tableau software (data) earnings report: q3 2015 ...ms. joni davis, director of investor relations...
TRANSCRIPT
EventDescription:Q32015EarningsCallMarketCapasofEventDate:4.50BPriceasofEventDate:102.44
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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TableauSoftware(DATA)EarningsReport:Q32015ConferenceCallTranscriptThefollowingTableauSoftwareconferencecalltookplaceonNovember5,2015,04:30PMET.Thisisatranscriptofthatearningscall:
CompanyPart icipants
JoniDavis;TableauSoftwareInc.;DirectorofIRChristianChabot;TableauSoftwareInc.;CEOTomWalker;TableauSoftwareInc.;CFO
OtherPart icipants
RaimoLenschow;BarclaysCapital;AnalystMattHedberg;RBC;AnalystPhillipWinslow;CreditSuisse;AnalystBrentThill;UBS;AnalystSteveAshley;RobertW.Baird;AnalystBrentBracelin;PacificCrestSecurities;AnalystJohnDiFucci;Jefferies;AnalystKarlKeirstead;DeutscheBank;AnalystKeithWeiss;MorganStanley;AnalystBradSills;BofAMerrillLynch;AnalystWalterPritchard;Citigroup;AnalystBhavinSuri;WilliamBlair;Analyst
MANAGEMENTDISCUSSIONSECTION
Operator :
AtthistimeIwouldliketowelcomeeveryonetotheTableauthird-quarterearningsconferencecall.
(OperatorInstructions)
Ms.JoniDavis,DirectorofInvestorRelationsatTableau,youmaybeginyourconference.
JoniDavis (DirectorofIR):
Thankyou.Goodafternoon.Thankyouforjoiningustoday.
WithmeonthecallareTableau'sChiefExecutiveOfficer,ChristianChabot,andChiefFinancialOfficer,TomWalker.
Ourpressreleasewasissuedearliertodayandispostedonourwebsite.Thiscallisbeingbroadcastliveviawebcast.FollowingthecallanaudioreplaywillbeavailableintheInvestorRelationssectionofthewebsite.ChristianandTomwillbeginwithpreparedremarks,andthenwewillopenthecallforquestions.
Beforewebegin,Iwouldliketoremindyouthatduringtoday'scallwewillbemakingforlookingstatementsregardingfutureeventsandfinancialperformance,includingourguidanceforthefourthquarterandfull-year,aswellasaglimpseintofullyear.Wecautionyouthatsuchstatementsreflectour
EventDescription:Q32015EarningsCallMarketCapasofEventDate:4.50BPriceasofEventDate:102.44
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bestjudgmentbasedonfactorscurrentlyknowntous,andthatactualeventsorresultscoulddiffermaterially.PleaserefertothedocumentswefilefromtimetotimewiththeSEC.Inparticular,ourmostrecentlyfiledquarterlyreportonForm-QandourannualreportonForm-K.
Thesedocumentcontainandidentifyimportantriskfactorsandotherinformationthatmaycauseouractualresultstodifferfromthosecontainedinourforward-lookingstatements.Anyforward-lookingstatementsmadeduringthiscallarebeingmadeasoftoday.Ifthiscallisreplayedorreviewedaftertoday,theinformationpresentedduringthecallmaynotcontaincurrentoraccurateinformation.
Exceptasrequiredbylaw,weassumenoobligationtoupdatetheseforward-lookingstatementspubliclyortoupdatethereasonsactualresultscoulddiffermateriallyfromthoseanticipatedintheforward-lookingstatements,evenifnewinformationbecomesavailableinthefuture.
Duringthecallwewillalsodiscussnon-GAAPfinancialmeasures.Thesenon-GAAPfinancialmeasuresarenotpreparedinaccordancewithgenerallyacceptedaccountingprinciples.AreconciliationoftheGAAPandnon-GAAPresultsisprovidedintoday'spressrelease.
Theprojectionsthatweprovidetodayincludestock-basedcompensationexpensewhichcannotbedeterminedatthistime;andtherefore,arenotreconciledontoday'spressrelease.Withthat,it'smypleasuretoturnthecallovertoChristian.
Christ ianChabot (CEO):
Thankyou,Joni.Thankyou,everyone,forjoiningustodaytodiscussTableau'sthird-quarterresults.Tableaudeliveredexcellentfinancialperformanceinthethirdquarter.Wecontinuetodemonstratesolidgrowthandconsistentexecution.
Forthequarter,ourtotalrevenuegrewto$.million,up%year-over-year,drivenbystrongproductadoptionbybothnewandexistingcustomers.I'mpleasedwithourperformancesofarin.Themovetoeasy,agile,self-serviceanalyticscontinuestothrive.
Hereareafewstatisticsonourprogressthisyear.Inthefirstninemonthsof,wehavegenerated$millioninrevenue.That's%growthovertheprior-yearperiod.Wecontinuetobuildonourstrongcustomerbase.Sofarthisyearwehaveaddedmorethan,newcustomeraccounts.
We'vealsocontinuedourrapidproductreleasecadencethisyear.Tableau.receivedanenthusiasticresponsewhenitwasreleasedApril.Sincethen,we'vereleasedTableau..JustafewweeksagowelaunchedVizable,ournewstandalonemobileapplicationthatprovideseasyaccesstoanalyticsforeveryone,andTableau.wasreleasedinthebetajustafewweeksagoaswell.
Duringthethirdquarterwecontinuedtoinvestingrowthinitiativesthatdrivetheexpansionofourcustomerbase.Ourproductshavebroadappealacrossindustries,departments,andprofessions.Asresult,wehaveanotherrecordquarterofnewcustomerswins.Morethan,newcustomeraccountswereaddedinQ,bringingthetotaltomorethan,worldwide.Inaddition,weclosedsalesordersgreaterthan$,.
We'repleasedtowelcomenewcustomers,suchasAlcatel-LucentShanghaiBell,Inovalon,ChinaEverbrightBank,ProgressiveDigitalMediaGroup,DNA,andKemiraOyj.
Duringthethirdquarter,wealsoexpandedrelationshipswithexistingcustomersincludingNetApp,[Kapata],NewYorkCityTransitAuthority,MutualofOmaha,andtheTrusteesofPrincetonUniversity.
Momentumcontinuestobuildforourproductsinternationallyaswereportanotherquarterofimpressivegrowth.Inthethirdquarter,internationalrevenuegrewto$.million,up%fromthe$.millionwereported
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inQ.
I'mpleasedwiththegrowthwe'reseeinginallofourregionsaswecontinuebringingthepowerofTableautomorepeople.JustlastmonthweannounceourexpansionintoChina,withanewofficeinShanghai.
Wenowhaveofficesincitiesacrosscountries.Weremainenthusedbytheresponsewearegettingfromcustomerseverywhereandplantocontinuegrowingourbusinessabroad.
Wecontinuetoseeresultsfromourinvestmentsinproductinnovation.Ourmostrecentrelease,Tableau.,isanothermilestoneinourdevelopmentcycle.Itincludesanewandimprovedmobileexperience,moredataconnectors,newenterprisesecurityandauthenticationoptions,andadditionalanalyticalfunctions.
JustlastmonthweannouncednewdataintegrationswithAmazonWebServices,designedtoexpandchoicesforcustomersasweadoptclouddatabases.ThesenewintegrationsincludeadataconnectorforAmazonAurora,aswellasthelaunchofTableauserverintheAmazonWebServicemarketplace,makingiteasyforuserstodeployTableauserveronEWS.
Wecontinuetoinvestininitiativesthatexpandandengageourvibrantecosystemofdatalovers.JustafewweeksagoweheldourthAnnualCustomerConferenceinLasVegas.Theconferencesold-outagainthisyear,withmorethan,Tableaucustomersandpartnersattending.That'snearlydoublethe,attendinglastyear'sconference.
Inaddition,morethan,peoplefromcountriesregisteredforthevirtualconference.Ialwaysenjoytalkingwithourcustomersandpartners,andfoundthatconferenceattendeesnotonlyrepresentedabroadrangeofindustries,butalsobroadrangeofprofessions.
