AYX - Alteryx Announces Second Quarter 2019 Financial Results

July, 31 2019 04:05 PM Alteryx Inc. Class A

Second Quarter Revenue of $82.0 Million, up 59% Year-Over-Year

Dollar-Based Net Expansion Rate of 133%

Alteryx, Inc. (NYSE: AYX), revolutionizing business through data science and analytics, today announced financial results for its second quarter ended June 30, 2019.

“Our forward momentum continued in the second quarter highlighted by revenue growth of 59% year-over-year and net expansion rates of over 130% driven by both strong market tailwinds and solid execution,” said Dean Stoecker, CEO of Alteryx, Inc. “We continue to be humbled and amazed by the innovative ways our customers are leveraging the Alteryx platform to transform their business in remarkable ways.”

Second Quarter 2019 Financial Highlights

Revenue: Revenue for the second quarter of 2019 was $82.0 million, an increase of 59%, compared to revenue of $51.5 million in the second quarter of 2018.
Gross Profit: GAAP gross profit for the second quarter of 2019 was $72.7 million, or a GAAP gross margin of 89%, compared to GAAP gross profit of $46.2 million, or a GAAP gross margin of 90%, in the second quarter of 2018. Non-GAAP gross profit for the second quarter of 2019 was $74.3 million, or a non-GAAP gross margin of 91%, compared to non-GAAP gross profit of $46.9 million, or a non-GAAP gross margin of 91%, in the second quarter of 2018.
Income (Loss) from Operations: GAAP loss from operations for the second quarter of 2019 was $(8.3) million, compared to $(3.4) million for the second quarter of 2018. Non-GAAP income from operations for the second quarter of 2019 was $0.8 million compared to non-GAAP income from operations of $1.1 million for the second quarter of 2018.
Net Income (Loss): GAAP net loss attributable to common stockholders for the second quarter of 2019 was $(3.2) million, compared to $(4.2) million for the second quarter of 2018. GAAP net loss per diluted share for the second quarter of 2019 was $(0.05), based on 62.6 million GAAP weighted-average diluted shares outstanding, compared to GAAP net loss per diluted share of $(0.07), based on 60.7 million GAAP weighted-average diluted shares outstanding for the second quarter of 2018.

Non-GAAP net income and non-GAAP net income per diluted share for the second quarter of 2019 were $0.9 million and $0.01, respectively, compared to break-even non-GAAP net income and non-GAAP net income per diluted share for the second quarter of 2018. Non-GAAP net income per diluted share for the second quarter of 2019 was based on 68.5 million non-GAAP weighted-average diluted shares outstanding.
Balance Sheet and Cash Flow: As of June 30, 2019, we had cash, cash equivalents, and short-term and long-term investments of $426.8 million, compared with $426.2 million as of December 31, 2018. Cash provided by operating activities for the first six months of 2019 was $6.7 million compared to cash provided by operating activities of $6.4 million for the same period last year.

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.”

Second Quarter 2019 and Recent Business Highlights

Ended the second quarter of 2019 with 5,278 customers, a 34% increase from the second quarter of 2018. Added 305 net new customers in the second quarter of 2019.
Achieved a dollar-based net expansion rate (annual contract value based) of 133% for the second quarter of 2019.
Hosted the largest-ever Alteryx user conference, U.S. Inspire 2019, which brought together approximately 4,500 customers, partners and employees to celebrate the Alteryx Community.
Named one of the 2019 Best Places to Work in Orange County for the fourth consecutive year.

Financial Outlook

As of July 31, 2019, guidance for the third quarter 2019 and full year 2019 is as follows:

Third Quarter 2019 Guidance:
- Revenue is expected to be in the range of $88.0 million to $91.0 million, an increase of 41% to 45% year-over-year.
- Non-GAAP income from operations is expected to be in the range of $5.0 million to $8.0 million.
- Non-GAAP net income per share is expected to be in the range of $0.06 to $0.09 based on approximately 70.0 million non-GAAP weighted-average diluted shares outstanding.
Full Year 2019 Guidance:
- Revenue is now expected to be in the range of $370.0 million to $375.0 million, an increase of 46% to 48% year-over-year.
- Non-GAAP income from operations is now expected to be in the range of $35.0 million to $40.0 million.
- Non-GAAP net income per share is now expected to be in the range of $0.44 to $0.50 based on approximately 69.5 million non-GAAP weighted-average diluted shares outstanding and an effective tax rate of 20%.

