UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2016
Hortonworks, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-36780 | 37-1634325 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
5470 Great America Parkway, Santa Clara, California 95054
(Address of principal executive offices) (Zip Code)
(408) 916-4121
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On November 3, 2016, Hortonworks, Inc. (the Company) issued a press release announcing financial results for the quarter ended September 30, 2016. A copy of the press release is furnished as Exhibit 99.1 to this report. The Company also released prepared remarks regarding its financial results for the quarter ended September 30, 2016 (the Prepared Remarks). The full text of the Prepared Remarks is furnished as Exhibit 99.2 to this report. The information in this Item 2.02 (including Exhibits 99.1 and 99.2) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit |
Description of Exhibit | |
99.1 | Press Release dated November 3, 2016. | |
99.2 | Prepared Remarks dated November 3, 2016. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HORTONWORKS, INC. | ||||||
Dated: November 3, 2016 | By: | /s/ Scott Davidson | ||||
Scott Davidson Chief Financial Officer |
Exhibit |
Description of Exhibit | |
99.1 | Press Release dated November 3, 2016. | |
99.2 | Prepared Remarks dated November 3, 2016. |
Exhibit 99.1
Hortonworks Reports Financial Results for Third Quarter 2016
SANTA CLARA, Calif.November 3, 2016Hortonworks, Inc.® (NASDAQ: HDP), a leading innovator of open and connected data platforms, today announced financial results for the third quarter of 2016.
Q3 was a milestone quarter for Hortonworks. We crossed the 1,000 customer count and our operating billings grew 66% year-over-year, said Rob Bearden, chief executive officer and chairman of the board of directors of Hortonworks. Customers in 60 countries have selected our connected data platforms to leverage a comprehensive data management strategy spanning on-premise, hybrid and public cloud environments. As we continue to work within the Apache Software Foundation to enhance the value to our customers, we are looking forward to future achievements in product functionality and the benefits to be derived from our industry leading solutions.
Third Quarter 2016 Financial Highlights
| Revenue: Total GAAP revenue was $47.5 million for the third quarter of 2016, an increase of 47 percent compared to the third quarter of 2015. |
| Operating Billings: Operating billings, the aggregate value of all invoices sent to our customers in a given period, were $72.5 million for the third quarter of 2016, an increase of 66 percent compared to the third quarter of 2015. We have historically disclosed gross billings as a non-GAAP financial measure that presented total revenue plus the change in deferred revenue for the same period. One would need to add our revenue to our change in deferred revenue to calculate a number that is comparable to our historically reported gross billings numbers. |
| Gross Profit: Total GAAP gross profit was $27.7 million for the third quarter of 2016, compared to gross profit of $17.5 million for the same period last year. Non-GAAP gross profit was $29.1 million for the third quarter of 2016, compared to $18.3 million for the same period last year. GAAP gross margin was 58 percent for the third quarter of 2016, compared to 54 percent for the same period last year. Non-GAAP gross margin was 61 percent for the third quarter of 2016, compared to 57 percent for the same period last year. |
| Operating Loss: GAAP operating loss totaled $64.4 million for the third quarter of 2016, compared to a loss of $45.2 million for the same period last year. Non-GAAP operating loss was $39.9 million for the third quarter of 2016, compared to a loss of $33.3 million for the same period last year. |
| Net Loss: GAAP net loss for the third quarter of 2016 was $64.7 million, or $1.10 per basic and diluted share, compared to a net loss of $45.3 million, or $1.03 per basic and diluted share, in the third quarter of 2015. Non-GAAP net loss was $40.2 million for the third quarter of 2016, or $0.68 per basic and diluted share, compared to a net loss of $33.3 million, or $0.76 per basic and diluted share, for the same period last year. |
| Deferred Revenue: Deferred revenue was $156.8 million as of September 30, 2016, a 47 percent increase over the $106.8 million reported as of December 31, 2015 and a 70 percent increase over the $92.1 million reported as of September 30, 2015. |
| Cash & Investments: Cash and investments totaled $95.6 million as of September 30, 2016, compared to $96.9 million as of December 31, 2015 and $116.3 million as of September 30, 2015. |
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
| Hortonworks DataFlow 2.0 Delivers Enterprise Productivity and Streaming Analytics In July, we announced the next generation of Hortonworks DataFlow (HDF) version 2.0 for enterprise productivity and streaming analytics. HDF is an integrated system for dataflow management and streaming analytics to quickly collect, curate, analyze and deliver insights in real-time, on-premises or in the cloud. With HDF, customers get an easy-to-use enterprise-ready platform to manage data in motion anywhere and in any environment. HDF 2.0 includes the following new functionalities: Next-Generation User Experience, Enterprise Readiness, and IoT at the Edge. |
| Munich Re Achieves Strategic Big Data Platform with SAS and Hortonworks In August, Munich Re Group, the worlds largest reinsurer, announced that it is leveraging SAS Analytics and the Hortonworks Data Platform (HDP) for its big data initiative. |
| Prescient Chooses Hortonworks to Make Travel Safer with Connected Data Platforms In August, we announced that Prescient Traveler, LLC (Prescient) has adopted our connected data platforms, utilizing both HDP and HDF to redefine the traveler risk management market. We are helping Prescient process 19,000 location updates per second to keep travelers aware of and safe from physical, health-related and environmental threats. |
| Hortonworks, IBM Collaborate to Offer Source Distribution on Power Systems In September, in a partnership with IBM, we announced the planned availability of HDP for IBM Power Systems enabling POWER8 clients to support a broad range of new applications while enriching existing ones with additional data sources. HDP will complement the performance of Power Systems by allowing clients to quickly gain business insights from their structured and unstructured data. |