It'sraretofindaneventwhereITprofessionalssitalongsidetheirbusinesspartnersinfinanceandHR,operations,sales,andmarketing;tonameafew,andcheerforthesameproducts.It'sreallyinspiring.Ourexpohallwasfilledwithpartnersthisyear.IncludingInfoSys,Deloitte,HP,Cloudera,AmazonWebServices,Informatica,Splunk,Alteryx,andAccenture;demonstratingastronggrowingpartnerecosystem.
JustlastmonthweannouncedouralliancewithDeloitteConsulting.DeloittewillcomplementTableau'sDrivemethodologytosupportbroaderadoptionofself-serviceandcollaborativeanalyticsacrossenterprises.
ThisyearwehadmorethanTableaucustomerssharetheirstoriesandanalytical[wings]attheconference.
CompaniesarechoosingTableauDesktop,TableauServer,andTableauOnlinebecausewe'vemadeiteasyforpeopletoquicklyanswertheirownquestionswithdata,butalsopowerfulenoughtomeettheenterpriserequirementsoflarge-scaledeployments,includingthesecurity,governance,mobile,andadministrativecapabilitiestheyneed.
Weheardsuccessstoriesfromworld-classcompanieslikeCisco,Boeing,WaltDisney,CreditSuisse,Comcast,Target,Nextel,Google,PepsiCo,andmore.
I'dliketohighlightafewofthestoriessharedatourconference.EBP'sbusinessintelligenceteamtoldusthatayearand-a-halfago,theyweretaskedwithdemocratizingdataacrosstheorganization.TheychoseTableaubecauseofthespeedtoimplementationandthelowcostproofofconcept.
Whatstartedwithafewdashboardsdevelopedoveraweekendwithoneperson,quicklygrewtoarobust
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Tableaudeploymentwithoverdashboardsandusers.
WeheardhowConsolidatedEdison,oneofournation'slargestenergycompaniesprovidingelectricandgasservicestomorethanmillioncustomers,usesTableautomakeimprovementsinperformanceandcustomersatisfaction.Theirtraditionalreportsweretellingthemtheirperformancewaswithintheirtargetrange.
ByusingTableautointerrogatetheirdata,andnotjustreportonit,theydiscoveredthattheirperformancelevelswereactuallywellbelowtheirtargets.Sincethen,theyhaverolledoutTableausothatkeystakeholderscanmoreeffectivelymonitorperformanceonadailybasis.Theresult,ConEdishittingitsgoal%ofthetime.
AnotherstorycomesfromtheITdepartmentatElectronicArts.Theytookonthechallengeofanalyzingvolumesofreal-timeplayerdataatscale.TheytoldusthattheyusedTableautoanalyzebillionsofrowsofplayerbehaviordatageneratedeachdayandstoredinavarietyofdatabases,includingGreenplum,Invertica,andOracle,Hadoop,MySQL,andAmazonRedshift.UsingTableau,theyarenowabletocapturethisrealtimedata,automaticallyanalyzeit,andmakeimmediatechangestogains.
Finally,weheardfromUK-basedairline,easyJet,whichstarteditsbusinessintelligencejourneythreeyearsago.WhatstartedwithacoupleofTableaudesktopsandaserverstoredundertheirdesk,hadgrowntoanenterprisewiderollout.easyJetusesTableautounderstandwherepeoplechoosetositonanaircraft,toanalyzeforbirdstrikedata,andlookatplannedandactualroutes.
AttheTableauconferencewelaidoutourvisiontofurtherdevelopourproducts.Newopportunitiestousedataareexpandingfasterthanever.Weremainfocusedonproductinnovationandadvancingourplatformtobringevenmorevaluetoourgrowingcustomerbase.
Infact,weplanonspendingmoreinresearchanddevelopmentoverthenexttwoyearsthanwe'veinvestedinthelastyearscombined.
Duringthekeynoteattheconference,ourproductdevelopersdemonstratedsomeofournewestinnovations,includingsomeslatedforTableauVersion.Wedemonstratedinnovationsinvisualanalytics,dataintegrations,datapreparation,serveradministration,clouddeployment,andmobileanalytics.
Ialwaysgetaskedhowwecomeupwiththefeaturesthatultimatelygointoourproducts.Well,asignificantnumberofthefeaturesweshowedonstagecamefromfeedbackinouronlineforumsandfromcustomermeetings.
We'refortunatetohaveapassionateandengagedcommunityofusers.AscustomersuseTableauproductsmore,theywantthemtodomore.Andbasedontheresponsewereceivedfromthecrowd,theyareexcitedaboutourlatestinnovations.
AttheconferencewealsolaunchedVizable,anewstandalonemobileproductthatbringsdataanalyticstoevenmorepeople.Mobiledeviceshavechangedthewaypeopleconsumeinformation.
PewResearchCenterfoundthat%ofthepopulationusesmobiledevicestogetinformationrightwhentheyneedit.UsingVizable,userscanreceiveandanalyzeeasilydigestible,personalizedchunksofdatarightontheiriPad,makinganalyticsapplicabletomoresituationsandaccessibletoeveryone.
Finally,attheconferenceweheldourthAnnualIronVizCompetition,inwhichcontestantscompeteforthetitleofthebestVizzerintheworld.OurthreecontestantsfromDeloitte,SlalomConsulting,andAccenturewerechallengedtoanalyzeadatabaseofnewsandeventsfromaroundtheworld.
Injusttwominuteswewitnessedvisualizationscometolifeasourcontestantsaskedquestionsofdata,
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testedhypotheses,blendeddatasets,andcreatedbeautifulstorieswiththeirdata,everythingthatembodiesthepowerofvisualanalytics.
Inclosing,Tableauhadanimpressivequarter.Wecontinuetodemonstratesolidbusinessgrowth,weareseeingmorecustomersembracingtheTableauwayofanalyticswithgreatenthusiasmandsuccess,andweunveiledsomeoftheinnovationthatwilldriveTableauevenfurther.
Duringthequarter,TableauwasnamedthegoldmedalistintheWashington'sBestWorkplacesCompetition,inrecognitionofouramazingpeople.That'sanhonorweareveryproudof.Wehaveateamofmorethan,smart,passionate,anddedicatedpeople;andI'dliketothankthemfortheircontributionsthisquarter.
I'llnowtothecallovertoTom.
T omWalker (CFO):
Thankyou,Christian.Goodafternoon,everybody.AsyouheardfromChristian,we'reverypleasedwithTableau'sperformanceinQ.Let'sturntothenumbersandI'llprovideyouwithmoredetails,thenI'llprovideyouwithouroutlookforQandthefull-year.I'llalsoofferaninitialglimpseintothefull-year.
Thethirdquarterexceededourexpectationsastotalrevenuesgrewto$.million,up%year-over-year.AsChristiansaid,wecontinuetodeliversolidresults,solidgrowth,andconsistentexecution.
Inparticular,I'dliketocalloutnewcustomergrowthandagrowingtrendofcustomersdeployingTableaumorewidelyinorganizations.Wehadanotherquarterofrecordcustomeradds.Weaddedmorethan,newcustomeraccounts,bringingourtotaltomorethan,worldwide.
Inaddition,weclosedtransactionsover$,each.Infact,wehadadozencustomersspendmorethan$millionwithusduringthequarter.Anotherinterestingfactisthediversification.Thecustomersactuallyrepresentdifferentindustriesacrosstheglobe.Allofthesearepositiveindicatorsthatourlandandexpandstrategycontinuestogrowandthrive.Asareminder,thenumberoflargetransactionscanfluctuateinanygivenquarter.
Turningtotheincomestatement,inQlicenserevenuegrewto$.million,up%year-over-year.Maintenanceandservicesrevenuegrewto$.million,up%fromtheprioryear.Maintenanceandservicescontinuedtobeanimportantandgrowingrecurringrevenuestream.
GlobalexpansioncontinuestobeoneofourtopprioritiesforTableau.We'repleasedwithourprogress.InQ,internationalrevenuegrewto$.million,up%yearoveryear,representing%ofourtotalrevenues.
