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Tableau Plummets 12% as Shift to Subscriptions Hits Forecast

The company’s outlook for this quarter calls for revenue in a range of $235 million to $245 million, below the average analyst estimate of $250.7 million.

The shortfall appears to be the result of a faster move of the company’s customer base off of traditional revenue and to subscription, which cuts the amount of revenue that’s recognized in a quarter.

On the call tonight, CFO Thomas Walker noted, "Our higher-than-expected ratable mix this quarter impacted our license revenue in Q3 as we continue to make more progress in our subscription transition."

The forecast for this quarter, he noted, "assumes the mix of ratable license bookings will represent approximately 46% to 51% of our license bookings for the quarter,” which is “a significant increase over the 20% mix in Q4 of 2016."

Walker offered up a “hypothetical example,” to show “the dramatic short-term difference in the way revenue is recognized."

Let's take the individual user cost of the customer deploying Tableau Server as their analytics solution. Our subscription price is $35 per user per month built annually. The upfront cost is $420 compared to $1,000 on the perpetual basis. On a perpetual basis, we'd recognize $800 in license revenues in Q4 and 1/12 of the $200 annual maintenance fee. The total revenue recognized in Q4 would be $816. Now on a subscription basis, we would recognize 1/12 of the $420 in the quarter or $35. This example helps highlight the dramatic short-term difference in the way revenue is recognized. $816 million versus $35, even though the underlying unit demand is identical.


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