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Alteryx, Inc. (AYX)
Q4Â 2019 Earnings Call
Feb 13, 2020, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings. Welcome to Alteryx's Fourth Quarter and Full Year 2019 Financial Results. [Operator Instructions] At this time, I'll turn the conference over to Chris Lal, of Investor Relations. Please go ahead.
Chris Lal -- Chief Legal Officer
Thank you, operator. Good afternoon, and thank you for joining us today to review Alteryx' fourth quarter and full year 2019 financial results. With me on the call today are Dean Stoecker, Chairman and Chief Executive Officer; and Kevin Rubin, Chief Financial Officer. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks and uncertainty. Our actual results could differ materially from expectations reflected in any forward-looking statements. For a discussion of material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's EDGAR system and our website as well as the risks and other important factors discussed in today's earnings release. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release and the Investors section of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure.
With that, I'd like to turn the call over to our Chief Executive Officer, Dean Stoecker. Dean?
Dean Stoecker -- Chairman and Chief Executive Officer
Thanks, Chris. Alteryx delivered a strong finish to another year of remarkable growth, driven by both favorable market trends and excellent execution. On today's call, I will give you an overview of these results and the key factors that drove them, as well as provide additional color on major trends that we believe will benefit Alteryx in 2020 and beyond. Kevin will then walk through our Q4 and 2019 financial performance and our outlook for the full year 2020. We once again raised the bar and set many new records in 2019. We generated record Q4 revenue of $156.5 million, up 75% year-over-year. We booked approximately $290 million in total contract value, up 81% year-over-year. Posted 33% operating margins and generated $21 million in positive operating cash flow. Net expansion remains strong at 130%. We added 474 net new customers, including 36 of the Global 2000, and now have approximately 6,100 customers, including 36% of the Global 2000.
Some notable Global 2000 Q4 lands include: Caesars Entertainment; Canadian Pacific Railway; Emerson Electric; Halliburton; Komatsu; and NASDAQ. For the full year 2019, we saw revenue grow 65% year-over-year to $418 million, and total contract value bookings growth of 70% to approximately $600 million. Additionally, we added just under 1,400 net new customers and posted positive operating margins of 18%. Finally, we generated $34 million in positive cash flow from operations. The strength in the quarter was driven by both strong global execution as well as continued favorable market trends. Competing, let alone winning in this data-driven world requires global enterprises to either disrupt themselves or be disrupted by others. It requires reimagining themselves, wherein data is valued as an asset and analytics as a prowess. This is not achieved by leveraging incumbent technologies and existing processes that made them great in the first place. And it cannot, in our view, be achieved by advocating analytics to only the trained statisticians working on edge cases, even with the best AI and ML capabilities.
It can only effectively be achieved by harnessing the networking effects of people, data and technologies, which allow companies to build a culture of data science and analytics that drives value across all functional areas of the organization. We believe this is best achieved with a human-centered platform that is code-free and code-friendly that liberates thinking, enables creativity and prosecutes analytics to address hundreds of use cases in every organization. We believe that this next wave of digital transformation efforts by global organizations will help fuel our growth for years to come. Last quarter, we discussed the convergence of analytic personas that we believe represent a positive trend that favors Alteryx. We have long discussed the two main analytic personas: the 47 million citizen data scientists that live in the line of business, with limited or no analytics training; and the two million data scientists with deep quantitative and coding expertise. The lines between these two categories continues to blur, as the citizen data scientists are raising the bar in order to meet the business challenges of today by performing more sophisticated analyses, and the data scientists are looking for more efficient ways to build automated data pipelines to drive their models.
With our strong net expansion rates that move us closer to IT over time, there was a third persona emerging. This is the data engineers typically doing a lot of data work for IT. Over time, we see these three personas morphing into a category of workers who drive meaningful business change and unlock, according to PwC's most recent global artificial intelligence study, the $15 trillion of value currently locked up in the data throughout enterprises around the world. With thoughtful leadership in large global organizations, we believe this convergence will continue to accelerate and benefit Alteryx for years to come. And we believe our platform is well suited to enable these analytic personas to unlock tremendous business value. As a reminder, you can discover the hundreds of use cases where this value is discovered by visiting community.alteryx.com. You will find examples like British American Tobacco, who expanded their footprint of Alteryx to include server last year, and generated a $9 million return in just one year by automating analytic processes.
We also believe there is another positive movement under way, and that is a hyper-focused and automated data pipelines, smart algorithms and business processes. These used to be discrete processes performed by multiple tools from multiple vendors with multiple people across multiple departments. We have long said that Alteryx hasn't changed the analytic process, we simply unified the experience in one end-to-end, easy-to-use platform. As we enter the age of Digital Transformation 2.0, the focus shifts from simply improving efficiency to improving outcomes. Better outcomes happen when you combine the imagination and ingenuity of humans, the power of data and the speed of modern compute. Every day, Alteryx is amplifying human intelligence and enterprises around the world, which in turn is delivering better results for our customers. For example, a large global bank established an Alteryx center of excellence as part of their digital transformation effort and is seeing meaningful ROI, each seat of designer saving 400 hours per worker each year.
