tableau software (data) earnings report: q2 2015...
TRANSCRIPT
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page1of21
TableauSoftware(DATA)EarningsReport:Q22015ConferenceCallTranscriptThefollowingTableauSoftwareconferencecalltookplaceonJuly29,2015,08:00AMET.Thisisatranscriptofthatearningscall:
CompanyPart icipants
JoniDavis;TableauSoftware;Director-IRChristianChabot;TableauSoftware;CEOTomWalker;TableauSoftware;CFO
OtherPart icipants
JesseHulsing;CowenandCompany;AnalystMattHedberg;RBCCapitalMarkets;AnalystBrentThill;UBS;AnalystDerrickWood;SusquehannaFinancialGroup;AnalystMarkMurphy;JPMorgan;AnalystTomRoderick;StifelNicolaus;AnalystJohnRizzuto;SunTrustRobinsonHumphrey;AnalystBradSills;BofAMerrillLynch;AnalystKeithWeiss;MorganStanley;AnalystPhilipWinslow;CreditSuisse;AnalystSteveKoenig;WedbushSecurities;AnalystWalterPritchard;Citigroup;AnalystKarlKeirstead;DeutscheBank;AnalystSteveAshley;RobertW.Baird;AnalystJohnDiFucci;Jefferies;Analyst
MANAGEMENTDISCUSSIONSECTION
Operator :
Ladiesandgentlemen,welcometotheTableausecond-quarter2015earningsconferencecall.Duringthecallallparticipantswillbeinalisten-onlymode.Afterthepresentationwewillconductaquestionandanswersession.
(OperatorInstructions).
Asareminder,thisconferenceisbeingrecordedandwillbeavailableforreplayfromtheinvestorrelationssectionofTableau'swebsitefollowingthiscall.IwillnowturnthecallovertoJoniDavis.Thankyou,ma'am,youmaybeginyourconference.
JoniDavis (Director-IR):
Thankyou.Goodafternoon,everyone,andthankyouforjoiningustoday.WithmeonthecallareTableau'sChiefExecutiveOfficer,ChristianChabot;andChiefFinancialOfficer,TomWalker.
Ourpressreleasewasissuedearliertodayandispostedonourwebsite.Thiscallisbeingbroadcastlive
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page2of21
viawebcastandfollowingthecallanaudioreplaywillbeavailableintheinvestorrelationssectionofthewebsite.ChristianandTomwillbeginwithpreparedremarksandthenwewillopenthecallforquestions.
Beforewebegin,Iwouldliketoremindyouthatduringtoday'scall,wewillbemakingforward-lookingstatementsregardingfutureeventsandfinancialperformance,includingourguidanceforthethird-quarterandfull-year2015.Wecautionyouthatsuchstatementsreflectourbestjudgmentbasedonfactorscurrentlyknowntous,andthattheactualeventsorresultscoulddiffermaterially.PleaserefertothedocumentswefilefromtimetotimewiththeSEC,inparticularourmostrecentlyfiledform10-Qandourform10-K.Thesedocumentscontainandidentifyimportantriskfactorsandotherinformationthatmaycauseouractualresultstodifferfromthosecontainedinourforward-lookingstatements.Anyforward-lookingstatementsmadeduringthiscallarebeingmadeasoftoday.Ifthiscallisreplayedorreviewedaftertoday,theinformationpresentedduringthecallmaynotcontaincurrentoraccurateinformation.Exceptasrequiredbylaw,weassumenoobligationtoupdatetheseforward-lookingstatementspubliclyortoupdatethereasonsactualresultscoulddiffermateriallyfromthoseanticipatedintheforward-lookingstatements,evenifnewinformationbecomesavailableinthefuture.
Duringthecallwewillalsodiscussnon-GAAPfinancialmeasures.Thesenon-GAAPfinancialmeasuresarenotpreparedinaccordancewithgenerallyacceptedaccountingprinciples.AreconciliationoftheGAAPandnon-GAAPresultsisprovidedintoday'spressrelease.Theprojectionsthatweprovidetodayexcludestock-basedcompensationexpense,whichcannotbedeterminedatthistime,andarethereforenotreconciledintoday'spressrelease.Withthat,it'smypleasuretoturnthecallovertoChristian.
Christ ianChabot (CEO):
Thankyou,Joni.Thankyou,everyone,forjoiningustodaytodiscussTableau'ssecond-quarter2015results.TableauexecutedanotherstrongquarterinQ2,resultingintotalrevenueof$149.9million,up65%yearoveryear.Thegrowthwasfueledbyrecordcustomergrowthandcontinuedproductadoption.Letmerecapsomeofthehighlights.Duringthequarter,weaddedmorethan3,000newcustomeraccounts.That'sthemostwe'veaddedinanyquarter.Inaddition,wesigned233transactionsgreaterthan$100,000ascustomerscontinuetodeployTableaumorebroadlywithintheirorganization.
OurinvestmentsininnovationarepayingoffwithusersadoptingTableau'sproductsatarapidpace.InQ2wereleasedTableau9.0,bringingbigadvancesinanalytics.Inthefirstfewweeksafterlaunchweexperienced78%moreregistrationthanwedidwithTableau8.2.Animportantaspectofourgrowthisthatourinternationalbusinesscontinuestogrowandthrive.I'mpleasedtoreportthatinternationalrevenuehasnowgrownto25%ofourtotalrevenue.Ourproductscontinuetohavebroadappealacrossindustries,departmentsandprofessions.Asaresultweareexperiencingsignificantgrowthinourcustomerbase.Wenowhavemorethan32,000customeraccountsworldwide.InQ2,wewelcomednewcustomerssuchasMerrillGardens,Infomedia,Globalpayments,OneAmericaFinancialPartners,andStandardBankofNamibia.Andweexpendedrelationshipswithexistingcustomers,includingSwisscom,Ericsson,UniversityofArizona,UCLAHealth,andSeagateTechnology.
LetmeshareafewstoriesaboutTableauimpactingpeopleacrossdiverseindustries.Ourfirststorycomesfromoneoftheworld'slargestconsumerproductscompanies.Thecompanymanagesavastportfolioofthousandsofproductsthataresoldin170countries.Peopleacrossthecompanywereeagertoharnessthepowerofthemassivedatatheyhadaccessto.Asamulti-nationalcompany,theirunderlyingarchitectureisextremelycomplex,andtheyneededananalyticssolutionthatwouldseamlesslyfitintotheirglobaldataframework.TheychoseTableau.Nowabusinessuserinonedepartmentcandroveintouniqueinventorydetailswhileinanotherdepartment.Managerscanlearnmoreaboutbuyingpatternsonthefly.Datasourcesareblendedtogethertobetterunderstandlargerprogramslikeloyaltyprograms.Tableau'sself-serviceanalyticsenablespeopleatalllevelsoftheorganizationtomakebetterandsmarterdecisions.
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page3of21
AnotherstorycomesfromtheQueenslandPublicSafetyBusinessAgency.TheyuseTableaudashboardstoestimatetheimpactofnaturaldisastersforthewholestate.Eachdashboardanalyzesdataaboutbuildings,vegetationandslopes.Thesevisualizationsareparticularlyusefulforestimatingthepopulationsthatwouldbeimpactedbystormswhenthereisn'tmuchtimetodeploysafetyplans.
Anothercustomer,Necco,isanonprofitthatworkstogetfosterchildrenintopermanenthomesasquicklyaspossible.Necco'scontractsareperformance-basedsoit'simportantthattheycanusedatatodemonstratetheresults.TheyuseTableautocloselytracktheoutcomesforchildrenaftertheyleavefosterhomes.Tohelptheteamsstayontrack,NeccohasinstitutedTableauTuesdays,toreviewdashboards,asknewquestionsandworktogethertowardthegoalofbuildingfamilies.
AndfinallyagreatstoryaboutTableaucomesfromtheObservatoriodeTurismodeGalapagos.TheyuseTableautohelpinsurethatinfrastructureandresourcesareproperlyallocatedtominimizetheeffectsofhumanactivitiesontheenvironment.Andthentheysharetheseresultswithkeystakeholders.
Tableau'sinternationalgrowthisanimportantandgrowingpartofoursuccess.Forthesecondquarter,internationalrevenuegrewto$36.7million,up83%fromtheprioryear.Weremainfocusedonourinternationalgrowthbycontinuingtomakeinvestmentsabroad.InearlyJulyweannouncedplanstoopenadatacenterinEuropetosupportourgrowinginternationalcustomerbaseadoptingourcloudsolution,TableauOnline.Andjustafewweeksago,welaunchedtechnicalsupportinJapanese.Theseandotherimprovementsleavemeoptimisticaboutourgrowthprospectsinternationally.
