Tableau Software (DATA) Earnings Report: Q2 2015...

EventDescription:Q22015EarningsCallMarketCapasofEventDate:6.24BPriceasofEventDate:104.98

CompanyName:T ableauSof twareIncCompanyTicker:DAT ASector:T echnologyIndustry:ComputerSof tware&

©2014TheStreet,Inc.Al l R ightsReserved Page1of21

TableauSoftware(DATA)EarningsReport:Q22015ConferenceCallTranscriptThefollowingTableauSoftwareconferencecalltookplaceonJuly29,2015,08:00AMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

JoniDavis;TableauSoftware;Director-IRChristianChabot;TableauSoftware;CEOTomWalker;TableauSoftware;CFO

OtherPart icipants

JesseHulsing;CowenandCompany;AnalystMattHedberg;RBCCapitalMarkets;AnalystBrentThill;UBS;AnalystDerrickWood;SusquehannaFinancialGroup;AnalystMarkMurphy;JPMorgan;AnalystTomRoderick;StifelNicolaus;AnalystJohnRizzuto;SunTrustRobinsonHumphrey;AnalystBradSills;BofAMerrillLynch;AnalystKeithWeiss;MorganStanley;AnalystPhilipWinslow;CreditSuisse;AnalystSteveKoenig;WedbushSecurities;AnalystWalterPritchard;Citigroup;AnalystKarlKeirstead;DeutscheBank;AnalystSteveAshley;RobertW.Baird;AnalystJohnDiFucci;Jefferies;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator :

Ladiesandgentlemen,welcometotheTableausecond-quarter2015earningsconferencecall.Duringthecallallparticipantswillbeinalisten-onlymode.Afterthepresentationwewillconductaquestionandanswersession.

(OperatorInstructions).

Asareminder,thisconferenceisbeingrecordedandwillbeavailableforreplayfromtheinvestorrelationssectionofTableau'swebsitefollowingthiscall.IwillnowturnthecallovertoJoniDavis.Thankyou,ma'am,youmaybeginyourconference.

JoniDavis (Director-IR):

Thankyou.Goodafternoon,everyone,andthankyouforjoiningustoday.WithmeonthecallareTableau'sChiefExecutiveOfficer,ChristianChabot;andChiefFinancialOfficer,TomWalker.

Ourpressreleasewasissuedearliertodayandispostedonourwebsite.Thiscallisbeingbroadcastlive




viawebcastandfollowingthecallanaudioreplaywillbeavailableintheinvestorrelationssectionofthewebsite.ChristianandTomwillbeginwithpreparedremarksandthenwewillopenthecallforquestions.

Beforewebegin,Iwouldliketoremindyouthatduringtoday'scall,wewillbemakingforward-lookingstatementsregardingfutureeventsandfinancialperformance,includingourguidanceforthethird-quarterandfull-year2015.Wecautionyouthatsuchstatementsreflectourbestjudgmentbasedonfactorscurrentlyknowntous,andthattheactualeventsorresultscoulddiffermaterially.PleaserefertothedocumentswefilefromtimetotimewiththeSEC,inparticularourmostrecentlyfiledform10-Qandourform10-K.Thesedocumentscontainandidentifyimportantriskfactorsandotherinformationthatmaycauseouractualresultstodifferfromthosecontainedinourforward-lookingstatements.Anyforward-lookingstatementsmadeduringthiscallarebeingmadeasoftoday.Ifthiscallisreplayedorreviewedaftertoday,theinformationpresentedduringthecallmaynotcontaincurrentoraccurateinformation.Exceptasrequiredbylaw,weassumenoobligationtoupdatetheseforward-lookingstatementspubliclyortoupdatethereasonsactualresultscoulddiffermateriallyfromthoseanticipatedintheforward-lookingstatements,evenifnewinformationbecomesavailableinthefuture.

Duringthecallwewillalsodiscussnon-GAAPfinancialmeasures.Thesenon-GAAPfinancialmeasuresarenotpreparedinaccordancewithgenerallyacceptedaccountingprinciples.AreconciliationoftheGAAPandnon-GAAPresultsisprovidedintoday'spressrelease.Theprojectionsthatweprovidetodayexcludestock-basedcompensationexpense,whichcannotbedeterminedatthistime,andarethereforenotreconciledintoday'spressrelease.Withthat,it'smypleasuretoturnthecallovertoChristian.

Christ ianChabot (CEO):

Thankyou,Joni.Thankyou,everyone,forjoiningustodaytodiscussTableau'ssecond-quarter2015results.TableauexecutedanotherstrongquarterinQ2,resultingintotalrevenueof$149.9million,up65%yearoveryear.Thegrowthwasfueledbyrecordcustomergrowthandcontinuedproductadoption.Letmerecapsomeofthehighlights.Duringthequarter,weaddedmorethan3,000newcustomeraccounts.That'sthemostwe'veaddedinanyquarter.Inaddition,wesigned233transactionsgreaterthan$100,000ascustomerscontinuetodeployTableaumorebroadlywithintheirorganization.

OurinvestmentsininnovationarepayingoffwithusersadoptingTableau'sproductsatarapidpace.InQ2wereleasedTableau9.0,bringingbigadvancesinanalytics.Inthefirstfewweeksafterlaunchweexperienced78%moreregistrationthanwedidwithTableau8.2.Animportantaspectofourgrowthisthatourinternationalbusinesscontinuestogrowandthrive.I'mpleasedtoreportthatinternationalrevenuehasnowgrownto25%ofourtotalrevenue.Ourproductscontinuetohavebroadappealacrossindustries,departmentsandprofessions.Asaresultweareexperiencingsignificantgrowthinourcustomerbase.Wenowhavemorethan32,000customeraccountsworldwide.InQ2,wewelcomednewcustomerssuchasMerrillGardens,Infomedia,Globalpayments,OneAmericaFinancialPartners,andStandardBankofNamibia.Andweexpendedrelationshipswithexistingcustomers,includingSwisscom,Ericsson,UniversityofArizona,UCLAHealth,andSeagateTechnology.

LetmeshareafewstoriesaboutTableauimpactingpeopleacrossdiverseindustries.Ourfirststorycomesfromoneoftheworld'slargestconsumerproductscompanies.Thecompanymanagesavastportfolioofthousandsofproductsthataresoldin170countries.Peopleacrossthecompanywereeagertoharnessthepowerofthemassivedatatheyhadaccessto.Asamulti-nationalcompany,theirunderlyingarchitectureisextremelycomplex,andtheyneededananalyticssolutionthatwouldseamlesslyfitintotheirglobaldataframework.TheychoseTableau.Nowabusinessuserinonedepartmentcandroveintouniqueinventorydetailswhileinanotherdepartment.Managerscanlearnmoreaboutbuyingpatternsonthefly.Datasourcesareblendedtogethertobetterunderstandlargerprogramslikeloyaltyprograms.Tableau'sself-serviceanalyticsenablespeopleatalllevelsoftheorganizationtomakebetterandsmarterdecisions.




AnotherstorycomesfromtheQueenslandPublicSafetyBusinessAgency.TheyuseTableaudashboardstoestimatetheimpactofnaturaldisastersforthewholestate.Eachdashboardanalyzesdataaboutbuildings,vegetationandslopes.Thesevisualizationsareparticularlyusefulforestimatingthepopulationsthatwouldbeimpactedbystormswhenthereisn'tmuchtimetodeploysafetyplans.

Anothercustomer,Necco,isanonprofitthatworkstogetfosterchildrenintopermanenthomesasquicklyaspossible.Necco'scontractsareperformance-basedsoit'simportantthattheycanusedatatodemonstratetheresults.TheyuseTableautocloselytracktheoutcomesforchildrenaftertheyleavefosterhomes.Tohelptheteamsstayontrack,NeccohasinstitutedTableauTuesdays,toreviewdashboards,asknewquestionsandworktogethertowardthegoalofbuildingfamilies.

AndfinallyagreatstoryaboutTableaucomesfromtheObservatoriodeTurismodeGalapagos.TheyuseTableautohelpinsurethatinfrastructureandresourcesareproperlyallocatedtominimizetheeffectsofhumanactivitiesontheenvironment.Andthentheysharetheseresultswithkeystakeholders.

