Tableau Software (DATA, Financial) is benefiting fundamentally through strong customer acceptance and rising adoption of production. Also, it is strategically investing in various growth initiatives that continue to fetch potential customers to its folds. These trends and smart moves are driving its top as well as bottom line performance. Looking ahead, the company is expected to gain from its state-of-the-art product offerings and investments.
A closer look at the results and guidance
Tableau has provided strong guidance for the fourth-quarter 2014. It now expects its revenue to be in the range of $118 million to $120 million. This revenue guidance is above the market estimates of $113.9 million for the quarter and represents approximately 50% growth over the same quarter 2013. Also, it expects its non-GAAP profit to range between $8.0 million to $12.0 million.
For the full year, the company projects revenue of $388 million to $392 million. This represents about 69% revenue growth, considering the high range of its guidance. Meanwhile, its operating profits are estimated to be in the range of $30.0 million to $34.0 million.
In fact, the company expects its revenue to grow about 40% in fiscal 2015, which is quite impressive considering its continuous efforts of bringing in new products. The company also plans to increase investment in hiring, global operations, and product development that will drive gross margin and operating profit down year-over-year.
Tableau 8.2 to enhance its growth…
The company has released Tableau 8.2 of late. The Tableau 8.2 is expected to allow the customers to run Tableau natively on the Mac to create interactive story with data. Tableau has seen incredible customer adoption for its 8.2 version since its release in June. Moreover, its Tableau 8.2 desktop and surfer gained more adoption as it carries 50% faster adoption rate in first 90 days. It expects this product to drive its revenue and earnings this quarter and into 2015.
Tableau is additionally planning to bring in Tableau 9.0. This 9.0 version will better demonstrates its innovation in visual analytics, performance, data preparation, enterprise capabilities, cloud and mobile. It is also planning to advance its platform and offer more value added products to its customers across the world that should enhance its growth going forward.
In addition, its existing products are gaining traction at a much faster rate. Its sales order for the third-quarter increased $100,000 with incremental 2500 new customer accounts. Tableau has now total of 23,000 customers across the world. These products are driving its growth with plenty of new customers such as Yokohama Corporation of America, Simmons Bedding, Bioclinica, Kimbrell's Furniture, West Springs Hospital, The Panama Canal Authority.
Tableau is additionally making various efforts to gain its market share in the international front. It is experiencing solid growth momentum in most of the regions for its products. Looking forward, the company is strategically investing in its international business. It plans to expand its operation and product development that should strengthen its global presence and drive its margins in the future.
Additionally, Tableau should benefit from the strong momentum for its Tableau Public. It is a free cloud based service, which is driving consumer engagements. It has a total of 300 million views globally, better highlighting its growth and community engagement. Further, the company remains on track to invest in vibrant customers and ecosystem.
Conclusion
Tableau looks good with its product pipeline that should drive its growth in the future. The analysts expect its earnings to grow at CAGR of 60.23% three times greater than average industry CAGR of 20.36% for the next five years. This indicates incredible growth for the stock in the long-run. Also, the stock trades at the forward P/E of 350.39, which signifies a lot of growth for bottom line in the future. Tableau’s balance sheet carries total cash of $644.52 million and has no debt outstanding. It has operating cash flow of $75.59 million and levered free cash flow of $43.28 million.
