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Cloudera (CLDR) Q4 Loss Widens, Revenues Beat Estimates

Zacks Equity Research

Cloudera CLDR reported fourth-quarter fiscal 2019 adjusted loss of 15 cents per share, wider than the Zacks Consensus Estimate of a loss of 11 cents and the year-ago quarter’s loss of 5 cents.

Revenues of $144.5 million surged 36.7% year over year and beat the consensus mark of $121 million. Adjusted annualized recurring revenues (ARR) were $680.6 million, up 24% year over year.

Cloudera completed the previously announced merger with Hortonworks on Jan 3, 2019. Customers with ARR of more than $100,000 were 976, up 85 between Oct 3, 2018 (merger announcement) and Jan 31, 2019. Since the merger announcement, the company added 140 new enterprise customers.

Cloudera now has more than 2,000 enterprises in its clientele in most data intensive industries, including the top 10 auto manufacturers, the top 10 telecommunication companies and eight of the top 10 banks.

Quarter Details

The year-over-year growth in revenues was driven by 41.7% jump in subscription revenues (85.1% of revenues) that totaled $123 million. Hortonworks contributed $15 million to total revenues.

Moreover, services (14.9% of revenues) rallied 13.7% year over year to $21.5 million.

Cloudera, Inc. Price, Consensus and EPS Surprise

Cloudera, Inc. Price, Consensus and EPS Surprise | Cloudera, Inc. Quote


In the reported quarter, gross margin expanded 220 basis points (bps), driven by 150-bps increase in subscription gross margin. However, services gross margin declined 680 bps year over year.

While research and development (R&D) expenses rose 29.2% to $37.4 million, sales and marketing (S&M) expenses surged 30.5% to $63.5 million. However, as percentage of revenues, R&D and S&M expenses declined 150 bps and 210 bps, respectively.

Moreover, general and administrative (G&A) expenses soared 276% to $41.4 million. As percentage of revenues, G&A was 28.6% compared with 10.4% in the year-ago quarter. Merger-related expenses in the fourth quarter were $30 million.

Expenses rose due to one month of Hortonworks expenses, merger costs and the usual fourth-quarter seasonal increase in sales commissions.

Loss from operations widened to $30.2 million compared with a loss of $9 million a year ago.

Balance Sheet & Cash Flow

As of Jan 31, 2019, Cloudera had total cash, cash equivalents, marketable securities and restricted cash of $540.6 million.

Moreover, operating cash flow was $40.2 million in fourth-quarter fiscal 2019.

Upcoming Product Update

Cloudera is set to launch Cloudera data platform (CDP), an enterprise data cloud, which combines the best of Hortonworks and Cloudera platforms. The company will launch CDP as a public cloud service within the next two quarters. Later in the year, Cloudera will come up with a private cloud version of CDP.

CDP will offer a full complement of open source data management analytic functions, including data warehousing and machine learning. Moreover, to address data-privacy regulatory issues, CDP will feature Shared Data Experience (SDX), a set of shared services, which will provide consistent security, governance and metadata across all cloud environments.


For first-quarter fiscal 2020, Cloudera expects revenues between $187 million and $190 million. Subscription revenues are estimated between $154 million and $156 million.

Non-GAAP net loss is expected between 25 cents and 22 cents per share.

For fiscal 2020, Cloudera expects revenues between $835 million and $855 million, reflecting growth of almost 76% year over year. Lower Hortonworks’ deferred revenues will hurt total revenues by $62 million.

Subscription revenues are estimated between $695 million and $705 million, reflecting growth of roughly 72% year over year.

Cloudera expects modest improvements in subscription gross margin and a slight decrease in services gross margin in fiscal 2020. Deployment of more technical resources to support customer success will hurt services margin.

Adjusted ARR for the fourth quarter of fiscal 2020 is estimated between $800 million and $825 million, representing 18-21% year-over-year growth.

Non-GAAP net loss is expected between 36 cents and 32 cents per share.

Moreover, operating cash outflow is expected to be $40-$30 million for fiscal 2020. Shift in billing practices will reduce billings and cash flow by approximately $125 million in fiscal 2020 and $75 million in fiscal 2021.

Zacks Rank & Stocks to Consider

Currently, Cloudera carries a Zacks Rank #3 (Hold).

Alteryx AYX, eGain Corp. EGAN and Castlight Health CSLT are stocks worth considering in the broader computer and technology sector. While Alteryx and eGain have a Zacks Rank #1 (Strong Buy), Castlight has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx, eGain and Castlight are currently pegged at 15.4%, 30% and 22.5%, respectively.

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