Tableau Software (DATA) Earnings Report: Q3 2015 ...Ms. Joni Davis, Director of Investor Relations...

EventDescription:Q32015EarningsCallMarketCapasofEventDate:4.50BPriceasofEventDate:102.44

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

©2014TheStreet,Inc.Al l R ightsReserved Page1of21

TableauSoftware(DATA)EarningsReport:Q32015ConferenceCallTranscriptThefollowingTableauSoftwareconferencecalltookplaceonNovember5,2015,04:30PMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

JoniDavis;TableauSoftwareInc.;DirectorofIRChristianChabot;TableauSoftwareInc.;CEOTomWalker;TableauSoftwareInc.;CFO

OtherPart icipants

RaimoLenschow;BarclaysCapital;AnalystMattHedberg;RBC;AnalystPhillipWinslow;CreditSuisse;AnalystBrentThill;UBS;AnalystSteveAshley;RobertW.Baird;AnalystBrentBracelin;PacificCrestSecurities;AnalystJohnDiFucci;Jefferies;AnalystKarlKeirstead;DeutscheBank;AnalystKeithWeiss;MorganStanley;AnalystBradSills;BofAMerrillLynch;AnalystWalterPritchard;Citigroup;AnalystBhavinSuri;WilliamBlair;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator :

AtthistimeIwouldliketowelcomeeveryonetotheTableauthird-quarterearningsconferencecall.

(OperatorInstructions)

Ms.JoniDavis,DirectorofInvestorRelationsatTableau,youmaybeginyourconference.

JoniDavis (DirectorofIR):

Thankyou.Goodafternoon.Thankyouforjoiningustoday.

WithmeonthecallareTableau'sChiefExecutiveOfficer,ChristianChabot,andChiefFinancialOfficer,TomWalker.

Ourpressreleasewasissuedearliertodayandispostedonourwebsite.Thiscallisbeingbroadcastliveviawebcast.FollowingthecallanaudioreplaywillbeavailableintheInvestorRelationssectionofthewebsite.ChristianandTomwillbeginwithpreparedremarks,andthenwewillopenthecallforquestions.

Beforewebegin,Iwouldliketoremindyouthatduringtoday'scallwewillbemakingforlookingstatementsregardingfutureeventsandfinancialperformance,includingourguidanceforthefourthquarterandfull-year,aswellasaglimpseintofullyear.Wecautionyouthatsuchstatementsreflectour




bestjudgmentbasedonfactorscurrentlyknowntous,andthatactualeventsorresultscoulddiffermaterially.PleaserefertothedocumentswefilefromtimetotimewiththeSEC.Inparticular,ourmostrecentlyfiledquarterlyreportonForm-QandourannualreportonForm-K.

Thesedocumentcontainandidentifyimportantriskfactorsandotherinformationthatmaycauseouractualresultstodifferfromthosecontainedinourforward-lookingstatements.Anyforward-lookingstatementsmadeduringthiscallarebeingmadeasoftoday.Ifthiscallisreplayedorreviewedaftertoday,theinformationpresentedduringthecallmaynotcontaincurrentoraccurateinformation.

Exceptasrequiredbylaw,weassumenoobligationtoupdatetheseforward-lookingstatementspubliclyortoupdatethereasonsactualresultscoulddiffermateriallyfromthoseanticipatedintheforward-lookingstatements,evenifnewinformationbecomesavailableinthefuture.

Duringthecallwewillalsodiscussnon-GAAPfinancialmeasures.Thesenon-GAAPfinancialmeasuresarenotpreparedinaccordancewithgenerallyacceptedaccountingprinciples.AreconciliationoftheGAAPandnon-GAAPresultsisprovidedintoday'spressrelease.

Theprojectionsthatweprovidetodayincludestock-basedcompensationexpensewhichcannotbedeterminedatthistime;andtherefore,arenotreconciledontoday'spressrelease.Withthat,it'smypleasuretoturnthecallovertoChristian.

Christ ianChabot (CEO):

Thankyou,Joni.Thankyou,everyone,forjoiningustodaytodiscussTableau'sthird-quarterresults.Tableaudeliveredexcellentfinancialperformanceinthethirdquarter.Wecontinuetodemonstratesolidgrowthandconsistentexecution.

Forthequarter,ourtotalrevenuegrewto$.million,up%year-over-year,drivenbystrongproductadoptionbybothnewandexistingcustomers.I'mpleasedwithourperformancesofarin.Themovetoeasy,agile,self-serviceanalyticscontinuestothrive.

Hereareafewstatisticsonourprogressthisyear.Inthefirstninemonthsof,wehavegenerated$millioninrevenue.That's%growthovertheprior-yearperiod.Wecontinuetobuildonourstrongcustomerbase.Sofarthisyearwehaveaddedmorethan,newcustomeraccounts.

We'vealsocontinuedourrapidproductreleasecadencethisyear.Tableau.receivedanenthusiasticresponsewhenitwasreleasedApril.Sincethen,we'vereleasedTableau..JustafewweeksagowelaunchedVizable,ournewstandalonemobileapplicationthatprovideseasyaccesstoanalyticsforeveryone,andTableau.wasreleasedinthebetajustafewweeksagoaswell.

Duringthethirdquarterwecontinuedtoinvestingrowthinitiativesthatdrivetheexpansionofourcustomerbase.Ourproductshavebroadappealacrossindustries,departments,andprofessions.Asresult,wehaveanotherrecordquarterofnewcustomerswins.Morethan,newcustomeraccountswereaddedinQ,bringingthetotaltomorethan,worldwide.Inaddition,weclosedsalesordersgreaterthan$,.

We'repleasedtowelcomenewcustomers,suchasAlcatel-LucentShanghaiBell,Inovalon,ChinaEverbrightBank,ProgressiveDigitalMediaGroup,DNA,andKemiraOyj.

Duringthethirdquarter,wealsoexpandedrelationshipswithexistingcustomersincludingNetApp,[Kapata],NewYorkCityTransitAuthority,MutualofOmaha,andtheTrusteesofPrincetonUniversity.

Momentumcontinuestobuildforourproductsinternationallyaswereportanotherquarterofimpressivegrowth.Inthethirdquarter,internationalrevenuegrewto$.million,up%fromthe$.millionwereported




inQ.

I'mpleasedwiththegrowthwe'reseeinginallofourregionsaswecontinuebringingthepowerofTableautomorepeople.JustlastmonthweannounceourexpansionintoChina,withanewofficeinShanghai.

Wenowhaveofficesincitiesacrosscountries.Weremainenthusedbytheresponsewearegettingfromcustomerseverywhereandplantocontinuegrowingourbusinessabroad.

Wecontinuetoseeresultsfromourinvestmentsinproductinnovation.Ourmostrecentrelease,Tableau.,isanothermilestoneinourdevelopmentcycle.Itincludesanewandimprovedmobileexperience,moredataconnectors,newenterprisesecurityandauthenticationoptions,andadditionalanalyticalfunctions.

JustlastmonthweannouncednewdataintegrationswithAmazonWebServices,designedtoexpandchoicesforcustomersasweadoptclouddatabases.ThesenewintegrationsincludeadataconnectorforAmazonAurora,aswellasthelaunchofTableauserverintheAmazonWebServicemarketplace,makingiteasyforuserstodeployTableauserveronEWS.

Wecontinuetoinvestininitiativesthatexpandandengageourvibrantecosystemofdatalovers.JustafewweeksagoweheldourthAnnualCustomerConferenceinLasVegas.Theconferencesold-outagainthisyear,withmorethan,Tableaucustomersandpartnersattending.That'snearlydoublethe,attendinglastyear'sconference.

Inaddition,morethan,peoplefromcountriesregisteredforthevirtualconference.Ialwaysenjoytalkingwithourcustomersandpartners,andfoundthatconferenceattendeesnotonlyrepresentedabroadrangeofindustries,butalsobroadrangeofprofessions.

