37% of rev was Int’l
  • opened offices in Munich, Paris, Sydney, Osaka

======================
DOCU - Q420

PR: https://investor.docusign.com/investors/press-releases/press…
Slides: https://s22.q4cdn.com/408980645/files/doc_financials/2020/q4…
Fool take: https://www.fool.com/premium/coverage/investing/2020/03/14/w…
Fool take: https://www.fool.com/premium/coverage/investing/2020/03/18/f…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…

Revenue 274.9M +38%

  • Sub Rev 258.1M +38%
    Billings 366.9M +40%
    Adj GM 79% +100bps
  • Adj Sub GM 84% -100bps
    Adj Op Inc 21M +200%
    … margin 7.6% +410bps
    Adj Inc 0.12 +50%
    Opex 249.2M +19%
    CFFO 45.5M +33%
    … margin 17% flat
    FCF 15.5M -32%
    … margin 6% -500bps
    Cash 896.2
    Empl 3909 +29%
    Custs 589K +24%
  • Ent&Comm Custs 75K +33%

FY20:
Revenue 974M +39%
Billings 1.1B +38%
Adj Inc 0.31 (vs 0.09)

  • acq Seal Software, a partner for 2y providing â??Intelligent Insightsâ?? product core, using AI to search for legal concept

======================
WDAY - Q420

PR: https://www.workday.com/en-us/company/newsroom/press-release…

Revenue 976.3M +24%

  • Sub Rev 839.7M +25%
    Adj Inc 116.6M +26% !!

FY20:
Revenue 3.63B +29%

  • Sub Rev 3.1B +30%
    Adj Inc 484.5M +16%
    CFFO 864.6M +43%
  • Q4 growth decelerating from FY
  • Q4 inc growth increasing over FY

======================
VEEV - Q420

PR: https://ir.veeva.com/investors/news-and-events/latest-news/p…

Revenue 311.5M +34%

  • Sub Rev 254.1M +33%
    Adj Inc 85.5M +20%
    Adj EPS 0.54
    CFFO 39.1M +23%
    Custs 861 +20%
  • Commercial Cloud 390 +16%
  • Vault 715 +20%
    Sub ARR 121%

FY20:
Revenue 1104.1M +28%

  • Sub Rev 896.3M +29%
    Adj Inc 347.4M +36%
  • Acquired ScoutRFP

  • Human Capital Mgmt product line won Jan 2020 Gartner Peer Insight Customers’ Choice award

  • Adaptive Insights product line won Nov 2019 Gartner Peer Insight Customers’ Choice award

  • received top award from KLAS Research for #1 in Healthcare ERP, 3rd yr in a row https://www.workday.com/content/dam/web/en-us/documents/data…

  • Q4 rev growth growing over FY !!

  • Q4 inc growth decelerating from FY

======================
PAYC - Q419

PR: https://investors.paycom.com/press-releases/press-release-de…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…

Revenue 193.4M +29%

  • Recurring Rev 190.2M +29%
    Adj Inc 50.5M +43% !!
    Adj EPS 0.86
    Adj Gross Margins 85.3% +100bps
    Cash 133.7M
    ARRR 93% +100bps
    CFFO 47.8M

FY19:
Revenue 737.7M +30%

  • Recurring Rev 724.4M +30%
    Adj Inc 204.6M +31%
    Adj EPS 3.50
  • New products Direct Data Exchange, Ask Here, Manager On-the-go

  • Added to S&P500 in Jan

  • Q4 growth slight drop from FY

  • Q4 inc growth accelerating !!

======================
TWLO - Q419

PR: https://investors.twilio.com/all-news/press-release-details/…
Slide deck: https://s21.q4cdn.com/247074597/files/doc_financials/2019/q4…
Tedyun take: https://discussion.fool.com/4056/twlo-page-3-q4-2019-earnings-82…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…
CC notes (Edyboom): https://discussion.fool.com/4056/conference-call-notes-earnings-…

Base Revenue 306.6M +65%

  • Organic 253M +36%, +44% adj
  • SendGrid 54M +30%
    Adj Op Loss -3.0M (vs -2.4M)
    Adj EPS 0.04 (flat)
    $NER 124% -2300bps
    Empl 2905
    Custs 179k

FY19 totals:
Base Revenue 1.06B +79%

  • Organic +47%
    Adj Op Loss -1.8M (vs +4.1M)
    Adj EPS 0.16 (vs 0.11)
    Gross Margins 57%
    $NER 136%
  • hit $1B revenue, int’l is 29%

  • 800B tx in FY19

  • SendGrid sent 4.1B emails on Black Friday, then 4.2B on Cyber Monday, +45% YoY

  • new SMS custs Paypal, Blablacar, Rappi

  • new Flex cust Southwest Airlines

  • Q4 growth decelerating from FY

  • Dropping $NER (147% to 124%), organic growth under 40%. Some one time adj in Q418 supposedly takes organic to +44%.

-muji
long many of these

45 Likes