Chit Chat Stocks - Cam Iadeluca | Alteryx (AYX)

Episode Date: December 8, 2020

On the 8th day of Christmas Cam Iadeluca gives to you, Alteryx the computer software company focused on data visualization and analytics. Enterprise customers of Alteryx are raving fans and Iadeluca explains to Chit Chat Money why they should continue to be. Visit our website: https://www.chitchatmoney.com/ Subscribe to 7 Investing with the code "CCM": https://7investing.com/subscribe/ Follow Chit Chat Money on Twitter: https://twitter.com/chitchatmoney Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to 25 Stocks of Christmas, presented by Chit Chat Money. Today, we have an interview with Cam Iadoluca, and we're talking Alteryx. He has sort of an expertise on that business. He's been a shareholder for a while, but he gives some good explainers on the product. Before we get to that, though, we've got our sales pitch. Yes, we have our partners. You've heard about them a lot. They are 7investing. You can get $10 off your first month, So it was only $7 for one month.

You don't have to lock in. You get seven stock picks each month. And they're very personal over there. Simon, the whole team, they'll talk with you, explain how things are working. They're just a great team to have at your back. Yeah, and I think we're going to have them on a few shows for 25 Stocks at Christmas as well. So they'll give a little sneak peek of what you'll be getting. Oh, yeah, definitely.

But here's your interview with Cam Iadoluca. Welcome to Chit Chat Money. On this show, host Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investment. As a quick reminder, Chit Chat Money is a CCM Media Group podcast. Ryan and Brett are not financial advisors. Anything discussed on Chit Chat Money by Ryan or Brett or any other podcast guest is not formal advice or a recommendation. Now, please enjoy this episode. today we are welcomed by cam ayadoluka am i saying that right yeah yeah you got it that's right so we both i guess virtually met cam through fintwit um and we saw i think it was a thread

i don't know how long ago on alter x uh but we really enjoyed it and so we thought we really had it would be a good idea to have you on the show um so welcome to the show why don't you give the listeners a little bit of background about yourself. How'd you get started investing? Where are you at now? Yeah, guys, thanks for having me, man. I've been excited about this for a while. I'm really looking forward to it. So thanks for reaching out to me. But yeah, you said my name, right? A lot of people think it's an L, not an I at the beginning, but it is an I. So you got that right. Yeah. So currently 24, I'm living in Southern Rhode Island. My undergrad and graduate degree were done at the university of mississippi or old miss which more

people uh know it as it's in sec school in northeast mississippi um you know i played hockey my whole life i played ice hockey and i thought that was the route that i was kind of going to go down and just play you know college hockey and things didn't really work out for me so um you know i was like i want to go be a student somewhere and i looked around and that school offered me the best options. But as far as investing goes, I think what really caught my eye was I was a junior in my accounting program as an undergrad. And there was a fund at school called the Tennessee Valley Authority Investment Fund. And essentially it was 21 or 25, excuse me, different schools that managed $500,000 from the Tennessee Valley

Authority, which was a Southeastern power and utility company. And it was a, um, a long portfolio. And essentially you tried to beat the benchmark S and P and you competed against these other schools. And I, uh, I thought it was a great experience and I said, or a great opportunity. So I joined, I was in there for three years. Um, within that fund, I helped manage the money in, uh, the energy sector as well as the information and technology sector. so that's kind of where i i found a keen uh interest in software and tech um and you know i did my underground there finished decided to go back got my master of accountancy and data analytics from omiss um and we were talking earlier but i was supposed to start in september

in new york city for a job that got pushed to january so in my meantime i've just been doing some equity research you know keeping up with my portfolio and um now i'm here so again yeah thanks for having me spending a lot of time on finn twit right dude i've been spending too much time on twitter but it's not bad if you use it wisely you know like people talk about twitter and all this social media and i never actually understand the value of of social media until you curate it in a way that can help you and i think finn twit has been that for me you know I've been able to go online and meet new people like you guys and other people. It's good if you use it in the right ways, and FinTwit for me has been that.

So I've been on there a lot. Definitely, and it's easy to get caught up in the wrong stuff on Twitter. But the company we're talking about today is Alteryx. How did you find them? Yeah, so like I said, I did my grad degree there at Ole Miss as well. It was a Master of Accountancy in Data Analytics. And the year that I actually finished this past year, it was the first year that they offered the data analytics program as an emphasis for a grad degree. And what it consisted of was four classes, two per semester, where you would utilize different softwares.