| Hortonworks Tightens Focus on the Cloud with Connected Data Architecture In September, we showcased our latest technology solutions for streaming analytics, security, governance, and Apache Spark at scale at Strata + Hadoop World. As customers increasingly look to deploy cloud-based solutions, our connected data architectures and mission-critical security, governance, and data access innovations provide unparalleled integration across multiple clouds and the data center. |
| Hortonworks Accelerates Cloud Innovation for Customers with Microsoft Azure HDInsight In September, we announced updates to the Microsoft Azure HDInsight Hadoop Cloud solution. As part of our collaboration with Microsoft Corporation, these updates will allow customers to achieve big data query speeds that approach data warehousing performance, provide a highly secure Hadoop solution in the cloud, and allow for an easier experience for administrators to spin up third-party ISV applications. |
| Lenovo Chooses Hortonworks Data Platform for Actionable Intelligence In October, we announced that Lenovo Group Ltd. (Lenovo), a multinational technology company, is using HDP to manage its robust big data analytics platform, as well as our professional services to provide expert global support. Lenovos Global Business Intelligence team developed a hybrid cloud-based platform, Lenovo Unified Customer Intelligence (LUCI Sky), which has scaled to over a petabyte of data in just a few years time. This analytics platform, powered by HDP, delivers actionable insights from a myriad of global sources in a matter of seconds. |
| Webtrends Chooses Hortonworks to Power Its Connected Data Architecture In October, we announced that Webtrends Inc. (Webtrends), a leading provider of data, analytics, and optimization solutions, is using HDP and HDF as the foundation of its connected data architecture, both in the data center and in the cloud. With connected data platforms, Webtrends transformed its business by storing, processing and analyzing data to uncover insights into consumers and their behaviors, which are invaluable to global brands. |
| Recruit Technologies Deploys Hortonworks Data Platform for Analytics In October, we announced that Recruit Technologies Co., Ltd. (Recruit Technologies) has selected HDP for its data analytics platform. As a strategic partner, we will offer connected data platform expertise on collecting, accumulating and analyzing big data to support Recruit Technologies mission to develop and implement its business in a highly competitive IT environment. Recruit Technologies Internet marketing platform powered by HDP will meet the future needs of its customers. |
| Hortonworks Data Platform to Provide Data Analytics for LIXIL In October, we announced that LIXIL Corporation (LIXIL) has selected HDP as its data analytics platform. By deploying HDP, LIXIL will offer cutting-edge technology and quality support through the connected data platforms that serve as its foundation for data management. |
Financial Outlook
As of November 3, 2016, Hortonworks is providing the following financial outlook for its fourth quarter of 2016 and full year 2016:
For the fourth quarter of 2016:
We expect total GAAP revenue to be $48.0 million.
We expect operating billings, the aggregate value of all invoices sent to our customers in a given period, to be $81.0 million.
We have historically provided guidance for Adjusted EBITDA, which we calculated as revenue plus change in deferred revenue minus non-GAAP expenses plus depreciation. Through the last quarter of 2016, when we expect to achieve Adjusted EBITDA breakeven, we will guide to each element of Adjusted EBIDTA for the fourth quarter of 2016 separately, as follows:
GAAP Revenue: |
$48.0 million | |
Change in deferred revenue: |
$33.0 million | |
Non-GAAP expenses: | $83.0 million | |
Depreciation: | $2.0 million |
For the full year 2016:
We currently estimate our total GAAP revenue to be $180.5 million.
We estimate operating billings, the aggregate value of all invoices sent to our customers in a given period to be $269.4 million.
We have historically provided guidance for Adjusted EBITDA, which we calculated as revenue plus change in deferred revenue minus non-GAAP expenses plus depreciation. Through the last quarter of 2016, when we expect to achieve Adjusted EBITDA breakeven, we will guide to each element of Adjusted EBIDTA for the full year 2016 separately, as follows:
GAAP Revenue: |
$180.5 million | |
Change in deferred revenue: |
$83.0 million | |
Non-GAAP expenses: | $331.9 million | |
Depreciation: | $7.2 million |
Hortonworks has not reconciled its expectations as to non-GAAP expenses to its most directly comparable GAAP measure because of the uncertainty regarding, and the potential variability of, certain costs and expenses that may be incurred in the future, such as stock-based compensation and litigation expenses. Accordingly, reconciliation is not available without unreasonable time and effort, although these factors could be material to Hortonworks results computed in accordance with GAAP.
Third Quarter 2016 Earnings Conference Call and Webcast Details
Hortonworks will hold a conference call and webcast today to discuss the Q3 results, Q4 and FY 2016 outlook and related matters at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Thursday, November 3, 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 gross profit and margins, operating loss and margins, net loss and, basic and diluted net loss per share 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, 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 Companys 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 Companys past and future operating performance.
Non-GAAP cost of revenue is calculated as GAAP cost of revenue less stock-based compensation expense and amortization of intangibles. Management believes non-GAAP cost of revenue offers 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 to help compare our recurring core business operating results over multiple periods.
Non-GAAP gross margin is calculated as non-GAAP gross profit divided by non-GAAP revenue. Management believes that non-GAAP gross margin offers investors useful supplemental information in evaluating our ongoing operational performance, and will help investors better understand our underlying business.
Non-GAAP expenses is calculated as GAAP cost of revenue plus stock-based compensation expense and amortization of intangibles plus GAAP operating expenses plus stock-based compensation expense and amortization of intangibles. Management believes non-GAAP expenses offers investors useful supplemental information regarding the cost structure of our business, and will help investors better understand our business.