Turningtoproductnews,inQ2wereleasedTableau9.0,oneofthemostsignificantproductreleasesinourhistory.Tableau9.0includesadvancesinvisualanalytics,performance,scalability,datapreparationandenterprisecapabilities.Customershavebeenveryexcitedaboutsomeofthebreakthroughnewfeatures,suchaslevelofdetailedexpressionsanddraganddropanalyticsthatmakeansweringsophisticatedquestionseveneasier.Andtheperformanceenhancementswemadeacrossourproductsarehelpingpeoplegetresultsfaster.InearlyJulyweannouncedthebetaversionofourrelease,Tableau9.1,anothermilestoneinourdevelopmentcycle.Itincludesanentirelynewandimprovedmobileexperience,moredataconnectors,newenterprisesecurityandauthenticationoptionsandadditionalanalyticalfunctionsforusers.ThenewwebdataconnectorinTableau9.1enablesuserstowritetheirownconnectionstowebdata.WebelievethewebdataconnectorwillgreatlyexpandthenumberofconnectorsinTableauandprovidemoreflexibilityforcustomerstoconnecttoanydatasourcetheywant.
WehaveseencustomersaddconnectionstoFacebook,TwitterandGoogleSheets.Thepossibilitiesareendless.BylaunchweexpectmanymoreexamplesofwebdatabeingavailableinTableauusingthewebdataconnector.Inaddition,weaddednewconnectionsforGoogleCloud,SQL,MicrosoftazureSQLDataWarehouse,MicrosoftSparkonAzureHDInsightandAmazonAurora.TheTableaumobileapplicationinTableau9.1hasbeenredesignedtomakeiteasiertofind,interactwithandtomanagecontentonthego.Itincludesanewnavigationexperience,fasterperformanceandenhancestouchcapabilities.Italsoincludesanewfeaturecalledofflinesnapshotsthatenableuserstosaveinformationtobeviewedoffline.WeexpectTableau9.1tobereleasedwithinthenext90days.
TableauOnline,ourcloudanalyticsolution,continuestogrowandthrive.Asweseeagrowingproportionofdatabeinggeneratedandstoredinthecloud,moreanalyticsarebeingconductedtheretoo.OneexampleofhowcustomersuseTableauOnlinecomesfromGermane-commercefashioncompany,Stylight.TheyuseTableauOnlinetosharevisualizationsontheirproductcategories.Forinstance,whichproductcategoriesarethebestsellersineachshop.TheirTableaucloudsolutionconnectsdirectlytodatafromAmazonRedShiftandGoogleAnalyticsalsoblendsdatafromothersources.Theytellusthey'resavingoverhundredsofhoursofmanualworkeachweekthankstotheirdataautomationinTableau'scloudplatform.
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page4of21
We'reexcitedtoseeTableauPublic,ourcommunityforpeopletoshareandexploredataonthepublicweb,continuetoextenditsreach.InQ2TableauPublicadded20,000authors.DuringthequarterTableauPublicauthorsgeneratedarecord72millionviewsofinteractivedatavisualizations.PeopleuseTableauPublictosharestoriesandstartconversationscontainingdata.Forexample,oneofourauthorswonderedhowlongitwouldtaketopayoffGreece'sdebtifweallworkedtogether.Heanalyzedthesalariesandnumberofworkersin299differentUKprofessions,fromprofessionalsoccerplayerstoelementaryschoolcrossingguards,andcomparedthosefigurestotheamountGreeceowestheinternationalmonetaryfund.WiththreeTableauvisualizations,hecameupwithasolution.HefoundthatifalltheUKfootballersputtheirsalariestogether,theycouldbailoutGreeceinaboutayear.Youcanusetheinteractivevisualizationtofindouthowlongitwouldtakeyourindustrytopayoffthedebt.
Wecontinuetoinvestininitiativesthatexpandandengageourvibrantcustomerandpartnerecosystem.Inthepastfewmonths,weheldregionalcustomerconferencesinSingapore,LondonandBerlin.Inaddition,ourteamhasbeengearingupforourbiggestcustomerconference,oureighthannualTableauConferencebeingheldthethirdweekofOctoberinLasVegas.ThisyearTableauwillhostmorethan10,000dataenthusiastsfromaroundtheworld.Thisconferenceisbecomingthedataandanalyticseventoftheyear.Attendeeswillcometogethertosharetheirpassionfordata,seethedevelopmentteamshowcase,ournewestinnovations,andattendanyof340sessionsfromcustomers,partnersandtheTableauteam.
Insummary,we'repleasedwithTableau'sperformanceinthesecondquarter.Wecontinuetobuildoursuccessfultrackrecordofgrowingrevenue,expandingourcustomerbase,developinginnovativeproductsandexpandinginternationally.I'dliketothanktheTableauteamworldwidefortheireffortsinexecutinganothersuccessfulquarter.I'llnowturnthecallovertoTom.
T omWalker (CFO):
Thankyou,Christian.Goodafternoon,everybody,andforthoseofyouintheUnitedStates,goodmorning.We'retalkingtoyoutodayfromourofficesinLondon.
AsyouheardfromChristian,Q2wasanotherwell-executedquarter,comingofftheheelsofaverystrongQ1.We'reverypleasedwithourperformanceinQ2.Wedemonstratedcontinuingsuccessinlandingnewcustomers,increasingadoptionwithexistingcustomersandgrowinginternationally.Let'sdothenumbersandprovideyouwithmoredetailsthenIwillprovideyouwithguidanceforQ3,andanupdateforthefull-year2015.
Thesecondquarterexceededourexpectationsastotalrevenuesgrewto$149.9million,up65%yearoveryear.AsChristiandiscussed,ourgrowthisattributedtooverallstrengthinthebusinessacrosstheboard.Oursalesandmarketingteamscontinuedoingamazingjobsbuildingawarenessanddrivingcustomeracquisitionandexpansion,andI'dliketothankthemfortheirtremendousefforts.Inthequarter,weaddedmorethan3,000newcustomeraccounts,bringingourtotaltomorethan32,000worldwide.Inaddition,weclosed233transactionsover$100,000each.Boththesemetricsarepositiveindicatorsthatourlandandexpandstrategycontinuestogrowandthrive.Asareminder,thenumberofcustomeraccountsandlargetransactionscanfluctuateinanygivenquarter.
Turningtotheincomestatement,inQ2licensedrevenuesgrewto$96.7million,up60%yearoveryear.Maintenanceandservicesrevenuesgrewto$53.1million,up75%fromtheprioryear.Maintenanceandservicescontinuetobeanimportantandgrowingrecurringrevenuestream.Weexpectmaintenancesandservicestobecomealargerpercentageoftotalrevenueovertimeasourcustomerbasecontinuestogrow.GlobalexpansioncontinuestobeoneofourtopprioritiesforTableauandwearepleasedwithourprogress.InQ2,internationalgrewto25%oftotalrevenues.Breakingitdown,totalrevenuesfromtheUnitedStatesandCanadawere$113.1million,up60%yearoveryear.Internationalrevenuesgrew
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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to$36.7million,up83%yearoveryear.Weintendtocontinuemakingsignificantinvestmentstoexpandourfootprintinallregions.
NextI'llspendafewminutesdiscussingmarginsandoperatingexpenses.Unlessotherwisenoted,allreferencestofinancialmeasuresareonanon-GAAPbasis,whicharereconciledinthepressreleasetablesandpostedonourinvestorrelationswebsite.InQ2ourgrossmarginwas90%.Aswe'vesaidbefore,weexpectourgrossmargintofluctuateaswecontinuemakinginvestmentstosupportourgrowingglobalcustomerbase.Forthequarter,totaloperatingexpenseswere$124.3million.Asareminder,themajorityofouroperatingexpensesareemployee-related.InQ2,weinvested$34.9millioninproductdevelopment,up65%yearoveryear.Weaddedarecord66netnewhiresinR&D,endingthequarterwithtotalheadcountof614,up52%yearoveryear.Productinnovationisveryimportanttousandweplantocontinueinvestingandgrowingtheteam.