You would learn the technical side, but then you would also learn the hands-on side of all these softwares and statistics and whatnot. and you know we used tableau we used sap we used rapid miner and then another one of the softwares we used was all tricks so that wasn't the first time i had heard of the company the first time i heard of it was online i believe i can't remember if it was twitter or discord or slack but i remember chatting about it with some friends and um you know i was i was keen to it in the sense of i kind of knew what they were doing but i didn't know exactly what it was until i did my degree. And I had two classes where we built, um, multiple, you know, workflows and we would chat about them in class. So my grad degree was when I actually got the hands-on experience with

the software itself. Um, and understood it a little bit more. Um, but yeah, I mean, like I said, I heard about it a little bit, didn't know too much, but when I did get to my grad degree and I got to utilize it in school, that was when I actually kind of figured out what it did and what it was okay and so i think a lot of people know like broadly what it's about that most people just see alter x and they think data but can you explain sort of in layman's terms what alter x actually does yeah yeah that's that's a good question just because everything nowadays is kind of data related that's kind of the hot topic right and that's part of the reason i did my grad degree was no why wouldn't you do it if it's offered but uh so essentially it's a data in

machine learning platform um people refer to it as a product or software but it is a platform in that sense of it offers they have multiple different products in its offering um they operate in what's called the analytics process automation side of data analytics so it's kind of big words but essentially it just means technology that allows for data manipulation and then sharing of this manipulation of data so uh another good work good way to think about it is essentially it's a platform that takes data and makes useful information for decision making more specifically you can take this data from you know unstructured databases structured databases json documents you can even scan documents and then pull data from these scan

documents um move this data around however you want and then transform it and load it into um into whatever you want to do right so that's where the extract transform and load part of it gets in and i know you said layman's terms so i'll keep it fairly simple to to start i'll keep be fairly simple right but um yeah it's a platform that assists companies um with making decisions from um from a bunch of different data and just to touch back on the platform side of things rather than the product side of things all tricks is a platform because it offers um all tricks designer server analytics hub and then a few other different products but the main product that people think about when they think about Alteryx is Alteryx Designer. So, within Alteryx Designer, you have

the capability to create what's called a workflow. So, there's tools at the top of your Alteryx platform or software, and you can drag and drop these tools and manipulate these tools to bring in the data, transform the data, and load it into whatever you want. And start to finish, that's what's called a workflow. And that entire workflow is built within Alteryx Designer. so for the sake of simplicity all tricks designer is their main product um i'm not exactly sure how much of like their revenue comes from each individual product but when people think of all tricks a majority of the time they're thinking of all tricks designer and building the workflows within this designer platform okay and then who is using it is it uh so say you're at a large

company uh are the data scientists using this is it just all the computer science people or is it you know even people that are just kind of business analysts yeah i think that's why that's a that's a it's a good question because that's a little bit of uh the long thesis that i have on all tricks is anybody can really use it like that's why all tricks is so good is um because when you needed to make a business decision or you needed to, um, you know, make a decision to buy or sell a product, you might only go to one individual person in a company. You know, if you needed to build a predictive model, that's like, that's a majority of that is the coder's job, right? Like you get the guy who codes and you say, or the girl who codes and you say, Hey,

look, I need you to code me a predictive analysis on how much we should price our, uh, our unit set or you go, Hey, should we sell this product in this geographic region? Alteryx can help in both of those situations. But the reason that Alteryx is so powerful is that you don't need to be a coder or you don't need to be a business analyst to understand how to solve those problems. The power, like how powerful the platform is, is it allows anybody whatsoever, whatever line of business you're in to solve any problem that you might have throughout the business so yeah you could have a coder use it and you could have an analyst use it but then you could also have someone that had just taken a couple courses on how to use all tricks solve

the same problem for simplicity search uh circumstances and do the companies pay like a subscription monthly for it do they pay per usage um is it like yeah so it's per it's per user right So, um, I, the all tricks designer, I believe it's $5,500 per user. So yeah, that's annually. So, uh, that's annually. So, um, they give you a license, right? A license code. So you'd be able to, um, you know, I don't know how many users you can have on that license

