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SANTA CLARA, Calif.—May 4, 2016—Hortonworks, Inc.® (NASDAQ: HDP), a leading innovator of open and connected data platforms, today announced financial results for the first quarter 2016.
“We are pleased with our first quarter performance that was highlighted by an acceleration of support subscription billings, which grew 122% year-over-year,” said Rob Bearden, chief executive officer and chairman of the board of directors of Hortonworks. “As our enterprise customers realize transformative business insights from new use cases that are made possible by our Connected Data Platforms, we look forward to making even greater value-added contributions in 2016.”
First Quarter 2016 Financial Highlights
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release.
Recent Business Highlights
Financial Outlook
As of May 4, 2016, Hortonworks is providing the following non-GAAP financial outlook for its second quarter and full year 2016:
For the second quarter of 2016, we expect:
For the full year 2016, we expect:
First Quarter Earnings Conference Call and Webcast Details
Hortonworks will hold a conference call and webcast today to discuss the results and outlook at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Wednesday, May 4, 2016. Interested parties may access the call by dialing (877) 930-7786 in the U.S. or (253) 336-7423 from international locations. In addition, a live audio webcast of the conference call will be available on the Hortonworks Investor Relations website at http://investors.hortonworks.com.
Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on the Hortonworks Investor Relations website for approximately seven days.
Statement regarding use of non-GAAP financial measures
Hortonworks reports non-GAAP results for revenue, gross profit and margins, operating loss and margins, net loss, basic and diluted net loss per share, adjusted EBITDA and gross billings in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Hortonworks’ financial measures under GAAP include stock-based compensation expense, contra-revenue, acquisition-related items, amortization of intangible assets, depreciation expense, and other income/expense, net. Management believes the presentation of operating results that exclude these items provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is therefore useful to investors in analyzing and assessing the Company’s past and future operating performance.
Non-GAAP revenue is calculated as GAAP revenue excluding the non-GAAP contra-revenue adjustments associated with the issuance of equity to an affiliate of AT&T. Management believes non-GAAP revenue offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Gross Billings are calculated as non-GAAP revenue plus the change in total deferred revenue. Management believes gross billings offer investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP gross profit is calculated as non-GAAP revenue less our non-GAAP cost of revenue. Management believes non-GAAP gross profit offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP gross margin is calculated as non-GAAP gross profit divided by non-GAAP revenue. Management believes non-GAAP gross margin offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP operating loss is calculated as GAAP operating loss plus non-GAAP revenue adjustments and non-GAAP cost of revenue and operating expense adjustments. Management believes non-GAAP operating loss offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP operating margin is calculated as non-GAAP operating loss divided by non-GAAP revenue. Management believes non-GAAP operating margin offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP net loss is calculated as GAAP net loss plus non-GAAP revenue adjustments and non-GAAP cost of revenue and operating expense adjustments. Management believes non-GAAP net loss offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Non-GAAP net loss per basic and diluted share is calculated as non-GAAP net loss divided by the weighted average shares outstanding for the period. Management believes non-GAAP net loss per basic and diluted share offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Adjusted EBITDA is calculated as gross billings minus non-GAAP cost of revenue and operating expenses plus adjustments to non-GAAP cost of revenue and operating expenses. Management believes adjusted EBITDA offers investors useful supplemental information regarding the performance of our business, and will help investors better understand our business.
Use of forward-looking statements
This release contains “forward-looking statements” regarding our performance, including in the section titled “Financial Outlook.” Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
The important factors that could cause actual results to differ materially from those in any forward-looking statements include, but are not limited to, the following: (i) we have a history of losses, and we may not become profitable in the future, (ii) we have a limited operating history, which makes it difficult to predict our future results of operations, and (iii) we do not have an adequate history with our support subscription offerings or pricing models to accurately predict the long-term rate of support subscription customer renewals or adoption, or the impact these renewals and adoption will have on our revenues or results of operations.