Salesandmarketingexpensesforthequarterwere$74.3million,up62%fromtheprioryear.WeendedQ2withtotalsalesandmarketingheadcountof1,086.Thisisup61%yearoveryear.WecontinuetobuildourtalentpoolandI'dliketocalluptheawesomejobouroperationsteamscontinuedtodothisquarter.Weonboardedarecord271netnewhiresinQ2,bringingourtotalto2,463.Thisrepresents61%year-over-yeargrowth.Letmeremindyouthattherecanbefluctuationsinheadcountadditionsonaquarter-by-quarterbasis.
Oursecond-quarteroperatingincomewas$10.5millioncomparedtoanoperatingincomeof$7millionforthesecondquarterof2014.Netincomewas$5.6millionforthesecondquarterandnon-GAAPdilutedearningspersharewere$0.07.Duringthequarter,ourweightedaveragesharecountusedforGAAPEPSwas71.4millionshares.SincewehadaGAAPnetloss,ourdilutedandbasicsharecountswerethesame.Asareminder,periodsinwhichwehaveaGAAPnetlossbutareprofitableonanon-GAAPbasis,ourpresentationofnon-GAAPEPSwillusethedilutedsharecount.Accordingly,ourweighted-averagedilutedsharecountfornon-GAAPEPSwas77.7millionshares.Adetailedreconciliationisavailableinthepressreleasetablesandpostedonourinvestorrelationswebsite.
Onthebalancesheet,cashandcashequivalentsattheendofQ2were$729.5million,upfrom$715.7millioninthepriorquarter.Accountsreceivablewere$98millionandourDSOswerefewerthan65days,consistentwithpriorperiods.
NowI'dliketomoveontoourguidanceforthethirdquarterandprovideyouwithanupdateforthefullyearof2015.Asareminder,allforward-lookingguidancebeingdiscussedisonanon-GAAPbasis.ForQ3,weareexpectingrevenuestobeintherangeof$153millionto$157million.Atthehighendofthisrange,thisrepresents50%year-over-yearrevenuegrowth.ForQ3,we'reexpectingoperatingincomeof$5millionto$9million.Asyou'veseeninpriorquarters,ouroperatingexpensescanvarybasedonrecruitingtrendsandthetimingofnewhiresjoiningtheCompany.Forthethirdquarter,weanticipateourbasicsharecounttobebetween72millionand73millionshares,andourweighted-averagedilutedsharecounttobebetween77millionand78millionshares.Forthefullyear,weareraisingourpriorguidancefortotalrevenuestoarangeof$617millionto$627millionfromtherangeof$600millionto$610million.Thisrepresentsannualgrowthofapproximately52%atthehighendofthisrange.Forthefullyear,we'reexpectingoperatingincometobeintherangeof$41millionto$51million.
Wehaveforecastedanon-GAAPtaxrateof43%whichwe'lluseforinterimperiodsduring2015.Thenon-GAAPtaxratedoesnotassumetheR&Dtaxcreditisextended.Wewillprovideupdatestothisrateonanannualbasisorifmaterialchangesoccur.
Inclosingwe'repleasedwithourperformanceinQ2.Wewillcontinueinvestinginproductinnovation,expandingourcustomerbaseandbuildingoutourexceptionalteam.Welookforwardtothesecondhalfof2015.Thankyouallforjoiningustoday.Nowwe'llturnitovertotheoperatorforQ&A.
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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QUESTIONS&ANSWERS
Operator :
(OperatorInstructions)
YourfirstquestioncomesfromJesseHulsingwithCowen.Yourlineisopen.
JesseHulsing (Analyst-CowenandCompany):
Thanksfortakingmyquestion.Tom,Christian,onthelargedealside,itlookslikedealsaround1,000weredownquarteroverquarterslightly.Canyoutalkaboutmomentumthere?AnddidyoupullanybusinessintoQ1?Ordoyouseeanytrendslikethat?Thankyou.
T omWalker (CFO):
Hi,Jesse,thisisTom.Soyes,overallthelargedealsare--those233wereagoodamountofdeals,anditdoesfluctuateonaquarter-by-quarterbasis.Q1wasdownfromQ4sowedon'texpectthattoalwaysbeupandtotheright.
OverallIwouldn'tsaythattherewasashiftingofdealsbetweenthetwoquarters.Ithinkthatmetricwillvaryonaquarter-by-quarterbasis.I'dalsojustremindyouthatthe233isgreat,butwe'redoingthousandsandthousandsandthousandsandthousandsofothertransactions.Soit'sallpartoftheportfolioofwhatwedoinanygivenquarter.
JoniDavis (Director-IR):
Thanks,Jesse.Operator,couldwehaveournextquestion,please?
Operator :
YournextquestioncomesfromMattHedbergwithRBCCapital.Yourlineisopen.
MattHedberg (Analyst-RBCCapitalMarkets):
Hi,guys,thanksfortakemyquestions.YouguysgavealotofgoodevidenceofTableau9.I'mcurious,youcouldtalkalittlebitmoreabouthowthat'sdoingversuspeers,thecompetitivelandscape?There'sbeenalotoftalkaboutembeddedanalyticsoverthepastseveralquarters.Andthenfollowinguponthat,thepredictiveanalyticcapabilities.I'mcurioustohearyourpointonthat.
Christ ianChabot (CEO):
Tableau9hasproventobethestrongreleasewehopeditwould.Uptakeandregistrationsandtrialshavebeenfantastic.Andofcoursewehaveahugeyear-over-yeargrowthinthebusinessbasedonthebackofthatrelease.
Overallthecompetitivelandscapefluctuates.There'salotofdimensionstothecompetitivedescriptioninthisindustry.Soit'snoteasytosummarizeinwhatnumber,butoverallwefeellikethecompetitivegapwithTableau9hasstayedaboutthesameasithasbeeninrecentquarters.
Withregardstothespecificfocusareasyoubringup,embeddedanalyticshasbeenabigpartofwhatTableauhasbeendoingformanyyearsnow.Sothatperse,Iwouldn'tidentifyitasamajorcompetitivedimension.Mostoftheproductsinourindustryenableittoonedegreeoranother.Tableauisexceptionalatit.
Andinfact,oneofthemostcommon-usecasesofourproductsareinembeddedscenarios,eitherin
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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enterpriseapplicationoracloudsolutionorsomemonitoringsystem.PeoplethatarebuildingincludeothertechnologiesotherthanTableau.
Sowecontinuetoplaceverystrongthere.We'vebolsteredthatfunctionalitylatelyinparticularbyincreasingthenumberofAPIsandtherobustnessofthem.SoIfeelverywellpositionedthere.
Withregardtopredictiveanalytics,wehaveareallyniceforecastingcapabilitybuiltintheproducttoday.Wehavereallynicestatisticalmodelingtechnologybuiltintotheproducttoday.It'sallveryeasytouse,it'sdraganddrop,itupdatesinstantly,andthat'sprovenverypopularwiththecustomerbase.
Thatalsohappenstobeateamwe'rebuildingoutquiteabitatthemoment.Buttofinelyputapointon,Ithink,toyourquestion,onthepredictorfrontperse,wehaven'tseenachangeinthecompetitivelandscapeinthislastquarter.
MattHedberg (Analyst-RBCCapitalMarkets):
Great,thanks,alot,Christian.
JoniDavis (Director-IR):
Thank,Matt.Operator,canwehaveournextquestion,please?
Operator :
YournextquestioncomesfromBrentThillwithUBS.Yourlineisopen.
BrentT hill(Analyst-UBS):
Goodafternoon.Christianon9.0,there'sbeenalotofemphasisontheserverrewrite.Curiouswhattheimplicationsareintermsofsomeofthelargercustomerslookingatthis.
Someoftheduediligencewe'vedonesuggeststhatthisisaloteasierforthemtodeployatmassmarket.Areyoustartingtoseethatimpact?Howdoyouexpectthattoplayoutinthesecondhalf?AndIhadaquickfollow-upforTom.
Christ ianChabot (CEO):
Yes,it'sgoingreallywell.Tableau9,withoutquestion,isourmostrobustandmostscalableandhighestperformanceserver.Itevenhasalotofadministrativebenefitsandease-of-useimprovementstoboot.We'reinanevergrowingnumbersofconversationstouseTableauserver,asanenterprisedepartment-wideordepartment-wideself-serviceanalyticssolution.
SoreallyIdon'thaveanythingtoreportthere,otherthangreatresults.Wehavealotofdealsinthepipe,andIthinkwewillseesomeofthebenefitofthatinthesecondhalf.Theaggressiveyear-over-yeargrowthwe'reseeinginlargedealsisinparttestimonytothat.Andwedoexpectthattocontinue.
