Tableau's Revenue Grow But Miss Consensus, Continuous Expansion To Fuel Growth?
Tableau Software (NYSE:DATA) announced its Q1 2019 results on May 2, 2019, followed by a conference call with analysts. The company missed consensus for revenue which was recorded at $282.8 million, up by 14.7% y-o-y. The increase was driven largely by customer expansion and continued subscription adoption. The Non-GAAP earnings beat consensus and were recorded at $0.02, lower than the $0.07 per share in the same period of 2018.
Tableau reported $1.2 billion in Total Revenues in Fiscal 2018. This included 2 revenue streams:
- Business Analytics Software Licenses: $569.8 million in FY2018 (48.1% of Total Revenues). This includes revenues recognized from the sale of perpetual, term, and subscription licenses to new and existing customers.
- Maintenance and services Net Revenue: $615.1 million in FY2018 (51.9% of Total Revenues). This includes revenues recognized from the sale of maintenance agreements (including support) and also for training and professional services.
We have summarized our key expectations from the earnings announcement in our interactive dashboard – What Has Driven Tableau’s Revenues & Expenses Over Recent Quarters, And What Can We Expect For Full-Year 2019? In addition, here is more Information Technology Data.
Key Factors Affecting Earnings:
Revenue Growth to continue:
- Tableau’s revenue growth is fueled by continuous innovation and expansion with the company reaching more than 86K customers at the end of FY 2018. Moreover, since the company’s move to subscription licensing, the expansion has been much faster. In Q1 2019 revenue was recorded at $282.5 million, up by 14.7% y-o-y.
- The average licensing revenue per customer has fallen due to the shift to subscription licensing and is expected to be around $6.6K in 2019.
- The average maintenance and services revenue has grown strongly over the years (except 2017) and is expected at $8.1K in 2019.
Trend in Expenses:
- Tableau’s Total Expenses have also risen continuously similar to its revenue except in Q1 2019 where the General and Administrative charges has nearly doubled compared to the last few quarters.
- The company focuses on continuous innovation and expanding its reach. This leads to Sales & Marketing and Research and Development as its two main expenses. In Q1 2019 they contributed 73.9% to Total Expenses.
Full Year Outlook:
- For the full year, we expect gross revenue to increase by 12.8% to $1.3 billion, led by an increase in the customer base due to its continuously expanding reach. In 2019 on average we expect more than 10K+ new customers to be added.
- Gross Profit margin is expected to remain in line at around 89%.
Trefis has a price estimate of $139 per share for Tableau’s stock. The value is based on the expectation that the company is on a high growth path as they continue to expand reach and new customers across geographies.
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