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Alteryx Posts Record Q4 and 2022 Gains

Firm predicts revenue milestone in 2023

On the heels of posting record revenue for the fourth quarter and full-year 2022, Alteryx Inc. is preparing to set new sales benchmarks in 2023.

The Irvine-based data analytics software company (NYSE: AYX) earlier this month said revenue last year jumped 60% to $855.4 million, while fourth-quarter revenue surged 73% to $301.1 million.

“We are very happy with the results that we were able to put up for the fourth quarter and the full year,” Chief Financial Officer Kevin Rubin told the Business Journal on Feb. 10, the day after the earnings release. The company looks forward to “continuing to grow profitably here in 2023.”

Wall Street seized on the earnings and guidance, sending shares of Orange County’s most-valuable publicly traded software company up 13% to north of $68 on Feb. 10.

Alteryx’s valuation was approaching $5 billion as of last week, the highest it has been since last September.

Markets “certainly seemed to have liked the results,” Rubin said.

2023 Goals

Alteryx software allows users to quickly access, manipulate and analyze data. The software lets workers turn huge amounts of information and data into actionable business decisions.

The company expects to set a new financial record in 2023, when it forecasts annual recurring revenue (ARR) will top $1 billion in a major milestone for the 26-year-old company. The earnings measure is used by companies that depend on subscriptions, as Alteryx does. Alteryx posted ARR of $834 million in 2022, up 31% over 2021.

“It’s an important milestone. In history very few software companies have been able to achieve a billion dollars of ARR so that’s definitely something that we have sights on,” Rubin said. “As we hopefully pass through that milestone in 2023, we’ll look onto $2 billion, and $3 billion and beyond.”

Client Gains

Rubin notes businesses are increasingly seeking to leverage data for business decisions.

The company’s Analytics Cloud platform has grown in popularity among businesses, according to CEO Mark Anderson.

Alteryx’s focus on large global companies has increased the firm’s long-term portfolio, Anderson noted during a conference call with analysts this month.

Bolstering the company’s efforts is “robust demand for data analytics,” Anderson said, as technology executives “prioritize core operational platforms like Alteryx over front-end applications more exposed to headcount variations.”

Royal Caribbean Group is one example of a client that expanded its business with Alteryx last quarter, and now uses the software for its human resources department.

“They will leverage designer, server, and machine learning in an effort to further unlock and optimize their crew experience and to drive financial efficiencies,” Anderson said.

Alteryx ended the year with more than 140 customers with ARR of $1 million or more, up 50% from the year prior. The company is now used by nearly half of the top 2,000 public companies in the world.

Alteryx posted a net loss of $318.5 million last year. The company expects profitability of 36 cents to 46 cents per share this year on an adjusted basis.

Investor website TheMotleyFool.com said the results “were far better than investors had hoped.”

The company’s share price has risen about 35% this year to $69 apiece as of Feb. 14. Alteryx’s market cap topped $10 billion in early 2020 before the pandemic.

Headwinds, Tailwinds

“As we enter 2023, we have a tremendous opportunity to continue to drive powerful outcomes for our customers with enhanced sales and customer success initiatives and an expanded portfolio of offerings,” Anderson said.

Though the company spots gains on the horizon, it’s remaining cognizant of market uncertainty and has made cost-saving efforts to offset such headwinds (see story, this page).

Rubin anticipates “macro is going to get worse, it’s going to be harder.”

“We are bracing for a weakening environment. As we go into 2023, the hope is that it’s not as difficult as some fear and we can see some silver linings this year,” according to Rubin.

Alteryx had more than 2,900 employees as of Dec. 31, and had several dozen jobs posted on its website as of Feb. 13.

The firm is encouraging workers to come back to the office, according to Rubin. Its headquarters at Spectrum Terrace in Irvine touts an experience center that “has been seeing increasing traction among customers and prospects,” Rubin said.

Alteryx is also gearing up for its annual Inspire 2023 conference in Las Vegas on May 22-25. The event draws thousands of participants eager to hear the latest about data analytics.

Belt-Tightening for Alteryx

Data analytics software firm Alteryx Inc. looked at the economic environment and undertook some belt-tightening last year.

“On Dec. 31, 2022, we ceased using certain of our corporate offices in California, Colorado, Massachusetts, Texas, Canada and Germany as part of our real estate rationalization efforts,” the company said in its 2022 annual report.

CFO Kevin Rubin told analysts on Feb. 9 that “we were able to rationalize our real estate usage by approximately 40%” in the final three months of 2022.

“We optimized headcount by approximately 5%, primarily from rigorous performance management, as well as role eliminations,” Rubin added.

The measures impacted 150 positions globally, including some positions in Irvine, officials said.

“We did reduce a little space here in Irvine in addition to other space around the world,” according to Rubin.

The company leases approximately 120,000 square feet of office space at its Irvine headquarters, according to its latest annual report, released this month. That’s down from about 180,000 square feet a year ago.

—Kevin Costelloe

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Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal

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