BrentT hill(Analyst-UBS):
Okay.AndTom,Ithinkthenumberonequestiononinvestors'mindsrightnowisthemagnitudeofbeat.Thisisoneofthelowermagnitudes.Andagain,givenyoudidbeat,butrelativetowhatwe'veseenhistorically,wastheresomethinginQ2thatforcedsomebusinessintothebackhalfoftheyear?Somethingasitrelatestowhatyousawthatmayhavehadsometypeofimpactrelativetothemagnitudeyou'vebeenseeinginthepastfewquarters?
T omWalker (CFO):
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
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Yes,Ithinkthat'sagreatquestion,Brent.IthinkI'vebeentryingtobeconsistentwiththecompetesyear-over-yearasthenumbersgetlargerandlarger,becomeharderto,fromapercentagestandpoint,togrow.Ouroverallexpectation,we'regoingtogrowthe--andtheguidancelastquarterwas54%.Sowedeliveredup65%.Sowe'reactuallyveryhappywithourperformanceandhowwe'reexecuting.
AsImentionedbefore,I'mnotnecessarilygoingtoguidetotheupsideoranythinglikethatbecauseit'snotprudentforustodothat.Welookatthepipelinethatwehave,welookatallthemeasuresofhowourcustomersareexpanding,andwebasicallyapplythattoouroverallmethodology.Andinpreviousquarterswe'veseensomeuptickinawarenessandotherthings.
Andsowe'restillgrowing.Therecordnumberofaccountsisatestamenttothat,andIthinkit'satestamentto9.0.Sowe'refeelinggood,butwedon'texpect--weweren'texpectingthosebeatsbeforesoit'snotsomethingwe'recalibratingto.
MattHedberg (Analyst-RBCCapitalMarkets):
Thankyou.
JoniDavis (Director-IR):
Allright,thankssomuch,Brett.Operator,canwehaveournextquestionplease?
Operator :
YournextquestioncomesfromDerrickWoodwithSusquehannaFinancialGroup.Yourlineisopen.
DerrickWood (Analyst-SusquehannaFinancialGroup):
Thanks.IseeyouhavesomenewintegrationswithMicrosoft.I'dbecuriouswhatyouthinkaboutthemasacompetitor.TheydidjustannounceanewproductlaunchandanapproachtothemarketwithPowerBI2.0.Idbecuriouswhatyouthinkabouttheirapproachtothedatadiscoverymarketandhowitmaycomparetowhatyouguysarefocusedon.
Christ ianChabot (CEO):
Yes,thisisChristian.MicrosofthasbeenafiercecompetitorofTableaureallysincethebeginning,evensincetheearliestdaysoftheCompany.Andasthey'vetriedtofindtheirwaywiththeirBIstrategy,thecompetitivedynamichaschangedhereandthere,ebbsandflowsastheyrevtheirreleases.
Theydidjustputanewproductoutonthemarket,oratleastareaboutto,inthecaseofpowerBI.Andagain,IguessthebestnewsIcanreportatthispointisthatwehaven'tseenachangeinthecompetitivedynamic.
Tableau'sstrengthscontinuetobeversusthecompetition,powerBIincluded,incredibleeaseofuse,apioneeringapproachtovisualanalyticsandresponsiblevisualization,aplatformthatcantrulybeusedasaself-serviceenablementplatform.Andfinallyaproductlinethatishighlytunedandintouchwithalltheworld'sdisparatedata,includingtheabilitytoattachtoliveenterprisedatasourcesofallformsandvarieties,andclouddatasourcestoboot.
SothatconstellationofthreeorfourpillarscontinuetobethecompetitivejuggernautforTableau.Andtherecentnewsfromourcompetitorshaven'tchangedthat.Butwe'llcertainlykeepintouchontheissue.
DerrickWood (Analyst-SusquehannaFinancialGroup):
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
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Okay,thanksforthecolor.AndthenIalsosawyouannouncedaplanforanewdatacenterinEurope.Isthispartofabiggercloudpush?Orwhat'sthereasontobuildadatacenterinEurope?
Christ ianChabot (CEO):
Yes,shortanswerisitispartofabiggercloudpush.Tableaubelievestherightstrategyforcustomersoverthecomingyearswithregardtocloudversuson-premiseis,inshort,tobeboth.That'swhatwerefertoasoneofourhybridstrategies.Andwe'recontinuinginvestinginbothsimultaneouslyasaresult.Infact,wehavequiteafewnumberswhouseourcloudsolutionsandouron-premisesolutions.
Astheindustryevolvesanddatausecontinuestogrowandmoredatabecomesinthecloud,wedoexpectovertheyearsforTableautobecomemoreandmoreofacloud-basedbusiness.Flashforwardtoadistantdate,maybe8or10years,itmaybethatallofourbusinessisinthecloud.
Tableauonlineisourmainplatformformonetizingthatnow,andforhelpingcustomers,andthat'sgoingextremelywell.AndtheEUdatacenterakeystepinthat,absolutely.We'reveryexcitedaboutit.We'llhavemorenewsonthespecificshereinthebackhalf.
DerrickWood (Analyst-SusquehannaFinancialGroup):
Thankyouverymuch.
JoniDavis (Director-IR):
Thanks,Derrick.Operator,canwehaveournextquestion,please?
Operator :
YournextquestioncomesfromMarkMurphywithJPMorgan.Yourlineisopen.
MarkMurphy(Analyst-JPMorgan):
Yes,goodmorning,thankyou.Tom,regardingthis,youdohavethiscombinationofslightlylessrevenueupsideonapercentagebasisthaninpriorquarters.Butitiscombinedwithverystrongdeferredrevenueinbillingsresultsandincreasedguidancefortherestoftheyear.
I'mcurious,giventhatcombination,ifyoumighthaveexperiencedanymixshifttowardsratablerevenuestreamsduringthequarter.YoudidjusttalkaboutTableauPublicandthemovementmoretowardscloudarchitectures,andI'mwonderingifthatmighthaveinanywaytweakedthebookingsmixmoretowardsratablerevenuestreams.
T omWalker (CFO):
Hi,Mark.Yes,overall,Iwouldn'tsaybreakoutorstandout,thatsomethingstoodoutmorethanotherpreviousquarters.Theratableasatermrevenueissub10%oftheoveralllicensenumbers,isusuallywhatitis.Itmighthavebeenonahighersidethisquarter.
Weareseeinggoodtraction,butithasn'tbrokenupabovethat10%thresholdjustyet.SoIwouldn'tcallthatoutasanyparticularreasonforit.ButitisgrowingasTableauOnlineandsomeothertypesofenterpriseagreementsaregrowing.
MarkMurphy(Analyst-JPMorgan):
Okay,great.Andthenwhenwelookatvolumeofordersover$100,000,goingbackandlookingatit,ithasdeclinedsequentiallynow,Ibelieve,inthreeofthelastsixyearsinQ2.ButithasrepeatedlyalsogrowninQ3.Historicallythathasbeenthepattern.
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I'mwonderingifyouwouldexpect,fromamodelingstandpoint,ifyouwouldexpectmoreofthesamethereinQ3ofthisyear.AndI'malsocurious,Tom,ifyouweretodrilldownwithinthose233transactionsforthequarter,andtrytolookattheaggregatevalueofthosetransactions,wasthereanythingnewanddifferentthereintermsofperhapslargertransactionscontributingmorethantheyhaveinthepast,moreorless?
T omWalker (CFO):
Theoverallseasonality,asImentionedbefore,Mark,weexpectthattofluctuateandebbandflowonaquarter-by-quarterbasis.SowhetherQ3isaboveoraroundthesameballpark,Ijustdon'tknow,andIwouldn'twanttoguideyoutowardsthatatall.Q4istraditionallymoreofourstrongerquarter.SoIthinkoverallthat'swhereweexpectalargeramountofrevenues.Andprobablythelargeramountofsix-figuredealswillfallinQ4.That'smoreofwhatIwouldgiveyoufromthatperspective.
Butwithrespecttothe233,it'sagoodquestioninaggregate.Yes,weareseeingmuchlargerexpansiondealsinsideofourcustomerbase.Soinaggregate,thenumbersdoincrease.They'redoingquitewell.
