Alteryx : Q3 2023 Shareholder Letter

Shareholder Letter

Q3 FY2023

November 6, 2023

From Our CEO

Fellow Shareholders,

Q3 was a solid quarter for Alteryx across the board. Our product team made significant progress with our generative AI infused offerings that we believe will bring high value to our customers. Our business execution improved from the prior quarter, with key financial metrics above the high-end of our guided ranges.

• Annualized recurring revenue, or ARR, came in at $914 million, up 21% year-over-year. This includes a currency headwind of approximately $6 million due to rate changes since we established the outlook.
• Revenue came in at $232 million, up 8% year-over-year.
• And non-GAAP operating income1 of $36 million exceeded the high-end of our guided range by $30 million, driven by both the revenue upside and disciplined cost management.

These results reflect improved sales execution despite consistent demand trends relative to Q2.

Our customers continue to demonstrate a deep, growing commitment to the Alteryx platform. We believe the quest to digitize government entities and businesses around the world is intensifying as we hear our customers look for ways to improve efficiencies and drive automation and analytics across their user communities. We also believe Alteryx is uniquely positioned as the data analytics orchestration layer of an increasingly fragmented data ecosystem. Customers are leveraging our solutions to automate analytic processes to do more with less, and our easy-to-use solutions enable this with improved governance and security features.

These are substantial competitive moats that have enabled us to win for years!

I am so proud of our R&D team as they work to incorporate generative AI throughout our cloud-connected platform, reinforcing this differentiated market position to customers and prospects alike. Alteryx AiDIN, our brand of generative AI and machine learning technologies, is uniquely suited for this time and place. We recently announced several new Alteryx AiDIN capabilities - more on that shortly.

M A R K A N D E R S O N

Chief Executive Officer

1See pages 15-16 for reconciliations of GAAP to non-GAAP financial measures.

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Enhanced Go-To-Market Execution

I'm also encouraged with the progress we're making with our sales strategy. On our Q2 earnings call, we committed to improving our sales execution and enhancing the visibility of our business, particularly in the context of the tougher macro environment. We quickly adapted with some personnel and process changes to do just that.

• First, we made significant progress enhancing our pipeline management. Paula Hansen has driven more rigor and discipline into deal qualification, stage assessment and forecast management. With visibility improving, we are better able to optimize our go-to-market resources.
• Second, we improved our in-quarter linearity. The nature of our renewal cycle leads to a back-end weighted quarter, but we did much better capitalizing on opportunities to secure wins earlier in the quarter.
• And third, we incorporated these changes into our sales enablement capabilities. We are providing new training programs and tools to sales leaders throughout the organization to help them better monitor opportunities and deliver coaching actions needed to drive success with their teams.

We have more work ahead of us, but we're pleased to see an early impact from our efforts. We saw our best pipe conversion in recent quarters, plus delivered meaningful improvement in sales and marketing efficiency.

As discussed on last quarter's call, we're excited to welcome two new senior leaders to the sales organization, both reporting directly to Paula Hansen. I'm excited to welcome both Mark and Scott to the mission and look forward to building on recent progress in our go-to-market strategy.

Mark Dorsey	Scott Van Valkenburgh
SVP, Sales for the Americas	SVP, Global Alliances & Channels

Our new SVP of Sales for the Americas, Mark Dorsey, joins us from Oracle, where he served as SVP of Enterprise Cloud sales, growing Oracle's cloud business and transforming the sales team into a skilled cloud sales organization. Mark has held several leadership positions at Oracle, and most recently was the SVP of the Retail Vertical for North America.

Our new SVP of Global Alliances and Channels, Scott Van Valkenburgh, brings over 25 years of partner leadership experience working with global channel organizations. Scott joins us from Genpact, where he ran their global channel and alliance business, prior to which he led a high- performing global alliance team at SAS Institute where he managed over 1,400 partners.

