Avalara Q2 2022 Financial Analysis
Avalara's Presentation Is a Dramatic Change of Tone from Analyst Day
What Avalara Said Three Months Ago
What Avalara Is Claiming Now
Why Avalara is a special company
Avalara
Clear, unified vision to be part of every transaction in the world
2
Unrivaled leader in large global market with low penetration and low churn
3 Partner-based company with three powerful competitive moats
Expansion to multi-product platform enlarges market opportunity
5
Resilient business model that performs well in good and challenging times
6
Focus on sustaining high growth while driving operating leverage
D
Avalara / Vista transaction represents the best outcome for shareholders in
our view
Avalara
Avalara / Vista Transaction
Standalone Path
$93.50
per share
x
International rebuild - y/y decline through 2023
ANAR ANALYST DAY VIRTUAL 6
Certain cash value, no risk, attractive valuation
Required U.S. GTM transformation to reaccelerate anemic
demand generation
× High sales and marketing attrition contributing to 2022
sales divot
×
Required evolution of the executive team to resolve
execution challenges and transform operations
×
Q2 earnings revenue miss and would need to guide down
2022 revenue expectations
x Challenging and uncertain macroeconomic backdrop
$?? per share
"[A]fter 19 years of doing this, we believe transactional tax automation in the
US is still roughly 10% penetrated, and even less so globally, leaving many
years of runway to compound growth at high rates. And Avalara is a leader
in this space, and we believe, is well-positioned to capture more than the
fair share of the market opportunity."1
"Now is the right time to sell considering expected degradation of
performance and further operating challenges anticipated as a standalone
public company resulting in significant downside risk."2
We find it dubious that Avalara went from being a “special company" to a company requiring a “multi-year rebuild”
and "evolution of the leadership team" in just three months
1 Source: Avalara Analyst Day, June 28, 2022.
2 Source: Avalara Investor Presentation, filed with the SEC on September 23, 2022.
Altair US, LLCView entire presentation