The year 2019 has been nothing short of spectacular for Alteryx (NYSE: AYX) – be it in terms of operational performance, or stock market run. Though the stock was battered by a market-wide correction in the latter half of the year, it still finished the calendar year better than most FAANG stocks.
AYX has regained its momentum this year, rising 46% YTD, partly propelled by the solid fourth-quarter results that saw revenues surge 75%. This was pretty high even by the standards set by the data analytics firm.
The company is now headed to Sydney, where it is will organize the second annual APAC user conference, Inspire APAC 2020, on February 25 and 26. Though CFO Kevin Rubin will not be attending, he expressed hopes of gaining entry into a couple of new Asian markets through this event.
Rubin told AlphaStreet, “One of the strongest assets we have as a company is the incredibly passionate and devoted community of Alteryx users. So it’s important for us to foster the ecosystem and give users an opportunity to experience our platform and help them assess us well.”
The Irvine, California-based firm’s prior Inspire conferences have reportedly made meaningful contributions to its customer base. Notably, Alteryx has consistently reported year-over-year customer additions of 30% or more over the past three financial years.
Scope for further upside
It’s quite natural for value investors to be wary of initiating stake in a stock that has just seen robust growth and is trading near an all-time high. However, the market seems pretty convinced that the rally has not ended. Recently, two analyst firms – Needham and Wedbush – gave bullish outlook on AYX, keeping in view the firm’s efforts in expanding its customer base and building partnerships to penetrate better into the lucrative data analytics market.
The company had last year reported that 60% of its customers use the platform for advanced analytics, which illustrates the depth of their analytical capabilities. The company has 719 Global 2000 customers, which accounts for just 36% of the total. Of these, Rubin said half are international firms, suggesting there is plenty of untapped space overseas.
Another strong characteristic that makes Alteryx stand out is that the revenue growth is not being achieved at the cost of profitability or cash flows. For fiscal 2019, operating income grew over 50%, while operating cash flow grew an impressive 46%.
According to the CFO, the staggering revenue growth is pivoted by big deals and their time duration. In the fourth quarter, for example, there was a 150% spike in deals valued over $1 million and 80% growth in those valued above $500,000.
LISTEN TO: Alteryx Q4 2019 earnings conference call
On the other hand, the management has guided revenue growth of just 33-35% for fiscal 2020, which is a marked decrease from the earlier financial years when it registered increases of 53%, 93% and 65%. Rubin commented that the guidance is based on the best information available at the moment, disagreeing with the market view that Alteryx outlooks are often very conservative.
Impact of coronavirus outbreak
The CFO said he doesn’t see much impact on its operations or expansion activities from the recent coronavirus outbreak in China, given the less significant footprint and customer base it has in Asia.
“It’s certainly too early to tell whether any of the issues surrounding the coronavirus situation had an impact on us. We haven’t been in Asia for long and it’s not a significant piece of our business today, especially China. So the impact should be insignificant,” he said.
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