Non-GAAP operating loss is calculated as GAAP operating loss plus GAAP revenue adjustments and non-GAAP cost of revenue and operating expense adjustments. The Company believes that non-GAAP operating loss is a useful metric for management and investors because it excludes the effect of stock-based compensation expense, acquisition-related retention bonus, amortization of intangibles and other nonrecurring items so that our management and investors have a greater visibility to the underlying performance of the business operations.
Non-GAAP operating margin is calculated as non-GAAP operating loss divided by non-GAAP revenue. Management believes that non-GAAP operating margin offers investors useful supplemental information in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods.
Non-GAAP net loss is calculated as GAAP net loss plus GAAP revenue adjustments and non-GAAP cost of revenue and operating expense adjustments. Management believes non-GAAP net loss offers investors useful supplemental information to help identify trends in our underlying business and perform related trend analyses.
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, and will help investor better understand our performance and return to shareholders.
Use of Forward-Looking Statements
This press release contains forward-looking statements regarding our performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as may, will, might, expect, believe, anticipate, could, would, estimate, continue, pursue, or the negative thereof or comparable terminology, and may include (without limitation) information regarding our expectations, goals or intentions regarding future performance, including the forward-looking statements, 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 Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016 filed on May 9, 2016 and August 9, 2016, respectively, or in other filings we make with the Securities Exchange Commission from time to time, particularly under the caption Risk Factors.
All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of the date hereof, and 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 1,800+ partners, Hortonworks provides the expertise, training and services that allow customers to unlock transformational value for their organizations across any line of business.
Hortonworks, Powering the Future of Data, HDP and HDF 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 Statements of Operations
(in thousands, except share and per share data)
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Support subscription and professional services revenue: |
||||||||||||||||
Support subscription |
$ | 32,468 | $ | 20,947 | $ | 91,120 | $ | 52,173 | ||||||||
Professional services |
15,055 | 11,303 | 41,382 | 32,350 | ||||||||||||
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Total support subscription and professional services revenue |
47,523 | 32,250 | 132,502 | 84,523 | ||||||||||||
Cost of revenue: |
||||||||||||||||
Support subscription |
6,400 | 3,629 | 17,181 | 9,214 | ||||||||||||
Professional services |
13,375 | 11,171 | 37,011 | 30,260 | ||||||||||||
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Total cost of revenue |
19,775 | 14,800 | 54,192 | 39,474 | ||||||||||||
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Gross profit |
27,748 | 17,450 | 78,310 | 45,049 | ||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
48,807 | 34,017 | 137,065 | 95,083 | ||||||||||||
Research and development |
26,028 | 16,382 | 73,633 | 46,238 | ||||||||||||
General and administrative |
17,298 | 12,297 | 61,592 | 32,768 | ||||||||||||
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Total operating expenses |
92,133 | 62,696 | 272,290 | 174,089 | ||||||||||||
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Loss from operations |
(64,385 | ) | (45,246 | ) | (193,980 | ) | (129,040 | ) | ||||||||
Other (expense) income, net |
(10 | ) | 88 | 87 | 487 | |||||||||||
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Loss before income tax expense |
(64,395 | ) | (45,158 | ) | (193,893 | ) | (128,553 | ) | ||||||||
Income tax expense |
291 | 135 | 742 | 330 | ||||||||||||
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Net loss |
$ | (64,686 | ) | $ | (45,293 | ) | $ | (194,635 | ) | $ | (128,883 | ) | ||||
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Net loss per share of common stock, basic and diluted |
$ | (1.10 | ) | $ | (1.03 | ) | $ | (3.47 | ) | $ | (3.02 | ) | ||||
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Weighted-average shares used in computing net loss per share of common stock, basic and diluted |
59,018,867 | 43,968,697 | 56,141,354 | 42,626,865 |
Hortonworks, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2016 | December 31, 2015 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 35,830 | $ | 35,748 | ||||
Short-term investments |
47,672 | 58,553 | ||||||
Accounts receivable, net |
78,003 | 53,913 | ||||||
Prepaid expenses and other current assets |
6,250 | 5,276 | ||||||
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Total current assets |
167,755 | 153,490 | ||||||
Property and equipment, net |
20,671 | 15,422 | ||||||
Long-term investments |
12,061 | 2,592 | ||||||
Goodwill |
34,333 | 34,333 | ||||||
Intangible assets, net |
3,342 | 4,002 | ||||||
Other assets |
890 | 872 | ||||||
Restricted cash |
1,319 | 1,308 | ||||||
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Total assets |
$ | 240,371 | $ | 212,019 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
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Accounts payable |
$ | 9,990 | $ | 6,365 | ||||
Accrued compensation and benefits |
15,495 | 12,685 | ||||||
Accrued expenses and other current liabilities |
10,772 | 14,989 | ||||||
Deferred revenue |
105,964 | 90,407 | ||||||
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Total current liabilities |
142,221 | 124,446 | ||||||
Long-term deferred revenue |
50,837 | 16,372 | ||||||
Other long-term liabilities |
2,549 | 3,610 | ||||||
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Total liabilities |
195,607 | 144,428 | ||||||
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Stockholders equity: |
