Thread by @cameroniadeluca

1/ Let's talk Alteryx - $AYX Q3 ER:

Stock is getting punished today. It's currently -15% on the day.

In my opinion, it is unfairly getting punished for a few things. I'm going to tell you why I am holding shares and my thesis is still intact.

2/ Financials:

Look, these are GOOD numbers for a company seeing small-medium size business churn because of Covid-19 and limited spend:

- Revenue: $129.7 million (+25% YoY)
- ARR: $449.5 million (+38% YoY)
- GM 92%
- 6,955 customers (+24% YoY)
- 241 net new cust

3/ I am happy with those numbers as a shareholder. Q2 and Q3 are tough quarters for $AYX. This leads me to my next point, guidance.

Every mgmt team is forced to guide numbers in a market of uncertainty. We either punish them for it, or we reward them.

4/ The team at Alteryx is getting punished for it.

Guiding a drop of 4-7% in revenue for Q4 at surface level looks brutal. But let's look into Q4 of 2019...

It was monstrous with revenues of $156.5 million, an increase of 75% YoY from Q4 2018.

5/ You simply cannot guide anything higher than that in a global pandemic. You can't.

The uncertainty of Covid leads to uncertain guidance. Management really DOES NOT know what will happen.

What we do know is this: a lot of adoption licenses are coming due in Q4.

6/ This means Alteryx is presented with a good opportunity to put a lock on customers using a trial and have not yet signed a contract.

I don't know the # of adoption licenses outstanding and I don't know the conversion rate.

7/ You have to trust the execution of management and the stickiness of the product. From a product perspective, mgmt offered plenty of examples in the earnings call to tell me it is still working. It is going to assist companies in many ways in the near and long-term future

8/ Alteryx has baked in the effect of adoption license into Q4 guidance. CFO Kevin Rubin has historically been a conservative guider when it comes to numbers which means there is a possibility that they have underestimated these numbers.

9/ I am not holding on a "what-if" numbers are better because they're guiding low.

I am holding because Mark Anderson is a seasoned veteran CEO with only 30 days on the job. I am holding because Q4 2019 growth was monstrous and there is no way we repeat that anytime soon.

10/ I am holding because there is a track record of success for customers using Alteryx.

I holding because there is an opportunity to surprise next quarter. But that doesn't matter too much, it is the 5-year horizon for me.

11/ Alteryx has not been treated well by the market recently and rightfully so. Mgmt changes and sub-par results can do that.

I am looking past all of this. Next quarter could post a surprise. Great if it does, if not then we keep pushing forward with our vision.

12/ We are in a global pandemic where businesses are trying to survive, not all businesses are trying to advance their efficiencies. They are just trying to hold on.

My thesis hasn't changed. I see the end-goal. This too shall pass.

Cheers