Data analytics software maker Alteryx Inc. has its sights on reaching $1 billion in annual revenue as measured by the company’s preferred metric, and sees plenty more room for growth beyond that.
Orange County’s most valuable publicly traded software company (NYSE: AYX) is projecting it will hit as much as $825 million in “annual recurring revenue” (ARR) as early as this year. The measure is used by companies that depend on subscriptions, as Alteryx does.
Yet moving up to $1 billion “isn’t a goal as much as a milestone” said the Irvine-based company’s Chief Financial Officer Kevin Rubin, who didn’t provide a specific time frame for reaching the 10-digit threshold.
Rubin spoke to the Business Journal on Nov. 2, the day after the company released financial results showing a 31% increase in ARR to nearly $758 million through the third quarter. The company’s third-quarter net loss widened to $74.5 million from $58 million in the same three-month period a year earlier.
Adjusted gross profit for the 2022 third quarter climbed sharply to $191.9 million.
Alteryx now counts 8,340 customers, an increase of 8% from a year ago.
Challenging Conditions
Rubin is very pleased with how his team worked last quarter, especially given rising inflation, a looming recession and global economic upheaval sparked by the war in Ukraine.
“I’m proud of the results and how the quarter went and how the team performed again with the increasingly more difficult macro backdrop,” the Newport Beach resident said.
Alteryx’s software allows data workers to turn huge amounts of information and data into actionable business decisions. The company says it is “focused on enabling every person to transform data into a breakthrough.”
Nearly half of Forbes Global 2000 companies are Alteryx customers, and the company’s goal is to sign up the rest.
Public Listing
Alteryx, founded in 1997, burst onto the scene when it went public in 2017 at $14 a share.
Under the guidance of co-founder and then-CEO Dean Stoecker, the company reached a market cap of more than $10 billion at several points in early 2020.
The skyrocketing value temporarily made Stoecker a billionaire. He has since become executive chairman and handed over the CEO duties to Silicon Valley veteran Mark Anderson.
The company’s market cap stood at $3.3 billion as of Friday morning, with the shares trading at $47.88 apiece, for a decrease of about 21% since the start of the year.
Rubin keeps looking ahead for the company, which recently moved into new 183,000-square-foot headquarters at Spectrum Terrace alongside the San Diego (405) Freeway (see story, this page).
“Given the backdrops of a little more difficult market, the fact that we were able to execute so well was super-impressive. We are definitely pleased with how the quarter went,” he said.
There are still many more milestones to reach.
The CFO says even the $1 billion milestone for ARR “is a small percentage of this very large opportunity in front of us.”
Spending Priority
“Data and analytics does still tend to be a priority spend area,” Rubin said.
Notable Alteryx customers in the region include ÂÂÂMolina Healthcare, Pacific Life Insurance Co., GreatCall, Intuit and Blizzard Entertainment.
Alteryx has customers in nearly every industry, including financial services, insurance, public sector, healthcare and manufacturing.
The strong dollar hit the company’s third-quarter results, with a $12 million “headwind” against annual recurring revenue, since 20% of the contracts are denominated in currencies other than the U.S. dollar.
Looking ahead to 2023, Rubin also reminded investors that the first quarter is seasonally the slowest quarter of a year.
“I was trying to provide some seasonal color on how each of the quarters tend to trend within a given year,” he told the Business Journal about his conference call remarks.
“Seasonally, Q1 is our softest quarter. Q2 and Q4 are our strongest.”
He indicated potential customers are taking a couple extra looks before they subscribe to Alteryx during the current tight economy.
“We certainly saw slightly greater deal scrutiny, additional layers of approval, etc. in Q3. I would expect to continue into Q4,” he said.
