A Closer Look At Tableau’s Performance In 2017
Tableau Software‘s (NYSE:DATA) decision to shift from perpetual licensing to a subscription-based model has led to a notable reduction in licensing revenues over the first three quarters of 2017. However, the strong growth in maintenance and services revenue has more than offset those declines. Moreover, reduced upfront costs across product lines, and the expectation of increased adoption of its products going forward, suggests an improved growth outlook. As the company has prioritized keeping expenses in check, the year so far has seen a relatively slower rate of growth in operating expenses.
Our price estimate for Tableau stands at $62, which is around 15% below the current market price.
- Can Salesforce’s Acquisition of Tableau Reduce Annual Operating Expense In the Next 3 Years?
- How Will Salesforce.com’s Gross Profits Be Impacted Due to Tableau Acquisition?
- Tableau’s Revenue Grow But Miss Consensus, Continuous Expansion To Fuel Growth?
- Tableau’s Increasing Customer Base To Fuel Growth In Q1 2019
- What Is Tableau’s Expected Revenue For FY 2019?
- Tableau Reports Record Revenues, Will Subscription Licensing Continue To Push This Growth?
Subscription Pricing
Owing to the introduction of subscription-based licensing, Tableau’s licensing revenues saw a 10% decline. Despite that, Tableau’s stock price went up by over 40% this year. Subscription pricing and product innovation led to strong uptake of Tableau products. The company managed to add multiple features, such as advanced mapping capabilities and certification to data sources, in the versions released this year. In the upcoming version, Tableau will be available on Linux, which should further its reach. The first three quarters of the year saw the addition of over 11,000 new customer accounts, which took the overall customer count to over 65,000 (+20% since the beginning of 2017). Tableau was also able to close 38 six-figure deals and over a thousand transactions greater than $100,000 in the same period.
Lately, the company has been aggressively targeting growth in international markets, as growth in more mature markets such as the U.S. and Canada has slowed down. International revenues witnessed 17% growth and constituted 30% of the company’s overall revenues (200 basis points above the prior year comparable period), which highlights the returns from its increased global footprint.
With customer preferences shifting toward cloud-based products, Tableau is leveraging two cost-effective product lines, Tableau Online and Tableau Public, to capitalize on this demand. Both products have seen increased adoption since their launches, which bodes well for the company’s long-term future.
Please refer to our complete analysis for Tableau