Butagainthey'regoingtofluctuatefromaquarter-by-quarterbasis.Becauseagain,thebeautyofourmodeliswe'renotjustbeholdentojustthesesix-figuredealsorseven-figuredeals,right?Customerscancontinuetoexpandatapacethatworksforthemtotryanddeployandexpandin,quitefrankly,alow-riskway;theycanproveoutthevalue.
Sothat'swhatweallowpeopletodo.That'swhyit'sanimportantmetric,butit'snotametricthatIwouldoverlyfocuson,becausewehaveplentyofcustomersthathaveaseven-figurespendwithusthathavebasicallytripledaround.Notalot,hundredsandhundredsoftransactions,andnotalotofthoseweresix-figuretransactions.Soit'sagoodmetric,it'sonethatwedisclose,butIwouldn'tholdourhatonjustthatmetric.
MarkMurphy(Analyst-JPMorgan):
Okay,andjustonefinalone,howwouldyoucharacterizethepricinganddiscountingtrends,inparticularforthedesktopproductwhenyoulookatthe$1,000en-oplicenseprices?Hastherebeenanychangeonewayortheotherintermsofyourabilitytosticktothosepricesandtosticktothemechanismforhowthevolumediscountswouldworkaswell?
T omWalker (CFO):
Yes,overallIthinkasweexpandlargerandlargerintoenterprises,weleveragediscounting.Aspeoplewanttoinvestmorewithus,weactuallyabsolutelywanttoworkwiththem.Soyou'llseethatmoreprevalentinthelargerenterpriseaccountsthatwedealwith.
Aspeopleareestablishingandgrowingtheirfootprint,onthelowerend,Iwouldn'tcallthatanytrendordifferenceinthat.Becauseagainfrompeoplegettingstarted,youcangetstartedverycost-effectivelywithTableau,whetherit'sdesktopserverorTableauOnline.Notseeingdiscountingtrendstheresomuch,asmuchasintheenterpriseside.
MarkMurphy(Analyst-JPMorgan):
Thankyou.
JoniDavis (Director-IR):
Thanks,Mark.Operator,couldwehaveournextquestionplease?
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Operator :
YournextquestioncomesfromTomRoderickwithStifel.Yourlineisopen.
T omRoderick(Analyst-StifelNicolaus):
Hey,guys,goodmorning,thanksforthequestion.SoIwanttotouchbackonthetrendlinehereinthebigdeals,particularlythoseover$100,000.Iknowtheydon'tjustfalloutofthesky.Iknowthere'saprocesswithcustomersasyoulandandexpandandmovethemfromtrialtodepartmentaltoenterprise.
Isupposeit'sprobablyimperativetoscalebothyourservicesteamsandyourpartnercommunitytoenablecustomerstounlocktheirdata.Canyoutalkaboutanychallengesortrendsorthingsthatyou'redoingtoenableyourcustomerstomakesenseoftheirdatafaster?Toloaddatafaster?Andultimatelyenablethemtoexpandonthoseinitialpurchasessothatyoucan,infact,upsizethedeals?
T omWalker (CFO):
Sure,hi,Tom,thisisTom.SooverallIthinkyouhititonthehead.Wedohaveasmallservicesteamthathelpsourcustomersdothat.Butwealsohavealotofpartners,bothpartnersthatgoengageandhelppeoplewiththeirdata,andwealsohavesometechnologypartnersthathelpintheETLefforts,whenpeoplearetryingtocombineandmashupdatainalargefashion.
Sooverall,weengagewithcustomersandusuallyproveoutwhat'sgoingonwiththeirdata,andthenitgrowsintobiggeropportunitiesovertime.ButwhetherweleverageitourselveswithourTableauserver,orourembeddedTableaudataengine,orwe'remashingitupwiththelikesofInformaticaorULTRIX,orsomethingalongthoselines,there'snotoneortheother.
Again,we'reusingthesameapplication.It'sjustawaythatpartnersandcustomersareabletogettheirdataorganizedinafashionandthengetitanalyzedbymorepeoplethroughouttheirorganization.Butit'sagrowingpartofitbecausealotofpeoplehavedirtydata.You'renotgoingtofindonecustomerthatcan'tsaythatthedata'sperfect,right?SoIthinkit'sanimportantpartoftheoverallmission.
T omRoderick(Analyst-StifelNicolaus):
Withrespect--
T omWalker (CFO):
IwasjustgoingtoaddwithTableau9.0,alotofwhatwedidwas,there'salotofdataparsingandcleaningthatyoucandotokeepintheflowofanalytics.Sothat'sreally,reallyimportantforendusersasthey'reabouttodosomething,tobeabletotweakthedatawithouthavingtogoallthewaybacktothewellandchangethings.Butwe'llcontinuetomakeprogressonthat.
T omRoderick(Analyst-StifelNicolaus):
Great,andaquickfollow-uponthat.Doyoufeelasthoughyourimplementationandservicesteamsareappropriately-sizedrightnow?Doyoufeellikeyoumaybeneedtomakesomemoresizeableandmoreaggressiveinvestmentsinthoseteamstohandletheroadhere?
T omWalker (CFO):
Yes,IthinkjustlikeallthedepartmentsinTableau,we'rehiring.Sowecontinuetoexpandandgrowitasourgrowingglobalcustomerbasegrows.Becausethere'sopportunitiesinEMEAandAPACandLatinAmericaandtheUSandCanada.Sowehaveopenrecs.Wewanttoexpanditbutwealsowanttobuildthathealthypartnerecosystemthatcanhelpuswithhandlingourcustomers.
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T omRoderick(Analyst-StifelNicolaus):
Great,thankyou.That'sveryhelpful,appreciateit.
JoniDavis (Director-IR):
ThanksTom.Operatorcouldwehaveournextquestionplease?
Operator :
OurnextquestioncomesfromJohnRizzutowithSunTrust.Yourlineisopen.
JohnRizzuto (Analyst-SunTrustRobinsonHumphrey):
Thankyou,goodafternoonwhereyouare,anyway.Oneofthethings,soChristian,fromyourroots,andIthinkoneofthethingsthatyousetouttodoverydifferentlywithTableau,andobviouslyhadtheimpactIbelieveyouintended,wastothinkaboutvisualizationfromamuchdifferentperspectivethanjusttrivializingitasprettypictures.Thatwentallthewaydowntotheresearchyoudidabouthowpeopleunderstanddata,howtheyinteractwithdata,howthebrainworks.You'vepublished--yourgroup,you'vegotsomeofthegreatscientistswhothinkthiswayinyourresearchdepartment.Andithasbuiltaveryeclecticresearchgroup,andit'sbeenakeyadvantageforyouforalongtime.
Nowwe'reseeing,weallknowit'soutthere,weseemicro-strategies,newMicroStrategy10,weseeQlikSensecomingoutthere,weseealotofcompanieswhoseeminglyareclosingthefunctionalgapalongthoselines.I'mnotsayingthey'recatchingup,butthey'retryingtoclosethatgapanditseemstobegettingnarrower.
Sotocuttothechase,doyouthinkthisstrategyisaroadthatyoucontinuetogodown?There'salotofroomtomakehere.OrdoyoustartfocusingonsomeofthethingsthatreconfigureclassicenterpriseBI,ifyouwill?Thingsmore,agreaterfocusongovernance,onthecontrols,ondataquality?
Allthebackendstuffthatare--Idon'twanttosayTableauisworse--certainlydon't,butreallythatthey'reusing,orisbeingusedasadifferentiator.Andoftenwhatweseeoutinthemarketasbeingcalledoutasadifferentiator.
Christ ianChabot (CEO):
That'sagreatquestion.It'salittlebitofboth.WhenwefoundedTableau,thetraditioninenterprisesoftwareisthatsystemswerebuiltfromthebackendforward.Okay,productdevteam,let'sarchitectourschema,thenlet'sthinkaboutourappfunctions,nowlet'sbreakthatintolayers.Oh,bytheway,someoneputaUIonattheend.
AndtheUIandtheuserexperiencewaslefttoday270inyourprojectmanagementschedule,andusuallyshortenedandcutattheveryend.Whichiswhyweareinanagestillwhereyouraverageenterpriseapplicationinvirtuallyeveryfieldiscumbersome,complex,andlargelydislikedbyitsusers.AndIwishIcouldsaytheworldhasalreadyturnedfromthatage,butithasn't,we'restillinit.