Tableau'sinternationalgrowthisanimportantandgrowingpartofoursuccess.Forthesecondquarter,internationalrevenuegrewto$36.7million,up83%fromtheprioryear.Weremainfocusedonourinternationalgrowthbycontinuingtomakeinvestmentsabroad.InearlyJulyweannouncedplanstoopenadatacenterinEuropetosupportourgrowinginternationalcustomerbaseadoptingourcloudsolution,TableauOnline.Andjustafewweeksago,welaunchedtechnicalsupportinJapanese.Theseandotherimprovementsleavemeoptimisticaboutourgrowthprospectsinternationally.

Turningtoproductnews,inQ2wereleasedTableau9.0,oneofthemostsignificantproductreleasesinourhistory.Tableau9.0includesadvancesinvisualanalytics,performance,scalability,datapreparationandenterprisecapabilities.Customershavebeenveryexcitedaboutsomeofthebreakthroughnewfeatures,suchaslevelofdetailedexpressionsanddraganddropanalyticsthatmakeansweringsophisticatedquestionseveneasier.Andtheperformanceenhancementswemadeacrossourproductsarehelpingpeoplegetresultsfaster.InearlyJulyweannouncedthebetaversionofourrelease,Tableau9.1,anothermilestoneinourdevelopmentcycle.Itincludesanentirelynewandimprovedmobileexperience,moredataconnectors,newenterprisesecurityandauthenticationoptionsandadditionalanalyticalfunctionsforusers.ThenewwebdataconnectorinTableau9.1enablesuserstowritetheirownconnectionstowebdata.WebelievethewebdataconnectorwillgreatlyexpandthenumberofconnectorsinTableauandprovidemoreflexibilityforcustomerstoconnecttoanydatasourcetheywant.

WehaveseencustomersaddconnectionstoFacebook,TwitterandGoogleSheets.Thepossibilitiesareendless.BylaunchweexpectmanymoreexamplesofwebdatabeingavailableinTableauusingthewebdataconnector.Inaddition,weaddednewconnectionsforGoogleCloud,SQL,MicrosoftazureSQLDataWarehouse,MicrosoftSparkonAzureHDInsightandAmazonAurora.TheTableaumobileapplicationinTableau9.1hasbeenredesignedtomakeiteasiertofind,interactwithandtomanagecontentonthego.Itincludesanewnavigationexperience,fasterperformanceandenhancestouchcapabilities.Italsoincludesanewfeaturecalledofflinesnapshotsthatenableuserstosaveinformationtobeviewedoffline.WeexpectTableau9.1tobereleasedwithinthenext90days.

TableauOnline,ourcloudanalyticsolution,continuestogrowandthrive.Asweseeagrowingproportionofdatabeinggeneratedandstoredinthecloud,moreanalyticsarebeingconductedtheretoo.OneexampleofhowcustomersuseTableauOnlinecomesfromGermane-commercefashioncompany,Stylight.TheyuseTableauOnlinetosharevisualizationsontheirproductcategories.Forinstance,whichproductcategoriesarethebestsellersineachshop.TheirTableaucloudsolutionconnectsdirectlytodatafromAmazonRedShiftandGoogleAnalyticsalsoblendsdatafromothersources.Theytellusthey'resavingoverhundredsofhoursofmanualworkeachweekthankstotheirdataautomationinTableau'scloudplatform.




We'reexcitedtoseeTableauPublic,ourcommunityforpeopletoshareandexploredataonthepublicweb,continuetoextenditsreach.InQ2TableauPublicadded20,000authors.DuringthequarterTableauPublicauthorsgeneratedarecord72millionviewsofinteractivedatavisualizations.PeopleuseTableauPublictosharestoriesandstartconversationscontainingdata.Forexample,oneofourauthorswonderedhowlongitwouldtaketopayoffGreece'sdebtifweallworkedtogether.Heanalyzedthesalariesandnumberofworkersin299differentUKprofessions,fromprofessionalsoccerplayerstoelementaryschoolcrossingguards,andcomparedthosefigurestotheamountGreeceowestheinternationalmonetaryfund.WiththreeTableauvisualizations,hecameupwithasolution.HefoundthatifalltheUKfootballersputtheirsalariestogether,theycouldbailoutGreeceinaboutayear.Youcanusetheinteractivevisualizationtofindouthowlongitwouldtakeyourindustrytopayoffthedebt.

Wecontinuetoinvestininitiativesthatexpandandengageourvibrantcustomerandpartnerecosystem.Inthepastfewmonths,weheldregionalcustomerconferencesinSingapore,LondonandBerlin.Inaddition,ourteamhasbeengearingupforourbiggestcustomerconference,oureighthannualTableauConferencebeingheldthethirdweekofOctoberinLasVegas.ThisyearTableauwillhostmorethan10,000dataenthusiastsfromaroundtheworld.Thisconferenceisbecomingthedataandanalyticseventoftheyear.Attendeeswillcometogethertosharetheirpassionfordata,seethedevelopmentteamshowcase,ournewestinnovations,andattendanyof340sessionsfromcustomers,partnersandtheTableauteam.

Insummary,we'repleasedwithTableau'sperformanceinthesecondquarter.Wecontinuetobuildoursuccessfultrackrecordofgrowingrevenue,expandingourcustomerbase,developinginnovativeproductsandexpandinginternationally.I'dliketothanktheTableauteamworldwidefortheireffortsinexecutinganothersuccessfulquarter.I'llnowturnthecallovertoTom.

T omWalker (CFO):

Thankyou,Christian.Goodafternoon,everybody,andforthoseofyouintheUnitedStates,goodmorning.We'retalkingtoyoutodayfromourofficesinLondon.

AsyouheardfromChristian,Q2wasanotherwell-executedquarter,comingofftheheelsofaverystrongQ1.We'reverypleasedwithourperformanceinQ2.Wedemonstratedcontinuingsuccessinlandingnewcustomers,increasingadoptionwithexistingcustomersandgrowinginternationally.Let'sdothenumbersandprovideyouwithmoredetailsthenIwillprovideyouwithguidanceforQ3,andanupdateforthefull-year2015.

Thesecondquarterexceededourexpectationsastotalrevenuesgrewto$149.9million,up65%yearoveryear.AsChristiandiscussed,ourgrowthisattributedtooverallstrengthinthebusinessacrosstheboard.Oursalesandmarketingteamscontinuedoingamazingjobsbuildingawarenessanddrivingcustomeracquisitionandexpansion,andI'dliketothankthemfortheirtremendousefforts.Inthequarter,weaddedmorethan3,000newcustomeraccounts,bringingourtotaltomorethan32,000worldwide.Inaddition,weclosed233transactionsover$100,000each.Boththesemetricsarepositiveindicatorsthatourlandandexpandstrategycontinuestogrowandthrive.Asareminder,thenumberofcustomeraccountsandlargetransactionscanfluctuateinanygivenquarter.

Turningtotheincomestatement,inQ2licensedrevenuesgrewto$96.7million,up60%yearoveryear.Maintenanceandservicesrevenuesgrewto$53.1million,up75%fromtheprioryear.Maintenanceandservicescontinuetobeanimportantandgrowingrecurringrevenuestream.Weexpectmaintenancesandservicestobecomealargerpercentageoftotalrevenueovertimeasourcustomerbasecontinuestogrow.GlobalexpansioncontinuestobeoneofourtopprioritiesforTableauandwearepleasedwithourprogress.InQ2,internationalgrewto25%oftotalrevenues.Breakingitdown,totalrevenuesfromtheUnitedStatesandCanadawere$113.1million,up60%yearoveryear.Internationalrevenuesgrew




to$36.7million,up83%yearoveryear.Weintendtocontinuemakingsignificantinvestmentstoexpandourfootprintinallregions.