||||||||
Preferred stock, par value of $0.0001 per share25,000,000 shares authorized; none issued or outstanding as of September 30, 2016 and December 31, 2015 |
| | ||||||
Common stock, par value of $0.0001 per share500,000,000 shares authorized as of September 30, 2016 and December 31, 2015; 59,920,186 and 45,692,391 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively |
7 | 5 | ||||||
Additional paid-in capital |
690,985 | 518,986 | ||||||
Accumulated other comprehensive loss |
(739 | ) | (546 | ) | ||||
Accumulated deficit |
(645,489 | ) | (450,854 | ) | ||||
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Total stockholders equity |
44,764 | 67,591 | ||||||
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Total liabilities and stockholders equity |
$ | 240,371 | $ | 212,019 | ||||
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Hortonworks, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||||||
Net loss |
$ | (64,686 | ) | $ | (45,293 | ) | $ | (194,635 | ) | $ | (128,883 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||||||
Depreciation |
1,949 | 1,141 | 5,237 | 3,061 | ||||||||||||
Amortization of premiums from investments |
203 | 214 | 721 | 756 | ||||||||||||
Amortization of intangible assets |
222 | 171 | 660 | 171 | ||||||||||||
Stock-based compensation expense |
24,220 | 11,379 | 75,560 | 23,719 | ||||||||||||
Impairment of promissory note receivable |
| | 717 | | ||||||||||||
Loss on disposal of assets |
| 10 | | 520 | ||||||||||||
Provision for losses on accounts receivable |
(34 | ) | | 409 | | |||||||||||
Other |
77 | | 30 | | ||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(16,508 | ) | (4,279 | ) | (24,367 | ) | (13,259 | ) | ||||||||
Prepaid expenses and other current assets |
431 | (302 | ) | (557 | ) | (2,302 | ) | |||||||||
Other assets |
140 | (75 | ) | (57 | ) | (726 | ) | |||||||||
Accounts payable |
(2,661 | ) | (2,305 | ) | 4,108 | 78 | ||||||||||
Accrued expenses and other current liabilities |
916 | (838 | ) | (543 | ) | 5,525 | ||||||||||
Accrued compensation and benefits |
(139 | ) | (877 | ) | 2,901 | 1,529 | ||||||||||
Deferred revenue |
24,898 | 11,473 | 49,663 | 29,148 | ||||||||||||
Other long-term liabilities |
(167 | ) | (1,773 | ) | (742 | ) | 106 | |||||||||
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Net cash used in operating activities |
(31,139 | ) | (31,354 | ) | (80,895 | ) | (80,557 | ) | ||||||||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of investments |
| (18,613 | ) | (80,519 | ) | (90,988 | ) | |||||||||
Proceeds from sale of investments |
| | 7,316 | | ||||||||||||
Proceeds from maturities of investments |
32,341 | 40,871 | 73,320 | 77,017 | ||||||||||||
Acquisitions, net |
| 180 | | (3,541 | ) | |||||||||||
Issuance of promissory note receivable |
| | | (2,500 | ) | |||||||||||
Purchases of property and equipment |
(3,790 | ) | (2,950 | ) | (11,065 | ) | (11,373 | ) | ||||||||
Change in restricted cash |
(11 | ) | | (11 | ) | 31 | ||||||||||
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Net cash provided by (used in) investing activities |
28,540 | 19,488 | (10,959 | ) | (31,354 | ) | ||||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from follow-on public offering, net of issuance costs |
| | 87,233 | | ||||||||||||
Proceeds from issuance of common stock |
2,969 | 6,187 | 8,821 | 8,752 | ||||||||||||
Payments for deferred offering costs |
| | | (835 | ) | |||||||||||
Purchase of treasury stock |
(377 | ) | | (474 | ) | | ||||||||||
Payment of contingent consideration related to an acquisition |
| | (1,625 | ) | | |||||||||||
Payment of acquisition-related liability |
(1,875 | ) | | (1,875 | ) | | ||||||||||
Payments of capital lease liability |
(39 | ) | | (103 | ) | | ||||||||||
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Net cash provided by financing activities |
678 | 6,187 | 91,977 | 7,917 | ||||||||||||
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Effect of exchange rate changes on cash and cash equivalents |
(65 | ) | | (41 | ) | | ||||||||||
Net (decrease) increase in cash and cash equivalents |
(1,986 | ) | (5,679 | ) | 82 | (103,994 | ) | |||||||||
Cash and cash equivalentsBeginning of period |
37,816 | 30,769 | 35,748 | 129,084 | ||||||||||||
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Cash and cash equivalentsEnd of period |
$ | 35,830 | $ | 25,090 | $ | 35,830 | $ | 25,090 | ||||||||
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Hortonworks, Inc.
Reconciliation of GAAP to Non-GAAP
(in thousands, except share and per share amounts)
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Non-GAAP Revenue: |
||||||||||||||||
GAAP revenue |
$ | 47,523 | $ | 32,250 | $ | 132,502 | $ | 84,523 | ||||||||
Contra-revenue |
| 65 | | 65 | ||||||||||||
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Non-GAAP revenue |
$ | 47,523 | $ | 32,315 | $ | 132,502 | $ | 84,588 | ||||||||
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Non-GAAP Gross Profit and Margin: |
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Gross profit |
$ | 27,748 | $ | 17,450 | $ | 78,310 | $ | 45,049 | ||||||||
Stock-based compensation expense |
1,332 | 825 | 4,107 | 1,616 | ||||||||||||
Contra-revenue |
| 65 | | 65 | ||||||||||||
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Non-GAAP gross profit |
$ | 29,080 | $ | 18,340 | $ | 82,417 | $ | 46,730 | ||||||||
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Gross margin percentages: |
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GAAP |
58 | % | 54 | % | 59 | % | 53 | % | ||||||||
Non-GAAP |
61 | % | 57 | % | 62 | % | 55 | % | ||||||||
Non-GAAP Operating Loss and Margin: |
||||||||||||||||
Operating loss |
$ | (64,385 | ) | $ | (45,246 | ) | $ | (193,980 | ) | $ | (129,040 | ) | ||||
Stock-based compensation expense |
24,220 | 11,379 | 75,560 | 23,719 | ||||||||||||
Contra-revenue |
| 65 | | 65 | ||||||||||||
Acquisition-related retention bonus |
| 333 | | 3,839 | ||||||||||||
Loss on asset write-off |
| | | 503 | ||||||||||||
Impairment of promissory note receivable |
| | 717 | | ||||||||||||
Litigation expense |
| | 600 | | ||||||||||||
Amortization of intangible asset |
