Tableau Reports 35 Percent Q3 Revenue Growth, Surge In Subscription License Sales

Tableau Software's transition to subscription licensing for its business analytics software has occurred more quickly than the company anticipated with subscriptions accounting for 81 percent of overall license bookings in the just-completed third quarter.

The company reported 35 percent year-over-year revenue growth for the fiscal 2018 third quarter ended Sept. 30, including significant gains in annual recurring revenue.

"We continue to make healthy progress in the subscription transition as customers increasingly turn to subscription licensing to help rapidly scale their Tableau footprint," said President and CEO Adam Selipsky in a conference call Tuesday with financial analysts.

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The quarterly results come on the heels of Tableau's annual customer and partner conference in October, with its 17,000 attendees, including 750 channel partners. At the conference the company announced a number of channel expansion initiatives, adding new partner training and certification offerings and support for bundled solutions, and a number of enhancements to its core business analytics platform, including natural language analytics and new data preparation capabilities.

Tableau reported revenue of $290.6 million for the third quarter, up 35.2 percent from $214.9 million in the third quarter last year. The company reported a loss of $21.3 million for the quarter compared with a $46.6 million loss one year earlier.

Tableau began transitioning to a subscription model for its software licensing last year and in the third quarter subscriptions accounted for 81 percent of overall license bookings recognized ratably, up from 67 percent in the second quarter, the company said Tuesday.

Earlier this year Tableau launched a role-based subscription plan under which it sells Creator, Explorer and Viewer software subscriptions and the third quarter was the first full quarter for those subscription sales.

"With the launch of our role-based subscription offerings in April of this year, we've made it easier for customers to tailor Tableau to everyone in an organization, regardless of skill set, from analysts that shape, manage and prepare data to the frontline employees that view and interact with dashboards," Selipsky said on the call. "Q3 marked the first full quarter of our role-based subscription launch, and we've continued to see strong customer adoption and momentum with our Creator, Explorer and Viewer offerings.

"For example, this quarter we signed the largest new customer in our company history as a Fortune 500 insurance company elected to deploy Tableau to over 10,000 people in their organization, with a large weighting towards our new Viewer SKU," the CEO said.

Tableau's total annual recurring revenue was $762.6 million as of Sept. 30, up 45 percent from $526.2 million as of Sept. 30, 2017. Subscription annual recurring revenue was $352.4 million as of Sept. 30, up 160 percent from $139.2 million as of Sept. 30, 2017.

The vendor added more than 3,800 customers in the third quarter, bringing its total customer accounts to 82,000.

Tableau expects fourth-quarter revenue in the range of $266 million to $276 million, representing 9 percent year-over-year revenue growth. That would push revenue for the entire 2018 year to between $1.085 and $1.095 billion.

For fiscal 2019 Tableau is forecasting revenue in the range of $1.33 billion to $1.44 billion.