Mid-Year Review: Tableau Goes From Strength To Strength

-15.20%
Downside
170
Market
144
Trefis
DATA: Tableau Software logo
DATA
Tableau Software

Tableau Software (NYSE:DATA) is an innovative Business Intelligence (BI) software company that provides its clients with tools and interactive dashboards to search, query, analyze and visualize chunks of data, so as to generate useful business insights. The company is considered a pioneer in the field of data discovery. Data discovery involves discovering insights from a set of data and analyzing and presenting those insights in interactive and visual format, which makes it easy for non-IT business users  to run queries and analysis. Tableau has had an exceptional six months since the start of the year and we expect more of the same from the company going forward.

See our complete analysis for Tableau

Relevant Articles
  1. Can Salesforce’s Acquisition of Tableau Reduce Annual Operating Expense In the Next 3 Years?
  2. How Will Salesforce.com’s Gross Profits Be Impacted Due to Tableau Acquisition?
  3. Tableau’s Revenue Grow But Miss Consensus, Continuous Expansion To Fuel Growth?
  4. Tableau’s Increasing Customer Base To Fuel Growth In Q1 2019
  5. What Is Tableau’s Expected Revenue For FY 2019?
  6. Tableau Reports Record Revenues, Will Subscription Licensing Continue To Push This Growth?

Tableau’s Customer Base Continues To Expand

Tableau has seen a significant growth in its customer base, which has jumped from 4,400 customers in 2010 to 26,000 customers by the end of 2014. [1] Tableau also added 2,600 new customers to its customer base during the first quarter of 2015. We believe that the company will end 2015 with around 35,000 customers. Furthermore, we believe that Tableau’s subscriber base will continue to grow in the coming years and will cross 65,000 by the end of our forecast period. The business analytics software industry is in the midst of a secular trend of growth and Tableau has been one of the beneficiaries. According to Gartner, the Business Intelligence and Analytics industry grew by 9% in 2013 and is expected to grow at a compounded annual growth rate of 8.7% through 2018. [2] Within the BI software market, Tableau belongs to the segment specifically focused on developing easy-to-use and interactive data discovery platforms. In the recent years, focus has shifted in this market from traditional enterprise IT requirements to data discovery. In addition to the conventional established reports, big firms now want descriptive, predictive and prescriptive analysis performed by a larger population of administrators.

According to Gartner, data discovery is poised to become a dominant segment of BI market, replacing traditional BI which involves static reporting. [3] We believe Tableau and other similar players are going to be more responsive to this need. Tableau has featured as a leader in Gartner’s Magic Quadrant for Business Intelligence and Analytics Platforms for the last three years and its business discovery platform has been a pioneer in the data discovery segment. [2] [4] Tableau’s in-memory technology is also a big draw for its customers. In-memory computing (IMC) technology reduces the number of data transactions required while analyzing data by storing the entire database in random access memory (RAM) which is nearer to the processor. This makes the analysis faster and more real-time and reduces the complexities of physical space requirement.

 

Tableau Experiencing Exceptional Revenue Growth

Tableau has experienced a phenomenal rise in its revenues, jumping from $34 million in 2010 to just under $413 million in 2014. [1] Tableau’s total revenues for Q1 2015 amounted to $130.1 million, an increase of 75% over the prior year period. The company’s license revenues jumped 74% while its maintenance and services revenues saw an uptick of 75%. Tableau is confident this strong growth will continue and expects full year revenues to be in the $600-610 million range. [5] Tableau closed 249 enterprise-level transactions (worth $100,000 or more) in the first three months of 2015, an increase of 108% from the prior year period. [5] The company closed 781 such transactions in 2014 and is well on its way to comfortably beat that mark this year. We believe that Tableau’s growing focus on enterprise-level capabilities, along with its decidedly superior data discovery platform, will give it an edge over its competitors in an increasingly dynamic business analytics market. Consequently, we estimate Tableau’s 2015 revenues to be around $619 million, in line with the consensus estimate of $619 million, and EPS to be around $0.43, compared to a consensus estimate of $0.40. Taking a long-term perspective, we believe that Tableau’s revenue will continue to grow throughout the Trefis forecast period and reach $2 billion by 2021.

One of the biggest drivers of Tableau’s overall revenue growth is growth in Average Revenue per Tableau Customer, which has gone up from $6,610 in 2011 to $11,700 in 2014. [1] This increase can be attributed to Tableau’s land and expand model. The ease of use of its products enables business users to perform even complex analysis without extensive skills or IT assistance leading to grassroots level adoption. The usage of its products spreads across an enterprise through discovery of new use cases. Resultantly, we expect continued growth in this driver and currently forecast average revenue per customer to be north of $17,000 by 2021.

Other Developments

Gartner introduced the concept of governed data discovery that refers to platforms that can address enterprise-level IT requirements as well as assist business users (non-IT) in data discovery. No vendor has addressed both these aspects convincingly so far, but there is an indication that this convergence will happen. Governed data discovery strives to find the right balance between allowing creativity so that end users can experiment with the data and maintaining just enough centralized control so that enterprise tasks can run smoothly. In keeping with this concept, Tableau is introducing more enterprise-related features related to visual analytics, performance, scalability and data preparation with its new product Tableau 9.0. [5] Tableau 9.0 also employs technologies such as parallel queries, vectorization, smarter query caches and Query Fusion which improves the software’s speed and efficiency. [6]

The company also recently announced that they have secured the services of renowned statistician, academic and author Leland Wilkinson. [7] Considered a pioneer in the data visualization field, Wilkinson created the SYSTAT statistical package in the early 1980’s and has developed various visualization systems since then. Wilkinson has been brought on-board to further research and development efforts in the areas of predictive analysis, scientific visualization and statistical graphics. Wilkinson is an impressive addition to Tableau’s R&D team, which has grown by 50% in the last year, highlighting the company’s commitment to improving and enhancing its products.

See More at TrefisView Interactive Institutional Research

(Powered by Trefis)
Get Trefis Technology

Notes:
  1. Tableau’s SEC Filings [] [] []
  2. Magic Quadrant for Business Intelligence and Analytics Platforms, 23 February 2015, Gartner [] []
  3. Gartner Press Release, December 16, 2013, www.gartner.com []
  4. A Leader. Again., Tableau Press Release []
  5. Tableau Software (DATA) Christian Chabot on Q1 2015 Results – Earnings Call Transcript, May 8, 2015, Seeking Alpha [] [] []
  6. Tableau 9.0 Brings Interactive Speed and Enriched Flow to Data Analytics, April 7, 2015, Tableau Investor News []
  7. Tableau Expands R&D Team with Renowned Statistician Leland Wilkinson, May 26, 2015, Tableau Investor News []