CLDR is the developer of a platform for data management, machine learning, and advanced analytics. Its software is used by enterprises to operate, manage, and move workloads across IT architectures, mixing on-premise and cloud environments. The company says it has pioneered the hybrid open source software development model or "HOSS."
This model is based on active participation in the open source data management ecosystem and software development process. To deliver the agility and innovation of open source software to its customers, its platform integrates more than 25 distinct open source projects, most of which were created by its engineers. CLDR believes their HOSS model delivers substantially greater value to customers in managing, operating and securing their data and data architectures.
CLDR offers its platform on a subscription basis and it focuses its selling efforts on the largest 8,000 corporations around the world, as well as large public sector organizations. It offers subscriptions for five editions of its platform, ranging from Cloudera Essentials to Cloudera Enterprise. Other editions are designed to address the most common and critical data challenges enterprises face: Cloudera Data Science for programmatic preparation, predictive modeling, and machine learning; Cloudera Real Time for online, streaming, and real-time applications; and Cloudera Analytics for business intelligence and SQL analytics.
2Q18 Results & Guidance
Circling back to its Q2 results, CLDR posted a loss per share of ($0.08), comfortably ahead of the ($0.15) consensus. This was also a significant improvement from the ($0.17)/share figure in the year-ago quarter. Providing a boost to the better-than-expected bottom line result was that Non-GAAP subscription gross margin improved to 87% from 85% in the year ago period. During its conference call, management commented that it is marking progress in terms of operational efficiencies, and, that it is seeing the benefits of its technology being applied in support of the business and its go-to-market processes.
On that topic, CLDR has been in transition mode over the past several quarters as it refines its go-to market strategy. What this means is, the company is seeking to lower customer acquisition costs, while sustaining high net expansion rates by specifically focusing on a target market of 5,000 customers it has identified in existing accounts that it believes are most likely to expand their business.
Additionally, the company has reorganized its sales teams around two new separate roles. Namely, some account managers will solely focus on landing new customers, while some will exclusively work with existing customers, looking to drive expansion rates higher. So far, the early results are looking positive, as indicated by the growth seen in both new accounts and its very healthy dollar-based net expansion rate of 128%.
In total, revenue was up 23% to $110.3 mln for the quarter, exceeding the $107.7 mln consensus. Underlying the revenue growth are a couple encouraging metrics that point to CLDR's transition taking hold. For instance, the company now has 69 customers with more than $1 mln in annual recurring revenue, representing about half of all its software revenue. Also, customers with annual recurring revenue above $100K grew by 30 accounts to 568, which exceeded CLDR's expectations.
Finally, CLDR also provided upside guidance for both Q3 and FY19. For Q3, it is forecasting a loss per share of ($0.12)-($0.10) compared to the ($0.14) consensus, on revenue of $113-$114 mln versus the $111.8 mln consensus. For FY19, it sees a loss per share of ($0.53)-($0.59) versus the ($0.59) consensus, and revenue of $440-$450 mln compared to the $441.7 mln expectation.
To wrap up, it was an encouraging report from CLDR as many of its key operating metrics are pointing towards a successful transition to its go-to-market strategy. From a technical standpoint, the stock is also back above the 200-day moving average for the first time since early April. This provides a little more fuel to the fire as shares continue to climb higher in early trading.