Tableau Reports First Quarter 2019 Financial Results

SEATTLE, Wash. - May 2, 2019 - Tableau Software, Inc. (NYSE: DATA) today reported results for its first quarter ended March 31, 2019.

Financial Summary

• Total revenue was $282.5 million, up 15% year over year.
• Total annual recurring revenue was $902.0 million as of March 31, 2019, up 41% year over year.
• Subscription annual recurring revenue was $510.1 million as of March 31, 2019, up 115% year over year.
• Diluted GAAP net loss per share was $1.04.
• Diluted non-GAAP net income per share was $0.02.

"We saw strong subscription momentum during Q1 with our mix at 84 percent and our annual recurring revenue exceeding $900 million, up 41 percent year-over-year," said Adam Selipsky, President and Chief Executive Officer of Tableau. "We are seeing more and more customers cultivate a data-driven culture in their organizations due to the ease of use and flexibility of Tableau's end-to-end analytics platform."

Financial Results
Total revenue for the first quarter of 2019 was $282.5 million, up 15% from $246.2 million for the first quarter of 2018. Total annual recurring revenue increased 41% to $902.0 million as of March 31, 2019, up from $641.9 million as of March 31, 2018. Subscription annual recurring revenue increased 115% to $510.1 million as of March 31, 2019, up from $237.5 million as of March 31, 2018.

GAAP operating loss for the first quarter of 2019 was $93.2 million, compared to a GAAP operating loss of $50.4 million for the first quarter of 2018. GAAP net loss for the first quarter of 2019 was $88.9 million, or $1.04 per diluted common share, compared to a GAAP net loss of $46.5 million, or $0.57 per diluted common share, for the first quarter of 2018.

Non-GAAP operating loss was $2.7 million for the first quarter of 2019, compared to non-GAAP operating income of $5.7 million for the first quarter of 2018. Non-GAAP net income was $2.0 million for the first quarter of 2019, or $0.02 per diluted common share, compared to a non-GAAP net income of $5.8 million, or $0.07 per diluted common share, for the first quarter of 2018.

During the first quarter of 2019, Tableau repurchased 34,986 shares of its outstanding Class A common stock for a total of $4.3 million. As of March 31, 2019, the Company was authorized to repurchase a remaining $275.7 million of its Class A common stock under the previously authorized repurchase program.

Recent Business Highlights

• Released Tableau 2019.1, which includes Ask Data, which leverages natural language processing to enable customers to ask questions of their data in plain language.
• Expanded Tableau's data preparation capabilities with the release of Tableau Prep Conductor, which enables organizations to schedule and manage self-service data preparation at scale. Tableau Prep Conductor is part of a new offering called the Tableau Data Management Add-On.
• Recognized as a Leader in the Gartner Magic Quadrant for Analytics and Business Intelligence Platforms for the seventh consecutive year.
• Tableau donated 209,384 shares of the Company's Class A common stock to Tableau Foundation, a donor-advised charitable fund.

Conference Call and Webcast Information
In conjunction with this announcement, Tableau will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) today to discuss Tableau's first quarter 2019 financial results, as well as its guidance for the second quarter of 2019 and outlook for full year 2019. A live audio webcast and replay of the call, together with detailed financial information, will be available in the Investor Relations section of Tableau's website at http://investors.tableau.com. The live call can be accessed by dialing (833) 241-7252 (U.S.) or (647) 689-4216 (outside the U.S.) and referencing passcode 5036617. A replay of the call can also be accessed by dialing (800) 585-8367 (U.S.) or (416) 621-4642 (outside the U.S.), and referencing passcode 5036617.

About Tableau
Tableau (NYSE: DATA) helps people see and understand data. Tableau's self-service analytics platform empowers people of any skill level to work with data. From individuals and non-profits to government agencies and the Fortune 500, tens of thousands of customers around the world use Tableau to get rapid insights and make impactful, data-driven decisions. See how Tableau can help you by downloading the free trial at www.tableau.com/trial.

Tableau and Tableau Software are trademarks of Tableau Software, Inc. All other company and product names may be trademarks of the respective companies with which they are associated.

Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding customer demand and customers' continued scaling of Tableau within their organizations; the Company's progress and continued transition to subscription and term licensing and adoption rate by customers of role-based subscription offerings; new product offerings, features and capabilities to broaden and expand its analytics platform; continued product innovation and adoption, including strong subscription adoption and annual recurring revenue growth; demand, adoption and deployment by enterprise customers, and the Company's ability to service, execute and grow that demand in the U.S. and globally; momentum with the Company's partners; customers' ability to easily scale the Company's products and broaden the deployment of analytics across their workforces with tailored solutions for employees; the Company's research and development investments, costs, continued innovation and ability to timely release future products and features; the Company's leadership position in the sector and ability to address market opportunities as an analytics platform; the Company's expectations, quarterly and annual outlook, and guidance regarding future operating results, including revenues, expenses and net income or loss, and future performance of key metrics; and the Company's stock repurchase authorization and timing and ability to repurchase shares of the Company's Class A common stock under its stock repurchase program. These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: customer demand for Tableau's products and services and customer response to its subscription offerings; risks associated with anticipated growth in Tableau's business and addressable market; competitive factors, including new market entrants and changes in the competitive environment, pricing changes, sales cycle time and increased competition; Tableau's enterprise sales execution and expansion and further transition to subscription and term licensing; Tableau's ability to attract, integrate and retain qualified personnel; general economic and industry conditions, including expenditure trends for business analytics and productivity tools; new product introductions and Tableau's ability to develop and deliver innovative, secure and high-quality products to customers' on-premise, public, private or hybrid cloud environments; Tableau's ability to provide high-quality customer service and support offerings to expand its business and drive customer renewals; risks associated with international expansion and operations; macroeconomic conditions; market conditions; and the possibility that the stock repurchase program may be suspended or discontinued. These and other important risk factors are described more fully in additional documents filed with the Securities and Exchange Commission, including Tableau's most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other reports and filings with the Securities and Exchange Commission, and could cause actual results to vary from expectations. All information provided in this release and in the conference call is as of the date hereof and Tableau undertakes no duty to update this information except as required by law.