It'sraretofindaneventwhereITprofessionalssitalongsidetheirbusinesspartnersinfinanceandHR,operations,sales,andmarketing;tonameafew,andcheerforthesameproducts.It'sreallyinspiring.Ourexpohallwasfilledwithpartnersthisyear.IncludingInfoSys,Deloitte,HP,Cloudera,AmazonWebServices,Informatica,Splunk,Alteryx,andAccenture;demonstratingastronggrowingpartnerecosystem.

JustlastmonthweannouncedouralliancewithDeloitteConsulting.DeloittewillcomplementTableau'sDrivemethodologytosupportbroaderadoptionofself-serviceandcollaborativeanalyticsacrossenterprises.

ThisyearwehadmorethanTableaucustomerssharetheirstoriesandanalytical[wings]attheconference.

CompaniesarechoosingTableauDesktop,TableauServer,andTableauOnlinebecausewe'vemadeiteasyforpeopletoquicklyanswertheirownquestionswithdata,butalsopowerfulenoughtomeettheenterpriserequirementsoflarge-scaledeployments,includingthesecurity,governance,mobile,andadministrativecapabilitiestheyneed.

Weheardsuccessstoriesfromworld-classcompanieslikeCisco,Boeing,WaltDisney,CreditSuisse,Comcast,Target,Nextel,Google,PepsiCo,andmore.

I'dliketohighlightafewofthestoriessharedatourconference.EBP'sbusinessintelligenceteamtoldusthatayearand-a-halfago,theyweretaskedwithdemocratizingdataacrosstheorganization.TheychoseTableaubecauseofthespeedtoimplementationandthelowcostproofofconcept.

Whatstartedwithafewdashboardsdevelopedoveraweekendwithoneperson,quicklygrewtoarobust




Tableaudeploymentwithoverdashboardsandusers.

WeheardhowConsolidatedEdison,oneofournation'slargestenergycompaniesprovidingelectricandgasservicestomorethanmillioncustomers,usesTableautomakeimprovementsinperformanceandcustomersatisfaction.Theirtraditionalreportsweretellingthemtheirperformancewaswithintheirtargetrange.

ByusingTableautointerrogatetheirdata,andnotjustreportonit,theydiscoveredthattheirperformancelevelswereactuallywellbelowtheirtargets.Sincethen,theyhaverolledoutTableausothatkeystakeholderscanmoreeffectivelymonitorperformanceonadailybasis.Theresult,ConEdishittingitsgoal%ofthetime.

AnotherstorycomesfromtheITdepartmentatElectronicArts.Theytookonthechallengeofanalyzingvolumesofreal-timeplayerdataatscale.TheytoldusthattheyusedTableautoanalyzebillionsofrowsofplayerbehaviordatageneratedeachdayandstoredinavarietyofdatabases,includingGreenplum,Invertica,andOracle,Hadoop,MySQL,andAmazonRedshift.UsingTableau,theyarenowabletocapturethisrealtimedata,automaticallyanalyzeit,andmakeimmediatechangestogains.

Finally,weheardfromUK-basedairline,easyJet,whichstarteditsbusinessintelligencejourneythreeyearsago.WhatstartedwithacoupleofTableaudesktopsandaserverstoredundertheirdesk,hadgrowntoanenterprisewiderollout.easyJetusesTableautounderstandwherepeoplechoosetositonanaircraft,toanalyzeforbirdstrikedata,andlookatplannedandactualroutes.

AttheTableauconferencewelaidoutourvisiontofurtherdevelopourproducts.Newopportunitiestousedataareexpandingfasterthanever.Weremainfocusedonproductinnovationandadvancingourplatformtobringevenmorevaluetoourgrowingcustomerbase.

Infact,weplanonspendingmoreinresearchanddevelopmentoverthenexttwoyearsthanwe'veinvestedinthelastyearscombined.

Duringthekeynoteattheconference,ourproductdevelopersdemonstratedsomeofournewestinnovations,includingsomeslatedforTableauVersion.Wedemonstratedinnovationsinvisualanalytics,dataintegrations,datapreparation,serveradministration,clouddeployment,andmobileanalytics.

Ialwaysgetaskedhowwecomeupwiththefeaturesthatultimatelygointoourproducts.Well,asignificantnumberofthefeaturesweshowedonstagecamefromfeedbackinouronlineforumsandfromcustomermeetings.

We'refortunatetohaveapassionateandengagedcommunityofusers.AscustomersuseTableauproductsmore,theywantthemtodomore.Andbasedontheresponsewereceivedfromthecrowd,theyareexcitedaboutourlatestinnovations.

AttheconferencewealsolaunchedVizable,anewstandalonemobileproductthatbringsdataanalyticstoevenmorepeople.Mobiledeviceshavechangedthewaypeopleconsumeinformation.

PewResearchCenterfoundthat%ofthepopulationusesmobiledevicestogetinformationrightwhentheyneedit.UsingVizable,userscanreceiveandanalyzeeasilydigestible,personalizedchunksofdatarightontheiriPad,makinganalyticsapplicabletomoresituationsandaccessibletoeveryone.

Finally,attheconferenceweheldourthAnnualIronVizCompetition,inwhichcontestantscompeteforthetitleofthebestVizzerintheworld.OurthreecontestantsfromDeloitte,SlalomConsulting,andAccenturewerechallengedtoanalyzeadatabaseofnewsandeventsfromaroundtheworld.

Injusttwominuteswewitnessedvisualizationscometolifeasourcontestantsaskedquestionsofdata,




testedhypotheses,blendeddatasets,andcreatedbeautifulstorieswiththeirdata,everythingthatembodiesthepowerofvisualanalytics.

Inclosing,Tableauhadanimpressivequarter.Wecontinuetodemonstratesolidbusinessgrowth,weareseeingmorecustomersembracingtheTableauwayofanalyticswithgreatenthusiasmandsuccess,andweunveiledsomeoftheinnovationthatwilldriveTableauevenfurther.

Duringthequarter,TableauwasnamedthegoldmedalistintheWashington'sBestWorkplacesCompetition,inrecognitionofouramazingpeople.That'sanhonorweareveryproudof.Wehaveateamofmorethan,smart,passionate,anddedicatedpeople;andI'dliketothankthemfortheircontributionsthisquarter.

I'llnowtothecallovertoTom.

T omWalker (CFO):

Thankyou,Christian.Goodafternoon,everybody.AsyouheardfromChristian,we'reverypleasedwithTableau'sperformanceinQ.Let'sturntothenumbersandI'llprovideyouwithmoredetails,thenI'llprovideyouwithouroutlookforQandthefull-year.I'llalsoofferaninitialglimpseintothefull-year.

Thethirdquarterexceededourexpectationsastotalrevenuesgrewto$.million,up%year-over-year.AsChristiansaid,wecontinuetodeliversolidresults,solidgrowth,andconsistentexecution.

Inparticular,I'dliketocalloutnewcustomergrowthandagrowingtrendofcustomersdeployingTableaumorewidelyinorganizations.Wehadanotherquarterofrecordcustomeradds.Weaddedmorethan,newcustomeraccounts,bringingourtotaltomorethan,worldwide.

Inaddition,weclosedtransactionsover$,each.Infact,wehadadozencustomersspendmorethan$millionwithusduringthequarter.Anotherinterestingfactisthediversification.Thecustomersactuallyrepresentdifferentindustriesacrosstheglobe.Allofthesearepositiveindicatorsthatourlandandexpandstrategycontinuestogrowandthrive.Asareminder,thenumberoflargetransactionscanfluctuateinanygivenquarter.

Turningtotheincomestatement,inQlicenserevenuegrewto$.million,up%year-over-year.Maintenanceandservicesrevenuegrewto$.million,up%fromtheprioryear.Maintenanceandservicescontinuedtobeanimportantandgrowingrecurringrevenuestream.

