Datawatch Corporation (NASDAQ:DWCH) Q3 2015 Earnings Conference Call July 23, 2015 8:30 AM ET
James Eliason - Chief Financial Officer
Michael Morrison - President and Chief Executive Officer
Richard Davis - Canaccord Genuity
Chad Bennett - Craig-Hallum
Michael Kim - Imperial Capital
Bhavan Suri - William Blair
Greetings and welcome to the Datawatch Corporation’s Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded.
It is now my pleasure to introduce your host, Jim Eliason, CFO for Datawatch Corporation. Please go ahead sir.
Thank you, Kevin. Good morning, everyone. Thank you for joining us for the Datawatch Corporation’s third quarter fiscal year 2015 earnings conference call. I am Jim Eliason, Chief Financial Officer at Datawatch. Joining me today is our President and CEO, Michael Morrison.
I would like to remind everyone that you can obtain a copy of our earnings release, which was distributed at 4 PM Eastern Time yesterday by e-mailing us at firstname.lastname@example.org. This release is also available on our website in the Investors section at www.datawatch.com.
Let me first outline for you this morning’s agenda. I will begin by presenting our Safe Harbor statement, followed by a summary of our Q3 FY ‘15 financial results along with some key operating metrics for the just completed quarter. Michael will then provide some commentary on our go to market strategy and how it is being received in the market, some color around key deals won in Q3, as well as an update on recent partnership activities. He will end with a brief overview on our product initiatives, in particular the recent release of Monarch complete. We will then open the call up for question-and-answer session.
Before we begin, I would like to remind you that any statements we make that do not describe historical facts may constitute forward-looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such statements are accurate as of today, July 23, 2015 and are subject to a number of risks and uncertainties that could cause actual results to differ materially from current expectations. We undertake no obligation to update any forward-looking statements.
For more information, I refer you to the descriptions of these risk factors found in our earnings release along with the Company’s Annual Report on Form 10-K for the year ended September 30, 2014, and in the quarterly reports on Form 10-Q for the quarters ended March 31, 2015 and December 31, 2014, as well as other publicly available documents filed with the SEC. Any forward-looking statement should be considered in light of those factors.
I would also like to remind you that to supplement our financial results, prepared in accordance with Generally Accepted Accounting Principles, we will from time-to-time discuss certain non-GAAP financial measures that we believe are helpful in understanding our financial performance and future results. A reconciliation of our GAAP and non-GAAP financial results is contained in the press release issued yesterday and is also available in our filings with the SEC. Our non-GAAP financial measures are not meant to be considered in isolation nor as a substitute for the comparable GAAP measures and should be considered in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Let me now start with a summary on the Company’s financial performance for Q3 fiscal 2015 as well as some other key operating metrics. Datawatch’s total revenue for Q3 FY 2015 was $7.8 million, an increase of 4% sequentially from Q2 FY 2015 revenue of $7.5 million, but a decrease of 16% from revenue of $9.2 million from Q3 of the prior year.
Revenues from software licenses in the third quarter of fiscal 2015 were $4.1 million, again up 5% sequentially from Q2 FY 2015 license revenue of $3.9 million but down 26% from license revenue of $9.2 million from Q3 of the prior year.
Revenues from maintenance and services were $3.7 million in Q3 FY 2015 up slightly some 3% sequentially from Q2 FY 2015, maintenance and services revenue of $3.6 million and essentially flat year-over-year.
Gross margins for software licenses, excluding IP amortization charges, were 95% in the third quarter of 2015 which is consistent with the prior year quarter. Gross margins for maintenance and services were 85% in Q3 FY 2015 versus 73% in Q3 of 2014.
Overall, gross margins came in at 90% for Q3 2015, as compared to 86% for the prior year quarter. The increase in gross margins is due primarily to a shift through web-enabled online training offering in Q3 FY 2015.
On a non-GAAP basis, the Company incurred a net loss in Q3 of 2015 of $2.0 million or $0.18 per diluted share as compared to a net loss of $2.6 million or $0.24 per diluted share for Q3 of 2014. And for the second consecutive quarter, down substantially on a sequential basis from Q2 FY 2015 which is $3.2 million or $0.29 per diluted share.
