Alteryx, Inc.

Greetings. Welcome to the Alteryx Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Chris Lull, Chief Legal. Thank you. You may begin.

Thank you, operator. Good afternoon and thank you for joining us today to discuss Alteryx's third quarter 2021. With me on the call today are Mark Anderson, Chief Executive Officer, and Kevin Rubin, Chief Financial Officer. Additionally, Paula Hanson, our Chief Revenue Officer, will be joining us for the question and answer session after prepared remarks. This afternoon, we issued a press release announcing our results for the third quarter ended September 30, 2021. If you would like a copy of the release, you can access it online on our Investor Relations website. During this call, we will make forward-looking statements related to our business, including statements about our financial guidance for the fourth quarter and full year 2021. These statements are not guarantees of future performance. They are subject to a variety of risk and uncertainty, some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward-looking statement. For discussion of the material risk and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and our Investor Relations website, as well as the risks and other important factors discussed in today's earnings release. Additionally, non-GAAP financial measures will be discussed on today's call. A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in today's earnings release. With that, I'd like to turn the call over to our Chief Executive Officer, Mark Anderson. Mark?

Thanks, Chris, and thank you all for joining us on the call today. I'm proud to report that in Q3, we delivered another solid quarter of ARR growth, beating our guidance range as we continue to drive meaningful transformation across all areas of our business. Achieving $579 million of ARR in Q3, which grew 29% year over year, sets us up well for Q4, seasonally our largest quarter of the year. I'm especially proud of our execution today. while closing the strategic acquisitions of Hyperana and Lore.io. It's my pleasure to welcome these teams and their incredible talent to Alteryx. Each brings us high-quality, cloud-centric engineering and subject matter expertise that will continue to bolster our commitment to innovation. I've never been more confident that we have the right leadership and the right operating framework in place. Today, I'll give you an update on our progress of our go-to-market efforts, an update on our product strategy, and more color on our M&A activity, including recent announcements. We continue to focus on driving transformation and the necessary change it brings, and we're doing this fast. I believe a strong sense of urgency is necessary as we pursue this $49 billion TAM, which includes about 47 million advanced spreadsheet users who would benefit from the automated advanced analytics that the Alteryx platform delivers. Today, our user base is less than 1% penetrated into this TAM. With close to 7,700 customers, many of them are very early in their customer journeys with Alteryx and very early in their journeys to data centricity. For example, at one of our recent C-suite advisory board meetings, every participant from across the globe scored themselves at best at midpoint in their journey to drive a data centric culture. I maintain that there is a massive opportunity ahead of us as companies around the world realize that their need for data analytics is more important than ever. In the future, governments and enterprises that embrace data to make consistently better decisions will win hands down. A major part of our transformation is devoted to our go-to-market efforts. Here, we've been focused on large enterprises' desires to democratize analytics, drive adoption, and reduce friction in our customer's journey to adopt our platform and make it available in a highly scalable way. We continue to invest in developing and expanding our global sales team as well as our customer success resources to help in the consumption of our innovation. Our strategy is to supplement our land and expand sales motion with the complementary enterprise sales model where we're selling higher up in the organizations to CIOs, CDOs, and other chief executive leaders. a typical customer journey may start with two to three seats in a specific department, and over time, using our land and expand path initially, we grow our enterprise scale and ultimately expand deployment to more and more users company-wide. For example, CVS launched with a handful of seats in their analytics and risk department in 2016, and within 12 months, strategically launched Alteryx across the revenue cycle and claims processes. Through our engagement, we began to up-level our conversations. Today, the executive leadership team at CVS receives and depends on daily analytic reports delivered through Alteryx workflows. They now have 450 seats and have automated over 3 million membership claims since 2018. Stanley Black & Decker started with one seat in 2018 and completed a large transformation deal with us in 2020, leading to over 450 seats across finance, operations, merchandising, e-commerce, strategy, compliance, and data science. Our presence in these critical functions is helping Stanley's major transformative program to drive technology-enabled productivity. The initiative is expected to drive $300 to $500 million in value over three years by way of supply chain and productivity improvements by leveraging advanced analytics. At the end of Q3, we had nearly 80 customers with greater than $1 million in ARR, representing a 40% year-over-year increase. What we have learned is that when we have pockets of users across the organization, we have the opportunity to engage in more holistic conversations at an enterprise-wide scale. These strategic conversations are targeted to go higher up in the organization. And what we're hearing from customers is that this much more mature approach brings enterprise-wide capabilities, governance, and stabilization in how Alteryx can be deployed across the organization. Let's start with our efforts to create best-in-class go-to-market organizations. Paula Hansen, our Chief Revenue Officer, continues to make significant progress driving operational discipline and rigor into our go-to-market