February 10, 2017

Hortonworks Announces Financial Results for Fourth Quarter and Full Year 2016

SANTA CLARA, Calif., Feb. 10 — Hortonworks, Inc. (NASDAQ: HDP), a leading innovator of open and connected data platforms, has announced financial results for the fourth quarter and full year 2016.

“Our fourth quarter performance was highlighted by double-digit growth in support subscription revenue, clearly showing continued strong market demand for our open source platforms,” said Rob Bearden, chief executive officer and chairman of the board of directors of Hortonworks. “The combination of enterprise customers’ accelerating business transformations fueled by data and our continued financial discipline positions Hortonworks extremely well for growth and success in 2017.”

Fourth Quarter and Full Year 2016 Financial Highlights

Revenue

  • Total GAAP revenue was $52.0 million for the fourth quarter of 2016, an increase of 39 percent compared to the fourth quarter of 2015.
  • Total GAAP revenue was $184.5 million for the full year of 2016, an increase of 51 percent compared to the prior year.

Operating Billings

  • Operating billings, the aggregate value of all invoices sent to our customers in a given period, were $81.4 million for the fourth quarter of 2016, an increase of 56 percent over operating billings of $52.1 million for the fourth quarter of 2015.
  • Operating billings were $269.9 million for the full year of 2016, an increase of 63 percent over operating billings of $165.9 million for the prior year.

Gross Profit

  • Total GAAP gross profit was $34.0 million for the fourth quarter of 2016, compared to gross profit of $21.7 million for the same period last year. Non-GAAP gross profit was $35.6 million for the fourth quarter of 2016, compared to $22.8 million for the same period last year. GAAP gross margin was 65 percent for the fourth quarter of 2016, compared to 58 percent for the same period last year. Non-GAAP gross margin was 68 percent for the fourth quarter of 2016, compared to 61 percent for the same period last year.
  • Total GAAP gross profit was $112.3 million for the full year of 2016, compared to gross profit of $66.8 million for the prior year. Non-GAAP gross profit was $118.0 million for the full year of 2016, compared to $69.5 million for the prior year. GAAP gross margin was 61 percent for the full year of 2016, compared to 55 percent for the prior year. Non-GAAP gross margin was 64 percent for the full year of 2016, compared to 57 percent for the prior year.

Operating Loss

  • GAAP operating loss was $57.2 million for the fourth quarter of 2016, compared to $50.6 million for the same period last year. Non-GAAP operating loss was $30.7 million for the fourth quarter of 2016, compared to $32.9 million for the same period last year.
  • GAAP operating loss was $251.2 million for the full year of 2016, compared to $179.6 million for the prior year. Non-GAAP operating loss was $147.1 million for the full year of 2016, compared to $133.6 million for the prior year.

Net Loss

  • GAAP net loss was $57.1 million for the fourth quarter of 2016, or $0.94 per basic and diluted share, compared to a GAAP net loss of $50.2 million, or $1.11 per basic and diluted share, for the same period last year. Non-GAAP net loss was $30.6 million for the fourth quarter of 2016, or $0.50 per basic and diluted share, compared to a non-GAAP net loss of $32.7 million, or $0.72 per basic and diluted share, for the same period last year.
  • GAAP net loss for the full year of 2016 was $251.7 million, or $4.40 per basic and diluted share, compared to a GAAP net loss of $179.1 million, or $4.13 per basic and diluted share, for the prior year. Non-GAAP net loss for the full year of 2016 was $147.6 million, or $2.58 per basic and diluted share, compared to a non-GAAP net loss of $133.3 million, or $3.08 per basic and diluted share, for the prior year.

Adjusted EBITDA

We historically calculated Adjusted EBITDA as revenue plus change in deferred revenue minus non-GAAP expenses plus depreciation. We provided guidance for each element of Adjusted EBITDA through the fourth quarter of fiscal 2016, which we targeted for Adjusted EBITDA breakeven.

  • For the fourth quarter of 2016, GAAP revenue was $52.0 million, change in deferred revenue was $28.6 million, non-GAAP expenses were $82.7 million, and depreciation was $2.0 million.
  • For the full year 2016, GAAP revenue was $184.5 million, change in deferred revenue was $78.6 million, non-GAAP expenses were $331.6 million, and depreciation was $7.2 million.

Deferred Revenue

  • Deferred revenue was $185.4 million as of December 31, 2016, an 18 percent increase over the $156.8 million reported as of September 30, 2016 and a 74 percent increase over the $106.8 million reported as of December 31, 2015.

