Cloudera Reports Second Quarter Fiscal Year 2018 Financial Results

2017-09-08 01:00:31

(MENAFNEditorial) iCrowdNewswire - Sep 8, 2017 - Q2 subscription revenue up 46% year-over-year- Net expansion rate of 140%- 45 net new Global 8000 customers added- Acquired Fast Forward Labs, leader in machine learning and applied artificial intelligence

PALO ALTO, Calif.—(NYSE: CLDR), the modern platform for machine learning and analytics optimized for the cloud, today reported results for its second quarter fiscal 2018, ended July31, 2017. Total revenue was$89.8 million, an increase of 39% from the second quarter fiscal 2017. Subscription revenue was$74.0 million, an increase of 46% from the year-ago period. Subscription revenue represented 82% of total revenue, up from 79% in second quarter fiscal 2017.

"In our fiscal second quarter, we outperformed on sales, customer acquisition, customer expansion and cash flow objectives," saidTom Reilly, chief executive officer at Cloudera. "The enterprise machine learning and analytics market is quickly emerging and we continue to lead its direction through technology and product innovation. In Q2, we exhibited strong momentum in the areas that drive sustained growth for Cloudera: machine learning, analytics and the cloud. Also, we are especially pleased to have strengthened our market position through the acquisition of a recognized leader in machine learning applied research, development and solutions, Fast Forward Labs."

GAAP loss from operations for the second quarter fiscal 2018 was$65.7 million, compared to a GAAP loss from operations of$38.8 millionfor the second quarter fiscal 2017. Non-GAAP loss from operations for the quarter was$25.3 million, compared to a non-GAAP loss from operations of$32.3 millionin the year-ago period.

Operating cash flow for the quarter was negative$22.8 millioncompared to operating cash flow of negative$28.5million in the second quarter fiscal 2017.

GAAP net loss per share for the second quarter fiscal 2018 was$0.48per share, based on weighted-average shares outstanding of 134.5 million shares, compared to a GAAP net loss per share in the second quarter fiscal 2017 of$1.07per share, based on weighted-average shares outstanding of 36.3 million shares. See 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 fiscal 2018 was$0.17per share, based on non-GAAP weighted-average shares outstanding of 136.5 million shares, compared to non-GAAP net loss per share in the second quarter fiscal 2017 of$0.29per share, based on non-GAAP weighted-average shares outstanding of 111.2million 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 ofJuly 31, 2017, the company had total cash, cash equivalents, marketable securities and restricted cash of$493.8 million.

Recent Business and Financial Highlights:

Subscription revenue was up 46% year-over-year to$74.0 million

Subscription revenue represented 82% of total revenue, up from 79% in year-ago period

Non-GAAP subscription gross margin for the quarter was 85%, 200 basis points higher than second quarter fiscal 2017

Dollar-based net expansion rate was 140% for the quarter

45 net new Global 8000 customers added

Acquired Fast Forward Labs, leading machine learning and applied artificial intelligence research and development company, deepening Cloudera's expertise in the application of machine learning to practical business problems

Recognized by Microsoft for machine learning and analytics on Azure; named 2017 U.S. Enterprise Partner Group Data Platform ISV Partner of the Year

Achieved Service Capability & Performance (SCP) Standards certification for delivering world class customer service and support, the only modern data platform vendor to have earned this distinction

Business Outlook

The outlook for the third quarter fiscal 2018, endingOctober 31, 2017, is:

Total revenue in the range of$90 to $92 million, representing 34% to 37% year-over-year growth

Subscription revenue in the range of$74 million to $76 million, representing 40% to 44% year-over-year growth

Non-GAAP net loss per share in the range of$0.25 to $0.23per share

Non-GAAP weighted-average shares outstanding of approximately 138 million shares

The outlook for fiscal 2018, endingJanuary 31, 2018, is:

Total revenue in the range of$355 million to $360 million, representing 36% to 38% year-over-year growth

