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Alteryx Taps Silicon Valley Vet as CEO

Dean Stoecker began Alteryx Inc. with three employees in 1997 in a small office above a restaurant in downtown Orange.

Last week, the 63-year-old announced he’s relinquishing the chief executive reigns after building the Irvine-based data analytics company into one of America’s hottest software companies. It has a market cap in the $10 billion range, more than 6,700 customers and 1,500 employees.

“I am incredibly proud and honored to have led the team that built Alteryx over the past 23 years,” Stoecker said in an Oct. 5 statement.

Alteryx announced that industry veteran Mark Anderson, who is on the company’s board of directors, became CEO last week while Stoecker assumed the role of executive chairman.

Anderson’s résumé includes a pedigree deep in Silicon Valley experience, including leadership positions at F5 Networks Inc. (Nasdaq: FFIV) Cisco Systems Inc. (Nasdaq: CSCO) and Lucent Technologies Inc.

More recently, he was president at Palo Alto Networks Inc. (NYSE: PANW), which has a $24 billion market cap. During the six years Anderson worked there as a top-level executive, Palo Alto’s sales exploded elevenfold to $2.9 billion in fiscal 2019, becoming one of the world’s largest internet security companies.

New CEO Anderson “brings the scaling capability and scaling expertise that frankly Dean did not have,” Brent Bracelin, a senior research analyst and managing director at Piper Sandler, told the Business Journal. The executive change is “a natural evolution of a business model that hits a certain scale.”

Transition Preparation

Stoecker is the largest shareholder in Alteryx with a nearly 12% stake in the company, according to a proxy statement.

He hands over the CEO position as a billionaire, once again. After taking a hit earlier in the year, Alteryx stock got a more than 25% boost last week as the firm said it would easily beat Wall Street earnings expectations for the latest quarter. The company’s stock—now trading at around $150, is up about 35% from year-ago levels.

The company went public in 2017 at $14 a share. It’s the second-most valuable publicly traded tech company in OC.

Stoecker made it clear it was his decision to leave the CEO position, though he acknowledged Anderson’s skill at growing a business and called him an “ideal candidate.”

“When I decided to transition from day-to-day operations, it was clear to me that Mark is the ideal candidate to serve as Alteryx’s next CEO given his passion for our company and our newly created Analytic Process Automation category, coupled with his experience in scaling organizations,” Stoecker said in a statement.

“Since joining our board two years ago, Mark has proven himself as a trusted advisor providing valuable insights and strategic direction. I am confident that Alteryx will achieve new heights under his leadership,” he added.

Not Moving HQ

Anderson, who is 58, still holds ties to Silicon Valley and that will continue under his new role.

Company officials last week said he would “be splitting time between the Bay Area and Orange County but will of course be travelling to all our offices once it’s safe to do so.”

He doesn’t plan to relocate headquarters, the company said. Alteryx plans to move to a pair of new offices at the Spectrum Terrace development soon. The Irvine complex, where Alteryx will be leasing 183,000 square feet, isn’t far from Stoecker’s home in Shady Canyon.

Other well-known Orange County tech companies have moved their headquarters designation and large portions of their workforce to Silicon Valley in the past five years, including chipmaker Broadcom Inc. (Nasdaq: AVGO), Western Digital Corp. (Nasdaq: WDC) and CrowdStrike Holdings Inc. (Nasdaq: CRWD).

OC’s largest tech company by market cap, $25 billion-valued chipmaker Skyworks Solutions Inc. (Nasdaq: SWKS), earlier this year moved its headquarters designation from Woburn, Mass., to Irvine, where its CEO, Liam Griffin, is based.

High Note

Stoecker left on a high note as Alteryx last week issued preliminary third-quarter revenue results that topped analysts’ expectations and sent its shares up 28% to nearly $146 on the following day.

Alteryx said revenue for the third quarter ended Sept. 30 will be in the range of $126 million to $128 million, representing 22% to 24% year-over-year growth, ahead of the previously issued guidance of $111 million to $115 million.

Alteryx said neither Stoecker nor Anderson were available to comment for this article because of a “quiet period” before the company issues its quarterly results on Nov. 5.

The latest report marks a notable turnaround in the company’s fortunes from Aug. 7, when the company’s shares dropped 28% after the company forecast third-quarter sales below the average analyst estimate due to the coronavirus.

Big Bet

Alteryx is one of Orange County’s most closely watched companies. One of its earliest believers was local investor guru Vinny Smith who made a 2013 investment when Alteryx was valued below $100 million.

Since its initial public offering at $14 in 2017, its share price steadily climbed up to an all-time high of $185.75 last July.

The company’s software allows data workers to turn huge amounts of information into actionable business decisions. New customers using the company’s product earlier this year included Levi Strauss, Banco Santander and Qatar Airways.

Stoecker likes to say data analytics “is the new oil,” adding that it’s “the most important skill set for the 21st century.”

Leadership Changes

Sales climbed 53% in 2017, 93% in 2018 and 65% in 2019. The average analyst estimate is for 2020 revenue of $469 million, which implies a 12% growth rate.

The “business has kind of moderated from a growth standpoint” as the company faced challenges related COVID-19 in the second quarter, Bracelin told the Business Journal.

Alteryx has a “big opportunity” to expand as companies increasingly rely on data, he said.

The 28% stock surge on Oct. 6 was “related to both the positive results, as well as investor respect for Mark, given his strong track record,” Rishi Jaluria, a senior research analyst and senior vice president at D.A. Davidson & Co. told the Business Journal.

“I think Alteryx will continue to execute well even with the leadership changes.”

Other analysts were also upbeat about the future for Alteryx.

Stock market research site TipRanks.com quoted Wedbush Securities analyst Daniel Ives as telling clients last week’s development is a major bounce back from a “soft” second quarter.

“This quarter speaks volumes and along with Anderson at the helm should give investors a major vote of confidence in this growth story over the next 12 to 18 months,” Ives reportedly said.

Based on Ives’ calculations, the new guidance would put third-quarter earnings per share at 18 cents to 19 cents, above his and the consensus estimate of 12 cents, according to TipRanks.

Billionaires’ Club

Stoecker first joined the exclusive billionaires’ club last year, based on the increasing value of his shares. Though he slid out of the ranks when its shares fell in August, Stoecker was again a bona fide member last week with his Alteryx holdings worth about $1.2 billion.

Stoecker has been active in Orange County affairs, including as the guest speaker at the Business Journal’s 2019 Innovator of the Year Awards.

“You start a business because you love what you do,” he told the Business Journal in an interview last year. “You want to change the world the best you can.”

Along the way, Stoecker has backed numerous philanthropic efforts while the pandemic led Alteryx to set up its ADAPT program—Advancing Data & Analytics Potential Together—to train workers for free after they lost their jobs (see story, page 6).

Stoecker has a sense of humor, such as installing a 1960s-era hippie-style Volkswagen Van at the company’s main office and where techies can grab a beer.

“We brought the bus in, mostly as a symbol of the long journey,” Stoecker said.

He also said last year that he had no interest in stepping down.

“It’s an awesome gig,” he said. “I’m 62 years old. I get up in the morning, I read the obituaries and if I don’t see my name, I come to the office.”

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Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal

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