We remained diligent with regards to controlling expenses, with a goal of balancing our investments appropriately in front of what we still believe is a very large market opportunity, but at the same time being mindful of the objectives among the business on a cash breakeven basis against which we continue to make very good progress.
Our Q3 non-GAAP loss declined more than 50% from that of Q1 FY 2015 reflecting the initial impact of our cost containment initiatives as well as revenue growth over the past two quarters.
Moving to the balance sheet, Datawatch’s cash balance at June 30, 2015 was $36.3 million, a decrease of approximately $2.2 million or 6% from March 31, 2015. The decrease in cash from the previous quarter is attributable to the operating loss, temporary shifts in working capital and to a lesser degree cash severance payments associated with our sales and marketing restructure which were now largely complete.
From an accounts receivable perspective, our agings have improved dramatically from levels from just a couple of quarters ago and were strong as they have been over the past 12 months. Over 80% of our AR balances as of the end of Q3 FY 2015 were in the current category, more than 20 percentage points better than Q1 of FY 2015. Furthermore, less than 10% of our receivables are over 60 days past due.
DSOs for Q3 FY 2015 was 73 days which is up slightly to 69 days as of the end of the previously reported quarter and higher than Q3 of FY DSOs of 61 days. Given the AR on the aging metrics I just shared with you it’s clear that the small increase in DSOs primarily reflect the timing of when revenue is received during the quarter and not the quality of our receivables.
I would also like to point out that our deferred revenue increase, our deferred revenue increased by more than $400,000 sequentially driven exclusively by growth in the license deferred revenue which grew almost 100% sequentially from Q2 FY 2015 and 170% from Q3 FY 2014.
The primary driver for this license growth is a new pricing policy change we implemented at the start Q3 FY 2015, which mandates subscription pricing for smaller size Monarch orders as well as the traction we are gaining in our OEM partner channel.
We are encouraged by the initial customer feedback through this pricing change and we’ll continue to track the results of this offering closely in future quarters.
At this time, I would like to share some operating metrics from the just completed quarter. Our strategic partner OEM channel contributed approximately 12% of the total license revenue in Q3 FY 2015, an increase from 7% in Q3 of the prior year and up significantly from the first half results of FY 2015, which were in the mid-single digit percentage range.
This is an important metric for our long-term growth and we are pleased that I worked over the past year to driven it closer to long-term models that we shared with you.
There were seven six-figure license deals in the third fiscal quarter this year, equal to the total number of such deals for Q1 and Q2 of FY 2015 combined. The average deal size in Q3 of fiscal 2015 was approximately $56,000 as compared to approximately $62,000 in Q3 FY 2014. The trend on our average deal size is positive; however, as the current quarter metric improved significantly versus Q1 and Q2 of FY 2015 and it was in the mid 30K range.
Obviously, the aforementioned six-digit deal traction we experienced in the quarter had a significant impact in future results. Our worldwide headcount, as of June 30, 2015 was 163 people, a net increase of 6 people from March 31, 2015. Included in our current headcount are 29 quota-carrying sales reps, down from 22 such reps as of March 31, 2015.
Weighted average shares outstanding as of June 30, 2015 was approximately 11,450,000 shares, compared to approximately 11,340,000 shares as of March 31, 2015. Total shares outstanding as of June 30, 2015 was approximately 11,500,000 shares.
With that, I would now like to turn the call over to Michael Morrison.
Thanks, Jim, and good morning everyone. Thank you for attending our fiscal third quarter earnings call. In Q3, we gained some solid traction with our Managed Analytics Platform approach to the market, continuing the sequential revenue improvement we saw in Q2.
You’ll recall we launched this platform in Q2, so we are still in the early phase of customer outreach and sales. We believe that our platform strategy is resonating the market because it’s an end-to-end offering that allows organizations to meet all of their analytic requirements not just today, but into the future.
The breadth of our platform is unmatched. We allow organizations to acquire data from structured, as well as multi-structured sources, prepare that data, automate these data acquisition and preparation processes, govern the data throughout its life cycle in a highly compliant manner and ultimately visual and gain insights from the data.
We are changing the conversation around, not just DI, but data discovery, visualization and advanced analytics with a complete vision that begins with self-service data acquisition and data preparation due to discovery and visualization, all without losing focus on critical governance for user empowerment and enterprise deployment.