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Enterprise-Focused Strategy

On that note, we continue to see strong validation that our executive facing, enterprise-focused sales motion is working.

• Global 2000 penetration came in at 49%. That's up three points from Q3 last year;
• Global 2000 net expansion rate held strong at 130% and remains well above our overall net expansion rate of 119%; and
• We continue to attract marquee additions to our growing partner ecosystem - we announced a great new partnership with SADA, a leading business and technology consultancy and
  Google Cloud's top global partner.

Our ELA strategy has provided a streamlined land and expand motion that is resonating with larger organizations. ELAs simplify pricing, bundle features, and often include a component of trial seats - what we refer to as burst licenses. This flexibility encourages exploration and removes the friction that software vendors often impose on customers. Of course, we support these projects with our customer success team and partners, which we believe accelerates upsell opportunities.

And we are selling more and more ELAs every quarter. In Q3, we more than doubled the number of ELAs sold versus the same quarter last year.

More than

2x Y/Y

Number of

ELAs sold

Fortune 500

Biopharmaceutical Company

Adopted its first burstable ELA with Alteryx in 2022. Early users quickly generated significant cost savings by automating time- consuming tasks across finance and operations teams. This resulted in a strategic push to broaden user engagement with the burst licenses. We saw dramatic use case expansion. In Q3 2023, the customer signed on for a new larger ELA with burst to drive momentum into next year.

One of the Largest Private

Companies in America

Signed on for a 1,000 seat ELA with 500 burst seats. This customer is establishing a flexible framework for increased engagement and automation across finance, tax, accounting, and HR, plus is exploring use cases in manufacturing and supply chain management. Our Snowflake partnership and integration were key differentiators for this customer.

Fortune 500 Global Marketing & Communications Company

Adopted a new multi-year ELA as they expand their usage of Alteryx Designer. After using Alteryx Designer for years to enhance marketing analytic processes for their clients, the customer is now exploring opportunities to automate financial processes and unlock savings within their own organization.

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Customer Showcase

We now have a foothold in nearly half of the Global 2000, many of which remain early in bringing scale and accessibility to their data stack. With our top-downexecutive-level engagement, we believe these companies are establishing Alteryx as a key pillar of their data analytics journeys.

NVIDIA

Avalara

Pacific Dental

NVIDIA, the leader in accelerated computing and AI, is leveraging Alteryx to automate tasks and orchestrate data within finance and beyond.

Avalara, a leading provider of tax compliance automation software, meaningfully expanded with an ELA as they are finding incremental opportunities to save cost by automating more within finance.

After beginning with a relatively small implementation of Alteryx Designer a few years ago, we established multiple workflows that generated significant time savings throughout the finance organization. With the ROI potential well- established and strong executive engagement and support, Pacific Dental, a leading national dental and medical support organization, expanded to a much more comprehensive burstable ELA package this quarter as they look to empower new users and introduce Alteryx to adjacent teams.

WestRock

Company

KeyBank National Association

In collaboration with our customer success team and a partner, WestRock Company, a Fortune 500 packaging solutions company, identified opportunities to create value through automation across a broad range of use cases. We found we were able to best meet the needs of new users by meaningfully expanding the Alteryx Designer implementation with a new Alteryx Designer and Alteryx Server ELA bundle, plus add a new Cloud ELA to enable use cases across Alteryx Designer Cloud, Alteryx Machine Learning, and Alteryx Auto Insights.

KeyBank National Association, one of the nation's largest bank-based financial services companies, selected Alteryx Designer Cloud as a foundational component to accelerate their analytics program. Alteryx Designer Cloud's ease-of-use, scalability, and native integration with Google Cloud Platform were key differentiating factors in KeyBank's decision to expand with Alteryx.