NextI'llspendafewminutesdiscussingmarginsandoperatingexpenses.Unlessotherwisenoted,allreferencestofinancialmeasuresareonanon-GAAPbasis,whicharereconciledinthepressreleasetablesandpostedonourinvestorrelationswebsite.InQ2ourgrossmarginwas90%.Aswe'vesaidbefore,weexpectourgrossmargintofluctuateaswecontinuemakinginvestmentstosupportourgrowingglobalcustomerbase.Forthequarter,totaloperatingexpenseswere$124.3million.Asareminder,themajorityofouroperatingexpensesareemployee-related.InQ2,weinvested$34.9millioninproductdevelopment,up65%yearoveryear.Weaddedarecord66netnewhiresinR&D,endingthequarterwithtotalheadcountof614,up52%yearoveryear.Productinnovationisveryimportanttousandweplantocontinueinvestingandgrowingtheteam.

Salesandmarketingexpensesforthequarterwere$74.3million,up62%fromtheprioryear.WeendedQ2withtotalsalesandmarketingheadcountof1,086.Thisisup61%yearoveryear.WecontinuetobuildourtalentpoolandI'dliketocalluptheawesomejobouroperationsteamscontinuedtodothisquarter.Weonboardedarecord271netnewhiresinQ2,bringingourtotalto2,463.Thisrepresents61%year-over-yeargrowth.Letmeremindyouthattherecanbefluctuationsinheadcountadditionsonaquarter-by-quarterbasis.

Oursecond-quarteroperatingincomewas$10.5millioncomparedtoanoperatingincomeof$7millionforthesecondquarterof2014.Netincomewas$5.6millionforthesecondquarterandnon-GAAPdilutedearningspersharewere$0.07.Duringthequarter,ourweightedaveragesharecountusedforGAAPEPSwas71.4millionshares.SincewehadaGAAPnetloss,ourdilutedandbasicsharecountswerethesame.Asareminder,periodsinwhichwehaveaGAAPnetlossbutareprofitableonanon-GAAPbasis,ourpresentationofnon-GAAPEPSwillusethedilutedsharecount.Accordingly,ourweighted-averagedilutedsharecountfornon-GAAPEPSwas77.7millionshares.Adetailedreconciliationisavailableinthepressreleasetablesandpostedonourinvestorrelationswebsite.

Onthebalancesheet,cashandcashequivalentsattheendofQ2were$729.5million,upfrom$715.7millioninthepriorquarter.Accountsreceivablewere$98millionandourDSOswerefewerthan65days,consistentwithpriorperiods.

NowI'dliketomoveontoourguidanceforthethirdquarterandprovideyouwithanupdateforthefullyearof2015.Asareminder,allforward-lookingguidancebeingdiscussedisonanon-GAAPbasis.ForQ3,weareexpectingrevenuestobeintherangeof$153millionto$157million.Atthehighendofthisrange,thisrepresents50%year-over-yearrevenuegrowth.ForQ3,we'reexpectingoperatingincomeof$5millionto$9million.Asyou'veseeninpriorquarters,ouroperatingexpensescanvarybasedonrecruitingtrendsandthetimingofnewhiresjoiningtheCompany.Forthethirdquarter,weanticipateourbasicsharecounttobebetween72millionand73millionshares,andourweighted-averagedilutedsharecounttobebetween77millionand78millionshares.Forthefullyear,weareraisingourpriorguidancefortotalrevenuestoarangeof$617millionto$627millionfromtherangeof$600millionto$610million.Thisrepresentsannualgrowthofapproximately52%atthehighendofthisrange.Forthefullyear,we'reexpectingoperatingincometobeintherangeof$41millionto$51million.

Wehaveforecastedanon-GAAPtaxrateof43%whichwe'lluseforinterimperiodsduring2015.Thenon-GAAPtaxratedoesnotassumetheR&Dtaxcreditisextended.Wewillprovideupdatestothisrateonanannualbasisorifmaterialchangesoccur.

Inclosingwe'repleasedwithourperformanceinQ2.Wewillcontinueinvestinginproductinnovation,expandingourcustomerbaseandbuildingoutourexceptionalteam.Welookforwardtothesecondhalfof2015.Thankyouallforjoiningustoday.Nowwe'llturnitovertotheoperatorforQ&A.




QUESTIONS&ANSWERS

Operator :

(OperatorInstructions)

YourfirstquestioncomesfromJesseHulsingwithCowen.Yourlineisopen.

JesseHulsing (Analyst-CowenandCompany):

Thanksfortakingmyquestion.Tom,Christian,onthelargedealside,itlookslikedealsaround1,000weredownquarteroverquarterslightly.Canyoutalkaboutmomentumthere?AnddidyoupullanybusinessintoQ1?Ordoyouseeanytrendslikethat?Thankyou.

T omWalker (CFO):

Hi,Jesse,thisisTom.Soyes,overallthelargedealsare--those233wereagoodamountofdeals,anditdoesfluctuateonaquarter-by-quarterbasis.Q1wasdownfromQ4sowedon'texpectthattoalwaysbeupandtotheright.

OverallIwouldn'tsaythattherewasashiftingofdealsbetweenthetwoquarters.Ithinkthatmetricwillvaryonaquarter-by-quarterbasis.I'dalsojustremindyouthatthe233isgreat,butwe'redoingthousandsandthousandsandthousandsandthousandsofothertransactions.Soit'sallpartoftheportfolioofwhatwedoinanygivenquarter.


Thanks,Jesse.Operator,couldwehaveournextquestion,please?

Operator :

YournextquestioncomesfromMattHedbergwithRBCCapital.Yourlineisopen.

MattHedberg (Analyst-RBCCapitalMarkets):

Hi,guys,thanksfortakemyquestions.YouguysgavealotofgoodevidenceofTableau9.I'mcurious,youcouldtalkalittlebitmoreabouthowthat'sdoingversuspeers,thecompetitivelandscape?There'sbeenalotoftalkaboutembeddedanalyticsoverthepastseveralquarters.Andthenfollowinguponthat,thepredictiveanalyticcapabilities.I'mcurioustohearyourpointonthat.


Tableau9hasproventobethestrongreleasewehopeditwould.Uptakeandregistrationsandtrialshavebeenfantastic.Andofcoursewehaveahugeyear-over-yeargrowthinthebusinessbasedonthebackofthatrelease.

Overallthecompetitivelandscapefluctuates.There'salotofdimensionstothecompetitivedescriptioninthisindustry.Soit'snoteasytosummarizeinwhatnumber,butoverallwefeellikethecompetitivegapwithTableau9hasstayedaboutthesameasithasbeeninrecentquarters.

Withregardstothespecificfocusareasyoubringup,embeddedanalyticshasbeenabigpartofwhatTableauhasbeendoingformanyyearsnow.Sothatperse,Iwouldn'tidentifyitasamajorcompetitivedimension.Mostoftheproductsinourindustryenableittoonedegreeoranother.Tableauisexceptionalatit.

Andinfact,oneofthemostcommon-usecasesofourproductsareinembeddedscenarios,eitherin




enterpriseapplicationoracloudsolutionorsomemonitoringsystem.PeoplethatarebuildingincludeothertechnologiesotherthanTableau.

Sowecontinuetoplaceverystrongthere.We'vebolsteredthatfunctionalitylatelyinparticularbyincreasingthenumberofAPIsandtherobustnessofthem.SoIfeelverywellpositionedthere.

Withregardtopredictiveanalytics,wehaveareallyniceforecastingcapabilitybuiltintheproducttoday.Wehavereallynicestatisticalmodelingtechnologybuiltintotheproducttoday.It'sallveryeasytouse,it'sdraganddrop,itupdatesinstantly,andthat'sprovenverypopularwiththecustomerbase.

Thatalsohappenstobeateamwe'rebuildingoutquiteabitatthemoment.Buttofinelyputapointon,Ithink,toyourquestion,onthepredictorfrontperse,wehaven'tseenachangeinthecompetitivelandscapeinthislastquarter.


Great,thanks,alot,Christian.


Thank,Matt.Operator,canwehaveournextquestion,please?

Operator :

YournextquestioncomesfromBrentThillwithUBS.Yourlineisopen.

BrentT hill(Analyst-UBS):

Goodafternoon.Christianon9.0,there'sbeenalotofemphasisontheserverrewrite.Curiouswhattheimplicationsareintermsofsomeofthelargercustomerslookingatthis.

Someoftheduediligencewe'vedonesuggeststhatthisisaloteasierforthemtodeployatmassmarket.Areyoustartingtoseethatimpact?Howdoyouexpectthattoplayoutinthesecondhalf?AndIhadaquickfollow-upforTom.


