Alteryx (NYSE:AYX) Q3: Strong Sales, Stock Jumps 10.1%

Adam Hejl /
2022/11/01 4:11 pm EDT

Data analytics and automation platform Alteryx announced better-than-expected results in the Q3 FY2022 quarter, with revenue up 74.6% year on year to $215.7 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $278.5 million at the midpoint, 14% above what analysts were expecting. Alteryx made a GAAP loss of $74.5 million, down on its loss of $58 million, in the same quarter last year.

Is now the time to buy Alteryx? Access our full analysis of the earnings results here, it's free.

Alteryx (AYX) Q3 FY2022 Highlights:

  • Revenue: $215.7 million vs analyst estimates of $192.3 million (12.1% beat)
  • EPS (non-GAAP): $1.04 vs analyst estimates of -$0.10 ($1.14 beat)
  • Revenue guidance for Q4 2022 is $278.5 million at the midpoint, above analyst estimates of $244.1 million
  • Free cash flow was negative $67.2 million, compared to negative free cash flow of $67.6 million in previous quarter
  • Net Revenue Retention Rate: 121%, in line with previous quarter
  • Customers: 8,340, up from 8,296 in previous quarter
  • Gross Margin (GAAP): 85.1%, down from 87.4% same quarter last year

"Alteryx continues to execute at a high level and gain traction with large enterprises. We delivered a strong third quarter with annual recurring revenue (ARR) growth of 33% year-over-year, adjusted for the effect of foreign currency, improved operating profitability, and an increased net expansion rate of 121%," said Mark Anderson, CEO of Alteryx,

Initially created as a way to organise census data for the government, Alteryx (NYSE:AYX) provides software that helps companies automate and analyse their internal data processes.

Organizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the silo-ed data.

Sales Growth

As you can see below, Alteryx's revenue growth has been strong over the last two years, growing from quarterly revenue of $129.7 million in Q3 FY2020, to $215.7 million.

Alteryx Total Revenue

This was a standout quarter for Alteryx with quarterly revenue up an absolutely stunning 74.6% year on year. which is above the two year trend for the company. On top of that, revenue increased $35 million quarter on quarter, a very strong improvement on the $22.6 million increase in Q2 2022, and a sign of re-acceleration of growth, which is very nice to see indeed.

Guidance for the next quarter indicates Alteryx is expecting revenue to grow 60.2% year on year to $278.5 million, improving on the 8.27% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 20% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Alteryx reported 8,340 customers at the end of the quarter, an increase of 44 on last quarter. That is a little slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing a little bit.

Alteryx Customers

Key Takeaways from Alteryx's Q3 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Alteryx’s balance sheet, but we note that with a market capitalization of $3.33 billion and more than $379.9 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by how strongly Alteryx outperformed Wall St’s revenue expectations this quarter. And we were also glad that the guidance for the next quarter exceeded analysts' expectations. Zooming out, we think this was a fantastic quarter that should have shareholders cheering. The company is up 10.1% on the results and currently trades at $53 per share.

Alteryx may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.