engine. We're making the investments where it matters, such as customer success and deploying commercial structures that encourage flexible expansion. Through these investments, we're creating a scalable organization poised to go after the significant opportunity in front of us. In Q3, we saw improvements in sales attrition and continued to see strong hiring. The team is coming together to embrace the new go-to-market operating framework, tools, and leadership. Our numerous associates continue to ramp quickly, adding value as sales productivity continues to improve. As a result, we are increasingly selling higher in and more strategically to customers and prospects. We're also working hard to be the best and most flexible partner for our customers. For example, our new enterprise contracts now allow for additional capacity, which provides customers flexibility to grow quickly and encourages more users to leverage Alteryx. These contracts enable sellers to address multiple departments with an enterprise-wide capability. Companies like Sharp Healthcare and separately, a Fortune 100 consumer electronics company, as well as a leading electric SUV and truck manufacturer are accelerating analytics adoptions across their organizations with new flexible enterprise license bundles. These flexible bundles are part of our broader strategy to leverage pricing and packaging to accelerate expansion. With this pathway, business and analytics leaders can now organically and seamlessly grow transformational initiatives across departments. By up-leveling our conversations with our customers and expanding our sales motion, we're getting our platform into more users' hands. At the end of the day, this is still a very fragmented analytic vendor landscape, and I believe that platforms are going to win. One aspect of Alteryx that I've always found compelling is how much our customers love and depend on us for the incredible business outcomes and ROI that our platforms deliver. Illustrating this, we received a handful of significant customer accolades from industry analysts in the third quarter. Alteryx was named a customer choice for 2021 in Gartner's Peer Insights, voice of the customer for data science and machine learning platforms. Alteryx was also named as one of the five solutions to know in the self-service data science and machine learning by Constellation Research as part of their Q3 2021 annual shortlist. Equally exciting, Alteryx was named a leader in multiple G2 reports for fall of 2021, including predictive analytics. Finally, we were recognized as a leader in KLIS's research data and analytics platform report for 2021. We're immensely proud of these recent accolades and humbled as the voice of our customers are heavily weighted in these rankings. No doubt, these accolades validate what our customers have been saying for years, that our unified platform and self-serviced, easy-to-use interface continues to be a market leader. Moving now to an update on our product strategy. Earlier this year, we unveiled Alteryx Designer Cloud and Alteryx Machine Learning, a major step in our cloud strategy. we continue to make strides on this important journey. I'm excited to share that over the last few weeks, both products have become commercially available as part of a limited availability launch for select North America customers. This is a major milestone for our cloud journey. These cloud innovations offer easy-to-use, unified data analytics and approachable ML, interoperability across on-prem and cloud, and no-friction adoption with minimal downtime and seamless software. Feedback on these cloud products has been highly positive, with now over 600 participants using the early release of Designer Cloud and Alteryx Machine Learning. Suresh Patel, our Chief Product Officer, and his team are advancing our product roadmap and are actively evaluating both organic and inorganic opportunities to develop and accelerate our innovation agenda. Our efforts are focused around three pillars of innovation, cloud centricity, big data fluency, and AI as a strategic advantage. Cloud centricity supports our goal of making it easier for customers to democratize access to analytics across their enterprise. Our second innovation theme, big data fluency, is aligned with our customers' need to analyze large data sets, a trend in both on-prem as well as cloud data repositories. We expect this trend will grow as data across the enterprise remains highly fragmented. Finally, AI as a strategic advantage is aimed at democratizing insights across the business by using AI capabilities to help upscale analysts. As I mentioned at the beginning of the call, we recently closed two acquisitions providing capabilities as well as talent. Hyperana brings a cloud-based platform for generating AI-driven automated insights from data, The solution enables anyone, regardless of technical background, to access AI-driven insights. We also recently announced the acquisition of Lore.io. Lore.io brings talent and cloud-based data modeling capabilities to Alteryx. Both acquisitions enable us to accelerate more functionality to the cloud and to add improved data discovery capabilities. Finally, this morning, we announced the appointment of two new members to our board of directors. effective November 10th. C.C. Morkin, President of Headspace Health, and Dan Wormenhoven, former Executive Chair and CEO of NetApp, join us as directors. Both bring innovative customer thinking and deep technology expertise. Their experience with scale will help in our transformation journey and position Alteryx for our next phase of growth. I'd like to thank both Kimberly Alexi and John Bellizzi for their invaluable contributions to the Alteryx Board of Directors over the past several years. I remain confident in our abilities to successfully transform Alteryx to deliver long-term value for our customers, partners, associates, and shareholders. The opportunity ahead of us is significant and growing at a global scale. I believe Alteryx will be one of the winners in this highly fragmented data analytics and automation landscape. I'm so pleased at what we are doing here. We're building an innovation powerhouse supported by a world-class go-to-market motion. With that, let me turn the call over to Kevin. Kevin?