Yes,it'sgoingreallywell.Tableau9,withoutquestion,isourmostrobustandmostscalableandhighestperformanceserver.Itevenhasalotofadministrativebenefitsandease-of-useimprovementstoboot.We'reinanevergrowingnumbersofconversationstouseTableauserver,asanenterprisedepartment-wideordepartment-wideself-serviceanalyticssolution.

SoreallyIdon'thaveanythingtoreportthere,otherthangreatresults.Wehavealotofdealsinthepipe,andIthinkwewillseesomeofthebenefitofthatinthesecondhalf.Theaggressiveyear-over-yeargrowthwe'reseeinginlargedealsisinparttestimonytothat.Andwedoexpectthattocontinue.

BrentT hill(Analyst-UBS):

Okay.AndTom,Ithinkthenumberonequestiononinvestors'mindsrightnowisthemagnitudeofbeat.Thisisoneofthelowermagnitudes.Andagain,givenyoudidbeat,butrelativetowhatwe'veseenhistorically,wastheresomethinginQ2thatforcedsomebusinessintothebackhalfoftheyear?Somethingasitrelatestowhatyousawthatmayhavehadsometypeofimpactrelativetothemagnitudeyou'vebeenseeinginthepastfewquarters?

T omWalker (CFO):




Yes,Ithinkthat'sagreatquestion,Brent.IthinkI'vebeentryingtobeconsistentwiththecompetesyear-over-yearasthenumbersgetlargerandlarger,becomeharderto,fromapercentagestandpoint,togrow.Ouroverallexpectation,we'regoingtogrowthe--andtheguidancelastquarterwas54%.Sowedeliveredup65%.Sowe'reactuallyveryhappywithourperformanceandhowwe'reexecuting.

AsImentionedbefore,I'mnotnecessarilygoingtoguidetotheupsideoranythinglikethatbecauseit'snotprudentforustodothat.Welookatthepipelinethatwehave,welookatallthemeasuresofhowourcustomersareexpanding,andwebasicallyapplythattoouroverallmethodology.Andinpreviousquarterswe'veseensomeuptickinawarenessandotherthings.

Andsowe'restillgrowing.Therecordnumberofaccountsisatestamenttothat,andIthinkit'satestamentto9.0.Sowe'refeelinggood,butwedon'texpect--weweren'texpectingthosebeatsbeforesoit'snotsomethingwe'recalibratingto.


Thankyou.


Allright,thankssomuch,Brett.Operator,canwehaveournextquestionplease?

Operator :

YournextquestioncomesfromDerrickWoodwithSusquehannaFinancialGroup.Yourlineisopen.

DerrickWood (Analyst-SusquehannaFinancialGroup):

Thanks.IseeyouhavesomenewintegrationswithMicrosoft.I'dbecuriouswhatyouthinkaboutthemasacompetitor.TheydidjustannounceanewproductlaunchandanapproachtothemarketwithPowerBI2.0.Idbecuriouswhatyouthinkabouttheirapproachtothedatadiscoverymarketandhowitmaycomparetowhatyouguysarefocusedon.


Yes,thisisChristian.MicrosofthasbeenafiercecompetitorofTableaureallysincethebeginning,evensincetheearliestdaysoftheCompany.Andasthey'vetriedtofindtheirwaywiththeirBIstrategy,thecompetitivedynamichaschangedhereandthere,ebbsandflowsastheyrevtheirreleases.

Theydidjustputanewproductoutonthemarket,oratleastareaboutto,inthecaseofpowerBI.Andagain,IguessthebestnewsIcanreportatthispointisthatwehaven'tseenachangeinthecompetitivedynamic.

Tableau'sstrengthscontinuetobeversusthecompetition,powerBIincluded,incredibleeaseofuse,apioneeringapproachtovisualanalyticsandresponsiblevisualization,aplatformthatcantrulybeusedasaself-serviceenablementplatform.Andfinallyaproductlinethatishighlytunedandintouchwithalltheworld'sdisparatedata,includingtheabilitytoattachtoliveenterprisedatasourcesofallformsandvarieties,andclouddatasourcestoboot.

SothatconstellationofthreeorfourpillarscontinuetobethecompetitivejuggernautforTableau.Andtherecentnewsfromourcompetitorshaven'tchangedthat.Butwe'llcertainlykeepintouchontheissue.





Okay,thanksforthecolor.AndthenIalsosawyouannouncedaplanforanewdatacenterinEurope.Isthispartofabiggercloudpush?Orwhat'sthereasontobuildadatacenterinEurope?


Yes,shortanswerisitispartofabiggercloudpush.Tableaubelievestherightstrategyforcustomersoverthecomingyearswithregardtocloudversuson-premiseis,inshort,tobeboth.That'swhatwerefertoasoneofourhybridstrategies.Andwe'recontinuinginvestinginbothsimultaneouslyasaresult.Infact,wehavequiteafewnumberswhouseourcloudsolutionsandouron-premisesolutions.

Astheindustryevolvesanddatausecontinuestogrowandmoredatabecomesinthecloud,wedoexpectovertheyearsforTableautobecomemoreandmoreofacloud-basedbusiness.Flashforwardtoadistantdate,maybe8or10years,itmaybethatallofourbusinessisinthecloud.

Tableauonlineisourmainplatformformonetizingthatnow,andforhelpingcustomers,andthat'sgoingextremelywell.AndtheEUdatacenterakeystepinthat,absolutely.We'reveryexcitedaboutit.We'llhavemorenewsonthespecificshereinthebackhalf.


Thankyouverymuch.


Thanks,Derrick.Operator,canwehaveournextquestion,please?

Operator :

YournextquestioncomesfromMarkMurphywithJPMorgan.Yourlineisopen.

MarkMurphy(Analyst-JPMorgan):

Yes,goodmorning,thankyou.Tom,regardingthis,youdohavethiscombinationofslightlylessrevenueupsideonapercentagebasisthaninpriorquarters.Butitiscombinedwithverystrongdeferredrevenueinbillingsresultsandincreasedguidancefortherestoftheyear.

I'mcurious,giventhatcombination,ifyoumighthaveexperiencedanymixshifttowardsratablerevenuestreamsduringthequarter.YoudidjusttalkaboutTableauPublicandthemovementmoretowardscloudarchitectures,andI'mwonderingifthatmighthaveinanywaytweakedthebookingsmixmoretowardsratablerevenuestreams.

T omWalker (CFO):

Hi,Mark.Yes,overall,Iwouldn'tsaybreakoutorstandout,thatsomethingstoodoutmorethanotherpreviousquarters.Theratableasatermrevenueissub10%oftheoveralllicensenumbers,isusuallywhatitis.Itmighthavebeenonahighersidethisquarter.

Weareseeinggoodtraction,butithasn'tbrokenupabovethat10%thresholdjustyet.SoIwouldn'tcallthatoutasanyparticularreasonforit.ButitisgrowingasTableauOnlineandsomeothertypesofenterpriseagreementsaregrowing.


Okay,great.Andthenwhenwelookatvolumeofordersover$100,000,goingbackandlookingatit,ithasdeclinedsequentiallynow,Ibelieve,inthreeofthelastsixyearsinQ2.ButithasrepeatedlyalsogrowninQ3.Historicallythathasbeenthepattern.




I'mwonderingifyouwouldexpect,fromamodelingstandpoint,ifyouwouldexpectmoreofthesamethereinQ3ofthisyear.AndI'malsocurious,Tom,ifyouweretodrilldownwithinthose233transactionsforthequarter,andtrytolookattheaggregatevalueofthosetransactions,wasthereanythingnewanddifferentthereintermsofperhapslargertransactionscontributingmorethantheyhaveinthepast,moreorless?

T omWalker (CFO):

Theoverallseasonality,asImentionedbefore,Mark,weexpectthattofluctuateandebbandflowonaquarter-by-quarterbasis.SowhetherQ3isaboveoraroundthesameballpark,Ijustdon'tknow,andIwouldn'twanttoguideyoutowardsthatatall.Q4istraditionallymoreofourstrongerquarter.SoIthinkoverallthat'swhereweexpectalargeramountofrevenues.Andprobablythelargeramountofsix-figuredealswillfallinQ4.That'smoreofwhatIwouldgiveyoufromthatperspective.