Non-GAAP Financial Measures
Tableau believes that the use of non-GAAP gross profit and gross margin, non-GAAP operating expenses (sales and marketing, research and development, and general and administrative), non-GAAP operating income (loss) and operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted common share and free cash flow is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Non-GAAP gross profit is calculated by excluding stock-based compensation expense and expense related to amortization of acquired intangible assets, each to the extent attributable to the cost of revenues, from gross profit. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by total revenues. Non-GAAP sales and marketing expense is calculated by excluding stock-based compensation expense attributable to sales and marketing from sales and marketing expense. Non-GAAP research and development expense is calculated by excluding stock-based compensation expense attributable to research and development from research and development expense. Non-GAAP general and administrative expense is calculated by excluding stock-based compensation expense attributable to general and administrative and expense associated with the donation of the Company's Class A common stock in the first quarter of 2019 from general and administrative expense. Non-GAAP operating income (loss) is calculated by excluding stock-based compensation expense, expense related to amortization of acquired intangible assets and expense associated with the donation of the Company's Class A common stock in the first quarter of 2019 from operating income (loss). Non-GAAP operating margin is the ratio calculated by dividing non-GAAP operating income (loss) by total revenues. Non-GAAP net income (loss) is calculated by excluding stock-based compensation expense, expense related to amortization of acquired intangible assets, non-GAAP income tax adjustments and expense associated with the donation of the Company's Class A common stock in the first quarter of 2019 from net income (loss). Non-GAAP net income (loss) per basic and diluted common share is calculated by dividing non-GAAP net income (loss) by the basic and diluted weighted average shares outstanding. Non-GAAP diluted weighted average shares outstanding includes the effect of dilutive shares in periods of non-GAAP net income.

Non-GAAP financial information is adjusted for a tax rate equal to Tableau's estimated tax rate on non-GAAP income over a three-year financial projection. This long-term rate is based on Tableau's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures. To determine this long-term non-GAAP tax rate, Tableau evaluates a three-year financial projection that excludes the impact of non-cash stock-based compensation expense, expense related to amortization of acquired intangible assets and expense associated with the donation of the Company's Class A common stock in the first quarter of 2019. The long-term non-GAAP tax rate takes into account other factors including Tableau's current operating structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where Tableau operates. The long-term non-GAAP tax rate applied to the three months ended March 31, 2019 and 2018 was 20%. The long-term non-GAAP tax rate assumes the Company's deferred income tax assets will be realized based upon projected future taxable income, excluding stock-based compensation expense, expense related to amortization of acquired intangible assets and expense associated with the donation of the Company's Class A common stock in the first quarter of 2019. The Company anticipates using this long-term non-GAAP tax rate in future periods and may provide updates to this rate on an annual basis, or more frequently if material changes occur.

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash expenses, Tableau believes that providing non-GAAP financial measures that exclude stock-based compensation expense allow for meaningful comparisons between its operating results from period to period. The expense related to amortization of acquired intangible assets is dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, Tableau believes non-GAAP measures that adjust for the amortization of acquired intangible assets provides investors a consistent basis for comparison across accounting periods. The non-cash expense related to the donation of the Company's Class A common stock is not considered by Tableau's management team when evaluating the Company's operating performance and is non-recurring in nature as Tableau does not expect to make additional donations of its common stock in the foreseeable future; therefore, Tableau believes non-GAAP measures that adjust for the expense associated with the donation of the Company's Class A common stock in the first quarter of 2019 allow for meaningful comparisons between its operating results from period to period. All of these non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Tableau's own operating results over different periods of time.
Tableau calculates free cash flow as net cash provided by operating activities less net cash used in investing activities for purchases of property and equipment. Tableau considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by Tableau's business that can be used for strategic opportunities, including investing in Tableau's business, making strategic acquisitions, repurchasing Tableau's common stock and strengthening Tableau's balance sheet. All of Tableau's non-GAAP financial measures are important tools for financial and operational decision-making and for evaluating Tableau's operating results over different periods of time.

Non-GAAP financial measures may not provide information that is directly comparable to information provided by other companies in Tableau's industry, as other companies in the industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Tableau's reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Tableau's business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Tableau's business.