And while our platform is completely integrated, we also offer any component on a modular basis, which enables us to partner with a wide variety of vendors including vendors in infrastructure, DI, data discovery, visualization and advanced analytics, the cooptation approach that we talked about previously.
I’d like to highlight a few of the deals we closed in Q3 that reinforce the unique differentiation of our technology solution in the market. One of the big four public accounting firms extended use of Datawatch’s Monarch Data Preparation Solutions, making Monarch available to an additional thousand plus auditors in order to acquire and prepare multi-structured data during the audit process.
LIFE Today, this big four firm has purchased nearly 2500 copies of Monarch Data Preparation for use by its auditors. The self-service capabilities of Monarch make it the perfect tool in an industry where time to result is essential.
Chesapeake Energy selected Datawatch for an IOT application to visualize and analyze in real-time sensor data coming from wellheads and other drilling and production equipment on more than 60 of its wells. Through the use of this application, Chesapeake will be able to better manage and monitor production volumes, as well as improve its preventive and predicative maintenance capabilities.
In ASG Software Solutions, a new OEM, saw the opportunity to employ Datawatch’s multi-structured data preparation features, specifically applied to documents archived in enterprise content management systems, as well as the opportunity to automate the data acquisition and preparation processes and govern the use of the data right through to the visualization experience.
ASG is a great example of a customer, in this case an OEM partner that sees real value in the entire Managed Analytics platform. We remain very excited about the OEM relationship that was announced by Dell during the quarter. Dell has embedded our visualization technology with its Statistica Advanced Analytical offering and it’s bringing this combined offering to market through its global sales force. The industry analyst feedback on this relationship and the technology offering has been extremely positive, particularly the reception received at the Dell Annual Analyst Conference in late May, where Dell shared with more than 100 industry and financial analysts their business strategy for Advanced Analytics.
In an expansion of the original agreement, Dell has also agreed to resell our Monarch Data Preparation Solution together with Statistica in order to more elegantly bring additional data sources into their advanced analytics environment. We are working very closely with Dell to make the most of this relationship for the long-term. In fact, we already closed a high profile, internal visualization deal with Dell last quarter for rolling inventory forecasting in its hardware business across 4,000 discrete parts in 40 Dell sites.
In addition to ASG and Dell, we entered into partnership agreements with several new OEMs and resellers including Lipper in Switzerland, Fincad and FlexTrade in the US and the Strateq Group in Malaysia. The new OEM relationship with Lipper is particularly interesting. Lipper which is an operating unit of Thomson Reuters is leveraging our visualization technology to showcase the value of over 10 years of Lipper Mutual Fund data, plans to promote this solution to its more than 1000 clients. Lipper sold its first deal to UBS in the just completed quarter.
As Jim indicated earlier, contribution from our partner channel improved in Q3 that we still on the way to go to achieve our long-term target of attaining 30% quarterly license contribution of our partner channel. This past quarter, we made some important progress toward this goal.
We continued our recent history of wrapping and leading-edge innovation with the latest release of Monarch. Our flagship solution for self-service data preparation which we announced for general availability on the last day of the third quarter. The new product release significantly extends the range of data sources available to Monarch and provides a simple point and click interface built on top of the world’s most powerful data preparation engine.
Importantly, this release allows prepared data to be saved in a variety of needed formats, so you can immediately visualize your results, not just in Datawatch designer, but in other popular BIs and advanced analytics tools such as Tablo, QlikTech, IBM Watson Analytics, SpotBuy or SAS, SAP Lumira Dell and Excel.
Data preparation is an important onramp to our Managed Analytics platform and we are executing several programs in Q4 to tap into this robust market. Notably, initiatives to target the customer bases of leading self-service data discovery and visualization vendors such as QlikTech and Tablo, as well as the customer bases of leading advanced analytics vendors, such as SAS and SCSS.
We are also targeting the system integrators and resellers that service these customer bases since they are prime candidates to take advantage of the capabilities of our Monarch self-service data preparation solution.
Later this quarter, we’ll be hosting a multi-city data prep school specifically for system integrators and resellers to enable consultants from these organizations to discover first-hand of Datawatch can help them better address their clients’ needs.
In closing, we are singularly focused on continuing our sequential revenue growth in our fiscal fourth quarter and are confident that we are on the right path. Our strategy is sound, our technology is differentiated and our people are motivated. While riding the ship and taking the actions we’ve implemented this year have not been easy, we are convinced that we are building a strong foundation to our long-term growth for Datawatch.