Butwithrespecttothe233,it'sagoodquestioninaggregate.Yes,weareseeingmuchlargerexpansiondealsinsideofourcustomerbase.Soinaggregate,thenumbersdoincrease.They'redoingquitewell.

Butagainthey'regoingtofluctuatefromaquarter-by-quarterbasis.Becauseagain,thebeautyofourmodeliswe'renotjustbeholdentojustthesesix-figuredealsorseven-figuredeals,right?Customerscancontinuetoexpandatapacethatworksforthemtotryanddeployandexpandin,quitefrankly,alow-riskway;theycanproveoutthevalue.

Sothat'swhatweallowpeopletodo.That'swhyit'sanimportantmetric,butit'snotametricthatIwouldoverlyfocuson,becausewehaveplentyofcustomersthathaveaseven-figurespendwithusthathavebasicallytripledaround.Notalot,hundredsandhundredsoftransactions,andnotalotofthoseweresix-figuretransactions.Soit'sagoodmetric,it'sonethatwedisclose,butIwouldn'tholdourhatonjustthatmetric.


Okay,andjustonefinalone,howwouldyoucharacterizethepricinganddiscountingtrends,inparticularforthedesktopproductwhenyoulookatthe$1,000en-oplicenseprices?Hastherebeenanychangeonewayortheotherintermsofyourabilitytosticktothosepricesandtosticktothemechanismforhowthevolumediscountswouldworkaswell?

T omWalker (CFO):

Yes,overallIthinkasweexpandlargerandlargerintoenterprises,weleveragediscounting.Aspeoplewanttoinvestmorewithus,weactuallyabsolutelywanttoworkwiththem.Soyou'llseethatmoreprevalentinthelargerenterpriseaccountsthatwedealwith.

Aspeopleareestablishingandgrowingtheirfootprint,onthelowerend,Iwouldn'tcallthatanytrendordifferenceinthat.Becauseagainfrompeoplegettingstarted,youcangetstartedverycost-effectivelywithTableau,whetherit'sdesktopserverorTableauOnline.Notseeingdiscountingtrendstheresomuch,asmuchasintheenterpriseside.


Thankyou.


Thanks,Mark.Operator,couldwehaveournextquestionplease?




Operator :

YournextquestioncomesfromTomRoderickwithStifel.Yourlineisopen.

T omRoderick(Analyst-StifelNicolaus):

Hey,guys,goodmorning,thanksforthequestion.SoIwanttotouchbackonthetrendlinehereinthebigdeals,particularlythoseover$100,000.Iknowtheydon'tjustfalloutofthesky.Iknowthere'saprocesswithcustomersasyoulandandexpandandmovethemfromtrialtodepartmentaltoenterprise.

Isupposeit'sprobablyimperativetoscalebothyourservicesteamsandyourpartnercommunitytoenablecustomerstounlocktheirdata.Canyoutalkaboutanychallengesortrendsorthingsthatyou'redoingtoenableyourcustomerstomakesenseoftheirdatafaster?Toloaddatafaster?Andultimatelyenablethemtoexpandonthoseinitialpurchasessothatyoucan,infact,upsizethedeals?

T omWalker (CFO):

Sure,hi,Tom,thisisTom.SooverallIthinkyouhititonthehead.Wedohaveasmallservicesteamthathelpsourcustomersdothat.Butwealsohavealotofpartners,bothpartnersthatgoengageandhelppeoplewiththeirdata,andwealsohavesometechnologypartnersthathelpintheETLefforts,whenpeoplearetryingtocombineandmashupdatainalargefashion.

Sooverall,weengagewithcustomersandusuallyproveoutwhat'sgoingonwiththeirdata,andthenitgrowsintobiggeropportunitiesovertime.ButwhetherweleverageitourselveswithourTableauserver,orourembeddedTableaudataengine,orwe'remashingitupwiththelikesofInformaticaorULTRIX,orsomethingalongthoselines,there'snotoneortheother.

Again,we'reusingthesameapplication.It'sjustawaythatpartnersandcustomersareabletogettheirdataorganizedinafashionandthengetitanalyzedbymorepeoplethroughouttheirorganization.Butit'sagrowingpartofitbecausealotofpeoplehavedirtydata.You'renotgoingtofindonecustomerthatcan'tsaythatthedata'sperfect,right?SoIthinkit'sanimportantpartoftheoverallmission.


Withrespect--

T omWalker (CFO):

IwasjustgoingtoaddwithTableau9.0,alotofwhatwedidwas,there'salotofdataparsingandcleaningthatyoucandotokeepintheflowofanalytics.Sothat'sreally,reallyimportantforendusersasthey'reabouttodosomething,tobeabletotweakthedatawithouthavingtogoallthewaybacktothewellandchangethings.Butwe'llcontinuetomakeprogressonthat.


Great,andaquickfollow-uponthat.Doyoufeelasthoughyourimplementationandservicesteamsareappropriately-sizedrightnow?Doyoufeellikeyoumaybeneedtomakesomemoresizeableandmoreaggressiveinvestmentsinthoseteamstohandletheroadhere?

T omWalker (CFO):

Yes,IthinkjustlikeallthedepartmentsinTableau,we'rehiring.Sowecontinuetoexpandandgrowitasourgrowingglobalcustomerbasegrows.Becausethere'sopportunitiesinEMEAandAPACandLatinAmericaandtheUSandCanada.Sowehaveopenrecs.Wewanttoexpanditbutwealsowanttobuildthathealthypartnerecosystemthatcanhelpuswithhandlingourcustomers.





Great,thankyou.That'sveryhelpful,appreciateit.


ThanksTom.Operatorcouldwehaveournextquestionplease?

Operator :

OurnextquestioncomesfromJohnRizzutowithSunTrust.Yourlineisopen.

JohnRizzuto (Analyst-SunTrustRobinsonHumphrey):

Thankyou,goodafternoonwhereyouare,anyway.Oneofthethings,soChristian,fromyourroots,andIthinkoneofthethingsthatyousetouttodoverydifferentlywithTableau,andobviouslyhadtheimpactIbelieveyouintended,wastothinkaboutvisualizationfromamuchdifferentperspectivethanjusttrivializingitasprettypictures.Thatwentallthewaydowntotheresearchyoudidabouthowpeopleunderstanddata,howtheyinteractwithdata,howthebrainworks.You'vepublished--yourgroup,you'vegotsomeofthegreatscientistswhothinkthiswayinyourresearchdepartment.Andithasbuiltaveryeclecticresearchgroup,andit'sbeenakeyadvantageforyouforalongtime.

Nowwe'reseeing,weallknowit'soutthere,weseemicro-strategies,newMicroStrategy10,weseeQlikSensecomingoutthere,weseealotofcompanieswhoseeminglyareclosingthefunctionalgapalongthoselines.I'mnotsayingthey'recatchingup,butthey'retryingtoclosethatgapanditseemstobegettingnarrower.

Sotocuttothechase,doyouthinkthisstrategyisaroadthatyoucontinuetogodown?There'salotofroomtomakehere.OrdoyoustartfocusingonsomeofthethingsthatreconfigureclassicenterpriseBI,ifyouwill?Thingsmore,agreaterfocusongovernance,onthecontrols,ondataquality?

Allthebackendstuffthatare--Idon'twanttosayTableauisworse--certainlydon't,butreallythatthey'reusing,orisbeingusedasadifferentiator.Andoftenwhatweseeoutinthemarketasbeingcalledoutasadifferentiator.


That'sagreatquestion.It'salittlebitofboth.WhenwefoundedTableau,thetraditioninenterprisesoftwareisthatsystemswerebuiltfromthebackendforward.Okay,productdevteam,let'sarchitectourschema,thenlet'sthinkaboutourappfunctions,nowlet'sbreakthatintolayers.Oh,bytheway,someoneputaUIonattheend.

AndtheUIandtheuserexperiencewaslefttoday270inyourprojectmanagementschedule,andusuallyshortenedandcutattheveryend.Whichiswhyweareinanagestillwhereyouraverageenterpriseapplicationinvirtuallyeveryfieldiscumbersome,complex,andlargelydislikedbyitsusers.AndIwishIcouldsaytheworldhasalreadyturnedfromthatage,butithasn't,we'restillinit.

