Alteryx, Inc.

Greetings. Welcome to the Altruist Fourth Quarter 2022 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'll now turn the conference over to your host, Brian Goodman, Head of Investor Relations. You may begin.

Thank you, Operator. Good afternoon, and thank you for joining us today for Alteryx's fourth quarter and full year 2022 earnings conference call. I'm Ryan Goodman, Alteryx's Head of Investor Relations. 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 31st, 2022, as well as a new shareholder letter with key metrics and commentary on the results. If you would like a copy of the release and shareholder letter, you can access both 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 first quarter and full year 2023. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward-looking statement. For a discussion of additional forward-looking statements made during this call and 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 Chief Executive Officer Mark Anderson.

Thanks, Ryan, and thank you all for joining us on the call today. We delivered a strong Q4 with all of our key financial metrics exceeding our outlook. Q4 revenue came in at $301 million, up 73% year-over-year. Annual recurring revenue, or ARR, came in at $834 million, up 31% year-over-year. And Q4 non-GAAP operating profitability meaningfully exceeded our outlook at $68 million. We finished 2022 with strong growth momentum and an increasing focus on profitability, tapping off a historic year for Alteryx with multiple key strategic initiatives. We significantly accelerated our cloud platform innovation roadmap. We realigned our go-to-market motion to focus on the largest global organizations with the greatest opportunity for expansion. We updated our partner program to efficiently scale our market reach, and we invested in our customer success program to ensure that our customers are engaged and successful on their data democratization journeys with Alteryx. We are pleased with our financial results, particularly given the economic backdrop, as our value-focused sales motion is resonating with customers. Even so, we are seeing similar dynamics that are facing many of our software peers. In Q4, we saw this in the form of elevated deal scrutiny and elongation of sales cycles. I've certainly experienced similar macroeconomic headwinds throughout my executive career, and I'm confident in our ability to continue to execute at a high level with the transformational decisions we've made over the last two years. First, our Alteryx Analytics Cloud Platform has catalyzed enterprise buy-in to the long-term Alteryx vision. Second, our focus on enterprise has driven a mixed shift to higher lifetime value customers with increased net retention. Third, our executive-facing go-to-market approach has aligned our sales engagement with the decision-makers and budget owners of our customers. And last but not least, our level of engagement with customers is stronger than ever, supported by both our partner ecosystem and customer success initiatives. Underlying this is robust demand for data analytics, as we are seeing CIOs prioritize core operational platforms like Alteryx over front-end applications more exposed to headcount variations. Let me share a few highlights from the quarter. Our global 2000 penetration increased to 47%, up four points from this time last year, as top brands across the globe are aligning with Alteryx. We saw durable strength in our global 2000 net expansion rate of 109% and our overall net expansion rate of 121% and achieved record high renewal rates. We sold more ELA bundles in Q4 than the rest of the year combined. The increased flexibility and simplified pricing are resonating with our larger customer cohorts. We're also starting to see ELAs from 2021 creating tangible and more predictable upsell opportunities. Our Alteryx online community has now surpassed 400,000 members, a great milestone for these Alteryx zealots who continue to champion our mission across the globe. And our partner ecosystem, which continues to influence a growing percentage of our business, is providing an increased tailwind to the business, again, influencing well over half of new business in Q4. Q4 was truly a great quarter, capping off a strong year and another clear validation of the strategic direction of this company. Customers need our innovation now more than ever. The pace and scale of our innovation has never been greater, and our commitment to governance across the platform is enabling our customers to scale with confidence across their organizations. Our cloud platform initiative is increasingly becoming a contributing driver of success with large enterprise companies looking to expand their Alteryx deployment. In fact, we're finding that the introduction of Alteryx Analytics Cloud is amplifying customers' commitment to the extended Alteryx platform. Our cloud innovation roadmap provides customers with a clear path to layer on cloud and expand data analytics to new personas and new use cases. We saw examples of this in Q4. We had a great win with Royal Caribbean Group, a leading international cruise company. Building on its existing Alteryx usage within finance, Royal Caribbean is expanding with new use cases and new personas in human resources. They'll leverage designer, server, and machine learning in an effort to further unlock and optimize their crew experience and to drive financial efficiencies. They're also adopting auto-insights as a means to more effectively disseminate information and insights throughout the organization. Chemours Company, a global specialty chemicals company that signed on with an ELA earlier in 2022, is now expanding with auto-insights to provide enhanced data-driven clarity on cost and budgeting trends. And a mobile network operator that expanded with the designer ELA in early 2022 signed on for a cloud ELA in Q4 to utilize auto insights for cloud cost optimization analysis by the office of the CIO. With access now to machine learning and designer cloud, they can also explore new use cases such as network data analysis and financial forecasting, empowering new personas within other parts of the organization. Our technology partnerships with cloud-based data warehouses like Snowflake, Databricks, and Google BigQuery are also helping us win with companies driving cloud-based digital transformation initiatives. In Q4, Specsaver's