With that, Kevin, let’s open the lines for questions.
[Operator Instructions] Our first question today is coming from Richard Davis from Canaccord Genuity. Please proceed with your question.
Thanks. So, kind of looking to the evolution of the story, it’s a little bit more like we are kind of moving towards data prep and things like that. And so, that’s a good question and on that would be, are there, so if I am imagining, I am sales person for you, are there benchmarks that I can use with regard to kind of the front-end processes in terms of ingestion and data prep that would allow me to kind of show that I could be better than whatever that dozen or so other firms trying to do that? Just kind of – I am trying to kind of size the mull or how you created and things like that. Thanks.
So, Richard, on the data prep side specifically, and it’s not exclusively data prep, it’s part of – as I mentioned sort of the onramp to the whole platform. Where we clearly differentiate is being able to gather in multi-structured data. So there is a number of players in data prep and seems like every week there is somebody else jumping into the play. But being able to take, not just data from excel and CSB files, but all of that dark data as Gartner calls it, from documents and principles and machine logs and what not, and bring it into an analytic process, we believe is highly differentiated. I mean, it’s what we’ve been doing for 20 plus years. A number of our – the deals that we closed at the end of last quarter, the last day of the quarter when we brought the data prep products to market were with existing customers that have been using Monarch for years and saw the value of that new user interface and being able to bring in additional data sources including the structured ones into a data prep process. So, that’s where we are focusing our attentions and differentiation in terms of getting it multi-structured data, bringing into an analytic process.
Got it. And then just the coronary to that is now, so now we have that product, is there a key person inside the companies you are focused on, in other words, you go out to the CIO, do you go to a CFO, in other words, pitching a use case that’s specific, pointing to their acute if I am not for the buyer. Thanks.
So, the ideal persona is a business analyst. It’s the same persona that the buys, our visualization product or a QlikTech or a Tablo to do self-service, data discovery or visualization. So, we are doing our lead gen towards that persona, the business analyst and then it’s line of business at a higher level for the enterprise-wide data prep onramp to the whole platform.
Got it. Perfect, thank you so much.
Thank you. The next question today is coming from Chad Bennett from Craig-Hallum. Please proceed with your question.
Hey guys, good morning.
Hey. So, I guess, maybe following up, I think on the first question, first questions. So, Michael, can you give us a sense for, I know the momentum or the progress you’ve made on the data prep side of the business, your Monarch side of the business compared to maybe a couple quarters ago? And kind of how we should think about intermediate term growth rates for that side of business? I realize, you’ve kind of view them as an onramp to the platform and what not. But I think, you refocused the sales force on this business and I think what I – at least I want to find out, I am sure, other people is, how much progress you’ve actually made to kind of return that business to where it should be?
So, and we’ve talked the last couple calls about the past year where we arguably over-rotated to a visualization-only message and brought it back to the whole platform. So, the messaging and how we address the market with the whole platform story has been in place for the last one or two quarters. This latest product release we have taken Monarch which again has been in the marketplace for a long time. Arguably, the original data prep solution and Qlik put a new cover on it. It just – it hit the market the last day of the quarter. So we are seeing, we’ve seen certainly a pick up in that business, a pick up in the interest in it. I think the most important aspect of it is, when we get out in front of prospects, whether they are existing Monarch customers or new name prospects or somebody that comes at us with a visualization-led agenda and we draw them back to our whole platform story and positioning and then address their specific needs. It has been universally well accepted. It’s a great story. It’s something that we can – where we can deliver the end-to-end solution. But also, we closed a few deals last quarter where their existing Tablo shops or QlikTech shops had issues with data prep and we’ve been able to address those for the customers. There is other ones who – that we are looking at a next-generation analytics provider and us and as we tell the whole story, we get – we’ve had the opportunity to broaden the agenda and we play very well there. So, the early results are very promising. Obviously, the revenue line while it’s up sequentially has not hit the inflection point but we are encouraged by the early feedback and the early results.
So what, what’s kind of the progress update on the sales productivity side? And kind of – how far off are we actually realizing kind of anything close to market growth rates for the two segments we are in? And what’s left to fix, I guess, I am basically actually asking.