Andafewofus,Tableauisn'taloneinthismessage,areflippingthewholeequationinreverse.We'reactuallybuildingapplicationsandexperiencesbasedontheuserofthesystem,basedontheirflowsandtacksandperceptions.Andit'sawayofengineering,it'sastyleofthinkingthatgoesdeepintothecultureofyourdevelopmentandengineeringanddesigndepartments,bytheway.AndTableauisashowcaseexampleofit.

Sonowletmegetintoansweringthequestion.Webelieveyoucanbuildamassivelysuccessfulglobalcompetitivetechnologycompanybasedonbrilliantlycrafted-enduserexperiences.Furthermore,we




believesayingknowhowtodothatandbeingabletodoitaretwoverydifferentthings.

Soasyouflashforwardtotoday,2015,justabouteveryoneisnowsayingtheydoit.Butveryfewpeople,veryfewcompaniesareabletodoit,inpartbecauseofthelevelofengineeringtalentyouneed.Inpartbecausemakingabrilliantlycraftedeasy-to-usesystemgoesstraighttothearchitectureofthesystemitself.Itoftenrequirespage1rewritesoftheseoldarchitecturalphilosophies.Andfurthermore,it'samatterofculture,asImentioned.

SoI'llsubmitthatTableauremainstheshiningexampleinenterprisesoftware,inbusinesssoftware,ofhigh-performance,brilliantlycrafted,easyfastvisualsystemsforeveryone.Andwhileeveryoneelseissayingthey'rekindoffiguringitoutanddoingit,Tableauremainsthegoldstandard,andthatwillremainourmainsourceofcompetitiveadvantage.

NowbeforeIend,Iwillsayofcoursewe'reextendingintothoseotherareas.Sowe'rebuildingmoreandmorecompetitiveadvantage,andimportantaspectsofoursystemintheseareasthatyoumightconsiderthemorecommoditizedareasoftheapplication,itsadministrationfunctionsandtheplatformsitrunsonandthingslikethat.

Sothoseareimportanttohardeningourstory.ButinnowaywouldIsaysomehowthelocusofcompetitiveadvantagehaschangedtothosethings.That'sjustnotwhat'sgoingon,inourview.


Great,andaquickfollow-uponthat--that'sveryhelpful,thankyou,Christian.Aquickfollow-uponthat.Docustomersreactandhavethisperceptionorhowdotheyfeelaboutdoingtheseotherthings,asatthisstagearetheyreadytogoforwardwithyou?Inotherwords,reallysaythisisgoingtobetheenterprisestandardandTableaucanbeandwillbeourenterprisestandardforlargeenterprises?


Yes,IthinkIunderstandthequestion.BasicallyTableautakesgreatcomfortinourstrategy,inpartbecauseIwouldsubmitthatsomewherearound100%oftherevenuethatflowsthroughourcategoryofspend,flowsthroughafull-functionfreetrialNPOC.It'ssomewherearound--Imeannooneintheirrightmindbuysasoftwaresystemwhosemainclaimiseasy-for-everyoneanalyticswithouttryingit.Okay?

Again,it'sadeparturefromtheolddayswhereyouhadtobuyonPowerPointdecksandpromisesandconsultingprojects.Socompetingonbeingthefastestandeasiesttouseandmostvisuallyintuneandmostdelightfulproduct,thewayAppledoesinotherindustries,isacorepartofourstrategy.Andwetakecomfortinthefactthatmostbuyers,evenastheystarttogobigandthinkaboutenterprisestandardsanduseitinverystrategicprojects,comparetheproductsonthemarketandpicktheonethattheyviewasthebest.


Okay,great,thankyou.


Thankssomuch,John.Operator,canwehaveournextquestionplease?

Operator :

YournextquestioncomesfromBradSillswithBankofAmericaMerrillLynch.Yourlineisopen.

BradSills (Analyst-BofAMerrillLynch):




Hey,guys,thanksfortakingmyquestion.JustaquestionIhadoninternational,canyoucommentalittlebit,Christian,please,onwhichcountriesthatyoumightbeseeingsometransaction,ormoreso?Orevencountrieswhereyouseepotentialformorenear-termupside,givensomeoftheinitiativesandtheeffortthatyou'vehavebeendoing,targetingtheregioninEurope?


Yes,absolutely,greatquestion.TransformingTableaufromaUS-focusedtechCompanyintowhatwillbeamajorglobalconcern,hasstartedtobecomeoneofthefunandenergizingpartsoftheTableaujourneyforpeopleattheCompany.Ourinternationalrevenuehasnowgrownto25%ofthetotal.Thatseemedlikeanimpossiblethingtodojustfourorfiveyearsago.

Ofcourseweremainasoptimisticaseverthatitwillgrowto50%or60%oftotalrevenue,becausetheproductswemakeareapplicabletoallindustriesandlanguagesandprofessionsandcontextsandincomelevels,andsoon,intermsoforganizations.Sothere'sbeenreallyjustgoodnewsaftergoodnews.

Intermsofspecificcountries,I'mpleasedtoreportit'severythingyouwouldexpect.InternallywebasicallybelieveourprioritizationsintermsofglobalexpansionareroughlythesameastherelativeGDPsoftheglobaleconomies.

Sowe'reseeingalotoftractionandalotofopportunityinGermany,inFrance,inEngland,inCanada,inJapan,inAustralia.WelaunchedourParisofficethisyear.Chinaisunderwayaswespeak.AndIcanevenaddthatearlyresultsinevenournewestregionsareverypromisingwithveryhighyear-over-yeargrowthrates,excitedandenergizedstaffs,employees,andwhatlookslikealotofopportunityinfrontofus.


Great,thanks,Christian.AndthenmaybejustoneonTableauserver.Inthelargerdealactivityyousawthisquarter,didyounoticeanychangeinthemixbetweenserverattachversusmoredesktopsbeingaddedintosomeoftheselargeraccounts?FrameittermsofTableauserver,Ithinkthatwouldbehelpful,please.Thanks.

T omWalker (CFO):

Yes,hi,Brad,thisisTom.Wedon'tbreakouttheoverallmetricsbetweenaserveranddesktop.Butoverall,whenacompanyexpandsthey'reexpandingboth,especiallylargecompanies.They'reexpandingboththeirserverusageandtheirdesktopusage.Weseebothtrendsaredoingquitewell,soIwouldn'tcalloneoutversustheother.


Okay,thanks,guys.


Thanks,Brad.Operator,canwehaveournextquestion,please?

Operator :

YournextquestioncomesfromKeithWeisswithMorganStanley.Yourlineisopen.

KeithWeiss (Analyst-MorganStanley):

Excellent,thankyou,guys,andverynicequarter.Iwantedtodrillintowhathasbeenyour--thecore--




oroneofthecorestotheTableaucorestoryovertime,isyouhavetheabilitytoupsellintoexistingcustomers.Andtakeitintwodirections.One,intermsofthatcorelandandexpand.HowdoyouthinkTableau9impactsthat?

Thequestionis,whenyou'rehavingyourinitialconversationswithcustomers,giventheincreasedfunctionalityinTableau9,wherearetheyabletotakeitthattheyhaven'tinthepast?Togiveusasenseoftheexpansioncapabilities,furtherexpansioncapabilities,thatyou'reunlockhere.

Andthentheotherdirectionisheldasdoesmarktomarket.Whenwe'retalkingaboutthedealsover$100,000,Tom,canyoureminduswhatpercentageofoverallrevenuesisbeingrepresentedbythesedealsover$100,000?Andwhatpresentedyouthatcorelandandexpand-typebusiness?


Hi,Keith,thisisChristian,I'llstartonthefirstone.It'saverypointedquestion.Ithinktheansweris,withregardtoTableau9'sabilitytohelpcustomersgetstartedfasterandtotakeittomoreplaces,Ithinkthesalientcapabilitiesthereareimprovementsinautomaticdatapreparation.Okay?

Customersareableto,withnoassistance,nowconnecttomessierdataandtobeabletoperformclick,click,clicktheoperationstheyneedtogetdataintoaformthatisusefulforgatheringinsight.Sothere'snodoubtthatisaffectingeverysingletrialofTableauaswespeak,andit'sbeengoingverywell.