GlobalexpansioncontinuestobeoneofourtopprioritiesforTableau.We'repleasedwithourprogress.InQ,internationalrevenuegrewto$.million,up%yearoveryear,representing%ofourtotalrevenues.

TotalrevenuefromtheUnitedStatesandCanadawas$.million,up%yearoveryear.Weintendtocontinuemakingsignificantinvestmentstoexpandourfootprintinallregions.Infact,asChristianmentioned,wemostrecentlyexpandedintoChinawithanofficeinShanghai.We'reveryexcitedaboutourgrowthprospectsthere,asAPACcontinuestocontributenicelytoourgrowth.

NextI'llspendafewminutesdiscussingmarginsandoperatingexpenses.Unlessotherwisenoted,allreferencestofinancialmeasuresareinanon-GAAPbasis,whicharereconciledinthepressreleasetablesandpostedonourInvestorRelationswebsite.

InQ,ourgrossmarginwas%.Aswe'vesaidbefore,weexpectourgrossmargintofluctuateaswecontinuemakinginvestmentstosupportourgrowingglobalcustomerbase.

Forthequarter,totaloperatingexpenseswere$.million,up%fromtheprioryear.Asareminder,themajorityofouroperatingexpensesareemployeerelated.




InQ,weinvested$.millioninproductdevelopment,up%fromtheprioryear.Atourcustomerconferencelastmonth,weshowcasedadvancesininnovationtofurtherempowerourfast-growingbaseofpassionateusers,someofwhichwillbedeliveredinTableaunextyear.

IwanttocalloutthegreatjobourdevelopmentteamandFrancoisdidonstageatourcustomerconference,highlightingourlatestinnovations.Iwasactuallysittingnexttocustomerswhoweregiddyastheteamunveiledwhattheywereworkingon.Justatremendousjobthatthedevelopmentteamisdoing.Greatjob,team.

WeaddedarecordnetnewhiresinR&D,withheadcountup%fromtheprioryear,andinthequarterthetotalR&Dheadcountof.Productinnovationisveryimportanttousandweplantocontinueinvestingandgrowingtheteam.

Salesandmarketingexpensesforthequarterwere$.million,up%fromtheprioryear.Weaddednetnewhiresinsalesandmarketing,withheadcountup%fromtheprior-yearendingQwithtotalsalesandmarketingheadcountof,.

Wecontinuetobuildourtalentpool,andI'dliketocalloutawesomejobouroperationsteamscontinuedtodothisquarter.WeonboardedarecordnetnewhiresinQ,withourheadcountup%fromtheprioryear.BringingareCompanytotalto,employees.Letmeremindyouthattherecouldbefluctuationsinheadcountadditionsonaquarter-by-quarterbasis.

Ourthird-quarteroperatingincomewas$.million,comparedtoanoperatingincomeof$.millionforthethird-quarter.Netincomewas$.millionforthethirdquarter,andnon-GAAPdilutedearningspersharewere$..

Duringthequarter,ourweightedaveragesharecountforGAAPEPSwas.millionshares.Asareminder,periodsinwhichwehaveaGAAPnetloss,butareprofitableonanon-GAAPbasis,ourpresentationofnon-GAAPEPSwillusethedilutedsharecount.Accordingly,ourweightedaveragedilutedsharecountfornon-GAAPEPSwas.millionshares.AdetailedreconciliationisavailableinthepressreleasetablesandpostedonourInvestorRelationswebsite.

Onthebalancesheet,cashandcashequivalentsattheendofQwere$.million,upfromthe$.millioninthepriorquarter.Accountsreceivableswere$.million,andourDSOswerefewerthandays,consistentwithpriorperiods.

NowI'dliketomoveontoourguidanceforthefourthquarter,andprovideyouwithapreliminaryglimpseintothefull-year.Asareminder,allforward-lookingguidancebeingdiscussedisonanon-GAAPbasis.

ForQ,we'reexpectingrevenuestobeintherangeof$millionto$million.Atthehighendofthisrange,thisrepresents%year-over-yearrevenuegrowth.ThiswillbequitetheaccomplishmentgiventhestrongQwehadlastyear.

ForQ,we'reexpectingoperatingincomeof$millionto$million.Asyou'veseeninpriorquarters,ouroperatingexpensescanvarybasedaccruingtrendsandthetimingofnewhiresjoiningthecompany.

Inaddition,ourannualcustomerconferencewasinQthisyear,asopposedtoQin.Forthefourthquarter,weanticipateourbasicsharecounttobebetweenmillionandmillionshares,andourweightedaveragedilutedsharecounttobebetweenmillionandmillionshares.

Forthefullyearof,we'reraisingourpriorguidanceoftotalrevenuefromarangeof$millionto$million,toarangeof$millionto$million,representingannualgrowthapproximately%atthehighendofthisrange.




Forthefull-year,weexpectnon-GAAPoperatingincometobebetween$millionand$million.Wearestillforecastinganon-GAAPtaxrateof%,whichwehavebeenusingforinterimperiodsduring.Thenon-GAAPtaxratedoesnotassumetheR&Dtaxcreditisextended.Wewillprovideupdatestothisrateonanannualbasis,orifmaterialchangesoccur.

Withrespecttocapitalexpenditures,westillexpectthemtobeinarangeof$millionto$millionfortheyear.We'repleasedwithourresultsandmomentumasweheadintotheendoftheyear.

Aswedidlastyearatthistime,wethoughtitwouldbehelpfultogiveyouaearlyglimpseintotheoutlookfor.Pleasenotethatwe'restillinthemiddleofplanningfornextyear,andwillgiveyouspecificguidanceonnextquarter'searningscall.

We'recurrentlyanticipatingrevenuestobeintherangeof$millionto$million.Asyousawin,weexpectseasonality,especiallywithrespecttoQ,whichistypicallydownsequentiallyfromprioryearQ.

Asourrevenuesincrease,weexpectseasonalitytoincrease.Weareintheearlystagesofinvestingandcapitalizingonourlargemarketopportunity.IECforecastedin,themarketforbusinessanalyticsandanalytictoolswillbenearly$billion.Butaswe'vesaidinthepast,webelieveourmarketopportunityismuchlarger.Weplantobuilda$billionbusinessoverthenextfewyears.Weareexpectingtobeanothersignificantinvestmentyearaswepursueourlargemarketopportunity.

Asaresult,we'renotexpectingoperatingmarginimprovementin.Again,wewillgiveyouspecificguidanceonournextcallafterwefinishouttheyear.

Inclosing,weareverypleasedwithourperformanceinQ.We'rehappywithourgrowthopportunityandourleadershippositioninthemarket.Wefeelstronglyaboutourcontinuedinvestmentsthatpositionustotakefulladvantageofthelargemarketopportunityaheadofus.

Thankyouforjoiningustoday.Nowwe'llturnitovertotheoperatorforQ&A.

QUESTIONS&ANSWERS

Operator :

(OperatorInstructions)

RaimoLenschow,Barclays.

RaimoLenschow(Analyst-BarclaysCapital):

Thanksfortakingmyquestion,andcongratulationsonagreatquarter.Itwaswelldone.ThequestionIhadwasarounddatapreparations.Theconferencewasreallyexciting,andIenjoyedit.

Whatwedidnoticetherewasthattherewasquiteafewvendors.Youarethinkingabout[Altarigs]andBurrsandActiviowhoarenotworkingaroundthedatapreparationangle.Canyouthinkabouthowyouwanttoplayinthisfieldlonger-term?Isthatstillamarketwhereyouthinktherewillbeanecosystemaroundyou?Ordoyouthinkthere'ssomestuffthatyouneedtodomoreyourselfgoingforward?Thankyou.


Greatquestion,Raimo.ThisisChristian.Ourstrategythere,similartomanydimensionsofourdevelopmentroadmap,isaboth,notaneitheror.