TotalrevenuefromtheUnitedStatesandCanadawas$.million,up%yearoveryear.Weintendtocontinuemakingsignificantinvestmentstoexpandourfootprintinallregions.Infact,asChristianmentioned,wemostrecentlyexpandedintoChinawithanofficeinShanghai.We'reveryexcitedaboutourgrowthprospectsthere,asAPACcontinuestocontributenicelytoourgrowth.
NextI'llspendafewminutesdiscussingmarginsandoperatingexpenses.Unlessotherwisenoted,allreferencestofinancialmeasuresareinanon-GAAPbasis,whicharereconciledinthepressreleasetablesandpostedonourInvestorRelationswebsite.
InQ,ourgrossmarginwas%.Aswe'vesaidbefore,weexpectourgrossmargintofluctuateaswecontinuemakinginvestmentstosupportourgrowingglobalcustomerbase.
Forthequarter,totaloperatingexpenseswere$.million,up%fromtheprioryear.Asareminder,themajorityofouroperatingexpensesareemployeerelated.
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InQ,weinvested$.millioninproductdevelopment,up%fromtheprioryear.Atourcustomerconferencelastmonth,weshowcasedadvancesininnovationtofurtherempowerourfast-growingbaseofpassionateusers,someofwhichwillbedeliveredinTableaunextyear.
IwanttocalloutthegreatjobourdevelopmentteamandFrancoisdidonstageatourcustomerconference,highlightingourlatestinnovations.Iwasactuallysittingnexttocustomerswhoweregiddyastheteamunveiledwhattheywereworkingon.Justatremendousjobthatthedevelopmentteamisdoing.Greatjob,team.
WeaddedarecordnetnewhiresinR&D,withheadcountup%fromtheprioryear,andinthequarterthetotalR&Dheadcountof.Productinnovationisveryimportanttousandweplantocontinueinvestingandgrowingtheteam.
Salesandmarketingexpensesforthequarterwere$.million,up%fromtheprioryear.Weaddednetnewhiresinsalesandmarketing,withheadcountup%fromtheprior-yearendingQwithtotalsalesandmarketingheadcountof,.
Wecontinuetobuildourtalentpool,andI'dliketocalloutawesomejobouroperationsteamscontinuedtodothisquarter.WeonboardedarecordnetnewhiresinQ,withourheadcountup%fromtheprioryear.BringingareCompanytotalto,employees.Letmeremindyouthattherecouldbefluctuationsinheadcountadditionsonaquarter-by-quarterbasis.
Ourthird-quarteroperatingincomewas$.million,comparedtoanoperatingincomeof$.millionforthethird-quarter.Netincomewas$.millionforthethirdquarter,andnon-GAAPdilutedearningspersharewere$..
Duringthequarter,ourweightedaveragesharecountforGAAPEPSwas.millionshares.Asareminder,periodsinwhichwehaveaGAAPnetloss,butareprofitableonanon-GAAPbasis,ourpresentationofnon-GAAPEPSwillusethedilutedsharecount.Accordingly,ourweightedaveragedilutedsharecountfornon-GAAPEPSwas.millionshares.AdetailedreconciliationisavailableinthepressreleasetablesandpostedonourInvestorRelationswebsite.
Onthebalancesheet,cashandcashequivalentsattheendofQwere$.million,upfromthe$.millioninthepriorquarter.Accountsreceivableswere$.million,andourDSOswerefewerthandays,consistentwithpriorperiods.
NowI'dliketomoveontoourguidanceforthefourthquarter,andprovideyouwithapreliminaryglimpseintothefull-year.Asareminder,allforward-lookingguidancebeingdiscussedisonanon-GAAPbasis.
ForQ,we'reexpectingrevenuestobeintherangeof$millionto$million.Atthehighendofthisrange,thisrepresents%year-over-yearrevenuegrowth.ThiswillbequitetheaccomplishmentgiventhestrongQwehadlastyear.
ForQ,we'reexpectingoperatingincomeof$millionto$million.Asyou'veseeninpriorquarters,ouroperatingexpensescanvarybasedaccruingtrendsandthetimingofnewhiresjoiningthecompany.
Inaddition,ourannualcustomerconferencewasinQthisyear,asopposedtoQin.Forthefourthquarter,weanticipateourbasicsharecounttobebetweenmillionandmillionshares,andourweightedaveragedilutedsharecounttobebetweenmillionandmillionshares.
Forthefullyearof,we'reraisingourpriorguidanceoftotalrevenuefromarangeof$millionto$million,toarangeof$millionto$million,representingannualgrowthapproximately%atthehighendofthisrange.
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Forthefull-year,weexpectnon-GAAPoperatingincometobebetween$millionand$million.Wearestillforecastinganon-GAAPtaxrateof%,whichwehavebeenusingforinterimperiodsduring.Thenon-GAAPtaxratedoesnotassumetheR&Dtaxcreditisextended.Wewillprovideupdatestothisrateonanannualbasis,orifmaterialchangesoccur.
Withrespecttocapitalexpenditures,westillexpectthemtobeinarangeof$millionto$millionfortheyear.We'repleasedwithourresultsandmomentumasweheadintotheendoftheyear.
Aswedidlastyearatthistime,wethoughtitwouldbehelpfultogiveyouaearlyglimpseintotheoutlookfor.Pleasenotethatwe'restillinthemiddleofplanningfornextyear,andwillgiveyouspecificguidanceonnextquarter'searningscall.
We'recurrentlyanticipatingrevenuestobeintherangeof$millionto$million.Asyousawin,weexpectseasonality,especiallywithrespecttoQ,whichistypicallydownsequentiallyfromprioryearQ.
Asourrevenuesincrease,weexpectseasonalitytoincrease.Weareintheearlystagesofinvestingandcapitalizingonourlargemarketopportunity.IECforecastedin,themarketforbusinessanalyticsandanalytictoolswillbenearly$billion.Butaswe'vesaidinthepast,webelieveourmarketopportunityismuchlarger.Weplantobuilda$billionbusinessoverthenextfewyears.Weareexpectingtobeanothersignificantinvestmentyearaswepursueourlargemarketopportunity.
Asaresult,we'renotexpectingoperatingmarginimprovementin.Again,wewillgiveyouspecificguidanceonournextcallafterwefinishouttheyear.
Inclosing,weareverypleasedwithourperformanceinQ.We'rehappywithourgrowthopportunityandourleadershippositioninthemarket.Wefeelstronglyaboutourcontinuedinvestmentsthatpositionustotakefulladvantageofthelargemarketopportunityaheadofus.
Thankyouforjoiningustoday.Nowwe'llturnitovertotheoperatorforQ&A.
QUESTIONS&ANSWERS
Operator :
(OperatorInstructions)
RaimoLenschow,Barclays.
RaimoLenschow(Analyst-BarclaysCapital):
Thanksfortakingmyquestion,andcongratulationsonagreatquarter.Itwaswelldone.ThequestionIhadwasarounddatapreparations.Theconferencewasreallyexciting,andIenjoyedit.
Whatwedidnoticetherewasthattherewasquiteafewvendors.Youarethinkingabout[Altarigs]andBurrsandActiviowhoarenotworkingaroundthedatapreparationangle.Canyouthinkabouthowyouwanttoplayinthisfieldlonger-term?Isthatstillamarketwhereyouthinktherewillbeanecosystemaroundyou?Ordoyouthinkthere'ssomestuffthatyouneedtodomoreyourselfgoingforward?Thankyou.
Christ ianChabot (CEO):
Greatquestion,Raimo.ThisisChristian.Ourstrategythere,similartomanydimensionsofourdevelopmentroadmap,isaboth,notaneitheror.
Thedatapreparationandintegrationanddatapipinganddatamovementanddatasecurityneedsof
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theworld'stensofmillionsoforganizationsarebroadanddeepandvaried.We,innoway,anticipatewewillsomehowbeabletoprovidecustomerswitheverythingtheyneed.
Asaresult,we'vebeencultivatingtogreateffectanecosystemofproviders.Someaddressingeachaspectsofthecustomerproblemthere,othersamorecomprehensiveplatformslikeInformatica,ofcourse.
