Tableau’s maintenance and service business slows
Tableau Software’s (DATA) maintenance and service segment grew strongly in 2017 as its customer base surged. The company’s shift from an upfront payment business model to a subscription-based model offered customers more flexibility. However, as the graph below shows, the segment’s revenue growth has been decelerating. We used its ASC (Accounting Standards Codification) 605 revenue to facilitate comparison.
Maintenance and services drag down Tableau’s growth
In the fourth quarter, Tableau’s maintenance and service segment made $165.4 million under ASC 606. However, under ASC 605, the segment’s revenue grew only 3.2% YoY (year-over-year) to $123.9 million. In the third quarter, the segment’s revenue grew 5.2%.
This weakness has dragged down Tableau’s overall growth down in the last two quarters. In the third quarter of 2017, the segment, which comprises 49.2% of Tableau’s total revenue, grew ~30% YoY.
However, the company is expanding its operations, especially outside North America, and continues to build its client portfolio. In the fourth quarter, the company made 634 deals worth more than $100,000. That number has been steadily increasing over the quarters.