Thedatapreparationandintegrationanddatapipinganddatamovementanddatasecurityneedsof




theworld'stensofmillionsoforganizationsarebroadanddeepandvaried.We,innoway,anticipatewewillsomehowbeabletoprovidecustomerswitheverythingtheyneed.

Asaresult,we'vebeencultivatingtogreateffectanecosystemofproviders.Someaddressingeachaspectsofthecustomerproblemthere,othersamorecomprehensiveplatformslikeInformatica,ofcourse.

Wecontinuethattobelievethatecosystemwillbeanimportantandthrivingpartofourbusinessplanformanyyearstocome.Now,ofcourse,you'venoticewe'rebuildingmoreandmorethingsintoourcoreproductthatcouldbecalledtheintegrationanddatapreparationsanddataqualityfeatures.That'salsoatrajectorywebelievein,andasyoucanseefromthedemonstrationsonstage,weareinvestinginprettyaggressively.

Toputasummaryonit,whichIthinkistheessenceofyourquestion,wearefocusedonthemainstreamneedsofbusinessusers.So,thetypesofcapabilitiesyouneedinadailyflowofmainstreamanalytics,joiningdatafromdiversedatabases,fixingfieldswiththefunnydateformats,intelligentlysuggestingdatayoumightwanttobringin,doingstatisticaltestsondataquality.

Iwillclosebysaying,itiscurrentlyabothstrategy.AndIbelievethatwillbethecaseforthefutureaswell.

RaimoLenschow(Analyst-BarclaysCapital):

Perfect.Veryclear.Thankyou.Welldone.Thanks,Raimo.


Operator,canwehaveournextquestion,please?

Operator :

MattHedberg,RBCCapitalMarkets.

MattHedberg (Analyst-RBC):

Yes.Thanksfortakingmyquestions,guys.I'lloffermycongratsaswell.Welldone.MaybefollowinguponRaimo'squestionhere.Therewasalotofnoiseinyourquarter,whetheritbePowerBIorWaveorAWS.Christian,inyourpreparedremarksyoutalkedaboutAWSasapartner.

Iwanttogetyoursense,justfromabroadbrush,anychangesthere?Itsoundslike,inthequestionwithyourpreviouscomment,youcan'tdoeverythingonyourown.Justcurious,howyouseesomeoftheselowerendtoolsinthemarketatthispoint?Thanks.


Greatquestion.We'veseentheriseandfallofveryplatformspecificanalytictoolsovertheyears.Recentlythere'sbeenawaveofnewentrants,youmentionedAmazonasaparticularone.

Webelievetheforwardsituationwillbesimilartothehistoricalones,whichismanyofthosetoolswillbeabletocarveoutsomenicheandbeabletoachievesomelevelofsuccesswithcustomers,butwillnotfundamentallychangethedynamicsofcompetitioninbusinessanalyticsplatforms.Andtherearealotofreasonsforthat.Iwon'tgointoallofthem.

Tomentionthetwomostprominentones,mostoftheseplatform-tiedofferingsarereallyfairlylightandshallowandnotparticularlycapableproducts.Mostindustryobserversandoutsiderswillcallthem.




feelingproductthatlackbasiccapabilitiesandlargelyhavealongroadaheadofthem.That'ssomeofthemostimportantthingstosayaboutthoseofferings.

Second,ofcourse,istheytendtobeoptimizedfor,orexclusivelyusedwith,thedatafromthatplatformproviderthemselves.Again,offeringslikethatwillcertainlycarveoutsomelevelofsuccessinthisvastmarket,butgenerallyspeaking,themainstreamcustomerneedsweseeoutthereisthatpeoplearelookingforaSwissArmyknifestyleproduct,likeTableau,thatcantapintotherelationaldataandtheirmultidimensionaldataandtheiron-premdataandtheirclouddata,regardlessofvendor.Regardlessofhistory.Regardlessoflanguage.Regardlessofformat.

Andhavetheabilitytocombineontheflyandexecuteabusinessanalyticstrategyagainstit.Althoughtherehasbeenmorenoise,asyoumentionedwithregardtoofferingsofthatprofile,I'llclosewhereIbegan,whichiswedon'tseeitfundamentallychangingthecompetitivedynamicforTableau.

MattHedberg (Analyst-RBC):

Veryhelpful.Thanks.


Great.Thankyou.Operator

Operator :

PhilipWinslow,CreditSuisse.

PhillipWinslow(Analyst-CreditSuisse):

Christian,toechoyourcommentthere,asa.Betauser,nobodydoesdowhatyoudo,thewayyoudoit.MyquestionisnotonTableauDesktop,whichwe'reobviouslyusersherebutonTableau'sServer.Obviously,there'sbeenabigdriverforyouguys.Iknowyoudon'tdisclosethebreakdownofTableauServerversusTableauDesktop.ButI'mwonderingifyoucangiveussomecolorofwhatyou'reseeingwithTableauServer?Maybetherelativegrowthratesandhowthat'salsoimpactingsomeoftheselargerdealsyouaretalkingabout?

T omWalker (CFO):

Hey,Bill,thisisTom.I'lljumpinandChristiancancomeinbehindme.BothDesktopandServeraredoingquitewell.Infact,Serveralsoonline.Allproductsaregoingataveryhealthyclip,andwe'rehappywiththeexpansionuse.

Asyouknow,usuallypeoplegetstartedwithussub$,averageordersize.It'susuallyanchoredaroundDesktop,andsoServerisabsolutelywhereweareseeingtheexpansionbusinessgrow.Andmoreandmoreofthecasualusageandgettinganalyticsouttomorepeopleinanorganization.

Butthey'rebothgoingverywell.Botharecriticalpartsofouroverallstrategy.TheneatthingwithTableauOnlinenowis,wecantaketheITheadacheoutofTableauServerandhostitforpeople.That'salsoofferingup,tappinganewmarket,whichweweren'treallyofferingbefore.Overall,botharevery,veryimportant.They'rebothverymaterial.They'reimportantpartsofouroverallproductstrategyinhowtheyapproachthecustomers.


Great.Thanks.AlsoonthatpointaboutTableauServerandTableauDesktop,andthesynergybetweenthosetwo.AsyoustarttoseetheadoptionofTableauServer,doyouthinkthatactuallydrives




incrementaladoptionofTableauDesktopinsideoftheseorganizations?Isnotjust,it'sgreat,IcantakeandupselltheTableauServer,whichobviouslyatahighpricepoint.ButhaveyoufounditactuallydrivesextraovertimethanincrementalTableauDesktoplicenses?


Absolutely.Aspeoplegetusedtoconsuminginformation,astheystarttointeractwithitandstarttoparticipateinthedatastrategyasacompany,theirenthusiasmfordata'simpactontheirgrouporteamonlygrows.Andasaresult,weseealotofourTableauDesktopcustomerscomeinasessentiallyleadwhooriginallylearnedaboutTableauthroughtheTableauServerorTableauOnlineproduct.


Great.Thanks,guys.


Operator,canwehaveournextquestion,please?

Operator :

BrentThill,UBS.

BrentT hill(Analyst-UBS):

Christian,anotherimpressivecustomeraddquarter.CanyougiveusasenseofwherethestrengthcamefrombetweentheenterprisebusinessandinS&B?I'massumingyou'regoingtosayalloftheabove,butwasthereanythingnotableyousawineitherofthosesegments?

T omWalker (CFO):

Brent,I'lljumpin.ThisisTom.Howareyoudoing?Overall,itisacrosstheboard,soyou'rerightaboutthat.IfIwasgoingtocallitsomething,itwouldprobablybeinternational.

International,asyousawfromtherevenuetargets,it'sgrowingataveryhealthyclip.We'reseeingsomereallygoodacquisitionoraddstotheTableaufranchisefromtheinternationalmarkets.Butalloftheotheronesaregrowingjustaswellalso.Iwouldn'tcallanythingoutparticularlydifferent,besidesinternational.


