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Cloudera Reports Second Quarter Fiscal Year 2020 Financial Results

September 04, 2019

PALO ALTO, Calif., Sept. 4, 2019 /PRNewswire/ -- Cloudera, Inc. (NYSE: CLDR), the enterprise data cloud company, reported results for its second quarter of fiscal year 2020, ended July 31, 2019. Total revenue for the second quarter was $196.7 million, and subscription revenue was $164.1 million. Annualized Recurring Revenue grew 16% year-over-year.

"We executed better in Q2, exceeding expectations on all our financial measures. Most importantly, we delivered an initial release of our cloud-native data management and analytics offering, Cloudera Data Platform. We already have a select group of customers evaluating this rich set of public cloud services, CDP Data Hub, Data Warehouse, and Machine Learning," said Marty Cole, chairman of the board and interim chief executive officer, Cloudera. "We are focused on meeting our customers' demands for hybrid and multi-cloud solutions that support use cases from the Edge to AI. That is the promise of CDP and the enterprise data cloud. Also, our internal metrics and pipeline generation have materially improved from Q1 levels. Together with solid execution in our second quarter, we are 'on plan' for achieving our objectives for this fiscal year."

All numbers reported for prior periods are presented for Cloudera on a standalone basis since the merger with Hortonworks, Inc. closed on January 3, 2019, and, as such, there is no comparative year-over-year financial information for the combined company.

GAAP loss from operations for the second quarter of fiscal 2020 was $89.1 million, compared to a GAAP loss from operations of $29.4 million for the second quarter of fiscal 2019.

Non-GAAP loss from operations for the second quarter of fiscal 2020 was $7.4 million, compared to a non-GAAP loss from operations of $8.3 million for the second quarter of fiscal 2019.

Operating cash flow for the second quarter of fiscal 2020, which includes $13.3 million of merger-related payments, was negative $33.0 million, compared to operating cash flow of negative $23.6 million for the second quarter of fiscal 2019.

GAAP net loss per share for the second quarter of fiscal 2020 was $0.31 per share, based on weighted-average shares outstanding of 276.8 million shares, compared to a GAAP net loss per share of $0.19 per share for the second quarter of fiscal 2019, based on weighted-average shares outstanding of 149.5 million shares. See financial statement tables below for additional information regarding historical and forward-looking stock-based compensation expenses and shares outstanding.

Non-GAAP net loss per share for the second quarter of fiscal 2020 was $0.02 per share, based on weighted-average shares outstanding of 276.8 million shares, compared to a non-GAAP net loss per share of $0.05 per share for the second quarter of fiscal 2019, based on weighted-average shares outstanding of 149.5 million shares.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading Non-GAAP Financial Measures.

As of July 31, 2019, the company had total cash, cash equivalents, marketable securities and restricted cash of $508.6 million.

Recent Business and Financial Highlights

  • Annualized Recurring Revenue was $681.9 million, representing 16% year-over-year growth
  • Non-GAAP subscription gross margin for the quarter was 86%
  • Operating cash flow was negative $33.0 million, including $13.3 million of merger-related payments
  • Customers with annualized recurring revenue greater than $100,000 were 953, up 24 from the previous quarter
  • Delivered the initial release of our cloud-native data management and analytics offering, Cloudera Data Platform, including Data Hub, Data Warehouse, and Machine Learning public cloud services
  • Announced a new open source licensing and distribution framework, aligning Cloudera's model with the industry standard set by Red Hat
  • Entered into an agreement to acquire Arcadia Data, a provider of cloud-native AI-powered business intelligence and real-time analytics
  • Expanded our strategic partnership with IBM resulting in our best historical customer bookings quarter with IBM
  • Cloudera was named an Overall Leader for Analytical Data Infrastructure by Dresner Advisory Services in their 2019 Industry Excellence Awards

Business Outlook

The outlook for the third quarter of fiscal 2020, ending October 31, 2019, is:

  • Annualized Recurring Revenue in the range of $685 million to $695 million
  • Total revenue in the range of $187 million to $190 million
  • Subscription revenue in the range of $162 million to $164 million
  • Non-GAAP net loss per share in the range of $0.08 to $0.06 per share
  • Weighted-average shares outstanding of approximately 283 million shares

The outlook for fiscal 2020, ending January 31, 2020, is:

  • Annualized Recurring Revenue in the range of $685 million to $720 million
  • Total revenue in the range of $765 million to $775 million
  • Subscription revenue in the range of $645 million to $655 million
  • Operating cash flow in the range of negative $80 million to negative $65 million, including $60 million of non-recurring merger-related payments
  • Non-GAAP net loss per share in the range of $0.28 to $0.24 per share
  • Weighted-average shares outstanding of approximately 280 million shares

Conference Call and Webcast Information

Cloudera is hosting a conference call for analysts and investors to discuss its second quarter of fiscal 2020 results and the outlook for its third quarter of fiscal 2020 and full year fiscal 2020 at 2:00 PM Pacific Time today. Participants can listen via webcast by visiting the Investor Relations section of Cloudera's website. A replay of the webcast will be available for two weeks following the call.

The conference call can also be accessed as follows:

  • Participant Toll Free Number: +1-833-231-7247
  • Participant International Number: +1-647-689-4091
  • Conference ID: 8872765

About Cloudera

At Cloudera, we believe that data can make what is impossible today, possible tomorrow. We empower people to transform complex data into clear and actionable insights. Cloudera delivers an enterprise data cloud for any data, anywhere, from the Edge to AI. Powered by the relentless innovation of the open source community, Cloudera advances digital transformation for the world's largest enterprises. Learn more at cloudera.com.

Connect with Cloudera

About Cloudera: cloudera.com/about-cloudera.html
Read our VISION blog: vision.cloudera.com/ and Engineering blog: blog.cloudera.com/
Follow us on Twitter: twitter.com/cloudera and LinkedIn: linkedin.com/cloudera/
Visit us on Facebook: facebook.com/cloudera
See us on YouTube: youtube.com/user/clouderahadoop
Join the Cloudera Community: community.cloudera.com
Read about our customers' successes: cloudera.com/customers.html

Cloudera and associated marks are trademarks or registered trademarks of Cloudera, Inc. All other company and product names may be trademarks of their respective owners.

Forward-Looking Statements

Statements in this press release that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are also intended to identify forward-looking statements. The forward-looking statements in this press release address a variety of subjects, including statements about our short-term and long-term goals and targets, including expectations regarding the acceptance by our enterprise customers of enterprise data cloud and the Cloudera Data Platform, and our "Business Outlook" for our third quarter of fiscal 2020 and our full year fiscal 2020 operating results. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including global economic conditions, competitive pressures and pricing declines, intellectual property infringement claims, and other risks or uncertainties that are described under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC), and in our other SEC filings. You can obtain copies of the company's SEC filings on the SEC's website at www.sec.gov. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

We report all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). To supplement our unaudited and audited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of our operations as determined in accordance with GAAP. The non-GAAP financial measures used by us include non-GAAP gross margins, non-GAAP subscription gross margins, non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, and historical and forward-looking non-GAAP net loss per share. These non-GAAP financial measures exclude stock-based compensation, acquisition- and disposition-related expenses (if any), and amortization of acquired intangible assets from the Cloudera unaudited condensed consolidated statement of operations. In addition, we use non-GAAP weighted-average shares outstanding to calculate non-GAAP net loss per share. This non-GAAP measure includes the impact of anti-dilutive restricted stock units and stock options outstanding, on a weighted basis.

For a description of these items, including the reasons why management adjusts for them, and reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Use of Non-GAAP Financial Information" as well as the related tables that precede it. We may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures we use.

We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results or future outlook. Management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results, as well as when planning, forecasting and analyzing future periods. We use these non-GAAP financial measures in conjunction with traditional GAAP measures to communicate with our board of directors concerning our financial performance. These non-GAAP financial measures also facilitate comparisons of our performance to prior periods.

Annualized Recurring Revenue
Annualized Recurring Revenue ("ARR") is a performance metric, which we use to assess the health and trajectory of our business. ARR equals the annualized value of all recurring subscription contracts with active entitlements as of the end of the period, including pre-merger Hortonworks contracts. ARR does not reflect non-recurring partner revenue, subscription revenue with certain related parties, custom engineering and premium add-on support.

