Investor News

Tableau Reports Third Quarter 2016 Financial Results

11/01/2016

SEATTLE, Nov. 1, 2016 /PRNewswire/ -- Tableau Software, Inc. (NYSE: DATA) today reported results for its third quarter ended September 30, 2016.

Tableau Software logo www.tableausoftware.com.
  • Total revenue grew to $206.1 million, up 21% year over year.
  • License revenue grew to $116.7 million, up 7% year over year.
  • Added more than 3,600 new customer accounts.
  • Closed 360 transactions greater than $100,000, up 22% year over year.
  • Diluted GAAP net loss per share was $0.40; diluted non-GAAP net income per share was $0.16.
  • The Board of Directors has authorized the repurchase of up to $200 million of Tableau's common stock.

"During the third quarter, we generated our highest quarterly revenues and expanded our customer base to over 50,000 customer accounts worldwide. But our results were impacted by extended sales cycles on large deals in the US and softness in EMEA," said Christian Chabot, Chairman and Co-Founder of Tableau.

"Tableau has that rare combination of leading products, talented people, dedication to technology innovation and passionate customers," said Adam Selipsky, President and Chief Executive Officer of Tableau. "We see great opportunity to serve and expand our customer base, deepen our enterprise engagements, and accelerate our progress in the cloud. Looking ahead, I am confident that Tableau's leading technology is well positioned to address the large and growing market opportunity for business analytics."

Financial Results
Total revenue increased 21% to $206.1 million, up from $170.8 million in the third quarter of 2015. License revenue increased 7% to $116.7 million, up from $109.5 million in the third quarter of 2015. Maintenance and services revenue increased 46% to $89.4 million, up from $61.4 million in the third quarter of 2015.

GAAP operating loss for the third quarter of 2016 was $29.4 million, compared to a GAAP operating loss of $13.2 million for the third quarter of 2015. GAAP net loss for the third quarter of 2016 was $30.3 million, or $0.40 per diluted common share, compared to a GAAP net loss of $13.4 million, or $0.19 per diluted common share, for the third quarter of 2015.

Non-GAAP operating income, which excludes stock-based compensation expense and expense related to amortization of acquired intangible assets, was $18.1 million for the third quarter of 2016, compared to a non-GAAP operating income of $18.4 million for the third quarter of 2015. Non-GAAP net income, which excludes stock-based compensation expense, expense related to amortization of acquired intangible assets and non-GAAP income tax adjustments, was $13.3 million for the third quarter of 2016, or $0.16 per diluted common share, compared to a non-GAAP net income of $10.6 million, or $0.14 per diluted common share, for the third quarter of 2015. 

Highlights
During the quarter, Tableau expanded the Company's leadership by appointing Adam Selipsky as President and Chief Executive Officer. Additionally, Tableau bolstered its technology leadership with the promotions of Andrew Beers as Chief Development Officer and Francois Ajenstat as Chief Product Officer.

Also during the quarter, Tableau launched Tableau 10, one of Tableau's most significant releases in its history. Tableau 10 delivers new design and analytical innovations that make interacting with data on the web, mobile or in the enterprise faster and easier. Additional capabilities include cross-database joins to bring together disparate data sources, advanced analytics improvements like drag and drop clustering, a device designer for mobile responsive dashboards design and support for additional data sources.

In other news, Tableau:

  • Delivered new application program interfaces ("APIs") to help developers build new experiences and extend the power of Tableau.
  • Announced global expansion of its free software program for non-profits making it easy for small non-profits, non-governmental organizations and community-based charities to do good with data.

$200 Million Stock Repurchase Program
Tableau's Board of Directors authorized the Company to repurchase up to $200 million of the Company's Class A common stock. The program allows the Company to repurchase its shares opportunistically from time to time when it believes that doing so would enhance long-term shareholder value. The repurchase authorization does not have a fixed expiration and may be modified, suspended or discontinued at any time. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions or a combination of the foregoing.