The financial outlook above for non-GAAP income (loss) from operations and non-GAAP net income (loss) per share exclude estimates for stock-based compensation expense, acquisition related adjustments, amortization of debt discount and issuance costs, and certain non-recurring items. A reconciliation of the non-GAAP financial guidance measures to corresponding GAAP measures is not available on a forward-looking basis primarily as a result of the uncertainty regarding, and the potential variability of, stock-based compensation expense, acquisition related adjustments, amortization of debt discount and issuance costs, and certain non-recurring items. In particular, stock-based compensation expense is impacted by our future hiring and retention needs, as well as the future fair market value of our Class A common stock, all of which is not within our control, is difficult to predict, and is subject to constant change. The actual amount of these expenses during 2019 will have a significant impact on our future GAAP financial results. Accordingly, a reconciliation of the non-GAAP financial guidance measures to the corresponding GAAP measures is not available without unreasonable effort.

Quarterly Conference Call

Alteryx will host a conference call today at 5:00 p.m. Eastern Time to discuss the company’s financial results. To access this call, dial 877-407-9716 (domestic) or 201-493-6779 (international). A live webcast of this conference call will be available on the “Investors Relations” page of the company’s website at https://investor.alteryx.com.

Following the conference call, a telephone replay will be available through August 7, 2019, at 844-512-2921 (domestic) or 412-317-6671 (international). The replay passcode is 13692466. An archived webcast of this conference call will also be available on the “Investors Relations” page of the company’s website at https://investor.alteryx.com.

Non-GAAP Financial Measures and Operating Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) per share, and non-GAAP weighted-average diluted shares outstanding. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures. We exclude the following items from one or more of our non-GAAP financial measures:

Stock-based compensation expense. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.

Acquisition-related adjustments. We exclude amortization of intangible assets and changes in fair value of contingent consideration, which are non-cash, related to business combinations from certain of our non-GAAP financial measures. We exclude such expenses as they are related to a business combination and have no direct correlation to the operation of our business.

Convertible senior notes adjustments. We exclude the portion of amortization of debt discount and issuance costs that relate to the equity component of our convertible notes, which are non-cash, from certain of our non-GAAP financial measures. We exclude such expenses as they are non-cash and have no direct correlation to the operation of our business.

Income tax adjustments. We utilize a fixed annual projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the effects of items such as changes in the tax valuation allowance, excess tax benefits associated with stock options, and tax effects of acquisition-related costs, since each of these can vary in size and frequency. When projecting this rate, we evaluated an annual projection that excludes the direct impact of the following non-cash items: stock-based compensation expenses, amortization of purchased intangibles, and the amortization of debt discount and issuance costs. The projected rate also assumes no new acquisitions, and considers other factors including our expected tax structure, our tax positions in various jurisdictions and key legislation in major jurisdictions where we operate. We used a projected non-GAAP tax rate of 20% and 23% for 2019 and 2018, respectively. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations. We will re-evaluate our long-term rate as appropriate.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, we exclude stock-based compensation expense, amortization of intangible assets, and amortization of debt discount and issuance costs which are recurring and will be reflected in our financial results for the foreseeable future. The non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our outlook for the third quarter 2019 and full year 2019, our market opportunity, our ability to execute our long-term growth strategy, our non-GAAP tax rate for 2019, and other future events. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including, but not limited to: our ability to manage our growth effectively; our ability to expand our talent base, particularly our sales force and software engineers, and increase their productivity; our history of losses; the rate of growth in the market for analytics products and services; our dependence on our software platform for substantially all of our revenue; our ability to attract new customers and expand sales to existing customers; our ability to develop and release product and service enhancements and new products and services to respond to rapid technological change in a timely and cost-effective manner; intense and increasing competition in our market; our ability to develop, maintain, and enhance our brand and reputation cost-effectively; our ability to establish and maintain successful relationships with our channel partners; our dependence on technology and data licensed to us by third parties; risks associated with our international operations; litigation, and related costs; security breaches; and other general market, political, economic, and business conditions.

