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.

Visualize this Growth

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. 

Land-and-Expand Strategy

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.

Another positive metric: big deal flow. After averaging 60 large deals (those greater than $100,000 each) per quarter in 2012, Tableau really ratcheted it up toward the end of last year, with a record 179 in the fourth quarter, acceleration from 119 in the third quarter and 80 in the second quarter. More of these large deals are getting closed thanks to Tableau ramping up sales capacity; in 2013, sales and marketing expenses nearly doubled, representing mainly new sales hires.

Learning Opportunities

For 2014, international expansion will be a major focus. On the fourth quarter earnings conference call, Tableau CEO Christian Chabot said the EMEA, APAC and Latin American regions are all out of the “angry start-up years” for Tableau and that the company would be “leaning into these investments.” In the December quarter, international sales represented 22 percent of total revenue, up from 18 percent in the third quarter. Chabot said US software companies are often able to scale to at least a 40 percent international revenue mix.

Tableau isn’t sitting still on the technology front (Chabot calls the company an “R&D machine”), and is on track for a second quarter launch Tableau 8.2. Last year, Tableau 8.1 helped drive demand with new enterprise features, improved analytics and more interactivity on the Web and mobile. A major new release, Tableau 9.0, is set for the first half of 2015.

What Happens Next

As Tableau gets larger, its rate of growth naturally will come in. For 2014, revenue guidance of $320 million to $325 million (growth of 40 percent at the high end) looks conservative even though comps will be tough given last year’s strong showing. The consensus revenue estimate is already above this range, at $328.5 million, while the Street-high estimate stands at $362 million.

Given the strong performance of Tableau shares, it should come as no surprise that the valuation is extended. Even using a 2014 revenue estimate of $348 million (50 percent growth), the stock trades at 15.8 times the recent market cap of $5.5 billion. The bulls are counting on Tableau to continue to deliver robust results over the longer term: the 2015 consensus revenue estimate of $443.5 million indicates growth of 35 percent.