Tableau Q3 Earnings Review: Revenue Misses Guidance, Consensus Estimates

November 2nd, 2016 by Trefis Team
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Tableau Software

Tableau (NYSE:DATA) announced relatively solid third quarter results on November 1st. For the quarter ended September 30th, the company’s revenue grew by 21% year over year to $206 million. Despite the increase in revenues, the company was unable to meet its own guidance as well as the $214 million in consensus expected revenue, based on analyst estimates compiled by Reuters. The increase in revenues was driven by moderate growth in License revenues, which recorded an increase of 7% over the prior year quarter to $117 million, partially offset by longer-than-expected sales cycles and subdued performance in the Europe, Middle East and Africa region (EMEA). The company successfully added 3,600 clients to its base in the quarter, taking its customer count beyond 50,000.

Despite the increase in revenues, the company reported operating losses of $29.4 million. This was primarily due to increased spending in sales and marketing and research and development, a reflection of the company’s focus on growth. On a non-GAAP basis, the company’s operating income was $18.1 million, marginally lower than the prior year quarter’s figure of $18.4 million. For the quarter, the company reported a net loss of $30.3 million or 40 cents a share, a notable increase from the last year quarter’s figures of $13.4 million or 19 cents a share. On a non-GAAP basis, the earnings per share increased 14% over the same period last year to 16 cents a share and beat Reuters compiled analysts’ estimates by 9 cents a share.

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International Markets Drive Growth

The revenue growth for Tableau was fueled by a 7% increase in Licensing revenues and a 46% rise in Maintenance and Services revenue and offset by longer than expected sales cycles. In the third quarter, the company managed to close 360 six-figure deals, a 21.6% increase over the same period last year, which drove the uptick in revenues. The company’s constant efforts to expand into different geographies paid dividends, with International revenues rising 38% over the same period last year to $58.2 million.

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The Way Forward

In the fourth quarter of the current fiscal year the company expects revenues in the range of $225 million to $235 million, which would imply growth of 13% over the same period last year. For the fiscal year, the company expects revenues to be in the range of $801 million to $811 million, which would be 23% higher than last year’s figures.

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Additionally, the company expects subscription based models on cloud platform to be the way forward and expects more customers to start using them. Tableau’s cloud offering – Tableau Online – has started to make inroads and has 5,000 customers as of September 30, 2016. The company expects this number to increase going forward.

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