code. It's just like the Netflix debacle, like how many people you have on your Netflix account. I'm assuming that all tricks has that under control where they don't have multiple people in a firm using the same license code. but yeah, it's on a user base and, um, and they give you an annual prescription or subscription for $5,500. Okay. And then, uh, before we get onto your thesis around them, I know we've explained a little bit, can you go over the management? Uh, I know they've had some shakeups there. Can you explain that for the listeners? Yeah, this is important. I think, um, it's been

a topic of conversation for a while. Dean Stoker co-founded this company in 1997 with Olivia Dwayne Adams and Ned Harding. Olivia is currently the chief customer officer and she's been for a while. And Ned Harding, the other co-founder, is actually retired and he kind of acts as a special advisor now for the company as well as any other company that hires him um dean stoker left in october of this year um it was for unknown reasons at the time and um you know the market didn't really like that that much they got punished that day i think they were down like 20 percent um during trading hours and and it was kind of it was a little bit of a surprise because it was kind of on you know no one really expected it coming but um dean is

still on the board. He's still the chairman of the board. And now the current CEO is Mark Anderson. Mark Anderson came from Palo Alto Networks, which is one of the largest cybersecurity companies in the world. You know, they currently sit at like $28 billion in market cap with $3 billion in revenue. Mark Anderson, you know, was with Palo Alto Networks from its pre IPO days in like 2010 until its IPO in 2012 and then up until October. So Mark comes from a developed company where he learned how to scale a business tremendously into a large cap company. And Mark was actually on the board of Alteryx prior to taking the position as CEO. So Mark had an outsider look on the company and he also had an insider look on the company. So for purposes of management,

I think it was a great decision. President and Chief Revenue Officer is Scott Jones. He's been with the company since 2017. He worked with Tableau and SAP. Chief Customer Officer and Co-Founder, like I said previously, is Olivia Dwayne Adams. CFO is Kevin Rubin. He's been with the company since 2016. He brings, you know, 20 years of experience in software.

And then the chief technology officer is Derek Knudsen, if I'm pronouncing that correctly, and he's been with companies since 2018. So if you look at the tenures of all these executives, they're a fairly young management group, but they're a very experienced management group. And having Dean on the board with the management team, I think, will allow them to develop their go-to-market strategy in a way that makes sense. and a way that they can monotonize it in the future right and the cto is something that's very important for this company right is that something you're looking at closely like researching whether this guy um i forget if it's a guy or girl uh is you know up to par right yeah uh you know it is for sure um but when you think about a cto you know they're keeping up with the technology but a product like all tricks it's they're innovating but their main goal isn't

really to innovate the product itself i think a reason that they're really not trying to innovate too much themselves as a product is because they don't really have much competition right now um so the i think the chief technology officer is kind of working alongside um some of their major enterprise clients to basically seamlessly transition the Alltricks software into these businesses, right? So I don't think his main goal as the CTO is to develop this into something different or iterate it into new fashions. It's not something that I personally take too much of a look into. I just think it's important that he has the experience and he's not just coming over from a smaller company he's been in the industry for 20 25 years as well all right i imagine the

and i guess you can correct me if i'm wrong but i imagine customers when they subscribe to all tricks know what the utility is they know what they're getting um but a lot of the work probably is in onboarding uh those clients and making it really easy to use right yeah they you know people go to all tricks not because uh right now not because it's something that they need it's something that they want so they have already reached out and and i think a lot of these customers know what they need it for um you know they know how they're going to utilize the product or the software um and you know a lot of that falls on the sales team as well being able to integrate the product and explain the product to, to, to these clients in a way that makes sense

for them. But a lot of them already know what they need it for, you know, and a lot of them are reaching out and saying, Hey, look, I need it for this, this and this. How am I going to do this as the chief technology officer? I think he's able to go in there and tell them, yeah, we can offer that for you. And this is how we're going to do it. Okay. And then I guess the main thing here, you know, why do you like Alteryx as an investment? You know, maybe give the listeners uh you know what your time horizon might be um you know why do you like to i think you do own the stock i don't want to put words in your mouth but why would you yeah going forward yeah i probably should have prefaced that before i started talking um but yeah i'm long i'm long

