Tableau Earnings – Q3 2016

Tableau earnings have been released on the 01th of November 2016. The stock price fell by more than 12% in after hours trading. Here are the main takeaways of the Q3 Tableau Earning Call.

 

Growth is slowing down.

Tableau Quarterly Revenue since 2013.

In 2015 Tableau made 653M in Sales with a YoY growth of 58% vs 2014. After nine months in 2016 Tableau realised a smaller YoY growth of 28% and a more worrying 3.5% growth QoQ (Q3 16 vs Q2 16). If we extend this growth to the full year, it would push Tableau around the 830M marks. The company is known for strong Q4 results (30% of its yearly sales in Q4 2015), so if Tableau reproduces its 2015 performance, it would push Tableau around the 820M mark. Way too short to get the 1 Billion dollar company title. Tableau will not break the 1 Billion $ in revenue this year and needs to adapt to a slowing growth.

 

Tableau is not profitable.

Tableau Quarterly Profits / Loss since 2013.

Tableau has accelerated its loss for the last 3 quarters making a total loss of 122 million since the beginning of the year 2016. The Seattle based company is heading to double its loss in 2016 compared to 2015 (83.7M loss). The projected loss is around 160M if we take the 122M loss and extrapolated it for the full year. The 2016 deficit is expending at around 21% vs 13% in 2015.

In short Tableau is spending too much in “Sales and marketing” and costs are growing way faster than Sales. The total expenses of “Sales and Marketing” expenses represented 59% of the revenue in the first 9 month of 2016 versus 54.5% in 2015 and 52.5% in 2014.

 

Tableau bets on R&D.

Tableau is a breakthrough company and the amount spent on R&D is a reflection of the desire to revolutionize the data industry. The staggering amount of R&D represented a total of 31% of the revenue in 2015 versus 27% in 2014. But the number for the latest report are even higher and pushing Tableau to reach an impressive 39% of the revenue spent on R&D which represents an 55% YoY increase in spending. In contrasts, Apple spends less than 5% of its revenue in R&D (10B). Let’s keep in mind that those two companies are in different stages of their lives.

 

Time to Buy some Tableau Stocks?

Tableau Stock Price from April to November 16.

 

Tableau share price have fallen around 12% in the after-hours trading following the Q3 2016 financial reports, falling from 49.5$ to 42.25$. The Tableau stock is not far from its record low of 37$ and the price is staying below its IPO opening price. The market capitalisation is around 3.6B and trades around 3.7 time its yearly revenue. For me the DATA stock is quite cheap around the 45$ mark. It could be a good time to buy before the new appointed CEO puts in place a new sales execution.

 

What is next for Tableau?

Tableau has some challenges ahead. The new CEO will need to keep under control expenses and try to renew with profitability. The company will also need to revaluate its old fashion licensing model to a more 2016 way of selling software. Buying upfront large amount of software and hoping for the best is not aligned to a world where companies only wants to pay for what they use. It is in direct contradiction with Tableau’s vision; revolutionizing the Data industry.

The high amount of R&D will be changed into products or major updates that will hit the market at some point. Let’s see what the visualisation company comes up with and how things will be branded. A good indicator will be the Tableau Conference starting in this early November 16 in Austin, Texas.

 

What are your thoughts on the Tableau earnings of Q3 2016?

 

I AM NOT RESPONSIBLE FOR ANY FINANCIAL LOSS AND DO NOT OWN TABLEAU STOCKS AT THE TIME OF PUBLISHING THIS ARTICLE.

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