Optical Group, a multinational optical retail chain, selected DesignerCloud to help drive their initiative to promote a data-oriented culture with self-service analytics. Designer Cloud's low-code, no-code interface and deep integrations with cloud environments like Databricks were key differentiators in enabling this new customer relationship. We have a highly differentiated data analytics platform, and our enhanced go-to-market motion built on the pillars of enterprise, partners, and customer success is now enabling us to capitalize on this opportunity. We continue to see strong traction with large enterprise organizations. We more than doubled the number of $1 million ACV wins in 2022 versus 2021. And we closed the year with over 140 customers with ARR of $1 million or more, up over 50% year-over-year. As I mentioned earlier, we now have presence at 47% of the global 2,000. Many are using Alteryx in only a small initial capacity, which creates meaningful upsell opportunities in these accounts for the years ahead. Our ELA bundles are resonating with our larger customers as they provide flexibility to expand to additional licenses for a fixed period of time, or what we refer to as first capacity. First capacity gives customers the freedom to use up to 50% more than their allocated license count at no cost during the first year without additional license or procurement administration complexity. our customers are digitally transforming this burst capacity helps them go faster and for the ela sold in q4 2021 some of which were multi-year contracts over two-thirds became upsells in q4 2022 we are still in early days for the ela strategy and momentum has been growing orange france the largest subsidiary of the Orange Group and a leader in B2B and B2C telecommunication services in the country, selected an Alteryx ELA in Q4 to automate and optimize many processes within the financial team, as well as to drive analytics on infrastructure and network usage. The ease of use of the Alteryx platform, coupled with the flexibility of the ELA, convinced the finance teams and will enable Orange to begin expanding data analytic uses with new personas throughout the organization. As for the second pillar of our go-to-market motion, partners, we are benefiting from ecosystem expansion and favorable engagement trends. We're pleased to welcome EY as one of our newest partners in Q4. Partners delivered over 50% year-over-year growth in new logo ACV contributions in 2022, and once again, influenced well over 50% of the new ACV in the quarter. We deeply value our partner relationships, and it is particularly gratifying when we find our partners broadening their usage of Alteryx as a customer. KPMG is a great example, where we're seeing both regional expansion of the partnership and increased usage of designer to provide differentiated offerings to their clients, particularly those looking to transform and optimize their corporate tax departments. In Q4, KPMG increased its designer license count by over 50% as it looks to elevate Alteryx usage across more client-facing consultants, plus further leverage Alteryx for internal analytics. Partners provide additional scale to our go-to-market motion, enhancing our ability to find incremental use cases and drive value for our customers. We saw this with West Monroe, a digital service firm who worked closely with a partner when they first explored Alteryx solutions over the summer. In Q4, West Monroe significantly expanded their Alteryx implementation after identifying opportunities to both accelerate and enhance digital analytic services they provide their clients. And the journey doesn't end with the implementation of our software. We've invested in our customer success team over the past two years, and our customers are seeing tangible, incremental returns on their Alteryx engagement. There are so many positive examples here of value creation in partnership with Alteryx customer success. A leading FTSE 100 financial institution identified over 1.5 million pounds in value via automation of manual efforts, upskilling, and efficiency gains. A national retail chain identified a way to save 5,000 hours plus hundreds of thousands of dollars in costs within its supply chain optimization in just two months of working with the customer success manager. I encourage you all to take a look at the use cases on our Alteryx community site for real-life examples that speak to both the value of our solutions and the effectiveness of our enhanced customer success efforts. As I look ahead to 2023, We have a massive opportunity in front of us, and we expect to achieve a significant milestone of becoming a billion-dollar ARR company this year. Let's be clear, it won't be easy in this macro environment, but we have demonstrated the robust nature of data analytics demand, as well as Alteryx's ability to effectively execute in this market. We enter 2023 on even stronger footing and are focused on three key initiatives to ensure our success. First, the Alteryx Analytics Cloud Platform. We are seeing strong interest in our portfolio of offerings across designer cloud, machine learning, and auto insights. As customers look to consolidate vendors, we are uniquely positioned to provide a cloud-based, end-to-end, no-code, no-code data analytics platform for all. And we have some exciting updates to share on this front soon. Second, go-to-market. We made so much progress in upgrading our go-to-market motion in 2022, and I firmly believe we are just getting started. We entered 2023 with an upgraded and expanded sales force, partner program, and customer success team, and we're just starting to lap early ELA wins, which will create incremental upsell opportunities at our larger customers. And third, profitability. As we move beyond the investment phase of last year, we are committed to increasing operating profitability. We plan to achieve this through both scaling the business and demonstrating spending discipline. Kevin will provide additional color in his comments. In closing, 2022 was an outstanding year for Alteryx, and I am so proud of the entire team. We are absolutely changing lives with what we do, empowering people to upskill themselves and drive value for their companies. Thank you to our customers, our employees, and our partners on an amazing 2022. And with that, I'll turn the call over to Kevin for a closer look at the financials. Kevin?