William Blair Reviews Tableau Software's 'Respectable' Q2

Tableau Software Inc DATA reported its 2Q results, with the top line beating the consensus forecasts, but the operating income and EPS coming in below expectations.

William Blair’s Bhavan Suri maintains an Outperform rating on the company.

‘Respectable’ Results

Tableau Software reported total revenue of $4.8 million, ahead of the consensus, driven by upside in license and maintenance revenues.

The calculated billings growth of 33.9 percent outpaced the total revenue growth of 32.5 percent, also beating the consensus expectations.

“The company attributed the outperformance to an uptick in sales productivity as more reps became fully ramped up and average tenure increased. This translated to record new customer account additions and solid large deal activity,” Suri mentioned.

Related Link: Deutsche Bank Downgrades Tableau Software To Hold

However, operating income came in at $5.7 million, while the EPS stood at $0.04, both metrics missing expectations.

Expenses were also higher than planned, driven by adjustments associated with the company’s decision to moderate sales hiring during the quarter, as well as higher commissions on robust bookings and a company-wide meeting held during 2Q.

Guidance Miss

“The company plans to return to positive margins in the second half of the year,” the analyst pointed out.

Suri also noted that the guidance fell short of the expectations due to the strong acceleration in ratable transactions, with an increasing number of customers showing interest in Tableau Software’s offerings on a term or subscription basis.

“The shift in ratable license bookings has progressed faster than anticipated, which resulted in below-consensus third-quarter guidance and a lowered full-year outlook,” Suri explained.

At time of writing, Tableau was down 9.17 percent on the day, trading at $51.18.

Full ratings data available on Benzinga Pro.