Andafewofus,Tableauisn'taloneinthismessage,areflippingthewholeequationinreverse.We'reactuallybuildingapplicationsandexperiencesbasedontheuserofthesystem,basedontheirflowsandtacksandperceptions.Andit'sawayofengineering,it'sastyleofthinkingthatgoesdeepintothecultureofyourdevelopmentandengineeringanddesigndepartments,bytheway.AndTableauisashowcaseexampleofit.
Sonowletmegetintoansweringthequestion.Webelieveyoucanbuildamassivelysuccessfulglobalcompetitivetechnologycompanybasedonbrilliantlycrafted-enduserexperiences.Furthermore,we
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believesayingknowhowtodothatandbeingabletodoitaretwoverydifferentthings.
Soasyouflashforwardtotoday,2015,justabouteveryoneisnowsayingtheydoit.Butveryfewpeople,veryfewcompaniesareabletodoit,inpartbecauseofthelevelofengineeringtalentyouneed.Inpartbecausemakingabrilliantlycraftedeasy-to-usesystemgoesstraighttothearchitectureofthesystemitself.Itoftenrequirespage1rewritesoftheseoldarchitecturalphilosophies.Andfurthermore,it'samatterofculture,asImentioned.
SoI'llsubmitthatTableauremainstheshiningexampleinenterprisesoftware,inbusinesssoftware,ofhigh-performance,brilliantlycrafted,easyfastvisualsystemsforeveryone.Andwhileeveryoneelseissayingthey'rekindoffiguringitoutanddoingit,Tableauremainsthegoldstandard,andthatwillremainourmainsourceofcompetitiveadvantage.
NowbeforeIend,Iwillsayofcoursewe'reextendingintothoseotherareas.Sowe'rebuildingmoreandmorecompetitiveadvantage,andimportantaspectsofoursystemintheseareasthatyoumightconsiderthemorecommoditizedareasoftheapplication,itsadministrationfunctionsandtheplatformsitrunsonandthingslikethat.
Sothoseareimportanttohardeningourstory.ButinnowaywouldIsaysomehowthelocusofcompetitiveadvantagehaschangedtothosethings.That'sjustnotwhat'sgoingon,inourview.
JohnRizzuto (Analyst-SunTrustRobinsonHumphrey):
Great,andaquickfollow-uponthat--that'sveryhelpful,thankyou,Christian.Aquickfollow-uponthat.Docustomersreactandhavethisperceptionorhowdotheyfeelaboutdoingtheseotherthings,asatthisstagearetheyreadytogoforwardwithyou?Inotherwords,reallysaythisisgoingtobetheenterprisestandardandTableaucanbeandwillbeourenterprisestandardforlargeenterprises?
Christ ianChabot (CEO):
Yes,IthinkIunderstandthequestion.BasicallyTableautakesgreatcomfortinourstrategy,inpartbecauseIwouldsubmitthatsomewherearound100%oftherevenuethatflowsthroughourcategoryofspend,flowsthroughafull-functionfreetrialNPOC.It'ssomewherearound--Imeannooneintheirrightmindbuysasoftwaresystemwhosemainclaimiseasy-for-everyoneanalyticswithouttryingit.Okay?
Again,it'sadeparturefromtheolddayswhereyouhadtobuyonPowerPointdecksandpromisesandconsultingprojects.Socompetingonbeingthefastestandeasiesttouseandmostvisuallyintuneandmostdelightfulproduct,thewayAppledoesinotherindustries,isacorepartofourstrategy.Andwetakecomfortinthefactthatmostbuyers,evenastheystarttogobigandthinkaboutenterprisestandardsanduseitinverystrategicprojects,comparetheproductsonthemarketandpicktheonethattheyviewasthebest.
JohnRizzuto (Analyst-SunTrustRobinsonHumphrey):
Okay,great,thankyou.
JoniDavis (Director-IR):
Thankssomuch,John.Operator,canwehaveournextquestionplease?
Operator :
YournextquestioncomesfromBradSillswithBankofAmericaMerrillLynch.Yourlineisopen.
BradSills (Analyst-BofAMerrillLynch):
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Hey,guys,thanksfortakingmyquestion.JustaquestionIhadoninternational,canyoucommentalittlebit,Christian,please,onwhichcountriesthatyoumightbeseeingsometransaction,ormoreso?Orevencountrieswhereyouseepotentialformorenear-termupside,givensomeoftheinitiativesandtheeffortthatyou'vehavebeendoing,targetingtheregioninEurope?
Christ ianChabot (CEO):
Yes,absolutely,greatquestion.TransformingTableaufromaUS-focusedtechCompanyintowhatwillbeamajorglobalconcern,hasstartedtobecomeoneofthefunandenergizingpartsoftheTableaujourneyforpeopleattheCompany.Ourinternationalrevenuehasnowgrownto25%ofthetotal.Thatseemedlikeanimpossiblethingtodojustfourorfiveyearsago.
Ofcourseweremainasoptimisticaseverthatitwillgrowto50%or60%oftotalrevenue,becausetheproductswemakeareapplicabletoallindustriesandlanguagesandprofessionsandcontextsandincomelevels,andsoon,intermsoforganizations.Sothere'sbeenreallyjustgoodnewsaftergoodnews.
Intermsofspecificcountries,I'mpleasedtoreportit'severythingyouwouldexpect.InternallywebasicallybelieveourprioritizationsintermsofglobalexpansionareroughlythesameastherelativeGDPsoftheglobaleconomies.
Sowe'reseeingalotoftractionandalotofopportunityinGermany,inFrance,inEngland,inCanada,inJapan,inAustralia.WelaunchedourParisofficethisyear.Chinaisunderwayaswespeak.AndIcanevenaddthatearlyresultsinevenournewestregionsareverypromisingwithveryhighyear-over-yeargrowthrates,excitedandenergizedstaffs,employees,andwhatlookslikealotofopportunityinfrontofus.
BradSills (Analyst-BofAMerrillLynch):
Great,thanks,Christian.AndthenmaybejustoneonTableauserver.Inthelargerdealactivityyousawthisquarter,didyounoticeanychangeinthemixbetweenserverattachversusmoredesktopsbeingaddedintosomeoftheselargeraccounts?FrameittermsofTableauserver,Ithinkthatwouldbehelpful,please.Thanks.
T omWalker (CFO):
Yes,hi,Brad,thisisTom.Wedon'tbreakouttheoverallmetricsbetweenaserveranddesktop.Butoverall,whenacompanyexpandsthey'reexpandingboth,especiallylargecompanies.They'reexpandingboththeirserverusageandtheirdesktopusage.Weseebothtrendsaredoingquitewell,soIwouldn'tcalloneoutversustheother.
BradSills (Analyst-BofAMerrillLynch):
Okay,thanks,guys.
JoniDavis (Director-IR):
Thanks,Brad.Operator,canwehaveournextquestion,please?
Operator :
YournextquestioncomesfromKeithWeisswithMorganStanley.Yourlineisopen.
KeithWeiss (Analyst-MorganStanley):
Excellent,thankyou,guys,andverynicequarter.Iwantedtodrillintowhathasbeenyour--thecore--
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oroneofthecorestotheTableaucorestoryovertime,isyouhavetheabilitytoupsellintoexistingcustomers.Andtakeitintwodirections.One,intermsofthatcorelandandexpand.HowdoyouthinkTableau9impactsthat?
Thequestionis,whenyou'rehavingyourinitialconversationswithcustomers,giventheincreasedfunctionalityinTableau9,wherearetheyabletotakeitthattheyhaven'tinthepast?Togiveusasenseoftheexpansioncapabilities,furtherexpansioncapabilities,thatyou'reunlockhere.
Andthentheotherdirectionisheldasdoesmarktomarket.Whenwe'retalkingaboutthedealsover$100,000,Tom,canyoureminduswhatpercentageofoverallrevenuesisbeingrepresentedbythesedealsover$100,000?Andwhatpresentedyouthatcorelandandexpand-typebusiness?
Christ ianChabot (CEO):
Hi,Keith,thisisChristian,I'llstartonthefirstone.It'saverypointedquestion.Ithinktheansweris,withregardtoTableau9'sabilitytohelpcustomersgetstartedfasterandtotakeittomoreplaces,Ithinkthesalientcapabilitiesthereareimprovementsinautomaticdatapreparation.Okay?
Customersareableto,withnoassistance,nowconnecttomessierdataandtobeabletoperformclick,click,clicktheoperationstheyneedtogetdataintoaformthatisusefulforgatheringinsight.Sothere'snodoubtthatisaffectingeverysingletrialofTableauaswespeak,andit'sbeengoingverywell.