Conference Call and Webcast Information
In conjunction with this announcement, Tableau will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) today to discuss Tableau's third quarter 2016 financial results. A live audio webcast and replay of the call, together with detailed financial information, will be available in the Investor Relations section of Tableau's website at http://investors.tableau.com. The live call can be accessed by dialing (866) 393-4306 (U.S.) or (734) 385-2616 (outside the U.S.) and referencing passcode 98743210. A replay of the call can also be accessed by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode 98743210.

About Tableau
Tableau (NYSE: DATA) helps people see and understand data. Tableau helps anyone quickly analyze, visualize and share information. As of September 30, 2016, more than 50,000 customer accounts get rapid results with Tableau in the office and on-the-go. Over 250,000 people use Tableau Public to share data in their blogs and websites. See how Tableau can help you by downloading the free trial at www.tableau.com/trial.

Tableau and Tableau Software are trademarks of Tableau Software, Inc. All other company and product names may be trademarks of the respective companies with which they are associated.

Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding market acceptance of visual analytics, the Company's business and customer growth and product adoption, including adoption by international customers, and leadership position in the market, the Company's research and development investments, costs, efforts and future product releases, the Company's ability to address any market opportunities, and the Company's expectations regarding future revenues, expenses and net income or loss, and the Company's stock repurchase authorization and timing and ability to repurchase shares of the Company's Class A common stock under a stock repurchase program. These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with anticipated growth in Tableau's business and addressable market; competitive factors, including new market entrants and changes in the competitive environment, pricing changes, sales cycle time and increased competition; Tableau's ability to build and expand its direct sales efforts and reseller distribution channels; Tableau's ability to attract, integrate and retain qualified personnel; general economic and industry conditions, including expenditure trends for business intelligence and productivity tools; new product introductions and Tableau's ability to develop and deliver innovative products; Tableau's ability to provide high-quality service and support offerings; risks associated with international operations; macroeconomic conditions; market conditions; and the possibility that the stock repurchase program may be suspended or discontinued. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Tableau's most recently filed Quarterly Report on Form 10-Q and other reports and filings with the Securities and Exchange Commission, and could cause actual results to vary from expectations. All information provided in this release and in the conference call is as of the date hereof and Tableau undertakes no duty to update this information except as required by law.

Non-GAAP Financial Measures
Tableau believes that the use of non-GAAP gross profit and gross margin, non-GAAP operating income (loss) and operating margin, non-GAAP net income (loss) and non-GAAP net income (loss) per basic and diluted common share is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Non-GAAP gross profit is calculated by excluding stock-based compensation expense and expense related to amortization of acquired intangible assets, each to the extent attributable to the cost of revenues, from gross profit. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenues. Non-GAAP operating income (loss) is calculated by excluding stock-based compensation expense and expense related to amortization of acquired intangible assets from operating income (loss). Non-GAAP operating margin is the ratio calculated by dividing non-GAAP operating income (loss) by total revenues. Non-GAAP net income (loss) is calculated by excluding stock-based compensation expense, expense related to amortization of acquired intangible assets and non-GAAP income tax adjustments from net income (loss). Non-GAAP net income (loss) per basic and diluted common share is calculated by dividing non-GAAP net income (loss) by the basic and diluted weighted average shares outstanding. Non-GAAP diluted weighted average shares outstanding includes the effect of dilutive shares in periods of non-GAAP net income.

Non-GAAP financial information for the quarter is adjusted for a tax rate equal to Tableau's estimated tax rate on non-GAAP income over a three-year financial projection. This rate is based on Tableau's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures. To determine this long-term non-GAAP tax rate, Tableau evaluates a three-year financial projection that excludes the impact of non-cash stock-based compensation expense and expense related to amortization of acquired intangible assets. The long-term non-GAAP tax rate takes into account other factors including Tableau's current operating structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where Tableau operates. The long-term non-GAAP tax rate applied to the three and nine months ended September 30, 2015 was 43% and did not assume the U.S. federal R&D tax credit would be extended. In December 2015, the federal R&D tax credit was permanently extended. Accordingly, the Company revised its long-term non-GAAP tax rate to 30% and applied this rate to the three and nine months ended September 30, 2016. The long-term non-GAAP tax rate assumes the Company's deferred income tax assets will be realized based upon projected future taxable income excluding stock-based compensation expense. The Company anticipates using this long-term non-GAAP tax rate in future periods and may provide updates to this rate on an annual basis upon the completion of each fiscal year, or more frequently if material changes occur.

