Cloudera (CLDR) Q1 Loss Narrows, Shares Down On Dim '20 View

Cloudera (NYSE:CLDR) reported first-quarter fiscal 2020 adjusted loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents and the year-ago quarter’s loss of 18 cents.

Revenues of $187.5 million surged 81.2% year over year but lagged the consensus mark of $188 million. Adjusted annualized recurring revenues (ARR) were $672 million, up 21% year over year. Customers with annualized recurring revenues greater than $100,000 were 929.

Management stated that the upcoming launch of Cloudera Data Platform prompted some enterprise customers to delay renewals and extension of contracts, thereby negatively impacting fiscal 2020 outlook.

Shares were down a massive 35.6% in pre-market trading.

Moreover, Cloudera also announced that current CEO Tom Reilly will retire on Jul 31, 2019. The board of directors has appointed Martin Cole, the chairman of the board, as the interim CEO.

Quarter Details

The year-over-year growth in revenues was driven by 78.5% jump in subscription revenues (85.1% of revenues) that totaled $154.8 million. Moreover, services (17.4% of revenues) rallied 95.4% year over year to $32.6 million.

During the reported quarter, Cloudera expanded partnership with International Business Machines (NYSE:IBM) to include all its product offerings and services.

The company also launched two products — Cloudera Edge Management and Cloudera Flow Management.

In the reported quarter, gross margin stayed flat at 73.2%. Subscription gross margin was unchanged on a year-over-year basis. However, services gross margin expanded 560 basis points (bps) year over year.

While research and development (R&D) expenses rose 37.1% to $46.3 million, sales and marketing (S&M) expenses surged 59.4% to $88.8 million. However, as percentage of revenues, R&D and S&M expenses declined 800 bps and 650 bps, respectively.

Moreover, general and administrative (G&A) expenses soared 208.8% to $36.8 million. As percentage of revenues, G&A was 19.7%, up 810 bps from the year-ago quarter.

Loss from operations widened to $34.8 million compared with a loss of $25.7 million a year ago.

Balance Sheet & Cash Flow

As of Apr 30, 2019, Cloudera had total cash, cash equivalents, marketable securities and restricted cash of $547.5 million.

Moreover, operating cash flow was $11.5 million in first-quarter fiscal 2020.

Guidance

For second-quarter fiscal 2020, Cloudera expects revenues between $180 million and $183 million.

Subscription revenues are estimated between $155 million and $157 million.

Non-GAAP net loss is expected between 11 cents and 8 cents per share.

For fiscal 2020, Cloudera expects revenues between $745 million and $765 million, down from the previous guidance of $835-$855 million.

ARR growth is expected between 0% and 10%.

Subscription revenues are estimated between $635 million and $645 million.

Non-GAAP net loss is expected between 32 cents and 28 cents per share.

Moreover, operating cash outflow is expected to be $75-$95 million, up from the previous guidance of $40-$30 million for fiscal 2020.

Zacks Rank & Stocks to Consider

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

eGain Corporation (NASDAQ:EGAN) and j2 Global (NASDAQ:JCOM) are stocks worth considering in the same industry. Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for eGain and j2 Global is currently pegged at 30% and 8%, respectively.

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