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August 7, 2018

Hortonworks Handily Beats Analyst Estimates

Alex Woodie

Hortonworks today announced the financial results for its second quarter ended June 30, and the numbers beat the projections of every financial analyst that covers the company, giving its stock a 12.5% lift in after-hours trading.

The Santa Clara, California company reported total revenues of $86.3 million, beating analysts’ consensus forecast of $80.3 million, as well as the high estimate of $83.2 million. It also beat analysts’ profitability predictions, as it narrowed its non-GAAP net loss to $.12 per diluted share, compared to a consensus estimate of negative $.23 per diluted share.

Hortonworks CEO Rob Bearden cheered the topline result. “Our entire team executed extremely well in the second quarter to deliver another fantastic result, with total revenue growth of 40 percent year over year,” Bearden stated in a press release accompanying the results.

The company, whose stock is traded on the Nasdaq Global Select market under the ticker symbol HDP, recorded gains across several categories. Technical support subscriptions brought in the lion’s share of revenue, $65.0 million, up 42% year over year. Professional services accounted for $21.3 million in revenue, a 33% increase from a year ago.

Hortonworks has demonstrated that it can grow revenues. Since it went public in late 2014, the company has grown revenues about 40% on an annualized basis. The challenge has been controlling spending in a manner that steers the company toward eventual profitability without hurting its ability to grow and expand into new markets.

Hortonworks appears to have found its rhythm with regards to spending. From the second quarter of 2017 to the second quarter of 2018, its operating expenses grew by just 8.9% to $104.4 million for the quarter. Its gross margin from a GAAP perspective was 72 percent, compared to 67 percent for the same period last year.

“Our margins have continued to improve as we maintain cost discipline and drive leverage across the business,” a company spokesperson tells Datanami.

The improved margins come on the heels of Hortonworks’ 2017 fourth quarter, when Bearden declared that the company broke even on a cash-flow basis for the first time. The company now says it expects to be operating cash flow positive for the full year when it reports financial results for the fourth quarter and fiscal year 2018 early next year.

There were other positive signs for the company, which distributes a version of Hadoop called Hortonworks Data Platform (HDP) as well as its real-time streaming data management software, Hortonworks Data Flow (HDF). Hortonworks recorded 17 deals with values in excess of $1 million, a 70% increase from a year. Ten of the deals of $1M+ included HDF, the company says.

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