Additional risks and uncertainties that could affect our financial results are included under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, which is available on the “Investor Relations” page of our website at https://investor.alteryx.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019. All forward-looking statements contained herein are based on information available to us as of the date hereof and we do not assume any obligation to update these statements as a result of new information or future events.

About Alteryx, Inc.

Revolutionizing business through data science and analytics, Alteryx offers an end-to-end analytics platform that empowers data analysts and scientists alike to break data barriers, deliver insights, and experience the thrill of getting to the answer faster. Organizations all over the world rely on Alteryx daily to deliver actionable insights. For more information visit www.alteryx.com.

Alteryx is a registered trademark of Alteryx, Inc. All other product and brand names may be trademarks or registered trademarks of their respective owners.

Alteryx, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)





Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Revenue
$
82,043


$
51,502


$
158,063


$
101,831

Cost of revenue
9,295


5,269


17,295


10,273

Gross profit
72,748


46,233


140,768


91,558

Operating expenses:







Research and development
16,381


10,181


30,453


20,949

Sales and marketing
48,185


27,539


86,635


49,618

General and administrative
16,470


11,938


36,370


21,733

Total operating expenses
81,036


49,658


153,458


92,300

Loss from operations
(8,288
)

(3,425
)

(12,690
)

(742
)
Interest expense
(3,098
)

(1,398
)

(6,084
)

(1,400
)
Other income (expense), net
847


(834
)

3,676


(64
)
Loss before benefit of income taxes
(10,539
)

(5,657
)

(15,098
)

(2,206
)
Benefit of income taxes
(7,320
)

(1,418
)

(17,793
)

(2,864
)
Net income (loss)
$
(3,219
)

$
(4,239
)

$
2,695


$
658

Net income (loss) per share attributable to common stockholders, basic and diluted
$
(0.05
)

$
(0.07
)

$
0.04


$
0.01

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic
62,613


60,685


62,271


60,372

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted
62,613


60,685


67,994


63,662

Alteryx, Inc. Stock-Based Compensation Expense (in thousands) (unaudited)





Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Cost of revenue
$
410

$
206

$
717

$
345
Research and development
1,516

721

2,355

1,954
Sales and marketing
3,152

1,613

5,351

2,770
General and administrative
2,946

1,354

4,936

2,614
Total
$
8,024

$
3,894

$
13,359

$
7,683

Alteryx, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)





June 30, 2019

December 31, 2018
Assets



Current assets:



Cash and cash equivalents
$
108,004


$
89,974

Short-term investments
224,652


239,718

Accounts receivable, net
64,977


94,922

Prepaid expenses and other current assets
43,522


37,199

Total current assets
441,155


461,813

Property and equipment, net
13,984


11,729

Operating lease right-of-use assets
31,575


—

Long-term investments
94,146


96,551

Goodwill
19,004


9,494

Intangible assets, net
16,527


7,491

Other assets
47,111


31,089

Total assets
$
663,502


$
618,167

Liabilities and Stockholders’ Equity



Current liabilities:



Accounts payable
$
10,823


$
5,028

Accrued payroll and payroll related liabilities
18,989


24,659

Accrued expenses and other current liabilities
16,836


10,878

Deferred revenue
71,767


84,015

Convertible senior notes, net
179,160


—

Total current liabilities
297,575


124,580

Convertible senior notes, net
—


173,647

Deferred revenue
1,824


2,130

Operating lease liabilities
28,411


—

Other liabilities
4,264


15,992

Total liabilities
332,074


316,349

Stockholders’ equity:



Preferred stock
—


—

Common stock
6


6

Additional paid-in capital
341,110


315,291

Accumulated deficit
(10,213
)

(12,908
)
Accumulated other comprehensive income (loss)
525


(571
)
Total stockholders’ equity
331,428


301,818

Total liabilities and stockholders’ equity
$
663,502


$
618,167

Alteryx, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)





Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Cash flows from operating activities:







Net income (loss)
$
(3,219
)

$
(4,239
)

$
2,695


$
658

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:







Depreciation and amortization
1,338


1,164


1,986


2,433

Non-cash operating lease cost
1,134


—


2,134


—

Stock-based compensation
8,024


3,894


13,359


7,683

Amortization of debt discount and issuance costs
2,814


1,261


5,513


1,261

Deferred income taxes
(7,490
)