So, we’ve gone through the lion share of the re-tooling. I mean, these past nine months what we’ve seen internally is a big re-tooling on discipline around the sales process, the sales forecasting process. The enablement process, we – as we’ve mentioned, in the last call, and I think two calls before, a re-organization to a more focused on inside sales, a new BDR function. A lot of that has already happened, like I said, we are 80%, 90% of the way through that and a lot of what’s happened in these past couple of quarters is an all around enablement. We’ve got a bunch of new people onboard in business development roles, inside sales, enabling them with the new message that the new focus on the market. So, that’s largely complete and it’s not a point in time exercise either something you always continue. In terms of the inflection question that you – I don’t have the solid answer for you there. We are continuing to see some good signs with everything we’ve done internally. We believe, we are confident we will continue this sequential growth. We, as well as yourselves are focused on that inflection point where we get back to or back to the growth rates that these markets, these interconnected markets are experiencing right now and ideally, exceed those growth rates.
Yes, I mean, I don’t know if I am looking, inflection point might be a stronger word. I think I am just looking for when we do get to the point where sales guys are even remotely close to producing what they should be producing, considering the markets we’re going after. I mean, it seems like, you’ve indicated before, we can double the business with the current sales capacity that we have. What are we missing? Or what – I mean, the markets growing dramatically, what’s the impediment?
So, I guess, I won’t call it an impediment, but, and you are right, the productivity is nowhere near where it should be or it can be, right, and we can double revenue with the organization we’ve got in place right now. Again, largely behind the scenes there has been a dramatic re-tooling of how we go to market. So, I think we are there and what we see in the pipeline is where they’ve been increasing but more importantly, the quality of the pipeline, we now know the types of opportunities we should be chasing. The pipeline is largely loaded with those types of opportunities which has resulted in the increase in the win rates. So, I’d like to think that we are on the verge of seeing that happen, there is nothing is – as I sit here today, there is nothing dramatic that we need to do to get to that next level. We’ve done a lot – all of the foundational works and we are ideally poised to take advantage of it.
And Chad, this is Jim, just to add to that, in terms of going from pipeline to real business, in the quarter, as I mentioned here, but seven, six-figure license deals. There were ten six-figure deals, if you break that down, about half of them were straight Monarch, but bigger deals about another two to three were, I will call them platform deals but they bought all pieces of the platform and then a couple of big deals. So, a big uptick on the deal size and I think that’s driven primarily because we are going to more quality deals that Datawatch would be my view with that.
Great color, Jim. Thanks. Last question for me, Michael, is there anyway to kind of size up the Dell opportunity that you have in front of you? Not necessarily this quarter or next quarter, but just kind of the – and it’s always they have for that analytics product that you are with and kind of what the opportunity is?
So, with Dell and their specific to that product, so in the advanced analytics world, they are – I believe the third most prevalent vendor out there is SAS and SCSS are two market-leaders and Dell is right behind them. So, they’ve got an enormous customer base. The Statistica product in that business is, in my opinion sort of the cornerstone of the Dell analytics strategy. They’ve been getting some very good press themselves and the reason that we are optimistic about the potential here is that they are – even though the Dell Software business, that was a $2 billion plus business within a nearly $60 billion organization. They – the experience with them thus far has been very positive. They operate like a start-up, a $2 billion start-up. So they are very aggressive innovative thinkers. They’ve got in my opinion a very good strategy. We were able to go from competing for an opportunity with several of the largest and most well-known players in visualization and data discovery and ultimately winning that to integrating the products and getting in on a price list and getting into the field’s hands in less than six months which is nearly unheard of with a normal software company with a company that $2 billion of software revenue, it’s quite impressive. So, the opportunity I believe is quite large. We are, we’ve got a big focus ourselves on making the best of this. We’ve got a growing pipeline as I mentioned, it’s into the channel late in the quarter. They closed a deal with a Fortune-50 CPG company before the end of the quarter. We’ve done an internal deal with them, a competitive deal. So, we are – we’ve got – we know that there is a good opportunity here if we go and execute properly.
Okay, thanks guys.
Thank you. [Operator Instructions] Our next question today is coming from Michael Kim with Imperial Capital. Please proceed with your question.
