Tableau Software (DATA, Financial) reported solid numbers for third quarter led by strong customer growth and production adoption. Its revenue grew significantly on a year over year basis and also exceeded the street expectations, while earnings declined marginally compared to last year but came above the consensus estimate. The stock had tanked to its 52-week low few months but since then has risen considerably and seems to be on the right track for further growth.
Investing for growth
During the quarter Tableau continued to invest in its growth initiatives that helped to expand its customer base with the addition of more than 2500 new customer accounts. Along with this, it also bagged two hundred new orders with value greater than $100,000. These are encouraging numbers, which is a result of its investment in product innovation.
According to Christian Chabot, CEO of Tableau, “If you look at the industry data, very few companies in this arena of technology have had anywhere near the R&D investment we have, and that includes our current publicly traded competitors”
Its recent launch of Tableau 8.2, received a strong response and such product innovations will continue to drive its business ahead.
Opportunities to consider
The company sees immense opportunities in the EMEA region, which reported a whopping 100% growth in revenue during the quarter. And with expectations that companies will increase their spending on business intelligence and analytics, Tableau is well positioned to tap this growing potential.
“We're seeing tremendous momentum as more and more people seek to harness the power of these technologies to see and understand their data," Chabot said.
To strengthen its position further in business analytics software, the company has partnered with Infosys, which has a leading edge in technology, consulting, outsourcing and next-generation services. Under this deal Infosys will incorporate Tableau’s analytic technology into its own solutions. The partnership stems from the rising interest of Infosys’ clients in Tableau’s visualization and business intelligence. Thus, the deal will benefit both companies in the long run.
In spite of these positives tech investors have expressed their concern over the quarterly loss (GAAP) compared to a small profit last year. However, the management has reassured its optimism citing that such losses is a part of its longer term growth strategy and these short term pains will yield rewarding results in the coming years.
Conclusion
Going forward, the company continues to enhance its customer and partner ecosystem. In its recent conference, the attendees represented various industries ranging from education to non-profit government organization. Some were its existing customer while others represent prospective ones that will drive its top line in the days ahead. The stock rallied considerably after sinking to its 52-week low few months back and considering its future prospects we could see more upside to this stock.