Secondoneisjustconnectingtomoreandmorethings.Infact,we'llbringthatstorytoaconsummation,sotospeak,withtheadditionofourwebdataconnectorinTableau9.1.We'vebeenaggressivelyaddingmoreandmoresystems.
Thisweek'snewswithAmazonAurora,bytheway,Amazonisbecomingaforceindatabases.Iassumeyou'venoticedthat.AndifyougotoAmazonAurora'slaunchmaterial,you'llseeTableauisoneoftheirfirst-namedpartnersinharnessingthepowerofit.Soagain,it'sawaytohelpcustomersgettomoreplacesthantheyhavebeenabletobefore.
Ithinkthoseareprobablythemost--oh,actuallynoonemoreIwouldadd,weaddedthisreallyimportantfeaturecalledlevelofdetailexpressions.Andwerefertoitasanimprovementinour,basically,formulabuilder,ourlittlecalcwriterinourproducts,thathelpspeopleexpressextremelysophisticatedquestionswithjustshortlittleexcel-likeformulas.Andit'sunlikeanythingthat'sbeenonthemarketbefore.
Again,it'shelpingthoseearlytrialersandusersoftheproductstarttoapplyTableau,thisthingtheybroughtinthedoortocompletesomelittleproject,it'shelpingthemtakeit,toansweringsomeofthemostsophisticatedquestionsthattheiranalyticsandBIteamshavebeenstrugglingwithforyears.Andthey'redoingitinamatterofhoursandself-trainingwithaYouTubevideo.
It'sactuallyeven--youcanprobablyheartheexcitement--it'soneofmyfavoritefeatureswe'veputonthemarketlastyear.It'scalledlevelofdetailexpressions,andagain,it'shavingareallybigimpactonthatarea.
T omWalker (CFO):
AndKeith,thisisTom.Thenumberofdealswedon'tbringoutwhatpercentofrevenuethoseareonaquarter-by-quarterbasis.Ithinkthesecondpartofitwastheexpansionpart.Thelion'sshare,thesupermajorityofthoselargetransactionsarewithinsidetheexistingbase.Sotheyareexpansionorders.Ithinkthat'swhatyourquestionwas?
KeithWeiss (Analyst-MorganStanley):
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Yes.ThenifIcouldfollowupwithTomontheexpensesideoftheequation,itsoundslikeyouhadareallygoodquarterinhiringandbringingnewpeopleonboard.Hasthefull-yearhiringtargetschangedsignificantly?OrwasitjustalittlebitmoresuccessinQ2orjustmoreofit'scominginQ2?
T omWalker (CFO):
Yes,actuallywehadaverysuccessfulQ2onthehiringfront.Andoverall,wedoarollingforecast.Sowelookattheopportunity.Ifyoulookattheoriginalhiringgoalsatthebeginningoftheyear,wechangethoseonaquarterlybasisasweputinresults.Soitcontinuestomove.
Asyoucantell,we'reinexpansionmode.We'regoingtocontinuetoinvestaroundtheglobeandpeople.Soifwe'refortunateenoughtofindmoretoptalent,we'regoingtocontinuetohireit.
KeithWeiss (Analyst-MorganStanley):
Excellent,thankyou,guys.
JoniDavis (Director-IR):
ThanksKeith.Operator,canwehaveournextquestionplease?
Operator :
YournextquestioncomesfromPhilipWinslowwithCreditSuisse.Yourlineisopen.
PhilipWinslow(Analyst-CreditSuisse):
Hi,guys,thankyoufortakingmyquestion.Backonthehiringside,wonderifyou'dgiveussomecoloronwhatyou'reseeingintermsoftheramptimeofsomeofthenewhires,particularlyonthego-to-marketside.Iknowyou'vebeenfocusingontheenterpriseinparticularandhiring.Butanytrendsyou'reseeingintimetoramp,timetoproductivityandhowyou'reimplyingthatinguidancegoingforward,thatwouldbegreat.
T omWalker (CFO):
Hi,Phil,thisisTom.Overall,Iwouldn'tsaytheramptime,wehaven'tfiguredoutawaytohavesomebodyrampinoneday.Ithinkthetrendsarejustasconsistentastheyhavebeeninthepast.
IthinkKellyWrightandtheentiresalesorganization,marketingorganization,Elissa'steam,worktogethertocomeupwithonboardingandbootcampstogeteverybodyramped,anditjustvaries.We'vementionedbeforetherearefourdifferentkindofsalespeople,togeneralize.We'vegotacquisitionsalesmanagers,we'vegotexistingbusinesssalesmanagers,accountmanagers,andstrategicmanagers.
Andthatramptimecanvaryfromthesix-monthrangeontheoneendofthespectrumto9to12months-plustogettofullrampontheotherendofthespectrum.Thatdoesn'tmeanthatpeoplearen'tengagedinsellingrightoutofthegate,andthey'reactuallycontributing,it'sjustamatterofgettingtothatfullramp.
Buttheoveralltrendshavenotchanged.Wedospendalotoftimeandfocusontrainingandmentoringtomakesurethattheteamsrampeffectivelytoserviceourcustomers.
PhilipWinslow(Analyst-CreditSuisse):
Great,guys,I'mlookingforwardto9.1.
JoniDavis (Director-IR):
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Thanks,Phil.Operator,canwehaveournextquestion,please?
Operator :
YournextquestioncomesfromSteveKoenigwithWedbushSecurities.Yourlineisopen.
SteveKoenig (Analyst-WedbushSecurities):
Hi,thanksfortakingmyquestion.Iwouldwonderifyouallcangiveanycolorontherelativeperformanceofyourinsideversusyourfieldteamsandmomentumthere.Andrelatedtothat,anycommentsonhowyou're--we'vebeenhearingaboutmoretractioninsellingintomajoraccountsonamorecoordinatedbasis.Howisthatgoing?Howwillyouexecuteinthatfashionwithoutcausingdisruptiontoyourlandandexpand?
T omWalker (CFO):
Hey,Steve,thisisTom,andChristiancanjumpinbehindme.I'lltakeafirstcrackatit.Betweenthetwo,insideversusthefieldteams,bothareperformingwell.We'reinvestinginboth.Theycontinuetogettraction.
Thesecondpartofwhatyou'reaskingactuallyisthemoreinterestingone.Regardlessofthesizeoftheaccount,andeventheenterpriseaccountsthatwedon'thaveascurrentcustomers,theyallgetstartedwiththatinitiallandorder.Thatdoesn'tchangeifyou'reaglobal10o0orifyou'reoneoftheother55millioncompaniesintheworld.
Thatexpansionisprovingthatourtechnologycanhelppeopleseeandunderstandtheirdata.That'swhatoursalesteam,boththeinsideandthefieldteams,aredoingeveryday.Soitdoesn'ttakealotoftimeandefforttograbasampledatafromthecustomerorprospect,andmuchitupanalyzeitandpresentsomeinsights.SoIdon'tthinkthatchangesverymuchthedynamic.
Butastheteamscontinuetogrowandmature,theyareabsolutelygoingafterlargerexpansionopportunities.Sotheenterpriseteamisabsolutelydoingthat,andusingsuccessinonefunctionalareaofalargecompanytogofindsuccessinotherfunctionalareas.SomaybestartingoverinsalesandmarketingandnowgoingovertofinanceandHRorlogistics.There'sopportunitiesinsidethelargecompaniesthathavetonsofdataanddon'thavealotofeasy-to-usetoolstoanalyzeit.
SteveKoenig (Analyst-WedbushSecurities):
Great,thanksalot,guys.
JoniDavis (Director-IR):
Thanks,Steve.Operatorcanwehaveournextquestion,please?
Operator :
YournextquestioncomesfromWalterPritchardwithCitigroup.Yourlineisopen.
WalterPritchard (Analyst-Citigroup):
Hi,thanks.Mostofthequestionsherehavebeenasked.ButTom,onthe60%growthinsales,thatwastotalsalesandmarketingheadcount,asyoutalkaboutthatpaceandisthatapacethatrepresentsfullborehiring?Isthatapaceyoucouldaccelerate?Anycolorthereonhowweshouldthinkaboutthatandhowthatportendstoyoursalescapacityyou'rebuilding12monthsout?
T omWalker (CFO):
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Yes,hi,Walter,that'sagreatquestion.Sooverall,itisthesamecommentImadebeforeaboutourhiring.Soifwe'refortunateenoughtofindreallygoodtalent,we'regoingtohirethattalent.