Hi, good morning guys. Just a follow-up on the sales force realignment, I think there is a slight churn in the number of quota-carrying sales reps in the quarter and if you could provide some commentary on that and the mix between outside sales reps and inside sales?
Yes, so, it’s Jim Michael. So the – I’d say, it’s – I don’t know the specific people, but I would say most of it was voluntary. So there was one involuntary in there is I believe. So, not a huge shift. As far as inside outside, there is nine inside currently and there is 20 outside including the partner channel.
And you mentioned bring on some new folks here over the last year. Do you have a sense of the mix between ramp and guys who are still coming up the curve and building pipeline?
Yes, so the increase in headcount was primarily focused on the business development rep group that we were building. So coming into the quarter, I think we had two of those reps, we had to hire, four in the US, one in Europe and that was all executed again and I believe we had all of them on board by June 1 and they are probably close to being ramped up. So the add was more on the development rep side, you wanted quota-carrying per se, right. They lay in front of those sales guys.
Got it and then with the increase in the average deal size with some of these larger seven-figure deals, was there a change in the inside sales groups with the smaller deals at $10,000 to $20,000 type opportunities or was that just a function of mix?
No, I think there was a couple cases with the inside guys booked some bigger deals, but the primary driver on the larger deals was – what I would say retained from the outside group and as I indicated to Chad earlier, I think it does speak to the quality of the pipeline that they are working on right now. I think it’s better, I think it’s better positioned to play to our strength. So it allows them to go and tell a bigger story as Michael was pointing out in his comment and drive those deals.
And Michael, let me just add one thing today. It’s – I think the larger opportunities are a byproduct of the message around the platform. Now, nobody ever calls us up and says I want to buy a platform. There is always a driving need of whether it be data prep or visualization. As we articulate our position in the market, and like I said earlier, it resonates very, very well. It’s a solid message and we got the technology to deliver on it. The larger deals are all a byproduct of people buying into that vision and buying a more complete solution and just what they originally engage to them.
I mean, from a bigger picture you just talk about this year about expanding your market awareness, your branding, any metrics you can share or maybe quantify in terms of about attendance or increase or fees, anything that you can got some framework around the awareness?
So, I don’t have anything at my fingertips now. So, all of those things you mentioned are up incrementally, I would say, any of them are up 100% or triple digits, but it’s all moving in the right direction and – we rided the ship, it’s taken a bit longer than we anticipated. But I think as we sit here today we’ve got a very clear vision, we got a great opportunity to excel. We invested these past – this past year in the technology, the people to get it going. And we believe we are at a good stage right now based on where we’ve been in the last year.
Great. Thank you very much.
Thank you. Our next question today is coming from Bhavan Suri from William Blair. Please proceed with your question.
Hey, guys. Thanks for taking my questions. And, excuse noise due to I am sitting at airport here. But, let’s start-off first of all, I think with the Dell relationship, you touched on a little bit, you sort of said, hey, they are going to use Monarch or resell Monarch or integrate Monarch. Can you provide a little more color on that, given that obviously that relationship is helping sort of on the visualization side as they sort of integrate that into their offerings?
So, Bhavan, as you know, so the original the deal that Dell announced was an OEM deal with their – they’ve integrated with our visualization with Statistica. So, we white-labeled it for them, they’ve integrated with the product. Shortly thereafter, they – we exposed our data preparation solution to them. They sort of – they’ve got a product in their portfolio Toad which is a very good product and with a large customer base, targeted largely at IT, which had some data preparation capabilities, some very good data preparation capabilities as well. So, we are – Toad is integrated with Statistica for those IT personas that need the two of them together. What we do is, address the business analyst persona that needs to grab data and multi-structured data and bring it into the Statistica environment. So, we are certainly working closely with the folks in the Statistica group, but also with the folks in the Toad group, where I believe the data preparation capabilities, the two of us have are very complementary as well.
But to be clear, the data prep side, the resell arrangement with Dell, not an OEM.
That’s helpful. And then, it looks like the – out of the gate, you’ve got a nice uptick of Monarch versus routine, I guess, I am little curious what kinds of customers that you’ve landed any pattern to that, any type of industry, any type of using that is making sense with that?
