Alteryx, Inc. (AYX): history, ownership, mission, how it works & makes money

A Brief History of Alteryx, Inc.

Company Overview

Alteryx, Inc. is a data analytics company that specializes in data preparation and analytics solutions. Founded in 1997, the company has evolved to serve a wide range of industries, offering tools that empower organizations to analyze data efficiently and make informed decisions.

Recent Financial Performance

As of December 31, 2023, Alteryx reported a net loss of $179 million, compared to a net loss of $319 million in 2022. The weighted-average shares used to compute net loss per share attributable to common stockholders were 70.948 million, resulting in a net loss per share of $(2.52).

Cash Flow and Investments

For the year ended December 31, 2023, Alteryx generated net cash provided by operating activities of $29 million. This was a significant improvement compared to the net cash used in operating activities of $(105 million) in 2022. The company also reported net cash provided by investing activities of $86 million.

Debt Obligations and Equity

As of December 31, 2023, Alteryx's total liabilities amounted to $1.722 billion, while stockholders' equity was reported at $190 million. The company has issued various convertible senior notes, including $400 million due in 2024 and $400 million due in 2026.

Market Position and Strategic Initiatives

Alteryx continues to strengthen its market position through strategic acquisitions and partnerships, enhancing its product offerings. The company acquired Trifacta in February 2022, which is expected to augment its data preparation capabilities.

Workforce and Operational Changes

In 2023, Alteryx implemented a workforce reduction plan, incurring charges of $17 million related to severance and benefits. This operational adjustment aimed to streamline costs and improve profitability.

Future Outlook

Looking forward, Alteryx is focused on leveraging its technology to capture a larger share of the analytics market, supported by its strong cash position of $744 million as of December 31, 2023.

A Who Owns Alteryx, Inc. (AYX)

Current Ownership Structure

As of 2024, Alteryx, Inc. (AYX) is primarily owned by two major investment firms, Clearlake Capital Group and Insight Partners, following a merger agreement.

Merger Agreement Details

On December 18, 2023, Alteryx entered into a merger agreement with Azurite Intermediate Holdings, Inc., an entity affiliated with Clearlake Capital and Insight Partners. Under this agreement, Alteryx will become a wholly owned subsidiary of Azurite after the merger is completed. The merger entails that each share of Alteryx’s Class A and Class B common stock will be converted into cash valued at $48.25 per share.

Shareholder Breakdown

Financial Overview

As of December 31, 2023, Alteryx reported total assets of $1.912 billion and total liabilities of $1.722 billion, resulting in stockholders' equity of $190 million.

Key Financial Metrics

Market Position and Customer Base

As of December 31, 2023, Alteryx served over 8,000 customers globally, including 980 of the Global 2000 companies. This customer base spans various industries, enhancing Alteryx's market position.

Alteryx, Inc. (AYX) Mission Statement

The mission of Alteryx, Inc. is to empower analytics for all by delivering easy, end-to-end automation of data engineering, analytics, reporting, machine learning, and data science processes. The Alteryx Analytics Automation Platform is designed to democratize data analytics across organizations, allowing users, regardless of technical skill, to discover insights and solve problems efficiently. The integration of embedded artificial intelligence capabilities accelerates the discovery and sharing of analytics insights, enabling users to create both top and bottom-line impact.

Financial Overview

Alteryx reported significant financial metrics for the fiscal year ending December 31, 2023, showcasing growth and operational developments:

Key Business Metrics

Alteryx tracks several key business metrics to gauge performance and strategic direction:

• Customer Growth: Increased to 748 customers with ARR of $250,000 or greater, reflecting a 16% increase year-over-year.
• Dollar-Based Net Expansion Rate: Achieved 116% in Q4 2023, indicating strong existing customer growth and retention.
• Global 2000 Net Expansion Rate: Reached 127% for Q4 2023, highlighting continued demand among large enterprises.

Recent Developments

In December 2023, Alteryx announced a merger agreement with Clearlake Capital Group and Insight Venture Management, with a proposed cash purchase price of $48.25 per share. This strategic move is aimed at enhancing the company's operational capabilities and market reach.

Additional innovations include:

• Launch of Alteryx AiDIN, an AI and ML engine to boost productivity on the Alteryx Analytics Cloud Platform.
• Introduction of Alteryx Marketplace, enabling customers to discover verified solutions to enhance their use of Alteryx products.