Wecontinuethattobelievethatecosystemwillbeanimportantandthrivingpartofourbusinessplanformanyyearstocome.Now,ofcourse,you'venoticewe'rebuildingmoreandmorethingsintoourcoreproductthatcouldbecalledtheintegrationanddatapreparationsanddataqualityfeatures.That'salsoatrajectorywebelievein,andasyoucanseefromthedemonstrationsonstage,weareinvestinginprettyaggressively.
Toputasummaryonit,whichIthinkistheessenceofyourquestion,wearefocusedonthemainstreamneedsofbusinessusers.So,thetypesofcapabilitiesyouneedinadailyflowofmainstreamanalytics,joiningdatafromdiversedatabases,fixingfieldswiththefunnydateformats,intelligentlysuggestingdatayoumightwanttobringin,doingstatisticaltestsondataquality.
Iwillclosebysaying,itiscurrentlyabothstrategy.AndIbelievethatwillbethecaseforthefutureaswell.
RaimoLenschow(Analyst-BarclaysCapital):
Perfect.Veryclear.Thankyou.Welldone.Thanks,Raimo.
JoniDavis (DirectorofIR):
Operator,canwehaveournextquestion,please?
Operator :
MattHedberg,RBCCapitalMarkets.
MattHedberg (Analyst-RBC):
Yes.Thanksfortakingmyquestions,guys.I'lloffermycongratsaswell.Welldone.MaybefollowinguponRaimo'squestionhere.Therewasalotofnoiseinyourquarter,whetheritbePowerBIorWaveorAWS.Christian,inyourpreparedremarksyoutalkedaboutAWSasapartner.
Iwanttogetyoursense,justfromabroadbrush,anychangesthere?Itsoundslike,inthequestionwithyourpreviouscomment,youcan'tdoeverythingonyourown.Justcurious,howyouseesomeoftheselowerendtoolsinthemarketatthispoint?Thanks.
Christ ianChabot (CEO):
Greatquestion.We'veseentheriseandfallofveryplatformspecificanalytictoolsovertheyears.Recentlythere'sbeenawaveofnewentrants,youmentionedAmazonasaparticularone.
Webelievetheforwardsituationwillbesimilartothehistoricalones,whichismanyofthosetoolswillbeabletocarveoutsomenicheandbeabletoachievesomelevelofsuccesswithcustomers,butwillnotfundamentallychangethedynamicsofcompetitioninbusinessanalyticsplatforms.Andtherearealotofreasonsforthat.Iwon'tgointoallofthem.
Tomentionthetwomostprominentones,mostoftheseplatform-tiedofferingsarereallyfairlylightandshallowandnotparticularlycapableproducts.Mostindustryobserversandoutsiderswillcallthem.
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feelingproductthatlackbasiccapabilitiesandlargelyhavealongroadaheadofthem.That'ssomeofthemostimportantthingstosayaboutthoseofferings.
Second,ofcourse,istheytendtobeoptimizedfor,orexclusivelyusedwith,thedatafromthatplatformproviderthemselves.Again,offeringslikethatwillcertainlycarveoutsomelevelofsuccessinthisvastmarket,butgenerallyspeaking,themainstreamcustomerneedsweseeoutthereisthatpeoplearelookingforaSwissArmyknifestyleproduct,likeTableau,thatcantapintotherelationaldataandtheirmultidimensionaldataandtheiron-premdataandtheirclouddata,regardlessofvendor.Regardlessofhistory.Regardlessoflanguage.Regardlessofformat.
Andhavetheabilitytocombineontheflyandexecuteabusinessanalyticstrategyagainstit.Althoughtherehasbeenmorenoise,asyoumentionedwithregardtoofferingsofthatprofile,I'llclosewhereIbegan,whichiswedon'tseeitfundamentallychangingthecompetitivedynamicforTableau.
MattHedberg (Analyst-RBC):
Veryhelpful.Thanks.
JoniDavis (DirectorofIR):
Great.Thankyou.Operator
Operator :
PhilipWinslow,CreditSuisse.
PhillipWinslow(Analyst-CreditSuisse):
Christian,toechoyourcommentthere,asa.Betauser,nobodydoesdowhatyoudo,thewayyoudoit.MyquestionisnotonTableauDesktop,whichwe'reobviouslyusersherebutonTableau'sServer.Obviously,there'sbeenabigdriverforyouguys.Iknowyoudon'tdisclosethebreakdownofTableauServerversusTableauDesktop.ButI'mwonderingifyoucangiveussomecolorofwhatyou'reseeingwithTableauServer?Maybetherelativegrowthratesandhowthat'salsoimpactingsomeoftheselargerdealsyouaretalkingabout?
T omWalker (CFO):
Hey,Bill,thisisTom.I'lljumpinandChristiancancomeinbehindme.BothDesktopandServeraredoingquitewell.Infact,Serveralsoonline.Allproductsaregoingataveryhealthyclip,andwe'rehappywiththeexpansionuse.
Asyouknow,usuallypeoplegetstartedwithussub$,averageordersize.It'susuallyanchoredaroundDesktop,andsoServerisabsolutelywhereweareseeingtheexpansionbusinessgrow.Andmoreandmoreofthecasualusageandgettinganalyticsouttomorepeopleinanorganization.
Butthey'rebothgoingverywell.Botharecriticalpartsofouroverallstrategy.TheneatthingwithTableauOnlinenowis,wecantaketheITheadacheoutofTableauServerandhostitforpeople.That'salsoofferingup,tappinganewmarket,whichweweren'treallyofferingbefore.Overall,botharevery,veryimportant.They'rebothverymaterial.They'reimportantpartsofouroverallproductstrategyinhowtheyapproachthecustomers.
PhillipWinslow(Analyst-CreditSuisse):
Great.Thanks.AlsoonthatpointaboutTableauServerandTableauDesktop,andthesynergybetweenthosetwo.AsyoustarttoseetheadoptionofTableauServer,doyouthinkthatactuallydrives
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incrementaladoptionofTableauDesktopinsideoftheseorganizations?Isnotjust,it'sgreat,IcantakeandupselltheTableauServer,whichobviouslyatahighpricepoint.ButhaveyoufounditactuallydrivesextraovertimethanincrementalTableauDesktoplicenses?
Christ ianChabot (CEO):
Absolutely.Aspeoplegetusedtoconsuminginformation,astheystarttointeractwithitandstarttoparticipateinthedatastrategyasacompany,theirenthusiasmfordata'simpactontheirgrouporteamonlygrows.Andasaresult,weseealotofourTableauDesktopcustomerscomeinasessentiallyleadwhooriginallylearnedaboutTableauthroughtheTableauServerorTableauOnlineproduct.
PhillipWinslow(Analyst-CreditSuisse):
Great.Thanks,guys.
JoniDavis (DirectorofIR):
Operator,canwehaveournextquestion,please?
Operator :
BrentThill,UBS.
BrentT hill(Analyst-UBS):
Christian,anotherimpressivecustomeraddquarter.CanyougiveusasenseofwherethestrengthcamefrombetweentheenterprisebusinessandinS&B?I'massumingyou'regoingtosayalloftheabove,butwasthereanythingnotableyousawineitherofthosesegments?
T omWalker (CFO):
Brent,I'lljumpin.ThisisTom.Howareyoudoing?Overall,itisacrosstheboard,soyou'rerightaboutthat.IfIwasgoingtocallitsomething,itwouldprobablybeinternational.
International,asyousawfromtherevenuetargets,it'sgrowingataveryhealthyclip.We'reseeingsomereallygoodacquisitionoraddstotheTableaufranchisefromtheinternationalmarkets.Butalloftheotheronesaregrowingjustaswellalso.Iwouldn'tcallanythingoutparticularlydifferent,besidesinternational.
BrentT hill(Analyst-UBS):
Okay.Tom,justafollow-uponsalesandmarketing,ifmynumbersareright,Ithinkyouaregrowingsalesandmarketinginthelow%growth.Inthisquarter,itwentto%.You'reseeinganincreaseinsalesandmarketinghigher.Ithink,perhaps,itjustgoestoyourpointthatyouseethisasabigger[town]thantheindustryanalystshavedefined.