Wefeelthattheopportunityisbigenough,notonlyintheUSandCanada,butalsointernationally.Sowewillcontinuetohireandonboardpeoplethatwecanfind.Thehiringtrendcouldebbandflowinanygivenquarterbutwe'reexpanding.
WethinkthemarketopportunityismuchmorevastthanjustthetraditionalBI.Sowewanttocontinuetogrowoursalesandmarketingfunctions.
WalterPritchard (Analyst-Citigroup):
Andthere'sbeenafewquestionsaskedaboutthelargedeals.Anywaycanyougiveusthe$1milliondealcount?Ithinksomepeoplearetryingtofigureoutiftheexceptionallylargedealshadanimpactonyourrelativeperformanceoverthelastcouplequarters?I'mtryingtogetasenseastowhetherthatmaybethecase.
T omWalker (CFO):
Wedon'tbreakthegreaterthan--six-figuredealsisthemetricthatwefocuson.Butwedodoseven-figuredeals,andfromtimetotimewe'llcallthoseout.They'retobeexpectedasourcustomersareexpanding,sotheybecomemorethenorm.
Butagainthey'renotnecessarilytheonlyfocusofwhatwe'retryingtodobecausewedon'thavetojustgoafterthatbigordertobesuccessful.We'retryingtogetsuccessthroughoutanorganization.Overall,wedon'tbreakoutthe$1milliononesbecausepeoplecanhavesevenfiguresworthofspendbydoingmultiple,hundredsandhundredsofpurchaseswithus.
WalterPritchard (Analyst-Citigroup):
Okay,great,thanksfortakingthequestions.
JoniDavis (Director-IR):
ThanksWalter.Weonlyhavetimeforacouplemorequestions,soifwedon'tgettoyoutoday,we'lldefinitelyfollowupwithyouafterthecall.Canwehaveournextquestionplease?
Operator :
YournextquestioncomesfromKarlKeirsteadwithDeutscheBank.
KarlKeirstead (Analyst-DeutscheBank):
Thankyou.I'vegotaquestionaboutversion9contribution,maybeforTom.Tom,rightorwrong,Ithinkoneofthecontributorstotherelativelyhighinvestorexpectationsintothisprintwasoptimismaroundtheversion9lifttothe2Qresults.
I'mwondering,Iknowcustomerinterestwashigh,butI'mwonderingifyoucoulddescribetheactualrevenueliftyousawin2Qfromversion9,relativetoafewyearsbackagotowhatyousawinversion8.AndI'mwonderingif,asdealsgetlarger,ascustomershaveanopportunitytoevaluateotheralternatives,whethernewversionliftsmaynothappenquiteasquicklyastheyhaveinthepast.Thankyou.
T omWalker (CFO):
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page19of21
Hi,Karl.SooverallIthinkwe'vesaidthisbefore,insidetheexistingbase,there'snotastepfunctionwhenwegouptonewversions.Becauseourcustomersareusedtousinnovatinganddevelopingandhandingoutgoodness,ifyouwill,inupgradesthroughoutdifferentperiods.Sothere'snotlikeapentupdemandwhereanupgradecycleislikethat.Sofromtheoverallthat'snotwhatweexpectedinQ2atall.
Thethingthat'sinterestingtopointout,though,ishowimportant--wetalkedaboutcohortsinthepast.Solanding3,000newcustomeraccounts,that'sgoingtohelptheclassof2015,ifyouwill,andexpandingthatbase.Sothat'sactuallyshowinggood,positivetractionofreachingnewcustomersinorganizations.Sowe'revery,veryhappywithactuallythatmetricoverall.
Butagain,Idon'tthinkpeopleshouldeverthinkofusashavingastepfunctionaroundtheleasesinsidetheexistingbase.,Becauseifyou'reoncurrentmaintenanceandsupport,you'regettingthoseupgradesandupdateswithouthavingtopayanythingelsetous.
KarlKeirstead (Analyst-DeutscheBank):
Okay,thanksforthatperspective,Tom.
JoniDavis (Director-IR):
ThanksKarl.Operator,canwehaveournextquestion,please?
Operator :
YournextquestioncomesfromSteveAshleywithRobertW.Baird.Yourlineisopen.
SteveAshley(Analyst-RobertW.Baird):
Gettinginunderthewire.IwouldliketoaskaboutFX.With25%ofyourbusinessoverseas,doyouhaveanysenseofhowFXmaybeimpactingreportedrevenueorlicense?
T omWalker (CFO):
Notoverall.Mostofourrevenuesaredollar-denominated,withtheexceptionofJapan.Ithinkyouknowthat,Steve,sothat'swherewechargeintheyen.Butno,theonlyimpactitwouldhavewasmoreontheoperatingside,becausewedo--obviouslywehaveoperationsinEMEAandAPAC,sothoseexpensesoverthere.Butoverallhaven'tseenanimpactfromFXonthetopline.
SteveAshley(Analyst-RobertW.Baird):
Terrific.Andthenintermsof--youcalledoutaconsumerproductcompanythathaddonealargerdeployment.Doyouhaveanysenseastothenumberofdesktopsthatkindofcustomermaybeconsumingwiththatkindofdeployment?
T omWalker (CFO):
Yes,overall,thousandsandthousandsandcontinuingtogrow.Thattypeofthing.SoSteve,usuallyitgetsstartedinanarea,anditjustcontinuestogrowovertime.Thatwouldberepresentativeoflargedesktopdeployments.
SteveAshley(Analyst-RobertW.Baird):
Perfect,thanks.
JoniDavis (Director-IR):
EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page20of21
Thanks,Steve.Operator,wehavetimeforonemorequestiontoday.
Operator :
YournextquestioncomesfromJohnDiFucciwithJefferies.Yourlineisopen.
JohnDiFucci(Analyst-Jefferies):
Thankyouverymuchfortakingthequestion.Christian,youweretalking,itwasinthepressrelease,youtalkedalittlebitduringQ&AandeveninyourpresentationabouttheadvanceswithTableau9.Ibelieveinananswertoonequestion,youtalkedaboutTableau9beingyourmostscalableserverever.Whatchangesweremadetoittomakeitmorescalable?Becausethat'soneofthethings,ifweeverhearanything,thatisa,Idon'twanttosayacriticism,butsomethingthatwesometimeshearfromenterprisesthatyouhavetoworkon.
Christ ianChabot (CEO):
Yes,quiteafewthings.Oneofthecoreinternalcomponentsresponsibleforstoringallthevisualizationsanddataofacustomer,andkeepingtrackofit,andtakingitandservingitupandrespondingtorequests,oneofthecoresystemswasvirtuallycompletelyrewrittentohavemuchhigherperformance.That'soneaspectofit.
Secondisthatwedidalotofgoodoldfashionedqueryperformancetuning.Weaddedparallel,supportforparallelqueries,whereapplicableasanexample.Andallsortsofreallyintense,someofitevenPhD-levelqueryissuanceandperformancetuninginthesuite,tomakerespondingtoquestionsfaster.Sothatwasawholeothereffort.
Third,wemademiscellaneousimprovementstocaching,ourcachingisnowsmarter.Someoneisloggingintothesysteminthatexactsameviewofthatexactsameaspectofthebusinesshadalreadygeneratedveryrecently,wewillnowreuseitwithabetterhitratethanwedidbefore.
Andfinallyanotheraspectofscalabilitytopeoplewhoarelookingatlargepurchasesisadministration.PartofscalabilitytoanITbuyerishoweasyisthisgoingtobetomaintainandadduserstothesystem.AndwithourAPIsintheproduct,aswellastheadministrationscreensintheproduct,wemadealotofupgradestheresothatpeoplefeelcomfortablethinkingofTableauasaplatformfortensandhundredsofthousandsofusersintheircompanies.
We'reverypleasedwiththedevelopmentresultsinthatregard.Ofcoursethat'sanongoingeffortforus,butTableau9todateisourstrongestexpressionofourperformanceandscalabilityonthemarket,andwe'reverypleasedwithit.
JoniDavis (Director-IR):
Great,thanks,John.AndfromLondon,Iwanttothankeveryoneforjoiningustoday.IknowitwasearlyforalotofyouWestCoasters.Butweappreciateyoujoiningus,andhaveagreatday.
Operator :
Thisconcludestoday'sconferencecall.
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EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
©2014TheStreet,Inc.Al l R ightsReserved Page21of21
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