They are optimizing millions of square feet of office space, enabling better cost controls, and they are pushing forward with replacing expensive legacy analytics solutions. Enormous efficiency gains are being delivered at an overall lower cost. Last quarter, we also discussed our expanding ecosystem. We are pleased to recognize PwC as our first global elite partner, and are committed to working closely with them to accelerate digital transformation across the Global 2000. PwC will advise clients in establishing strategy and governance around their automation program, building solutions on the Alteryx platform via hands-on business-focused training, process assessment, data design and a variety of other means. By doing so, PwC will help clients across industries gain an introduction to the practice of automation, analytics and transformation and empower them to solve complex data processing challenges with the Alteryx platform. We are excited about the strategic relationship with PwC to accelerate digital transformation across the Global 2000.
They are uniquely equipped to help clients unleash the full power of analytics, data science and process automation with the Alteryx platform. As a leading stand-alone end-to-end data science and analytics platform in the market today, we have a unique value proposition for a variety of partners, including independent software vendors, large systems integrators and global advisory and analytic consultants. Given the multiple avenues of growth available to us, we plan to continue to invest in our platform and our go-to-market model in order to capitalize on the significant opportunity in front of us. We have the right team and the right platform to continue to scale Alteryx for many years to come. And speaking of the right team, I'd like to thank the extended Alteryx community, our customers, our partners and all of our associates around the world for making 2019 a great success. As we have long said, analytics is a social experience, and we are all better together.
With that, let me turn the call over to Kevin to discuss our Q4 and full year 2019 financial performance and the outlook for 2020. Kevin?
Kevin Rubin -- Chief Financial Officer
Thank you, Dean. As Dean mentioned at the beginning of the call, Q4 was a strong finish to 2019. Q4 revenue was $156.5 million, an increase of 75% year-over-year, and net expansion remains strong at 130%. Revenue upside in the fourth quarter was due to the following factors: first, we had another quarter of strong execution. As previously mentioned, our Q4 bookings grew 81% year-over-year. Second, we closed a record number of large deals, with an over 150% growth in deals over $1 million and an over 80% increase in deals over $500,000. Third, we did see a modest sequential increase in contract duration. For the full year 2019, our average contract duration was exactly 2.0 years. I'd like to once again remind investors of how our revenue is determined under ASC 606. Revenue is determined based on the total amount of bookings in the period, total contract value, or TCV. As a reminder, we typically enter into either one- or three-year agreements with our customers. TCV includes the full dollar value of multiyear agreements. Of our TCV booked in the quarter, we recognize between 35% and 40% of that amount upfront. The percentage recognized upfront is solely based on product mix.
Sales of our designer product skewed toward the lower end of the range, while sales of Server, Connect and Promote skewed to the higher end. Thus, as we experience more enterprisewide deployments that includes Servers, Connect and/or Promote, our upfront percentage skews toward the higher end of the range. We recognize revenue upon the later of contract signing or contract start date. As we've discussed in prior earnings calls, this factor is important to keep in mind since we have a number of renewal contracts that expire on December 31, but which renew on January 1. This dynamic results in Q4 TCV bookings that will not translate into revenue until Q1 2020. This impact was evident last year as well. Finally, revenue includes the recognition of the ratable portion of our bookings. Q4 international revenue was $45.9 million, up 84% year-over-year, as we continue to benefit from the strong global demand for analytics. Of our 719 Global 2000 customers, approximately half are non-U.S. based. This validates our continued investment in our global go-to-market and support organizations. In Q4, we added 474 net new customers, and now have 6,087 total customers, including 719 or 36% of the Global 2000.
Notable customers that transacted with Alteryx during the fourth quarter included: Chevron Corporation; Federal National Mortgage Association, Fannie Mae; Salesforce.com; Splunk, Inc.; Ulta Beauty; and Xerox Corporation. Before moving on, I want to remind everyone that unless otherwise stated, I will be discussing non-GAAP results. Please refer to our press release for a full reconciliation of GAAP to non-GAAP results. Our Q4 gross margin was 93%, consistent with Q4 2018. Gross margin was positively impacted by our strong fourth quarter revenue performance. Our Q4 operating expenses were $94.8 million compared to $56.7 million in the same period last year. The year-over-year increase in operating expenses was primarily due to additional headcount and other investments in scaling our global operations. Our Q4 operating income was $51 million or an operating margin of 33%. Net income was $44.2 million or $0.64 per share based on 69 million non-GAAP fully diluted weighted average shares outstanding. Our net income assumes a non-GAAP effective tax rate of 20%. Briefly summarizing the results for the full year. Revenue was $418 million, an increase of 65% year-over-year. Gross margin for 2019 was 92%, in line with 2018. Operating expenses for the year were $309 million compared to $184 million in the same period last year.