all tricks i've been long for a couple years now i think when i first when i first actually found it i was i loved it i was like i need i want to own this but um yeah so i'm long all tricks uh My time horizon and my philosophy as an investor doesn't change. I'm a long-term investor. I rarely sell. I sold one company last year and that was the first company I'd sold since I bought any companies when I first started investing. So my thesis is buy and hold good companies for a long period of time. And that's easier said than done because everybody wants to buy good companies and hold them for a long period of time. But historically speaking, you have better success when you don't move your money around and um and i think i've been able to master this skill in the

short term that i've been in the market so yeah that's my strategy is buy and hold uh these companies for a while and all chicks tested me a lot this year um with a lot of all total yeah yeah dude like two or three times it was dropping like 20 and i'm like oh my god so it was a test for me but um i love it man i love this company i think it has a lot to offer to people um you know broadly speaking before i get like too too in depth into why man there is so much data just being pushed around into markets right into people's faces um whether the data is coming in at the beginning of the product cycle whether the data is coming in halfway through um your development or whether the data is coming in right before you're you're selling this product

to someone data is just so chaotic it's in and out of businesses it's coming through every channel that you could possibly imagine, like there needs to be one way that companies can turn all of this chaotic data and all of these different forms into a way that's easily digestible. And then once they've digested it, they can take it and they can make actual decisions with this data. And Alteryx gives these companies a way to do this. It's well positioned in this environment because it doesn't really have many competitors. And from my research, there isn't a competitor whatsoever that competes with Alteryx in the way that they're addressing their market. And that's something that I think we should adjust to is this total adjustable market that

Alteryx talks about and that you guys have probably heard about. I know you've heard about it. I've actually heard about it on the podcast when you had Kermit Capital on. And even Dean stoker said this there are total total addressable markets about 50 billion dollars right and they said that they've penetrated less than one percent of this market so to think about the room that they have to grow the runway in this market they have to grow is tremendous um another couple quick stats while i'm here is like the internet of things which are essentially connected devices installed on individuals phones uh tablets refrigerators nowadays like the internet of things currently sits at around 35 billion devices. And by 2025, it's expected to hit around

75 billion total devices connected on the internet of things. And if you think about that on an individual level, that's 10 connected devices per person, which is absolutely incredible. Like I don't have 10 devices that are connected on internet or even sending data anywhere, at least that I don't think so, right? Like that's 10 devices per person. There's so much data that's being flushed around into these people's hands, into these companies' hands, that they really need help finding a way to simplify this data in a digestible way. And with that being said, on the digesting side, a couple more things I wanted to touch on was that there was 6 billion hours per year spent working in spreadsheets, which translates to like 26 hours a week wasted

on needless repetitive tasks. And to touch on Kermit again, when he was on your pod earlier this year, he actually mentioned an example when he was asked a question from his superior and he had to try to find a way to basically tell his superior, well, this is just the way it works. So this is just repetitive tasks that people are doing over and over again, just modeling efficiencies that are just wasted so many times. And there's been over $60 billion spent this year alone on just repetitive manual spreadsheet work. I mean, this is just chaotic numbers I'm spitting out at you, but you get the point, right? There's so much data that's flowing in and out of these businesses that businesses really can't keep up with it. So how do they keep up with it,

right? How do they build this out into something that's going to increase their operational efficiency and help them succeed. Okay. So let's bring up all tricks now, right? Like you have the data and what do you do with it? Um, all tricks in itself for me, the product and why I love the product so much as an investment is it's the only end to end analytics platform, um, that enables anybody whatsoever, what your skill level is to kind of discover data, translate the data, and then load the data into something that's important, right? And that's the ETL extract, transform, and load side of things that I mentioned earlier. The only software that actually offers an end-to-end analytical pipeline of tools for

companies to use. There might be a company in the extracting portion of the ETL process, which is gathering the data from multiple different sources and then being able to converge this data, now we can use it. There might be one software that may offer a little bit of an edge over Alteryx extraction side, but then that same software doesn't really offer a transforming of the data product. And then that same software doesn't offer a loading part of the data. And the same thing can be said for transforming and loading the data, right? There's individual fragmented offerings and products, but then there's no real one offering that is a true end-to-end full pipeline tool in the market