Isthatincreaseinhiringjustasignthatyou'reseeinginyourpipelinearoundavailability?Wastherejustalagearlierintheyearingettingsaleson?You'rejustseeingapickupinthegrowthonthesalesandmarketinglinenowinQ?Canyougiveusalittlemorecolor?Thatwouldbehelpful.
T omWalker (CFO):
Sure.Overall,actuallywehadastellarrecruitingquarterinQ,itwasexceptional.WewereabletoaddoverpeopletotheTableaufamily.Wearevery,veryhappyaboutthat.
Ithinkwhatyou'reseeingadueiswhatwe'vebeendoingforyears.Weareinvestinginthelargemarket
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opportunityandwe'retryingtopositionourselvestobeabillion-dollarcompanyoverthenextfewyears.Bydoingthat,you'remakingforwardinvestmentsbybuildingouttheteamandgettingthemtrainedupandgettingthemrampedandgettingthemgoing.
It'snotjustinsalesandmarketing,right?It'sintheproductteam.It'sinoperations.We'recontinuingtoinvestinalargeopportunity,sothat'swhatyou'reseeingthere.Overall,Qwasaspectacularhiringquarterforus.
BrentT hill(Analyst-UBS):
Great.Thankyou.
JoniDavis (DirectorofIR):
Thanks,Brent.Operator,canwehaveournextquestion,please?
Operator :
SteveAshley,RobertW.Baird.
SteveAshley(Analyst-RobertW.Baird):
Perfect.I'mactuallygoingtogobackandtrytodrilldownonaquestionMattaskedearlier.Heaskedyouaboutcompetitiveenvironment,andyousaidreallyalotoftheseproductsareearlyintheirlives.ThequestionthatIamaskedallthetime,istherearepeoplewhohaveabsolutelynodoubtthatpeoplewillcontinuetobuyTableau.Buttheirquestionis,willpeoplegoandlookatthesenewproducts.Tokickthetires.Findoutwhatthey'reallaboutbeforecomingbacktoTableautomakethedecision.And,havethesenewproductschangedforextendedsalescycles?
Christ ianChabot (CEO):
ThisisChristian.Theshortanswerisno,inthesensethatwhentherearenewproductsavailabletocustomers,generallyspeaking,theydon'tincreasethenumberofthingsthey'relookingat.Theyjustchangethemixoftheonestheyarechoosingtolookat.
Andindeterminingthatmixtheywill,ofcourse,consultfriendsandpeersandlookatinternaldepartmentstheyalreadyhavegoing.TheywillconsultGartnerandotheranalystsandsoon.
Wehaven'tseenasignificantchangethere.Iwouldadd,atthispoint,Idon'tpredictone.Again,forthesamereason,whichisIthinkthosecompetitivechangesarelargelyaboutchangingthemixofwho'sbeingconsideredasopposedtofundamentallychangingthewaycustomersareevaluatingproduct.
SteveAshley(Analyst-RobertW.Baird):
Myquickfollow-up.dealsgreaterthan$millioninthethirdquarter.Itmayhavebeenmorethanyoudidalloflastyear.I'mwonderingifthatisreallybeingpartnerinfluenced?Andwonderingwhatisreallycontributingtothesuccessyou'rehavingoutofthoselarge[deals]?
T omWalker (CFO):
Hi,Steve,thisisTom.Yes,itwasactuallycustomersthathadspentmorethan$millionwithusinthequarter.Afewofthosehadmultipletransactionsthataddeduptomorethan$million.
Butoverall,themixandifpartnerinfluences.Absolutely,there'ssomepartnerinfluenceinthere,butthere'salsoobviouslyalargedirectteam.Ithinkthethingthat(inaudible)calledoutwasIcallthediversification,butofthoseyou'rehittingdifferentindustries,right?
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You'rehittingthecustomersacrosstheglobe.Itjustshowshowbroadourtechnologyreaches.Isnotjustanicheareaournichefunctionalarea,itactuallyisreachingtheglobe,andwe'reseeingpeopleexpandinasignificantwayandbringingTableauvisitorexpansionorders.Obviouslyifthosearepeoplewhostartedsmallandexpanded.Itreallyisagreatsignofwhatistocome.
SteveAshley(Analyst-RobertW.Baird):
Thankyou.
JoniDavis (DirectorofIR):
Thanks.Operator,canwehaveournextquestion,please?
Operator :
BrentBracelin,PacificCrestSecurities.
BrentBracelin (Analyst-PacificCrestSecurities):
Thankyou.IhaveaquestionforChristianandTom,ifIcould.Christian,high-levelquestionmoreontheevolutionofthemarket.Earlyonthere'sanoticeableabsenceofthelargesthighpartners.Igetthat.You'repioneeringaself-servicetool.Nowyou'restartingtoseesomeofthoselargepartnerscomein,Deloitte,Tata,othersaswell.Whatdoesthatmeanrelativetotheevolutionofthisself-servicetoolmarketandhowshouldwethinkaboutwhatthatmeansaswelookintoand?
Christ ianChabot (CEO):
Greatquestion.Moreoftheworld'sbiggestandmosteconomicallyimportantenterprisesarestartingtomarshalawholesalechangeintheirbusinessintelligencestrategy.Youcanprobablynamesomewhoarealreadyfardownthatroad.Others,frankly,haven'tevenstartedyet.Youhaveeverythinginbetween.
AndbythatImean,themoveawayfromtheseverydevelopmentintensive,waterfall-style,changerequirementsdominatedenterpriserollouts,thatbleedcostandexpenseandgenerallyresultinend-userfrustration;towardamorest-centurystrategythatisagileandvisualandself-serviceandforeveryone.
Asyoudouble-clickonthatchange,particularlywithinthelargeenterprisesyouaretalkingabout,you'lloftenfinditisasmuchaboutdatastrategychangeandculturalchange,asaboutbringinginTableaupersay.Okay?
AlthoughTableauisthrivingintheenterprisebothfromagrassrootsandatopdownITevaluationperspective,togetthemostoutofourplatformandhittheboldbracketofenterprisesgoingthroughthistransition,customersoftenneedhelponthemanyaspectsthatorbittheTableauplatform.
Andthatregard,nobetterpartnertogotothenanintegrated,globallypresent,andexperienceSIpartner;includingtheonesyou'vementioned.Togetmorepointedtothequestion,Iwouldpredictatthispointthatourjourney,withregardtoSIpartnerships,willbemuchlikeofSalesforce.com.Meaning,atfirstthenewproductlineisviewedwithskepticismandthere'ssomethingthatmightjustcannibalizetheoldway.Andthentheycometoseethatitmayactuallybeanicefootinthedoortodevelopnewopportunitiesandtheninstagethreetheystarttorealizetheentiremarketisgoingthatway,andthatopensupawholenewkindofconsultingwithstrategicsupportbusinesslinefromthemasthemarketevolves.
Weare,rightnow,instagetwoandthree,aswespeak.Andwedoexpectgreatthingsfromit.Youcan
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seeinourinvestmentsinourteamandourinitiativesandourannouncements,howseriouslywe'retakingthat,andIcouldn'tbemoreexcitedaboutthosepartnerships.
BrentBracelin (Analyst-PacificCrestSecurities):
Great.Veryhelpfulcolor.Tom,onthelargedeals,youhadanicereboundinthequarter,up%sequentially.Whatdrovetheuptickinlargedeals?Wouldyouattributethattotiming?Areyouseeingahigherwinrate?Helpusdrilldownalittlebitonthelargedealsandwhatchangedthisquarterversuslast.
T omWalker (CFO):
Yes.Overall,itfluctuatesonaquarter-by-quarterbasis.Isaythatallthetime.Ithinkwe'rejustseeinggoodtraction.Iwouldn'tcalloutwinratesbeingbetterorchangingmuchatall.
We'reseeinggoodtraction.We'reseeingourcustomersbeingabletoexpandandgrowandbringmoreandmoreanalyticstomoreoftheirpeople.That,overtime,justtakestime.Thesalesteamexecutesandfocusesonthosedealsespeciallyintheenterprisespace.Iwouldn'tcalloutanytypeofdifferenttrend,ordifferenttypesofwinrates.