Full year operating income was $75 million or an operating margin of 18%. Net income was $65 million or $0.94 per share based on 68.7 million non-GAAP fully diluted weighted average shares outstanding. Turning now to the GAAP balance sheet. As of December 31, we had cash, cash equivalents, short-term and long-term investments of $975 million, compared with $986 million as of the end of Q3 2019. Cash as of December 31 reflects the cash paid for the purchase of Feature Labs, which closed in October. Finally, we ended the quarter with 1,291 associates, up from 1,176 associates at the end of Q3 2019, and 817 associates at the end of Q4 2018. Our increase in headcount is reflective of the pace of investments we are making and expect to continue to make to capture the meaningful opportunity we see globally. Now turning to guidance. As a reminder, please note that our guidance assumes the following: the average duration of our subscription agreements will be two years consistent with the levels we saw in 2019. Approximately 35% to 40% of our TCV booked in the quarter will be recognized upfront, with the remainder recognized ratably over the life of the contract. Quarterly revenue seasonality will be consistent with what we experienced in 2019. Capital expenditures of approximately $45 million, which includes the costs associated with the build-out of our new headquarters, and additional offices globally. No material changes to the overall macroeconomic conditions.
For Q1 2020, we expect GAAP revenue in the range of $105 million to $108 million, representing year-over-year growth of approximately 38% to 42%. We expect our non-GAAP operating loss to be in the range of $6 million to $9 million and non-GAAP net loss per share, basic and diluted, of $0.07 to $0.11. This assumes 66 million non-GAAP weighted average shares outstanding, basic and diluted. For the full year 2020, we expect GAAP revenue in the range of $555 million to $565 million, representing year-over-year growth of approximately 33% to 35%. We expect our non-GAAP operating income to be in the range of $71 million to $81 million, and non-GAAP net income per diluted share of $0.80 to $0.91. This assumes 71.5 million non-GAAP fully diluted weighted average shares outstanding, and an effective tax rate of 20%.
And with that, we'll open up the call to the questions. Operator?
Questions and Answers:
Operator
[Operator Instructions] Thank you. And our first question is from Brent Bracelin with Piper Sandler. Please proceed with your question.
Brent Bracelin -- Piper Sandler -- Analyst
Thank you and good afternoon. I'll Start with Dean, and then I have a follow-up for Kevin. Dean, can you provide additional color on what's driving kind of broader Alteryx engagement at some of these larger global SIs? I know you announced the strategic alliance with PwC last week, but our checks also show pretty healthy engagement in Accenture, IBM and Deloitte. So I guess the question here is, why are you seeing these large global SIs engage more broadly? What are the drivers and kind of why now?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, thanks for the question, Brent. I think there's a couple of vectors that are occurring kind of simultaneously here. First of all, the quarter, I think, and the year were largely driven by just improved execution by the company. We have been spending quite a bit of time on our top-down selling motion, and I think that's reflected in the strategic alliances that we've formed in the execution in G2Ks that we've established. The second thing, I think, that's driving this is all the factors that are falling under the umbrella of what we've been referring to recently as Digital Transformation 2.0. I think over the decade between 2010 to 2020, there was a lot of money spent on digital transformation, a lot of things didn't go well. Most organizations did not see success or at least sustainable success. And it's for a variety of reasons. Many organizations had sort of outward-in approach, was thinking they could digitally transform others before digitally transforming themselves, a kind of a selling out of the humans in the digital transformation effort, and probably, an over-reliance on machines.
And I think that's completely changed. We're seeing now an inside-out approach, we're seeing the requirements to upskill data workers, having the human in the mix, which means you've got to have a human-centered platform available to them, and we believe we're best human-centered platform. And the emergence of CDOs or the proxies of CDOs that we've been talking about now for well over a year on these very calls. And these folks in the organizations see and understand this networking effect of people, data, technologies and processes in organizations. And it turns out that the global analytic consulting firms and the big four are all beginning to realize that digital transformation has to be inside-out. So we're seeing these firms focus more on automation, we see them focusing more on the convergence between the personas that matter in digital success, like the convergence of the citizen data scientist, the trained statistician and this new profile of the data engineer that has always existed riding sequel mostly closer to IT.
And as we engage with with more companies in a net expansion model or net expansion number of 130, we're starting to see the data engineers arrive more often. We also have been talking about the other factor that is extraordinarily important, and that is the fact that analytics is a social experience, and that's at the heart of digital transformation. So community is extraordinarily important. And that's what's driving this ecosystem build-out, is that we've executed, and the time is now. We're seeing Digital Transformation 2.0 arrive in extraordinary fashion.
Brent Bracelin -- Piper Sandler -- Analyst
Helpful color there. It sounds like we need to spend a little more time understanding what's happening there, but certainly interesting. Kevin, just for you here on RPO, we have the first year-over-year growth metric now that came in at over 80%, which is a little higher than quite a bit higher than I anticipated. Help us understand the puts and takes as you think about that really strong RPO number versus duration? Or other kind of factors that maybe are driving that above the, call it, true kind of ratable growth rate of the business?
Kevin Rubin -- Chief Financial Officer
Yes, thanks, Brent. So a couple of things. I think if you look at the growth rate in RPO, it was obviously very consistent with the growth rate in bookings. And you would expect those to be somewhat similar. As I mentioned in our prepared remarks, we did see a modest increase in duration in the quarter. And I shared a similar set of colors in Q3 as well. So duration generally has been a favorable component to our bookings. And then I guess, lastly, I did provide clarity in terms of for 2019, average duration was exactly 2.0.