that allows you to move this data around and create all these different decisions that you want to do. And that's Alteryx. That's essentially Alteryx's moat. That's why people and customers love Alteryx. That's why the stickiness of Alteryx is so important when it comes to an investment. is once you have the product in your hands and you see the capabilities of having it, it doesn't make sense to go back to what you were doing. And I don't have any examples off the top of my head, but if you were to go back into the recent Q3 earnings calls, they touch on every earnings call. They bring in new examples of their customers and their customers show, this is how sticky the product is. I'll never go back. So as far as a total

addressable market, yeah, we talked about chaotic data moving in and out. And then as far as the product goes, it really is the only end-to-end analytical software that allows you to extract data, transform data, and then load data into whatever you want. And just to touch on that really quickly is you don't need to be, like we talked about earlier, you don't need to be a mathematician or a coder or a data scientist to learn how to use Alteryx. Alteryx is a machine learning an AI tool. So essentially, if you know what the tool is within Alteryx that you're using and why you're using it, Alteryx can handle the rest of it. You don't need to code to create a spatial modeling. You don't need to code to create a predictive analysis. You just drag the tool in

if you know what the tool is doing, right? So it's kind of, it doesn't necessarily eliminate the need for certain business or certain individuals within a company. It just finds a way to enhance these lower skilled people within your company and kind of upskill them even more. And Alteryx has been doing a great job with that over the past years. One of the ways they've been doing this is they're offering Alteryx Academy. And this is another reason why I just like it. It's kind of an ethical investment in the sense of they're giving back to the community, right? They're upskilling, like I said, these people, they're offering Alteryx academy where they're teaching these, uh, younger kids start to finish how to operate the software.

They're running competitions weekly and monthly. Um, they're offering what's called the adapt program to help people who lost their, lost their jobs in COVID, um, become what's proficient in all tricks. And now you can put that on your resume with a certification. So they're doing all these things to show, um, to, to build their brand in a sense and get their name out there. but the product makes sense and then the total addressable market is 100 there and only growing for the future and so like you said you used it in school um and now you're going to and i think the job is correlated to what you did in school do did your employer ask you know do you understand how to use alterex was that sort of a barrier to entry did you have to uh do you feel like that

was useful to already have that skill uh the employer didn't didn't it was it was helpful to have right it was nice to be able to say i can i can operate it i'm in i'm by no means a master in this platform because it still is extremely complex right it's just like it's just like learning anything else it takes a lot of time so i really don't i'm not a master by any means but it was nice to be able to say, I can use this. And the business that I'm getting into, we won't be using it to increase operational efficiencies internally. We would have a division, like an analytics department that would then be contracted from a customer to come in and help them with their business. So I don't need it to go and work and do what I'm doing. But if I understood how to

use it, I could go into the line of business within the company that I'm working in that helps clients and consumers. So it's nice to have. And if I do want to work in that side of the business, I'll already have that jumpstart above people that haven't used it. Okay. And how does, maybe correct me if I'm wrong, but you said you use Tableau and I know a lot of people kind of see Tableau and AlterX as competitors, but how does Tableau differ from what AlterX is doing i know this wasn't on our notes or anything like no no no no of course not yeah um you're good i think the main difference with what people really have to understand is i posted about this before on twitter's tableau is primarily they primarily operate in the data visualization

industry right so all tricks prides itself on being a data analytics and data science company whereas tableau primarily operates in um the data visualization so they're not direct competitors in a sense but they're used together a lot so if you were to build we could go through like a quick example right if you were to take covid data from all over the united states and you had different data you could from you know unstructured like i said structured and then you had random documents You could throw it all into Tableau. You could manipulate this data and say, okay, I only want the states in the Northeast. I only want people of this age group, and I only want people of this ethnicity. And you do that all in Alteryx. And then you get at the end, you take that loading phase, which could be an Excel document, which could be a PDF file, which could be anything, but it's just that loading. And you take that, which you did at the end of your Alteryx workflow, and then you plug it into Tableau. From Tableau, you can there visualize it and create maps, you can create charts, you can create bar graphs, you can create pie charts, you can create heat charts, you can heat maps. So it's more on the data visualization side rather than the data manipulation and changing and altering the data.