222 | 171 | 660 | 171 | ||||||||||||
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Non-GAAP operating loss |
$ | (39,943 | ) | $ | (33,298 | ) | $ | (116,443 | ) | $ | (100,743 | ) | ||||
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Operating margin percentages: |
||||||||||||||||
GAAP |
(135 | )% | (140 | )% | (146 | )% | (153 | )% | ||||||||
Non-GAAP |
(84 | )% | (103 | )% | (88 | )% | (119 | )% | ||||||||
Non-GAAP Net Loss and Net Loss per Share: |
||||||||||||||||
Net loss |
$ | (64,686 | ) | $ | (45,293 | ) | $ | (194,635 | ) | $ | (128,883 | ) | ||||
Stock-based compensation expense |
24,220 | 11,379 | 75,560 | 23,719 | ||||||||||||
Contra-revenue |
| 65 | | 65 | ||||||||||||
Acquisition-related retention bonus |
| 333 | | 3,839 | ||||||||||||
Loss on asset write-off |
| | | 503 | ||||||||||||
Impairment of promissory note receivable |
| | 717 | | ||||||||||||
Litigation expense |
| | 600 | | ||||||||||||
Amortization of intangible asset |
222 | 171 | 660 | 171 | ||||||||||||
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Non-GAAP net loss |
$ | (40,244 | ) | $ | (33,345 | ) | $ | (117,098 | ) | $ | (100,586 | ) | ||||
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Weighted-average shares |
59,018,867 | 43,968,697 | 56,141,354 | 42,626,865 | ||||||||||||
Non-GAAP net loss per share |
$ | (0.68 | ) | $ | (0.76 | ) | $ | (2.09 | ) | $ | (2.36 | ) | ||||
Stock-based compensation expense by function: |
||||||||||||||||
Cost of revenue |
$ | 1,332 | $ | 825 | $ | 4,107 | $ | 1,616 | ||||||||
Sales and marketing |
7,650 | 3,518 | 19,308 | 6,882 | ||||||||||||
Research and development |
9,810 | 3,897 | 26,392 | 8,251 | ||||||||||||
General and administrative |
5,428 | 3,139 | 25,753 | 6,970 | ||||||||||||
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Stock-based compensation expense |
$ | 24,220 | $ | 11,379 | $ | 75,560 | $ | 23,719 | ||||||||
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For Additional Information Contact:
Reuben Gallegos
VP, Corporate Development
rgallegos@hortonworks.com
Exhibit 99.2
Hortonworks Prepared Financial Remarks for the Third Quarter of 2016
SANTA CLARA, Calif.November 3, 2016Hortonworks, Inc.® (NASDAQ: HDP), a leading innovator of open and connected data platforms, today announced financial results for the third quarter of 2016. Consistent with the practice that we adopted for our second quarter 2016 earnings call, we are sharing our prepared financial remarks regarding our earnings results with the investment community on the Investor Relations portion of our website in advance of the call. We believe that this practice will facilitate a more productive question and answer session during our live earnings call with the investment community.
Reuben Gallegos (VP, Corporate Development)
Thank you for reading Hortonworks Q3 2016 Earnings Prepared Remarks. Today we will also host a live 30-minute call with the investment community at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). 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 Hortonworks Investor Relations website for approximately seven days at http://investors.hortonworks.com.
During the call, we will make forward-looking statements regarding future events and views about the future financial performance of the company. These statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
These risks are described in our press release and are more fully detailed under the caption Risk Factors in our Form 10-K and our other periodic filings with the SEC.
We will also present both GAAP and non-GAAP financial measures. Non-GAAP measures should not be considered in isolation from, as a substitute for, or superior to our GAAP results. We encourage you to consider all measures when analyzing Hortonworks performance. A reconciliation of GAAP to non-GAAP measures is included in todays press release.
In addition, please note that any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.
Rob Bearden (Chairman and CEO)
Thanks, Reuben. Good afternoon and thanks for joining our earnings call. You might recognize the new person on the call as Reuben, who recently joined Hortonworks and is taking over Brian Marshalls corporate development and investor relations responsibilities. Unfortunately for us, Brian recently received an incredible opportunity and will be returning to his banking roots later this month. We will miss him dearly at the company and wish him the best of luck in his new capacity.
As always, I want to start off by thanking our customers, the open source community, and our partners, employees and shareholders for their support. Key open source data technologies like Apache Hadoop, Apache Spark and Apache NiFi would simply not have the market penetration today without you.
In terms of the structure of these remarks, I will begin with a business update and highlight several strategic use cases we are seeing emerge with some of our customers. Scott Davidson will then review our financial results in more detail, and Ill provide some final thoughts.
Business Highlights
With over 1,000 enterprise customers deploying Hortonworks solutions at scale, we are helping drive the renovation of legacy data systems. Many of these same customers have moved well beyond this process, which was driven by economics, and are now innovating their business models based upon the needs of their line-of-business users. These line-of-business users demand better, faster and more intelligent access to their data assets so that they can make full use of them and deepen their competitive advantage.
These customers require forward-thinking solutions that combine new paradigm data with extensive legacy datasets. It is a hybrid world, and many of todays datasets reside both in the cloud and on premise. Forward-thinking customers choose Hortonworks because at its core, its solutions are architected to support hybrid and cloud architectures with all of the security, governance and speed required by todays most data-driven companies. Hadoop remains at the fulcrum and continues to emerge as the core technology fueling many use cases, solidifying the technology as the new data management platform of choice.