Further information on these and other factors that could affect our financial results and the forward-looking statements in this press release are included in our Form 10-K filed on March 15, 2016, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed November 4, 2015 and our final prospectus dated February 1, 2016 and filed on February 2, 2016, or in other filings we make with the Securities Exchange Commission from time to time, particularly under the caption Risk Factors.
We undertake no obligation, and do not intend, to update these forward-looking statements.
About Hortonworks
Hortonworks is an industry leading innovator that creates, distributes and supports enterprise-ready open data platforms and modern data applications that deliver actionable intelligence from all data: data-in-motion and data-at-rest. Hortonworks is focused on driving innovation in open source communities such as Apache Hadoop, NiFi and Spark. Along with its 1,600+ partners, Hortonworks provides the expertise, training and services that allow customers to unlock transformational value for their organizations across any line of business.
Hortonworks, HDP, HDF, and SmartSense are registered trademarks or trademarks of Hortonworks, Inc. and its subsidiaries in the United States and other jurisdictions. For more information, please visit www.hortonworks.com. All other trademarks are the property of their respective owners.
Hortonworks, Inc.
Unaudited Condensed Consolidated Statement of Operations
(in thousands, except share and per share data)
| Three Months Ended March 31, | |||||||||||||||
| 2016 | 2015 | ||||||||||||||
| Support subscription and professional services revenue: | |||||||||||||||
| Support subscription | $ | 27,634 | $ | 13,144 | |||||||||||
| Professional services | 13,708 | 9,173 | |||||||||||||
| Total support subscription and professional services revenue | 41,342 | 22,317 | |||||||||||||
| Cost of revenue: | |||||||||||||||
| Support subscription | 4,901 | 2,549 | |||||||||||||
| Professional services | 11,455 | 8,911 | |||||||||||||
| Total cost of revenue | 16,356 | 11,460 | |||||||||||||
| Gross profit | 24,986 | 10,857 | |||||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 42,083 | 27,757 | |||||||||||||
| Research and development | 22,151 | 14,980 | |||||||||||||
| General and administrative | 26,054 | 9,052 | |||||||||||||
| Total operating expenses | 90,288 | 51,789 | |||||||||||||
| Loss from operations | (65,302) | (40,932 | ) | ||||||||||||
| Other (expense) income, net | (295) | 426 | |||||||||||||
| Loss before income tax | (65,597) | (40,506 | ) | ||||||||||||
| Income tax expense | 155 | 84 | |||||||||||||
| Net loss | $ | (65,752) | $ | (40,590 | ) | ||||||||||
| Net loss per share of common stock, basic and diluted | $ | (1.26) | $ | (0.98 | ) | ||||||||||
|
Weighted average shares used in computing net loss per share of common stock, basic and diluted |
52,067,608 | 41,479,563 | |||||||||||||
|
|
|||||||||||||||
Hortonworks, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| March 31, 2016 | December 31, 2015 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ 38,511 | $ 35,748 | |||||||||
| Short-term investments | 86,059 | 58,553 | |||||||||
| Accounts receivable, net | 64,932 | 53,913 | |||||||||
| Prepaid expenses and other current assets | 9,236 | 5,276 | |||||||||
| Total current assets | 198,738 | 153,490 | |||||||||
| Property and equipment, net | 18,207 | 15,422 | |||||||||
| Long-term investments | 24,402 | 2,592 | |||||||||
| Goodwill | 34,333 | 34,333 | |||||||||
| Intangible assets, net | 3,783 | 4,002 | |||||||||
| Other assets | 953 | 872 | |||||||||