Okay.Tom,justafollow-uponsalesandmarketing,ifmynumbersareright,Ithinkyouaregrowingsalesandmarketinginthelow%growth.Inthisquarter,itwentto%.You'reseeinganincreaseinsalesandmarketinghigher.Ithink,perhaps,itjustgoestoyourpointthatyouseethisasabigger[town]thantheindustryanalystshavedefined.

Isthatincreaseinhiringjustasignthatyou'reseeinginyourpipelinearoundavailability?Wastherejustalagearlierintheyearingettingsaleson?You'rejustseeingapickupinthegrowthonthesalesandmarketinglinenowinQ?Canyougiveusalittlemorecolor?Thatwouldbehelpful.

T omWalker (CFO):

Sure.Overall,actuallywehadastellarrecruitingquarterinQ,itwasexceptional.WewereabletoaddoverpeopletotheTableaufamily.Wearevery,veryhappyaboutthat.

Ithinkwhatyou'reseeingadueiswhatwe'vebeendoingforyears.Weareinvestinginthelargemarket




opportunityandwe'retryingtopositionourselvestobeabillion-dollarcompanyoverthenextfewyears.Bydoingthat,you'remakingforwardinvestmentsbybuildingouttheteamandgettingthemtrainedupandgettingthemrampedandgettingthemgoing.

It'snotjustinsalesandmarketing,right?It'sintheproductteam.It'sinoperations.We'recontinuingtoinvestinalargeopportunity,sothat'swhatyou'reseeingthere.Overall,Qwasaspectacularhiringquarterforus.


Great.Thankyou.


Thanks,Brent.Operator,canwehaveournextquestion,please?

Operator :

SteveAshley,RobertW.Baird.

SteveAshley(Analyst-RobertW.Baird):

Perfect.I'mactuallygoingtogobackandtrytodrilldownonaquestionMattaskedearlier.Heaskedyouaboutcompetitiveenvironment,andyousaidreallyalotoftheseproductsareearlyintheirlives.ThequestionthatIamaskedallthetime,istherearepeoplewhohaveabsolutelynodoubtthatpeoplewillcontinuetobuyTableau.Buttheirquestionis,willpeoplegoandlookatthesenewproducts.Tokickthetires.Findoutwhatthey'reallaboutbeforecomingbacktoTableautomakethedecision.And,havethesenewproductschangedforextendedsalescycles?


ThisisChristian.Theshortanswerisno,inthesensethatwhentherearenewproductsavailabletocustomers,generallyspeaking,theydon'tincreasethenumberofthingsthey'relookingat.Theyjustchangethemixoftheonestheyarechoosingtolookat.

Andindeterminingthatmixtheywill,ofcourse,consultfriendsandpeersandlookatinternaldepartmentstheyalreadyhavegoing.TheywillconsultGartnerandotheranalystsandsoon.

Wehaven'tseenasignificantchangethere.Iwouldadd,atthispoint,Idon'tpredictone.Again,forthesamereason,whichisIthinkthosecompetitivechangesarelargelyaboutchangingthemixofwho'sbeingconsideredasopposedtofundamentallychangingthewaycustomersareevaluatingproduct.


Myquickfollow-up.dealsgreaterthan$millioninthethirdquarter.Itmayhavebeenmorethanyoudidalloflastyear.I'mwonderingifthatisreallybeingpartnerinfluenced?Andwonderingwhatisreallycontributingtothesuccessyou'rehavingoutofthoselarge[deals]?

T omWalker (CFO):

Hi,Steve,thisisTom.Yes,itwasactuallycustomersthathadspentmorethan$millionwithusinthequarter.Afewofthosehadmultipletransactionsthataddeduptomorethan$million.

Butoverall,themixandifpartnerinfluences.Absolutely,there'ssomepartnerinfluenceinthere,butthere'salsoobviouslyalargedirectteam.Ithinkthethingthat(inaudible)calledoutwasIcallthediversification,butofthoseyou'rehittingdifferentindustries,right?




You'rehittingthecustomersacrosstheglobe.Itjustshowshowbroadourtechnologyreaches.Isnotjustanicheareaournichefunctionalarea,itactuallyisreachingtheglobe,andwe'reseeingpeopleexpandinasignificantwayandbringingTableauvisitorexpansionorders.Obviouslyifthosearepeoplewhostartedsmallandexpanded.Itreallyisagreatsignofwhatistocome.


Thankyou.


Thanks.Operator,canwehaveournextquestion,please?

Operator :

BrentBracelin,PacificCrestSecurities.

BrentBracelin (Analyst-PacificCrestSecurities):

Thankyou.IhaveaquestionforChristianandTom,ifIcould.Christian,high-levelquestionmoreontheevolutionofthemarket.Earlyonthere'sanoticeableabsenceofthelargesthighpartners.Igetthat.You'repioneeringaself-servicetool.Nowyou'restartingtoseesomeofthoselargepartnerscomein,Deloitte,Tata,othersaswell.Whatdoesthatmeanrelativetotheevolutionofthisself-servicetoolmarketandhowshouldwethinkaboutwhatthatmeansaswelookintoand?


Greatquestion.Moreoftheworld'sbiggestandmosteconomicallyimportantenterprisesarestartingtomarshalawholesalechangeintheirbusinessintelligencestrategy.Youcanprobablynamesomewhoarealreadyfardownthatroad.Others,frankly,haven'tevenstartedyet.Youhaveeverythinginbetween.

AndbythatImean,themoveawayfromtheseverydevelopmentintensive,waterfall-style,changerequirementsdominatedenterpriserollouts,thatbleedcostandexpenseandgenerallyresultinend-userfrustration;towardamorest-centurystrategythatisagileandvisualandself-serviceandforeveryone.

Asyoudouble-clickonthatchange,particularlywithinthelargeenterprisesyouaretalkingabout,you'lloftenfinditisasmuchaboutdatastrategychangeandculturalchange,asaboutbringinginTableaupersay.Okay?

AlthoughTableauisthrivingintheenterprisebothfromagrassrootsandatopdownITevaluationperspective,togetthemostoutofourplatformandhittheboldbracketofenterprisesgoingthroughthistransition,customersoftenneedhelponthemanyaspectsthatorbittheTableauplatform.

Andthatregard,nobetterpartnertogotothenanintegrated,globallypresent,andexperienceSIpartner;includingtheonesyou'vementioned.Togetmorepointedtothequestion,Iwouldpredictatthispointthatourjourney,withregardtoSIpartnerships,willbemuchlikeofSalesforce.com.Meaning,atfirstthenewproductlineisviewedwithskepticismandthere'ssomethingthatmightjustcannibalizetheoldway.Andthentheycometoseethatitmayactuallybeanicefootinthedoortodevelopnewopportunitiesandtheninstagethreetheystarttorealizetheentiremarketisgoingthatway,andthatopensupawholenewkindofconsultingwithstrategicsupportbusinesslinefromthemasthemarketevolves.

Weare,rightnow,instagetwoandthree,aswespeak.Andwedoexpectgreatthingsfromit.Youcan




seeinourinvestmentsinourteamandourinitiativesandourannouncements,howseriouslywe'retakingthat,andIcouldn'tbemoreexcitedaboutthosepartnerships.


Great.Veryhelpfulcolor.Tom,onthelargedeals,youhadanicereboundinthequarter,up%sequentially.Whatdrovetheuptickinlargedeals?Wouldyouattributethattotiming?Areyouseeingahigherwinrate?Helpusdrilldownalittlebitonthelargedealsandwhatchangedthisquarterversuslast.

T omWalker (CFO):

Yes.Overall,itfluctuatesonaquarter-by-quarterbasis.Isaythatallthetime.Ithinkwe'rejustseeinggoodtraction.Iwouldn'tcalloutwinratesbeingbetterorchangingmuchatall.