Our connected data platforms have emerged from a powerful combination of the Hortonworks Data Platform (HDP) powered by Apache Hadoop and the Hortonworks DataFlow (HDF) platform powered by Apache NiFi. We believe that they serve as the cornerstone for industry innovation and community collaboration, are 100% open source, and lead to increased market consumption.
Cloud and hybrid dataset architectures continue to emerge. In fact, approximately 25% of our customer base today utilizes Hortonworks solutions in public cloud environments like Microsoft Azure and Amazon Web Services. This is not a new phenomenon to us; we built Microsoft Azure HDInsight, an HDP-packaged version for Microsoft that represented the industrys first Hadoop managed service for deployment on Azure back in 2013. Execution of workloads is one thing, but the value of being able to offer mission-critical security, governance and data access is critical. We are uniquely positioned to do this with a connected data architecture exemplified by breakthrough product releases in Q3 like HDP 2.5, HDF 2.0 and Microsoft Azure HDInsight that also further enhance streaming analytics, dynamic security and Apache Spark at Scale.
In Q3, we crossed a major milestone and now have over 1,000 customers across 60 countries. In fact, almost 60% of the Fortune 100 are Hortonworks customers, and we have higher penetration rates across the telecommunications and media, retail and financial verticals. Additionally, over 25% of the Fortune Global 500 are Hortonworks customers, highlighting the worldwide customer traction and market adoption of our unique solutions. We are experiencing increased market pull from enterprise line-of-business executive sponsors, and this has resulted in strong renewal momentum and deployment scale. Additionally, our customers are accelerating investments targeted at data service innovation as our solutions enable the value-proposition of modern data applications.
In Q3, total operating billings, an operating measure representing the collective value of our customer invoices in a given period, were $72.5 million in Q3, up 66% year-over-year and an acceleration of growth compared to Q2. Support subscription operating billings in Q3 were up 67% year-over-year, representing 79% of the revenue mix. Support subscription revenue was up 55% year-over-year.
Clearly we made several adjustments coming out of Q2, and I am extremely pleased with how the entire Hortonworks team performed in Q3 by delivering operational excellence. We reported upside to our financial guidance metrics in the third quarter, improved the overall operating cadence of the company and are in a great position to close out 2016 on a strong note.
We are witnessing tremendous evolution across the IT landscape that is being driven by incredible innovation within the Hadoop ecosystem. We believe this transformation is a once-in-a-generation event and has enabled rich connected data platforms use-case proliferation at high velocity and tremendous scope. In fact, according to several third party industry research firms, Hadoop and the Internet-of-Things (IoT) are on track to become approximately $50 billion and $1.5 trillion markets, respectively, by 2020. Simply put, we are playing in a very large sandbox.
Industry and Use Case Examples
While the size of the total available market is tremendous, at the end of the day, were all about creating business transformations for our customers.
Hortonworks customers such as Arizona State University, Blue Cross Blue Shield, Capital One, Macys and Progressive Insurance shared their use cases at our Summit back in June, while approximately 20 Hortonworks customers presented detailed breakout sessions as well. These customers included Ford Motor Company, Marketo, MD Anderson Cancer Center, Motorists Insurance Company, Prescient, Progressive, Royal Bank of Canada, Salesforce, Schlumberger and Webtrends.
We hear about these transformational experiences from our customers in every major industry that Hortonworks serves. With our earnings announcements for the first two quarters of 2016, we shared the stories of many customers who are transforming their businesses and industries with Hortonworks solutions. In Q1, we focused our discussion on customers in the transportation, healthcare and insurance industries. In Q2, we shared anecdotes for some Hortonworks customers in the energy and financial services sectors. For this quarters prepared remarks, we would like to highlight the business transformations we are currently seeing in the retail, advertising, telecommunications and media and financial sectors.
Retail and Advertising Industries
More than 70% of U.S. retailers on the Fortune 100 use Hortonworks solutions. Those household names have matured their use of Hortonworks Data Platform (HDP) for data-at-rest and many are now adding Hortonworks DataFlow (HDF) to stay current with management of their data-in-motion across their marketing operations, supply chains and points of purchase.
One US F100 retailer has trusted Hortonworks for its Big Data journey for years. Throughout our journey together, the work weve done with this company has provided an important source of information for the open-source community, helping us make Hadoop more useful in a retail settingfor the benefit of our subscriber, its customers, and other retailers transforming their architectures with HDP.
We are also seeing rapid growth among retailers and digital marketers outside of the United States.
Headquartered in Italy but with operations globally, ContactLab has been collecting digital marketing data over the past 15 years. With changes in the Big Data landscape, the company re-engineered its business models to focus on new data-driven products and revenue streams. ContactLab has built a cloud-based marketing data science service running on HDP to help its clients grow revenue by identifying actionable insights. This new framework to ingest, analyze and activate customer data provides a 360-degree view that improves engagement between ContactLabs clients and their respective customers.
Hortonworks is also supporting entrepreneurial companies that are disrupting traditional marketing and retail models.
Some of those market makers begin their journey to actionable intelligence with HDF as a stand-alone solution. One of these HDF subscribers is DHISCO, an online distributor of hotel room nights that oversees over $13 billion in annual global bookings. DHISCO streams unstructured data from various hospitality customers they service that allows them to process over 12 billion booking transactions per month in milliseconds. Timing is crucial for DHISCO, as processing data at slower speeds would showcase incorrect rates for customers that could drive business elsewhere. HDF, driven by Apache NiFi and Apache Kafka, have allowed them to process these streams of data in real time, allowing for the most current rates for end users and hoteliers alike. Now hoteliers can reach travelers quickly enoughand with just the right room offerbefore they check in to a competitors property, sometimes hours or even minutes before check-in. Now that theyve got their data ingest challenge solved with HDF, DHISCO is looking into HDP for its long-term storage and processing roadmap.