Investment and Growth Strategy

Alteryx's strategy focuses on:

• Investing in cloud infrastructure and AI capabilities to enhance product offerings.
• Targeting international markets, with 29% of revenue derived from outside the United States in 2023.
• Acquiring complementary technologies to enrich the analytics platform and accelerate innovation.

How Alteryx, Inc. (AYX) Works

Business Model

Alteryx, Inc. operates primarily in the analytics automation sector, providing a platform that enables organizations to perform data analytics, reporting, machine learning, and data science processes. A significant portion of its revenue is derived from subscription-based software licenses, which typically span one to three years and are billed annually in advance. The company also generates income through professional services, including training and consulting.

Financial Performance

For the fiscal year 2023, Alteryx generated total revenue of $970 million, which represents a 13% increase from 2022. The breakdown of revenue sources includes:

Annualized Recurring Revenue (ARR)

As of December 31, 2023, Alteryx reported an annualized recurring revenue of $955 million, marking a 15% increase from the previous year. The company had 748 customers with annualized recurring revenue of $250,000 or greater, which is a 16% increase year-over-year.

Operational Metrics

Alteryx achieved a dollar-based net expansion rate of 116% for Q4 2023, indicating strong customer retention and upselling capabilities. The Global 2000 net expansion rate was reported at 127%.

Expenses and Profitability

Operating expenses for 2023 totaled $1,004 million, down from $1,038 million in 2022. Key components of operating expenses include:

Net Loss

Alteryx reported a net loss of $179 million for 2023, compared to a loss of $319 million in 2022. The net loss per share attributable to common stockholders was $2.52 for 2023, a significant improvement from $4.65 in the previous year.

Cash Flow and Liquidity

As of December 31, 2023, Alteryx had cash and cash equivalents totaling $530 million, with total investments amounting to $744 million. The company generated $29 million in net cash from operating activities, a recovery from the -$105 million in 2022.

Recent Developments

On December 18, 2023, Alteryx announced a merger agreement with investment funds managed by Clearlake and Insight. Upon completion, shareholders will receive $48.25 per share in cash. The merger is expected to close in the first half of 2024, leading to Alteryx ceasing to be a publicly traded company.

Employee Metrics

As of December 31, 2023, Alteryx employed 2,345 full-time employees, down from 2,904 in the previous year. The decrease reflects organizational adjustments aimed at improving efficiency and profitability.

Global Presence

Alteryx continues to expand its international footprint, with 29% of its revenue generated from markets outside the United States in 2023.

Market Position and Competitive Landscape

Alteryx's competitive advantage lies in its comprehensive analytics automation capabilities, which are enhanced by its focus on integrating AI and machine learning into its platform. The company is committed to ongoing product development and enhancing customer engagement through its analytics solutions.

How Alteryx, Inc. (AYX) Makes Money

Revenue Streams

Alteryx, Inc. primarily generates revenue through two main streams: subscription-based software licenses and professional consulting services.

Subscription-Based Software Licenses

In fiscal year 2023, Alteryx reported revenue from subscription-based software licenses totaling $516 million, representing 53% of total revenue. This segment saw a 15% increase compared to 2022, driven by a rise in total contract value bookings.

Professional Services

Revenue from professional services, which includes training and consulting, amounted to $454 million in 2023, accounting for 47% of total revenue. This segment experienced an 11% increase from the previous year.

Annualized Recurring Revenue (ARR)

As of December 31, 2023, Alteryx's annualized recurring revenue reached $955 million, marking a 15% increase from the prior year. The company ended 2023 with 748 customers generating annualized recurring revenue of $250,000 or more, a 16% increase from 2022.

Cost Structure

The cost of revenue for Alteryx in 2023 was reported at $131 million, which is 14% of total revenue, reflecting a stable cost structure relative to revenue growth.

Operating Expenses

In 2023, total operating expenses amounted to $1,004 million, a decrease from $1,038 million in 2022, showcasing Alteryx's commitment to managing costs while pursuing growth initiatives.

Market Expansion and Strategy

Alteryx continues to focus on expanding its market presence, particularly in international markets, which comprised 29% of total revenue in 2023. The company's platform has been adopted by organizations worldwide, enhancing its revenue generation capabilities.

Conclusion of Financial Performance Overview

Alteryx's robust financial performance in 2023 highlights its effective revenue generation through subscription services and professional consulting, alongside strategic cost management and market expansion efforts. The company's focus on annualized recurring revenue and customer growth underpins its ongoing financial health.