It'sjustmoresteady,chippingaway.That'sthelandandexpandmodelthatwe'vebeingdoingformorethanadecade.Itiswhatwe'vebuiltiton.It'sbasicallynotforcingpeopletobuy,butwhentheyarereadytoexpand,whenthey'rereadytobringproductivitygainstotheirorganizations,we'reabsolutelytheretotaketheorder.
BrentBracelin (Analyst-PacificCrestSecurities):
Gotit.Veryclear.Thankyou.
JoniDavis (DirectorofIR):
Thanks,Brent.Operator,canwehaveournextquestion,please?
Operator :
JohnDiFucci,Jefferies.
JohnDiFucci(Analyst-Jefferies):
Iwanttogobacktoaquestion,Ithinkthat'sbeingaskedandI'mgoingtocomerightout.OntheDesktopstuff,Christian,it'sharderforussee.Weseeitinthefieldallthetime.ButI'mtalkingaboutwhenyou'resellingtosmallerbusinessesandthey'rebuyingthreetofiveDesktopsforTableau.I'mcurious,it'shardforustoseethat.It'shardforustoseethecompetitionthere,butyoucanseethedata.
Areyouseeinganyincreasedcompetitioninthatparticularmarket?Wehearofgoodthingsinthefield.Wealldo.Andobviously,greatproducts.
Buttherearesomenewproductsoutthere,forinstance,Q likSense.Intheirdesktopversion,becausetheyarelatetothemarketrelativetoTableau,isfree.It'saversion.versusTableauat..AndIthinkBilltellsyouhe'susingthebeta.,butatthesametimefreeisverydifferentfromalistpriceof$,or$,,dependinguponpersonalorprofessional.
Iguesswhenyoulookatthedatathatyouhaveaccessto,doyouseeanychangeinthatmarketrightnow?
Christ ianChabot (CEO):
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Afewcomments.Letmestartbysaying,thatformostofourhistoryasaCompany,Tableauhasinsomewaycontinuedwithfreeproducts.Wearejustsousedtothat,thattotrytosaythatthere'sbeenwholesalechange.That'sthefirstcomment.
Thesecondis,thereismoreactionandthingstoconsideratthelowendofthemarket.Yes,Iwouldsaythere'sbeenachangeinthecompetitivedynamicthereinthesensecustomerswillincreasinglybeconsideringdifferentthings,atthatend.
I'llclosebysaying,Tableauisanextremelyaffordablebusinessanalyticssolutionandonethat,ofcourse,actuallysolvesthecustomerproblemthatthecustomersactuallyhave.Right?
So,alotoftheselowendthingsareessentiallysimpledashboardingtools.Theyarenotanalyticsenvironments.Theyarenotenterpriseready.Theydon'thaveanylivedataconnectivity.Andtheydon'thavea[fast]andmemorydatastore.Thedon'thaveagreatmobilestrategy.
Dependingontheoneyoutalktomeabout,theyjusthaveoneindictmentaftertheother.Ourcategoryoftechnologyisonewhere,regardlessofhowbigyourorganizationis,ourproductsareaconsideredpurchased.
Nooneexecutesananalyticsprojectoranalyticsstrategyonawhim.Theyareconsideringtheoptionsandnavigatingtheonesthatwillhelpthemdrivevalueinthiscrucialassetthatisnowavailabletoeveryoneknowasdata.Inthatregard,theyareawideTableaudeliverersagainstdataseeingthatitactuallysolvestheproblemstheyhaveandlivesuptotheirdreamofwhatananalyticsproductshoulddo.
Ithadreallygonewell.Wewillhavetokeepyouupdatedonthat.ButIwouldsay,ithasbeenconsistentwithhistory.
T omWalker (CFO):
John,thisisTom.TheonlythingIwouldaddis,thecustomeracquisitionmodelthatwehave--thelandpartoftheequation--thelasttwoquarterswe'veaddedover,customeraccounts.Thewaywegetinandgetconsideredandgetpurchasedisprettyfastandprettyeasyforustoproveoutvalue.
Intermsofhead-to-headbake-off,it'svery,veryeasyto--asChristianwasmentioningbefore--toproveourtechnology.Whichoneisreallygoingtosuityourneedsandwewelcomethat.Youcandownloadourproductsinminutesanywhereontheglobeandtestitout.Freetrials,andknowwhatyouneedbeforeyoubeforeyoubuyit.Andknowthatitisgoingtoworkforyou.So,that'showitchanged.
JohnDiFucci(Analyst-Jefferies):
Great,guys.Thanksalotandnicejob.
JoniDavis (DirectorofIR):
Thanks,John.Operator,canwehaveournextquestion,please?
Operator :
KarlKeirstead,DeutscheBank.
KarlKeirstead (Analyst-DeutscheBank):
Congratsonthegoodnumbers,andI'vegotacoupleforTom.Tom,I'mwondering,firstofall,doyoufind
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morelargedealsskewingtothefourthquarter?Doyouthinkit'spossiblethatsequentiallicensegrowthinQcouldbehigherthanthepriorquarters?Thatisquestionnumberone.
Numbertwo,ontheguide,ineachofthelastthreequartersyou'veofferedguideandIthinkitwasabout%yougaveinitially.Thisyearitisinthelows.Itfeelslikeyourmomentumisprettystrong.Isitfairtoconcludethatthatdeltaisduemostly,orentirely,tothefactthatyouareatamuchgreaterscaleand;hence,itisjusthardtomaintainhistoricalgrowthrates?Thankyou.
T omWalker (CFO):
Hi,Karl.It'sforsureandI'llstartwithyourlastquestionfirst.As(inaudible)lowexpectation,aswecontinuetogrowandgetlargerandlarger,thatthegrowthpercentwillcomedown.That'swhatyouareabsolutelyseeingthere.
WithrespecttoyourskewingoflargetowardsQ,yousawthat--allIcantalkaboutisbecausethatwasthelasttimeitshoweditself.ButwesawanamplificationinpurchasingandlargedealsinQoflastyear.Ithinkitistobeexpectedaswegetlargerinsize,becausethere'salotofenterprisesoftwarethatisbeingpurchasedattheendoftheyears.
Butthelargedeal,asyousawinQ,couldfluctuatefromquartertoquarter.It'snotalwaysgoingtobeupandtotheright.Butourexpectationis,usuallyQ,andyousawintheguidancethatwe'rehandingout,thatwouldbeourbiggestquarteroftheyear.Andwewouldexpectittobesomegood,largedealtransactionsormetricsinthat.
KarlKeirstead (Analyst-DeutscheBank):
Okay.That'shelpful,Tom.Thanks,andcongratsagain.
T omWalker (CFO):
Okay.Thanks,Karl.
JoniDavis (DirectorofIR):
Thanks,Karl.Operator,canwehaveournextquestion,please?
Operator :
KeithWeiss,MorganStanley.
KeithWeiss (Analyst-MorganStanley):
Thankyou,guys,fortakingthequestion.I'llgobacktothecompetitivequestiononemoretime,andtakeaslightlydifferentangle.AquestionthatIgetalotfrominvestors.Understandingthatthere'salotofplatformsolutionscomingtothemarketplace,whetherit'sWavefromSoftwares.comorwhateveranybodyelseisbringingintothemarketplace.
Oneofthesethatpeopleseeitaretryingtogettheirhandsaroundis,whatpercentageofyourbusinessisrepresentedbythesingle-usecases?AcustomerjustusingTableautolookatSalesforce.comdataorjustlookingatstuffthat'sontheAWS.Myanecdotalworkssuggestthatit'sprettysmall,butitcouldbehelpfulforinvestorstohearfromyouguysofwhatpercentageofyouractualbusinessisforthatsingle-usecase,thatmightbecomeathreatfromaplatformsolution,likeaWave.
Christ ianChabot (CEO):
Greatquestion.I'llrespondwithextremelow.Infact,evenoutsideoftheTableauuniverseIwould
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encourageeveryonetogoandtalktorealprospectsandorganizationswhoaretryingtodosomethingwithdata.