Cloudera, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


















Three Months Ended July 31,


Six Months Ended July 31,


2019


2018
(As Adjusted)*


2019


2018
(As Adjusted)*

Revenue:








Subscription

$

164,102



$

95,798



$

318,940



$

182,561


Services

32,609



17,181



65,239



33,877


Total revenue

196,711



112,979



384,179



216,438


Cost of revenue:(1) (2)









Subscription

29,075



14,961



58,412



30,768


Services

28,055



17,171



59,951



34,715


Total cost of revenue

57,130



32,132



118,363



65,483


Gross profit

139,581



80,847



265,816



150,955


Operating expenses:(1) (2)








Research and development

65,742



39,800



129,915



83,464


Sales and marketing

112,491



53,381



231,874



115,191


General and administrative 

50,445



17,090



96,877



33,426


Total operating expenses

228,678



110,271



458,666



232,081


Loss from operations

(89,097)



(29,424)



(192,850)



(81,126)


Interest income, net

3,156



2,173



6,447



3,980


Other income (expense), net

104



(907)



337



(2,028)


Loss before provision for income taxes

(85,837)



(28,158)



(186,066)



(79,174)


Provision for income taxes

(1,206)



(791)



(4,107)



(2,097)


Net loss

$

(87,043)



$

(28,949)



$

(190,173)



$

(81,271)


Net loss per share, basic and diluted

$

(0.31)



$

(0.19)



$

(0.69)



$

(0.55)


Weighted-average shares used in computing net loss per share, basic and diluted

276,778



149,505



274,207



148,115



* As adjusted to reflect the impact of the full retrospective adoption of Topic 606.

 

(1) Amounts include stock-based compensation expense as follows (in thousands):


















Three Months Ended July 31,


Six Months Ended July 31,


2019


2018


2019


2018











Cost of revenue – subscription

$

4,189



$

2,496



$

8,008



$

5,044


Cost of revenue – services

4,196



2,776



8,456



5,250


Research and development

18,453



8,336



36,294



18,197


Sales and marketing

15,435



2,698



28,799



8,777


General and administrative

19,460



4,169



29,047



8,573


 

(2) Amounts include amortization of acquired intangible assets as follows (in thousands):


















Three Months Ended July 31,


Six Months Ended July 31,


2019


2018


2019


2018

Cost of revenue – subscription

$

2,687



$

622



$

5,597



$

1,244


Sales and marketing

17,250



35



34,500



70


 

Cloudera, Inc.

Condensed Consolidated Statements of Operations

(as a percentage of total revenue)

(unaudited)














Three Months Ended July 31,


Six Months Ended July 31,


2019


2018
(As Adjusted)*


2019


2018
(As Adjusted)*

Revenue:








Subscription

83

%


85

%


83

%


84

%

Services

17



15



17



16


Total revenue

100



100



100



100


Cost of revenue(1) (2): 








Subscription

15



13



15



14


Services

14



15



16



16


Total cost of revenue

29



28



31



30


Gross margin

71



72



69



70


Operating expenses(1) (2):








Research and development

33



35



34



39


Sales and marketing

57



47



60



53


General and administrative

26



15



25



15


Total operating expenses

116



97



119



107


Loss from operations

(45)



(25)



(50)



(37)


Interest income, net

2



2



2



2


Other income (expense), net



(1)





(1)


Loss before provision for income taxes

(43)



(24)



(48)



(36)


Provision for income taxes

(1)



(1)



(2)



(1)


Net loss

(44)

%


(25)

%


(50)

%


(37)

%


* As adjusted to reflect the impact of the full retrospective adoption of Topic 606.

 

(1) Amounts include stock-based compensation expense as a percentage of total revenue as follows:














Three Months Ended July 31,


Six Months Ended July 31,


2019


2018


2019


2018

Cost of revenue – subscription

2

%


2

%


2

%


2

%

Cost of revenue – services

2



2



2



2


Research and development

9



7



9



8


Sales and marketing

8



2



7



4


General and administrative

10



4



8



4


Total stock-based compensation expense

31

%


17

%


28

%


20

%

  

(2) Amounts include amortization of acquired intangible assets as a percentage of total revenue as follows:














Three Months Ended July 31,


Six Months Ended July 31,


2019


2018


2019


2018

Cost of revenue – subscription

1

%


1

%


1

%


1

%

Sales and marketing

9





9




Total amortization of acquired intangible assets

10

%


1

%


10

%


1

%

 

Cloudera, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)










July 31,
2019


January 31,
2019

ASSETS




CURRENT ASSETS:




Cash and cash equivalents

$

88,075



$

158,672


Marketable securities, current

331,763



322,005


Accounts receivable, net

160,298



242,980


Contract assets

5,569



4,824


Deferred costs

39,546



32,100


Prepaid expenses and other current assets

31,342



38,281


Total current assets

656,593



798,862


Property and equipment, net

26,061



27,619


Marketable securities, non-current

85,412



56,541


Intangible assets, net

639,229



679,326


Goodwill

588,742



586,456


Deferred costs, non-current

30,301



36,913


Restricted cash

3,352



3,367


Operating lease right-of-use assets

216,958




Other assets

9,727



7,559


TOTAL ASSETS

$

2,256,375



$

2,196,643


LIABILITIES AND STOCKHOLDERS' EQUITY




CURRENT LIABILITIES:




Accounts payable

$

4,283



$

8,185


Accrued compensation

50,149



53,590


Other contract liabilities, current

7,935



17,177


Other accrued liabilities

30,299



24,548


Operating lease liabilities, current

21,358




Deferred revenue, current

366,980



390,965


Total current liabilities

481,004



494,465


Operating lease liabilities, non-current

205,466




Deferred revenue, non-current

87,952



116,604


Other contract liabilities, non-current

1,053



1,296


Other liabilities

5,404



22,209


TOTAL LIABILITIES

780,879



634,574


STOCKHOLDERS' EQUITY:




Common stock

14



13


Additional paid-in capital

2,814,767



2,711,340


Accumulated other comprehensive income (loss)

130



(42)


Accumulated deficit

(1,339,415)



(1,149,242)


TOTAL STOCKHOLDERS' EQUITY

1,475,496



1,562,069


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,256,375



$

2,196,643


 

Cloudera, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


















Three Months Ended July 31,


Six Months Ended July 31,


2019


2018

(As Adjusted)*


2019


2018

(As Adjusted)*









CASH FLOWS FROM OPERATING ACTIVITIES








Net loss

$

(87,043)



$

(28,949)



$

(190,173)



$

(81,271)


Adjustments to reconcile net loss to net cash (used in) provided by operating activities:








Depreciation and amortization

34,433



2,676



69,064



5,068


Stock-based compensation expense

61,733



20,475



110,604



45,841


Accretion and amortization of marketable securities

(735)



(210)



(1,660)



(195)


Amortization of deferred costs

11,321



7,240



20,973



13,803


Loss (gain) on disposal of fixed assets

44





459



(20)


Changes in assets and liabilities:








Accounts receivable

(14,836)



(31,652)



80,660



34,188


Contract assets

(214)



5



(745)



2,850


Prepaid expenses and other assets

(3,222)



4,130



(3,213)



12,297


Deferred costs

(12,395)



(9,024)



(21,807)



(13,554)


Accounts payable

(1,056)



704



(3,661)



583


Accrued compensation

6,440



5,190



(6,090)



(9,437)


Accrued expenses and other liabilities

(5,238)



2,792



(16,345)



3,613


Other contract liabilities

(4,241)



152



(9,485)



385


Deferred revenue

(17,971)



2,918



(50,101)



(13,341)


Net cash (used in) provided by operating activities

(32,980)



(23,553)



(21,520)



810


CASH FLOWS FROM INVESTING ACTIVITIES








Purchases of marketable securities and other investments

(114,771)



(138,133)



(311,224)



(252,376)


Proceeds from sale of marketable securities and other investments

30,114



19,038



39,385



32,294


Maturities of marketable securities and other investments

105,404



116,690



235,402



230,903


Capital expenditures

(2,028)



(3,449)



(4,721)



(7,663)


Net cash provided by (used in) investing activities

18,719



(5,854)



(41,158)



3,158


CASH FLOWS FROM FINANCING ACTIVITIES








Taxes paid related to net share settlement of restricted stock units

(7,847)



(3,482)



(15,645)



(4,388)


Proceeds from employee stock plans

3,270



4,249



9,220



11,330


Net cash (used in) provided by financing activities

(4,577)



767



(6,425)



6,942


Effect of exchange rate changes on cash, cash equivalents and restricted cash

(449)



(834)



(1,509)



(1,215)


Net (decrease) increase in cash, cash equivalents and restricted cash

(19,287)



(29,474)



(70,612)



9,695


Cash, cash equivalents and restricted cash — Beginning of period

110,714



100,468



162,039



61,299


Cash, cash equivalents and restricted cash — End of period

$

91,427



$

70,994



$

91,427



$

70,994











SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION








Cash paid for income taxes

$

1,763



$

737



$

3,645



$

1,898


Cash paid for operating lease liabilities

$

13,955



$



$

25,034



$










SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES








Purchases of property and equipment in accounts payable and other accrued liabilities

$

500



$

561



$

500



$

561


Right-of-use assets obtained in exchange for new operating lease liabilities

$

526



$



$

2,966



$



* As adjusted to reflect the impact of the full retrospective adoption of Topic 606.