Subscription revenue in the range of$290 million to $295 million, representing 45% to 47% year-over-year growth

Operating cash flow in the range of negative$65 million to $60 million

Non-GAAP net loss per share in the range of$0.95 to $0.93per share

Non-GAAP weighted-average shares outstanding of approximately 133 million shares

Conference Call and Webcast Information

Cloudera is hosting a conference call for analysts and investors to discuss its second quarter fiscal 2018 results and the outlook for its third quarter fiscal 2018 and fiscal 2018 at2:00 p.m. Pacific Timetoday. 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: 67627548

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. We deliver the modern platform for machine learning and analytics optimized for the cloud. The world's largest enterprises trust Cloudera to help solve their most challenging business problems. Learn more at.

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
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

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

Global 8000 Customer List

As previously disclosed in our final prospectus datedApril 27, 2017and filed with the Securities and Exchange Commission onApril 28, 2017we periodically update the Global 8000 list based on the FORBES Global 2000 list and information from Data.com. The FORBES Global 2000 list is updated annually in the second quarter of the calendar year and we have since restated our previously disclosed numbers of customers to allow for comparability.

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 our belief that the enterprise machine learning and analytics market will quickly emerge and that we will continue to lead its direction through technology and product innovation, our expectation that we will continue our momentum in machine learning, analytics and the cloud, and our"Business Outlook" for our third quarter fiscal 2018 and fiscal 2018 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 Form 10-Q filed with the Securities and Exchange Commission, or the SEC, on June9, 2017 and in our other SEC filings. 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 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 forward-looking non-GAAP gross margins,historical and forward-looking non-GAAP operating income (loss), non-GAAP net loss, non-GAAP net loss per share. These non-GAAP financial measures exclude stock-based compensation, acquisition- and disposition-related expenses (if any), amortization of acquired intangible assets, and donations of common stock made to the Cloudera Foundation 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 assumed conversion of all outstanding shares of preferred stock to common stock and the impact of anti-dilutive RSUs and 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.

Cloudera, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Revenue:

Subscription

73,986

50,688

138,657

91,360

Services

15,842

13,768

30,767

29,581

Total revenue

89,828

64,456

169,424

120,941

Cost of revenue:(1) (2)

Subscription

15,215

9,706

41,687

19,057

Services

16,755

11,633

50,395

23,317

Total cost of revenue

31,970

21,339

92,082

42,374

Gross profit

57,858

43,117

77,342

78,567

Operating expenses:(1) (2)

Research and development

42,844

26,635

138,675

51,150

Sales and marketing

62,135

46,902

172,578

93,044

General and administrative

18,564

8,367

54,114

16,676

Total operating expenses

123,543

81,904

365,367

160,870

Loss from operations

(65,685)

(38,787)

(288,025)

(82,303)

Interest income, net

1,440

708

2,089

1,448

Other income (expense), net

817

(178)

839

(15)

Net loss before provision for income taxes

(63,428)

(38,257)

(285,097)

(80,870)

Provision for income taxes

(801)

(470)

(1,451)

(970)

Net loss

(64,229)

(38,727)

(286,548)

(81,840)

Net loss per share, basic and diluted

(0.48)

(1.07)

(3.28)

(2.27)

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

134,506

36,257

87,293

36,090

_____________

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

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Cost of revenue subscription

3,693

374

19,393

708

Cost of revenue services

3,890

457

24,227

931

Research and development

13,128

1,458

81,029

3,013

Sales and marketing

12,137

1,474

72,678

3,033

General and administrative

6,603

1,815

33,206

3,556

Total stock‑based compensation expense

39,451

5,578

230,533

11,241

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

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Cost of revenue subscription

510

514

1,024

969

Sales and marketing

431

861

Total amortization of acquired intangible assets

941

945

1,885

1,830

Cloudera, Inc.

