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A Look at Tableau Software’s Earnings Trend

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EPS headwinds

Tableau Software’s (DATA) bottom-line growth in the last several quarters has remained soft, driven by higher costs associated with its Licenses and Maintenance & Services segments. Increased marketing and product development expenses also affect the company’s EPS (earnings per share).

The company’s employee strength has gradually risen in the past few quarters due to increased demand for its product and services, which impacted its EPS growth. Moreover, the transition of the business from an upfront model to a subscription-based model also affected the company’s revenues.

In the last five quarters, Tableau Software has witnessed higher recurring revenues and customer growth. Increased contract wins and the growing demand for analytics in various sectors may boost its EPS going forward.

From the chart above, we can see DATA’s EPS trend in the last five quarters, which fell at a CAGR (compound annual growth rate) of 17.6%.

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Company outlook

In 4Q17, Tableau Software (DATA) reported EPS of $0.12 against $0.26 in 4Q16. The company easily outpaced its EPS estimate of $0.11 per share in 4Q17. Except for one quarter, the company easily surpassed analyst estimates in the last five quarters. For 1Q18, the company projected a non-GAAP[1. generally accepted accounting principles] loss of $0.17–$0.24 per share.

Among DATA’s peers in the software space, Microsoft (MSFT) and International Business Machines (IBM) reported their respective fiscal 2Q18 and fiscal 4Q17 financial results. Microsoft’s EPS came in at $0.96, and IBM’s EPS stood at $5.18, respectively, easily outpacing their estimates by 10.3% and 0.2%, respectively.

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