Alteryx, Inc.

Greetings. Welcome to the Alteryx fourth quarter and full year 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 Law, Chief Legal Officer. Thank you. You may begin.

Thank you, Operator. Good afternoon, and thank you for joining us today to discuss Alteryx's fourth quarter and full year 2021. With me on the call today are Mark Anderson, Chief Executive Officer, and Kevin Rubin, Chief Financial Officer. Additionally, Paula Hanson, our President and Chief Revenue Officer, and Suresh Patel, our Chief Product 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 fourth quarter and full year ended December 31, 2021. If you'd like a copy of the release, you can access it online on our investor relations website. During this call, we will make forward linking statements related to our business, including statements about our financial guidance for the first quarter and full year 2022. These statements are not guarantees of future performance. They are subject to a variety of risks 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 risks 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 delighted to report that we finished the year on an exceptional note with revenue, annual recurring revenue, and non-GAAP operating income all beating guidance. At the beginning of 2021, I outlined comprehensive changes to our business, a transformation designed to significantly increase our innovation and product development, as well as modernize and streamline how we sell to and serve customers. Looking back, I'm so proud of the entire Aldrix organization for executing such change while delighting customers and exceeding our forecast for the year. It's wonderful to see the impact on many of our initiatives show up in our results. Growing ARR by 30% year-on-year to finish 2021 at $638 million was job number one for us. We added $145 million in net new ARR during the year and delivered a record $59 million in Q4. This gives me the kind of confidence and momentum that every CEO wants going into a new fiscal year. Kevin will get into the details. But I'd like to highlight some of the progress we made in 2021 on our strategic imperatives before outlining our priorities for fiscal year 22. Since joining Alteryx, I have not wavered from my contention that we have a massive opportunity ahead of us. Business and government leaders tell me frequently that they are early in their journey to digitize and become data-centric organizations. The sense of urgency to upskill their workforces is only increasing. As this generational shift towards data literacy evolves, we believe there will be independent companies that emerge as platform leaders in this market. Today, we see a market opportunity of approximately $65 billion across the analytics and data engineering space. These markets are growing at a healthy clip and are projected to exceed $110 billion by 2025, according to IDC. Furthermore, We also recently completed a new study with IDC that concluded there are over 78 million advanced data workers worldwide, and we believe our strategy of democratizing analytics across this population positions us well. We will seize this opportunity through innovation, executing on our go-to-market strategy, and expanding through partners. Our product innovation continues to strengthen. Under Suresh Vittal's leadership, we are advancing our product roadmap and continue to drive both organic and inorganic opportunities to accelerate our innovation agenda. We're focused on three pillars of innovation, cloud centricity, big data fluency, and AI as a strategic advantage. We've been making terrific progress. Both Designer Cloud and Alteryx Machine Learning are now available in North America. In addition, With the success we've seen in APJ with Alteryx Auto Insights, formerly Hyperana, we are excited to share that we have now launched Auto Insights in North America. As more and more customers deploy modern data architectures in cloud data warehouses and operate across a hybrid cloud environment, their need to bring analytics to the data will certainly increase. Our acquisition of Trifacta enhances our ability to help customers solve this problem. In addition, it expands our product portfolio and accelerates our journey to the cloud. This acquisition leapfrogs us into all three public cloud environments, giving our customers more flexibility. Trifacta is particularly strong at serving the needs of IT and data engineers. This aligns very nicely with our core go to market strategy to work more inclusively with IT. Today, this adds to our growing portfolio of cloud-based products. Ultimately, we expect Trifacta to become our modern cloud-based backend for the combined Alteryx platform. Trifacta also brings us a rich bench of cloud-first talent across key functional areas of our business. Throughout 2022, we'll update you on our platform build progress. We know that you are keenly interested to learn more about our strategy and pricing for our cloud products. In order to drive adoption and encourage growth in our audience, including expansion within our customer base, we launched with introductory pricing that scales by user for all of the cloud products, Designer Cloud, Alteryx Machine Learning, and Alteryx Auto Insight. For Trifacta, we will retain the existing pricing constructs with scales based on consumption. Collectively, we are reducing the friction customers experience while providing more capabilities for them to further mature their analytic journey. On the go-to-market front, we've been focused on building and scaling a world-class team. Under Paula Hansen's leadership, we've seen major improvements in our account coverage, partner engagement, and execution discipline. The foundation for long-term growth is being instrumented through scalable sales processes and coordinated sales, marketing, and customer success resources. Customers tell me this focus helps them do more and do it faster. That confidence shows up in our 30% growth in year-over-year ARR results. Other proof points include we closed 17 deals with more than $1 million in ACV in the quarter, nearly double what we closed in Q4 2020. We ended the year with 90 customers with over $1 million in ARR, representing a 45% year-over-year growth. We realized our highest renewal rate since 2018. And we saw sales productivity continue to increase across the board. The fourth quarter is traditionally our strongest quarter for expansion business, and this quarter was no different. For example, a large multi-state insurer moved away from a la carte purchasing and expanded by leveraging our new ELA bundle because they saw a strong appetite