Brent Bracelin -- Piper Sandler -- Analyst
Right, thank you so much.
Kevin Rubin -- Chief Financial Officer
Thanks Brent.
Operator
Our next question is from the line of Brad Sills with BofA Securities. Please proceed with your question.
Brad Sills -- BofA Securities -- Analyst
Great, thanks guys. I wanted to ask about the net dollar-based expansion, the 130% number has been holding on very nicely here in that 130%, 130-plus percent range. How much is Connect and Promote now contributing to that metric? Is it coming in more increasingly? I guess, any color on just how those two and the cross-sell motion has been going there but Connect and Promote?
Dean Stoecker -- Chairman and Chief Executive Officer
To date, Brad, there's still very little impact from Connect and Promote. I think we at the time of acquisitions and the product launches, and we indicated it would be quite some time before we begin to see impact on these. I would imagine that, as we continue to get the global advisory firms pitching digital transformation efforts that, that might pick up in the future. It's still kind of unknown, a lot of the expand is still with designers. We're beginning to see the focus on automation, drives more servers as we become part of the analytic fabric of large global enterprises. I will say that the conversations about Connect and Promote is the end caps for the platform, continue to elevate.
They happen sooner. The digital journeys that organizations are building out, though, tend to start with the same as we've always had. It's a couple of seats of designer, it's $10,000 or $12,000, it's 45 days, and you get 20 designers, you get a server. And at some point in time, there's an inflection point where people decide that they don't want to lose sight of the assets that are being created by this new class of scientists, the citizen scientists. So Connect comes into the picture. And then, of course, if our thesis way back when, when we bought Yhat is true, then eventually, all of these citizen scientists are going to be creating machine learning algorithms, and deployment is going to be critical.
Brad Sills -- BofA Securities -- Analyst
That's great. Thank you for that. Very helpful. And then I wanted to ask one last one on this new persona, the data engineer. If you could elaborate a little bit on what's driving that? Why now? What was different in their needs versus the data scientists and the citizen scientists?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, I think that if you think back to systems of record, deep and IT, the scientists typically need access to data sets to drive algorithmic processes, and they typically relied on data engineers to go do that work. Usually, RIGHT and SQL, are using SSIS, other kinds of capabilities that required coding. And I think organizations are beginning to realize that these data engineers, I think, are morphing into DevOps people are beginning to become a really critical component to get to digital transformation success faster rather than the convergence between the citizen and the trained statistician, I think, is going to accelerate with the emergence of the data engineers. Yes. And let's not forget this then. Digital a core component of digital transformation is the necessity of organizations to see data as an asset and analytics as a prowess and those data engineers typically are the ones who understand data as an asset first. And so they're going to be able to help the PhDs get more productive, and they're going to help get the citizen data scientists more literate around data as an asset.
Brad Sills -- BofA Securities -- Analyst
Very helpful. Thank you very much.
Operator
Thank you. Our next question is from the line of Tyler Radke with Citi. Please proceed with your question. Hi, good afternoon, guys. Thanks for taking my question. I apologize if I may have missed some commentary on this earlier, but I wanted to touch on a couple of things. First, maybe, Dean, it seems like in the past call and at recent investor conferences, you've been talking a lot more about digital transformation and automation rather than data and analytics. I'm curious if that's a function of a change in terms of use cases that you're seeing with your customer. And then I'd be curious, obviously, the change at the beginning of the year to increase the price on Alteryx Server. I'm curious if that was a reflection of some of the more maturing of the uses case you saw, and maybe just help us understand the puts and takes of that. And then maybe, Kevin, if you want to jump in and just help us understand the financial framework in terms of the impact on 2020, that the price increase may have. Thank you.
Dean Stoecker -- Chairman and Chief Executive Officer
Great question. I truly believe that the focus on automation has everything to do with the success in data science and analytics. I think what organizations are beginning to realize is there's so much value that can be had by automating processes that are now easily being created by more people across all functional areas of organizations that rather than waiting for analysts to push the Go button every morning at 8:00 a.m. or 10 p.m. or whatever it is to get their reports and analytics and KPIs and dashboards and models built, that automation is critical. So the is the affirmation that we have, in fact, amplified human intelligence and put the capabilities into more people's hands. And the second part of your question is in why the price increase. I think by illustration, if you go through community.alteryx.com. You'll see tons of use cases and customers writing about the value that they've received, much like the.bat example driving $9 million in automating even routine kinds of processes. And not really sure what the impact will be on this, but we do see is that we're creating real value for customers with our Server product, and that price implementation actually occurred here in Q1.
Tyler Radke -- Citi -- Analyst
Great. And maybe if I could ask a follow-up for Kevin. So you talked about the very strong bookings growth in Q4 here. We obviously have revenue growth at 75%. And I appreciate the granularity on the duration of 2.0, but maybe could you help us understand what duration has been at a granular level, maybe a year ago? And just there's a way to think about, in a duration-adjusted or annualized bookings growth for the full year of 2019, just so it can kind of help understand the impact of duration on overall bookings growth. Thank you.