We'reseeinggoodtraction.We'reseeingourcustomersbeingabletoexpandandgrowandbringmoreandmoreanalyticstomoreoftheirpeople.That,overtime,justtakestime.Thesalesteamexecutesandfocusesonthosedealsespeciallyintheenterprisespace.Iwouldn'tcalloutanytypeofdifferenttrend,ordifferenttypesofwinrates.

It'sjustmoresteady,chippingaway.That'sthelandandexpandmodelthatwe'vebeingdoingformorethanadecade.Itiswhatwe'vebuiltiton.It'sbasicallynotforcingpeopletobuy,butwhentheyarereadytoexpand,whenthey'rereadytobringproductivitygainstotheirorganizations,we'reabsolutelytheretotaketheorder.


Gotit.Veryclear.Thankyou.


Thanks,Brent.Operator,canwehaveournextquestion,please?

Operator :

JohnDiFucci,Jefferies.

JohnDiFucci(Analyst-Jefferies):

Iwanttogobacktoaquestion,Ithinkthat'sbeingaskedandI'mgoingtocomerightout.OntheDesktopstuff,Christian,it'sharderforussee.Weseeitinthefieldallthetime.ButI'mtalkingaboutwhenyou'resellingtosmallerbusinessesandthey'rebuyingthreetofiveDesktopsforTableau.I'mcurious,it'shardforustoseethat.It'shardforustoseethecompetitionthere,butyoucanseethedata.

Areyouseeinganyincreasedcompetitioninthatparticularmarket?Wehearofgoodthingsinthefield.Wealldo.Andobviously,greatproducts.

Buttherearesomenewproductsoutthere,forinstance,Q likSense.Intheirdesktopversion,becausetheyarelatetothemarketrelativetoTableau,isfree.It'saversion.versusTableauat..AndIthinkBilltellsyouhe'susingthebeta.,butatthesametimefreeisverydifferentfromalistpriceof$,or$,,dependinguponpersonalorprofessional.

Iguesswhenyoulookatthedatathatyouhaveaccessto,doyouseeanychangeinthatmarketrightnow?





Afewcomments.Letmestartbysaying,thatformostofourhistoryasaCompany,Tableauhasinsomewaycontinuedwithfreeproducts.Wearejustsousedtothat,thattotrytosaythatthere'sbeenwholesalechange.That'sthefirstcomment.

Thesecondis,thereismoreactionandthingstoconsideratthelowendofthemarket.Yes,Iwouldsaythere'sbeenachangeinthecompetitivedynamicthereinthesensecustomerswillincreasinglybeconsideringdifferentthings,atthatend.

I'llclosebysaying,Tableauisanextremelyaffordablebusinessanalyticssolutionandonethat,ofcourse,actuallysolvesthecustomerproblemthatthecustomersactuallyhave.Right?

So,alotoftheselowendthingsareessentiallysimpledashboardingtools.Theyarenotanalyticsenvironments.Theyarenotenterpriseready.Theydon'thaveanylivedataconnectivity.Andtheydon'thavea[fast]andmemorydatastore.Thedon'thaveagreatmobilestrategy.

Dependingontheoneyoutalktomeabout,theyjusthaveoneindictmentaftertheother.Ourcategoryoftechnologyisonewhere,regardlessofhowbigyourorganizationis,ourproductsareaconsideredpurchased.

Nooneexecutesananalyticsprojectoranalyticsstrategyonawhim.Theyareconsideringtheoptionsandnavigatingtheonesthatwillhelpthemdrivevalueinthiscrucialassetthatisnowavailabletoeveryoneknowasdata.Inthatregard,theyareawideTableaudeliverersagainstdataseeingthatitactuallysolvestheproblemstheyhaveandlivesuptotheirdreamofwhatananalyticsproductshoulddo.

Ithadreallygonewell.Wewillhavetokeepyouupdatedonthat.ButIwouldsay,ithasbeenconsistentwithhistory.

T omWalker (CFO):

John,thisisTom.TheonlythingIwouldaddis,thecustomeracquisitionmodelthatwehave--thelandpartoftheequation--thelasttwoquarterswe'veaddedover,customeraccounts.Thewaywegetinandgetconsideredandgetpurchasedisprettyfastandprettyeasyforustoproveoutvalue.

Intermsofhead-to-headbake-off,it'svery,veryeasyto--asChristianwasmentioningbefore--toproveourtechnology.Whichoneisreallygoingtosuityourneedsandwewelcomethat.Youcandownloadourproductsinminutesanywhereontheglobeandtestitout.Freetrials,andknowwhatyouneedbeforeyoubeforeyoubuyit.Andknowthatitisgoingtoworkforyou.So,that'showitchanged.

JohnDiFucci(Analyst-Jefferies):

Great,guys.Thanksalotandnicejob.


Thanks,John.Operator,canwehaveournextquestion,please?

Operator :

KarlKeirstead,DeutscheBank.

KarlKeirstead (Analyst-DeutscheBank):

Congratsonthegoodnumbers,andI'vegotacoupleforTom.Tom,I'mwondering,firstofall,doyoufind




morelargedealsskewingtothefourthquarter?Doyouthinkit'spossiblethatsequentiallicensegrowthinQcouldbehigherthanthepriorquarters?Thatisquestionnumberone.

Numbertwo,ontheguide,ineachofthelastthreequartersyou'veofferedguideandIthinkitwasabout%yougaveinitially.Thisyearitisinthelows.Itfeelslikeyourmomentumisprettystrong.Isitfairtoconcludethatthatdeltaisduemostly,orentirely,tothefactthatyouareatamuchgreaterscaleand;hence,itisjusthardtomaintainhistoricalgrowthrates?Thankyou.

T omWalker (CFO):

Hi,Karl.It'sforsureandI'llstartwithyourlastquestionfirst.As(inaudible)lowexpectation,aswecontinuetogrowandgetlargerandlarger,thatthegrowthpercentwillcomedown.That'swhatyouareabsolutelyseeingthere.

WithrespecttoyourskewingoflargetowardsQ,yousawthat--allIcantalkaboutisbecausethatwasthelasttimeitshoweditself.ButwesawanamplificationinpurchasingandlargedealsinQoflastyear.Ithinkitistobeexpectedaswegetlargerinsize,becausethere'salotofenterprisesoftwarethatisbeingpurchasedattheendoftheyears.

Butthelargedeal,asyousawinQ,couldfluctuatefromquartertoquarter.It'snotalwaysgoingtobeupandtotheright.Butourexpectationis,usuallyQ,andyousawintheguidancethatwe'rehandingout,thatwouldbeourbiggestquarteroftheyear.Andwewouldexpectittobesomegood,largedealtransactionsormetricsinthat.

KarlKeirstead (Analyst-DeutscheBank):

Okay.That'shelpful,Tom.Thanks,andcongratsagain.

T omWalker (CFO):

Okay.Thanks,Karl.


Thanks,Karl.Operator,canwehaveournextquestion,please?

Operator :

KeithWeiss,MorganStanley.

KeithWeiss (Analyst-MorganStanley):

Thankyou,guys,fortakingthequestion.I'llgobacktothecompetitivequestiononemoretime,andtakeaslightlydifferentangle.AquestionthatIgetalotfrominvestors.Understandingthatthere'salotofplatformsolutionscomingtothemarketplace,whetherit'sWavefromSoftwares.comorwhateveranybodyelseisbringingintothemarketplace.

Oneofthesethatpeopleseeitaretryingtogettheirhandsaroundis,whatpercentageofyourbusinessisrepresentedbythesingle-usecases?AcustomerjustusingTableautolookatSalesforce.comdataorjustlookingatstuffthat'sontheAWS.Myanecdotalworkssuggestthatit'sprettysmall,butitcouldbehelpfulforinvestorstohearfromyouguysofwhatpercentageofyouractualbusinessisforthatsingle-usecase,thatmightbecomeathreatfromaplatformsolution,likeaWave.