Other marketing businesses are using Hortonworks connected data platforms to define new market categories such as Account-Based Marketing (ABM).
This is occurring near our headquarters in Silicon Valley, with two of the leading innovators in predictive marketing: Marketo and EverString. Both Hortonworks customers, Marketo and Everstring just announced their partnership for Account-Based Marketing. J.J. Kardwell, President and Co-founder of EverString, summed up the synergy in a recent press release, EverString is proud to be the predictive marketing partner in the Marketo Account-Based Marketing ecosystem. The combination of EverStrings target account selection and similar company identification capabilities with Marketos central account management, cross-channel engagement, and revenue-based analytic capabilities make achieving ABM success easier than ever. We at Hortonworks are doubly proud to provide a critical component of the connected data architectures that Marketo and Everstring rely on for their ABM partnership.
Telecommunications and Media Industries
In the telecommunications and media industries, Hortonworks customers are using both HDF to manage data-in-motion and HDP to manage data-at-rest. Hortonworks connected data platforms help these innovative companies build modern data applications for use cases such as a single view of their customers, cyber-security, network optimization, energy savings, data architecture cost offload and preparation for the data transmission requirements posed by connected cars. At the end of the third quarter, we were very pleased that more than 80% of the telecommunications and media companies in the U.S. Fortune 100 were Hortonworks customers.
The expertise weve built with United States telecommunications companies gives Hortonworks the expertise to support telco firms in other parts of the world.
For example, Hortonworks is seeing great success with multiple Telefónica affiliates in Europe and Latin America. Telefónica worldwide recently launched a program to monitor all communications on its worldwide networks, by aggregating and analyzing anonymous user behavior in real-time. Telefónica Chile is one of the first affiliates to roll out the program, because the country has some of the fastest growth in 4G data traffic. With its substantial investments in both HDP and HDF, Telefónica Chile is able to detect network problems and resolve those before customers notice them. Furthermore, real-time network monitoring will help the company do predictive equipment maintenance, proactively optimize the network, target promotional offers, analyze energy consumption and optimize its call centers.
WIND Mobile is Canadas fourth largest mobile operator, and it prides itself on offering affordable rates. That affordability is possible because the company built its network around the urban centers where Canadians spend most of their time, and it maintains a disciplined focus on maximizing the efficiency of its IT investments. This is why WIND turned to Hortonworks for what is the first use case of many customers: to offload costly data storage and ETL transformations from legacy platforms. WIND began its journey with cost-saving active archive and ETL offload projects, and now it can invest those savings to improve customer service with a 360-degree view of how subscribers engage with the company.
Pinsight Media is the elite mobile data company that uses verified, network-level data to fuel intelligent brand decisions. Pinsights Data Management Platform (DMP) ingests over 60 terabytes of data daily from over 30 unique sources across 65 million devices leveraging HDP. Its data science experts then use a proprietary method to combine first-party data with mobile web, app and location data to understand the persistent behaviors of a brands best customer, pinpointing those who have the highest propensity to respond. This results in actionable insights and smarter audience targeting that maximizes spend, minimizes waste, and refines the marketing messages. Mobile is essential to customers, which makes Pinsight essential to brands.
Financial Industry
More than 60% of financial firms on the US Fortune 100 use Hortonworks solutions, and we continue to win major financial customers in global markets outside of the United States. As we have done with our telecommunications and media expertise, we bring our knowledge earned working with the largest US financial firms to our relationships with banks, capital markets and insurance enterprises in other countries.
Our team in the UK has been working with a number of FTSE 100 customers, including Barclays.
Sompo Japan Nipponkoa Insurance Inc. is redesigning its business around its Innovation for Wellbeing initiative. Its investment in HDP is the first step in delivering new, digital customer experiences around safety, security and wellbeing. By creating a new data framework, Sompo will be ingesting, analyzing and activating customer information to deliver the new benefits of the initiative as quickly as possible.
Munich Re has adopted HDP as its global big data platform, which will provide a cost-effective and technically advanced way to meet big data challenges that exist within the reinsurance industry. The data lake platform operates by accessing and storing a number of different external and internal data sources, to perform different transformations on data and simultaneously analyze even extremely large quantities of data. One factor leading Munich Re, headquartered in Munich, to select Hortonworks was its strong partner ecosystem. In particular, its partnership with SAS enables Munich Re to benefit from the combination of Hadoop-powered data storage and the processing power of SAS Analytics.
Summary
In addition to these select retail, advertising, telecommunications, media and financial customers, Hortonworks connected data platforms can help unlock value from both data-at-rest and data-in-motion for leading customers in every major industry vertical.
Regardless of the use case or the industry, there is a recurring pattern: leading enterprises are choosing Hortonworks connected data platforms because they believe Open, Flexible, Secure and Manageable are all table stakes for enterprise-grade platforms. These same attributes are also required to build and develop an ecosystem of over 1,800 partners in the Hortonworks Partnerworks Program that help the platform flourish and its critical for next-gen data management solutions to work seamlessly with our customers existing IT environments.
Scott Davidson (CFO)
I will start by providing details on our third quarter performance and conclude with our outlook for the fourth quarter and full year 2016.
Operating billings, the aggregate value of all invoices sent to our customers in a given period, were $72.5 million, reflecting growth of 66%. Support subscription operating billings were up 67% year-over-year and represented 79% of total operating billings.
From a deal perspective:
| We had 10 deals over $1 million, a record number, |
| The average new subscription deal size remained below the $100k mark while the average add-on deal size remained below $200k, and |
| The dollar-based net expansion rate was 140% over the trailing four-quarter average |
Q3 total revenue was $47.5 million, up 47% compared to the prior year and support subscription revenue was $32.5 million, up 55% year-over-year. 68% of Q3 total revenue was comprised of subscription revenue compared to 65% in Q3 2015. As subscription revenue grew faster than total revenue it generates higher gross margins. Non-GAAP gross margin was 61% compared to 57% for the prior year.