| Restricted cash | 1,309 | 1,308 | |||||||||
| TOTAL ASSETS | $ 281,725 | $ 212,019 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ 8,995 | $ 6,365 | |||||||||
| Accrued compensation and benefits | 12,971 | 12,685 | |||||||||
| Accrued expenses and other current liabilities | 13,659 | 14,989 | |||||||||
| Deferred revenue | 92,523 | 90,407 | |||||||||
| Total current liabilities | 128,148 | 124,446 | |||||||||
| Long-term deferred revenue | 26,598 | 16,372 | |||||||||
| Other long-term liabilities | 3,162 | 3,610 | |||||||||
| TOTAL LIABILITIES | 157,908 | 144,428 | |||||||||
| STOCKHOLDERS’ EQUITY: | |||||||||||
| Preferred stock, par value of $0.0001 per share—25,000,000 shares authorized; none issued or outstanding as of March 31, 2016 and December 31, 2015 | — | — | |||||||||
| Common stock, par value of $0.0001 per share—500,000,000 shares authorized as of March 31, 2016 and December 31, 2015; 56,359,426 and 45,692,391 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively | 6 | 5 | |||||||||
| Additional paid-in capital | 640,902 | 518,986 | |||||||||
| Accumulated other comprehensive loss | (485) | (546 | ) | ||||||||
| Accumulated deficit | (516,606) | (450,854 | ) | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | 123,817 | 67,591 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 281,725 | $ 212,019 | |||||||||
Hortonworks, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
|
Three Months Ended March 31, |
|||||||||||||||
| 2016 | 2015 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
| Net loss | $$ | (65,752) | $ | (40,590 | ) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||
| Depreciation |
|
1,478 | 894 | ||||||||||||
| Amortization of premiums from investments |
|
284 | 282 | ||||||||||||
| Amortization of intangible assets | 219 | — | |||||||||||||
| Stock-based compensation expense |
|
29,442 | 5,194 | ||||||||||||
| Impairment of promissory note receivable | 717 | — | |||||||||||||
|
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies
|
219 | — | |||||||||||||
| Provision for losses on accounts receivable | 377 | — 5 |
|||||||||||||
| Other | (25) | 5 | |||||||||||||
| Changes in operating assets and liabilities: |
|
||||||||||||||
| Accounts receivable |
|
(11,147) | (1,607 | ) | |||||||||||
| Prepaid expenses and other current assets |
|
(3,468) | (2,895 | ) | |||||||||||
| Other assets |
|
(90) | (390 | ) | |||||||||||
| Accounts payable |
|
89 | (447 | ) | |||||||||||
| Accrued expenses and other current liabilities |
|
335 | 3,438 | ||||||||||||
| Accrued compensation and benefits |
|
303 | 464 | ||||||||||||
| Deferred revenue |
|
11,686 | 5,784 | ||||||||||||
| Other long-term liabilities | (335) | 1,139 | |||||||||||||
| Net cash used in operating activities |
|
(35,668) | (28,729) | ||||||||||||
|
|
|||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
| Purchases of investments |
|
(73,754) | (42,057 | ) | |||||||||||
| Proceeds from sale of investments |
|
1,321 | — | ||||||||||||
| Proceeds from maturities of investments | 22,199 | 27,861 | |||||||||||||
| Issuance of promissory note receivable | — | (2,500 | ) | ||||||||||||
| Purchases of property and equipment | (2,359) | (5,263 | ) | ||||||||||||
| Change in restricted cash |
|
— | 31 | ||||||||||||
| Net cash used in investing activities |
|
(52,593) | (21,928 | ) | |||||||||||
|
|
|||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
| Proceeds from follow-on public offering, net of issuance costs | 87,848 | — | |||||||||||||
| Proceeds from issuance of common stock |
|
4,612 | 313 | ||||||||||||
| Payments of contingent consideration related to business combinations | (1,625) | — | |||||||||||||