Greatquestion.I'llrespondwithextremelow.Infact,evenoutsideoftheTableauuniverseIwould




encourageeveryonetogoandtalktorealprospectsandorganizationswhoaretryingtodosomethingwithdata.

Whatyouwillquicklydiscoveronthatroadshow,which,Keith,Iknowyou'vedone(laughter).Whatyou'llquicklydiscoveristhatthere'svirtuallynocustomerintheworldthathasalltheirdatainoneplace.It'sliketryingtofindaunicorn.

Withtheindustryhereandthere,it'sgonethroughwaveswherethere'sbeenthisdreamthatallofthedataI'lleverneedisgoingtobeneatlyorganizedinthedatawarehouseofoneprovider.IthinkIfirstheardthatdreamin.

Hereweareand,ofcourse,whatwe'reseeingistheexactopposite.Dataisbecomingevenmoreproliferated.Thereareevermoreexcellentdatabaseoptionsavailableforpeople,rangingfromfiles,tobigdata,tocloud,to[fastest]memory,tofilesonyourdesktop,toJSON,toXML,andsoondowntheline.

So,repeatingwhatIsaidbefore,Ithinktheplatform-tiedcompetitiveplayswillhavesomesuccess.It'skindofhardnottohavesuccessinthisexplodingdataopportunitylandscapeforus.Buttheywillnotbecomethepredominant,multibillion-dollargo-tochoicesforcustomerswithmainstreamneeds.IbelievethatasmuchnowasIdidwhenwestartedthecompany.


Excellent.That'sveryhelpful.IfIcansqueezeinafollow-upforTom,perhaps.

LikeIsaid,veryimpressivehiringquarterparticularlyinsalesandmarketing.Inthelandscapewherealotofvendorsaretalkingtousaboutthedifficultyoffindingsalesheadcount,growingyoursalesforceat%isprettyimpressivethere.

Two,I'mgoingtofollowonwithafollowon.Twoquestionsonthat.One,howconfidentareyouguysthatyoutokeepupthatpace?Isitgettinghardertofindthoseguys?Doyouhavethesystemsinplacetobringthemonboardinaneffectiveway?

Andsomewhatrelated,canyoutalktousalittlebitaboutyoursalesproductivitytrends?Asyouhireonsoaggressively,howwellhaveyouguysbeenabletodoinkeepinguptheoveralllevelofsalesproductivitywithinthatquicklygrowingsalesforce?

T omWalker (CFO):

Great.Keith,it'sTom.Yes.Twogreatquestions.OverallQ,aspectacularquarter.Asyouknow,weobviouslywillhirepeople--ifwecanfindthegoodpeople--wewillhirethem.Iwouldnotexpectthatpacetocontinueatthat.I'dimagineit'sgoingtofallbacktopreviousquarters.

Wejusthadanexceptionallyhighendquarterthereandwereabletobringtop-notchpeople,notonlysalesandmarketingbutalso(inaudible)andalsoinoperations.We'revery,veryhappywithoursuccessthere,butIwouldexpectittocomebackdowntothepreviousratebefore.

Overallsalesproductivity,youknowwedo.Wearefocusedonmakingsurewehaveonboarding,wehavebootcamps,wehaveramps.Wehavealltypesoftrainingprogramsthatwedowithoursalesteamandmarketingteam;anourdevelopmentteamforthatmatter.

Thoseareallpartofwhatwe'vebeenbuildingyearafteryearafteryearaswecontinuetogrow.Weareconstantlycalibratingthoseprograms.We'reconstantlytryingtoimprovethemandmakethembetter.Butitisahuge,hugefocusbecauseTableauisapeoplecompany,itisallaboutthepeople.It'sallaboutthepeoplewhoworkhereandmakingthemasproductiveaspossible,iswhatwereallydofocuson.




It'sanongoingthing.It'saneverendingthing.It'slikepaintingaboat,bythetimeyougettotheendoftheboatyouhavetostartpaintingagain.We'reconstantly,constantlyworkingonwaystomakeouremployeesmoreproductiveandbetterattheirjobsandhelpingourcustomersandpartners.


ObviouslyyouhaveabiggerboatthanIdo.


Great.Thankssomuch.(laughter)

T omWalker (CFO):

Thanks,Keith.


Thanks,Keith.Operator,canwehaveournextquestion,please?

Operator :

MarkMurphy,JPMorgan.

Unidentif iedPart icipant :

ThisisMatt(inaudible)onforMarkMurphy.


Okay.Goahead,Matt.

T omWalker (CFO):

Doyouhaveaquestion?Goahead.Wecanhearyou.


Matt,welostyou.


Itlookslikewelostyou,Matt.Tryandgetbackinthequeue,ifyoucan.Operator

Operator :

BradSills,BankofAmericaMerrillLynch.

BradSills (Analyst-BofAMerrillLynch):

Onthelargedeals,asyouseethedealsizesgrowandthevolumeoflargerdealsgrow,areyouseeingamixshiftinthebusinessawayfromthatmoreadditiveuser,themanythatyoutalkaboutthataren'trunninganythingtodayversusreplacement?Orisit--anycommentarythereonasyougrowintothelandexpandopportunity.Ifyou'reseeinganyshiftmoretoreplacement?

T omWalker (CFO):

Iwouldn'tsaythat.Whatwementionedbeforeisasit'sgrowing,there'salotofstuffwherewecanget




ourtechnologyandserverplatformup,runninginanorganization;anditcangrowthroughouttheorganizationwithoutactuallygoingintoaripandreplacetypeofsituation.

It'sjustbasicallyhelpingpeopleandbecomesmoreofthedefactoinsteadofifoldBIisaghosttown,itbecomesaplacethatpeoplewanttogofortheirinformation;andwheretheyaretryingtomanagetheirdata,wheretheyareusingdatagovernance,anddoingallthistools.

Itdoesn'tnecessarily,Brad,havetobearipandreplace.Thatisnotnecessarilywhatwe'regoingafter.

Whatwe'retryingtodoisshowpeoplethatthere'sawaybetterwaytodoanalytics,andthere'sawaybetterwaytohavedatagovernance,manageyourdata,andhaveyourend-usersgivingyousecuredatatowhateverguidelinesyouhave.Sothat'sreallywhatwe'reseeing.


Great.MylastonewouldbeonTableau..Iknowit'sonlyinbetabutyouintroducedalotofnewfeatures.Thelevelofexcitementattheconferencewasveryhigh.

Canyoucommentonsomeearlyreceptiontosomeofthefeatures?Maybewhereyoumighthavebeensurprisedtotheupsidewhereyou'reseeingmoreinterestinbusiness?Thatwouldbehelpful.Thankyou.


Overall,it'sgoingwell.Iwouldsayit'sbroadlyconsistentwithourdotreleasesfrompreviousyears.It'saprettystrongrelease.

Thewebdataconnectorisverypopularwithpeople,astheycannowreachouttosomesortofalongtailofcrazydatasourcestheyhadinmindbothinternallyandexternally.ThefeedbackonthathasbeenevenmoredelightfulthanIexpected,toansweryourquestion.

Ithinkthethingthat'sprobablygeneratingthenextlevelofexcitementisthemobileupdate.That'swheretheTableau.monikerprobablyisn'tthebestone.Wedidareallymajorupgradetoourmobilestrategytheretoenableofflinesnapshotsandfasterperformance.Infact,likearedesignedUIexperienceandsoon.

We'regoingtobefollowingthatwithaphoneupdatehereshortly,andthatmobiletrajectorywewentunveilingoverthelastyearisgeneratingalotofexcitementfromprospectsandgettingusintonewopportunities.ThosearetheonesIwouldcallout.