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A LT E R Y X

A N A LY T I C S

C L O U D

P L AT F O R M

Cloud-Connected

Innovation

We're also seeing traction with the technical executive leadership teams of our customers - Chief Information Officers, Chief Technology Officers, and Chief Data Analytics Officers. This dynamic is most prominent with our larger customers, and we believe is validation of the governance and enterprise- readiness of the Alteryx platform. Additionally, CIO endorsement is often an important milestone on the path to broader cloud adoption.

On that note, our platform-focused strategy of creating a cloud- connected data analytics experience is resonating. We provide customers the ability to design analytic workflows anywhere, and then implement and automate workflows in the Alteryx Analytics Cloud Platform.

Some users will create workflows in Alteryx Designer on a desktop, some will leverage our analytics cloud offering for model creation, and some will tap into adjacent offerings with Alteryx Machine Learning, Alteryx Auto Insights, and Alteryx Location Intelligence.

This multi-faceted democratization of data analytics all built on a single, unified platform is what we mean when we say cloud is an 'and,' not an 'or.'

We're seeing many of our early Alteryx Analytics Cloud Platform adopters also expanding their flagship Alteryx Designer implementations, in parallel. Cloud is also opening up access to new customer opportunities.

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We envision a world where generative AI influences all aspects of software."

Alteryx +

Generative AI

Advancing the cloud-connected analytics experience is certainly an important R&D priority for Alteryx. Another top innovation focus is generative AI. We envision a world where generative AI influences all aspects of software and see opportunities to incorporate AI throughout our entire platform and breadth of offerings.

Earlier this year, we introduced Alteryx AiDIN, and we're already seeing great traction with Alteryx AiDIN features by existing Alteryx Auto Insights customers. Over the last three months, more than half of active Auto Insights accounts have leveraged Magic Documents - that's strong engagement for a solution we introduced less than six months ago.

At our Inspire user conference in Europe, we had several exciting AI announcements:

• First, AI Studio, previously code-named AI Workbench, is designed to enable Alteryx platform users to securely manage, tune, and consume customized large language models based on their proprietary data. A seamless integration with Alteryx Designer will enable customers to use those LLMs in existing Alteryx Designer workflows and construct applications with a conversational interface.
• Second, Playbooks is a new AI feature planned for Auto Insights that automatically recommends high-value use cases tailored to a customers' industry vertical, job function, or company. This will enable users to quickly generate synthetic datasets and build proof-of-concept deliverables.
• And third, AI-poweredBrushing is a new Alteryx Designer Cloud feature that is designed to provide predictive transformation suggestions for workflows as users explore workflow results real-time. This allows users to automate the creation of data pipelines and get from data to insights faster.

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Introducing Alteryx Marketplace

One more platform launch I want to highlight is the Alteryx Marketplace. Launched in early October, the Alteryx Marketplace has already gained significant traction with over 2,000 add-on downloads and a rapidly expanding collection of verified, expert-built, and supported add-ons, including connectors and macros. The Alteryx Marketplace is designed to provide our users with a platform for extending their analytic capabilities with confidence. Again, it's about helping our users increase efficiency with their analytics and get to insights faster.

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Closing Remarks

In conclusion, we're encouraged with the Q3 operational performance and results relative to our expectations entering the quarter. Our differentiated, easy-to-use platform enables our customers to rapidly scale a data-driven culture throughout their organizations. And with new cloud-connected experiences and our generative AI Alteryx AiDIN innovations, we're finding ways to further enhance and accelerate the analytic journey.

We certainly faced some challenges in Q2, and I'm so proud of how quickly the

team adapted and improved execution this quarter. And we did it while maintaining our focus, vision, and disciplined cost management. I believe the business and this team is on a strong foundation, and we are hard at work to carry forward the momentum as we close out the year.

M A R K A N D E R S O N

Chief Executive Officer

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Alteryx Inaugural

Global Impact Report

This report provides an overview of our key environmental, social and governance (ESG) initiatives: how we are protecting and fostering diversity and wellbeing on our teams, engaging our customers in giving back, and building sustainability into our development strategy with an aim towards a

greener, brighter future for everyone.

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