Condensed Consolidated Statements of Operations

(as a percentage of total revenues)

(unaudited)

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Revenue:

Subscription

Services

Total revenue

100

Cost of revenue:(1) (2)

Subscription

Services

Total cost of revenue

Gross margin

Operating expenses:(1) (2) (3)

Research and development

Sales and marketing

102

General and administrative

Total operating expenses

137

127

216

133

Loss from operations

(73)

(60)

(170)

(68)

Interest income, net

Other income (expense), net

—

Net loss before provision for income taxes

(71)

(59)

(168)

(67)

Provision for income taxes

(1)

Net loss

(72)

(60)

(169)

(68)

___________

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

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Cost of revenue subscription

Cost of revenue services

Research and development

Sales and marketing

General and administrative

Total stock-based compensation expense

136

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

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

Cost of revenue subscription

Sales and marketing

—

Total amortization of acquired intangible assets

Cloudera, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

July31,
2017

January 31,
2017

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

68,936

74,186

Short-term marketable securities

325,744

160,770

Accounts receivable, net

84,805

101,549

Prepaid expenses and other current assets

17,509

13,197

Total current assets

496,994

349,702

Property and equipment, net

13,027

13,104

Marketable securities, noncurrent

81,072

20,710

Intangible assets, net

5,166

7,051

Goodwill

31,516

Restricted cash

18,048

15,446

Other assets

3,994

5,015

TOTAL ASSETS

649,817

442,544

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

Accounts payable

6,326

3,550

Accrued compensation

32,254

33,376

Other accrued liabilities

15,670

9,918

Deferred revenue, current portion

194,252

192,242

Total current liabilities

248,502

239,086

Deferred revenue, less current portion

36,869

25,182

Other liabilities

9,058

4,345

TOTAL LIABILITIES

294,429

268,613

Redeemable convertible preferred stock

—

657,687

STOCKHOLDERS' EQUITY (DEFICIT):

Common stock

Additional paid-in capital

1,318,447

192,795

Accumulated other comprehensive loss

(521)

(556)

Accumulated deficit

(962,545)

(675,997)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

355,388

(483,756)

TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

649,817

442,544

Cloudera, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

(64,229)

(38,727)

(286,548)

(81,840)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

3,352

2,548

6,994

4,953

Stock-based compensation

39,451

5,578

230,533

11,241

Accretion and amortization of marketable securities

(128)

1,184

414

1,966

Changes in assets and liabilities:

Accounts receivable

(31,783)

(11,852)

16,744

4,011

Prepaid expenses and other assets

(740)

(2,103)

639

(784)

Accounts payable

3,595

2,844

1,674

1,872

Accrued compensation

7,684

6,309

(4,983)

(3,128)

Accrued expenses and other liabilities

1,828

151

2,970

1,006

Deferred revenue

18,125

5,523

13,697

8,604

Net cash used in operating activities

(22,845)

(28,545)

(17,866)

(52,099)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of marketable securities

(276,807)

(50,365)

(387,154)

(90,409)

Sales of marketable securities

11,523

14,931

43,198

34,372

Maturities of marketable securities

66,184

65,280

117,604

129,945

Cash used in business combinations, net of cash acquired

—

(2,700)

Capital expenditures

(1,796)

(986)

(1,971)

(6,135)

Net cash provided by (used in) investing activities

(200,896)

28,860

(228,323)

65,073

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from issuance of common stock in initial public offering

239,333

—

237,686

—

Proceeds from employee stock plans

4,450

804

5,932

1,633

Net cash provided by financing activities

243,783

804

243,618

1,633

Effect of exchange rate changes

(78)

(204)

(77)

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

19,964

915

(2,648)

14,641

Cash, cash equivalents and restricted cash — Beginning of period

67,020

49,720

89,632

35,994

Cash, cash equivalents and restricted cash — End of period

86,984

50,635

86,984

50,635

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for income taxes

723

257

1,352

654

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Purchases of property and equipment in other accrued liabilities

3,054

570

3,054

570

Deferred offering costs in accounts payable and other accrued liabilities

264

—

264

—

Conversion of redeemable convertible preferred stock to common stock

657,687

—

657,687

—

Cloudera, Inc.

