Tintri (TNTR), a developer of an enterprise cloud platform that provides public cloud capabilities, is trading sharply higher today (+8%) on its Q4 (Jan) earnings report last night. Tintri is a recent IPO, having made its debut in late June 2017.
Since most people are unfamiliar with Tintri, a little background would help. From a general sense, the conventional IT model, which has been constrained by siloed, costly and inflexible infrastructure, is giving way to cloud architectures. Cloud Computing can be Public (Amazon, Azure, Rackspace), where the focus is providing the lowest cost shared computing service where you pay for services as you need them (pay as you go), and there is Private Cloud Computing, where the entire cloud infrastructure (servers, storage, network) is dedicated to a single company and is behind the company firewall.
Enterprises are seeking to deploy cloud technologies through either public clouds or private clouds, which includes both on-premise and hosted options. Many companies have realized that while public cloud delivers many benefits, it's not the right solution for all problems. Moving applications to public cloud platforms can result in significant migration cost and effort, requiring applications to be recoded, reconfigured, refactored, and reintegrated.
On the other hand, private clouds provide many of the benefits of public clouds. Private clouds give organizations more control over access and usage of their applications, making private clouds ideal for larger businesses or those with strict data, regulatory and governance obligations. Unlike public cloud solutions, private clouds can satisfy the needs of both enterprise and cloud-native applications.
In simple terms, Tintri provides large companies with an enterprise cloud platform that offers public cloud capabilities inside their own data centers that can also connect to public cloud services. Its enterprise cloud platform combines cloud management software, web services and a range of all-flash storage systems. It sells storage appliances intended for virtual machines and software containers.
Turning to the JanQ result, TNTR reported a non-GAAP loss of $(0.72) per share, which was better than prior guidance of $(0.83)-(0.79). Revenue fell 29.2% year/year to $28.9 mln, which was also above prior guidance of $25-27 mln. In terms of guidance for Q1 (Apr), Tintri expect a non-GAAP loss of $(0.68)-(0.64) and revenue of $20-21 mln. This was mixed guidance. While the loss is not as big as the market was expecting, the revenue is light of expectations.
In addition to earnings, Tintri also announced that its CEO Ken Klein will step down after a successor is found. The Board of Directors is conducting a comprehensive search for its next CEO. This move is not entirely a surprise as the company announced in December that it was exploring strategic options, including retaining investment bank advisors to assist it in this process. Probably the whole company is being reviewed from top to bottom and it seems that a new CEO would be a positive step forward.
One look at the stock price and it's clear that Tintri has struggled since going public last summer. The IPO priced at $7 and has been trading below that level for most of its time as a public company. In December, Tintri said that it was impacted by delayed and reduced purchases by some accounts.
In sum, the stock is up nicely today, probably as much on news that a new CEO will be hired as for the JanQ results/guidance. Tintri's technology seems like it's very useful but revenue has fallen YoY in each of the past two quarters and they are expecting a sequential and YoY decline in AprQ. And this was after two quarters of YoY revenue growth. So the company clearly still has a lot to prove to investors that it's a viable company. Investors seem to be happy a new CEO will take over to perhaps turn the ship around.