For his first acquisition, Alteryx Inc. Chief Executive Mark Anderson didn’t go back to his stomping grounds in Silicon Valley.
Instead, he found a 29-employee company halfway around the world in Australia.
Irvine-based Alteryx (NYSE: AYX) on Oct. 7 announced that it had bought Hyper Anna, a cloud platform for generating artificial intelligence (AI)-driven automated business insights from data.
“Hyper Anna’s mission to enable everyone, regardless of analytical background, to access data insights aligns perfectly with the Alteryx vision to enable every person to transform data into a breakthrough,” Anderson said at the time the deal was struck.
Anderson, who became Alteryx CEO a year ago, has a deep pedigree in Silicon Valley, including serving as president of Palo Alto Networks.
The Hyper Anna acquisition is the sixth for Alteryx and its first in the past two years.
Hyper Anna was begun in 2016 by Natalie Nguyen, whose company website proclaims typical “dashboards don’t work.”
“They don’t give people the quality of insights they actually need,” the company’s website said. “Hiring extra analysts to get insights works. But it’s expensive and doesn’t scale.” Nguyen served as the Australian firm’s CEO.
Hyper Anna says it leverages advances in AI and machine learning for faster answers. Anna does all the tedious and technical work of writing code, analyzing data, producing charts and issuing insights.
“By now working together with Alteryx, we can offer capabilities that are far greater than the sum of its parts—the Alteryx offering that customers know and love but with more insights, visualizations and reporting features that enable every team to create recurring impact,” said Nguyen, who will continue to lead the Hyper Anna products for Alteryx and has become a vice president of product management.
Alteryx Expansion
Alteryx products turn huge amounts of data into actionable business solutions, enabling users to share insights, apps and models across their organizations.
The company now boasts more than 7,000 customers including Phillips 66, UBS AG, 7 Eleven, Ingersoll Rand and EY.
The addition of Hyper Anna will expand the use of Alteryx products from expert analysts to the “casual end user,” according to Jay Henderson, who is also vice president of product management
“You feed it some data, and it will identify interesting insights inside of that data; it will look for anomalies and outliers in that data, and then help you understand what contributing factors are driving those anomalies,” Henderson told the Business Journal.
Sales Data
The acquisition of Hyper Anna—no purchase price was immediately disclosed—will allow Alteryx to automate the end-to-end analytic pipeline from data sources to AI-driven insights, according to the company.
Henderson gives the example of a company that has plenty of sales data from various sources but few insights.
“The Hyper Anna product would allow them to surface insights and actually understand the causes of those insights,” Henderson said.
He said companies are often “data-rich but knowledge- and insight-poor.”
Companies are experiencing “vendor fatigue” and are looking to move toward platforms like Alteryx that can offer a broad set of capabilities, Henderson said.
Alteryx, which has taken its lumps on the stock market this year, has been expanding its partnerships with various organizations to grab a larger share of the data industry, which it estimates to be worth trillions of dollars.
The company, co-founded by Dean Stoecker, Olivia Duane Adams and Ned Harding 24 years ago, says it is constantly on the lookout for companies that will expand its capabilities.
“We’re always looking for good opportunities to augment the portfolio and to expand the value that we can add to customers,” Henderson said.
Previous Purchase
The company’s most recent purchase before Hyper Anna was in October 2019, when Alteryx picked up Feature Labs of Boston for $37.7 million. Feature Labs, a machine learning and artificial intelligence software firm, was launched from the Massachusetts Institute of Technology.
Hyper Anna allows users to ask plain English questions about their business’ performance and get AI-driven insights, among many other capabilities, Henderson said.
“An example might be a large spike or dip in the sales,” he said. “One of the interesting things Hyper Anna can do is tell you whether that’s a statistically significant spike or dip.
“It can do things like remove seasonality; it understands what the relative normal of a particular metric might be. It’ll surface these spikes or dips in that data and then help you understand what was driving the spike or dip.”
Data Breakthrough
Alteryx, once a darling of tech investors, has seen its share price fall about 37% since the start of the year to $76.80 apiece as of Oct. 14, for a market cap of $5.2 billion. The market cap topped $10 billion at several points last year.
It went public in 2017 at $14 a share.
The firm ranks No. 9 on the Business Journal’s list of largest public companies in Orange County, as ranked by market capitalization.
The company, which counts about 1,600 employees, is expected to release third-quarter earnings on Nov. 2.
Anderson has been transitioning the sales force to focus on large customers instead of small to medium size companies. It’s forecast third-quarter sales will be in the range of $121 million to $124 million, which would be around a 4% to 7% decline from a year ago. Analysts are expecting an average of $123.1 million.
For Alteryx executives, the key to understanding the business results is ARR—annual recurring revenue—which Chief Financial Officer Kevin Rubin called probably “the best underlying view of what the growth rate of the business is.”
Alteryx ended the second quarter with $547.6 million in annual recurring revenue, an increase of 27% year-over-year. ARR is expected to be approximately $635 million as of this Dec. 31, the company said on Aug. 3.
Once investors fully grasp the significance of ARR, Rubin said in August, “We’d like to believe that market cap will follow suit.”
Derrick Wood, a managing director at Cowen and Co., said in a note to investors in August: “We see revenue growth poised to significantly rebound next year, while ARR should continue to grow 25%-30%.”
Alteryx has been opening its new Spectrum Terrace offices for those who feel comfortable about coming back as the COVID-19 crisis appears to be waning. However, the company says it will begin asking employees to start coming back “no sooner than January.”
“Regarding vaccine mandates, we continue to follow all the health and safety guidelines in every area we have offices and will continue to re-evaluate as we go forward,” an Alteryx spokesperson said.
The Business of Alteryx is Business, Not Consumers
One of Orange County’s most visible tech companies, Alteryx Inc., takes huge amounts of data and comes up with valuable insights for companies.
The data industry is a $10 trillion to $15 trillion opportunity, company officials have said.
As the data analytics field broadens to all sorts of sectors, will Alteryx branch out into consumer-focused offerings to predict, say, whether today’s kindergartener will one day go to Harvard?
Not in the foreseeable future, according to officials.
“I hesitate to say never,” says Alteryx’s Jay Henderson, vice president for product management. “I think I’ve seen the James Bond movie ‘Never Say Never [Again]’ one too many times.
“But right now, we think that there is plenty of runway and opportunity for us just on the business market,” he says.