Great.Thanks,guys.Congratulationsonanicequarter.


Thankyou.


Thankssomuch.Operator,canwehaveournextquestion,please?

Operator :

WalterPritchard,Citi.

WalterPritchard (Analyst-Citigroup):




Tom,I'mwonderingifyoucantalkalittlebitabouthowyou'rethinkingaboutsettingguidancethesedays?Yourguidanceayearagowassoconservative.Youwerebeatingonapercentagebasisbydouble-digitpercentages.Inthelastcouplequartersit'sbeenmorehighsingle-digitpercentages.

I'mwonderingasyoulookbackonwhereyouwerethreeorfourquartersago,andyourperformancerelativetoguidanceandyourperformancerelativetoguidancenow.What'sbeenthedifference?Hasitbeenachangeinhowyousettheguidance?Orhasitbeenmoreofajustblowoutperformancesthatyoudidn'tpredict?I'mwonderinghowwouldyouthinkaboutthataswemoveforward?

T omWalker (CFO):

Walter,thanksforthequestions.Overall,Iwouldthinkthat,goingforward,we'reamuchlargercompany.Therevenuesaremuchlarger,soIthinkthattheabilitytohavetheupsidethatwesawasasmallercompanywithasmallerrevenuebase,isnotaspractical.It'snotunreasonabletothinkthatitwillcomedown.Ithinkwhatweexperiencedoverthelasttwoyearsor.yearsofbeingpublicis,thenumberonereasonwewentpublicwasforawareness.Ithinkyouknowthataboutus.

WewantedtogenerateawarenessoftheCompanysopeoplewouldconsiderourtechnologywhentheymadepurchases.So,whenwesawthat,wesawtherewasalotofupsidethere.Thatishardtopredictwhenyou'veneverbeeninthattypeofenvironmentbefore.So,thatismorewhatyou'redoing.

Assmallerscaletherevenue,butaswegettoalargerscaleandbase,andaswe'refocusingonthefuture,Idon'texpectthatbecausethenumbersarejustlarger.It'sthelawoflargenumbers.Overall,it'snotnecessarilyachange.It'sjustwe'regettingbiggerandwe'regettingmoretractionandthecustomerbaseisgrowing.


Gotit.Andasimilarquestionasitrelatestoyouroperatingandhowyou'rethinkingaboutoperatingexpenses.IfIlookatgoingintothisyear,youroriginalguidance--IthinkyougaveadetailedguidanceinQlastyear.Itimpliedsomewhereinthelow$million,$millionIcalculateinoperatingexpenses.Youactuallyendedupspending$millionor$millionlessthanthat.

I'mwonderingwasthatanadjustmenttotheplanmidyearorsomething?Orwasthatjustyoutalkedduringtheyearabouthavingtroublehiring.Itmayjustbethat.I'mtryingtounderstandthevarianceinoperatingexpenses,whichissomethingthat'sprobablymorewithinyourcontrolthanrevenue.

T omWalker (CFO):

Yes.Idon'tknowthatwetalkedabouthavingtroublehiring.Ithinkwe'vehadsomeprettyrobusthiring.Qwasjustanexceptionallygreatquarterforhiring.

Overall,Ithinkwe'vedoneaverygoodjoboverthelast,oroverourhistory,ofactuallyputtingourmoneytoworkandgrowing.We'renotthetypeoforganizationthatisjustgoingtoburnthroughmoney,justtodoit.

So,aswesee,andasourinvestmentsunfold,mostofourexpensesarearoundpersonnelbutthereareotherinvestmentsthatwe'remakingininfrastructureandthedevelopmentsideandinternationalgrowth.

Weredoingitatacadencethatmakesenseandwefeelwecanmanage.That'sprobablywhatyou'reseeingasanongoingtheme,becausewejustdon'tgoandsomething.Wethinkwe'reverygoodanddisciplinedinexecuting.Sowhenweseetheopportunitytoinvest,wewillandasyousawinQ,we'rehiringalotoffolksbecauseweknowit'stherightthingtodoforthelong-termtrajectoryofthecompany.





Great.Thankyou.


Thanks,Walter.Ithinkwehavetimeforonemorequestion.Operator,canwehaveourlastquestion,please?

Operator :

BhavinSuri,WilliamBlair.

BhavinSuri(Analyst-WilliamBlair):

Thanksfortakingmyquickquestionhere.Anycoloronthegrowthintheembeddedproductinhowyouareseeingthatbeingused?Andthen,howthecloudbusinesshasbeentrending?Thosewouldbehelpful.Thanks.


Whatdoyoumeanbytheembeddedproduct?


Sowecanembedthevisualization,sothirdpartiesaregivingtheTableauproductaspartoftheirfrontends.


Isee.Ithinkaboutthatasmoreofacoreproductcapabilityasopposedtoadifferentproduct.Iunderstandthequestionnow.

Itcontinuesbeacrucialpartofanalytics.Atsomepoint,peoplewouldjustdobasictypingofdatafromadatabaseandlookupsomestufforpassoutrequiredreports.Andthesedays,ofcourse,customersarewellpastthat.Theyaretryingtoembedtheresultsofkeydatainitiativesintootherapplications.ActuallyevenwithintheirowninternalInternet.Thisremainsverycommon.


Right.


Somepeoplewillrunthemliveonfactoryfloors.Ourproductcapabilitiestherehavestayedreallystrong.Iwouldn'tsaythere'sbeenanyrecentchangeinthat,butthatitcontinuestoflourish.


Morespecifically,haveyouseenthirdpartieswheresomeonewantstobuiltaproductwithanalyticsandtheyembeddedTableauintheirfunctionallyandthenresellingtocustomersandhowthatisplayingout?


Isee.ThatiswhatwerefertoasourOEMbusiness.Commonly,butnotalways,theOEMiswillingtotakeadvantageofTableauinanunembeddedscenario,butnotalways.That'sgoingreallywell.Thesituation




isthat,justabouteverybusinessapplicationineveryindustryyoucanname,isunderneathitcreatingadatabasewithsomereallykeyinformation.

Almostallofthoseprovidersofendproductsinallthevariousverticalsandprofessionsfeelliketheyneedanupgradedanalyticsenvironmenttotapintothatrepository.Tableaudoeshaveadedicatedgroupthere,wehaveformanyyearsnow.Thatcontinuestogrowandgrowverywell.Wetookitinternationalafewyearsago.That'salsoflourishing.Anythingelseyouwouldaddonthat,Tom?

T omWalker (CFO):

No.Overallitisafocusweexpectedtogrow.Butit'sgrowingjustasfastasthedirectbusinessistoo.


That'sgreat.That'shelpful,guys.Didyouguys--justaquickone.DidyouguysseeanyweaknessinAsiaPacatall?Youdon'thavethatmuchbusinessoutthere,butdidyouseeanythingoutthereatalldrivenbymacro?

T omWalker (CFO):

Yes,amacropart.That'sdifferent.Nobody'simmunetothemacro,butoverallAPACisdoingquitewell.Internationalisflourishing.Yousawus.Weputup%growthforthequarter.Werevery,veryhappywiththeinvestmentswe'remaking.Isstillearlythere,butoverall,we'reveryhappywiththeAPACteam.TheydidagreatjobinQ,andactuallyfortheyear.They'vebeendoingitgreatforafewyears.


That'sgreat.Thanksfortakingmyquestions,guys,andcongrats.Congrats.


Thanks,Bhavin.Withthat,wewillconcludeourcallfortoday.Thankyousomuchforjoiningus,andwewilltalktoyousoon.

Operator :

Thisconcludetoday'sconferencecall.

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Tableau Software (DATA) Earnings Report: Q3 2015 ...Ms. Joni Davis, Director of Investor Relations...

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Transcript of Tableau Software (DATA) Earnings Report: Q3 2015 ...Ms. Joni Davis, Director of Investor Relations...