So, there is no particular industry, but I would say just generally speaking, if we got a long-term Monarch customer, where the user is a business analyst in that type of persona. The data prep story resonates very, very well with them. We have some long-term Monarch customers where they are not business analysts, but they have very discrete functions of performing organization in getting data from point A and moving it to Point B. There is – we get less uptick from them but, as we deal with controllers or managers or directors in different areas, giving them the ability to grab more types of data and in a much more self-service fashion bring into their environment, that message is playing very well.
Great, great. And then, when you look at the potential to cross-sell the products, - and the visualization products, vis-à-vis the partnerships you have now with QlikTech and Tablo and everything else on data prep side, and then – how often is there sort of a upsell, potential opportunity and how do you address kind of the conflict in those situations given the partnership model?
So, we actually engage with QlikTech and Tablo in the last 30, 60 days to share with them the data prep, neither one of them had – each one understands the data prep market. They partner with other data prep players. They both tell us that their overall goal is to satisfy their customers’ needs. So they are very open to partnering with data prep players and in terms of our repositioning over these last couple months, we’ve really focused our visualization and what we do that’s very unique. Clearly, the real-time, but also a more time series or more complex visualizations is where we play very well. So we are not, we are trying not to spend a lot of time in visualization sales cycles where the data is all structured data. It’s not a real-time need. So, it’s less confrontational I guess if you will. And the reaction we got from both those two particular players and we talk with almost everybody else in this space as well and it’s been very positive. So, we are engaging the – in fact our data prep product, you can go through the whole process and click a button when it comes time to export it, to the export options are QlikTech and Tablo. So, our goal is to continue to be as open on the data prep side is open as humanly possible.
Got it. Got it. And then one of the interesting things we are starting to see a little bit is that coming to start and talking about using the streaming analysis early internet of things type analysis, how is activity pipeline business and those are these guys are trending, or is that still too early, like and we talk about them that are being with the part will be in 6 to 12 months or maybe 24 months, but maybe some sense of how you are doing to get that actual growth opportunities vis-à-vis it’s being some sort of niche case?
So, it’s still your – I guess, what you are seeing is what we are seeing as well, still a nascent market, but it’s growing. I mean, and if you read the commentary from the leading industry analyst firms, they think it’s going to continue to grow and accelerate. We’ve got, I talked about one of our deals from last quarter, which was a – I think a classic IOT type use case with Chesapeake around getting real-time streaming center data to do preventive maintenance in the oil and gas base. We’ve got a growing pipeline of deals and when we get into the good part of those, so we got to be careful but we don’t over-invest there. But at the same time, when we get into opportunities, where IOT like opportunities, there really isn’t any competition there since we are the only real player out there that can handle streaming data and motion and we are all cautiously optimistic that there is a good play there and we are continuing to prudently invest to sort of take advantage of it.
Got it. Got it. And then, one last one from me. As you look at the Advanced Analytics space, the statistics space, Statistica SAS, SCSS et cetera, some of the visualization guys today, Tablo, et cetera are starting to build integrations with our – and actually wanting that in their visualization piece, and others on the data prep side say, offering to others, assume that’s something the advanced statistic piece, whether it’s random walks or analysis or let’s say – regression into their data prep. So how do you think about the progression of the roadmap that you guys on the product side, of where that would fit that or the real-time sort of streaming – and sort of how does that plans or what’s going on at Dell?
So, we today have with our visualization product, we’ve got integration with our – so we’ve done what mostly other players in the biz and they’ve discovery space has done. We are in active conversations with Dell, because there will be more need for advanced analytics or predictive….
And two weeks back, one in the data prep process itself, as you are acquiring data and preparing it, predictive insights into what you should do with it and then the – once you’ve got your prepared dataset predicting something coming out of that. So there is two discrete areas there. I think those two markets are in the next year or so will come together. So we are looking to get closer with Dell in that area and we’ve also opened up our solutions so that, customers and prospects that want to roll their own have the ability to do it.
Great. That’s it for me guys. Thanks for taking my questions and with nice sequential growth and people are going to be at. Thanks for taking my questions.
Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to Mr. Morrison for any further closing comments.
Hey, thanks, Kevin. So thanks everyone for joining us this morning. As always if you got any follow-on questions, don’t hesitate to contact us. And we will be participating in the Canaccord Growth Conference in Boston August 12, and for any of you on the line that are going to be there, we look forward to speaking with you then and otherwise, have a good day, thanks.
Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.