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash expenses, Tableau believes that providing non-GAAP financial measures that exclude stock-based compensation expense allow for more meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Tableau believes non-GAAP measures that adjust for the amortization of acquired intangible assets provides investors a consistent basis for comparison across accounting periods. All of these non-GAAP financial measures are important tools for financial and operational decision making and for evaluating Tableau's own operating results over different periods of time.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in Tableau's industry, as other companies in the industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Tableau's reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Tableau's business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Tableau's business.

 

Tableau Software, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)




Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


2016


2015

Revenues









License


$

116,655



$

109,468



$

329,419



$

290,629


Maintenance and services


89,402



61,364



246,871



160,208


Total revenues


206,057



170,832



576,290



450,837


Cost of revenues









License


1,760



988



4,393



2,337


Maintenance and services


22,270



18,888



66,994



49,713


Total cost of revenues (1)


24,030



19,876



71,387



52,050


Gross profit


182,027



150,956



504,903



398,787


Operating expenses









Sales and marketing (1)


114,530



91,589



340,583



248,840


Research and development (1)


75,348



54,960



223,757



144,143


General and administrative (1)


21,505


17,584


63,178


50,753


Total operating expenses


211,383


164,133


627,518


443,736


Operating loss


(29,356)


(13,177)


(122,615)


(44,949)

Other income, net


814


217


3,496


1,404


Loss before income tax expense (benefit)


(28,542)


(12,960)


(119,119)


(43,545)

Income tax expense (benefit)


1,719


413


4,242


(1,166)

Net loss


$

(30,261)



$

(13,373)



$

(123,361)



$

(42,379)











Net loss per share:









  Basic


$

(0.40)



$

(0.19)



$

(1.65)



$

(0.59)


  Diluted


$

(0.40)



$

(0.19)



$

(1.65)



$

(0.59)











Weighted average shares used to compute net loss per share:









  Basic


75,647


72,089


74,743


71,341

  Diluted


75,647


72,089


74,743


71,341


























 


(1) Includes stock-based compensation expense as follows:



















Three Months Ended September 30,



Nine Months Ended September 30,




2016


2015



2016



2015


















Cost of revenues


$

2,614


$

1,856



$

8,060



$

4,804


Sales and marketing


17,487


11,966


51,037


31,265

Research and development


23,372


14,826


67,880


37,374

General and administrative


3,910


2,925


10,977


8,834

















 

Tableau Software, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)



September 30, 2016


December 31, 2015

Assets

Current assets




Cash and cash equivalents

$

864,593



$

795,900


Accounts receivable, net

136,940


131,784

Prepaid expenses and other current assets

27,716


16,977

Income taxes receivable

5


78

Total current assets

1,029,254


944,739

Property and equipment, net

91,056


72,350

Goodwill

15,531


932

Deferred income taxes

1,455


1,544

Deposits and other assets

12,154


11,146

Total assets

$

1,149,450



$

1,030,711


Liabilities and stockholders' equity




Current liabilities




Accounts payable

$

6,804



$

1,152


Accrued compensation and employee related benefits

62,070


53,003

Other accrued liabilities

40,746


31,838

Income taxes payable

1,496


1,000

Deferred revenue

230,736


185,608

Total current liabilities

341,852


272,601

Deferred revenue

18,685


12,903

Other long-term liabilities

21,872


11,262

Total liabilities

382,409


296,766

Stockholders' equity




Common stock

8


7

Additional paid-in capital

965,183


805,804

Accumulated other comprehensive income (loss)

(2,280)


643

Accumulated deficit

(195,870)


(72,509)

Total stockholders' equity

767,041


733,945

Total liabilities and stockholders' equity

$

1,149,450



$

1,030,711












 


Tableau Software, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)












Nine Months Ended September 30,




2016



2015


Operating activities









Net loss


$

(123,361)



$

(42,379)


Adjustments to reconcile net loss to net cash provided by operating activities





Depreciation and amortization expense


25,091


16,221

Stock-based compensation expense


137,954


82,277

Excess tax benefit from stock-based compensation


(827)