3,430


(18,040
)

3,422

Provision for (recoveries of) doubtful accounts
76


27


(47
)

(81
)
Change in fair value of contingent consideration
(75
)

162


(75
)

455

Loss on disposal of assets
—


9


—


9

Loss on remeasurement of intercompany loan
949


—


37


—

Changes in operating assets and liabilities, net of effect of business acquisitions:







Accounts receivable
(12,590
)

(15,083
)

30,290


5,470

Deferred commissions
(889
)

(2,262
)

(2,066
)

(3,471
)
Prepaid expenses and other current assets and other assets
(7,794
)

(3,916
)

(15,270
)

(11,884
)
Accounts payable
2,991


6,585


4,753


7,028

Accrued payroll and payroll related liabilities
4,672


2,483


(5,871
)

(153
)
Accrued expenses and other current liabilities
2,657


(1,983
)

3,228


(4,932
)
Deferred revenue
(133
)

2,551


(12,957
)

(1,713
)
Other liabilities
(1,830
)

189


(2,996
)

188

Net cash provided by (used in) operating activities
(9,365
)

(5,728
)

6,673


6,373

Cash flows from investing activities:







Purchases of property and equipment
(2,022
)

(2,089
)

(3,550
)

(3,505
)
Cash paid in business acquisitions, net of cash acquired
(16,604
)

5


(16,604
)

(3,537
)
Purchases of investments
(73,229
)

(188,226
)

(146,782
)

(271,817
)
Maturities of investments
90,059


28,374


167,040


39,374

Net cash provided by (used in) investing activities
(1,796
)

(161,936
)

104


(239,485
)
Cash flows from financing activities:







Proceeds from issuance of convertible senior notes, net of issuance costs
—


224,775


—


224,775

Purchase of capped calls
—


(19,113
)

—


(19,113
)
Proceeds from receipt of Section 16(b) disgorgement
—


—


4,918


—

Proceeds from exercise of stock options, net of taxes remitted
(5,198
)

1,852


13,227


6,824

Minimum tax withholding paid on behalf of employees for restricted stock units
(2,822
)

(48
)

(5,261
)

(48
)
Settlement of acquisition-related contingent consideration
—


—


(1,000
)

—

Other financing payments
—


(83
)

(305
)

(415
)
Net cash provided by (used in) financing activities
(8,020
)

207,383


11,579


212,023

Effect of exchange rate changes on cash, cash equivalents and restricted cash
148


(225
)

43


(56
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(19,033
)

39,494


18,399


(21,145
)
Cash, cash equivalents and restricted cash—beginning of period
128,393


59,277


90,961


119,916

Cash, cash equivalents and restricted cash—end of period
$
109,360


$
98,771


$
109,360


$
98,771

Alteryx, Inc. Reconciliation of GAAP Measures to non-GAAP Measures (in thousands, except percentages and per share amounts) (unaudited)





Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Reconciliation of non-GAAP gross profit:







GAAP gross profit
$
72,748


$
46,233


$
140,768


$
91,558

GAAP gross margin
89
%

90
%

89
%

90
%
Add back:







Stock-based compensation expense
410


206


717


345

Amortization of intangible assets
1,096


451


1,542


897

Non-GAAP gross profit
$
74,254


$
46,890


$
143,027


$
92,800

Non-GAAP gross margin
91
%

91
%

90
%

91
%
Reconciliation of non-GAAP income from operations:







GAAP loss from operations
$
(8,288
)

$
(3,425
)

$
(12,690
)

$
(742
)
GAAP operating margin
(10
)%

(7
)%

(8
)%

(1
)%
Add back:







Stock-based compensation expense
8,024


3,894


13,359


7,683

Amortization of intangible assets
1,152


517


1,657


994

Contingent consideration expense (income)
(75
)

162


(75
)

455

Non-GAAP income from operations
$
813


$
1,148


$
2,251


$
8,390

Non-GAAP operating margin
1
%

2
%

1
%

8
%
Reconciliation of non-GAAP net income:







GAAP net income (loss) attributable to common stockholders
$
(3,219
)

$
(4,239
)

$
2,695


$
658

Add back:







Stock-based compensation expense
8,024


3,894


13,359


7,683

Amortization of intangible assets
1,152


517


1,657


994

Amortization of debt discount and issuance costs
2,558


1,146


5,010


1,146

Contingent consideration expense (income)
(75
)

162


(75
)

455

Income tax adjustments
(7,544
)

(1,432
)

(18,764
)

(4,721
)
Non-GAAP net income
$
896


$
48


$
3,882


$
6,215

Non-GAAP diluted income per share:







Non-GAAP net income
$
896


$
48


$
3,882


$
6,215

Non-GAAP weighted-average shares used to compute net income per share attributable to common stockholders, diluted
68,504


63,843


67,994


63,662

Non-GAAP net income per share, diluted
$
0.01


$
0.00


$
0.06


$
0.10

Reconciliation of non-GAAP diluted net income per share:







GAAP net income (loss) per share attributable to common stockholders, diluted
$
(0.05
)

$
(0.07
)

$
0.04


$
0.01

Add back:







Non-GAAP adjustments to net income (loss) per share
0.06


0.07


0.02


0.09

Non-GAAP net income per share, diluted
$
0.01


$
0.00


$
0.06


$
0.10

Reconciliation of non-GAAP diluted weighted-average shares outstanding:







GAAP weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted
62,613


60,685


67,994


63,662

Add back:







Effect of potentially dilutive shares
5,891


3,158


—


—

Non-GAAP weighted-average shares used to compute non- GAAP net income per share, diluted
68,504


63,843


67,994


63,662

Alteryx, Inc.

Key Business Metrics

(unaudited)

Number of Customers. We define a customer at the end of any particular period as an entity with a subscription agreement that runs through the current or future period as of the measurement date. Organizations with free trials have not entered into a subscription agreement and are not considered customers. A single organization with separate subsidiaries, segments, or divisions that use our platform may represent multiple customers, as we treat each entity that is invoiced separately as a single customer. In cases where customers subscribe to our platform through our channel partners, each end customer is counted separately.

Mar. 31,

Jun. 30,

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,

2018

2019

Customers

3,673

3,940

4,315

4,696

4,973

5,278

Dollar-Based Net Expansion Rate. Our dollar-based net expansion rate is a trailing four-quarter average of the annual contract value, or ACV, which is defined as the subscription revenue that we would contractually expect to recognize over the term of the contract divided by the term of the contract, in years, from a cohort of customers in a quarter as compared to the same quarter in the prior year. To calculate our dollar-based net expansion rate, we first identify a cohort of customers, or the Base Customers, in a particular quarter, or the Base Quarter. A customer will not be considered a Base Customer unless such customer has an active subscription on the last day of the Base Quarter. We then divide the ACV in the same quarter of the subsequent year attributable to the Base Customers, or the Comparison Quarter, including Base Customers from which we no longer derive ACV in the Comparison Quarter, by the ACV attributable to those Base Customers in the Base Quarter. Our dollar-based net expansion rate in a particular quarter is then obtained by averaging the result from that particular quarter with the corresponding result from each of the prior three quarters. The dollar-based net expansion rate excludes contract value relating to professional services from that cohort.



Mar. 31,

Jun. 30,

Sep. 30,

Dec. 31,

Mar. 31,

Jun. 30,


2018

2018

2018

2018

2019

2019
Dollar-based net expansion rate

129
%

129
%

131
%

132
%

134
%

133
%

Remaining Performance Obligations. Remaining performance obligations represent amounts from contracts with customers allocated to unsatisfied or partially unsatisfied performance obligations that are not yet recorded in revenue in our condensed consolidated statements of operations (in millions).



Dec. 31,

Mar. 31,

Jun. 30,


2018

2019

2019
Remaining performance obligations

$
223.1


$
214.0


$
238.8

View source version on businesswire.com: https://www.businesswire.com/news/home/20190731005922/en/

Media Contact
Alteryx, Inc.
Emily Singer
esinger@alteryx.com

Investor Contacts
Alteryx, Inc.
Karen Moran, 844-842-1912
VP Investor Relations
ir@alteryx.com

Company Name:	Alteryx Inc. Class A
Stock Symbol:	AYX
Market:	NYSE
Website:	alteryx.com

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