Whatyouwillquicklydiscoveronthatroadshow,which,Keith,Iknowyou'vedone(laughter).Whatyou'llquicklydiscoveristhatthere'svirtuallynocustomerintheworldthathasalltheirdatainoneplace.It'sliketryingtofindaunicorn.
Withtheindustryhereandthere,it'sgonethroughwaveswherethere'sbeenthisdreamthatallofthedataI'lleverneedisgoingtobeneatlyorganizedinthedatawarehouseofoneprovider.IthinkIfirstheardthatdreamin.
Hereweareand,ofcourse,whatwe'reseeingistheexactopposite.Dataisbecomingevenmoreproliferated.Thereareevermoreexcellentdatabaseoptionsavailableforpeople,rangingfromfiles,tobigdata,tocloud,to[fastest]memory,tofilesonyourdesktop,toJSON,toXML,andsoondowntheline.
So,repeatingwhatIsaidbefore,Ithinktheplatform-tiedcompetitiveplayswillhavesomesuccess.It'skindofhardnottohavesuccessinthisexplodingdataopportunitylandscapeforus.Buttheywillnotbecomethepredominant,multibillion-dollargo-tochoicesforcustomerswithmainstreamneeds.IbelievethatasmuchnowasIdidwhenwestartedthecompany.
KeithWeiss (Analyst-MorganStanley):
Excellent.That'sveryhelpful.IfIcansqueezeinafollow-upforTom,perhaps.
LikeIsaid,veryimpressivehiringquarterparticularlyinsalesandmarketing.Inthelandscapewherealotofvendorsaretalkingtousaboutthedifficultyoffindingsalesheadcount,growingyoursalesforceat%isprettyimpressivethere.
Two,I'mgoingtofollowonwithafollowon.Twoquestionsonthat.One,howconfidentareyouguysthatyoutokeepupthatpace?Isitgettinghardertofindthoseguys?Doyouhavethesystemsinplacetobringthemonboardinaneffectiveway?
Andsomewhatrelated,canyoutalktousalittlebitaboutyoursalesproductivitytrends?Asyouhireonsoaggressively,howwellhaveyouguysbeenabletodoinkeepinguptheoveralllevelofsalesproductivitywithinthatquicklygrowingsalesforce?
T omWalker (CFO):
Great.Keith,it'sTom.Yes.Twogreatquestions.OverallQ,aspectacularquarter.Asyouknow,weobviouslywillhirepeople--ifwecanfindthegoodpeople--wewillhirethem.Iwouldnotexpectthatpacetocontinueatthat.I'dimagineit'sgoingtofallbacktopreviousquarters.
Wejusthadanexceptionallyhighendquarterthereandwereabletobringtop-notchpeople,notonlysalesandmarketingbutalso(inaudible)andalsoinoperations.We'revery,veryhappywithoursuccessthere,butIwouldexpectittocomebackdowntothepreviousratebefore.
Overallsalesproductivity,youknowwedo.Wearefocusedonmakingsurewehaveonboarding,wehavebootcamps,wehaveramps.Wehavealltypesoftrainingprogramsthatwedowithoursalesteamandmarketingteam;anourdevelopmentteamforthatmatter.
Thoseareallpartofwhatwe'vebeenbuildingyearafteryearafteryearaswecontinuetogrow.Weareconstantlycalibratingthoseprograms.We'reconstantlytryingtoimprovethemandmakethembetter.Butitisahuge,hugefocusbecauseTableauisapeoplecompany,itisallaboutthepeople.It'sallaboutthepeoplewhoworkhereandmakingthemasproductiveaspossible,iswhatwereallydofocuson.
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It'sanongoingthing.It'saneverendingthing.It'slikepaintingaboat,bythetimeyougettotheendoftheboatyouhavetostartpaintingagain.We'reconstantly,constantlyworkingonwaystomakeouremployeesmoreproductiveandbetterattheirjobsandhelpingourcustomersandpartners.
KeithWeiss (Analyst-MorganStanley):
ObviouslyyouhaveabiggerboatthanIdo.
JoniDavis (DirectorofIR):
Great.Thankssomuch.(laughter)
T omWalker (CFO):
Thanks,Keith.
JoniDavis (DirectorofIR):
Thanks,Keith.Operator,canwehaveournextquestion,please?
Operator :
MarkMurphy,JPMorgan.
Unidentif iedPart icipant :
ThisisMatt(inaudible)onforMarkMurphy.
Christ ianChabot (CEO):
Okay.Goahead,Matt.
T omWalker (CFO):
Doyouhaveaquestion?Goahead.Wecanhearyou.
Christ ianChabot (CEO):
Matt,welostyou.
JoniDavis (DirectorofIR):
Itlookslikewelostyou,Matt.Tryandgetbackinthequeue,ifyoucan.Operator
Operator :
BradSills,BankofAmericaMerrillLynch.
BradSills (Analyst-BofAMerrillLynch):
Onthelargedeals,asyouseethedealsizesgrowandthevolumeoflargerdealsgrow,areyouseeingamixshiftinthebusinessawayfromthatmoreadditiveuser,themanythatyoutalkaboutthataren'trunninganythingtodayversusreplacement?Orisit--anycommentarythereonasyougrowintothelandexpandopportunity.Ifyou'reseeinganyshiftmoretoreplacement?
T omWalker (CFO):
Iwouldn'tsaythat.Whatwementionedbeforeisasit'sgrowing,there'salotofstuffwherewecanget
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ourtechnologyandserverplatformup,runninginanorganization;anditcangrowthroughouttheorganizationwithoutactuallygoingintoaripandreplacetypeofsituation.
It'sjustbasicallyhelpingpeopleandbecomesmoreofthedefactoinsteadofifoldBIisaghosttown,itbecomesaplacethatpeoplewanttogofortheirinformation;andwheretheyaretryingtomanagetheirdata,wheretheyareusingdatagovernance,anddoingallthistools.
Itdoesn'tnecessarily,Brad,havetobearipandreplace.Thatisnotnecessarilywhatwe'regoingafter.
Whatwe'retryingtodoisshowpeoplethatthere'sawaybetterwaytodoanalytics,andthere'sawaybetterwaytohavedatagovernance,manageyourdata,andhaveyourend-usersgivingyousecuredatatowhateverguidelinesyouhave.Sothat'sreallywhatwe'reseeing.
BradSills (Analyst-BofAMerrillLynch):
Great.MylastonewouldbeonTableau..Iknowit'sonlyinbetabutyouintroducedalotofnewfeatures.Thelevelofexcitementattheconferencewasveryhigh.
Canyoucommentonsomeearlyreceptiontosomeofthefeatures?Maybewhereyoumighthavebeensurprisedtotheupsidewhereyou'reseeingmoreinterestinbusiness?Thatwouldbehelpful.Thankyou.
Christ ianChabot (CEO):
Overall,it'sgoingwell.Iwouldsayit'sbroadlyconsistentwithourdotreleasesfrompreviousyears.It'saprettystrongrelease.
Thewebdataconnectorisverypopularwithpeople,astheycannowreachouttosomesortofalongtailofcrazydatasourcestheyhadinmindbothinternallyandexternally.ThefeedbackonthathasbeenevenmoredelightfulthanIexpected,toansweryourquestion.
Ithinkthethingthat'sprobablygeneratingthenextlevelofexcitementisthemobileupdate.That'swheretheTableau.monikerprobablyisn'tthebestone.Wedidareallymajorupgradetoourmobilestrategytheretoenableofflinesnapshotsandfasterperformance.Infact,likearedesignedUIexperienceandsoon.
We'regoingtobefollowingthatwithaphoneupdatehereshortly,andthatmobiletrajectorywewentunveilingoverthelastyearisgeneratingalotofexcitementfromprospectsandgettingusintonewopportunities.ThosearetheonesIwouldcallout.
BradSills (Analyst-BofAMerrillLynch):
Great.Thanks,guys.Congratulationsonanicequarter.
Christ ianChabot (CEO):
Thankyou.
JoniDavis (DirectorofIR):
Thankssomuch.Operator,canwehaveournextquestion,please?
Operator :
WalterPritchard,Citi.