Secondoneisjustconnectingtomoreandmorethings.Infact,we'llbringthatstorytoaconsummation,sotospeak,withtheadditionofourwebdataconnectorinTableau9.1.We'vebeenaggressivelyaddingmoreandmoresystems.

Thisweek'snewswithAmazonAurora,bytheway,Amazonisbecomingaforceindatabases.Iassumeyou'venoticedthat.AndifyougotoAmazonAurora'slaunchmaterial,you'llseeTableauisoneoftheirfirst-namedpartnersinharnessingthepowerofit.Soagain,it'sawaytohelpcustomersgettomoreplacesthantheyhavebeenabletobefore.

Ithinkthoseareprobablythemost--oh,actuallynoonemoreIwouldadd,weaddedthisreallyimportantfeaturecalledlevelofdetailexpressions.Andwerefertoitasanimprovementinour,basically,formulabuilder,ourlittlecalcwriterinourproducts,thathelpspeopleexpressextremelysophisticatedquestionswithjustshortlittleexcel-likeformulas.Andit'sunlikeanythingthat'sbeenonthemarketbefore.

Again,it'shelpingthoseearlytrialersandusersoftheproductstarttoapplyTableau,thisthingtheybroughtinthedoortocompletesomelittleproject,it'shelpingthemtakeit,toansweringsomeofthemostsophisticatedquestionsthattheiranalyticsandBIteamshavebeenstrugglingwithforyears.Andthey'redoingitinamatterofhoursandself-trainingwithaYouTubevideo.

It'sactuallyeven--youcanprobablyheartheexcitement--it'soneofmyfavoritefeatureswe'veputonthemarketlastyear.It'scalledlevelofdetailexpressions,andagain,it'shavingareallybigimpactonthatarea.

T omWalker (CFO):

AndKeith,thisisTom.Thenumberofdealswedon'tbringoutwhatpercentofrevenuethoseareonaquarter-by-quarterbasis.Ithinkthesecondpartofitwastheexpansionpart.Thelion'sshare,thesupermajorityofthoselargetransactionsarewithinsidetheexistingbase.Sotheyareexpansionorders.Ithinkthat'swhatyourquestionwas?





Yes.ThenifIcouldfollowupwithTomontheexpensesideoftheequation,itsoundslikeyouhadareallygoodquarterinhiringandbringingnewpeopleonboard.Hasthefull-yearhiringtargetschangedsignificantly?OrwasitjustalittlebitmoresuccessinQ2orjustmoreofit'scominginQ2?

T omWalker (CFO):

Yes,actuallywehadaverysuccessfulQ2onthehiringfront.Andoverall,wedoarollingforecast.Sowelookattheopportunity.Ifyoulookattheoriginalhiringgoalsatthebeginningoftheyear,wechangethoseonaquarterlybasisasweputinresults.Soitcontinuestomove.

Asyoucantell,we'reinexpansionmode.We'regoingtocontinuetoinvestaroundtheglobeandpeople.Soifwe'refortunateenoughtofindmoretoptalent,we'regoingtocontinuetohireit.


Excellent,thankyou,guys.


ThanksKeith.Operator,canwehaveournextquestionplease?

Operator :

YournextquestioncomesfromPhilipWinslowwithCreditSuisse.Yourlineisopen.

PhilipWinslow(Analyst-CreditSuisse):

Hi,guys,thankyoufortakingmyquestion.Backonthehiringside,wonderifyou'dgiveussomecoloronwhatyou'reseeingintermsoftheramptimeofsomeofthenewhires,particularlyonthego-to-marketside.Iknowyou'vebeenfocusingontheenterpriseinparticularandhiring.Butanytrendsyou'reseeingintimetoramp,timetoproductivityandhowyou'reimplyingthatinguidancegoingforward,thatwouldbegreat.

T omWalker (CFO):

Hi,Phil,thisisTom.Overall,Iwouldn'tsaytheramptime,wehaven'tfiguredoutawaytohavesomebodyrampinoneday.Ithinkthetrendsarejustasconsistentastheyhavebeeninthepast.

IthinkKellyWrightandtheentiresalesorganization,marketingorganization,Elissa'steam,worktogethertocomeupwithonboardingandbootcampstogeteverybodyramped,anditjustvaries.We'vementionedbeforetherearefourdifferentkindofsalespeople,togeneralize.We'vegotacquisitionsalesmanagers,we'vegotexistingbusinesssalesmanagers,accountmanagers,andstrategicmanagers.

Andthatramptimecanvaryfromthesix-monthrangeontheoneendofthespectrumto9to12months-plustogettofullrampontheotherendofthespectrum.Thatdoesn'tmeanthatpeoplearen'tengagedinsellingrightoutofthegate,andthey'reactuallycontributing,it'sjustamatterofgettingtothatfullramp.

Buttheoveralltrendshavenotchanged.Wedospendalotoftimeandfocusontrainingandmentoringtomakesurethattheteamsrampeffectivelytoserviceourcustomers.

PhilipWinslow(Analyst-CreditSuisse):

Great,guys,I'mlookingforwardto9.1.





Thanks,Phil.Operator,canwehaveournextquestion,please?

Operator :

YournextquestioncomesfromSteveKoenigwithWedbushSecurities.Yourlineisopen.

SteveKoenig (Analyst-WedbushSecurities):

Hi,thanksfortakingmyquestion.Iwouldwonderifyouallcangiveanycolorontherelativeperformanceofyourinsideversusyourfieldteamsandmomentumthere.Andrelatedtothat,anycommentsonhowyou're--we'vebeenhearingaboutmoretractioninsellingintomajoraccountsonamorecoordinatedbasis.Howisthatgoing?Howwillyouexecuteinthatfashionwithoutcausingdisruptiontoyourlandandexpand?

T omWalker (CFO):

Hey,Steve,thisisTom,andChristiancanjumpinbehindme.I'lltakeafirstcrackatit.Betweenthetwo,insideversusthefieldteams,bothareperformingwell.We'reinvestinginboth.Theycontinuetogettraction.

Thesecondpartofwhatyou'reaskingactuallyisthemoreinterestingone.Regardlessofthesizeoftheaccount,andeventheenterpriseaccountsthatwedon'thaveascurrentcustomers,theyallgetstartedwiththatinitiallandorder.Thatdoesn'tchangeifyou'reaglobal10o0orifyou'reoneoftheother55millioncompaniesintheworld.

Thatexpansionisprovingthatourtechnologycanhelppeopleseeandunderstandtheirdata.That'swhatoursalesteam,boththeinsideandthefieldteams,aredoingeveryday.Soitdoesn'ttakealotoftimeandefforttograbasampledatafromthecustomerorprospect,andmuchitupanalyzeitandpresentsomeinsights.SoIdon'tthinkthatchangesverymuchthedynamic.

Butastheteamscontinuetogrowandmature,theyareabsolutelygoingafterlargerexpansionopportunities.Sotheenterpriseteamisabsolutelydoingthat,andusingsuccessinonefunctionalareaofalargecompanytogofindsuccessinotherfunctionalareas.SomaybestartingoverinsalesandmarketingandnowgoingovertofinanceandHRorlogistics.There'sopportunitiesinsidethelargecompaniesthathavetonsofdataanddon'thavealotofeasy-to-usetoolstoanalyzeit.

SteveKoenig (Analyst-WedbushSecurities):

Great,thanksalot,guys.


Thanks,Steve.Operatorcanwehaveournextquestion,please?

Operator :

YournextquestioncomesfromWalterPritchardwithCitigroup.Yourlineisopen.

WalterPritchard (Analyst-Citigroup):

Hi,thanks.Mostofthequestionsherehavebeenasked.ButTom,onthe60%growthinsales,thatwastotalsalesandmarketingheadcount,asyoutalkaboutthatpaceandisthatapacethatrepresentsfullborehiring?Isthatapaceyoucouldaccelerate?Anycolorthereonhowweshouldthinkaboutthatandhowthatportendstoyoursalescapacityyou'rebuilding12monthsout?

