Tableau Grows Through Small Acquisitions

According to a report published late last year, the global Data Visualization Applications Market is expected to grow at 10% CAGR by 2026. The growth is expected to be driven by the healthcare industry as it leverages the application of MRI in several medical areas including cardiology, radiology, and oncology. Recently, Billion Dollar Unicorn Tableau (NYSE: DATA) announced its fourth-quarter results but its weak outlook failed to impress the market.

Tableau’s Financials

Tableau recently adopted a new accounting standard ASC (Accounting Standards Codification) 606 that changes the way it recognized revenues. Revenues as per ASC 606 came in at $336.3 million. Revenues as per ASC 605 grew 10.5% over the year to $275.5 million, missing the Street’s forecast of $276.4 million. The company ended the quarter with a loss of $67.4 million. On an adjusted basis, it delivered a loss of $0.03 per share, significantly better than the market’s forecast of a loss of $0.08 per share.

By segment, license revenues came in at $170.8 million and maintenance and services revenues at $165.5 million.

It ended the year with revenues of $982.9 million and a net loss of $277.2 million or $3.36 per share.

Tableau expects to end the current year with revenues of $1.33-$1.4 billion with a non-GAAP net income of $1.54-$1.85 per share. It estimates to end the current quarter with revenues of $278-$292 million with a non-GAAP net loss of $0.09-$0.01 per share. Analysts are forecasting revenues of $1.36 billion for the year with a net income of $1.61 per share and $292.1 million for the current quarter with a net income of $0.11 per share. The market wasn’t pleased with Tableau’s outlook and the stock slipped nearly 5% in the after-hours trading session. Some believe that the decline in the stock price was a mere correction for the overvalued stock.

Tableau’s Growth Focus

Over the previous year, Tableau has been focused on moving from an up-front perpetual license-based model to a subscription-based model. During the last quarter, subscription annual recurring revenues grew 127% to $443.2 million. Total annual recurring revenue grew 41% over the year to $840.9 million with subscription annual recurring revenue growing 127% to $443.2 million. Tableau expects that by shifting to a subscription-based model, it will make it easier for its customers to scale and grow.

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