(4,688)

Deferred income taxes


282


(3,132)

Changes in operating assets and liabilities





Accounts receivable, net


(5,150)


(16,509)

Prepaid expenses, deposits and other assets


(10,355)


(13,166)

Income taxes receivable


72


21

Deferred revenue


49,868


37,807

Accounts payable and accrued liabilities


32,043


26,612

Income taxes payable


517


157

Net cash provided by operating activities


106,134


83,221

Investing activities





Purchases of property and equipment


(42,334)


(32,792)

Business combinations


(16,399)


(1,000)

Net cash used in investing activities


(58,733)


(33,792)

Financing activities





Proceeds from issuance of common stock


21,203


16,110

Excess tax benefit from stock-based compensation


827


4,688

Net cash provided by financing activities


22,030


20,798

Effect of exchange rate changes on cash and cash equivalents


(738)


(649)

Net increase in cash and cash equivalents


68,693


69,578

Cash and cash equivalents





Beginning of period


795,900


680,613

End of period


$

864,593



$

750,191











 


Tableau Software, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)




















Three Months Ended
September 30,



Nine Months Ended
September 30,




2016



2015



2016



2015



Reconciliation of gross profit to non-GAAP gross profit:

















Gross profit

$

182,027



$

150,956



$

504,903



$

398,787



Excluding: Stock-based compensation expense attributable to cost of revenues

2,614


1,856


8,060


4,804


Excluding: Amortization of acquired intangible assets

95



227



Non-GAAP gross profit

$

184,736



$

152,812



$

513,190



$

403,591












Reconciliation of gross margin to non-GAAP gross margin:










Gross margin

88.3

%

88.4

%

87.6

%

88.5

%

Excluding: Stock-based compensation expense attributable to cost of revenues

1.3

%

1.1

%

1.4

%

1.1

%

Excluding: Amortization of acquired intangible assets

0.0

%

%

0.0

%

%

Non-GAAP gross margin

89.7

%

89.5

%

89.1

%

89.5

%











Reconciliation of operating loss to non-GAAP operating income:









Operating loss

$

(29,356)



$

(13,177)



$

(122,615)



$

(44,949)


  Excluding: Stock-based compensation expense

47,383


31,573


137,954


82,277


  Excluding: Amortization of acquired intangible assets

95



227



Non-GAAP operating income

$

18,122



$

18,396



$

15,566



$

37,328











Reconciliation of operating margin to non-GAAP operating margin:









Operating margin

(14.2)

%

(7.7)

%

(21.3)

%

(10.0)

%

Excluding: Stock-based compensation expense

23.0

%

18.5

%

23.9

%

18.2

%

Excluding: Amortization of acquired intangible assets

0.0

%

%

0.0

%

%

Non-GAAP operating margin

8.8

%

10.8

%

2.7

%

8.3

%










 


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016



2015


2016


2015

Reconciliation of net loss to non-GAAP net income:













Net loss

$

(30,261)



$

(13,373)


$

(123,361)


$

(42,379)

Excluding: Stock-based compensation expense

47,383



31,573

137,954


82,277

Excluding: Amortization of acquired intangible assets

95



227


Income tax adjustments

(3,962)



(7,591)



(1,477)


(17,821)

Non-GAAP net income

$

13,255



$

10,609


$

13,343


$

22,077








Weighted average shares used to compute non-GAAP basic net income per share

75,647



72,089

74,743


71,341

Effect of potentially dilutive shares: stock awards

4,917



5,825



4,933


6,051

Weighted average shares used to compute non-GAAP diluted net income per share

80,564



77,914



79,676


77,392








Non-GAAP net income per share:







Basic

$

0.18



$

0.15


$

0.18


$

0.31

Diluted

$

0.16



$

0.14


$

0.17


$

0.29













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SOURCE Tableau Software

Investor Contact: Carolyn Bass, Market Street Partners, 415.445.3232 or 415.445.3235, tableau@marketstreetpartners.com; or Press Contact: Doreen Jarman, Tableau Director, Public Relations, 206.634.5648, djarman@tableau.com