WalterPritchard (Analyst-Citigroup):
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Tom,I'mwonderingifyoucantalkalittlebitabouthowyou'rethinkingaboutsettingguidancethesedays?Yourguidanceayearagowassoconservative.Youwerebeatingonapercentagebasisbydouble-digitpercentages.Inthelastcouplequartersit'sbeenmorehighsingle-digitpercentages.
I'mwonderingasyoulookbackonwhereyouwerethreeorfourquartersago,andyourperformancerelativetoguidanceandyourperformancerelativetoguidancenow.What'sbeenthedifference?Hasitbeenachangeinhowyousettheguidance?Orhasitbeenmoreofajustblowoutperformancesthatyoudidn'tpredict?I'mwonderinghowwouldyouthinkaboutthataswemoveforward?
T omWalker (CFO):
Walter,thanksforthequestions.Overall,Iwouldthinkthat,goingforward,we'reamuchlargercompany.Therevenuesaremuchlarger,soIthinkthattheabilitytohavetheupsidethatwesawasasmallercompanywithasmallerrevenuebase,isnotaspractical.It'snotunreasonabletothinkthatitwillcomedown.Ithinkwhatweexperiencedoverthelasttwoyearsor.yearsofbeingpublicis,thenumberonereasonwewentpublicwasforawareness.Ithinkyouknowthataboutus.
WewantedtogenerateawarenessoftheCompanysopeoplewouldconsiderourtechnologywhentheymadepurchases.So,whenwesawthat,wesawtherewasalotofupsidethere.Thatishardtopredictwhenyou'veneverbeeninthattypeofenvironmentbefore.So,thatismorewhatyou'redoing.
Assmallerscaletherevenue,butaswegettoalargerscaleandbase,andaswe'refocusingonthefuture,Idon'texpectthatbecausethenumbersarejustlarger.It'sthelawoflargenumbers.Overall,it'snotnecessarilyachange.It'sjustwe'regettingbiggerandwe'regettingmoretractionandthecustomerbaseisgrowing.
WalterPritchard (Analyst-Citigroup):
Gotit.Andasimilarquestionasitrelatestoyouroperatingandhowyou'rethinkingaboutoperatingexpenses.IfIlookatgoingintothisyear,youroriginalguidance--IthinkyougaveadetailedguidanceinQlastyear.Itimpliedsomewhereinthelow$million,$millionIcalculateinoperatingexpenses.Youactuallyendedupspending$millionor$millionlessthanthat.
I'mwonderingwasthatanadjustmenttotheplanmidyearorsomething?Orwasthatjustyoutalkedduringtheyearabouthavingtroublehiring.Itmayjustbethat.I'mtryingtounderstandthevarianceinoperatingexpenses,whichissomethingthat'sprobablymorewithinyourcontrolthanrevenue.
T omWalker (CFO):
Yes.Idon'tknowthatwetalkedabouthavingtroublehiring.Ithinkwe'vehadsomeprettyrobusthiring.Qwasjustanexceptionallygreatquarterforhiring.
Overall,Ithinkwe'vedoneaverygoodjoboverthelast,oroverourhistory,ofactuallyputtingourmoneytoworkandgrowing.We'renotthetypeoforganizationthatisjustgoingtoburnthroughmoney,justtodoit.
So,aswesee,andasourinvestmentsunfold,mostofourexpensesarearoundpersonnelbutthereareotherinvestmentsthatwe'remakingininfrastructureandthedevelopmentsideandinternationalgrowth.
Weredoingitatacadencethatmakesenseandwefeelwecanmanage.That'sprobablywhatyou'reseeingasanongoingtheme,becausewejustdon'tgoandsomething.Wethinkwe'reverygoodanddisciplinedinexecuting.Sowhenweseetheopportunitytoinvest,wewillandasyousawinQ,we'rehiringalotoffolksbecauseweknowit'stherightthingtodoforthelong-termtrajectoryofthecompany.
EventDescription:Q32015EarningsCallMarketCapasofEventDate:4.50BPriceasofEventDate:102.44
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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WalterPritchard (Analyst-Citigroup):
Great.Thankyou.
JoniDavis (DirectorofIR):
Thanks,Walter.Ithinkwehavetimeforonemorequestion.Operator,canwehaveourlastquestion,please?
Operator :
BhavinSuri,WilliamBlair.
BhavinSuri(Analyst-WilliamBlair):
Thanksfortakingmyquickquestionhere.Anycoloronthegrowthintheembeddedproductinhowyouareseeingthatbeingused?Andthen,howthecloudbusinesshasbeentrending?Thosewouldbehelpful.Thanks.
Christ ianChabot (CEO):
Whatdoyoumeanbytheembeddedproduct?
BhavinSuri(Analyst-WilliamBlair):
Sowecanembedthevisualization,sothirdpartiesaregivingtheTableauproductaspartoftheirfrontends.
Christ ianChabot (CEO):
Isee.Ithinkaboutthatasmoreofacoreproductcapabilityasopposedtoadifferentproduct.Iunderstandthequestionnow.
Itcontinuesbeacrucialpartofanalytics.Atsomepoint,peoplewouldjustdobasictypingofdatafromadatabaseandlookupsomestufforpassoutrequiredreports.Andthesedays,ofcourse,customersarewellpastthat.Theyaretryingtoembedtheresultsofkeydatainitiativesintootherapplications.ActuallyevenwithintheirowninternalInternet.Thisremainsverycommon.
BhavinSuri(Analyst-WilliamBlair):
Right.
Christ ianChabot (CEO):
Somepeoplewillrunthemliveonfactoryfloors.Ourproductcapabilitiestherehavestayedreallystrong.Iwouldn'tsaythere'sbeenanyrecentchangeinthat,butthatitcontinuestoflourish.
BhavinSuri(Analyst-WilliamBlair):
Morespecifically,haveyouseenthirdpartieswheresomeonewantstobuiltaproductwithanalyticsandtheyembeddedTableauintheirfunctionallyandthenresellingtocustomersandhowthatisplayingout?
Christ ianChabot (CEO):
Isee.ThatiswhatwerefertoasourOEMbusiness.Commonly,butnotalways,theOEMiswillingtotakeadvantageofTableauinanunembeddedscenario,butnotalways.That'sgoingreallywell.Thesituation
EventDescription:Q32015EarningsCallMarketCapasofEventDate:4.50BPriceasofEventDate:102.44
CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&
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isthat,justabouteverybusinessapplicationineveryindustryyoucanname,isunderneathitcreatingadatabasewithsomereallykeyinformation.
Almostallofthoseprovidersofendproductsinallthevariousverticalsandprofessionsfeelliketheyneedanupgradedanalyticsenvironmenttotapintothatrepository.Tableaudoeshaveadedicatedgroupthere,wehaveformanyyearsnow.Thatcontinuestogrowandgrowverywell.Wetookitinternationalafewyearsago.That'salsoflourishing.Anythingelseyouwouldaddonthat,Tom?
T omWalker (CFO):
No.Overallitisafocusweexpectedtogrow.Butit'sgrowingjustasfastasthedirectbusinessistoo.
BhavinSuri(Analyst-WilliamBlair):
That'sgreat.That'shelpful,guys.Didyouguys--justaquickone.DidyouguysseeanyweaknessinAsiaPacatall?Youdon'thavethatmuchbusinessoutthere,butdidyouseeanythingoutthereatalldrivenbymacro?
T omWalker (CFO):
Yes,amacropart.That'sdifferent.Nobody'simmunetothemacro,butoverallAPACisdoingquitewell.Internationalisflourishing.Yousawus.Weputup%growthforthequarter.Werevery,veryhappywiththeinvestmentswe'remaking.Isstillearlythere,butoverall,we'reveryhappywiththeAPACteam.TheydidagreatjobinQ,andactuallyfortheyear.They'vebeendoingitgreatforafewyears.
BhavinSuri(Analyst-WilliamBlair):
That'sgreat.Thanksfortakingmyquestions,guys,andcongrats.Congrats.
JoniDavis (DirectorofIR):
Thanks,Bhavin.Withthat,wewillconcludeourcallfortoday.Thankyousomuchforjoiningus,andwewilltalktoyousoon.
Operator :
Thisconcludetoday'sconferencecall.
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