Alteryx’s AYX partner-base expansion and strategic acquisitions have been playing a major part in driving its growth trajectory. Partnerships with the likes of Snowflake SNOW, Blue Prism, McLaren Racing, KPMG, PWC, Amazon AMZN, Adobe ADBE and UiPath are helping the company win customers regularly.
A strong partner base is helping Alteryx launch new solutions. For instance, the Snowflake partnership allows Alteryx to leverage the former’s compute, elastic scaling and secure data sharing capabilities to provide customers with automated data pipelining, faster data processing and accelerated analytics outcomes at scale. Alteryx has become an Elite partner in the Snowflake Partner Network.
Alteryx and PwC are also Global Elite Partners. The expanded relationship has helped the company gain footprint in organizations across Asia-Pacific and Europe, the Middle East and Africa regions. Another well-known accounting firm, KPMG, has been named an Alteryx’s Principal Alliance Partner.
Moreover, with Blue Prism, the company has formed Blue Prism Technology Alliance Partnership (“TAP”). By jointly using technologies provided by TAP, customers will be able to automate data-driven processes at scale, which will give them critical data and insights, helping them to quickly make smarter decisions.
Alteryx has also partnered with Adobe to provide marketers access to new analytics and data science solutions through Adobe Exchange.
Apart from an expanding partner base, acquisitions have been a growth driver for this analytics automation platform. Alteryx recently announced the acquisition of Sydney, Australia-based Hyper Anna, which offers a cloud platform that enables anyone to access AI-driven insights.
The buyout will help Alteryx to automate the end-to-end analytic pipeline from data sources to AI-driven insights, thereby expanding the company's product portfolio. With the addition of Hyper Anna’s solutions, Alteryx’s customers will be able to highlight anomalies in data, quickly scale automated insights and derive meaningful stories around the data.
Alteryx is benefiting from an expanding clientele, driven by increasing demand for a self-service data science and analytics platform.
Improved awareness of the company’s brands and solutions, particularly among Global 2000 clients, is expected to aid customer-base expansion in the near term. As of the end of the second quarter of 2021, Alteryx had 7,400 customers, including 770 or 39% of the Global 2000. Net expansion remained at 120%, and a stronger 129% within the Global 2000.
Lower Contract Duration to Hurt Revenues
Alteryx’s focus on improving annual contract value (ACV) is driving annual recurring revenue (ARR). However, its strategy to lower discounts for customers choosing three-year contracts is expected to hurt top-line growth in the near term.
The company noted that contract duration has come down to one and a half years years in 2021 against two years witnessed in 2019 and 2020. Per Alteryx’s calculation, every one-tenth in annual duration could impact revenues by $10 million.
For third-quarter 2021, Alteryx expects ARR between $572 million and $575 million, which represents year-over-year growth of 27-28%. However, revenues are expected between $121 million and $124 million, which represents a year-over-year decrease of 4-7% due to the above-mentioned factors.
Alteryx expects to exit 2021 with approximately $635 million of ARR, which reflects 29% year-over-year growth.
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