 

Cloudera, Inc.

Three Months Ended July 31, 2019

GAAP Results Reconciled to Non-GAAP Results

(in thousands, except per share amounts)

(unaudited)


















GAAP


Stock-Based
Compensation
Expense


Amortization of
Acquired
Intangible Assets


Non-GAAP

Cost of revenue- Subscription

$

29,075



$

(4,189)



$

(2,687)



$

22,199


Subscription gross margin

82

%


3

%


2

%


86

%

Cost of revenue- Services

28,055



(4,196)





23,859


Services gross margin

14

%


13

%


%


27

%

Gross profit

139,581



8,385



2,687



150,653


Total gross margin

71

%


4

%


1

%


77

%

Research and development

65,742



(18,453)





47,289


Sales and marketing

112,491



(15,435)



(17,250)



79,806


General and administrative

50,445



(19,460)





30,985


Loss from operations

(89,097)



61,733



19,937



(7,427)


Operating margin

(45)

%


31

%


10

%


(4)

%

Net loss

(87,043)



61,733



19,937



(5,373)


Net loss per share, basic and diluted

$

(0.31)



$

0.22



$

0.07



$

(0.02)


 

Cloudera, Inc.

Three Months Ended July 31, 2018

GAAP Results Reconciled to Non-GAAP Results

(in thousands, except per share amounts)

(unaudited) 


















GAAP


Stock-Based
Compensation
Expense


Amortization of
Acquired
Intangible Assets


Non-GAAP

Cost of revenue- Subscription

$

14,961



$

(2,496)



$

(622)



$

11,843


Subscription gross margin

84

%


3

%


1

%


88

%

Cost of revenue- Services

17,171



(2,776)





14,395


Services gross margin

%


16

%


%


16

%

Gross profit

80,847



5,272



622



86,741


Total gross margin

72

%


5

%


1

%


77

%

Research and development

39,800



(8,336)





31,464


Sales and marketing

53,381



(2,698)



(35)



50,648


General and administrative

17,090



(4,169)





12,921


Loss from operations

(29,424)



20,475



657



(8,292)


Operating margin

(26)

%


18

%


1

%


(7)

%

Net loss

(28,949)



20,475



657



(7,817)


Net loss per share, basic and diluted

$

(0.19)



$

0.14



$



$

(0.05)


Use of Non-GAAP Financial Information

In addition to the reasons stated under "Non-GAAP Financial Measures" above, which are generally applicable to each of the items Cloudera excludes from its non-GAAP financial measures, Cloudera believes it is appropriate to exclude or give effect to certain items for the following reasons:

  • Stock-based compensation expense. We exclude stock-based compensation expense from our non-GAAP financial measures consistent with how we evaluate our operating results and prepare our operating plans, forecasts and budgets. Further, when considering the impact of equity award grants, we focus on overall stockholder dilution rather than the accounting charges associated with such equity grants. The exclusion of the expense facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of our business.
  • Amortization of acquired intangible assets. We exclude the amortization of acquired intangible assets from our non-GAAP financial measures. Although the purchase accounting for an acquisition necessarily reflects the accounting value assigned to intangible assets, our management team excludes the GAAP impact of acquired intangible assets when evaluating our operating results. Likewise, our management team excludes amortization of acquired intangible assets from our operating plans, forecasts and budgets. The exclusion of the expense facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of our business.

 

Cloudera, Inc.

Reconciliation of Non-GAAP Financial Guidance

(unaudited)








Fiscal 2020

(in millions)

Q3


FY

GAAP net loss

($97) - ($91)



($378) - ($367)


Stock-based compensation expense (*)

54



220


Amortization of acquired intangible assets

20



80


Non-GAAP net loss

($23) - ($17)



($78) - ($67)



(*) Stock-based compensation expense is impacted by variables such as stock price and employee behavior, each of which are inherently difficult to forecast.  As a result, the guidance presented above is subject to a number of uncertainties and assumptions that may cause actual results to differ materially.

 

Cloudera, Inc. (PRNewsfoto/Cloudera, Inc.)

 

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SOURCE Cloudera, Inc.

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