Geographically, we have a presence in 17 countries and international revenue for Q3 accounted for 23% of total revenue.
Turning to the expenses, the operating leverage trend on an absolute basis continues to improve. Within Q3, support subscription revenue grew 55%, while operating expenses grew by 34%. Please note that Q3 expenses included approximately $2 million in severance costs. We have re-allocated our expense dollars on a sequential basis into revenue producing roles and curtailed expenses in other areas. We expect further margin improvement as we continue to manage our expense profile and as the impact of renewal dollars becomes proportionately larger.
Sales and marketing expense was up 35% over the prior year versus operating billings which grew 66%. We continue to make targeted investments in this area to support sales coverage and associated solution engineers.
Q3 research and development expenses increased 32% year-over-year to $16.0 million, primarily driven by headcount while general and administrative expense was $11.9 million, compared to $9.2 million last year.
Q3 non-GAAP net loss was $40.2 million or $0.68 per share based on 59.0 million weighted average shares outstanding. This compares to a Non-GAAP net loss of $33.3 million or $0.76 per share based on 44.0 million weighted average shares outstanding in the year-ago period.
Total deferred revenue balance was $156.8 million and increased $64.7 million year-over-year and $25.0 million sequentially. The average contract length for all deals was approximately 18 months, consistent throughout the year. Approximately 95% of the total deferred revenue balance was comprised of support subscription.
Remember we are building a data platform where purchases are characterized by long-term decisions which have architectural implications attached to them. They may start small, but our expand strategy is imperative for us to establish our platform aspirations. There is a common belief that multi-year deals are automatically linked to significantly higher discount rates. However, relative to one-year deals in Q3, on transactions with deal sizes above $500,000, the incremental discounts on multi-year deals were under 10%. Multi-year deals provide many benefits including long-term visibility into GAAP revenue, enables us to secure a customer for a longer period of time, develops a deeper relationship with the customer and extends customer lifetime value. So, in our competitive market where purchase decisions have long-term implications, multi-year deals in fact help drive the business model and platform adoption.
On the cash side, we exited the quarter with $95.6 million and we recently closed a $30.0 million revolving credit facility with Silicon Valley Bank. While we have no immediate plans to draw down on this facility, it provides us with flexibility with how we manage working capital.
Q3 operating cash flow (OCF) was impacted by the outperformance of billings, timing of the larger deals and their affect on working capital in addition to one-time payments such as severance.
While we have not formally guided operating cash flow in the past, we believe additional commentary would be helpful and we anticipate GAAP OCF to be in the negative mid-teens millions for Q4 2016 and breakeven in the middle of 2017.
Our Outlook
As of November 3, 2016, Hortonworks is providing the following financial outlook for the fourth quarter and full year 2016:
For the Fourth Quarter 2016
We expect total GAAP revenue to be $48.0 million for the fourth quarter of 2016.
We expect operating billings to be $81.0 million for the fourth quarter of 2016.
We have historically provided guidance for Adjusted EBITDA, which we calculated as revenue plus change in deferred revenue minus non-GAAP expenses plus depreciation. As we have indicated in the past, we expect to achieve Adjusted EBITDA breakeven this quarter. This is the last quarter we will guide to each element of Adjusted EBITDA separately, as follows:
GAAP Revenue: |
$ | 48.0 million | ||
Change in Deferred Revenue: |
$ | 33.0 million | ||
Non-GAAP Expenses: |
$ | 83.0 million | ||
Depreciation: |
$ | 2.0 million |
For the Full Year 2016
We currently estimate total GAAP revenue of $180.5 million and operating billings to be $269.4 million in 2016.
Rob Bearden
In summary, I would like to leave you with four fundamental points:
1. | Hortonworks is a leader in connected data platforms and connected data architectures, |
2. | We offer innovative next-gen data management solutions which deliver actionable intelligence to the worlds largest enterprise organizations, |
3. | Our customers are digitally transforming their businesses and business models by deploying our solutions in production at scale, and finally, and finally |
4. | We are driving an extremely vibrant ecosystem that is collectively speeding the pace of open source innovation. |
Our tag line sums it up perfectly . . . Hortonworks is powering the future of data.
As I mentioned earlier, we expect to deliver healthy growth rates with a renewed focus on expense leverage as we track to Adjusted EBITDA breakeven this quarter.
Most importantly, we are not doing this alone again, we want to thank our customers, the open source community, our partners, employees and shareholders.
This concludes the prepared remarks for our Q3 2016 earnings and we look forward to hosting a live 30-minute question and answer session with the investment community at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today. 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 Hortonworks Investor Relations website for approximately seven days at http://investors.hortonworks.com.
Use of forward-looking statements
These remarks contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as may, will, might, expect, believe, anticipate, could, would, estimate, continue, pursue, or the negative thereof or comparable terminology, and may include (without limitation) information regarding our expectations, goals or intentions regarding future performance, including the forward-looking statements. 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 these remarks are included in our Form 10-K filed on March 15, 2016, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed August 9, 2016 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.
All forward-looking statements in these remarks are made as of the date hereof, based on information available to us as of the date hereof, and 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, Apache NiFi and Apache Spark. Along with its 1,800+ partners, Hortonworks provides the expertise, training and services that allow customers to unlock transformational value for their organizations across any line of business.
Hortonworks, Powering the Future of Data, HDP and HDF 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.
For Additional Information Contact:
Reuben Gallegos
VP, Corporate Development
rgallegos@hortonworks.com
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