for future growth. Additionally, the ELA structure deliver the value and flexibility required. An important factor in their buy decision was due to our tight integration with Snowflake, which aligned to their cloud strategy. This insurer is primarily using Alteryx in the actuary, finance, and informatics departments, and early feedback includes how easy Alteryx is to use and to drive change with scalable automation throughout the organization. Miller Knoll, formerly known as Herman Miller, and known for their modern home and office furniture, expanded with Alteryx this quarter. They're building out their modern data and analytics technology stack, and we are a key partner. By leveraging Alteryx, Snowflake, and Tableau to speed up automation and upskill business analysts, Miller & Noll has seen value across their sales, supply chain, and finance departments. The elegance of the integration between partners in this stack was a key driver for Miller & Noll. Also this quarter, a leading America car rental company became a customer and is leveraging our platform to address data access challenges, preventing them from optimizing FP&A initiatives. The company is using the Alteryx platform to integrate critical planning, budgeting, and forecasting data coming from SaaS applications and to provide real-time insights to the FP&A team. Data that was generated but trapped in ERP and SaaS applications is now being pulled into workflows, generating real-time, actionable business insights. Next on partnerships, we continue to focus on developing the ecosystem through strategic technology and distribution partners. Like Miller Knoll, customers expect modern vendors to work well together. As a generational move to data centricity plays out, we are well positioned in the modern data ecosystem. With every partnership, we solve for a better customer experience, more actionable insights, and increased speed to value. Our strategy with technology partners is to deliver seamless integrations for customers and encourage deep field collaboration. This flywheel is just getting going for us, and there is a lot of upside here. In Q4, we sizably expanded our partnership with Thomson Reuters, allowing them to sell Alteryx across three of their key business units. Thomson Reuters customers that leverage these broad range of solutions yield remarkable results with dramatically improved efficiencies and risk reduction. Finally, AWS provides us with a great example of how we're leveraging partnerships to expand our go-to-market reach. In Q4, Alteryx Designer and Server became available in the AWS marketplace. This means that customers with enterprise discount programs in place can now have Alteryx product purchases count towards their annual consumption commitment. This unlocks new sales opportunities for us. This also allows AWS customers to realize the value of Alteryx while streamlining procurement and consolidated billing. In 2021, we achieved terrific progress with the SparkEd program, our education and upskilling initiative that empowers learners at all levels to acquire data analytics knowledge and skills. We now have more than 130,000 students representing over 700 global universities. We have ambitious plans to leverage SparkEd with our passionate community to create hundreds of thousands of data evangelists who advocate for Alteryx technology throughout their careers. As an executive team, we are hyper-focused on leveraging the momentum from our solid finish to 2021, our three recent acquisitions, as well as last week's successful in-person sales kickoff This was the first time in two years. We had well over 1,000 attendees, including over 200 partner participants. The energy was incredible. We've constructed another solid operating plan for FY22, and my confidence in our team and their ability to execute has never been greater. We still have much work to do, but I'm optimistic that we will continue to see strong operating results as we execute during FY22. Our ability to innovate is accelerating and our readiness in the field continues to improve as we sunset our year of transformation. Now, moving on to 2022, we are squarely focused on the following key initiatives that will define our success. This will be a year of innovation for Alteryx as we build an integrated cloud platform and assert our leadership while broadening our value in the modern data analytics stack. Our vision is to make it easy for customers to democratize analytics across their enterprise using easy-to-access cloud solutions, all while still providing flexible options that complement their on-premise investments. We believe we're well-positioned to build on this vision in FY22. Our core products, designer and server, continue to deliver new innovative capabilities that extend our low-code, no-code analytics automation. All four of our cloud products, including Trifacta, are available now. We are focused on driving adoption of these cloud solutions across our customer base as we move quickly to integrate Trifacta as our unified cloud platform through the rest of 2022. Our go-to-market strategy focuses on the foundation we put in place last year. Enterprise class, value selling to the global 2000, supported by a robust partner ecosystem from the initial land all the way through value realization. Our customer facing resources are now aligned under Paula's leadership. The launch of our cloud portfolio will provide our customers with innovation and options, initially in 2022, and in a more meaningful way in 2023 and beyond. In closing, I'm so proud of our results and the progress we made last year. And I'm extremely grateful to our employees, partners, and especially to our customers for their support in this journey. I believe we've put the vast amount of transformation behind us. I've been doing this for a long time, but I've never seen an executive team execute so much, so quickly, and so well. Customers globally are looking for unified platforms as they advance their digital transformation agendas and work to democratize data. I'm confident that we're doing the right things to drive predictable growth for a very long time. And I believe Alteryx will be one of the winners in this highly fragmented data analytics and automation landscape. We're building an innovation powerhouse supported by a world-class go-to-market motion. We look forward to keeping you updated on our progress and are also planning to hold an analyst day in conjunction with Inspire, our annual user conference, being held from May 16th to the 18th. We'll provide more information about that soon. With that, let me turn the call over to Kevin. Kevin?