Alteryx's (NYSE:AYX) Q1 Earnings Results: Revenue In Line With Expectations But Stock Drops On Weak Q2 Guidance

Data analytics and automation platform Alteryx reported results in line with analyst expectations in Q1 FY2023 quarter, with revenue up 26.1% year on year to $199.1 million. Alteryx made a GAAP loss of $89 million, improving on its loss of $105.6 million, in the same quarter last year.

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"Alteryx delivered a solid first quarter with annualized recurring revenue (ARR) growth of 25% year-over-year, driven by robust growth with our larger enterprise customers," said Mark Anderson, CEO of Alteryx,

Initially created as a way to organise census data for the government, Alteryx (NYSE:AYX) provides software that helps companies automate and analyse their internal data processes.

Organizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the silo-ed data.

Sales Growth

As you can see below, Alteryx's revenue growth has been very strong over the last two years, growing from quarterly revenue of $118.8 million in Q1 FY2021, to $199.1 million.

Even though Alteryx fell short of revenue estimates, its quarterly revenue growth was still up a very solid 26.1% year on year. But the revenue actually decreased by $102 million in Q1, compared to $85.4 million increase in Q4 2022. Alteryx's sales do seem to have a seasonal pattern to them, however the management is guiding for a further drop in revenue in the next quarter, so we think it is worth keeping an eye on the situation.

Guidance for the next quarter indicates Alteryx is expecting revenue to grow 0.76% year on year to $182 million, slowing down from the 50.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 13.8% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Alteryx reported 8,338 customers at the end of the quarter, a decrease of 20 on last quarter. That is suggesting that the customer acquisition momentum is slowing a little bit. 

Key Takeaways from Alteryx's Q1 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Alteryx’s balance sheet, but we note that with a market capitalization of $3.55 billion and more than $801 million in cash, the company has the capacity to continue to prioritise growth over profitability.

Alteryx delivered solid revenue growth this quarter. That feature of these results really stood out as a positive. On the other hand, it was unfortunate to see that the revenue guidance for the next quarter missed analysts' expectations and there was a slowdown in customer growth. Overall, this quarter's results were not the best we've seen from Alteryx. The company is down 8.45% on the results and currently trades at $46.7 per share.

Alteryx may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.