Alteryx (NYSE:AYX) Q4 Sales Beat Estimates, Stock Soars

Anthony Lee /
2023/02/09 4:16 pm EST

Data analytics and automation platform Alteryx beat analyst expectations in Q4 FY2022 quarter, with revenue up 73.2% year on year to $301.1 million. Guidance for next quarter's revenue was $200 million at the midpoint, 2.07% above the average of analyst estimates. Alteryx made a GAAP loss of $31.7 million, improving on its loss of $37.5 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) Q4 FY2022 Highlights:

  • Revenue: $301.1 million vs analyst estimates of $279.3 million (7.79% beat)
  • EPS (non-GAAP): $0.84 vs analyst estimates of $0.51 (64.1% beat)
  • Revenue guidance for Q1 2023 is $200 million at the midpoint, above analyst estimates of $195.9 million
  • Management's revenue guidance for upcoming financial year 2023 is $985 million at the midpoint, beating analyst estimates by 1.81% and predicting 15.2% growth (vs 57.8% in FY2022)
  • Free cash flow was negative $557 thousand, compared to negative free cash flow of $67.3 million in previous quarter
  • Net Revenue Retention Rate: 121%, in line with previous quarter
  • Customers: 8,358, up from 8,340 in previous quarter
  • Gross Margin (GAAP): 89.4%, down from 90.5% same quarter last year

"Alteryx delivered an excellent fourth quarter with annual recurring revenue (ARR) growth of 31% year-over-year, driven by continued success with large enterprises. We closed the year with strong momentum and improving operating profitability," said Mark Anderson, CEO of Alteryx, Inc.

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 very strong over the last two years, growing from quarterly revenue of $160.5 million in Q4 FY2020, to $301.1 million.

Alteryx Total Revenue

This was a standout quarter for Alteryx with quarterly revenue up an absolutely stunning 73.2% year on year. which is above the two year trend for the company. On top of that, revenue increased $85.4 million quarter on quarter, a very strong improvement on the $35.1 million increase in Q3 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 26.6% year on year to $200 million, slowing down from the 33% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $985 million at the midpoint, growing 15.2% compared to 59.5% increase in FY2022.

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 8,358 customers at the end of the quarter, an increase of 18 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 Q4 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 $4.18 billion and more than $341.8 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the exceptional revenue growth Alteryx delivered this quarter, and we were also glad to see the improvement in gross margin. Additionally, revenue guidance was ahead of expectations for both the upcoming quarter and full year. Zooming out, we think this was strong quarter. The company is up 9.24% on the results and currently trades at $65.64 per share.

Should you invest in Alteryx 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.