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A Look at Tableau Software’s Stock Buyback Program

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Share buyback trend

Tableau Software (DATA) has bought back shares on a regular basis in the last two years. During this period, the company bought back ~1.7 million shares worth ~$100.0 million, maintaining a steady average of ~$50.0 million in share repurchases each year. In fiscal 2017, the company repurchased ~$80.0 million in shares at an average of ~$20.0 million each quarter.

In the graph above, we can see Tableau Software’s share repurchase trend in the last five quarters. The company maintained an average buyback of ~$20.0 million per quarter.

In fiscal 2017, the company bought back shares valued at $80.0 million. In 4Q17, it bought back ~$20.0 million in shares.

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Factors influencing share buybacks

On November 1, 2016, Tableau Software’s (DATA) board of directors agreed to a share repurchase program of Class A common stock worth $200.0 million. At the close of the day on December 31, 2017, the company was left with nearly $100.0 million in shares to be repurchased under the company’s existing buyback program.

Tableau Software has generated healthy free cash flow in the last two years. During this period, the analytics service provider maintained an average free cash flow of nearly $141.0 million per year. 

Tableau Software exited fiscal 2017 with $165.0 million in free cash flow, up 42.0% YoY (year-over-year). This strong free cash flow indicates that the company isn’t dependent on debt to drive its share repurchase plan. So, lower leverage coupled with a trend of healthy free cash flow may boost the company’s future share repurchase plan.

Industry peers Citrix (CTXS) and International Business Machines (IBM) bought back shares worth $1.2 billion and $0.7 billion, respectively, in 2017.

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