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Why Cloudera Stock Is Down 42% Today

Steve Symington, The Motley Fool

What happened

Shares of Cloudera (NYSE: CLDR) are down 42% as of 12:00 p.m. EDT Thursday after the cloud software company announced the surprise resignation of its CEO along with mixed fiscal first-quarter 2020 results and lowered full-year guidance.

As for the quarter, Cloudera's revenue arrived at $187.5 million, including subscription revenue of $154.8 million, which translated to an adjusted (non-GAAP) net loss of $34.1 million, or $0.13 per share. Analysts, on average, were expecting a wider net loss of $0.23 per share, but on higher revenue of $188.5 million.

Stock market chart with yellow arrow indicating losses.

IMAGE SOURCE: GETTY IMAGES.

So what

Further stoking the market's ire, late yesterday, Cloudera also told investors CEO Tom Reilly will retire from his post and from Cloudera's board of directors, effective July 31, 2019. The abrupt departure comes less than a year after the company's merger with competitor Hortonworks.

Still, the company tried to frame the turnover in a positive light.

"I am very proud of everything that we have accomplished at Cloudera over the past six years, as we have transformed into a leading enterprise data cloud provider," Reilly stated. "While there is still much work to be done, I have determined that now is the right time for me to retire and transition leadership of the company as it enters the next chapter of growth."

Now what

For the fiscal second quarter, Cloudera expects revenue ranging from $180 million to $183 million, with an adjusted net loss per share of $0.11 to $0.08. In this case, most analysts were modeling a loss of $0.09 per share on revenue closer to $203 million.

As such, Cloudera reduced its full-year guidance (provided in March) to call for revenue in the range of $745 million to $765 million (down from $835 million to $855 million before), including subscription revenue of $635 million to $645 million (down from $695 million to $705 million previously) and an adjusted net loss per share of $0.32 to $0.28 (technically improved from $0.36 to $0.32 before, likely given a lower base of unprofitable revenue).

In the end, the combination of Cloudera's underwhelming start to the year, its CEO's resignation, and its freshly lowered guidance simply gave the bears more than enough fuel to drive shares steeply lower today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.