Tableau Software posted a strong fourth quarter to close out the year as its move to subscription-based products has jumpstarted a years-long turnaround for the data visualization company. However, despite beating Wall Street expectations for revenue and profits, Tableau stock is down 5.5 percent in after-hours trading.
Tableau is overhauling how it reports revenue under its subscription model, recognizing a greater percentage of revenue from contracts up front. The switch to this new standard, which will be adopted in full next quarter by Tableau and Wall Street alike, eliminates the ability to compare year-over-year growth for now and makes the numbers larger than the old standards.
- Revenue: Under that new standard, Tableau reported revenue of $336.3 million in the fourth quarter. Analysts still using the old standard expected Tableau to report revenue of $271.75 million.
- Profits: Tableau reported net income of $52.2 million in the fourth quarter, or $0.59 cents per share.
Because of new revenue reporting standards, Tableau representatives said annual recurring revenue is the best way to measure the health of the business. In the fourth quarter, Tableau hit annual recurring revenue of $841 million, up 41 percent over a year ago.
“Analytics is becoming more ubiquitous as organizations embrace and reap the benefits from data-driven insights,” Tableau CEO Adam Selipsky said in a statement. “Our fourth quarter capped a strong year of subscription transition and innovation that helped more and more customers scale Tableau to thousands and tens of thousands of users.”
Here are a few other important metrics for Tableau:
- For 2018 as a whole, Tableau hit revenue of $1.16 billion under the new standard. Under the old standard, Tableau brought in $983 million in revenue for the year.
- Tableau finished the year with a headcount of 4,181, up 19 percent from the end of 2017, when it had 3,489 employees.
- Tableau added 15,700 new customers in 2018, growing its customer base by 23 percent to more than 86,000 customer accounts.
It’s been an incredible turnaround for Tableau, which almost exactly three years ago saw its stock lose half its value after posting significant losses to close out its 2015 fiscal year. The company later slashed hiring plans, and it looked like Tableau was in deep trouble.
Later that same year, the company brought in Selipsky, a veteran of Amazon Web Services, to be its CEO. Soon after that, the company made the switch to subscriptions, and it was off to the races.
Today, subscription customers make up about 80 percent of Tableau’s business, up from about 50 percent a year ago and 20 percent two years ago.
Tableau’s stock has risen 231 percent since hitting a low point in 2016. In the last year, Tableau stock has risen 66 percent.
Highlights from the quarter
- In the fourth quarter, Tableau committed to donate $100 million in software, training and funding through its philanthropic arm over the next seven years to take on some of the world’s toughest challenges. The initiative is a huge step up for the Tableau Foundation, which has given a combined $30 million in software, training and funding to more than 5,770 organizations in 86 countries since it was launched in 2014.
- At the Tableau Conference in October, the company unveiled a variety of new products meant to make its offerings more appealing to a larger group of customers while also letting data experts dive even deeper.