Dean Stoecker -- Chairman and Chief Executive Officer
Yes. Thanks, Tyler. So we've been talking, even as we were kind of preparing for the IPO and going through conversations that the average contract duration has been two years. Obviously, that's an average. And so we thought it would be helpful to provide a little bit more precision for 2019. But I think the point is that going back as early as 2016, our average duration has still been in that range. Now we have seen some improvement in the back half of 2019. But not to the extent that it actually affected the averages. So in any event, I think that at least illustrates the stability in the customer decision around duration that we've seen over three or four years.
Kevin Rubin -- Chief Financial Officer
Let me also add that it's an expected effect of becoming a critical component of their analytic framework in organizations, you can expect them as they see more and more value to want to sign up for longer-term deals. Again, affirmation that strategy we've put together for many, many years now is paying off in space.
Tyler Radke -- Citi -- Analyst
And Kevin, sorry, just to jump in real quick. So the 2.0, is that a kind of total contract duration of everything on the books? Or was that is that a bookings duration for the renewals and new deals signed in Q4? Thanks.
Kevin Rubin -- Chief Financial Officer
No, that's an average for the whole business.
Tyler Radke -- Citi -- Analyst
Okay, appreciate the call. Thanks.
Operator
Our next question is from the line of Derrick Wood with Cowen & Company. Please proceed with your question.
Derrick Wood -- Cowen & Company -- Analyst
Great, Thanks. I guess, I'll pick up on that topic. So the spread Kevin, between reported revenue growth and reported billings growth has really expanded in Q3 and more in Q4. Sounds like it's mostly due to duration and product mix. But you did make a comment that you have more bookings that have invoices in on January 1. I guess, was there kind of an unusual mix that caused a higher percentage of bookings that didn't get invoiced until January 1, and we should see that in deferred revenue in Q1? Any way to provide some more color on that?
Kevin Rubin -- Chief Financial Officer
Yes. Thanks, Derrick. So as we've mentioned before, the calculated billings number that I think you're referring to, has noise in it. One of the dynamics that you described is, in fact, correct. We have contracts that their billing schedule are different, if you will, or fall over into the next into the next quarter. So it does provide a difference in between the billings growth count that you're looking at and the actual revenue growth. We have coterminous contracts where customers are adding on mid-cycle, that often will drive a less than an annual billing, because you're billing them just through the next period. So there's a number of reasons why those numbers may be different. There wasn't anything per se in Q4 that was unique other than, as we've called out both last quarter, and this quarter, just the dynamic that we do have a large number of year-end deals that ultimately trigger in January.
Derrick Wood -- Cowen & Company -- Analyst
And just to clarify, the 35% to 40% recognized upfront, it was, again, at the high end of that range?
Kevin Rubin -- Chief Financial Officer
I didn't actually provide any color on that in the prepared remarks, but it did skew to the high end of the range.
Derrick Wood -- Cowen & Company -- Analyst
Okay. And then, Dean, one for you. How should we think about how you guys are going to roll out assisted modeling this year? And what kind of monetization strategy that could come with that?
Dean Stoecker -- Chairman and Chief Executive Officer
Those plans are all in the works today. We're in a final beta of assisted modeling. We are confident in the value that it will drive for our customers, particularly the citizen data scientists who we need to understand in a transparent way, what modeling is all about and how to prepare data and how to decision off of it. It would be premature for me to tell you how we're going to do it on this call. We haven't notified customers of what we're going to do. But in the next couple of months, you'll see some materials that describe one, the value that we're going to provide and how we're going to package this modeling. We see it as a much better approach to amplifying the skills of the non-trained statisticians and it will give us a springboard into an auto modeling capability at some point into the future.
Derrick Wood -- Cowen & Company -- Analyst
Okay, all right. Thanks, guys.
Dean Stoecker -- Chairman and Chief Executive Officer
Thank you.
Operator
Next question is from the line of Chris Merwin with Goldman Sachs. Please proceed with your question.
Kevin -- Goldman Sachs -- Analyst
Hi. This is Kevin [Phonetic] on for Chris. International saw strong growth this quarter. Was the performance broad-based? And can you talk a bit about adoption trends that you're seeing across the different regions?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, the adoption trends are pretty consistent. I think the only factor that changes any of it is the duration of our time in market. But it's clear that the Global 2000, in particular, have the same challenges worldwide, whether you're an alpha team in Dubai or your ANA and Tokyo. It really doesn't matter. Everyone's got the same issues around Eaton out the estimated $10 trillion to $15 trillion of value that's locked up in data. So our teams are executing almost identical playbook. There are cultural differences, both bottoms up-selling and top-down selling the engagement models with the global advisory firms is pretty consistent internationally. And we continue to see good traction pretty much everywhere we go.
Kevin -- Goldman Sachs -- Analyst
Great. And can you talk about hiring trends as you enter 2020? Is sales capacity where you'd like it to be? And how are you thinking about incremental go-to-market investments this year?