So it's less technical in that sense and more easy on the eyes, I guess, if you will. Making it look prettier. Yeah, when you use the platform. Yeah, I was going to say, Ryan, you said that you've had this explained multiple times. Do you think you've – I think that finally did it, right? Yeah, I've probably had all three explained to me like five times. And I'm like a slow learner, but it makes sense now. But we're going to hit a quick break here.

And then on the second half, we're going to try to poke some holes in Cam's thesis. So here you go. cox panoramic wi-fi includes advanced security to help protect all your connected devices you'll get real-time alerts oh like this one so you don't have to worry about malware or when your kid downloads a song from a shady link and now all your computer can play is red color red color where are you all blocked thanks to advanced security included with cox panoramic wi-fi advanced security must be enabled in the panoramic Wi-Fi app. Restrictions apply. Welcome back in. Next up, we have Devil's

Advocate. So this is us providing some counterpoints to AlterX as an investment. I'll go first and Cam's job here is just to really refute what we're saying. And so we saw sort of a decline in spend with AlterX in March, or I guess the stock came down. I don't have the exact date in front of me, but I think it was quoted that a lot of people said this isn't core to their business. It's a nice service to have, but it's not essential. Is that true? And if so, is that a problem for Alteryx as an investment? Definitely true. Yeah, that's true. It's not a necessity, right? Like when you think of necessities to business, Alteryx isn't the first thing that comes to mind. And that's because people use Alteryx to find ways to increase efficiencies.

They use Alteryx to find ways to sell more or, you know, should we sell this product here or there? So as far as necessity goes, it's not the lifeline of a business. It's not essential. It's just nice to have. But I think it's important to know this is where my investment philosophy and um my vision as an investor is different from a lot of people's it could very well just be confirmation bias because i'm long but we talked about the total addressable market right and how big this market is going to be in 5 or 10 or even 15 years so you can say yes currently during a global pandemic, having all tricks and paying $5,500 per user right now during the middle of a global pandemic, it's not a necessity. But five or 10 years from now, when you're falling

behind to a competitor because you can't keep up with the data that's being pushed into your company, yeah, I think you're going to need to make a change and you're going to find out that all tricks is so valuable that you're going to say to yourself, why didn't I have this earlier? So currently I don't think it's really a necessity to businesses, but I think five or 10 years from now, I think businesses are going to realize we kind of made a mistake not having it, or we need this ASAP because it's, it's now a necessity to our business. There's going to be times in the future where businesses fail strictly because they can't handle this overload of data. They don't know how to manage it. And it's something that everyone knows coming, but it's something

that a lot of businesses don't really know how to prepare for. Alteryx will be there when businesses need it. And a lot of businesses will say, this is now a necessity for us. And like I said, this could be confirmation bias just because I own the stock. But I think it does touch on the fact that the market is so big and the product is so good that companies will see it as a necessity in the future. Okay. And it kind of gives them a competitive advantage maybe. So if someone's using it, their competitor is not. The customer is a competitor. Yeah. Sorry. The customer like has a competitive advantage over, you know, even if maybe they're a smaller one or even a large and bureaucratic organization and get using Alteryx gives them an advantage over any,

any competition yes yeah it does it you can use it however you know you can use it for so many different ways but yes 100 it'll give you a competitive advantage all right and then the counterpoint i had was about the ceo leaving so he was there for 24 years he was the founder yeah bumped up to the chairman of the board does that concern you at all were there any things about internal strife loss loss of confidence um is the new management team had you know you you did talk about them having a tracker but him leaving um do you worry about that at all uh yeah at first i did um i prefer founder-led companies a lot of people do because of the skin in the game that these these founders have but you know the more i looked at it i actually

watched the video a couple weeks ago and uh or a couple days ago excuse me dean stoker the original founder who left, like you said, after 24 years was on CNBC with Mark Anderson and Jim Kramer, and they talked about the transition. And, uh, before I watched that video, I had read something that said Dean was trying to get out of the company prior to the IPO in 2017. I don't know why he was trying to get out, but if, but his, um, if you don't remember one of the founding three members is already retired. I don't know if that plays a part on why he left. No one really knows why, right? I think he was kind of ready to move on and maybe the pandemic pushed him out. Maybe he couldn't scale the business quick enough. Maybe he couldn't, you know, there's so many

what ifs, but I don't think it scares me just because he had hinted at leaving before in the past, so it wasn't a complete surprise. And then two, it also doesn't really scare me because of the track record that Mark Anderson has with building Palo Alto Networks up. Palo Alto Networks is a great global cybersecurity company that has a mission of protecting these businesses, right? And then he also believes Alteryx has the same mission, just in a different industry. So I'm not too concerned because of the reputation and the experience that Mark had coming in. Okay, so you are a shareholder. What would have to happen for you to no longer be a shareholder?

