One sure way to keep investors interested in and buying your shares is to put up accelerating revenue growth quarter after quarter. That’s exactly what data visualization solutions specialist Tableau Software did in 2013: top-line growth climbed from 62 percent in the first quarter to 71 percent in the second quarter, accelerated to 90 percent in the third quarter and closed the year with fourth-quarter growth of 95 percent.
Tableau went public last May at $31 a share, opened for trading its first day at $47 and finished 2013 at $68.93. The stock late last month hit a new all-time high of $102.37, up 230 percent from the IPO price.
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A nearly 25 percent pullback in the shares from September to November (coupled with the strong fundamentals) was a key buying trigger for some big investors. Fidelity, the top institutional buyer in the fourth quarter, became the No. 1 non-venture capital holder of Tableau by adding 1.5 million shares, boosting its position by 191 percent to 2.3 million shares. Other large buyers in the latest quarter: Wellington Management, Jennison Associates and AllianceBernstein.
In 2013, Tableau saw revenue expand 82 percent to $232.4 million, with license revenue up 78 percent to $159.9 million. The enterprise-software industry is increasingly moving to the cloud, but Tableau last year still generated 90 percent of its revenue from perpetual licenses. However, with the rollout of Tableau Online — a hosted version of the core Tableau Server offering — now in full force, the company can start to really benefit from the powerful SaaS trend as well.
One important metric for Tableau is new customer wins. More than 1,800 new accounts were added in the fourth quarter alone, acceleration from 1,500 plus adds in the third quarter. In 2013, the company’s customer base advanced 50 percent to more than 17,000. Customers are attracted to Tableau because they’re able to gain access to the software at a reasonable entry price: the average initial order size is around $10,000.
Even with Tableau’s big increase in new customers, the company last year still generated 66 percent of its license sales from existing accounts (up from 64 percent in 2012 and 59 percent in 2011), showing the success of its land-and-expand strategy. With the low average initial order size, the company has plenty of runway when it comes to add-on sales, and in 2014 has the ability to sell into a much larger base.