Pomerantz Appointed Co-Lead Counsel in Alteryx Securities Litigation
On November 13, 2020, U.S. District Judge David O. Carter of the Central District of California — Southern Division appointed Pomerantz LLP as Co-Lead Counsel, on behalf of Lead Plaintiffs Alejandro Handal, Steven Cardoza, and Homayon Farnoodymeher (collectively, the “Alteryx Investor Group”), in In re Alteryx, Inc. Securities Litigation, 20-cv-1540 (C.D. Cal.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that Alteryx, Inc. (“Alteryx” or the “Company”) failed to disclose that they were experiencing difficulties within their sales organization that were reasonably likely to negatively impact the Company’s revenue.
Alteryx is a data analytics company that offers a subscription-based platform that enables customers to analyze data and share analytics at scale.
The complaint alleges that, between May 6, 2020 and August 6, 2020, defendants issued materially false statements and failed to disclose that: (i) Alteryx was unable to close certain large deals within the first quarter of 2020 due to the Covid-19 related disruption of the effort to “[modernize the] entire enablement process” and the integration of newly hired additional sales staff that did not operate at “historic productivity levels”; (ii) as a result, the Company increasingly relied on lower cost and shorter length licenses to attract new customers; and (iii) due to the nature of these licenses of lesser value, the Asteryx’s revenue was reasonably likely to decline.
On May 6, 2020, Alteryx issued a press release announcing its financial results for the first quarter ended March 31, 2020, including a statement by CEO Stoecker that the Company had “delivered solid results” with $108.8 million in revenue for the quarter, an increase of 43% compared to the same quarter in the previous year. Stoecker further stated that “In these challenging times, we believe the importance of data has never been greater.” For the second quarter 2020, the Company projected revenue growth “in the range of $91.0 million to $95.0 million, an increase of 10% to 15% year-over-year.”
The truth began to emerge on August 6, 2020, when Alteryx issued a press release announcing its financial results for the second quarter ended June 30, 2020, reporting $96.2 million in revenue for the second quarter of 2020, a year-over-year increase of 17%. The Company stated that the revenue growth projections were disappointing for the third quarter 2020 of just “7% to 11% year-over-year” and just “10% to 11% year-over-year” for the full year 2020.
On this news, Alteryx’s share price fell $47.62, or 28%, to close at $121.38 per share on August 7, 2020.