What scenario could you see yourself selling shares? Yeah, I said I rarely sell. So this was kind of hard for me to... I haven't really been in a position where I've debated on selling a company too hard yet. But man, if you look at a company and you just see five, six quarters of just single digit revenue growth and no net new customer ads and the business is just stagnant. And, you know, even if gross margins are still in the nineties, which all tricks tend to have and dollar based net expansion ratios, you know, slowly going down, like you got to think something's going on. Right. Like, and I think the biggest part for me with all tricks specifically would just be the revenue growth and the customer ads. and it's hard to say i would sell because all tricks historically underperforms in quarters two and three and i'm not entirely sure why that is it might be because of their product life cycle and the way that their their contracts are structured they might get more contracts in

q1 i'm not entirely sure but we're in the middle of a global pandemic right now and just to touch on some of the Q3 numbers that they just put out. They grew revenues at 25% year over year. Their ARR, annual recurring revenue, grew 38% year over year. Their gross margin was still 93%. Their dollar-based net expansion ratio was 124%. They added 241 net new customers. This was last quarter in a global pandemic. And those are pretty good numbers for a company that's battling with small and medium-sized business churn during a time where their customers don't have much money to spend. So for me, I'm seeing 25% year-over-year revenue growth in a global pandemic. If you show me 9% or 10% year-over-year revenue growth during a time of economic expansion for more than four

or five quarters, then yeah, I'm going to be slightly concerned considering you grew at 25% year over year during a pandemic. So I think that revenue growth and then that net new customer ad would probably be the two things that would lean me in the direction of selling off in the business. All right. That makes sense. You got anything else on that, Ryan? No. Okay. Last question before we wrap things up. Let's say you're made king of Alteryx for a day. you had 100 of the voting power uh what is one change you would like to see them make oh man i would have i have no idea i don't know if i'm capable of having that responsibility

um i don't think there's any changes that i would really make you know i would um i don't think i would change anything really um i think what i would like to see um i just really want to see mark anderson execute man like this new ceo coming in i would put a lot of my time and effort into into talking with him and making sure that he's executing in a plan that's going to help shareholders um because there's they're they're doing everything that they possibly can right like the numbers might not look great if you you can always find numbers that don't look great right but the product itself is is a tremendous product it's a powerful product you know the market's there the management is there still um i wouldn't

necessarily change anything currently about the business um they to touch on the numbers things you can find numbers that don't look good and there's been a new accounting rules that have been changed so people are going in and poking holes at the numbers in their financial statements and this and that so i wouldn't change any you know this i wouldn't really change anything i think it would be i would i would really try to focus on pushing mark the new ceo to execute and scale the business the same way he scaled it at palo alto networks i mean palo alto networks is huge now man they're 28 billion dollar market cap company um i think there's a lot of opportunity for him to come in and um and build the business you know he might have some things lined up on

the table whether that's um branching off from designer and and putting a lot of r&d and capital into these other altrix products like the altrix server or the analytics hub maybe i'd like to see them get into those and push those a little bit harder um but man there's really nothing that i would change currently about the business. I think it's just a really tough time right now that a lot of businesses are going through and the grass is greener on the other side. I think they're going to make it out fine. I mean, they are going to make it out fine. And I think five to 10 years from now, my personal opinion, obviously, because I'm long, I think people are going to be kicking themselves in the butt because they don't have it. All right. Yeah,

That's going to do it. Where can listeners find you? What's your Twitter handle? I'm on Twitter at Cameron Ida Luca, last name I A D E L U C A. I'm on Twitter there. Yeah. Give me a follow tweet at me.

I appreciate it guys. Thank you so much. Sweet. Now for our listeners, we want to remind you that we are not financial advisors. Anything we say or discuss here on chitchat money is not formal advice or recommendation. Thank you guys for listening.

Thank you, Cam, for joining us. Have a good day.