T omWalker (CFO):




Yes,hi,Walter,that'sagreatquestion.Sooverall,itisthesamecommentImadebeforeaboutourhiring.Soifwe'refortunateenoughtofindreallygoodtalent,we'regoingtohirethattalent.

Wefeelthattheopportunityisbigenough,notonlyintheUSandCanada,butalsointernationally.Sowewillcontinuetohireandonboardpeoplethatwecanfind.Thehiringtrendcouldebbandflowinanygivenquarterbutwe'reexpanding.

WethinkthemarketopportunityismuchmorevastthanjustthetraditionalBI.Sowewanttocontinuetogrowoursalesandmarketingfunctions.


Andthere'sbeenafewquestionsaskedaboutthelargedeals.Anywaycanyougiveusthe$1milliondealcount?Ithinksomepeoplearetryingtofigureoutiftheexceptionallylargedealshadanimpactonyourrelativeperformanceoverthelastcouplequarters?I'mtryingtogetasenseastowhetherthatmaybethecase.

T omWalker (CFO):

Wedon'tbreakthegreaterthan--six-figuredealsisthemetricthatwefocuson.Butwedodoseven-figuredeals,andfromtimetotimewe'llcallthoseout.They'retobeexpectedasourcustomersareexpanding,sotheybecomemorethenorm.

Butagainthey'renotnecessarilytheonlyfocusofwhatwe'retryingtodobecausewedon'thavetojustgoafterthatbigordertobesuccessful.We'retryingtogetsuccessthroughoutanorganization.Overall,wedon'tbreakoutthe$1milliononesbecausepeoplecanhavesevenfiguresworthofspendbydoingmultiple,hundredsandhundredsofpurchaseswithus.


Okay,great,thanksfortakingthequestions.


ThanksWalter.Weonlyhavetimeforacouplemorequestions,soifwedon'tgettoyoutoday,we'lldefinitelyfollowupwithyouafterthecall.Canwehaveournextquestionplease?

Operator :

YournextquestioncomesfromKarlKeirsteadwithDeutscheBank.

KarlKeirstead (Analyst-DeutscheBank):

Thankyou.I'vegotaquestionaboutversion9contribution,maybeforTom.Tom,rightorwrong,Ithinkoneofthecontributorstotherelativelyhighinvestorexpectationsintothisprintwasoptimismaroundtheversion9lifttothe2Qresults.

I'mwondering,Iknowcustomerinterestwashigh,butI'mwonderingifyoucoulddescribetheactualrevenueliftyousawin2Qfromversion9,relativetoafewyearsbackagotowhatyousawinversion8.AndI'mwonderingif,asdealsgetlarger,ascustomershaveanopportunitytoevaluateotheralternatives,whethernewversionliftsmaynothappenquiteasquicklyastheyhaveinthepast.Thankyou.

T omWalker (CFO):




Hi,Karl.SooverallIthinkwe'vesaidthisbefore,insidetheexistingbase,there'snotastepfunctionwhenwegouptonewversions.Becauseourcustomersareusedtousinnovatinganddevelopingandhandingoutgoodness,ifyouwill,inupgradesthroughoutdifferentperiods.Sothere'snotlikeapentupdemandwhereanupgradecycleislikethat.Sofromtheoverallthat'snotwhatweexpectedinQ2atall.

Thethingthat'sinterestingtopointout,though,ishowimportant--wetalkedaboutcohortsinthepast.Solanding3,000newcustomeraccounts,that'sgoingtohelptheclassof2015,ifyouwill,andexpandingthatbase.Sothat'sactuallyshowinggood,positivetractionofreachingnewcustomersinorganizations.Sowe'revery,veryhappywithactuallythatmetricoverall.

Butagain,Idon'tthinkpeopleshouldeverthinkofusashavingastepfunctionaroundtheleasesinsidetheexistingbase.,Becauseifyou'reoncurrentmaintenanceandsupport,you'regettingthoseupgradesandupdateswithouthavingtopayanythingelsetous.

KarlKeirstead (Analyst-DeutscheBank):

Okay,thanksforthatperspective,Tom.


ThanksKarl.Operator,canwehaveournextquestion,please?

Operator :

YournextquestioncomesfromSteveAshleywithRobertW.Baird.Yourlineisopen.

SteveAshley(Analyst-RobertW.Baird):

Gettinginunderthewire.IwouldliketoaskaboutFX.With25%ofyourbusinessoverseas,doyouhaveanysenseofhowFXmaybeimpactingreportedrevenueorlicense?

T omWalker (CFO):

Notoverall.Mostofourrevenuesaredollar-denominated,withtheexceptionofJapan.Ithinkyouknowthat,Steve,sothat'swherewechargeintheyen.Butno,theonlyimpactitwouldhavewasmoreontheoperatingside,becausewedo--obviouslywehaveoperationsinEMEAandAPAC,sothoseexpensesoverthere.Butoverallhaven'tseenanimpactfromFXonthetopline.


Terrific.Andthenintermsof--youcalledoutaconsumerproductcompanythathaddonealargerdeployment.Doyouhaveanysenseastothenumberofdesktopsthatkindofcustomermaybeconsumingwiththatkindofdeployment?

T omWalker (CFO):

Yes,overall,thousandsandthousandsandcontinuingtogrow.Thattypeofthing.SoSteve,usuallyitgetsstartedinanarea,anditjustcontinuestogrowovertime.Thatwouldberepresentativeoflargedesktopdeployments.


Perfect,thanks.





Thanks,Steve.Operator,wehavetimeforonemorequestiontoday.

Operator :

YournextquestioncomesfromJohnDiFucciwithJefferies.Yourlineisopen.

JohnDiFucci(Analyst-Jefferies):

Thankyouverymuchfortakingthequestion.Christian,youweretalking,itwasinthepressrelease,youtalkedalittlebitduringQ&AandeveninyourpresentationabouttheadvanceswithTableau9.Ibelieveinananswertoonequestion,youtalkedaboutTableau9beingyourmostscalableserverever.Whatchangesweremadetoittomakeitmorescalable?Becausethat'soneofthethings,ifweeverhearanything,thatisa,Idon'twanttosayacriticism,butsomethingthatwesometimeshearfromenterprisesthatyouhavetoworkon.


Yes,quiteafewthings.Oneofthecoreinternalcomponentsresponsibleforstoringallthevisualizationsanddataofacustomer,andkeepingtrackofit,andtakingitandservingitupandrespondingtorequests,oneofthecoresystemswasvirtuallycompletelyrewrittentohavemuchhigherperformance.That'soneaspectofit.

Secondisthatwedidalotofgoodoldfashionedqueryperformancetuning.Weaddedparallel,supportforparallelqueries,whereapplicableasanexample.Andallsortsofreallyintense,someofitevenPhD-levelqueryissuanceandperformancetuninginthesuite,tomakerespondingtoquestionsfaster.Sothatwasawholeothereffort.

Third,wemademiscellaneousimprovementstocaching,ourcachingisnowsmarter.Someoneisloggingintothesysteminthatexactsameviewofthatexactsameaspectofthebusinesshadalreadygeneratedveryrecently,wewillnowreuseitwithabetterhitratethanwedidbefore.

Andfinallyanotheraspectofscalabilitytopeoplewhoarelookingatlargepurchasesisadministration.PartofscalabilitytoanITbuyerishoweasyisthisgoingtobetomaintainandadduserstothesystem.AndwithourAPIsintheproduct,aswellastheadministrationscreensintheproduct,wemadealotofupgradestheresothatpeoplefeelcomfortablethinkingofTableauasaplatformfortensandhundredsofthousandsofusersintheircompanies.

We'reverypleasedwiththedevelopmentresultsinthatregard.Ofcoursethat'sanongoingeffortforus,butTableau9todateisourstrongestexpressionofourperformanceandscalabilityonthemarket,andwe'reverypleasedwithit.


Great,thanks,John.AndfromLondon,Iwanttothankeveryoneforjoiningustoday.IknowitwasearlyforalotofyouWestCoasters.Butweappreciateyoujoiningus,andhaveagreatday.

Operator :

Thisconcludestoday'sconferencecall.

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Tableau Software (DATA) Earnings Report: Q2 2015...

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Transcript of Tableau Software (DATA) Earnings Report: Q2 2015...