Three Months Ended July31, 2017

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
weighted-
average shares
outstanding

Non-GAAP

Cost of revenue- Subscription

15,215

(3,693)

(510)

—

11,012

Subscription gross margin

—

Cost of revenue- Services

16,755

(3,890)

—

12,865

Services gross margin

(6)

—

Gross profit

57,858

7,583

510

—

65,951

Total gross margin

—

Research and development

42,844

(13,128)

—

29,716

Sales and marketing

62,135

(12,137)

(431)

—

49,567

General and administrative

18,564

(6,603)

—

11,961

Loss from operations

(65,685)

39,451

941

—

(25,293)

Operating margin

(73)

—

(28)

Net loss

(64,229)

39,451

941

—

(23,837)

Net loss per share, basic and diluted(1)

(0.48)

0.29

0.01

(0.17)

______________

(1)

See below for a reconciliation of weighted-average shares outstanding used to calculate non-GAAP net loss per share

Cloudera, Inc.

Three Months Ended July31, 2016

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
weighted-
average shares
outstanding

Non-GAAP

Cost of revenue- Subscription

9,706

(374)

(514)

—

8,818

Subscription gross margin

—

Cost of revenue- Services

11,633

(457)

—

11,176

Services gross margin

—

Gross profit

43,117

831

514

—

44,462

Total gross margin

—

Research and development

26,635

(1,458)

—

25,177

Sales and marketing

46,902

(1,474)

(431)

—

44,997

General and administrative

8,367

(1,815)

—

6,552

Loss from operations

(38,787)

5,578

945

(32,264)

Operating margin

(60)

(50)

Net loss

(38,727)

5,578

945

—

(32,204)

Net loss per share, basic and diluted(1)

(1.07)

0.15

0.03

0.60

(0.29)

______________

(1)

See below for a reconciliation of weighted-average shares outstanding used to calculate non-GAAP net loss per share

Cloudera, Inc.

GAAP weighted-average shares reconciled to non-GAAP weighted-average shares

(in thousands)

(unaudited)

Three Months Ended July31,

Six Months Ended July31,

2017

2016

2017

2016

GAAP weighted-average shares, basic and diluted

134,506

36,257

87,293

36,090

Assumed preferred stock conversion

1,628

74,907

37,661

74,907

Assumed IPO issuance

375

—

477

—

Non-GAAP weighted-average shares, diluted

136,509

111,164

125,431

110,997

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.

Assumed preferred stock conversion.For periods prior to the closing of our initial public offering (IPO) onMay 3, 2017, we give effect to the automatic conversion of all outstanding shares of preferred stock to common stock, as if such conversion had occurred at the beginning of the period, in our calculations of non-GAAP weight-average shares, diluted, and non-GAAP net loss per share, diluted. The inclusion of these shares 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.

Assumed IPO issuance.We include the common shares issued in our IPO, on a weighted basis, as if the shares were issued on the date of our effectiveness. Our IPO was effective in the first quarter of fiscal 2018 and closed in the second quarter of fiscal 2018.

Cloudera, Inc.

Reconciliation of non-GAAP Financial Guidance

(unaudited)

Fiscal 2018

(in millions)

GAAP net loss

($70) - (67)

($427) - (425)

Stock-based compensation expense

298

Amortization of acquired intangible assets

Non-GAAP net loss

($35) - (32)

($126) - (124)

GAAP weighted-average shares, basic and diluted

137 - 139

112 - 114

Assumed preferred stock conversion

—

Assumed IPO issuance

—

Non-GAAP weighted-average shares, diluted

137 - 139

132 - 134

(1) Stock-based compensation expense in fiscal 2018 is expected to be $34 million in the third quarter and $33million in the fourth quarter. These amounts are 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.

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Cloudera Reports Second Quarter Fiscal Year 2018 Financial Results

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