Kevin Rubin -- Chief Financial Officer
Yes. So I mean, as we've talked about in the past, we do tend to front-load our hiring as we enter into a new calendar year. So we are expecting to see that dynamic, again, continue here in Q1. We have continued to focus our investments, as I think is evident through kind of our guidance, on continuing to invest in go-to-market as our kind of primary focus. There's still a tremendous opportunity within the Global 2000 around the world. We only have 36% of them today. So being able to continue to build out that global infrastructure, and then we'll continue to also invest in other areas of business, including specifically product and engineering.
Kevin -- Goldman Sachs -- Analyst
Great, thank you.
Operator
Thank you. [Operator Instructions] Your next question comes from the line of Steve Koenig with Wedbush Securities. Please proceed with your question.
Steve Koenig -- Wedbush Securities -- Analyst
Hi, thanks guys. I had two, but I'll save one for the call back. So I guess I'll ask you, I'm intrigued by the comments about the data engineer persona. And I'm wondering to what extent could the increasing visibility of that persona to Alteryx? Be it a function of you guys really breaching the IT fortress and taking over from EPL from other IT-centric tools, from custom programming? And how big could that opportunity be for you guys?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, we're actually going through the process now of sort of sizing that aspect of the market. We don't really have tons of detail. We do see the persona emerging more often. I think it's a critical element they are using other tools. I don't think you're going to see a sea change in our approach. You're not going to see we're not going to wake up one day and see a gigantic shift in their adoption. I think it's for the firms that are in the digital transformation effort, I think it will happen a bit faster as CDOs or proxies begin to really understand the importance of data engineers. I don't think it necessarily increases the TAM. I think it actually allows the TAM to occur in a more seamless fashion. We've always talked about the 47 million disenfranchised analysts in the line of business and the $25 billion that sits over in IT and that the winner of a parts and line of the line of business would be the natural beneficiary of the share shift. I think they aid in that share shift, and perhaps we'll see us sooner.
Steve Koenig -- Wedbush Securities -- Analyst
Got it. Great. Well, thank you very much.
Operator
Your next question comes from the line of Ittai Kidron with Oppenheimer. Please proceed with your question.
Ittai Kidron -- Oppenheimer -- Analyst
Thanks. Kevin, I wanted to dig into the expansion rate, still holding up quite nicely. But maybe can you give us at least qualitatively, some color on how much of the movement there is tied in the Designer seat expansion versus new product sales, like Server or Promote or Compose or Connect, I'm sorry?
Kevin Rubin -- Chief Financial Officer
Thanks Ittai, so continuing on some of the comments that Dean had made, we still continue to see the lion's share of expansion through seat expansion. So that's it is a combination of designers and servers, but it is fundamentally more use cases, more users, greater use of automation within accounts. Connect and Promote on their own are still contributors, but the success that we're continuing to see with the Designer Server products is certainly driving the lion's share of expansion.
Ittai Kidron -- Oppenheimer -- Analyst
Very good.
Kevin Rubin -- Chief Financial Officer
Thank you.
Operator
Our next question is from the line of Michael Turits with Raymond James. Please proceed with your question.
Michael Turits -- Raymond James -- Analyst
Hi, good evening, guys. Dean, could you talk about competition among other data science platforms. Oracle made an announcement today. Databricks has been more visible companies like data robots are out there. So a bunch of private companies. But maybe you could just schematize it and tell us what the key components you think are in that platform? Whether it's auto ML, prep, putting production tools, and where you think you stand up against some of those competitors?
Dean Stoecker -- Chairman and Chief Executive Officer
Yes, it's a great question. I think what we're beginning to see is a rapid consolidation in the space and it's because of the need of organizations to have a platform. So everyone wants to be a platform, and everyone wants to be a platform today in what I think is inarguably the largest sector of the tech sector that we've ever seen, data science and analytics. So we've long said that analytics is a continuum. The foundation of the continuum is built around expert data prep and blending capabilities, something we did extraordinarily well and continue to do very well. But it is the on-ramp for everything else. And so if there are players out there that want to call themselves platforms and their these vendors at the lowest value chain in the continuum, descriptive and diagnostic analytics. There's those that are involved in predictive modeling, there's those that are providing AI and ML capabilities that almost, in all cases, are requiring trained statisticians.
So we see everyone kind of jumping into the space. It's affirmation that what we've built is, in fact, what people need. And I believe that when we don't really do bake-offs. We don't really compete other than with staff, and it's kind of an incumbent compete more than anything. But it's clear to us that everyone wants to be a platform, and they have to have the entire continuum. They've got to have data prep and blending. They've got to be able to touch any database living anywhere in any container. They've got to be able to clean it, organize it, standardize it, prosecute the entire spectrum of predictive machine learning processes. They need to be able to play their algorithms. And if they have that, we haven't seen it. But you'll I'm sure there's a lot more noise from all kinds of vendors about having a platform. We welcome them to the mix.
Operator
Thank you. The next question is from the line of David Griffin with William Blair. Please proceed with your question.
