Tableau Mid Year Review : Stock Down 37% YTD Despite Top Line Growth
Tableau Software (NYSE:DATA) reported mixed earnings for the first two quarters of 2016, with revenue beating market expectations on both occasions. The uptick in revenues and the number of customers, now over 46,000 globally, did not help improve its bottom line, and the company reported a net loss of $93.1 million in the first six months of 2016. This was three times the loss reported during the first half of last year ($31.7 million) and the figure missed Reuters’ compiled analysts’ expectations by a significant margin. Following the second quarter results, the company lowered its revenue guidance for the full year from $835-$855 million to $825-$840 million. This wasn’t received well by investors and is reflected in the company’s current stock price, which is down over 30% year-to-date (YTD) and also reached an all-time low of $41.33 during this period.
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Revenues, Losses Continue to Grow Despite Newer Offerings
Tableau’s revenues increased 32% over the prior year to $370 million in the first half of the year. The increase was fueled by a significant increase in revenue from the Maintenance and Services division, which grew 59% year over year to $157 million in the first half. Last year, the company strengthened its sales workforce and increased its global presence, reflected by its acquisition of Hyper in Germany and the opening of offices in Shanghai, Tokyo, Dublin and Sydney. This positively impacted the revenues from global markets, which increased 53% over the last year to $105.1 million.
The uptick in revenues during the first two quarters hasn’t resulted in an improvement in profitability, however, The company’s net loss during the first two quarters rose a staggering 221% over the prior year to $93.1 million. This negatively impacted the company’s share price, with the stock declining by 5% after the Q2 2016 results.
Outlook for the Year
Going forward, Tableau expects its revenue growth to continue in the upcoming quarters. The company expects revenues in the range of $210-$215 million in the third quarter, which would be an increase of 26% year over year.
On August 22nd, the company made changes in its top management by appointing Adam Selipsky CEO, which will take effect September 16th. Christian Chabot, who was CEO for the past 14 years, will continue to serve as Chairman. This development improved investor sentiment, with the stock rising 11% after the announcement.
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