Cash & Investments

  • Cash and investments totaled $89.2 million as of December 31, 2016, compared to $95.6 million as of September 30, 2016 and $96.9 million as of December 31, 2015.
  • Operating cash used was $0.6 million for the fourth quarter of 2016, compared to $18.8 million for the same period last year.
  • Operating cash used was $81.5 million for the full year of 2016, compared to $99.3 million for the prior year.

Recent Business Highlights

  • Hortonworks Appoints Raj Verma as President and Chief Operating Officer. In January 2017, we announced the appointment of Raj Verma as president and chief operating officer. Verma is an experienced enterprise sales veteran who brings more than 20 years of enterprise sales and marketing leadership. Previously, Verma was chief operating officer of TIBCO Software Inc., where he was instrumental in taking TIBCO from $300 million to more than $1 billion in annual revenue.
  • Hortonworks Enterprise Data Warehouse Optimization Solution Fast Tracks Customers to Modern Business Intelligence. In January 2017, we announced the Enterprise Data Warehouse (EDW) Optimization Solution, the industry’s only turnkey Hadoop-powered Business Intelligence solution. This is the first Hortonworks Solution powered by the Hortonworks Data Platform (HDP™) and technology from partners Syncsort and AtScale. With the EDW Optimization Solution, customers can extend the value of existing EDW investments and overcome challenges, risks and costs of introducing new solutions into legacy infrastructure.
  • Hortonworks Celebrates 2016 Partnerworks Award Winners and Announces Record Ecosystem Growth. In January 2017, we announced our Partnerworks program had exceeded 2,100 members, illustrating strong demand for technologies that utilize data to transform business outcomes. In addition, we announced the winners of our inaugural Global Partner Awards for 2016: Microsoft, Accenture and Dell EMC.
  • United Network for Organ Sharing Chooses Hortonworks Data Platform to Help Save Lives. In December 2016, we announced that the United Network for Organ Sharing, the private non-profit organization that manages the United States organ transplant system, is using HDP to help transplant professionals make more informed decisions when life-saving organs become available.
  • Hortonworks Advances Cloud Strategy with Availability of Hortonworks Data Cloud for Amazon Web Services. In November 2016, we announced the availability of Hortonworks Data Cloud on the Amazon Web Services (AWS) Cloud. Hortonworks Data Cloud for AWS enables users to harness the agility and elasticity of Apache Hadoop and Apache Spark in the cloud for powering new workloads and analytic applications.
  • Hortonworks Powers Modernization of Health Insurance Industry. In November 2016, we announced that the Health Care Service Corporation is using HDP to modernize its data architecture and unlock the value of analytics. With HDP, leading providers of health insurance can provide better service to millions of healthcare plan members.
  • Hortonworks Celebrates 1,000 Customer Milestone. In November 2016, we announced that we had exceeded 1,000 customers worldwide. In the six years since our founding, we have rapidly built our customer base across industries—including healthcare, manufacturing, financial services, energy, telecommunications and public sector—by delivering the industry’s only open and connected data platforms to manage data-at-rest and data-in-motion in any environment.
  • Hortonworks Accelerates Global Expansion with Appointment of Open Source Industry Sales Veterans. In November 2016, we announced the addition of Joe Morrissey as vice president of international and Kamal Brar as vice president and general manager of Asia Pacific to our rapidly expanding international team. Morrissey will be responsible for developing and executing our sales and expansion strategy across the entire international business, with Brar responsible for leading and developing the growth opportunities across the Asia Pacific region.

Financial Outlook

As of February 9, 2017, Hortonworks is providing the following financial outlook for its first quarter and full year 2017:

For the first quarter of 2017, we expect:

Total GAAP revenue of $52.0 million.

GAAP operating margin between negative 115 percent and negative 110 percent, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $26.0 million.

Non-GAAP operating margin between negative 65 percent and negative 60 percent, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $26.0 million.

For the full year 2017, we expect:

Total GAAP revenue between $235.0 million and $240.0 million.

GAAP operating margin between negative 85 percent and negative 80 percent, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $105.0 million.

Non-GAAP operating margin between negative 50 percent and negative 45 percent, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $105.0 million.

GAAP operating margin outlook includes estimates of stock-based compensation and related expenses and amortization of purchased intangibles in future periods and assumes, among other things, the occurrence of no additional acquisitions, investments or restructuring and no further revisions to stock-based compensation and related expenses.


Source: Hortonworks

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