David Griffin -- William Blair -- Analyst
Hey, good afternoon. Thanks for squeezing me. I wanted to quickly touch on the product road map. So you've recently started to talk more about the opportunity to introduce new vertical solutions, which, I think, makes a lot of sense. But it also looks like there's still some work to be done in the near-term around integrating some of the recently acquired technologies and bringing some of the recently announced capabilities from beta to kind of GA. So it would be great if you could just talk a little bit about the innovation road map here and whether we could potentially see any of the new vertical solutions rolled out this year? Or is that something that's a little bit further down the road?
Dean Stoecker -- Chairman and Chief Executive Officer
Sure. So when we talked about vertical solutions over the past few quarters, we addressed the first I guess, first wave of verticalization, and that was a go-to-market motion, that was selling and marketing. So we've stood up teams for CPG flash retail, we've done it for public sector, we've done it for healthcare. The verticalization beyond that has been things like what we call kit. These are starter kits that allow an analyst in healthcare to be able to see four, five, six use cases within healthcare that are pretty typical across the provider community within healthcare. The next wave, though, of vertical solutions is not just us building pure vertical solutions as SaaS services, but when I guess, the ultimate value of the platform is when other people innovate on it, so the innovation isn't necessarily restricted to us.
And we're beginning to see that around the world where customers are standing up solutions of their own, whether they're in the advisory business or they're in a vertical that just needs to have a tailored best practice for themselves. Many of them are doing this on Server. So remember, Server doesn't allow you just to have a scheduler. Server allows you to deploy apps and APIs that can be controlled through a UI in another app or via a mobile device or a browser. And we're beginning to see a lot of these start to appear. At Alteryx, we'll begin to produce more of these vertical apps going forward. Some of the verticalization is just repackaging our existing offerings that are going to be a little bit more tailored to vertical spaces. And again, later this year, you'll begin to see early days of that next wave of verticalization.
Operator
Thank you. Our next question is from the line of Pat Walravens with JMP Securities. Please proceed with your question.
Joey Marincek -- JMP Securities -- Analyst
Hi, this is Joey on for Pat. How should we think about your strategy for M&A moving forward? Thank you.
Dean Stoecker -- Chairman and Chief Executive Officer
Great question. As you know, we did our convertible back in I think it was August of this last year. And we saw the dynamics in the space, and we recognize that a lot of really great technologies and teams aren't going to make it or going to be going to point to be wanting to be part of a broader platform like ours. Our pillars for M&A are pretty consistent with what we said when we did our first convertible one and half years ago, and that is IP first. If we can find an IP that's written in an environment that makes it easier to integrate into both current and future technologies that we have, and it builds out where we believe this market is going around data science and machine learning, we'll look at those companies. Second, in a full employment economy, especially in the data science world, we're always looking for acqui hires. Sometimes you get both acqui hires and IP. We believe that most of our acquisitions have those two dimensions, for sure. And then the third is, the acquisition of revenue and customers that we can put into a debt expansion number of one 30. I haven't found those yet. Those would likely be sincerely more money. But we're seeing lots of activity where people want to be part of the Alteryx platform, again, affirmation that what we set out to create many years ago is, in fact, being embraced by the broader market.
Operator
Our next question is from the line of Rishi Galeria with D.A. Davidson. Please proceed with your question. Hi guys, thanks for taking my questions. Dean, just wanted to ask if you could maybe expand a little bit on the PwC partnership? And with them the broadening relationship with them? What do you expect maybe incremental out of that partnership that hasn't been there before? Thanks.
Dean Stoecker -- Chairman and Chief Executive Officer
Well, first of all, I don't know if I'd classify it as a partnership. I would classify it as a strategic alliance. They obviously signed up as our first global elite partner. That may not adequately describe the opportunity for either PwC or Alteryx or our customers. And so this alliance will allow PwC's go-to-market and really take digital transformation, what we would refer to as 2.0, to the broader Global 2000 community. We don't know exactly what we will expect. I think we're working hard to align ourselves in the two teams to make sure that, first and foremost, we provide offerings to customers that provide tremendous value as they try to understand the data landscape that they have and trying to upscale the capabilities of organizations who actually do need to digitally transform or get disrupted by other people. This is a new program. We put it together last fall. It's part of a broader alliance program that we've always had a great channel program. 20% of our revenue is coming from resellers.
A lot more of our revenue is from influence revenue coming from the advisory firms, and we just never formalized it. And this last fall, we put together a team that created a work programmatic approach for alliances. So we've got a global elite program, and it's then anticipated to generate $1 billion in bookings to us over a five-year period. An elite alliance program that is expected to deliver $300 million in bookings to us over a three-year period, and a principal program that's expected to deliver $100 million to us over a three-year program. It's early days for the program. We're super excited that PwC stepped up to our global elite, and we're engaged with them now, and we're very excited about prospects of helping customers around the world see success in digital transformation.
Operator
Thank you. Our next question comes from the line of Mark Murphy with JPMorgan. Please proceed with your question.