| Payments of capital lease liability | (25) | — | |||||||||||||
| Net cash provided by financing activities | 90,810 | 313 | |||||||||||||
| Effect of foreign currency exchange rates on cash and cash equivalents | 214 | — | |||||||||||||
| Net increase (decrease) in cash and cash equivalents |
|
2,763 | (50,344 | ) | |||||||||||
| Cash and cash equivalents—Beginning of period |
|
35,748 | 129,084 | ||||||||||||
| Cash and cash equivalents—End of period | $ | 38,511 | $ | 78,740 | |||||||||||
|
|
|||||||||||||||
Reconciliation of GAAP to Non-GAAP
(in thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||
| 2016 | 2015 | ||||||
|
Non-GAAP Revenue: GAAP revenue |
$ | 41,342 | $ | 22,317 | |||
| Contra-revenue | — | — | |||||
| Non-GAAP revenue | $ | 41,342 | $ | 22,317 | |||
| 41 | ||||||||
|
Gross Billings: Non-GAAP revenue |
$ | 41,342 | $ | 22,317 | ||||
| Deferred revenue — end of period | 119,121 | 68,707 | ||||||
| Less: Deferred revenue — beginning of period | (106,779 | ) | (62,923 | ) | ||||
| Total change in deferred revenue | 12,342 | 5,784 | ||||||
| Gross billings | $ | 53,684 | $ | 28,101 | ||||
|
Non-GAAP Gross Profit and Margin: Gross profit |
$ | 24,986 | $ | 10,857 | |||
| Stock-based compensation expense | 1,358 | 270 | |||||
| Contra-revenue | — | — | |||||
| Non-GAAP gross profit | $ | 26,344 | $ | 11,127 | |||
| Gross margin percentages: | |||||||
| GAAP | 60 | % | 49 | % | |||
| Non-GAAP | 64 | % | 50 | % |
|
Non-GAAP Operating Loss and Margin: Operating loss |
$ | (65,302 | ) | $ | (40,932 | ) | ||
| Stock-based compensation expense | 29,442 | 5,194 | ||||||
| Acquisition-related retention bonus | — | 2,947 | ||||||
| Impairment of promissory note receivable | 717 | — | ||||||
| Amortization of intangible assets | 219 | — | ||||||
| Non-GAAP operating loss | $ | (34,924 | ) | $ | (32,791 | ) | ||
| Operating margin percentages: | ||||||||
| GAAP | (158 | )% | (183 | )% | ||||
| Non-GAAP | (84 | )% | (147 | )% | ||||
Reconciliation of GAAP to Non-GAAP (continued)
(in thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||
| 2016 | 2015 | ||||||
|
Non-GAAP Net Loss and Net Loss per Share: Net loss |
$ | (65,752 | ) | $ | (40,590 | ) | |
| Stock-based compensation expense | 29,442 | 5,194 | |||||
| Acquisition-related retention bonus | — | 2,947 | |||||
| Impairment of promissory note receivable | 717 | — | |||||
| Amortization of intangible assets | 219 | — | |||||
| Non-GAAP net loss | $ | (35,374 | ) | $ | (32,449 | ) | |
| Weighted average shares | 52,067,608 | 41,479,563 | |||||
| Non-GAAP net loss per share | $ | (0.68 | ) | $ | (0.78 | ) | |
| Adjusted EBITDA: | |||||||
| Gross billings | $ | 53,684 | $ | 28,101 | |||
| Less: Cost of revenue | (16,356 | ) | (11,460 | ) | |||
| Less: Operating expenses | (90,288 | ) | (51,789 | ) | |||
| Add: Non-GAAP cost of revenue and operating expense adjustments: | |||||||
| Stock-based compensation expense | 29,442 | 5,194 | |||||
| Depreciation expense | 1,478 | 894 | |||||
| Impairment of promissory note receivable | 717 | — | |||||
| Acquisition-related retention bonus | — | 2,947 | |||||
| Amortization of intangible assets | 219 | — | |||||
| Adjusted EBITDA | $ | (21,104 | ) | $ | (26,113 | ) |
| Stock-based compensation expense by function: | |||||||
| Cost of revenue | $ | 1,358 | $ | 270 | |||
| Sales and marketing | 5,619 | 1,417 | |||||
| Research and development | 7,804 | 2,123 | |||||
| General and administrative | 14,661 | 1,384 | |||||
| Stock-based compensation expense | $ | 29,442 | $ | 5,194 |
For Additional Information Contact:
Brian Marshall
VP, Corporate Development
650-305-7806
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