Pinjalim Bora -- JPMorgan -- Analyst
Hi, thanks. This is Pinjalim filling in for Mark. Dean, two-part question for you. I think you have disclosed before that 60% of your customers have been involved in advanced analytics kind of use cases, has that kind of picked up at the end of the year? And is it possible to understand, excluding the special analytics, what is that number?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, we've not divulged that before. Off the top of my head, I couldn't tell you what it is. I'm not sure if it's necessarily appropriate to separate one form of advanced analytics from another form of advanced analytics. We do have telemetries, so we do know, for a large part of the user base, what they do engage in. We are beginning to see we've had our Python tools out there for about a year now, and we're beginning to see more and more people leverage Python on for much more complex use cases. But I still think it's pretty early in that transition. What we do know for certain is that we are amplifying the skills of our customers, and we're seeing it in the way they react, then we're seeing it in the motive feedback that we get. And we see these use cases being far more strategic, particularly in the G2K. So it might be presumptuous for us to define what advanced analytics are. What we do know is that we become much more of a critical fabric for the analytic framework of organizations in using any of the advanced analytic capabilities of the platform. Let's not forget that there's 270-some-odd tools within the platform. With Python, you have the ability for an infinite number of new tools. And for those tools, we actually don't have visibility in telemetry. We know that they use the tool. We don't know the extent of the advanced notion that's created in those tools.
Pinjalim Bora -- JPMorgan -- Analyst
Right. Understood. And just to follow-up with that. In that vein, how should we think or how do you think about Alteryx versus some of the cloud providers that are providing something like a SageMaker or Azure ML. Is that more of a very complementary product in your opinion to Alteryx?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, we've always sustained the ecosystem as complementary. It would be somewhat silly to think that everyone is going to use only our product. And so we have partnerships with the folks like a DataRobot or an H2O or an Azure ML, while we don't have a formal relationship with SageMaker and the folks over there at AWS, we see the benefits of Alteryx in that rarely do our customers have all their data in one place. In fact, I think the motivations of the cloud vendors is to get your data into their place, and the reality is most customers aren't going to do that. They're going to be multi-cloud forever. They're going to be on-premise for a very, very long time. In fact, I think a lot of the narrative that we see out there now is that the data hasn't moved nearly as fast as people once thought it would. So having a set of partners in this ecosystem of data science and analytics, we find very, very helpful.
In fact, one of the things that you might have seen in just recent days is the renaming of our conference call, it used to be called INSPIRE, it's now called Analyticon or Global Conference. And the whole purpose of Analyticon is to invite in this diverse and inclusive community of, not just users, users of Alteryx and users of other capabilities from other vendors, but to bring in those other vendors. Because I think one of the challenges the business has faced is that the market for data science and analysts is so fragmented, people get so confused, they waste so much time and money trying to get to meaningful outcomes. We're trying to bring that all back together in a cohesive environment. And I think you'll find that if you come to join us at Analyticon in June, in New Orleans, you'll see the camaraderie, even among the vendors who, on surface, might look like they compete. They actually are far more friendly.
Operator
Thank you. Our final question is from the line of Taz Koujalgi with Guggenheim partners. Please proceed with your question. Hi, guys, thanks for squeezing me in. Can you just give some more color on the price increase? I believe there was a price increase on the Server product. Were there price increases in other products? And if you guys can give some more details on how much lift will that give in fiscal 2020?
Dean Stoecker -- Chairman and Chief Executive Officer
Well, that price increase went into effect this quarter. So we don't know the full impact. I think the price increase was truly a reflection of the value that we're driving for customers more than anything else that you might think. I'll let Kevin address the impact on the model that we've presented to you for 2020. But the reality is, we become an integral part of the strategic analytic framework for organizations and we believe that there's value in the Server product that we have.
Kevin Rubin -- Chief Financial Officer
Yes, just to touch on the model for a moment. So to Dean's point, I mean, and as we've mentioned, as you know, the deeper that we penetrate organizations and the more that they're leveraging Alteryx for automating their analytic pipelines, that is all being done on Server. And so Server is a key piece of that expansion cycle, and it's an incredibly valuable piece. And so I would just say that we expect to continue to see Server as a meaningful piece of expansion and overall revenue, and any impact of price changes would obviously be included in the guidance we provided.
Operator
Thank you. At this time, I'll turn we reached the end of our question-and-answer session. I'll turn the call back to Dean Stoecker for closing remarks.
Dean Stoecker -- Chairman and Chief Executive Officer
Great. Thank you, operator. Thanks, everyone, for joining us today. We look forward to updating you on our continued success throughout 2020. Thanks for your time.
Operator
[Operator Closing Remarks]
Duration: 60 minutes
Call participants:
Chris Lal -- Chief Legal Officer
Dean Stoecker -- Chairman and Chief Executive Officer
Kevin Rubin -- Chief Financial Officer
Brent Bracelin -- Piper Sandler -- Analyst
Brad Sills -- BofA Securities -- Analyst
Tyler Radke -- Citi -- Analyst
Derrick Wood -- Cowen & Company -- Analyst
Kevin -- Goldman Sachs -- Analyst
Steve Koenig -- Wedbush Securities -- Analyst
Ittai Kidron -- Oppenheimer -- Analyst
Michael Turits -- Raymond James -- Analyst
David Griffin -- William Blair -- Analyst
Joey Marincek -- JMP Securities -- Analyst
Pinjalim Bora -- JPMorgan -- Analyst
